Interview with Alan Jones

 

ALAN JONES:

The Prime Minister is on line. Prime Minister, good morning.

PRIME MINISTER:

Good morning.

ALAN JONES:

Prime Minister can I just begin because my listeners across Australia would be interested in your response to two letters today to the newspapers which I shared with my listeners earlier? Now of course your critics and mine would say this is a soft question and it’s all set up. But to me and to them this is the guts of what they are writing to me about, notwithstanding everything else that’s going on in the campaign. Robert Harcourt from Hahndorf in South Australia says today:

Opposition Leader Bill Shorten announces almost daily a new gift of taxpayer’s money to the welfare crowd. The total addition to the debt mountain left by his predecessors is eye watering. Either Shorten knows he will not win the election and will never be called on to make good his extravagant promises or the Labor strategy is to win the election and worry about the unaffordable consequences afterwards. Why aren’t politicians such as Shorten bound by the laws that operate for business? If a business induces a person to take an action relying on a misrepresentation or a promise not able to be fulfilled the business can be sued. Malcolm Turnbull having been a remarkable success at business is saying Australia must live within its means. He will not allow himself to litter the election campaign with undeliverable misrepresentations and be unaccountable for the consequences. Why should the Coalition lose the election for being honest?

Now I know that looks like a free kick but people are worried about debt. What’s your response to that kind of letter? I have a stack of them.

PRIME MINISTER:

The writer is absolutely correct. The Labor Party does not have any plan for economic growth, any plan for jobs, any plan for living within our means. The spend-o-meter keeps on whirring, we read in the papers today that Labor is going to introduce or produce a ten year economic platform which is going to see debt rising and deficits rising over the next four years. So presumably with some better outcome ten years from now which will be entirely speculative. The fact is, Labor talks a lot about fairness Alan and fairness is important. We all have a very deep understanding of it. There is nothing less fair than putting up one billion dollar spending promise after another on the national credit card and leaving it to our grandchildren to pay it.

ALAN JONES:

I agree with you.

PRIME MINISTER

They don’t have a vote.

ALAN JONES:

That’s the guts of this.

PRIME MINISTER:

They’re not voting. That’s the guts of it. Living within our means is the key responsibility and it is something that Labor has – the extraordinary war that Shorten is waging on business for example. You know, he must be the most left-wing, anti-business Labor leader we’ve seen in at least a generation. Just think about this, he is attacking business, he has opposed despite all the evidence, despite all of his statements only a few years ago about the importance of cutting business taxes in order to promote investment and jobs. You’ve seen Chris Murphy’s work from Independent Economics published today, about what strong growth we’ll deliver from that.

ALAN JONES:

I’ll stop you there for one minute, I was going to come to that Prime Minister, just for our listeners who wouldn’t have caught up with that. But there is independent research today by the Economics Director Chris Murphy, this has been released by the ANU. He is a visiting fellow there. He says that every dollar – his research – every dollar of company tax relief offered to business will generate – this is his words not Malcolm Turnbull or Alan Jones – will generate a long term national consumer benefit of $2.39. His words, “this makes reducing the company rate to 25 per cent the top priority for tax reform in Australia.” Sorry I just thought because our listeners may not have been familiar with that, go on.

PRIME MINISTER:

No no, that’s right. The reason is - and it’s common sense – if you lower the tax on investment, you get more investment. If you get more investment you get more jobs. So what we’re seeking to do is to drive economic growth, drive jobs growth. Our economic plan so far is working well, we are seeing strong jobs growth. Which is remarkable, given –

ALAN JONES:

But how can - sorry I’ll interrupt you there. What our listeners don’t understand and I don’t understand and I suppose this could be an implied criticism of you, have you gone strong enough on this? The Labor Party have said exactly what you are saying. Penny Wong when she was Finance Minister said “we understand that the cut in the corporate tax rate is important to increase productivity, to promote broad-based economic growth and to encourage more investment and jobs across Australia.”

PRIME MINISTER:

Well that’s right. They’ve all said that. Bill Shorten, you would have seen our advertisement on TV last night, showing Bill Shorten making exactly the same point in 2012 and he did it in 2011 and Paul Keating made that point back in the 90s.

ALAN JONES:

Chris Bowen says it in his book, it’s a Labor thing to have the ambition of lowering the company tax because it provides investment, creates jobs and drives growth. I mean …

Can I just take you to the second letter therefore, if that is important – which it is – then the other flipside is certainly worrying people. And that’s summed up by Dawn Jackovich from Western Australia saying:

I found it alarming to read that voters were intending to vote for the minor parties and independents. We’re still reeling from the Greens, Tony Windsor and Rob Oakeshott in the Rudd Gillard years. The Greens are never held accountable for their outrageous promises they’re only interested in trees and refugees. Voters have to realise we must learn some restraint and live within our means. Bill Shorten must have a hidden money tree in his back yard because he is spending like there is no tomorrow.

Now the concern here is, I mean you might do what Tony Abbott did and get a thumping majority on July 2 but the Senate will be hopelessly opposed to what you’re about. So how important is the Senate vote even though there is not a lot of debate on it.

PRIME MINISTER:

It is critically important Alan. I’ve been making that point - I made that point in South Australia on the weekend in the context of Mr Xenophon’s party. The fact is that a vote for the Greens, a vote for independents, is simply supporting the likelihood of there being a repeat of the Gillard, chaotic, unstable, minority Labor-Greens-Independent alliance and we all saw what that was like. We’ve seen that film before. If we don’t want to see it again, the only way to ensure that there is continued, strong, stable government with a strong national economic plan is to vote for the Coalition. In both houses.

ALAN JONES:

Just talking about cutting expenditure which you’ve been talking about. That is living within your means and making savings. You’re still being bashed up on the superannuation issue, which on your proposals, would save the taxpayer, or raise- whichever way you want to look at it, about $6 billion. So you’ve got a $1.6 million cap on tax free super, let’s forget about that, there’s a bit of an argument about it, but basically that would earn people investing about average weekly earnings, so that I think is quite fair.

They are still worried about the $500,000 limit but I just wanted to raise with you this whole question which many of the people haven’t- your cabinet- haven’t been able to explain the transition to retirement scheme. Now, it’s true that was designed to just enable people to work fewer hours but retain their income. But it was also being used by people working full time to reduce their tax, so you could salary sacrifice $80,000, shove it into super, pay no tax on that, then take it back out untaxed. So you’re trying to block that loophole, how the hell did that loophole ever get there?

PRIME MINISTER:

Yeah that’s a very good question Alan, it was designed for a completely different purpose but as usual the ingenuity of the legal and accounting professions have found a way around it and it’s become - and the Productivity Commission found all this last year, I mean what we’re doing with the TRIS they’re called is very much in line with their recommendations. But what you’ve seen is people on – almost invariably people on very high incomes, the 49 cent tax bracket, are establishing one of these TRIS account, they…

ALAN JONES:

TRIS is Transition to Retirement Scheme, an acronym.

PRIME MINISTER:

They salary sacrifice a contribution which reduces their tax on that from 49 to 15 and then they pull money out of the TRIS, the same amount, tax-free. Now, so what it’s essentially doing is it’s a tax arbitrage, now we are not abolishing TRIS by the way, the only change we are making is to say that the earnings of the account, in the TRIS account will be taxed at 15 per cent.

ALAN JONES:

Which is still a phenomenal discount.

PRIME MINISTER:

Look it is still a very good deal and it will still be used and it’s like the $1.6 million in the retirement account, we’re not saying that people can’t have more than….

ALAN JONES:

By the way on the 1.6 can you clarify please for a couple that is $1.6 million each isn’t it?

PRIME MINISTER:

Yeah that’s right, exactly right. And let me be quite clear about this, so a couple can have $1.6 million each, at you know at the start and of course what it grows to is a matter for them, there’s no limit, it’s not capped at 1.6. So they start off with 1.6 each, the earnings from that are tax-free, and of course the drawings from that they take out for themselves…

ALAN JONES:

But after that you pay 15.

PRIME MINISTER:

But they may have another $1.6 million each if they are a wealthy couple, and they’d have that in an accumulation account and they will pay on that, the earnings on that 15 per cent. As I’ve said, 15 per cent, people would rather pay no tax than 15 per cent. It is not a very high rate.

ALAN JONES:

A massive discount. See where people are critical of you, I guess, is that on some of these things they don’t see you going strong enough. Now I saw the other day that on the one hand you’re under siege on this superannuation and on the other hand outfits like ACOSS, actually supporting and urging Labor to adopt the Coalition superannuation policy. This is the Australian Council of Social Services and the Council on the Ageing, are saying well why doesn’t Labor adopt Coalition policy, I mean, there must be something okay with it if these people are supporting you.

PRIME MINISTER:

I mean Labor has proposed changes to super Alan which would involve tax being paid on any earnings in the retirement phase over $75,000. That is actually in our view, a tougher change than what we are proposing, but the reason, that’s one reason we haven’t adopted it and taken the approach we have. The other reason is administrative, the industry made it very very clear to us that, you know, taxing earnings above a certain level is administratively very hard to follow because people have multiple accounts so you’re much better just saying you’ve got a retirement account, you can start off with $1.6 in it and then do your best.

ALAN JONES:

I don’t think there’s an argument there. I think the argument I keep saying to you last time we spoke, was on this $500,000 life time non-concessional cap. Because you’ve gone back to 2007, now it’s not retrospective because retrospectivity is where something that was legal in the past is being made legal now. It’s just that many of those would say well look we’re already up to our $500,000. If it’s the bloke on $40,000 and suddenly the kids have left home, the mortgage has been paid, 40 year old, sorry, the kids have left home, and he’s got about $80,000. He would like actually to get his retirement lump up to that $1.6 or $1.45 where we can earn about $77,000. When you put the limit on $500,000 he is not able to do that. Why wouldn’t you just say its $500,000 or whatever amount is needed to reach the $1.6 cap?

PRIME MINISTER:

Well Alan let me say I note that but I don’t, we’re not going to make a change to this. Let me explain, put it into a bit of context. Of the 16 million people that are in the super system that are either contributing to it or have contributed to it and are drawing from it, 3 million have made a non-concessional contribution. That’s to say they have put money in their super fund out of their own after-tax earnings or a windfall or whatever. So 3 million only. Of those only 42,000 have contributed $500,000 and their average super balance is $2 million. So we’re talking about a relatively small number of people and you’re talking about people who already have in excess of $1.6 million. In practical terms in the real world when you look at it, the $500,000 lifetime cap is going to affect very few people and it certainly isn’t going to affect the battler that you’re talking about.

ALAN JONES:

Right. Just come back to this point. I mean the issue out here, and you saw the polls this week, one in four if you put ‘others’ along with the Greens, one in four are not, according to the poll, supporting you or Bill Shorten. Now you’ve got this double dissolution trigger which is the reinstatement of the Australian Building Construction Commission, next week I want to talk you about that industrial relations issue and the CFMEU and so on which we talked about last week, but there seems to be a preponderance of people out there who don’t understand what the Greens are about.

I mean here is an outfit that are getting 10, 11, 12 on a poll. They want to replace the 15 cents in the dollar tax on super and charge it at the marginal tax rate. They want to phase out the private health insurance rebate. They want to cut Federal Governments funding for so called wealthy private schools. They want to shift Australia to 90 per cent of renewables. They want to abolish negative gearing and the capital gains tax. Can someone educate the public to understand what the risk is if these people are given control in the Senate, or if in fact you’re voting for them believing you get a warm inner feeling about it all, that Australia is not going to benefit.

PRIME MINISTER:

Well Alan you’re absolutely right. It is one of the messages that we as a political party have to get across and we do get across in the course of the election campaign reminding people of what the Green’s policies are. They are an extremely left-wing party. For example they are in favour of every form of spending and every form of tax. They would send the Australian economy backwards at a rate of knots. They basically are like a magnet pulling the Labor Party to the left. You can see that Labor politicians like Anthony Albanese and Tanya Plibersek are leading figures in the Labor Party because they are trying to protect their seats from the Greens they are moving further and further to the left. It’s one of the reasons why for example you simply cannot trust the Labor Party on border protection. Now it doesn’t matter- Bill Shorten may say what he likes. His party, his base, his members and influential people on his frontbench have to be going in that more left direction in order to cover themselves from the threat from the Greens. They are an extremely left-wing party with a very dangerous economic agenda. They would abandon our border protection policies. You’d have the people smugglers back in business.

ALAN JONES:

They want to increase the refugee intake to 50,000.

PRIME MINISTER:

Well – yes. They want to increase it to that but you can imagine what would happen. It would be a lot more than 50,000.

ALAN JONES:

Give the vote to people in jail.

PRIME MINISTER:

Yeah exactly if they had their way. They are a very left wing party and they have increasing influence on the Labor Party.

ALAN JONES:

Okay. I just want to cover a couple of things here. There’s been a lot of correspondence to me here this week on this very moving repatriation of the 33 of our former service personnel killed in Vietnam previously buried in Malaysia. They’ve been brought home. This was an initiative of your predecessor Tony Abbott. What people are angry about, or concerned about, is that Mr Shorten didn’t attend and you didn’t attend the repatriation. They are arguing that we send Australians to war we should be there when they come home. They were also asking whether former Prime Minister Abbott had been invited. Was he invited to be there or did the Defence Department propose that an invitation shouldn’t be extended. What happened here?

PRIME MINISTER:

The repatriation ceremony was organised by the Department of Veterans’ Affairs and as you know Dan Tehan is the very capable Veterans’ Affairs Minister. He was responsible for issuing the invitation and that was based on advice from the Department of Veterans’ Affairs. The Australian Office of War Graves and the Department of Defence who organised the ceremony while considering the wishes of the families of the 33 soldiers and their dependants.

It’s important to remember Alan and it has been quite conspicuously omitted from some of the commentary, which I don’t think has – some of the media commentary, I’m not talking about your listeners – some of the media commentary hasn’t always had the interests of the families at heart. It has been conspicuously omitted in many accounts that the chief mourner was His Excellency the Governor-General Sir Peter Cosgrove who was a Vietnam veteran himself. He is the Head of State of Australia and the representative of the Queen. He is a Vietnam veteran. He is a recipient of the Military Cross for gallantry in Vietnam and he said at the repatriation ceremony and I quoted this at the RSL council just earlier this week, he said “now they are with us and at one with all other veterans in modern times who have in death made the sad journey back to their homeland Australia.” I want to pay my own tribute to the efforts of the veterans and the family members to bring those soldiers home.

ALAN JONES:

Was Tony Abbott invited to attend?

PRIME MINISTER:

I believe he was not.

ALAN JONES:

Should he have been?

PRIME MINISTER:

That’s really a matter for Dan and the Department of Veterans’ Affairs. I have on several occasions paid tribute to Tony’s leadership in organising this. The initiative of course came from the Minister for Veterans’ Affairs at the time Senator Michael Ronaldson and he was there at the ceremony. It was Michael’s initiative and Tony saw that as a very good initiative and supported it.

ALAN JONES:

Alright you have to go, I’ve got to go. Next week I do want to talk to you about this whole industrial relation thing which has got people utterly inflamed. CFMEU and the rest of it. So we’ll talk to you then. Thanks for your time.

PRIME MINISTER:

Thanks so much.