9 November 2015

Interview with Patricia Karvelas, RN Drive, ABC

Note

SUBJECTS: Tax reform; crowd source equity funding; women in Parliament.

KARVELAS:

Kelly O’Dwyer is the Assistant Treasurer and the Minister for Small Business. Minister welcome to RN Drive.

MINISTER O'DWYER:

Great pleasure to be with you Patricia.

KARVELAS:

Do you concede that the tax take might need to increase overall in any tax revamp?

MINISTER O'DWYER:

We’re not looking to increase taxes to chase ever increased spending. We’re actually looking to lower taxes. What we’re really talking about is getting the tax mix right, whether there are some inefficient taxes that can be better swapped for more efficient taxes, whether we’ve got the right solutions for income tax – the very fact that the average income earner is going to be in the second highest tax bracket is, I think, a real problem when we look at the fact that that’s going to happen as early as next year. So have we got it right? That’s the question we’re asking ourselves and that’s why we’re having this tax conversation.

KARVELAS:

So is there under no circumstances will the Government look at increasing the overall tax take as a proportion of GDP?

MINISTER O'DWYER:

We come from a philosophical standpoint where we want to lower taxes. So that’s our starting point Patricia. When it comes to talking about whether we’ve got the tax mix right, we’re open to that question as to whether or not we can do things better, where we can encourage people who want to work more to be able to keep more of their income, those people who want to save and to invest, we want to get a tax system that encourages and rewards that.

KARVELAS:

Scott Morrison has also referred to not increasing the overall tax burden, that is, no extra tax for households. Is that some sort of alternative commitment?

MINISTER O'DWYER:

I think that we’re having a conversation about this at the moment. He’s outlined the broad principles that we take to this whole discussion and debate. Unlike the Labor Party, we’re not simply saying that we want to increase taxes – that’s not the starting point that we come from. We come from a starting point that says you only need to have the amount of revenue that you collect from taxpayers that you need in order to fund the services that you do.

KARVELAS:

But we don’t have enough revenue.

MINISTER O'DWYER:

But the question is…

KARVELAS:

…We do seem to have a revenue problem don’t we?

MINISTER O'DWYER:

…We also have to ask ourselves the question here Patricia, here which is, are we also spending that precious taxpayer money as effectively as we can, are we spending it as efficiently as we can? And I don’t think right now that we can hand on heart say that that’s the case. We need to constantly be looking at whether our priorities are right and that’s not just true of the Commonwealth Government, it’s true of the state government as well, which is part of the reason that the Treasurer is having conversations with State Treasurers about the very fact that they take every single dollar from the GST and is every single dollar from the GST that is collected, is that used in the most efficient and effective way possible? That’s a question that they’re going to answer when they come together to have discussions with the Treasurer before the end of the year.

KARVELAS:

There is a growing smorgasbord of tax proposals now – including from the Coalition backbench. Has Cabinet had any role whatsoever in any of these?

MINISTER O'DWYER:

I welcome the fact that my colleagues are very keen to participate in this discussion and the reason that they’re keen to do that is because they come from diverse electorates right round the country and they bring to the table certain views and certain expertise…

KARVELAS:

…Sure but how long can the Government keep telling us that everything is on the table for tax reform? Will all be revealed in the budget? What is the timeframe for when not everything in on the table but we see some kind of formed proposal?

MINISTER O'DWYER:

We are still in the discussion phase at the moment and I know that you’d love me to put very specific time limit on it but there are still lots of things that we need to discuss.

KARVELAS:

Your moving on the Murray Inquiry recommendation to change superannuation funds so that industry funds and all other funds must have independent directors make up one third of the board. Can you get the Senate crossbench to agree when industry funds have performed better and say the change would be purely ideological?

MINISTER O'DWYER:

The change is not purely ideological and in fact the Murray Report is only the latest report in a number of reports that says we need to have world best practice governance of our superannuation funds. We need the same sort of governance that applies to banks and to life insurers. That superannuation funds, which account for around about $2 trillion and will grow to about $9 trillion by 2040, is too significant not to have the best possible people looking and protecting members’ funds. The Cooper Review, which was conducted by the previous Labor Government, said that we needed a third, as the minimum standard, a third independent directors on superannuation funds and he said it should apply not just to industry funds but right across the board to corporate, to public sector and to retail funds and that is the position that the Government has adopted, along with Murray’s recommendations…

KARVELAS:

… And are you getting…

MINISTER O’DWYER:

… Which is an independent chair as well.

KARVELAS:

Are you getting crossbench on side?

MINISTER O'DWYER:

We’re talking to the crossbench, but I’m not going to speak on their behalf. They’re able to speak to you about their views on this issue. Of course I’m talking to the crossbench, I’m talking to everyone about the importance of making sure that we have the strongest superannuation system that we can possibly have and that it will serve members’ interests.

KARVELAS:

Another Murray issue is crowd funding which has been basically illegal in Australia. How are you proposing to change that and what protection would there be for somebody who puts money into a crowd funding project?

MINISTER O'DWYER:

Well, at the moment, if you are a small business and you want to raise funds from mum and dad investors, you basically can’t do it because it costs you far too much money with all of the disclosure obligations that you need and you need to raise prospectuses. So it ends up not being worth it and for those small businesses that want access to funds, having access to mum and dad investors is really the key. What they can do at the moment is that they can go overseas, the UK have got a system there, the US, Canada, New Zealand and what we’re saying is in Australia, we think that we also need to have a system where mum and dad investors can say, “you know what? I’d really like to invest in a microbrewery in Tasmania, I think that’s a really great idea and I’d like to put $5,000 into that”. At the moment they can’t do it. We say that we will licence and make sure we regulate those people who have the platforms that will aggregate that data and do some of that due diligence but it will be buyer beware and it will be made very clear to those people who are making those investments that they need to be very conscious of the fact that it’s not guaranteed in the same way as a term deposit, that they are putting their money at risk, but it’s a calculated risk that they themselves can take.

KARVELAS:

Fairfax is reporting that Labor wants to increase cigarette tax, the tax on cigarettes by another 12.5%, to raise $40 billion over 10 years to fund the Gonski education reforms. Is that a fairer way of getting revenue than raising or broadening the GST?

MINISTER O'DWYER:

This is another tax-take that Labor has proposed. Look, I’m not familiar with it. I’ll obviously have a look at it. I think it is no surprise that they’ve got new ideas as to how they can put new taxes on products and obviously that is very much part of the Labor mould. What I think it does reveal here, is that very clearly the previous Labor Government did not fund all of Gonski. There was an exponential increase in the Gonski spend created over the forward estimates.

KARVELAS:

Do you have an objection to more taxes being put on cigarettes?

MINISTER O'DWYER:

We are having a broader conversation about tax, we will consider all proposals that are put on the table. I think this is usually the default option that is proposed by Labor Members which is to have what they call “sin taxes”, whether it’s on cigarettes, whether it’s on alcohol – I’m not sure that is going to be the solution to fund all of the debt that they got us into and I’m not sure that that is going to be the solution to making sure that we can fund all of their new spending proposals either. But we will consider the options that are on the table and that’s why we’re having this broader tax discussion and debate.

KARVELAS:

Just before you go, your Liberal colleague, Andrew Southcott has suggested changing parliamentary rules to allow new mums, like yourself, to bring their babies into the House of Reps or the Senate and even breastfeed them if needed, if the baby needs to be fed. Would you like to see that change?

MINISTER O'DWYER:

I think it’s always good to consider the options, but I’m very happy with the proxy rule which allows a nursing mother to have their vote counted in the Parliament while they are nursing, if in fact they are nursing at the time of a division. I’m not sure that I would avail myself of that particular opportunity…

KARVELAS:

…I’m interested in that. Is that because you feel like the Parliament is not kind of the space where you feel comfortable to breastfeed? Is it because it’s a particularly…

MINISTER O'DWYER:

I think it’s a very personal thing and I think every mother would say to you there are some things that you feel comfortable doing and there are some things you don’t feel comfortable doing and I think that’s very much an individual thing. Other people might feel very comfortable doing it. I’m just flagging that I’m probably not in that category.

KARVELAS:

I’ve got Kelly O’Dwyer who does not want to breastfeed in Parliament, I get that, but do you think other women should be able to if they feel more comfortable with that scenario?

MINISTER O'DWYER:

I’m very open to the idea that we should create a space here at Parliament House that encourages those people, particularly women, who might have young children to think of a career in the parliament and anything that can enhance that I think is probably a good thing.

KARVELAS:

Kelly O’Dwyer, I’ll let you go. Thank you for joining me.

MINISTER O'DWYER:

Thanks Patricia.