TICKY FULLERTON, HOST: Chris Bowen, thank you very much for joining us.
CHRIS BOWEN, SHADOW TREASURER: Pleasure Ticky.
FULLERTON: Now if there was an election today clearly you would be Treasurer of this country. The current Treasurer in the papers today is calling for business support. He maintains that the Coalition is the only side with business friendly policies.
BOWEN: Well firstly Ticky we are not getting ahead of ourselves, there is an election yet to be held so I appreciate the confidence but we have to earn the votes of every voting Australian and we intend to do so but we are putting a very strong offering forward. Now in relation to business and Mr Frydenberg‘s comments today this is a typical Liberal refrain complaining that business is doing enough but why would business bother with this Government? I mean no stability, this is the third Treasurer I’ve faced. I talk to business a lot and they say well of course we have our policy preferences but what we crave the most is stability. Well you get that under the Labor Party and when it comes to economic policy let me just give you a quick run through of our offerings which are superior to the Government for business. Firstly tax. You get the same headline rate of corporate tax now under both offerings, us or the Government and the Australian Investment Guarantee on top with us, 20 per cent upfront deduction for all investments over $20,000. You won’t get that if you vote Liberal. Point two, the biggest problem facing business in Australia is energy, this is a Government pathologically incapable of delivering an energy policy.
FULLERTON: Alright well I’ll come to those two things.
BOWEN: Can I add one more before we do?
BOWEN: Policy and stability divestment. I mean this is meant to be a conservative, meant to be a free enterprise Government and their policy is that a politician should be able to force divestment in energy. I won’t have a bar of it. Business will get more policy certainty, stability and rationality under a Labor Government.
FULLERTON: Right well there were a number, you are matching the Coalition in terms of your small business tax cuts, you wouldn’t come to the party in terms of big business tax cuts and there are a couple of other major issues that you’re putting out, the policies that you are putting out there come this election that business is nervous about. Can I asked start firstly with negative gearing. Now you’ve got Scott Morrison the great mortgage belt Liberal, they are very worried about a falling market.
BOWEN: Who is worried, who is ‘they’ Ticky?
FULLERTON: The Government and investors generally are worried about a falling market and what negative gearing changes might do. Are you 100 per cent secure in this position or would a falling market change your mind?
BOWEN: No, it’s our policy absolutely. We will take it to the election absolutely unchanged.
FULLERTON: What about after the election?
BOWEN: And we will implement it. We will seek to implement it through the Parliament but the Government will engage in a scare campaign. They have been since day one Ticky. I mean there’s no news here. The Government has, remember, Malcolm Turnbull and Scott Morrison saying the sky will fall house prices will crash, the Treasury modelling actually says the contrary.
FULLERTON: It’s been done before. Negative gearing has been brought in, changes, and then the changes were removed.
BOWEN: Well we will be implementing our policy. This is policy that we have announced two and a half years ago. We’ve taken it to a Federal election. We have taken it to multiple by-elections none of which we have lost that we have gone into holding the seat and all of which we have had swings to us. Of course the Government has lost Mayo and Wentworth in the meantime. But just on the important point. I accept the market has changed since we announce our policy. Of course its self evident. Key markets: Sydney Melbourne and Brisbane have changed. My point is this Ticky; this is a very good time to implement our reforms. Why has the market changed? By and large because investors have left. Investors have left the market because they are unable to get finance, a combination of macro prudential regulation to start with and more and more banks changing policies in the light of the Royal Commission. So the market has softened because investors have left, therefore this is a good time to reform, there will be even less of a shock, it will be even smoother.
FULLERTON: So you think it will be less painful?
BOWEN: Yes, I’ve always thought it was good policy but in terms of the actual impact on the market Ticky if you can’t get finance it doesn’t matter what the tax concessions are, you are not in the market. So this is a smooth time to implement it which gets the policy settings right, fit for purpose going forward. Of course we have grandfathered all existing investments so that’s protected and secondly we have made a negative gearing fit for purpose to try and increase housing supply.
FULLERTON: Another policy which has caused a bit of distress in the investment community particularly for people like Geoff Wilson is the changes to franking credits. Now there has been a dingdong between you and Geoff Wilson in the AFR. The broader point though that a significant number of Australians have been banking on this, have planned their retirement and their savings on the current plane. Now what do you have to say to those people?
BOWEN: Well again we’ve announce this policy very early. I mean the Liberals would have hidden this policy
FULLERTON: Well not before they put their plans together.
BOWEN: Well way before an election. I’ve had lots of discussions with people, I’ve had people come up to me and say I’m a beneficiary of this, I’ll do it for as long as it’s legal and I’ll thank you for fixing it because it’s not sustainable, I know it’s not sustainable, I know it’s not fair, there are better things to do with this Government money than provide me with a tax refund when I haven’t paid income tax. I’ve had that. I’ve had the opposite views. Now let’s just run through the facts. This is not double taxation. I mean when you provide a refund to a shareholder for the tax paid by the company that’s not double taxation, that’s zero taxation. The net impact for society…
FULLERTON: But it was an investment incentive which was put in and in good faith and people have..
BOWEN: Nor should we have a distortionary text system which people encourages people to go overweight in Aussie equities which is what it does, you know it and I know it and if is was honest…
FULLERTON: So 10,000 signatures isn’t going to make a difference to you?
BOWEN: Well again, no, it’s not because we put the policy out very very clearly, we are seeking a mandate for it. Again not just before an election before multiple by-elections as well.
FULLERTON: Now, what about wages growth? This has to be the great challenge for Governments of our time. Now in the US there is 3.1 per cent annual wages growth at the moment. We’ve got very low relatively unemployment here. How is Labor going to fix the wages growth problem?
BOWEN: Well again this is a real, low wages growth or no wages growth is good for no one. It’s not good for business, it’s not good for obviously workers
FULLERTON: Well you’ve got unions coming and putting pressure on a Labor Government to put in enterprise bargaining which would not be connected to productivity.
BOWEN: Well there has been a disconnect between productivity growth and wages growth in Australia and around the world now for some time.
FULLERTON: So you would walk away from that as a good idea?
BOWEN: What we’re doing is considering all options when it comes to industrial relations reform. Where talking to the unions, I talk to business and we will have a very carefully thought through well calibrated policy offering because industrial relations is a legitimate area.
FULLERTON: Would you look at re-introducing enterprise bargaining?
BOWEN: Well we are going through the process of consultation at the moment.
FULLERTON: Not related to productivity increases?
BOWEN: I can’t answer the question more clearly than that. I know you want me to announce the policy on your interview Ticky, fair enough, good try but I’m not going to do that. But of course as I said before we have also got the Australian Investment Guarantee which is tax relief on the condition of investment and investment creating that economic activity not only creates jobs but also create the environment for better wages growth as well.
FULLERTON: Chris you talk about yourself as being a reformer with certainty around policy. Nevertheless Labor like the Government has been very interventionist sometimes more so than the Government in terms of east coast gas where Bill Shorten actually mentioned prices but we’ve now got banking, gas, retail electricity even threats about caps on petrol, foreign investment.
BOWEN: Hang on, there is no Labor policy to cap petrol prices.
FULLERTON: Well there’s been talk. I mean, where next?
BOWEN: From whom Ticky?
FULLERTON: Well in the media. Where next? When next?
BOWEN: Well Labor announces policies not the media on our behalf. Again there are areas of reform necessary, I mean private health insurance you didn’t raise but it’s a legitimate one. It’s a heavily subsidised industry and therefore Government intervention is warranted but our policies are laid out very carefully and clearly. It’s not me who thought up a divestment power. I mean just saying that on a whim to an energy company “you’ve got to sell that off”. It’s not me who invented the bank tax.
FULLERTON: But do you accept that business is looking for certainty?
FULLERTON: And Government intervention when business doesn’t know where it’s coming from creates uncertainty?
BOWEN: Absolutely. Absolutely agree. And that’s why we are laying out…
FULLERTON: Will there be a higher bank levy for example?
BOWEN: No, there won’t be. But that’s why I’m laying out all the policies, we are laying out all the policies now in a careful clear methodical way. The Government came up with the bank levy because they were short of cash in a hurry. I mean the virtue of what we’re doing, you’re right some people don’t like dividend imputation policy or negative gearing policy, whatever it is but we are laying it all out clearly now in a stable way which means I don’t have to come up with some sort of banking levy on the run, policy on the run.
FULLERTON: Chris just on the financial side what do you think of the announcement of Wayne Byres early reappointment running APRA?
BOWEN: I’ve got a lot of respect for Wayne Byres and I think his reappointment is sensible. I have a big quarrel with the Government about timing, they have this Government has shown a propensity to politicise key economic appointments. The Secretary of the Treasury first and foremost among them. Again, bringing the appointment forward way ahead of time, I mean it wasn’t due to be dealt with until after the election. The Treasurer has to justify why he has now brought forward.
FULLERTON: But you support it broadly?
BOWEN: The Treasurer have to justify why he has brought forward the appointments of APRA and the ACCC when they normally wouldn’t have been reappointed until and incoming Government of either persuasion would have a chance to have their say but yes I do support the reappointment of Wayen Byres and if we had formed Government he would have been reappointed under us but there is a principle here which is that appointments should be dealt with when they’re due.
FULLERTON: And what about the PRRT changes, I think it is $6 billion over 10 years. Would you support that?
BOWEN: Well again the detail of that came out on Friday. We will have a good look, it’s up to the Government to justify the policy going forward.
FULLERTON: Does it seem sensible in principle to you? Because obviously our big energy companies won’t be very happy about it.
BOWEN: Well there is a process for them to interact with the Government about it but I don’t foresee a big policy difference between the two sides at the election, no.
FULLERTON: You’ve talked about your private health insurance premiums changes. What about Medi-scare? You talk about a scare campaign that the Coalition is running against you on negative gearing. Surely this is precisely what Labor is now doing in Bennelong.
BOWEN: In Bennelong?
BOWEN: No what we’re doing is running a fantastic candidate, a former president of the AMA.
FULLERTON: It’s a Medi-scare campaign, come on.
BOWEN: A pre-eminent neurosurgeon and a former President of the AMA, I think he’s a pretty good candidate Ticky. He is committed to public health, he is committed to universal healthcare as is the Labor Party. We invented it.
FULLERTON: You don’t believe that the Coalition who has it said time and time again that they are committed to Medicare?
BOWEN: Well let us be judged on our respective policies. I mean this is a Government which has frozen the Medicare benefits schedule, which has taken money out of hospitals funding. I mean I’m more than happy to have the comparative policy offerings compared when it comes to health and of course on other matters.
FULLERTON: What about Newstart? A lot of pressure to improve the adequacy. ACOSS is looking at an increase of $75 a week, that will cost $3.3 billion a year. Would you look at something like that?
BOWEN: We have committed to reviewing the Newstart rates. I think this is a very..
FULLERTON: Everyone is committed to reviewing it.
BOWEN: Well the Government is not. The Government’s not. I mean the Government is not reviewing the Newstart rate. We would in office. This is a complicated area. You need to have a view to the headline right but also the interaction with other Government payments like rent assistance. We need to look at its interaction with the job network, it’s interaction with the minimum wage.
FULLERTON: Could you restructure the whole thing because I mean people are quite exhausted about all this.
BOWEN: And that’s why I think, we haven’t announced many reviews from Opposition. Oppositions normally announce scores of reviews, we haven’t announced many. We’re very careful about because we don’t think a review is by and large an answer to some of the problems facing the country but there are some areas, a few areas where you really need the resources of Government, Treasury and the relevant departments to really be giving the best advice possible going forward. I think the Newstart rate, I mean the BCA, ACOSS, the ACTU; It’s one thing that would unite them right? The Newstart rate is too low hence we think a review is justified and it would be an item of business under a Shorten Labor Government.
FULLERTON: Just finally looking at the Labor Party conference which has been kicked into mid-December. What sort of pressures are you going to have to deal with first particularly on the trade position and immigration?
BOWEN: I’m looking forward to the conference, a Labor Party conference is always a splendid thing. There’s always good debate but there is also an opportunity for Labor again to show we are ready for Government which we are. Now immigration is always a hot button issue, the Party is full of good people wanting to do good things and there’s always different perspectives about that but it will be well managed by both the Party and the senior leadership of the Parliamentary Party.
FULLERTON: Because you’ve got hard lines there and on the trade front, there is different views aren’t there?
BOWEN: We have taken our position on the TPP. It is the right position that we talk but I do also recognise very legitimate concerns about this governance approach to trade and I don’t favour putting labour market relaxations into trade agreements. Never have, never will. Freetrade should not be about labour movement.
FULLERTON: And do you reckon MYEFO is going to be before or after your Labor conference?
BOWEN: Knowing this Government he will probably do it during conference which suits me fine, I’ll hold a press conference from Adelaide. I mean they held by-elections to make us delay our conference, that’s how juvenile these guys are.
FULLERTON: Chris Bowen, it’s been great to talk to you. Thank you very much.
BOWEN: Thanks, great to talk to you Ticky.