Sky News PVO Newshour Alongside Angus Taylor

12 May 2015

PETER van ONSELEN:Angus let me start with you if I can, I was just talking to the Assistant Treasurer, Josh Frydenberg, I'm now talking to a Liberal backbencher with far more, vastly more financial experience than the Assistant Treasurer. It must be frustrating in party politics, you are new to politics but you are incredibly well qualified outside of Parliament. But in a Labor-like process you have to wait your turn.



ANGUS TAYLOR, MEMBER FOR HUME: Well, I thought Josh did himself extremely well, so that is always a hard act to follow. I'm new to this game and I have learnt over the years that when you do something new, it takes time.

PVO: Let me ask you then a question similar to what I asked him and as a backbencher I guess you are more free to talk about this. Is it frustrating that one day you are arguing that we need to have a co-payment on Medicare then you are expected to argue that we don't need one and we need something else? It's the same with other policies, pension indexation and so forth.

TAYLOR: Look the one thing that I know we need, we need to contain government growth and expenditure. During the Labor era we saw government expenditure rising far faster than income and far faster than GDP. You know in that situation you have to find ways of containing it, I have no problem with recognising that it is going to take time to do that and you won't always get it absolutely right first time. That's fine, but that overall mission which we now know that we are halfway towards, is unbelievably important and we will keep at it at this Budget and beyond.

PVO: Stephen Jones, politics is in one way a bit like boxing, you need to stick and move. Now Bill Shorten and the Labor Party aren't sticking and moving when it comes to what the Government is doing to change its agenda. Don't you need to just take credit, say that it is just a great thing that they are changing what was so wrong the first time and we will now take a look before deciding we are for or against the new policy? It looks like you are trying to fight the old battles.

JONES: Well I think that is pretty close to what Bill said, we will look at the details of all of these policies - the ones that have been pre-released and if there are others that are yet to be released. An example, the GST on digital downloads, we have said that we will have a look at that. It wasn't the Treasurer's best press conference of his career, he's had a tough week

PVO: It's a surprise Scott Morrison didn't do it for him

JONES: I am surprised that Scott Morrison didn't do it for him, or even Angus here. But look we will have a look at the details of it. We are encouraged that finally after exploring just about every other option going to look at multinational tax avoidance. We would encourage them to have a look at the policy that we announced three weeks ago now, $7.1 billion worth of it in there. There is one point that I will make Peter, if you are going to crack down on multinational tax avoidance you need the staff in the tax office to detect and chase it down, so further cuts to the public service aren't going to be in that interest.

PVO: How different is the multinational tax chase that the Coalition are going to embark on Angus Taylor, to the one that Labor announced a matter of months ago?

TAYLOR: It's very different, because it is broad ranging. So Labor has focussed on one sort of tax avoidance, which is interest deductions. But we know that if you want to avoid tax, there are many, many other ways to do it. I mean you avoid having a taxable presence in Australia, you have transfer pricing and Labor hasn't touched those things. You know and this is the point

PVO: It sounds like you have advised in this space!

TAYLOR: I do know this area and the truth of what Labor has offered is that it wont work. Companies will get around it in about five seconds because they have picked one particular part of the problem. What was announced today was a much broader ranging solution to the problem where you look at all the ways that they can avoid tax and you have penalties for those who try and do it. That is the path we are going down.

PVO: Stephen Jones, I must say, it strikes me that both sides of politics do this but I think that Labor has been falling victim to it a lot lately; which is this idea that you assume that because practises are the way that they are the way now, that if you change the rules, you will capture a certain amount of money doing so. Whereas in reality of course we know that people will change their practises, it is an issue around super and it is an issue around multinational tax.

JONES: Look we acknowledge that it is a very fluid environment. If you walk down any main street of any of the capital cities you will see lots of lights on about eleven thirty or twelve o'clock at night in the big accounting firms, they are there advising the companies on how to get around these things. So we acknowledge that you have got to be nimble, but you also have to have a go and you have got to send a clear signal that that is what you are going to do. To take issue with what you said before, you said that we have campaigned on an issue but we never give credit to the Government when they start doing something about it. If they are going to be serious about multinational tax avoidance, then we will say well done but make sure you do it properly.

PVO: Are we going to see some substance in Bill Shorten's Budget-in-Reply speech this Thursday, or is it more likely to be one of those broad ranging speeches. I say this in full recognition that Tony Abbott gave broad ranging speeches right up until the election. But I think that the public now more than ever, as a result of that perhaps, are crying out for the Opposition to really make its Budget-in-Reply substantive rather than rhetorical?

JONES: I think Bill has shown a lot of substance over the last twelve months

PVO: Will we see this in the Budget-in-Reply speech?

JONES: I expect that we will, it is the job of the Opposition after all to keep the Government to account. We will be doing that, we have been doing it in spades. But we have also been saying, that we need a positive alternative. That is why we have released, well before the next election, our superannuation tax arrangements because we say that if you want to look at sustainability around pensions you have to look at retirement incomes as a lot, not just one part of it. As Angus was just saying, in relation to multinational tax avoidance, you've got to look at the lot, so that means super tax arrangements as well as the pension side of things. We are already on the job and you will have to give us credit for the things we have already been doing and there will be more to come.

PVO: Why are political parties so scared to look at the family home as part of the assets test for the pension? You can have reverse mortgages, you can put all sorts of safeties in play so that we aren't kicking people out of their homes at any given time. But if you don't do something in that space you have people living in multimillion dollar homes and taking the pension. Really its just for one reason only, they want to leave it as inheritance to a child. Thats fine, you can understand that at any emotional level, but the taxpayers shouldn't be paying for that, should they?

TAYLOR: Well Peter the view we have taken is that we start by looking at assets beyond the family home, the truth of the family home is that it is always going to be difficult. Because I can buy a home in the 1970's that is worth $100,000 and by the time you get to today it is worth much more, millions even. That always makes it difficult, because of the valuations. If you own a home and you intend to live in it for the rest of your life, valuation is sort of irrelevant.

PVO: But a reverse mortgage gets around that.

TAYLOR: Well reverse mortgages are not a simple product, they can be quite expensive and be very cumbersome and quite onerous in the way they work. So to force a reverse mortgage on someone is quite tough to take.

PVO: But it is the Menzies Research Centre, it was back in 2001 or maybe one year after they did some research of all this. Christopher Joye, who is now the contributing editor to the AFR, was the author of it. Is there any chance that either side of politics will take a look at this? Stephen?

JONES: I think there are other places where we can look first. I tend to agree with one of the observations that Angus has made, these are complex financial products and at a time when we are trying to encourage people to stay at home as long as possible, we are putting together a whole range of other complex changes in the aged care space I don't think that we need to throw this one in as another complication.

PVO: Before we take a break, I just want to ask you Angus Taylor about something. Josh Frydenberg, the Assistant Treasurer, was playing word games with me - he wouldn't acknowledge that the Netflix adjustment to the GST is a change to the GST and the reason he wouldn't acknowledge that is because of the words of Tony Abbott when he said that there will be no changes to the GST. It's a change to the GST.

TAYLOR: It's closing a loophole. I've had semantic debates here too, they really don't go anywhere Peter. I agree with Josh that they don't go anywhere. It is a sensible thing to do and

PVO: I agree that it is sensible but it is a change and

TAYLOR: Well the world has changed and that is the important thing about this, the world has changed. Much more is now sold digitally, whether it is movies or music or TV. We have to recognise that in the way that our tax works, we have to modernise our tax.

PVO: Labor is willing to be involved in a change to the GST. But for some reason you rule out before any debate or discussion a change to the rate or a change to where it might apply to food even though that kind of change can have give-back opportunities to the targeted groups you feel are most disadvantaged by what is a mildly regressive tax.

JONES: Look it is more than mildly regressive. Come and visit parts of my electorate, and you see how much money they spend on the basic necessities of life and you will see the impact of these sorts of things. A basic principle, on the GST on food, we are not going to help the Government break its promises; that is the first principle. They have said that they want to look at extending the GST into digital downloads, we are happy to look at this because we think it creates a level playing field and

PVO: But that is a broken promise, isn't it? You are breaking your promise because they have said no change to the GST and that is a change to the GST.

JONES: I think this is an area where we can work with the Government in a constructive way, and ensure that without taking food out of the fridge from peoples' houses we can create a level playing field between the digital and the non-digital providers of this sort of software.

PVO: Alright gentleman we need to take a break, when we come back we will have a look at the policy space of Scott Morrison. A lot of people are suggesting that he might want to be Treasurer, irrespective of that his policy areas are front and centre.

[Commercial break

PVO: Welcome back, well Scott Morrison has made an unfortunate comparison between Joe Hockey and controversial rugby league player Greg Bird who is suspended from the game. He is also one of the most suspended players in the game, Mr Morrison later tweeted that he meant to say Jack Bird who is a promising young centre and 5/8th with the Sharks. The Social Services Ministers high media profile in the pre-Budget pitch has raised speculation that he could take over as Treasurer.

[Excerpt of Scott Morrison interview and Joe Hockey press conference]

PVO: Angus Taylor, there are really only two choices here. Either it was a very poor choice of Greg Bird or he is a pretend follower of rugby league who can't even remember the name of one of the players in his own team!

TAYLOR: It's easy to confuse your birds, I mean I don't know what happened there. We can talk about gossip and semantics all night, but I think that it's more important to talk about the issues relating to the Budget and Scott has been doing a great job of that.

PVO: It's no better on the Labor side, I mean you have Tanya Plibersek saying that we need a binding vote on gay marriage. You've got Bill Shorten slapping it down, very carefully of course. Because he doesn't want there to be any issues internally with this. Labor has got its own problems and the national conference will expose a lot of that at the end of this sitting period when we are in the winter recess.

JONES: I don't think it is a problem at all PVO. I think that the national conference is an opportunity for us to have robust policy debates, we have been doing it for 100 years. People say they are sick of cardboard politics, the brand of politics where everyone speaks off an auto-cue or the talking points of the day but no one speaks as to what is on their mind and no one has a debate about anything. Well Labor and Labor's conferences are an opportunity to do that and

PVO: You are in the left, do you think it is should be a binding vote?

JONES: Well I think that, I find it very difficult to accept that discrimination should be a matter of conscience. But I can see that if you have a law that imposes a law on religious organisations, than that is a problem. So if you carve that out, discrimination is not a matter of conscience.

PVO: Just quickly on this issue, Angus Taylor, before we get back to the Budget. There will be a debate presumably at some point during this term in the Liberal party room as to whether it should be a conscience vote, do you think that it should be a conscience vote?

TAYLOR: My view on this, on this issues of conscience, is that we should be seeking to represent our constituencies. What I would do before I made a decision on that is to get out and talk to them. My view of my electorate at the moment is that they are not ready for gay marriage, but as I said I would get out and I would talk to the electorate and I would get a good sounding on that.

PVO: I've got to ask a follow-up on that, you haven't said this and I'm not verballing you, you may well or could well be in favour of gay marriage but you wouldn't want to be unrepresentative on that issue of your electorate in a conscience vote.

TAYLOR: Look I think on complex economic issues, it is quite appropriate that we make decisions about what is right because we are in a position where we can be very well informed. This is an issue where I think everyone has a view, and there are some very well informed views out there in the electorate. So the important thing is for us to understand those views and to reflect those in the views that we take to the party room and the Parliament.

PVO: Stephen Jones, the Government looks like it has put up a pretty good package which will be in tomorrow's Budgetin relation to adjustments to child care. You would think that Labor could be naturally inclined to support it, but the sting in the tail is that you need to support their changes to the Family Tax Benefit scheme, which you have expressed an unwillingness to do. They say that that is the only fiscally prudent way to do it, to find savings to be able to pay for new money. What is Labor's reaction to it?

JONES: There are lots of good ideas that we would like to introduce Pete, but unless you can afford to pay for them

PVO: Well they are giving you a way to do it.

JONES: A responsible Opposition has to raise big questions about it. We said no to the Family Tax Benefit changes last year when they were put up before the last Budget, they are still before the Senate. We aren't going to change our mind on this one, we will look at the details tomorrow but we don't think it is right to be robbing Peter to pay Paul; to be taking money from one group of needy parents and giving it to another group of parents, albeit for a good cause. We say to the Government, if you want to enhance child care look for another way to fund it.

PVO: Well, there you go Angus Taylor, in all likelihood if that is Labor's position given what has been expressed by large chunks of the cross-bench - that is a policy that hasn't even been formally announced yet it has only been informally leaked to the media - it won't become law by the looks of it.

TAYLOR: Well, let's see. I mean I think that it is early days, it hasn't actually been announced yet. The truth of this one though is that child care is unbelievably important in this day and age. It is behind the eight ball, we need to do more on child care. A large proportion of families have two incomes, even if one of them is only part time. We need to give the right support, both of us have had working wives as they have had children and we need to get this right. We are putting in now $20 billion for the Family Tax Benefit and only about $7 billion for child care so is that the right balance?

PVO: But you can't even get your Coalition partner over the line on this? I mean they have concerns about how it affects stay at home mums.

TAYLOR: Is that the right balance and

PVO: I like the policy but your own colleagues in the National Party are already expressing concerns about it and the Treasurer hasnt even got to his feet yet.

TAYLOR: As Stephen rightly points out, robust debate is always a good thing in politics. But the truth is, we need more in child care and

PVO: So how do you get them over the line?

TAYLOR: Well we will talk with them, we will talk through it. I mean we haven't even announced the policy yet so there is some water to go under the bridge

PVO: You may not have formally announced it yet, but we have already seen your Coalition partner come out against it, a number of cross-benchers, the Greens have expressed their concerns, and Labor have expressed their concerns. It's not going to pass!

TAYLOR: I would say to all of those who have concerns, go out into your electorates; go out into your electorates and ask working families how they feel about more support for child care. I'm very confident they will get an overwhelming and resounding level of support for those initiatives.

JONES: You ask them whether they want more support for their schools, they will say the same thing. But that didn't seem to get the same attraction for you guys, you pulled the money out of schools and I hope that they will be sorted out in the Budget.

TAYLOR: We didn't Stephen but

JONES: Are you going to fund the extra two years? Because it will be in the forward estimates, you can't dodge it this time and

TAYLOR: In my electorate school spending has been going up at double digits. But coming back to this one, Stephen well knows that this is one of those screaming issues out there. If you go to Wollongong or the South West of Sydney in my electorate or just outside of Canberra, there are so many families who have to commute into work. They need flexible, accessible, affordable childcare and we need to sort it out.

PVO: We are right out of time, thanks for joining us gentleman.