CHRIS BOWEN, SHADOW TREASURER: Thanks for coming everybody. Labor invented superannuation. Its one of our greatest achievements, giving millions of Australians the chance of a dignified retired that was denied them before the Labor Party reformed Australias superannuation system. We are always open to good ideas to build and strengthen superannuation. In office Bill Shorten and I, as respective Ministers for Financial Services and Superannuation pioneered My Super and the Future of Financial Advice reforms which made superannuation better value. And the Government, the Liberal Government, particularly try to undermine and wind back the FOFA reforms.
Today we see the report from the Productivity Commission. It is a serious report. It deserves to be treated with seriousness and respect. It is only a draft report. They say themselves that they need further consultation and will make further recommendations. We will engage very constructively in that process. The recommendations appear to be sensible. Many of the recommendations are about putting members first, which must be at the centre of superannuation. So if the Government chooses to take a constructive and cooperative approach on the Productivity Commission report they will find engaging partners in the Labor Party. But I just say this. The Government of the day should be working with the entire superannuation system on reforms and measures which are good for superannuation.
This Government, and frankly this Minister in particular, have chosen to engage in an ideological war against one part of superannuation - industry funds, which they call union funds, which, of course, is not accurate. These are industry funds, jointly managed by employers and union representatives. The Productivity Commission report talks about a performance divide and finds that eight out of the top 10 performing funds are industry funds. We will welcome and engage with good performing funds, whether they are retail, industry, or whatever they are. And Kelly O'Dwyer has engaged in a continual ideologically driven attack against one part of the superannuation industry. I will work with industry funds, I will work with retail funds, I will work across the board in superannuation and listen to good ideas when it comes to improving and strengthening superannuation.
We want to see more Australians retiring into dignity and less Australians retiring into poverty. That means as strong superannuation system as is humanly possible. You don't get that by continual attack on just one part of the superannuation industry. An attack which should stop today with the Productivity Commission finding a performance divide and industry funds performing very well. But we welcome this report. I thank the Productivity Commissioners for their efforts. Again, there is some way to go yet. But we are happy to engage in sensible reforms which build on those important reforms that Bill Shorten and I developed when we were in office, My Super and FOFA reforms.
Happy to take questions on those or other issues.
JOURNALIST: When it comes to a default fund, what is wrong with putting workers into one of the 10 best performing rather than one their union might have chosen?
BOWEN: I just said there are recommendations there which we are open to looking at the final recommendations and discussing. It is important that there is a process to enable members best interests to be represented. Whatever that process is. It has been Fair Work Australia up until now. The Government has frozen the Fair Work process. Thats unfortunate. They have refused to engage in that Fair Work process. Whatever it is, it must be transparent, it must be genuinely independent. We will look at the details.
JOURNALIST: But do you see any problems with that?
BOWEN: As I said, David, or we engage in all the recommendations seriously.
JOURNALIST: So you dont see a problem?
BOWEN: We will wait and see the final report. I am certainly not ruling out supporting the recommendations of the Productivity Commission, because it is a serious report which should be taken seriously by both sides.
JOURNALIST: On Labor history there has been argument for decades that super is a form of deferred wages, basically, and therefore this system belongs with Fair Work Australia or the industrial umpire, do you think there is an argument for that expert panel to be part of Fair Work Australia?
BOWEN: I think these details reworked through, David. I think the principle that the Productivity Commission has put forward is that it needs to be an independent process, thoroughly independent with experts on it. The interaction of that between the panel and Fair Work if there is any interaction. There will be submissions going forward to the Productivity Commission before they make a final report. Lets let the Productivity Commission do its work. I'm not coming out here today and saying a holus-bolus everything in the report should be ticked by the Government immediately, nor am I saying that there are things that should be ruled out immediately. I am saying these are big issues for the future of the superannuation industry. People of goodwill and good faith should sit down, work through them, make their recommendations to the PC, submissions to the PC, the Government should take them seriously and the Government should drop its ideological and is politically driven attacks on one part of the superannuation sector.
JOURNALIST: Under a Labor Government would there be changes of some kind to act on the issues the Productivity Commission has identified?
BOWEN: It may be that this is done before the election. If its not done before an election the indications I am making to you that we regard the Productivity Commission's report as a serious one would be reflected in our approach in office.
JOURNALIST: Not before the election, you wouldnt come up with a new superannuation policy to deal with some of these recommendations?
BOWEN: Election might be soon or the election might not be soon. We dont know it is out of our hands.
JOURNALIST: Your intention is to deal with it in office?
BOWEN: I think I am saying pretty clearly, if the Government chooses to engage it constructively, we will engage in a constructive manner from Opposition or Government.
JOURNALIST: Are you concerned that the system that Labor designed has now turned into a bit of a rip-off?
BOWEN: Well as I said, superannuation is one of our great achievements. One of our great achievements. Where would we be today without Paul Keating's superannuation reforms? There would be more pressure on the aged pension, more people living in poverty. We would not have as much liquidity in the economy. We would have found it more difficult to get through the global financial crisis, we would not have the pull of savings to be drawing down. Now of course 26 years later, are there opportunities to review and improve? Of course. Any system that has been in operation for almost three decades is going to need to be updated and refreshed. We did it in office with My Super and the increase in the superannuation guarantee of course. The Government, the Liberals, have taken a lot of convincing that superannuation is a good idea. Tony Abbott famously called it all a con job. And they have found opportunities, regularly, to undermine it. We take a different approach. Where there is a body of work like the Productivity Commission has recommended, at this stage in a draft form, which is serious, I think that deserves the attention of all serious people in this building as to how superannuation be improved. The system was set up almost three decades ago. Of course it needs to be refreshed and renewed from time to time.
JOURNALIST: This would appear to put pressure on the retail sector in particular, because they have the largest proportion of underperforming funds. That on top of what is coming out of the Royal Commission, what is going on in that banking sector that you might think might end up with some real pressures in a key part of the economy?
BOWEN: I guess in fairness we need to see what comes out of the Royal Commission. It would have been better if it had been held two years ago when we call for it. We would now be through this period and it would now be being implemented. The Government got that big call wrong and did not call the Royal Commission. As I said, I have a good working relationship with the retail sector of superannuation. There are areas of disagreement and theres areas of agreement. I will work with anybody in superannuation to lift performance. And to get better returns for members. It is members money. Everybody should agree with that. It is members money and if returns are better and fees are lower, then the individual is better off, our society is better off, the Budget is better off. Now if there are funds underperforming, then of course they need to have a look at their performance. That is a matter for them to explain to their members. What I am not going to do what Kelly O'Dwyer does and highlight one sector of superannuation and say I am at war with that sector I don't like retail funds. That is what shes in effect saying to industry funds. We take a more mature approach.
JOURNALIST: Mr Bowen, on a different topic: on 1 July this year the legislated company tax cuts for firms with turnovers between $25 and $50 million kicks in, were not talking about banks, were talking about Uncle Freds Widget factory or something like that. When are they going to know whether they are going to be able to get that tax cut if there is a change of Government? Before they receive it or
BOWEN: Phil, you asked me this question every so often which you're perfectly entitled to do of course. I am going to give you the same answer that I give on other occasions which is that the Labor Party takes this process very seriously. The Budget figures have moved substantially in relation to corporate tax revenue. Theyve moved very substantially. We continue to engage with the Parliamentary Budget Office about that, as you would expect us to do. The Government has been less than forthcoming. In talking about the way the company tax has moved they have provided the bare minimum of information. I need to take a responsible approach, we need to take a responsible approach. Our view on the big business tax cuts has been clear, has been consistent. Ive always said that we understood and respected once something was legislated that it would change the framework for our consideration. You could not accuse us of not having announced plenty of policy very early in the term. We will continue to do so including our approach to what has been (inaudible)
JOURNALIST: These business owners might be a bit anxious. Are you mindful of that?
BOWEN: Of course and to those business owners I say a Labor Government will give you the Australian Investment Guarantee, which will be a guarantee of cash flow assistance for investments made in the future under a Labor Government. That will apply to every single business in Australia, for every investment over $20,000. We want to see businesses investing in Austria. The Australian Investment Guarantee, which is our tax relief, which is based on the condition of investment. If you invest, we will help. The Government says that We will provide a tax cut and we hope that you invest.
JOURNALIST: (inaudible) in about five weeks when they get that money, should these businesses invest or hold on to it?
BOWEN: Businesses will make their investment decisions based on a whole range of circumstances and now the tax rate is just one. Many businesses tell me it is not their top consideration, far from it on their investment decisions. Our position, as I said, has been very full when it comes to policy development and release and will continue to be so.
JOURNALIST: Your approach does means they will get one tax cut up to 50 million, they will have one tax regime in 2018- 2019, then a different one under Labor, why not just keep it simple for those businesses and keep the $50 million threshold once it is passed into law rather than have yet another change to company tax rules under a Labor Government?
BOWEN: I appreciate your policy submission.
JOURNALIST: I am just asking why not?
BOWEN: We have to consider all the elements, fiscal responsibility, the state of the Budget, complexity and investment arrangements and the policies we have already announced, including the investment guarantee, which the Liberals are not offering. I mean when we go to the next election, the Liberals are not offering the upfront depreciation that we are. We are offering much more, I hesitate to use the word generous, because its not the right word, but a much fuller depreciation, which is tax relief based on the condition of investing in Australia, whether you are a small company, a big company, wherever you are based, if you invest in Australia we will provide that tax relief. The Liberals aren't offering that.
JOURNALIST: Mr Bowen the Coalition has indicated that in Senate estimates, that it has the year by year costings of the income tax plan but it has not released them yet.
BOWEN: Correct.
JOURNALIST: What is your response to that?
BOWEN: Well I mean Senator McAlister asked a very clear question: Do you have the year by year breakdowns? The Secretary said yes. Will you release them? No. The Secretary is acting on instructions clearly from the Treasurer, I respect that but what does the Treasurer have to hide? Why not release the full information about his tax cuts. He demands, he huffs and puffs and beats his chest, demands we vote for them but says Im not going to give you the figures. Well, the Treasurer should be treating the Parliament and the people with more respect than that.
JOURNALIST: Should you be Treasurer then Mr Bowen would you release year by year costings over 10 years on all policies?
BOWEN: If I was asked to and if I was asked to in relation to other policies, I would provide as much information as possible, yes.
JOURNALIST: The decade-long costing shows that the bulk of the cost, about $44 billion comes in with raising the 19 per cent threshold from 37 to 41. That is much more expensive than the later thresholds when you go into the $200,000 brackets. Does that put the Government's argument in perspective that really the biggest tax relief is going to those low and middle income earners?
BOWEN: Well I think what the Secretary has done in estimate is confirmed in relation to tranche three basically all the benefits go to the top 20 per cent of top income earners.
JOURNALIST: And tranche two?
BOWEN: And tranche two as Ive said consistently we see tranche two differently. Lets step it out just for the sake of completeness. Tranche one; we agree with. Wed vote for it tomorrow. We have voted for it. In fact, we go further with bigger and better tax cuts in 2019. Tranche two has some complexities to be worked through but certainly we don't rule out what we would do on tranche two. Tranche three we have deep concerns with, cant be clearer than that.
JOURNALIST: So do you accept that the Government is offering tax cuts to low and middle income earners?
BOWEN: Well they are offering some in 2018 but not enough. The Labor Party will provide tax cuts for low and middle income earners which are almost twice as big and not wait until 2022 or 2024, or some other date on the never-never, to be provided on the first of July 2019, in my first budget.
JOURNALIST: Is 75 per cent really almost twice as big?
BOWEN: You can characterise it how you wish. I think it is pretty clearly almost twice as big as the Government 's.
JOURNALIST: Do you think there should be a time limit on the detention of asylum seekers, either here or in Manus Island or Nauru?
BOWEN: Ill leave Shayne Neumann to obviously comment on Labor policy. I know as the former Immigration Minister that arbitrary limits are very difficult and our policy development continues. We continue to say to the Government they should accept New Zealand's offer, that is the most material concrete thing that the Government should do. Accept New Zealand's offer and get at least some of these people resettled in New Zealand as a matter of urgency.
JOURNALIST: I just want to go back to something Phil asked. Have you submitted a policy to the PBO costing a change in going to a $50 million for company tax?
BOWEN: We talk to the Parliamentary Budget Office as you would expect about a whole range of policy options across the board. I dont usually provide a running commentary and I'm not about to start.
JOURNALIST: Well theres a chance?
BOWEN: Nice try.
Anything else? All good? Cheers.
