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Transcript - ABC Lateline

Friday 12th March 2010

Subjects: Subjects: Henry Review, health reform, the Senate, paid parental leave, party room/Cabinet consultation

LEIGH SALES, PRESENTER: Australia's politicians went from kissing babies to wooing mothers this week, as Tony Abbott unveiled his paid parental-leave scheme and the Government defended its own plan. But as we've just seen, health's still occupying the Prime Minister and the premiers, who are keen to examine the Henry tax review before agreeing to support the PM's plan. Joining me tonight from Melbourne, Finance Minister Lindsay Tanner, and shadow immigration minister Scott Morrison.

Welcome to both of you.

LINDSAY TANNER, FINANCE MINISTER: Good evening, Leigh.

SCOTT MORRISON, SHADOW IMMIGRATION MINISTER: G'day, Leigh. G'day, Lindsay.

LEIGH SALES: Lindsay Tanner, let's start with a straightforward question: will the Henry tax review be released before the election?

LINDSAY TANNER: Well, Wayne Swan's indicated that that’s the case, Leigh, but obviously we've got to take some time to digest it and consider all the options and look at some of the issues it raises because it really is a once-in-a-generation review. There's a lot of complex issues involved. So we're taking our time to understand precisely what's involved and where we should head.

LEIGH SALES: But why can't you digest it at the same time as everyone else digests it?

LINDSAY TANNER: Ultimately we've got to form a view about what the Government's going to do and that's important that we do that in a proper and considered way and that's exactly what we're doing.

LEIGH SALES: Presumably you've seen it. Is it throwing up areas that the Government didn't anticipate?

LINDSAY TANNER: Look, I can't comment on the detail of what's put forward in the report, Leigh. There's been a lot of speculation in the media of course and a range of issues and they're all significant issues. I can't really fill you in, I'm afraid, as to what Ken Henry and his committee recommend. But it is a very important debate and it's one that Australia needs to take a considered approach to - not just some kind of political hoopla or anything like that. It's going to be challenging for the Government, for the Opposition as well, but ultimately there are some very serious issues here. One of the key themes of course was the fact that I think it's about 10 of our 90 or 100 taxes in Australia raise almost all the revenue, so there's lots of tiddler taxes which the inquiry obviously has raised as one of the key issues. So there's big structural questions here that Australia needs to address.

LEIGH SALES: Scott Morrison, when are we going to see the Coalition's tax policy?

SCOTT MORRISON: Well, I think the key question is what you've just actually put to Lindsay. I mean our tax policy obviously will have to address issues that come out of the Henry review and the other information that comes forward. I mean, the point's been made about ...

LEIGH SALES: You've commissioned your own review through from my understanding?

SCOTT MORRISON: Yeah, but a lot of that work as I understand it also has to now address what's going to come out of the Henry review for it to form a complete picture for us. But if the Government's having trouble digesting this - it's a bit like a boa constrictor trying to digest the donkey and it's a fairly unpleasant sort of image that we're getting here of the Government trying to wrestle with all this. I mean, all they have to do is put it on the website and hit "post", and all of us can have a look at this, we can all join the debate. The Government is looking to try and frame this debate on their terms rather than allow this information out in the public so we can all have a good look and we can have the debate over the course of the year. But every day that passes reduces the time available for this debate before the election. The Government said they wanted a debate on tax; let's have the debate on tax. Let's have the Henry review.

LEIGH SALES: Well, if every day that passes reduces the chance for debate around tax, why don't you put your own tax review on your own website and then we can all have that debate too?

SCOTT MORRISON: Well, because the fundamentals of what's going to frame this debate is really what's going to come out of the Henry review. The Government are the ones who've initiated this process. It's for them to release their information. There's been all sorts of excuses given why it's going to come out. Everything from taking holidays to Copenhagen conferences. I don't know what the next one will be. The Prime Minister writing children's books, or whatever it might be. But this needs to come out. There is nothing there that should really prevent it coming out. I mean, the Treasurer ... if the Prime Minister doesn't have time to do it, surely he can trust his Treasurer and Lindsay to put it out there into the public domain and let's get on with it.

LINDSAY TANNER: Leigh, we had the first installment of the Opposition's tax policy this week and it's the flakiest tax proposal we've seen from a major political party in decades.

SCOTT MORRISON: Well, I'm not surprised you’d say that, Lindsay, but nevertheless, if funds are planned, it is a fair dinkum plan for parental leave, unlike what we've seen from the Government which is just basically tokenism.

LEIGH SALES: I'll come back to the parental leave policy shortly. Let me just stick with the Henry review for a moment. Lindsay Tanner, what sort of credibility can any policy have arising from this review, given that it doesn't include the GST?

LINDSAY TANNER: Well, we've made a position very clear on the GST in that we have no intention of increasing the rate or expanding the scope of the GST. That's been a long-standing Labor position. We're not going to move from that. So, there will be some out there who'll be disappointed by that, Leigh, but ultimately that's the position the Government's taken. We, as you know, opposed the introduction of the GST at the time. We said, "Once this is in, we'll be stuck with it." That's exactly what's happened, but we didn't like it and for very good reason because it shifted the burden of taxes more and more onto ordinary working people on lower and middle incomes and relived the burden of taxes on higher incomes. That's ultimately what the Liberal Party's about. That's why they've put in place a new tax - or they're proposing a new tax - that'll ultimately hit consumers in order to fund paid maternity leave for people who are on $150,000 a year.

LEIGH SALES: Let's talk about health reform. Scott Morrison, if Kevin Rudd is able to persuade the states to put aside their opposition and back his health plan, then what right will the Coalition have to block it in the Senate?

SCOTT MORRISON: Well, this is the massive big if, Leigh. I mean, Kevin Rudd on this is a bit like Don Quixote and his donkey. He's charging at windmills in terms of getting the states to sign up to a plan to hand over 30 per cent of their GST revenue. I mean, this is an ask which is quite frankly politically unrealistic. The Prime Minister knows this - he is simply trying to shift the debate onto health on the ground that he thinks is his. He's engaged in a whole bunch of phony wars with the NSW Premier. Mark Arbib knows how to stage this thing. It's about a four-act drama and we're seeing it played out on a daily basis. Everyone's keeping to their lines with the feigned looks of tension and we'll see it play out a bit more and there's one purpose about this and it's to try to shift the debate away from the home insulation debacle. It's about trying to shift the debate away from the ETS which we haven't heard the Government talk about now for some time. The greatest moral challenge has slipped off their agenda.

LEIGH SALES: Well, none of that answers the question about whether the Coalition's going to support this package if it arrives in the Senate.

SCOTT MORRISON: Well, we want to wait and see to see what the states are going to do. Now, if the states aren't going to sign up to this plan then the question is moot. The Prime Minister has to be able to display that he can actually get this proposal to a yes, and if he can't get that proposal to a yes, well, it's academic.

LEIGH SALES: Lindsay Tanner, in a Government press conference this week five ministers lined up to bucket Tony Abbott's alleged obstructionism. Surely that sort of response shows that Tony Abbott has your side rattled?

LINDSAY TANNER: No, I don't think so, Leigh. It's just been a long-emerging phenomenon that's just got worse and worse. It started under his predecessors, but it's getting worse and worse and that is blocking key Government initiatives on virtually every major front, whether it's climate change, health, the budget, the broadband network, the Youth Allowance proposals - all of those issues are just samples of what the Coalition is doing in the Senate, and my concern of course is specifically with the budget. We have got a huge task in front of us to get the Government's budget back into surplus. We are being attacked every day by the Coalition for not doing that fast enough, yet at the same time they are blowing a $3 billion hole in the budget, $3 billion more debt than we need to have by knocking back savings initiatives in the Senate. So these are serious issues, and ultimately there is a question here for the Opposition. They've got to actually consider, they're the alternative government. They're not some minor party that's got no responsibility for the wider picture. They're the alternative government. It's about time they started behaving like one and allowing the Government to govern.

LEIGH SALES: But Lindsay Tanner, you've got a couple of triggers now on which you could call an election if you wanted to. If you're so worried about an obstructionist Senate, then why don't you to an election and aim for the Senate that you want?

LINDSAY TANNER: We obviously don't want to have a double dissolution election. The Prime Minister's said on numerous occasions that he wants to serve a full term and I think it's a pretty safe bet that the Australian people want us to serve a full term, so in my view that kind of approach is literally a last resort. So, in the interim, what we want to do is get the Opposition to wake up to itself. They're just blocking things every day. Just when we had that press conference, on the very same day they blocked another saving worth $50 million that was all about getting more efficiency out of the big pharmaceutical companies for the Pharmaceutical Benefits Scheme. No reason at all for blocking it - just another $50 million of debt that we are loaded with as a result of their vandalism.

LEIGH SALES: Let me get a response from Scott Morrison to that. Scott Morrison, is the Opposition saying no to everything just for the sake of it?

SCOTT MORRISON: Of course not. We're opposing bills that we're not happy with, that we think is bad legislation. We've opposed the ETS. Yes, we have. We've told the country, and the Government doesn't want to talk about the ETS. We've opposed things like the means testing of the private health insurance rebate, something that the Government promised it wouldn't do. So we're going to hold the Government to that promise and we don't want to see premiums increase. We think it's bad legislation. We've opposed issues relating to the Ruddbank for example, the Government's proposal to try to support the big four banks. And I hear the Prime Minister today squealing about the big four banks. He wanted to put ...

LINDSAY TANNER: Rubbish. It was about supporting workers in the property and construction sector. That's what it was about.

SCOTT MORRISON: I let you speak, Lindsay. I let you speak. He wanted to put a plan in place for a Ruddbank that would back up the big four banks which he squealed about today as doing over consumers on interest rates.

LINDSAY TANNER: Complete nonsense.

SCOTT MORRISON: So we're opposing what we believe is bad legislation, and it's not just us. We have the support of other parties in the Senate and independents in the Senate, and if the Government wants to abuse those people in the Senate, well, they can and they can call them obstructionist. They're doing their job and so are we.

LEIGH SALES: Alright. Let's turn to something that you think is good policy and that is your paid parental-leave scheme. In today's Financial Review, the political editor Laura Tingle describes it as one of the most profoundly stupid, expensive, badly designed, philosophically incoherent policies recently inflicted on the public. Let's start with the philosophical side of it. How is a tax on big business to fund parental leave consistent with conservative values?

SCOTT MORRISON: Well, the tax on business represents a very small number of businesses out of the total and what it does is enable small businesses in particular to be able to continue to support women in the workforce, in particularly to support parental leave initiatives in their businesses in regional areas, something which the Government scheme does at a very paltry amount. It provides a fair dinkum scheme which is also fair and we believe that putting that burden on businesses at that level, at that scale, who have a capacity to pay at that level, is not unreasonable.

LEIGH SALES: OK, well, then if you follow that through logically, well, why don't we get these same big businesses to pay unemployment benefits in a time of economic downturn? Where does the buck stop for making big business carry the can?

SCOTT MORRISON: Well, look, we have a progressive income tax system in this country, and I don't think anybody's suggesting that we should be moving to a flat tax. I don't know if Lindsay's going to suggest that tonight.

LINDSAY TANNER: Henry Ergas in your tax review did.

SCOTT MORRISON: And some similar principles, a similar principle, is being applied here in terms of this initiative. And I should stress it's genuinely a temporary levy. It wouldn't be required if this Government hadn't put us in so much debt and deficit, and when we tidy up the books, then we will be in a position to remedy that. But in the meantime, we're serious about paid parental leave. We're bringing in a scheme that's fair dinkum. I think it's exposed the Government's lack of real commitment in this area and it totally outdoes what they're offering.

LEIGH SALES: Lindsay Tanner, for whatever criticism the Coalition’s scheme has attracted, a number of commentators have noted that it makes your scheme look a bit stingy by comparison.

LINDSAY TANNER: Well, Leigh, ultimately we've got to make big decisions here about priorities and about the Australian economy. This week really is the week where the Liberal Party's lost its marbles. At the start of the week it's imposing a giant, big, new tax that'll flow through to consumers because of all these companies, people like Coles and Woolworths and BP and Shell ...

SCOTT MORRISON: What about the small businesses, Lindsay? Talk about them.

LINDSAY TANNER: That tax will flow through to consumers. And what they are unable to say is what the threshold is; how they'll prevent people rorting that threshold; how long the tax will last for; when the scheme's going to come in. And we've had book-ended at the end of the week the shadow treasurer Joe Hockey making a speech where he's claimed that Australia's anti-terrorism laws are too strict and we should have more regard for individual freedoms and that we shouldn't support the Government's attempt to protect children from extreme pornography on the internet. Now I'd love to know what John Howard ...

SCOTT MORRISON: (Inaudible) talking about tax, Lindsay. I thought the question was about tax, not attacking Joe Hockey.

LINDSAY TANNER: I'd love to know what John Howard and Peter Costello think of all this, because I think the Liberal Party's completely gone nuts and they really need to go back to their core constituency and get some soundings, because here they are putting a giant, new, big tax on business that'll cost jobs and hurt consumers to give maternity leave to people on $150,000 a year and now claiming our anti-terrorism laws are too strict. This is just madness.

LEIGH SALES: Scott Morrison, speaking of getting some soundings, Tony Abbott's admitted that he didn't consult the party room before announcing this parental-leave policy. Isn't a lack of consultation why you got rid of Malcolm Turnbull?

SCOTT MORRISON: Well, I think one of the things about the Liberal Party which I think stands us out is that we do give strong prerogatives to our leaders. This is something that Tony has talked about for a long period of time and Tony has put it forward and as it was talked through the day ...

LEIGH SALES: You didn't give it to Malcolm Turnbull though.

SCOTT MORRISON: Through shadow cabinet and of course then through the party room and it emerged actually with strong support. In Opposition, the opportunities to put your policies out there and to make points along the way are things that leaders take tactical decisions on and he made that decision and he's been supported. It's a good scheme, it supports families and the party's supporting it.

LEIGH SALES: Lindsay Tanner, while we're on the lack of consultation, is it true that many decisions in the Government are taken by four key ministers of which you're one and that the rest of the Cabinet is expected to tick off on them?

LINDSAY TANNER: No, it's not true, Leigh. We operate a cabinet system where we've had more cabinet meetings and more cabinet committee meetings than previous governments. There's a lot of consultation. We've had a period of extreme difficulty last year with the global financial crisis where some decisions had to be taken by a small group, for example the decision to put in place the bank guarantees in October, 2008. So there have been some instances like that that were just a product of circumstances.

LEIGH SALES: OK, what about the hospitals package? Was the hospitals package a decision by the full Cabinet?

LINDSAY TANNER: Yes, it was, it went to the full Cabinet and it was approved by the full Cabinet.

LEIGH SALES: Was the Cabinet consulted on the national schools curriculum or the MySchools website?

LINDSAY TANNER: Yes, in fact the caucus was also briefed about at least the MySchools website and from memory there was also reference to it in the Caucus from Julia Gillard with respect to the national curriculum plan as well. So I don't put any store on some of these suggestions, Leigh. Basically it's difficult in government, you've got lots of things happening, meetings are happening all the time, so ... and particularly when we've had the global financial crisis, that puts some stresses on our decision-making processes. But broadly Cabinet makes the key decisions and on the central legislative decisions of course it's ultimately the caucus that's approving what the Government does.

SCOTT MORRISON: What concerns me about that, Leigh, though, when they talk about - sorry - stresses and pressures and tensions is this whole issue of dotting the i's and crossing the t’s which Lindsay's famous for talking about. Through all those pressures and stresses we've had the home insulation program; we had the initial problems with the bank guarantee; we've had all of these failures in terms of the blowouts in costs from the schools program. It's all a function of ...

LINDSAY TANNER: From a party that's just put forward a giant, new tax on business that didn't even consult the shadow treasurer or the shadow finance minister, that's pretty rich. That's pretty rich.

SCOTT MORRISON: ... not going through and dotting the i’s and crossing the t’s. It's a classic case of Labor spending first and thinking later.

LEIGH SALES: Gentlemen, we are out of ...

LINDSAY TANNER: Have a chat to your own leader before you go on about those things, Scott.

LEIGH SALES: Gentlemen, we're out of time. We'll have to leave it there. Lindsay Tanner, Scott Morrison, always a pleasure to have you on. Thank you very much.

LINDSAY TANNER: Thank you very much.

SCOTT MORRISON: Thanks, Leigh. Thanks, Lindsay.

[END]

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