LEIGH SALES:
Prime Minister, thank you very much for joining us.
PRIME MINISTER:
Great to be with you.
LEIGH SALES:
Commentators are fairly universally interpreting the passage of the ABCC Bill and the Registered Organisations Bill as victories that you badly needed after a bruising year. Is that how you see it?
PRIME MINISTER:
I see it as a great win for the economy, Leigh.
These are very important economic reforms. They are fundamental to the National Economic Plan that we took to the election, because what this does is restore the rule of law to the construction sector - which is eight per cent of GDP, employs a million Australians, 300,000 small businesses and it has been characterised by lawlessness, thuggery, intimidation for far too long.
So restoring the Building and Construction Commission will set that to rights and at the same time we’ve all been shocked by the level of corruption, mismanagement, misappropriation from union officials, from union bosses that Mr Shorten supports and backs and the Registered Organisations Bill which is now law, will ensure that they have the same levels of disclosure and accountability that company directors have to their shareholders.
LEIGH SALES:
One of the compromises that you’ve made to get the bill through is that there is the introduction of a two year transition period. Given that your goal is, as you say, to change behaviour in the building industry – you point out its worth eight per cent of GDP – don’t you want to do that as fast as possible? And doesn’t the two year transition period undermine that?
PRIME MINISTER:
Well it only applies to - its limited, it only applies to enterprise agreements that have been entered into prior to the Building and Construction Commission Bill being made into law and so the new code applies prospectively. But it means that those companies over the next two years are still able to tender for government work even though their enterprise agreement is not compliant. But they will have to start bringing their arrangements into line with the code from day one and of course all of the other provisions of the law, the tough cop on the beat, the ability to call people in for examination, the trebling of penalties, all of those things apply to everybody. Immediately the bill is given royal assent.
LEIGH SALES:
One of the deals extracted by the Nick Xenophon Team in exchange for its support of the ABCC Bill was that on government projects worth more than $4 million preference should be given to local suppliers and labour. Isn’t that a form of protectionism and how can a Liberal Government that is staunchly in favour of the free market sign up to something like that?
PRIME MINISTER:
Leigh, what the arrangement does is it requires suppliers to demonstrate the level of local content and the local support, if you like, that they have in the services and in the work that they are doing, in the project they are delivering. So it doesn’t mandate it, it doesn’t say you have to do it, but it raises awareness and obviously that will become - as you raise awareness, as we do in so many other areas, you will see companies and contractors wanting to be seen to be good citizens and engage better and more productively with Australian suppliers. I think it’s a worthwhile - it’s a very worthwhile addition and worthwhile reform and I believe again over time that we’ll see more jobs, more growth here in Australia.
LEIGH SALES:
When you look at some of the deals you’ve done with the crossbench in order to get this bill through, many of them have nothing to do with say unions or workplace reform. They’re pet projects like water flows or the ABC - different things. Is your legislative agenda looking forwards, going to be held hostage by all of the niche interests that all of the crossbench has?
PRIME MINISTER:
Well Leigh that’s the nature of politics. We don’t control the Senate and so to secure the passage of our legislation through the Senate we have to negotiate with the crossbench. After the double dissolution election, the two triggers of which, Registered Organisations and ABCC are now passed by the Senate. So that has justified and vindicated our decision to go to a double dissolution election.
After the election, people said ‘whoa you’ve got this big crossbench, you won’t be able to get anything through the Senate’ – well we’re demonstrating that the Parliament is working. Our superannuation reforms have passed, our personal income tax reforms have passed. We’ve got now around $20 billion of gross budget savings through the Senate and that demonstrates that we are making the 45th Parliament work.
LEIGH SALES:
$20 billion is still a long way though away from where you need to be to get the budget back into surplus.
PRIME MINISTER:
Well there is a lot more work to do, that’s right. And that is why we have a lot of work ahead of us, but we are making progress. We’re committed to bringing the budget back into balance because we don’t want to leave our children and grandchildren with an enormous mountain of debt. Which can only mean – if we don’t live within our means, that they would have to pay higher taxes or receive lesser services from government or probably both.
LEIGH SALES:
I’ll come to some of those economic questions in a second and some of your agenda but just on another matter today. The Senate amended the Government’s backpacker tax and revised it down to 10.5 per cent. It now goes back to the lower House. Your Finance Minister Mathias Cormann says the government won’t support the 10.5 per cent change. Does that mean the backpacker tax reform is now dead?
PRIME MINISTER:
Well what that means is that unless the Senate is prepared to support the 15 per cent tax rate, then the rate will be 32.5 per cent and really the call should be on Mr Shorten as Leader of the Opposition, as an alternative Prime Minister, as he seeks to be. Why does he think for the simple reason of political opportunity - that’s all it is. It is obvious that this a good reform, it’s a good compromise, 15 per cent is a fair rate. We started off at 19, we’ve compromised, came back to 15.
Is Bill Shorten really going to impose this additional burden on all of those growers, all of those businesses in Australia that need backpacker labour? Particularly during the season. Is he going to impose it on them simply to show, make some vindictive point, because he’s so bitterly disappointed that our reforms to hold union bosses to account, got through the Senate?
LEIGH SALES:
This is the final sitting week of Parliament as we know so I want to spend a little bit of time looking forwards to next year, to 2017. So you can update the viewers on some of your priorities. What are going to be the first pieces of legislation that you put up next year?
PRIME MINISTER:
We will be continuing with our big business enterprise tax cuts, as you know, we’re presenting cuts to company tax starting off with the smallest businesses, businesses with turnovers up to $10 million. Then over about ten years, giving all companies a reduction in company tax down to 25 per cent.
We’re doing that because that supports investment. If you get more investment, you get more jobs. We’re seeking to reform childcare to make it better targeted so that it supports more effectively, families on lower and lower-middle incomes, and it better supports women seeking to go into the workforce, to stay connected with the workforce while of course while they’re having a family.
So there are so many reforms, our primary healthcare reforms are another very important example. Our Cities Agenda - you know for the first time, a federal Government is seeking to work collaboratively systematically with state and local government. We have City Deals with Townsville, Launceston, Western Sydney – at the heart of which is the big new Western Sydney Airport. These are all gigantic changes in the way the federal government does business.
Underlying all of that is our Innovation Agenda, because we know that if we are to remain competitive, prosperous, strong, high-wage first-world economy with a generous social welfare safety net, we have to be as smart and as fast and competitive as we can be. That’s why our Innovation and Science agenda is central to everything we’re doing.
LEIGH SALES:
If I can ask about the company tax cuts, have you been having discussions already with the crossbenchers on that or are you leaving it until next year?
PRIME MINISTER:
Well we talk to the crossbench all the time Leigh.
LEIGH SALES:
And do you have any indication if you’re going to get the numbers to get that through.
PRIME MINISTER:
Well all of these negotiations are best conducted privately. As you can see, we’ve been effective at negotiating with the crossbench, that’s been demonstrated especially over the last two weeks. But we will continue to work with the crossbench. We respect every single member of the Parliament, every single member of the Senate. Each of them is entitled to have their say, to cast a vote in the way they think fit. We don’t take any one on the crossbenches vote for granted. We don’t take anyone’s vote for granted. We seek to win their support.
LEIGH SALES:
How are you going to deal with your Tony Abbott problem in 2017?
PRIME MINISTER:
The reality is we have a strong team, of which Tony Abbott is part. It is a very strong team, a united Coalition team
LEIGH SALES:
Prime Minister I’m being told the bells are ringing, that there’s a division in the Parliament, are you going to have to go? Is that right?
PRIME MINISTER:
Well if that is the case, I will have to go.
LEIGH SALES:
That is unfortunate.
PRIME MINISTER:
Thank you very much Leigh.
[ENDS]