RAPHAEL EPSTEIN: Joining me is Steven Ciobo, the Member for Moncrieff, Minister for Trade, Tourism and Investment, he is of course part, of the Prime Minister's team. Good afternoon.
STEVEN CIOBO: Good afternoon Raph, good to be with you.
RAPHAEL EPSTEIN: And Tanya Plibersek joins us as well, she is Deputy Leader of the Opposition, Shadow Minister for Education and Shadow Minister for Women, part of Bill Shorten's team, of course. Good afternoon.
TANYA PLIBERSEK: Hi Raph, how are you?
RAPHAEL EPSTEIN: Okay, Steve Ciobo, can I start with you and company tax cuts? I don't know if you wish to hit for six Emma Alberici's entire analysis the Prime Minister did, but I'll zero in one thing and let you go where you wish. A fifth of Australia's biggest companies haven't actually paid tax, for the last three years, isn't that a significant argument to suggest they don't need a tax cut?
STEVEN CIOBO: Well Raph, let's look at one of those companies, which is Qantas, which I notice has been the focus of some discussion. Qantas lost billions of dollars. Lost, not as hidden, not as put away or hidden under the couch, lost money through, loss making operations. Now that means that they are perfectly entitled to carry those losses forward, and you know what, Raph? What I find incredibly bizarre, frankly, about this analysis of company tax and the suggestion that these big, greedy corporates are somehow doing over the Australian public; you know who the shareholders are of that business? They're mum and dad Aussies. It's basically every single person with a superannuation fund, whether it's an industry superannuation fund or their own private superannuation fund, these are the people that own these companies that they're talking about. So, before people start hyperventilating and suggesting that there's some grand conspiracy or making a suggestion that-
RAPHAEL EPSTEIN: Can I stop you there, Minister?
STEVEN CIOBO: Sure.
RAPHAEL EPSTEIN: I'm not sure that, I mean, I don't know about politicians, I don't hear Emma Alberici hyperventilating. I'll ask the question again, I'm not sure that you've addressed it; if a fifth of the biggest companies are already not paying tax, isn't that a significant argument for the reason they may not need a tax cut?
STEVEN CIOBO: I don't think you heard a word I just said. The reason they didn't pay tax, in Qantas' case, and I can't go into every single company but I'll pick Qantas as the most iconic Australian business, is because they lost money. You don't pay tax when you lose money. I mean, this is my point, and what I was then broadening out to, I mean, I know you say I'm not answering your question but I am very directly, I couldn't actually be more directly answering your question. What I'm making very clear is that the suggestion that companies are somehow cheating the Australian public, that they're not putting their shoulder to the wheel, they're not paying their fair share; the people who are beneficiaries of profitable Australian businesses are the shareholders; and the shareholders aren't rich people living in Toorak. It's mum and dads who have superannuation funds; they're the ones who are the beneficiaries because this is what provides their retirement income.
RAPHAEL EPSTEIN: Tanya Plibersek I'll ask you about the medium range tax cuts we've already got, what do you make of what Steve Ciobo had to say?
TANYA PLIBERSEK: Well, Steve's talking about, you know, mum and dad shareholders and we are, most Australians are, shareholders through their superannuation but most Australians are also taxpayers and I think, most Australians who are pay-as-you-go, ordinary income earners would be pretty surprised to know that Qantas hasn't paid any tax in ten years. They'd be pretty surprised that one in five of our largest companies manage not to pay tax because most ordinary pay-as-you-go taxpayers certainly have to. And your ordinary taxpayers are facing a tax increase under this government because of the increase in the Medicare Levy. So, we're gonna have big companies given $65 billion worth of big business tax cuts, we've got people on more than $180, 000 a year getting $19 billion worth of tax cuts over the next decade and we've got ordinary Australians paying $44 billion more tax over that same period. I think it's a bit rich and I think it shows how superficial some of these comparisons have been, people saying that we need to drop our tax rates like the United States. First of all we know that most companies aren't paying the headline tax rate and secondly, we know that in the U.S. a lot of companies are paying tax at both federal and a state level.
RAPHAEL EPSTEIN: Can I just ask you though, about where this leaves Labor? Certainly, there's going to be an election within 12 months, if not you know, within six, seven, eight months. At the moment you haven't given a position on the tax cuts that are now there for companies with a turnover of up to $50 million. So, if you don't support the government on giving a tax cut to businesses with a turnover of up to $50 million, you're voting for a tax increase on hundreds, if not thousands of companies around the country, aren't you?
TANYA PLIBERSEK: Yeah, well we've made our position clear on companies with at turnover of up to $2 million and we'll be very clear before the election when it comes to other thresholds-
RAPHAEL EPSTEIN: Well, you're kind of caught there aren't you because if you don't support the government up to $50 million, you're voting for a tax increase?
TANYA PLIBERSEK: Well, not really. I think most Australians understand that our priorities have to be with low and middle income earners and at the moment we've got a government that's proposing to hike taxes on low and middle income earners who had no wages growth, and do it in order that they can give people on very high incomes and big businesses a tax cut, I think most Australians see that as pretty unfair.
RAPHAEL EPSTEIN: Let me give Phillipa a go in [inaudible] on what companies do and don't pay when it comes to tax, go for it Phillipa.
CALLER 1: Thank you for the opportunity. Having read Emma's brilliant piece and I missed the question late at night but we'll have to deal with what ABC gives us. There is a song at the moment that rivers run dry; when you have such grossly lax corporate tax laws, with no auditing and no national ICAC, and when you have the Murray Darling, whole system-
RAPHAEL EPSTEIN: Try and keep it narrow if you can, Phillipa.
CALLER 1: I wonder why this is happening under the Liberal watch. This worries me, and also, who is checking on the defence systems and our hospitals?
RAPHAEL EPSTEIN: Look Phillipa, I'm gonna cut you off there, just because I wanna try and keep it on corporate tax at the moment. Steve Ciobo, I'll throw that at you, I mean she clearly feels, Phillipa, that not nearly enough is being done to make sure the bigger companies pay their fair share.
STEVEN CIOBO: Well, the statements are factually wrong. The suggestion that companies aren't audited is just plain wrong; any company that's listed is required to be audited. There's actually and auditor's report that's part of the annual report the company does, so to say it's not audited is just a complete incorrect statement of fact. But I go back again; if companies aren't paying tax, and it was interesting to hear Tanya's comment because she tried to say something sympathetic about suggesting they should make more of an effort, but didn't actually commit to any action whatsoever. Because Tanya knows, either she's going to announce that Labor is going to deny companies the ability to deduct losses from income or, they're gonna stick with status quo, and I can tell you already, that they'll stick with the status quo. So Tanya's job today is just make sympathetic sounds but commit to absolutely nothing. In terms of taxpayers, as I said, the reason they are not paying tax in the case of Qantas is because they have made massive losses. Now they didn't tap into employees’ pockets to fund those losses, they didn't go back to share holds and say "let's rip money out of superannuation, to pay for those losses," they had to carry those losses within the company. And this is the sound management that has seen Qantas, not only continue to function when for a while there, we thought, let's be frank, we thought Qantas was going to go to the wall, and that thousands of people would lose their jobs. So, full credit to Alan Joyce and the board, for the outstanding job that they did to steer Qantas through some pretty tough times, to keep thousands and thousands of Australians employed in jobs and also now, deliver a direct dividend back to every mum and dad with a superannuation account; every single person with a superannuation account, income that they can rely on to pay for their retirement.
RAPHAEL EPSTEIN: Tanya Plibersek, I'll give you a chance to respond. [Phone number] is the phone number, it's 16 minutes past five. Steve Ciobo is the Trade Minister, Tanya Plibersek is the Deputy Leader of the Opposition. We will get on to the future of the Deputy Prime Minister and also we've got a chronically low number of people buying private health insurance. Tanya Plibersek, if you could just respond to what Steve Ciobo had to say but just, maybe people are fine with you only talking about tax cuts on businesses up to $50 million, really close to the election but, don't you have tonnes of people in business around the country? I don't know how many small and medium businesses there are up to $50 million. You need to tell them what you're going to be doing with their taxes.
TANYA PLIBERSEK: Sure.
RAPHAEL EPSTEIN: Quite a few. Before the election.
TANYA PLIBERSEK: Yeah sure and we'll be very clear about that but I thought it was pretty funny today to hear that one of the biggest advocates for corporate tax cuts, Alan Joyce, his company hasn't been paying any tax for decades. So, a bit rich to have all this pressure from businesses that are not paying anywhere near the headline rate of tax and, I was just reminded by Phillipa's comments that in the first term of the Liberal's Government, in the first 19 months, 4,400 jobs were taken out of the Australian Tax Office. Now, I think in many respects, we do have strong laws to protect against avoidance, the resourcing of the Australian Tax Office to pursue people who are doing the wrong thing is very important and, you know, the big companies are pretty good at moving their profits offshore and having their profits considered in other jurisdictions, and so on. We need to close down those loopholes and we know just as soon as we close them down that clever tax lawyers find new ones. So it is a process of constant vigilance; you have to have people in the ATO, not just closing down the loopholes but policing the rules that we have in place.
RAPHAEL EPSTEIN: Let me give a chance to Paul in Geelong. Go for it, Paul.
CALLER 2: Yeah g'day Raph, how you going?
RAPHAEL EPSTEIN: Yeah good.
CALLER 2: Look, I'm just a little bit, I'm just driving home at the moment and I'm somewhat bewildered by the lack of understanding of the tax system that I'm constantly hearing. That includes Tanya Pilbersek, from about 15 minutes ago. Like, if I recall correctly, I heard her referring to depreciation as a method the companies use to minimise their tax and that's something that all taxpayers use to reduce their tax.
TANYA PLIBERSEK: I didn't say that actually. I don't know who you were listening to but that wasn't me.
CALLER 2: No, sorry Tanya, no, no, Emma Alberici, sorry.
RAPHAEL EPSTEIN: That was before five o’clock okay, so you agree with the government here or what's your point, Paul?
CALLER 2: Well to be honest, I don't agree with tax cuts, look, I'm a public accountant so I know a bit about this too. So I deal with companies that are have a $20 million turnover ...
RAPHAEL EPSTEIN: Right.
CALLER 2: And look, I'm not supporting tax cuts, but I find it very frustrating when I hear politicians and media experts discussing tax, but not understanding how they work.
RAPHAEL EPSTEIN: Okay, look, I can hear your frustration. Bill's in-store, what do you want to say, Bill?
CALLER 3: I just wanna say I agree entirely with what Steve has been saying. I'm a Qantas shareholder that bought them off the original float and, I sold them last Friday because we've had one dividend in ten years, and it was a fairly low one. So I think that shows that they haven't been making a profit anyway just as he's saying; a million dollar loss or whatever it was.
RAPHAEL EPSTEIN: Yeah they've been making a loss, that's one of the reasons they haven't been paying tax. We'll get onto the other issues in a moment, I wanna get a traffic check.
RAPHAEL EPSTEIN: And the opposition's Tanya Plibersek. Steve Ciobo if I can ask you about Barnaby Joyce. His current partner Vikki Campion had a number of jobs in Minister's office and in MPs offices; is the government confident that her work in those offices had nothing to do with her on-again, off-again relationship with Barnaby Joyce?
STEVEN CIOBO: Well Raph, I think this has been canvassed in media and discussed, frankly, ad nauseum for the past 72 hours. I mean, there's been nothing other than analysis around what the date was when she moved from this office to that office and, at what stage was she, officially, in a relationship with Barnaby. I mean, frankly there's not a single skerrick that I can add to the already-countless inches of newspaper columns and the countless hours of television commentary and in relation to this issue. I mean, look, it comes back to this: at the core of this issue is prudent use of taxpayers’ funds. And I think people, understandably and justifiably, can ask questions about have taxpayers’ funds been spent appropriately. Around the issue though is, a thousand hours’ worth of noise about was it appropriate, was it moral, should this have happened, should that have happened?
RAPHAEL EPSTEIN: Well it’s not that complicated thought is it? The code of conduct says you can't get a job in a mate’s office if you're that mate’s partner. Well I don't know that we have had a solid answer, on whether or not when she had those jobs.
STEVEN CIOBO: Well, he gave a whole statement on that, Raph. Well, we have a complete and thorough answer on that because Barnaby Joyce yesterday morning, gave a full statement that addressed exactly that issue that you're raising now, and that's why I'm saying there's nothing I can add to that nor do I intend to. To go back to my point though, I'm not going to get caught up in all the noise around this issue. I appreciate that everyone has an opinion about whether this is something to be ignored or something that should be taken into account. I do believe in prudent use of taxpayer funds, those questions are legitimate but, frankly, on this issue about timing and shifting from the office, he's given a full statement, there's been more analysis than any Australian could ever wade through, and I have nothing further to add.
RAPHAEL EPSTEIN: Tanya Plibersek, don't you need to prove there was an issue with the code of conduct? I'm not sure that any of your questions in Question Time have proven that there's any breach of the code.
TANYA PLIBERSEK: Well, Raph, I feel, like Steve, quite awkward discussing this because it's very difficult not to invade people’s privacies when we are discussing these issues. But I suppose, you could ask the question this way: the jobs in the other Minister's offices that were created for this person, were those jobs necessary? Were they created because that work had to be done? Would they have then paid at that pay level, in other circumstances, if they didn't have a particular person in mind for the job? And I think any sensible analysis would suggest that neither of those things is the case. So, as for prudent use of taxpayer money, it's pretty hard to argue that these jobs were created are necessary, and are necessary to be paid at this level. There are, of course, other questions about the expenditure of travel allowance and there are further questions that we went to today in relation to whether a gift of the value of $14, 000 approximately, worth of rent was properly declared by the Deputy Prime Minister. All of these things are things that he should be able to account for, and that the Prime Minister who, of course, has ultimately responsibility for his Prime Ministerial Code of Conduct should be confident that the Deputy Prime Minister has properly discharged his obligation to account for these things, and to make proper decisions about taxpayers’ funds.
RAPHAEL EPSTEIN: I'll just give Russell a go, calling from Middle Park. Go for it, Russell.
CALLER 5: Thanks Raph. Look, I appreciate what Tanya's just saying, just then. But look, I think that the people are getting sick and tired of all this issue. It's been going on for too long, and it seems to me that it's a distraction from the job that the Deputy Prime Minister, leader of the National Party, is supposed to be doing, in fact, the whole government. They've taken their finger off the pulse and it seems just to be a big distraction. Now, is this gonna go on as long as the ABC program they had years ago, ‘Blue Hills’? I mean it's just going on and on. And it seems to me that -
TANYA PLIBERSEK: I think that was more fun to watch!
RAPHAEL EPSTEIN: Well Russell, look, you raise a point about this going on. Steve Ciobo, I might ask you, I guess about next week. The Prime Minister's travelling to the States to meet with President Donald Trump. Are you comfortable Steve Ciobo? I mean, Barnaby Joyce will have to answer questions about this next week while being Acting Prime Minister.
STEVEN CIOBO: Well, he's the Deputy Prime Minister of the country. I don't think anyone is seriously making or able to sustain the charge that this is, in any way, impacting on his ability to be Deputy Prime Minister. People might say, as I said, some making suggestions it was inappropriate or whatnot, historically. But he's a guy who's on the public record over many, many years, making a very significant contribution to governing Australia, both in Government and in Opposition and he'll continue to do so.
TANYA PLIBERSEK: Well, Steve, I mean, I ...
RAPHAEL EPSTEIN: Quickly, Tanya.
TANYA PLIBERSEK: During Question Time this week, you were saying as I was, Barnaby Joyce's answers on things in his portfolio were hopeless. He was talking about the Inland Rail when he was talking about Tasmania and, I mean, he's just all over the place in his actual answers. You look at things he's actually responsible for and he's not able to account for his performance in those areas either.
STEVEN CIOBO: Well it's kind of ironic, Tanya, that you'd say that, I mean, I think the Opposition had two questions ruled out of order today. So you wanna have a go at answers?
TANYA PLIBERSEK: And we've asked him many about infrastructure and he hasn't been able to answer any of them.
STEVEN CIOBO: You wanna have a go about answers and you can't even get the 30 second questions right.
TANYA PLIBERSEK: And Raph, I'll just say this final thing, sorry, I'll just say this final thing, Raph. I think the most significant interventions have come from the former Nationals leaders that are out publicly now saying that his position is unsustained.
RAPHAEL EPSTEIN: People can peruse that on the ABC website. Just a brief answer to this one, Steve Ciobo: are you confident Barnaby Joyce will be leader of The Nationals in the next federal election?
STEVEN CIOBO: Yeah, absolutely.
RAPHAEL EPSTEIN: It's about 28 minutes past five o'clock on ABC Radio Melbourne, let's just quickly sign off on the ever-growing problem around private health insurance. There are more people dropping out of private health insurance than there has been, I think, in the last seven years. This is the lowest proportion of the population covered since seven years ago. Can you actually fix that Steve Ciobo? Is something fundamentally broken there?
STEVEN CIOBO: Well, first of all, I recognise that there is a difference in approach on this between the Government and the Opposition. The Coalition is a firm believer in the value of private health insurance. We've introduced the largest reforms in a decade, it's produced the lowest changes in 17 years and frankly, it's in stark contrast when Labor was in power. Labor is very determined to, effectively, wipe out private health insurance. We are putting in place reforms to keep it as affordable as possible and that's why we've seen, as I said, the lowest changes in 17 years.
RAPHAEL EPSTEIN: Steve, if all the changes you've done, Steve Ciobo, are as good as you say they are, surely we'd be at a better place than having the lowest proportion of people insured in 7 years. Isn't there something major that needs to change?
STEVEN CIOBO: Well, if we want more people to have private health insurance, it needs to continue to become more affordable. Full stop, it's that straightforward. Now, if you put in place policies like Labor's proposing, which will see premiums increase, based on Deloitte modelling by 16%, guess what that's gonna do? That's going to see a further erosion of private health insurance coverage.
TANYA PLIBERSEK: So, Raph, I guess there's two things to say. Steve says that you know, we were terrible on private health insurance; I don't think there's a single measure I introduced as Health Minister that his Government has reversed or changed in any way. So, I'd be curious to know exactly what his criticism is and when his Government is going to reverse the changes that we made. Secondly, the reason people aren't taking out health insurance, the reason they're dropping out is because of poor value. It's expensive, it's risen in cost by $1,000 since the Liberals came to government and people feel like they're getting less value for it because the number of exclusions from private health insurance has continued to rise.
RAPHAEL EPSTEIN: Same question to you, Tanya: do we need a significant fundamental change to ensure we have more people?
TANYA PLIBERSEK: Yeah we do, absolutely we do and that's why we're asking the Productivity Commission to do a thorough review of private health insurance. Private health insurance continue to be very profitable; they're getting very large public subsidies and they continue to put their prices up. The last change that Steve's boasting about was at twice the rate of inflation. They've gone up as I said by $1,000 since the Liberals came to government. So, yes, this needs root and branch review and that's why we said we'll cap increases at 2% for two years, while we are looking at how we can ensure that is a healthy industry.
RAPHAEL EPSTEIN: Thanks to both of you for your time today. Enjoy your final Question Time for a little while tomorrow.
STEVEN CIOBO: Thanks Raph.
TANYA PLIBERSEK: Thank you. See ya.
RAPHAEL EPSTEIN: Steve Ciobo's the Trade Minister, Tanya Plibersek the Shadow Minister for Education.
- Trade Minister's Office: (02) 6277 7420
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