ALAN JONES:

We’ve got the Prime Minister out of bed, he’s in Perth. Prime Minister good morning and thank you for your time.

PRIME MINISTER:

Good morning Alan. I’m operating on eastern time so I’m wide awake.

ALAN JONES:

[Laughs]

Stop pretending, will you. Stop pretending. Given your comments yesterday that you have zero tolerance for people coming to Australia to preach hatred - and given that this British born academic Islamic priest had made a speech in Orlando only months ago in April arguing re: homosexuals that ‘death is the sentence’ and three years ago he’d made a similar speech and it is argued that that is how he made his reputation by urging Muslims to get rid of homosexuals - isn’t it valid to ask, who is screening the screeners? Who let this bloke in?

PRIME MINISTER:

Well Alan I spoke to Peter Dutton the Immigration Minister about this very point earlier this morning. There are 37 million passenger movements and naturally most of them from countries like the UK and United States come in through the electronic visa processing service system. So unless he was on a watch list - and we’ll obviously examine why he wasn’t - but unless he was on a watch list, people would come through in that way. Can I say though that the moment this man’s presence and what he had said was drawn to our attention, the minister and I spoke about it. The minister acted decisively and his visa was revoked at about 7 o’clock last night.

ALAN JONES:

I know but see, people are ringing in today and saying “well how many others with similar attitudes have been let in that we don’t know about?”

PRIME MINISTER:

That is a good question, a fair question. The answer is of course if they come here and preach hatred, we find out about it.

ALAN JONES:

But there is a character test. People are simply saying - and I know Peter Dutton has rightly said this - he said “this bloke doesn’t pass the character test,” but who is applying this test? People are worried about the screeners.

PRIME MINISTER:

Alan that is a fair question but all I can say is that we control our borders. Obviously in order to facilitate tourism, in order to facilitate international travel and that is a very important part of our economy, we try to make the system move smoothly. You couldn’t be interviewing every single person for example that wanted to come to Australia from the UK or from the United States. So there is a trade-off there but the critical thing is that the Government and in this case Minister Peter Dutton acted decisively. As soon as this man, we became aware of him, steps were put in place to review his visa.

ALAN JONES:

Yeah I don’t want to pursue this but I just want to say the average Joe in the pub would think that given the problem about terrorism there must be some sophisticated system whereby certain names would register some kind of red alert and this ought to have been a name on such a list.

PRIME MINISTER:

Look all I can say is that there are names on lists I can assure you. This man was not on such a list apparently. That’s how he came to -

ALAN JONES:

Thank you for that. Can I just take you to a couple of questions from listeners? They are still asking questions on superannuation. Am I right in saying that this $1.6 million limit, if it’s a couple, is $1.6 million for each? Can we just clear that first.

PRIME MINISTER:

Yes. That’s absolutely right.

ALAN JONES:

So that’s $3.2 million in families. So what then if - $3.2 million from man and wife – what if a tax payer has $2.5 million in his super fund and his wife has no super because she has never worked, are the earnings on the husband’s account entirely tax free when he draws down a pension?

PRIME MINISTER:

Well Alan, the $1.6 million cap applies to individuals. So going forward in the case you described, the husband has $2.5 million and the wife has no super at all, the husband would be taxed on at 15 per cent on the earnings on the excess balance of $900,000 while future earnings under $1.6 remain tax free.

ALAN JONES:

So the fact that his wife has no super isn’t a factor?

PRIME MINISTER:

No. So let’s just flesh that out a bit. Let’s say the return was 5 per cent. The couple would pay in total an additional tax of $6750.

ALAN JONES:

By the way you were once a banker. You’d be struggling to get 5 per cent today wouldn’t you?

PRIME MINISTER:

Well certainly if you had all your money in a deposit in the bank you wouldn’t get anything like 5 per cent.

ALAN JONES:

No.

PRIME MINISTER:

But most people have a mixed portfolio. If, you know, they’ve got a balanced fund, 5 per cent is actually a little bit less than the average return over time.

ALAN JONES:

Can I just ask you another question, land tax? Now people are writing to me worried about multinationals paying any tax at all. But can you clarify - I know land tax is a state issue - can you clarify for our listeners whether multinationals who own for example factories or land in Australia or industrial units or commercial properties or warehouses, do they pay land tax? Can you have any idea about the total value of land tax paid by these multinationals? Because people are saying “well look, hang on, we’re debt. Are they paying their way on land tax?”

PRIME MINISTER:

The answer is yes they do. It’s a state and territory issue Alan, land tax. It’s levied on the owners of the land whether they be individuals, Australian companies, foreign companies. So where land tax is applicable a multinational company would pay.

ALAN JONES:

And it can’t be written off against any cost of doing business?

PRIME MINISTER:

Well if you have land, any tax-payer who perhaps owns an investment property for example and is renting it out, is able to deduct the land tax against, offset that against their income. That’s in the normal way. As far as the second part of your question, what is the total value of land tax paid by multinationals, we don’t have, or I don’t have that data, but I do know according to the ABS that the states and territories collected $6.7 billion in land tax in 2016.

ALAN JONES:

Yep because people are worried about the multinationals. Just while I have got you there, because there are other things I want to canvass. On this land tax, so many people are writing to me. I know different people, Chris Richardson from Deloitte Access Economics talked about land tax, that is a land tax which would be applied to all land across Australia, far better than stamp duty. He said “in terms of tax reform this is a big fat fish, in a big fat barrel waiting to be shot”. Now is there any modelling being done on this, given the debt that we’re in? I mean the Henry Tax Review said stamp duties have no place in a modern tax system. Would Federal Treasury have done any modelling – because I understand that it has – saying that axing state-based stamp duties on property in favour of a broad-based land tax would produce a 1.5 per cent increase in GDP, $24 billion per annum? That’s a lot of dough.

PRIME MINISTER:

Alan you’re right. The Federal Treasury has modelled that. These are state taxes by the way -

ALAN JONES:

Yeah I understand.

PRIME MINISTER:

Not federal taxes. So it is not our decision to change them.

But it would, if you can abolish taxes on transactions like stamp duty you will get more transactions, you get more trade and that is good for growth. That is why there has always been support in the economic fraternity for replacing stamp duties and conveyance taxes.

Can I just make a couple of points by way of warnings? Firstly we are in a situation where the big threat to property values at the moment comes from what Labor is proposing in this election, where people are already voting. You know they were voting yesterday. They’ll be voting every day up until the 2nd of July. Labor is proposing to increase capital gains tax by 50 per cent. That is a tax on investment. It’s increasing the tax on investment and so it discourages investment. It will discourage investment in every asset whether it is shares, new businesses, equipment, you know a new project, and including land. The other thing that they’re proposing to do is to ban negative gearing on everything except new dwellings.

That will pull about a third of the buyers out of the residential property market. It will pull even more of the buyers out of the commercial property market. It will undercut, it will devalue every home in Australia and of course it will make rents higher, because what it does, if you remove the ability to negative gear, it means that landlords will need to seek higher returns and over time of course, the pool of rental property will diminish.

ALAN JONES:

People will shift their money somewhere else.

PRIME MINISTER:

Well exactly. If you own an investment, under the world of Shortenomics, if you were an investor and you own a property, then when you go to sell it, you won't find any investors wanting to buy it. So over time the pool of property that is available for tenants, many of whom are on lower incomes, will get less. So what that will do is drive up rents, it will put pressure on governments to increase rental assistance. It is a classic case of Labor not understanding economics, not understanding the housing market. Of course this is why when Keating tried it on back in the 80s, as we remember he had to do a quick abandonment of it. Here is Shorten proposing to do it again.

ALAN JONES:

Just on that - I want to get off this but there is desperate and urgent need for some form of tax reform. I know that your Government has got this discussion paper Re:think which actually I have read and it argues that for every one dollar of stamp duty there is a 72 cent drag on the economy. Whereas land taxes provide a ten cent boost and people are saying we have to desperately embrace tax reform. Is there any hope of that happening?

PRIME MINISTER:

Well the ACT government is working towards replacing stamp duty with, in effect, a higher rate of land tax. Of course they have the advantage of being both the state and the local government. The big challenge I think with moving to a universal land tax is that if you impose it on residential property you are putting - we obviously already have land tax on non-residential property, on you know, investment properties if you like - but if you impose it on residential property, you have many people who, particularly older people, who are living in properties that may be quite valuable, because they bought them many years ago, but they have relatively low incomes. So there is a very big equity issue there. It's not something - it's one of these proposals Alan, that is easier to model in theory than it would be to implement in practice.

ALAN JONES:

Okay.

PRIME MINISTER:

It’s something that I think we'll continue focusing, on but from my point of view as the Prime Minister doing the federal issues, my concern is to deliver our tax reform agenda which I know will deliver stronger economic growth because it encourages businesses to invest and when they invest, they employ.

ALAN JONES:

Right preferences, there has been a lot of discussion about this. You have said, well there has been no discussion in the Liberal preferences about the National Party. I understand that the Liberals will preference Labor in Batman, which will knock out hopefully the Greens and then basically Labor will direct preferences to the Liberals in Mayo and Sturt in South Australia to save Jamie Briggs and Christopher Pyne. People are saying to me, if the Liberal Party has done a deal with the Labor Party over Batman and Mayo and Sturt, why wouldn’t they do a deal in New England so that Labor would preference the National Party ahead of the Greens?

PRIME MINISTER:

Well can I just say this to you, all we have done is put the Greens behind Labor, everywhere. That is absolutely our commitment because the threat to us at the moment, the choice on July the 2nd is between my Government - stable Coalition Government with a national economic plan that we know will deliver stronger growth, it will give more young people the chance to get a job, as we saw yesterday in the forum I had here in Perth - on the other hand we have the chaos and risk and dysfunction of yet another Labor-Greens-Independent alliance. As you know, you mentioned New England Alan, of course some of the old Julia Gillard-Bob Brown-independents band are trying to get back together. You've got Windsor running in New England and Oakeshott running in Cowper. But obviously we always preference the National Party and while we don't support the ideals of -

ALAN JONES:

But you won't be running a candidate you see, because Barnaby Joyce holds the seat, so the Liberals don’t have a candidate in New England. So the question is where these preferences go? Is anyone speaking to the Labor Party about preferencing the National Party or are they going to preference the Greens? What's happening in New England?

PRIME MINISTER:

The Labor Party preferences the Greens everywhere. The Labor Party and the Greens are two peas in a pod, it’s just that one is more to the left than the other. The Greens are more to the left of Labor and they are like a magnet, pulling the Labor Party further to the left. But in seats where we are running and the Nationals are running, like the seat of Murray in Victoria that you mentioned, because normally we don't have the three-cornered contest where there is a sitting member like Barnaby, but say in the seat of Murray where the Liberal member has retired and there is a National and a Liberal running, we preference the Nationals and they preference us.

ALAN JONES:

Could I just say to my listeners now before I get a question to the Prime Minister, I wrote, following that interview I did on Friday with that awful predicament in Oakey. It's an area I know very, very well. I know this is a headline story today on the front page of the Brisbane Courier Mail. Prime Minister I wrote to you along with Marise Payne, you're both aware of that you both responded to the detailed letter that I wrote. In fact Marise Payne the Defence Minister has responded twice. Terrible circumstances there in Oakey with toxic levels of two chemicals leeching into the underground supply of little Oakey, 5,000 people. Waterways contaminated, properties contaminated, livestock and residences and indeed individuals found to have very significant levels of these toxic chemicals in their blood system.

Now thank you on behalf of those people for indicating two things yesterday in that statement that you sent to me. The Government will fund tests there for anyone who wants to be tested and as the senate inquiry report said, the Government will also provide free counselling. But as the senate inquiry said Prime Minister, there are people now there who bought, who would never have bought had they known the toxic state of the water and the land. They now have property that is worth nothing. The senate inquiry said that the Government should voluntarily acquire property and land which is no longer fit for purpose due to contamination. That wasn't included in what you had to say yesterday. Are you giving serious consideration that these people are on the bare bones of their backsides? Their properties are worth nothing.

PRIME MINISTER:

Alan, the answer is yes. We are considering property acquisition once the interim health reference values have been established and the environmental investigations have been concluded. I mean what we need is to get a full understanding of the extent of the contamination and the risk to public health, so we can assess the impact on -

ALAN JONES:

Excellent well I hope we can keep in touch on that.

PRIME MINISTER:

We certainly will.

ALAN JONES:

These people are desperate. Just on IR before we go, I mean this mess in Victoria is a metaphor of what people are saying is all over Australia. Last week you had the Victoria Premier Daniel Andrews virtually forcing 60,000 volunteers - and I say to my listeners, these are firefighters who work for nothing, the Country Fire Authority, Victorian bushfires, the whole show - forcing them to be run by the unions. Even a left-wing Emergency Services Minister, Jane Garrett stood up to the Premier, she refused to buckle. It's cost her her job. Daniel Andrews has unleashed the ministerial attack dogs. What are you saying to the Country Fire Authority down there, what protection do they have from the predatory behaviour of their Premier and of a left-wing United Firefighters Union.

PRIME MINISTER:

Well we stand shoulder to shoulder with the volunteers of the CFA in Victoria. What is being done is symptomatic of the way in which the Labor Party is totally owned and controlled by militant unions. They’re doing the bidding of the firefighters union in Victoria, they’re doing the bidding of the CFMEU in refusing to support us in restoring the rule of law to the construction sector. Shamefully, as we know, they did the bidding of the Transport Workers Union in putting 50,000 owner drivers out of work. Now what I’ve said to the CFA and what we are committed to doing, is if we are returned to government, we will amend the Fair Work Act - that’s the federal Act, to prevent an enterprise bargain agreement, an EBA, to include any term that undermines the capacity of the CFA, or another volunteer emergency service to manage their own operations. What we will do by amending the Fair Work Act, make it impossible for, prevent the state government from the Victorian State Government from putting the unions in charge of these volunteers. These volunteers, 60,000 of them, they stand every time we have another bushfire in Victoria, as you know they have had some shockers there with Black Saturday being the worst in recent times of course. I was down with Lucy looking at the damage at Wye River just before, in December. They stand between the inferno and the people of Victoria.

ALAN JONES:

And for nothing. For nothing.

PRIME MINISTER:

They are the frontline, they are volunteers, they are part of the community.

Do you know in Wye River Alan, that town could have seen – they had a lot of property damage but no lives were lost and it was because of the leadership of the Country Fire Authority, of volunteers, led by Captain Roy Moriarty, who had put together as a community, an evacuation plan and a fire plan. They implemented it and no lives were lost, though a lot of houses were destroyed, that was a wonderful achievement. These are the men and women that this left-wing Labor Government wants to put under the direction of the union.

ALAN JONES:

A metaphor of Australia, thanks for your time. We will talk next week. Go get a bit of sleep Prime Minister of Australia, Malcolm Turnbull.