SUBJECTS: Labor’s plan to fund health and education – and balance the Budget; negative gearing; pensions; reshuffle
PHILIP CLARK: Our Monday Political Panel - Gai Brodtmann is with us here in the studio. Morning Gai, how are you?
GAI BRODTMANN, FEDERAL MEMBER FOR CANBERRA: Morning Philip, very well.
CLARK: Busy times, and Senator Zed Seselja, Liberal Senator for the ACT, joins us on the line this morning. Senator, good morning.
SENATOR ZED SESELJA: Good morning, Philip.
CLARK: Tax reform on the agenda, this time it’s negative gearing. We’ve heard this morning that Labor wants to negatively gear, or allow negative gearing, only for new houses, but even your side of politics too, Zed, seems to think there might be some tinkering with the system. Where’s the Government going with it?
SESELJA: Well, look, Scott Morrison has said that if there are, you know, unfairness and discrepancies in the system, he’ll look at that. I have some concerns, some initial serious concerns about Labor’s proposals; I think there could be a lot of unintended consequences. If you take out investor’s large chunk of the property market, you could get a bubble before the policy comes in, and, certainly, you could see prices go down.
CLARK: But you’re going to fiddle with it too though, aren’t you?
BRODTMANN: Are you ruling it out?
SESELJA: Well, Scott Morrison’s looking at these issues, but I don’t think we’d be taking a blunt instrument like ruling out 93 per cent of negative gearing in the way that Labor is, and as the property council and others have said, that could have a serious impact on the property market in all sorts of ways, and I think we need to be very, very careful with these policies that they don’t either force people out of the rental market, making rents higher, or potentially drop property values for a lot of people.
CLARK: You’re going to buy yourself a big argument, Gai Brodtmann, with this, aren’t you?
BRODTMANN: Well we have acknowledged that this is a courageous move, but we are putting out bold policies. We’ve put forward 50 so far. We want a fairer and more sustainable tax system. We want a tax system that will create jobs and boost growth and, in the case of negative gearing, improve housing affordability. Zed mentioned a figure before about 93 per cent of the stock being taken out of the market? I haven’t heard that, I’ve heard that 93 per cent of negative gearing is currently done on existing stock. And this is designed, it’s grandfathered, and it’s designed to direct that negative gearing investment into new stock.
CLARK: I don’t know whether you heard Kate Carnell this morning saying that the pension ought to be considered as a loan repayable out of the family home, sort of recast the idea of pensions and whether they should be paid back or whether they’re a safety net in the welfare system. What do you think, Zed?
SESELJA: Well, I don’t agree with Kate’s proposal. I think that it is true that people who have significant means don’t get the pension or get a reduced pension, I think that that’s fair, but we’ve excluded the family home for a number of good reasons and I think that going down that path is dangerous. I think what we’ve done with changing the paper rates in recent times, while that’s been challenging and certainly challenging for some people, it’s about making it as fair as we can – that those who need the pension, get the pension, those who can do without it don’t get it, but, you know, I think that bringing in the family home does bring all sorts of complexities into that, I’d be very nervous about such a move.
CLARK: Gai, do we need to stop this rhetoric which says that, you know, health and the age pension for that matter are unsustainable? They’re not unsustainable at all, are they?
BRODTMANN: Well the thing is, just going back to this proposal that Kate has made, I mean this Government, before the last election, promised no changes to pensions and then introduced dramatic changes and cuts in many ways to pensioners. We fought those every step of the way. So I’d just be interested to see what the Government’s response is to this, given that they have been brainstorming and floating around a whole range of ideas in terms of tax reform and none of them have actually been firmed up. Is the Government ruling out changes to negative gearing? Is it ruling out changes and increases to the GST? Is it ruling out changes to capital gains tax? Is it ruling out changes to superannuation? We don’t know what this Government’s vision is for tax reform. Zed, I’d be very interested to see what the Treasurer has to say at his Press Club speech on Wednesday. There’s been carping from the sidelines about the bold plans that we have. We’ve been gutsy enough to put those plans out there, to let the Australian people know what our vision is for the country, in so many ways, in terms of boosting jobs and creating growth.
SESELJA: Can I respond to that?
CLARK: Zed, what would you like to see in the package?
SESELJA: Well, I do need to respond to Gai, because, yes, the Government hasn’t outlined all of its plans for tax reform, that’s true, but the Labor party’s plans for tax reform, we know what that looks like, it’s not reform, it’s just higher and higher taxes. Whether it’s on property now, whether it’s on people’s superannuation, whether it’s any number of other taxes that they’re proposing, all they’ve proposed is more taxes. You can’t tax your way to prosperity, so when we look at tax reform, we look at making the system as fair as possible, and looking to lower taxes, so any discussion about –
CLARK: But you’re not doing that at present, are you? I mean the tax burden at the moment is historically high, isn’t it?
SESELJA: Well, we’ve obviously, been working to get the tax burden down, I mean we got rid of, for instances, the carbon tax –
CLARK: Yes I know, but I mean, but Zed, just as a simple matter of fact, the tax burden is historically high, isn’t it?
SESELJA: Well, it’s always, it’s higher than I would like it to be, and we’ve been seeking to lower the tax burden, that of course involves getting spending under control and every attempt we’d had at getting spending under control has virtually been blocked by the Labor party and the Greens, so, you know, you can’t just sort of go around possibly saying, well the way to get the budget back into surplus is just higher and higher taxes, we’re trying to lower taxes, we have lowered a number of taxes, we’ve lowered taxes for small business, gotten rid of the mining tax, gotten rid of the carbon tax, there’s more to be done.
BRODTMANN: What is that more to be done, Zed? What is that more to be done? What are you doing on tax reform? Are you ruling out an increase in the GST? Are you ruling out changes to capital gains tax? Are you ruling out changes to negative gearing? Are you ruling out changes to superannuation?
CLARK: Senator, I did ask you what you would like to see in the package. What would you like to see?
SESELJA: Well, look a number of things. What I’d like to see overall is lower taxes. One of the things I’ve been discussing in recent times is one way of lowering income tax, which I want to see, is people have floated this idea of people’s super contributions being taxed at a different rate. Now, I don’t like the idea of higher taxes, but if you were to tax people’s contributions at a higher rate than you are at the moment, and give them income tax relief right now, that’s the sort of tax reform that I would be happy to see, because it’s giving people choice, giving people more money right now, giving people more control over their finances.
CLARK: Alright –
BRODTMANN: The question is – what’s the Treasurer’s view, and what’s the Prime Minister’s view, most importantly?
CLARK: I guess we’ll find out. Well, the poll today, the Fairfax Ipsos poll, I don’t really want to comment on polls endlessly, but it does indicate that we’re probably back to reality. There’s been a reshuffle, in which you weren’t rewarded, Zed, are you disappointed?
SESELJA: Look, I think we’re all ambitious, Phil, and so, you know, in politics we’d love the opportunity to contribute as much as we can, but when I look at who has been promoted, I mean, I think there are just some outstanding people, there’s no doubt about it. If you look at the likes of Angus Taylor, the likes of Alan Tudge, who’s been promoted, Steven Ciobo, who’s been promoted to Cabinet, Matt Canavan –
CLARK: Almost everyone who went to Peter Hendy’s house seems to have got a gig, Zed. Are you sorry that you didn’t go?
SESELJA: I certainly wasn’t at Hendy’s house the night before, but putting that aside for a second, Phil, some of those people who I mentioned, that have been promoted of course supported Tony Abbott, so I don’t think this is about supporters of Malcolm Turnbull or Tony Abbott, it’s about great talent.
CLARK: Is it a better frontbench, Gai?
BRODTMANN: Well, just to speak on Angus, I do congratulate Angus on his promotion, but it is in fact a demotion of the Cities portfolio, a portfolio that the Prime Minister loves dearly. And it’s rather ironic that it’s been given to someone who represents a country seat.
CLARK: Well I look forward to talking to him too. Senator Seselja, good to talk, thank you.
SESELJA: My pleasure, thank you.
CLARK: And Gai Brodtmann too –
CLARK: Thanks, Gai. News now, talk tomorrow.