Fight Club on ABC774 with Rafael Esptein

09 March 2016


ABC 774



SUBJECTS: Early Election, Preference Deals, Tax Reform, Negative Gearing, Peta Credlin


EPSTEIN (HOST): Joining me from the Melbourne studio is Labor’s Member for the seat of Gellibrand, which could be under threat if the Liberal Party and the Greens do a deal, his name is Tim Watts, Tim, welcome.

TIM WATTS, MEMBER FOR GELLIBRAND: Good to be with you, Raff.

EPSTEIN: And in Canberra, fight club regular, Senator for Victoria, Minister for Vocational Education and Skills, gosh you’ve got a long title, Deputy Manager of Government Business in the Senate, wheeler and dealer, Scott Ryan. He’s in Canberra. Hi there Scott.


EPSTEIN: I’m well. Ah have you booked a, ah, skiing holiday for the 2nd of July?

RYAN: Well I played rugby at school because I actually wasn’t good enough to play Aussie rules, so I’d never dared go near the ski slopes. One needs to know their limits and I know skiing is well beyond mine.

EPSTEIN: Are we going to get a double d on the second of July?

RYAN: Look, it’s an option. The Constitution provides the option for when the Senate blocks legislation the Government thinks is important that the people can make that decision at an election and it’s an option if the Senate continues to even refuse to consider the ABCC Bill. Yeah, it’s not something new, the Howard Government brought it in, Julia Gillard and the Greens got rid of it, we promised to bring before the 2010 and the 2013 election and just two weeks ago the Senate voted even to refuse to debate it.

EPSTEIN: Can I put something to you, that those who voted for the Coalition could see you as constantly promising, never delivering. Debt and deficit disaster didn’t materialize into significant budget action, the GST was clearly being amped up by the Government, it was on then it’s off, now you’ve got an early election amped up amped up, if you back off that option, do you risk severely angering those who are keen to vote for you?

RYAN: Well on the debt and deficit firstly Raf, I think we actually got criticized for the first budget for actually acting too harshly and in some way contradicting what we said before the election, but it was motivated by the fact that we have long said and continue to say that the deficit that the Commonwealth Government accrues every single day is unacceptable. And a lot of the measure we proposed to get rid of that, including measures that Labor promised at the election, they voted to block. So I think on that front in particular, our bona fides are on display because we have made some very difficult decisions. On the GST, as I’ve said to you before, on all these tax issues, the idea that a group of people can get into a room and decide that they’re the self-declared experts and decide on a policy and then present it to the people is not going to work. We said we’d do this publically, so we’ve actually considered this publically over the last…

EPSTEIN: So would you be comfortable if there wasn’t an early Double Dissolution, and just August or something, that you wouldn’t see that as yet another raising of expectations and then dashing them?

RYAN: Well let’s see what the Senate does with the ABCC Bill. We want to bring it back on, we’re going to try and bring it back on. But obviously if that passed, that’s a key part of the Government’s agenda. You know, I’ve got a job to do, the timings of elections and the callings of it are a matter for the PM, but I’ve always made a point of, I don’t provide public advice to my boss.

EPSTEIN: I do, all the time. Tim Watts, do you think they’ll be a second of July Double Dissolution?

WATTS: Oh, look, who knows? It’s extraordinary isn’t it that since Malcolm Turnbull became Prime Minister we’ve seen a series of great soliloquies, the Prime Minister is Hamlet – to be or not to be, will he, won’t he? The GST, the early election, frankly it’s all just a distraction. What I’m interested in is not the timing of the election, it’s the substance of what’s at stake at the next election. I would much rather debating the merits of a tax policy if the Government got around to having one. I’d much rather…

EPSTEIN: They could come up with a comprehensive set of ideas and policies. It’s not necessarily a disadvantage, is it, to not have a detail in an area where you have detail at the moment, say like negative gearing, it’s not necessarily a disadvantage is it?

WATTS: It’s quite an extraordinary proposition isn’t it Raf. We’re the opposition, we are the alternate Government, we have an actual Government that ought to have actual policies.

EPSTEIN: But the big ideas normally come in a Budget, they don’t normally come just because the Opposition wants them to come…

WATTS: Well big ideas ought to flow from the fact that we have a Government. Malcolm Turnbull was elected Prime Minister by his colleagues about 6 months ago now on the promise of economic leadership, that he would make the case to the Australian people that Tony Abbott was unable to make, about the economic narrative of where we’re going as a country. Now since then, the Australian public have been relieved that we have a Prime Minister that now talks in full sentences. However, they’re a bit disturbed how many sentences there are, and they’re even more disturbed about how many of those sentences are about Malcolm himself. I’d rather see the Government doing less talking about itself, less talking about its internals and its past and who stabbed who in the back and more talking about the future of this nation, the policies we need to make our country more prosperous and fairer.

EPSTEIN: Scott, can I just ask you if there would be, or if you’re in favor of, preference deals. Now most people don’t understand preference deals, every time I look into it I have to remind myself of the detail. However just to give people the idea, the rumor, and I think it’s probably a bit more than a rumor, that the Liberal Party would preference the Greens ahead of Labor in crucial seats like David Feeney’s, Wills, maybe in Tim’s seat. Now that was very different to what Tony Abbott did at the last election when the Greens were placed last in every seat. Is it a good idea, it could work tactically, but are you comfortable with the idea?

RYAN: Well at every election before the 2010 state election that’s exactly what the Liberal party did. And for years before that I was an elected Party office bearer I was arguing the case against that. I remember at the 2010 federal election I lost the argument just as I lost the argument in 2007. But in 2010 later that year of course Ted Baillieu made that decision and that followed through again in 2013. So look, I think these are matters that we need to remember, they’re only what’s printed on a how to vote card, the Party doesn’t direct a preference. In the House of Representatives the vote goes…

EPSTEIN: But they make a difference…

RYAN: They do. They do make a difference. But it’s important to know what we’re trying to do in the Senate, because we’re trying to have the Senate voting system to be the same as the House, where you mark the ballot paper that’s where the vote goes, it’s entirely in control of the voter. That’s not the case in the Senate at the moment. So look, these are matters that will be decided by the federal organisation, the federal director in consultation with the federal leader, I don’t think that it’s something that occupies the public mind… Labor have done more preference deals with the Greens to get elected than any other party. The Greens have never done a preference deal with the Liberals, but the Labor Party have done preference deals with the Liberals and they’re upset now because they are losing their own seats to the Greens.

EPSTEIN: But isn’t it that…

RYAN: These are not seats that the Liberal party could ever win.

EPSTEIN: You need the deals perhaps more I’m guessing, and I think the figures help me out on this, Greens people are more likely to preference Labor anyway…

RYAN: About 80 per cent of the time.

EPSTEIN: But if you get into a formal deal with them, so you sort of preference against Tim in a seat like his, but in other places like La Trobe and Deakin, seats like that or maybe Anna Burke’s seat. You might get over the line if you did a deal with the Greens. I mean there's more advantage in that deal for you than for Labor.

RYAN: Well no I disagree. In 2010 Labor actually won the Federal Election and got all Greens seats in a coalition government because of preference deals with the Greens. Let's not pretend Labor don't have dirty hands here. They do a preference deal with the Greens at every election. John Brumby used to scream about it, but he did preference deals with the Greens, and then they relied on the Greens in an effective coalition agreement to maintain their position in government after the 2010 election. Now there's only one example of this historically, and the truth is the difference is, if I recall, was roughly, instead of 80% of Greens preference going to Labor, 70% of preference went to Labor. So we’re talking on the margins. This Labor hysterics is all about the fact that their voters are abandoning them.

EPSTEIN: There are I think there are lists today in the Oz, in the Australian newspaper, Tim, of I think 12 seats that were won off the back of Greens preferences. It would make a difference to some seats wouldn't it, if there was a formal deal between the Liberal Party and the Greens. I know there are people who understand it but just a reminder, you preference me here I'll preference you there. So where you got a stronger vote you get a bit of a bounce. I mean it would make a difference, I don't know if it would make a difference in your seat but it would make a difference to the outcome.

WATTS: It does make a difference, but we should be clear here that the proposal as articulated in the newspapers this morning wasn't that the Greens would direct preferences towards the Liberal Party, rather that they’d run dead. They’d have what's called an open ticket. They wouldn't direct preferences in any way, and that does effect preference flows, but less so than of the preference direction. What that means for your listeners Raf is that, take a seat like Deakin, a marginal seat in Melbourne, sitting member Michael Sukkar, literally Tony Abbot's numbers man as we found from the Karvelis book recently, stridently against Marriage equality…

EPSTEIN: I think you mean Savva.

WATTS: Niki Savva, apologies. Stridently against marriage equality, wrote an Op Ed against Safe Schools in the paper on the weekend. An open ticket would see the Greens Party saying that there's no difference between Michael Sukkar and Tony Clark, the Labor candidate in Deakin.

EPSTEIN: It's not quite saying that, it's saying you can make up your own mind.

WATTS: It's saying that the position of the Greens Party is that they will not make a recommendation over literally Tony Abbott's numbers man against a Labor Party candidate. Now what that means is that it makes it more likely for Liberal Party MPs to be elected in marginal seats. Now I think that is a travesty for progressive politics. I went into politics to actually get something done, to get into government, to deliver funding for schools, education and to expand equality of opportunity economic and social. I didn't get in there to be a protestor. Now if the Greens want to do a deal to get more protestors elected in the inner city, who are unable to do anything in government, in exchange for more Liberals being elected in marginal seats and delivering government to the Liberal Party and the conservatives, then I think they are going to have a lot to answer for the progressive movement in the future.

EPSTEIN: I don't know, I think the Greens do fairly in the Senate. However, 1300 222 774 is the phone number. You might have a query for Tim Watts or Scott Ryan yourself. The Business Council have come out they… remarkably it is to talk about it… however they have come out with a series of ideas. Everyone can grab something that they like, as John Daley told John Faine this morning, but Scott, can I put to you, the Business Council, along with the Productivity Commission, the Reserve Bank and others, are looking at doing something on negative gearing and the way it interacts with the Capital Gains Tax that would put you in an odd position wouldn't it, to not do what the Business Council and the Productivity Commission and so many economists are suggesting.

RYAN: Well the Reserve Banks have done some things on loaning residential property investment, which is not doing the same something on negative gearing you know they're … they asked the banks and they’ve changed the evaluations ratios.

EPSTEIN: The Government though has said negative gearing fuels house prices as well hasn't it?

RYAN: The point that I make though is that just because the Business Council of Australia has put out a policy we're not beholden to any particular group, they are one stakeholder in this debate, and as the Prime Minister has made clear, we're not going to see a policy introduced that damages the value of the asset of the single greatest asset most Australians will ever hold.

EPSTEIN: Will you agree that most stakeholders think something should be done? Might not go as far as Labor but most stakeholders think something should be done?

RYAN: Well this is the thing, Labor policy isn’t just on property investment, it actually limits the ability of people to claim the costs of investment generally against their income, and that will have an even more profound effect. It can have an impact on thousands of small business around Australia, and that's why you can't do these silver bullets solutions that Labor has, like the Marlboro Man is apparently going to fund our schools for the next ten years. No one believes that to be true, even the Parliamentary Budget Office says that is an estimate of low reliability, but Labor claims that they've funded schools and they haven't. This attempt at silver bullet solution has the complexity of damaging house prices which, where it happened any way in the world, and even in where it happened in places like Melbourne in the early 90s, has a profound economic impact and it has a profound and negative economic impact. We don't want to go down that path. We're seriously considering all the tax options and Tim criticises us for taking the time to consider it? Well I'll take that criticism, because when we come forward before the Budget with our policy proposals, everyone will know we have considered all the options rather have these bumper stickers solutions that Labor tries on.

EPSTEIN: Feel free to respond Tim. However, it is a big idea, it is a big change. Most Australians have most of their wealth in their home. There is risk associated with your ideas, is there not?

WATTS: No, Australians have nothing to worry about in terms of the value of their home under Labor policies. It is a bold policy, we have articulated a detailed tax policy across issues from not only the tobacco exercises that Scott was talking about, but also superannuation concessions that allegedly the Government is considering as well, around negative gearing, around a whole gamut of issues, fifty policies last year. Now the extraordinary thing though is that Malcolm Turnbull, who came to the Prime Ministership to deliver this economic leadership that Tony Abbott allegedly wasn't providing, is left with Tony Abbott's tax policy, which is nope, nope, nope. There is a veritable chorus of people saying that we need action, not negative gearing now, Saul Eslake…

EPSTEIN: Not everyone's urging people to go as far as Labor's going to…

WATTS: There is a veritable chorus of people saying that something needs to be done here and Malcolm Turnbull's position is nope, nope, nope. It's Tony Abbott's policy on tax and it's a shame how he's descended into the leadership of this country.

(News Beak)

EPSTEIN: I did not know that promo was going to be on while we were talking to Scott Ryan and Tim Watts. Look gentlemen, I get you both to address this kind of attitude. We address it from time to time I think it needs to be addressed, let's me read two texts. “The government's going to die from dithering and the opposition is increasingly sanctimonious, they both need a good hard look at themselves. The electorate has had a belly full of Canberra.” Someone else texting, “I won't be skiing in July. I'll be busy carving cows, listening to politicians deciding if they are more important for nation building then me”. Scott, do you think we are, and I'll include the media in this, do you think we are offering up a better offering to people in recent months, or has nothing changed?

RYAN: I think we are. I’m conscious that no one should go into politics hoping, or indeed journalism hoping, for acclamation from the public. Politics is in many ways a necessary evil, but when we said we would go the way we have discussed tax, we will do it public, we would let people have their say, that it would be both inside the Government, inside the Liberal Party, as well all the stakeholders. When we make our announcement at some point before the Budget, so in the next 6 weeks or so, I think we can legitimately say that things been duly considered. The idea that all these decisions should be taken in two or three months I mean, in 1997-98 it took Howard and Costello over a year, the tax proposals that came out of the 85 tax summit were in development for a year, so these are serious issues that require serious consideration and that takes a bit of time. We've decided to do it publicly rather than in secret, as Labor did with the Henry Tax Review, and I think that will… well I'm not going to expect that it's going to get public acclamation. I think when we go to the people with it will earn their trust.

EPSTEIN: Tim, are we giving people a bit more what they want, a bit more meat off the bones?

WATTS: Well we haven't seen any of it from Malcolm Turnbull yet. Scott Ryan was talking then about going through a diligent process of tax reform. Okay I can I can see that if I could see a substantial process. The process that he talked about earlier, they involved Green Papers, White Papers, summits, bringing people in, they actually had a fact based discussion in the public arena. It wasn’t a situation of having  the Treasurer and a Prime Minister having a will they won't they behind the scenes, musing publicly on the one hand on the other hand but not actually doing anything, not actually arguing a case. The tax summit, the Treasurer Paul Keating went into that tax summit with a very specific proposition, he argued it hard, lots of it got up, we got CGT out of it, we got FPT out of that…

EPSTEIN: Didn’t get GST out of that.

WATTS: But he didn’t get GST out of that. But he at least argued the case. Now what we've seen from the Treasurer Scott Morrison, and from Malcolm Turnbull is, you wouldn't know what they stand for. They talk a lot but they don’t do anything.

EPSTEIN: Can I just ask you both about Niki Savva's book, and only from this perspective? She's detailed a lot of the dysfunction, I think a lot of that dysfunction is backed up in other books like that written by Peter Van Onselen, Wayne Errington, but separate question and I'll start with you Scott. Would Peta Credlin have received the same internal criticism and press criticism if she'd been a man?

RYAN: Look Raff, I've made it a point to never comment on staff. They don't seek public office. They're not public officials and I'm not going to add to that.

EPSTEIN: Did her gender engender any internal criticism though, cause she clearly she feels it did?

RYAN: Look, I don't think it's appropriate for me to add public comment to this. I mean staff don’t seek public office. We put our names on the ballot paper. Our staff, and I'm sure Tim will agree with this, work particularly hard and it is not an easy job. There's as much time away from their families as it is for MPs, and I've never provided comment around staffing matters publicly, Labor or Liberal, when there's been other issues in the public domain. I don't plan on starting today.

EPSTEIN: Tim was gender an extra weight for Peta Credlin?

WATTS: Some of the discussion has made me uncomfortable to be frank, but I in general agree with Scott in that I think staff in a general principle get a rough trot in politics. It is an extremely hard job generally, you don't get to defend yourself, you don’t get the same platform to defend your integrity, your reputation as political principles do. So I think it is incumbent on members of Parliament to go into bat for staff, because they can't defend themselves a lot of the time. That being said, some of the conversation, particularly around Peta Credlin, has made me pretty uncomfortable; it's not the kind of critique that she would have received if she was a man. I think that is pretty indisputable.

EPSTEIN: Scott, there are a lot of Ministers, including the Deputy Prime Minister, willing to criticise Tony Abbott's Prime Ministership in a significant way. Does it paint a fair picture of how difficult it was to produce policy under the former Prime Minister?

RYAN: Look I haven't read it all I've read part of it.

WATTS: You feature in it, Scott.

RYAN: I know. I think politics over the last ten years has changed, and I think some elements have gotten a little bit harder. One of them is that advice is now much more contestable. So for example, to use a debate like the Renewal Energy Target, in the old days in the 80s when it was a tax summit or something, we all agreed on the facts and argued about what we wanted to do. But we had a big debate on the Renewal Energy Target, was it in fact a driver of electricity prices going up or down, and so we often start from different points and I think that has made politics a bit more complex. We're also dealing with some more complex issues. It is difficult, for example, to decide whether more money in schools makes a difference to outcomes. Now Tim and I may have different views on what happened on the last ten years, so I think that has made politics more difficult, and to be honest I think both sides of politics have found this over the last decade, including the end of the Howard government.

EPSTEIN: Do you think Malcolm Turnbull's the answer to the question whether or not everyone in the office in the last three times has just not been up to it, or if the actual system has systemic problems? Is the fate of his Prime Ministership an answer to whether or not we're all a bit stuffed?

RYAN: No, I don't think there is a systemic problem. I think Australia, you know, has been particularly blessed, with I've always said said that Bob Hawke was a remarkable leader, and so was John Howard, and John Howard was very complimentary about Bob Hawke as well. I think that the job is incredibly difficult and I'm glad that it is not something that I ever had aspiration or opportunity to do, because I find it an extraordinary difficult job to be on demand. I think the demands on the time… it's the one thing you can't buy more of, no matter how many staff you get, how wealthy you get, you... if you're a businessman, businessperson, you can’t get more time, and I think it's the new political environment, with all the demands all the stakeholders, makes it a lot more testing.

EPSTEIN: Gentlemen, thank you both for coming along. Tim Watts is the Labor Member for Gellibrand, Scott Ryan a Minister in Malcolm Turnbull's government.