SUBJECTS: Morrison Governments backflip on trailing commissions; Banking Royal Commission; RBA contribution on climate change; living wage; George Pell; Disability Royal Commission.

CHRIS BOWEN, SHADOW TREASURER: Thanks for coming everybody. 36 days. That's how long it took for the Morrison Government to backflip on an important Royal Commission recommendation. 36 days ago Josh Frydenberg told us tick: the Morrison Government would abolish trail commissions for mortgage brokers. Yesterday in a humiliating change of position the Government simply kicked it into the long grass as being all too hard for them. The Morrison Government says implementing this recommendation, dealing with this issue is just all too hard. From yesterday on no longer can the Government say they're taking action on all the recommendations of the Royal Commission because on the issue of mortgage brokers they are simply not.

Now Josh Frydenberg has to explain what has changed in those 36 days. What's different? What led the Government to change its mind? They very confidently told us that they'd thought about all the issues. They had consulted and that they would abolish trail commissions for mortgage brokers and they would leave upfront commissions alone.

The Labor Party's taken the view that we would, after consulting widely with the financial sector, that we would deal with the Royal Commission recommendation by legislating an upfront commission rate to deal with the concern that the size of commissions was infecting or changing the advice given by mortgage brokers. And we would also abolish trail commissions. Let's just think about what the Royal Commission said about trail commissions. This is a direct quote from Commissioner Hayne. As the Productivity Commission found, trail commissions have the effect of aligning brokers interests with those of the lender rather than those of the borrower. And he went on to say I agree.

So the Productivity Commission recommended abolishing trail commissions. The Royal Commission into Financial Services and Banking recommended abolishing trail commissions. But Josh Frydenberg knows better. And also the Treasurer and the Government have created considerable uncertainty for the sector by just saying theyll do nothing but have a review in three years time. That means that the mortgage broking business model is in limbo for the next three years. Anybody who goes to sell their business for example will have to say to the potential buyers The whole thing may change in three years time. We don't know what it might change to. Not every mortgage broker will agree with the Labor Party's policy. But it's clear. It's laid out.
It's there for all to see and it provides certainty for the sector. But it's just all too hard for the Treasurer. It's just all in the too hard basket. So this is a Government which didn't want the banking Royal Commission, voted against it 26 times said it was regrettable, a populist whinge. But now as is true to their form just simply saying they're not going to implement a recommendation, important recommendation from the Royal Commission. They are simply incapable of dealing with financial services reform.

One other issue just before I take questions. Of course a very important contribution from the Reserve Bank overnight. Here we have a Coalition Government conflicted about whether climate change is even real or caused by human activity, guns at 20 paces from the National Party and what they believe in; whether it's coal fired power stations, whether climate change is real. But the Reserve Bank being the grown-ups in the room pointing out that climate change is real and has very important economic consequences and it's best if governments, business and households actually take action on climate change to mitigate the negative impacts. The Deputy Governor said Both the physical impact of climate change and the transition are likely to have first order economic effects, the transition path to a less carbon intensive world is quite clearly different depending on whether it is managed as a gradual process or is abrupt. That's a clear warning from the Reserve Bank to governments to get on with the job of dealing with climate change and energy policy.

Now the Labor Party announced our energy policy last year. We have clear policies to deal with climate change, renewable energy. The Governments all at sea yet again. No policy, no framework, no beliefs, no values, no certainty. This says it all about the Abbott-Turnbull-Morrison Government; lost at sea whether it be mortgage brokers or climate change, simply not up to the task. It will probably fall to a new Labor Government if we are so elected to fix these issues going forward.

Happy to take any questions.

JOURNALIST: Would a Labor Government make legislative changes to force the Fair Work Commission to boost the minimum wage?

BOWEN: Well this is again, this is a Government which doesn't care about wages growth. Their wages growth record is absolutely appalling. The economy under the Liberal Government is not working for working people. Now we've announced a range of policies to deal with this: bigger tax cuts for low and middle income earners, 10 million Australians better off under our tax cuts. Reversing the cuts to penalty rates, dealing with wages theft and cracking down on sham contracting and making sure labour hire workers are paid the same as other workers. Weve announced all those policies. We've also identified the issue of the living wage that we want to ensure that those relatively small number of Australian adults who rely on the minimum wage arent in poverty. I mean the question is do you want a working poor or you don't. Do you want people going to work being in poverty or do you not? Well we don't. So we've identified that issue. Now we've been going through the process of consulting. We'll continue to do so about exactly the right mechanism to ensure that the minimum wage is fit for purpose. It has long been the role of the Fair Work Commission to do so and of course that will continue but there are things which Governments should be considering and that certainly we have been dealing with as an Opposition. We will have more to say but it's right and proper of course that we identify the problem, point out the issues as we go about the process of consulting on the exact detailed policy prescription.

JOURNALIST: So would you go to the Fair Work Commission and if you did, how would it work? Would it be changing guidelines?

BOWEN: Well now you're asking me to announce the detailed policy which I've just said with due respect we continue to consult about and we'll have more to say.

JOURNALIST: Do you support the ACTUs call for the minimum wage to be set at 60 per cent of the median?

BOWEN: The ACTU has made a submission and they've had a long standing policy position on the living wage and the minimum wage. To be clear; that's their position. I've outlined that we're concerned about the living wage and would continue to consult about the detailed policy prescription which is our position. The ACTU and the Opposition are not the same thing. They make a case. We consider our policy options as well.

JOURNALIST: Will you be making a submission to this years minimum wage review?

BOWEN: Yes. Any other questions?

JOURNALIST: Do you have any comment Mr Bowen on the George Pell sentencing?

BOWEN: Well of course this is an extremely distressing case for everybody, for victims of sexual abuse in particular to see this play out. I simply say this: Nobody is above the law in Australia. Nobody. Cardinals, politicians, famous people. All should be treated equally before the law and that is what we've seen played out. George Pell judged by his peers through a jury and the Judge providing a penalty today. Now I'm not going to comment on the penalty in particular. It's a matter for the Judge, for His Honour. But all Australians are subject to the law. That gives individuals the right to appeal as I understand George Pell will be doing. But every single Australian is subject to the law and anybody who is engaged in illegal activity in this case deeply distressing activity is subject to that law.
JOURNALIST: Just back on wages. The Prime Minister says that forcing businesses to pay some workers more would cause them to sack some. Is that something that you would expect?

BOWEN: Scott Morrison, really? Seriously? His economic credibility hovers around zero. I mean some people hate all wage increases and the Liberal Party hates all wage increases. Perhaps that's why we've seen wages growth at record lows in Australia on their watch. Perhaps that's why we've seen that. Now we actually think that sensible approaches to wages growth is good for the economy. I mean consumption is 60 per cent of the economy. And when households are doing it tough because they've fallen backwards because wages aren't keeping up with cost of living, they're dipping more into savings and borrowing more. We have the second highest household debt in the developed world. We have record low, historically, savings rates in Australia. Why? Well for very large part because wages are falling backwards. Families are doing it tough. And sooner or later families are going to have to start crimping consumption. Now that's not good for the economy.

So Scott Morrison is his normal typical negative self. I mean he's never seen an idea that's good for working people that he didn't hate. He hates our bigger tax cuts for low and middle income earners as well. So when I say we're consulting with experts and with those in the field, Scott Morrison isn't one of them. He's not an expert.

JOURNALIST: The Government says that it will fully fund the disability Royal Commission. Do you think that this is a good thing or do you think that other states should contribute?

BOWEN: Well the Royal Commission itself is vital. It would have been better if the Government did it a long time ago when we first called for a Royal Commission into the disability sector. Look I'm not going to particularly quibble about the Government's approach to funding and any discussions they have had with States or Territories. I'm not privy to the nature of those discussions from States or Territories so in fairness I'm not going to look, I want to ensure that there is a properly funded, well-funded Royal Commission. I'm not going to quibble with the Government. I'm sure that they've had meaningful discussions with the States and territories and not having been privy to those conversations I'm not going to be overly negative. I just want to see the Royal Commission well-funded. If the Government says that they've got the best way of funding it, I'll take that at face value.

Okay. Thanks very much.

ENDS