HOST:
Welcome back, let's get straight into our panel. On the panel this morning we have Parliamentary Secretary to the Treasurer David Bradbury, he's with us in Sydney. Thanks for your time.
BRADBURY:
Good morning, David.
HOST:
And in Melbourne, Shadow Small Business Minister Bruce Billson. Thanks for joining us Bruce.
BILLSON:
Morning, David.
HOST:
Firstly to the mining tax, and David Bradbury the Government hasn't quite ticked off or crossed out any of the 94 recommendations from this mining tax report yesterday, but Wayne Swan's language does seem to suggest that he won't allow the states to increase their royalties when it comes to resources. Dennis Shanahan in The Australian this morning says that the Government has retreated once again to save its political reputation. Is that what's going on here?
BRADBURY:
Well look I'm not going to respond to commentary in the broadsheets on this. I think that what we need to be focussed in on is the fact that the policy transition group has come up with a range of recommendations and government will be considering these recommendations. We'll be working through those recommendations in an orderly fashion, in a methodical way. But there are a couple of things that do come out of this report that are worth commenting on and one goes to this issue of royalties.
We have long said that when it comes to the taxation of mineral resources in this country that we need to move towards a system that is based on taxing profits rather than taxing production metrics, which is currently the case in the form of royalties. That is something that will ensure that the taxation regime in this country becomes much more efficient than it has been in the past and the policy transition group's recommendations simply make what I think is a pretty obvious point and that is that we should be looking to make our system of mineral taxation in this country more efficient, more internationally competitive, and the best way for us to do that is to move towards the Mineral Resource Rent Tax.
So, in terms of whether or not it's a retreat, clearly I think it's a little bit presumptuous to start making assessments like that when the Government has not yet formally responded to the recommendations of this report. But having said that, I think what we do see is a consensus emerging here between the industry and government when it comes to implementing this new tax which ultimately will deliver massive benefits right across Australia in the form of superannuation, in the form of better investment and reductions in company tax.
HOST:
Bruce Billson what's your take on the recommendations yesterday, particularly relating to royalties for the states?
BILLSON:
Well those 94 recommendations, David, amount to an enormous rebuke for the Gillard Government. Remember this was the mining tax that was so flawed Labor needed to take out a Prime Minister to fix it. Now Kevin Rudd's gone and now these 94 recommendations clearly point to the Gillard model of this mining tax being equally the dud that the Rudd model was. I wonder whether Julia Gillard is going to be taken out. I mean this is really a disastrous example of very poor policy process. Confusion about how this tax will be applied. David mentioned something about efficiency; I don't think anybody has talked about this tax being efficient. I mean the big argument was that the states own the minerals that are being extracted and get a fee for those minerals through royalties. Now the Commonwealth is virtually saying don't put up your fee for those minerals that you own that are being extracted for profit otherwise we will take a waddie to you and take back some of your GST revenue. This is a very confused and I think very difficult challenge for the Rudd government, as it is for the Gillard government. Neither has got it right and all we know the outcome will be a disincentive for success in the mining sector and higher electricity prices for Australian consumers.
BRADBURY:
Well I think you're sounding a bit confused on that one Bruce. And the point that I'd make is that we've never said that these resources are exclusively owned by the States. In fact the contrary argument that we've been putting is that these are national resources and that it is incumbent on any government wanting to manage in the best interests of the nation, to ensure that we secure the best return on our nation's mineral wealth. And that's simply what this proposal has always been about. You can't have it both ways. On one hand the criticism that we've faced when we announced the former version, the RSPT, was that there wasn't sufficient consultation. We go through a process of extensive consultation in relation to the MRRT and now Bruce you want to come forward and say, well, what a shambles this is because through that consultation some ideas have been put forward as to how we might better manage the implementation. I think what we've seen here is a consensus emerge around some of the things that can be done to ensure the proper and appropriate implementation of this tax. Now the Government will respond to that in due corse. But I think that to try and characterise this as anything other than a very positive development as far as the Government's implementation of its reforms, I think is a little bit churlish.
HOST:
(inaudible)
BILLSON:
Ten and a half billion dollars of the Budget in some doubt over that money. Ten and a half billion dollars. And now the only consensus appears to be that the design that was brought forward by Julia Gillard doesn't work, needs further improvement, further refinement. And then there's still a lot of doubt about what this tax will actually look like at the end of the day.
BRADBURY:
I think we're a step closer. I do think we are a step closer.
HOST:
Sorry gentlemen we'll have to wrap it up there. We've got a few other things I want to touch on, and one of them is the dumping of the Green Start program which was the replacement to the Green Loans program. Bruce Billson you're the shadow minister for small business. What have you heard in relation to these programs being dumped and how that's affecting or going to affect small business?
BILLSON:
Well there's small businesses that took the government on its word and were contractors, partners with the government on implementing this program, are devastated. They've invested time and energy and resources in setting up enterprises to implement this program. We've said all along it had some problems; in fact the Green Start program I remember putting out a statement nearly two years ago saying there are some fundamental flaws with the design of this program - fix them, but don't just pull the rug out from businesses that have got engaged in these programs at the encouragement of the Commonwealth. These green programs are now all gangrene. There's hardly any of them left standing. And people have been left in the wake of government decisions to just abandon these programs. They're left wondering when their interest will be taken account of. The investment that they've made, the commitment they put into a program which the government just unilaterally decides to pull out from. Same thing happened with insulation. You've still got people with you know, warehouses of foil and fluff wondering when they will be compensated. I mean this is another example of poor policy design. These programs are now gangrene.
HOST:
David Bradbury there has been a long line of policy failures when it comes to environmental policy. Why is it or, what is it that makes environmental policy so difficult for this government to implement?
BRADBURY:
Well look I think that clearly there have been some difficulties here. And I do take exception with the parallel that Bruce is trying to draw in relation to the home insulation program. But I just simply make the point that, in relation to the decision that the government has taken regarding the Green Loans and Green Start programs is that after considerable analysis and review by departmental officers the Government has come to the conclusion that there are some risks associated with these programs and to the extent that those risks cannot be satisfactorily mitigated against we've taken the view that it is appropriate not to proceed with the plans that we've previously set out. Now in relation to the Green Loans program though, I make the point that we have extended that program and we do acknowledge that this will not be welcomed by many people within the sector because they have an interest in this matter and I acknowledge that. But in relation to that program we have extended it so that there is a transitioning out of this program, extended until the end of February. So we are trying to ensure that there is certainty moving forward to those people and businesses involved in these assessments. But obviously we're not going to proceed with a program where we've identified risks that we can't be satisfied we can mitigate against.
HOST:
Ok well we're almost out of time but I just want to get both your thoughts on 2011 in 20 seconds or less. Bruce Billson can you tell me what you think are the big issues next year and where is the political war going to be waged?
BILLSON:
Well I think cost of living is going to be a big one. I think that the competence of the Government, David, we've just talked about a number of programs where Labor has sought the headline and the hype of an announcement only to realise there's hard work of policy development and program implementation to follow. I think that pattern is going to be a challenge. Border protection is still an enormous challenge for this Government. It could simply pick up the Coalition's policy and have a ready remedy. And from my particular area the small business community is completely being ignored by the Gillard Government. That's where the engine room of the economy is, millions of people are employed. I think you will see a revolt from the small business community unless they get some serious attention very soon.
HOST:
And David Bradbury your thoughts?
BRADBURY:
Well clearly I'm going to disagree with just about everything Bruce has said then. But what I will say is that when it comes to implementation and that was one of the issues that Bruce raised, next year will be about implementation.
It'll be where the hard work that has underpinned our reforms in relation to healthcare will start to be rolled out in communities and hospitals around the country. We'll see the National Broadband Network start to reach more and more communities around this country. In terms of the big decisions that will have to be taken in the coming year, obviously fronting up to the big challenge of trying to put a price on carbon will be something that we will need to walk up to, and there will be the challenges that are associated with ensuring that we continue to return the Budget to surplus. Some big challenges there but I'm confident that we can take them on.
HOST:
All right well David Bradbury Parliamentary Secretary and Shadow Small Business Minister Bruce Billson thank you both for your time. That's all we have time for, thanks for watching.