MOTTRAM:
Someone who is watching all this with no doubt some degree of interest is David Bradbury who is the Assistant Federal Treasurer and the member for Lindsay. Good morning, David Bradbury.
BRADBURY:
Good morning Linda.
MOTTRAM:
Can we start with the superannuation stuff? I mean it's, you know, it's a bit of a mess really isn't it now out there being debated when the government presumably prefer it to just be released in the budget.
BRADBURY:
Well and of course we go through this sort of speculation on a range of policy areas in the lead up to every budget. Some of the debate here I think seems to be rather super charged. I think it is important that people just take it easy. We're working through the range of decisions that Governments take in budgets; superannuation is one area across the full spectrum of policy areas that inevitably come under some form of review. That doesn't mean that we are going to be taking any particular decisions but I think people just need to settle down, wait until we get to the budget. But what I can say is that as a party no party has shown a greater commitment to superannuation. It was Labor that created superannuation; we have been the ones that have brought about every increase in compulsory superannuation that has occurred and the Opposition stands in stark contrast – they opposed it. They have opposed every single increase. If people are concerned about superannuation then my message to them is don't be concerned when it comes to a Labor Government. We are about increasing people's retirement savings but obviously to do that you need to make sure you got a sustainable system. To suggest that the system should never ever come in for in any reconsideration at all I think would be irresponsible from that perspective of sustainability. But I would simply say to people let's not get carried away we have always looked after people's superannuation, we will continue to do that but we work through the processes that we need to work through – (Inaudible)
MOTTRAM:
Okay, well Craig Emerson during the weekend as this debate was raging on said that Labor would only ever target the fabulously rich – who exactly are the fabulously rich?
BRADBURY:
Oh look, I'll leave it up to them to self-identify. Not sure they will but look, let's not get into a debate about exactly how we might describe particular cohort of people across the Australian community.
MOTTRAM:
But the reality – it is out there now, people are wondering whether you are about to change, perhaps retrospectively, the arrangements for their savings which may look like a large dollar amount but are in fact an attempt by people to play the game. As you say Labor put it in place and to save for their futures shouldn't you be coming clean now?
BRABDURY:
Well we will in the budget, you'll see full details of not just what we may be proposing to do in superannuation but right across the spectrum and I think that as exciting as it might be for journalists to try and elicit some early releases of details for the budget we're not in a position to do that and we won't be doing that.
MOTTRAM:
Yeah but I mean I think it is more than that, David Bradbury, isn't it? It's individuals now worrying because this discussion is out there they are now worrying what might be intended.
BRADBURY:
Well my message to people that are concerned about their superannuation is Labor will look after you and your superannuation. We've got a track record of having done that and I think people need to just take it easy, don't allow the hysteria of some of the commentary that has been occurring here to spook people because the truth is that under Labor Government your retirement savings will always be safe and they will always be at the forefront of our thinking – that is why we created superannuation – that is why we have been increasing it. We – just think about what has occurred in the context of this Parliamentary term. We have legislated to increase superannuation from 9 to 12 per cent for all working people and that was opposed, not only was that opposed and voted against by the Liberals in the Parliament but they are the only ones that actually have a policy out there that adversely rips away the superannuation entitlements of people. And the people that they have targeted are not people, however you might describe them, fabulously wealthy or otherwise, these are the ingloriously low paid, these are the people that are out there you know changing our kids' nappies in child care centres, wiping down tables at the restaurants that we might eat at, part time workers, female workers some of those that need support and assistance the most – Abbott says that he will take away a tax concession that we are providing for them.
MOTTRAM:
David Bradbury we are getting texts from people that are saying things like this: Gerro on the text, she says, "The fabulously wealthy are those who earn $1 more than the MPs." Someone else saying, "Why are politicians exempt for the superannuation limits? Julia Gillard gets $300,000 super benefit every year, how is that for fairness?" There is cynicism out there the May budget is still a little way away, do you not need to answer it especially given the parlous electoral situation you find yourself in?
BRADBURY:
OK, look I'll take the pollies super thing first and make the point that doesn't get a lot of coverage in most of the commentary and that is that anyone that enters the parliament after 2004 is not in that defined benefit scheme. Anyone that was in the scheme before that is a defined benefit scheme and will be treated in the same way as other employees right across the economy in defined benefits schemes will be treated. Now the changes that we have made in the past, it is our intention that they will also impact on people regardless of whether they're politicians or not. For my part I am one of those post 2004 people and my simple message to everyone is any change that we make to superannuation that affects you will affect me. But let's be clear about this: we are not just considering superannuation or the budget more generally in the context of what it means for me, we're considering it in the context of what it means for the sustainability – our fiscal sustainability into the future – and we need to make sure that we have a system that not only provides really important incentives for people to invest for their retirement and to alleviate the burden on the Government of having to provide pensions but we need to make sure that it is a sustainable system, one that can be sustained over time and won't have to come in for some really heavy duty changes down the track in order to reign it in and that is something that we just need to keep in mind.
MOTTRAM:
Last year you increased the tax on superannuation contributions from 15 to 30 per cent above $300,000 a year. TThat's yet to get through the parliament though isn't it?
BRADBURY:
That's right yes.
MOTTRAM:
Do you really seriously have any room to move on this given that's the model, that's the template if you like, you are going to struggle to get it through Parliament anyway?
BRADBURY:
Look in terms of why that hasn't gone through the Parliament I don't think that's so much a question around questions of support, often measures are announced and it does take some time particularly through the design phase of the legislation to get that all in place.
MOTTRAM:
So that's a time issue more than anything else?
BRADBURY:
Look yeah, that is my understanding but I don't have primary carriage for that legislation, but that is my understanding.
MOTTRAM:
Sure.
BRADBURY:
In terms of what we are doing my message to people is rest assured we won't be doing anything rash in this space. We will be taking a very reasoned and methodical approach to the policy outcomes that we pursue and rest assured Labor is the party of superannuation. We created it, we have been increasing it and we will make sure that it is sustainable into the future.
MOTTRAM:
Okay, David Bradbury I also wanted to ask you to comment if you would on the depreciation of interest rates. We see a lot of commentary around today saying the days of falling interest rates are over it is more likely that rates will go up again if not immediately then that will be the trajectory in the near future. Should people be concerned about that?
BRADBURY:
Well look you know, the commentary around interest rates seems to go this way that when interest rates go down it's because the economy is faltering and when there is a prospect that interest rates may stay the same or go up in the future people say, "oh this is a terrible thing for everyone and the economy." The interest rate story in the last couple of years is actually a really remarkable story of Australia's economic success and if you take it in the short term someone that has a mortgage of $300,000 a year is now paying $5000 a year less in interest expense than they were before we came in to office. But this a bigger story. The Deputy Governor of the Reserve Bank, Phillip Lowe, recently gave a speech and it's a great speech that sets out why the economic reforms of the last couple of decades are paying dividends. The floating of the dollar for example has been one of the key reasons why interest rates have been able to stay low. We're going through at the moment a record investment boom, we're going through an increase in our terms of trade like we have never seen before. Now normally those factors would lead to an outbreak in inflation and with higher inflation comes the need to increase interest rates. The floating dollar has meant that our dollar has appreciated, it has increased and with the stronger dollar that has of course put pressures on various parts of the economy but what Phillip Lowe also pointed out is that businesses right across our economy are making the changes to cope with that structural change that the high dollar has brought. And the important thing to understand here is that if you didn't have that high dollar you would have higher inflation and higher interest rates but what we have got is a much better outcome.
MOTTRAM:
OK we'll see what the Reserve Bank does today when it puts out its announcement a little later on. Thank you very much for your time David Bradbury.
BRADBURY:
Great to speak to you Linda.