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Transcript 40252

Interview with Leigh Sales, 7.30 ABC TV

Photo of Turnbull, Malcolm

Turnbull, Malcolm

Period of Service: 15/09/2015 to 24/08/2018

More information about Turnbull, Malcolm on The National Archive website.

Release Date: 21/03/2016

Release Type: Transcript

Transcript ID: 40252

LEIGH SALES: And with me in Sydney is the Prime Minister Malcolm Turnbull. Welcome back.

PRIME MINISTER: Great to be here.

LEIGH SALES: You set off the ABCC as a trigger for a federal election – a double dissolution, no less a very rare event in Australian politics.  How many Australians do you think have heard of the ABCC, let alone care?

PRIME MINISTER: Well, I think many Australians, many if not most Australians are well aware of the level of lawlessness and corruption and waste in the construction industry. The Heydon Royal Commission set it out very graphically, if we had reason to doubt it, there is about a hundred officials of the CFMEU and members of the CFMEU facing court proceedings at the moment. It is a – there has been a degree of lawlessness in that construction sector that was identified by the Cole Royal Commission years ago, the Howard government set up the Australian Building and Construction Commission to have a strong industry watchdog which reduced disputes, it improved productivity by 20 per cent. The Labor Party in government, Mr Shorten in fact as the minister, abolished the ABCC and what have we seen – industrial disputes rising, lawlessness rising. Do you know, Leigh, nearly 70 per cent of all of the industrial disputes in Australia are in the construction sector and that tells you that Heydon was right and I believe we are right in saying there should be a special regulator.

LEIGH SALES: You mentioned improved productivity. But a report by the Productivity Commission in 2014 found that the introduction of the ABCC didn't improve construction productivity overall and nor did the removal of it had a negative effect. Overall its impact was fairly marginal.

PRIME MINISTER: Well, I think you’ll find that’s not right.

LEIGH SALES: Well, I’ve got the report right here.

PRIME MINISTER: I’m sure you do, but there is plenty of work being done on this by independent economics and others that show there was an increase in productivity following the introduction of the ABCC.

LEIGH SALES: But you’re going to call a double dissolution election over it. Is the whole nation's future at stake over this one oversight body?

PRIME MINISTER: No. A double dissolution election, let's be clear, is just an election. The reason it is special is because all of the senators go up for election instead of just half. The reason you have the double dissolution mechanism is because in the Parliament, in our Parliament we have a House of Reps and a Senate and they have pretty much equal power. So, when they can’t agree, when they persistently can’t agree, there has to be a mechanism for breaking that deadlock. So what happens is the bills on which they persistently can’t agree on are the trigger for a double dissolution election. After the election we come back and vote in a joint sitting on those bills, otherwise you would never be able to resolve dead locks.

LEIGH SALES: Nonetheless, you are using this particular bill and this particular issue as the trigger for an election. So you are putting workplace issues at the forefront of the political debate. Yet in nearly three years the Abbott-Turnbull Government has done nothing with workplace reform despite business begging for it?

PRIME MINISTER: Well, Leigh, I don't accept that. The Australian Building Construction Commission Bill to reinstate that has already been into the Parliament and rejected by the Senate once. It's back in the Senate now…

LEIGH SALES: But what about workplace reform more broadly?

PRIME MINISTER: … and they kicked it off to a committee. Registered organisations, which is another important bill which deals essentially says that unions and employer organisations should be as responsible and accountable as companies. That's actually been rejected by the Senate three times.

You see, Leigh, the real agenda here, the key agenda here, is how do we successfully continue to manage our transition from an economy that was fuelled by a mining construction boom to a new and more diverse one.

LEIGH SALES: And if you listen to anyone in business, what they will tell you is that a big part of that is reform of the industrial relations sector. The outgoing chief of the Australian Chamber of Commerce and Industry, Kate Carnell said in a recent interview her greatest failure was in being not able to get workplace relations on the government's agenda.

PRIME MINISTER: Workplace relations, I can assure you, is very much in our thinking. But whatever policies we take to the election, we will lay out well in advance.

LEIGH SALES: So, there will be a comprehensive workplace reform policy going to the election?

PRIME MINISTER: We will take workplace reform to the election as we always would. But can I just say to you, that the successful transition from a mining construction boom fuelled economy to one that is more diverse, and we are doing it successfully, we have 3 per cent real GDP growth, we have over 300,000 jobs created last year. There is no-one silver bullet, not workplace relations, not tax reform, not industrial relations reform. You need to be pulling on every lever and that's why we are.

So we have an innovation policy. We have a defence policy that’s going to put money into Australian industry. We’re reforming the competition laws so that small and medium business cannot be pushed out of markets by big business. We are ensuring that our bankruptcy laws for corporate bankruptcy laws emphasise business continuity so that companies that get into financial difficulty can't be shutdown pre-emptively by banks.

So right across the board, all of these measures are part of our economic plan. I know people like to focus on one thing or another and that's fair enough, but you have got to have reform right across the board and that's what we are doing.

LEIGH SALES: You have listed a range of policies there. When you look at what you have done as Prime Minister versus what Tony Abbott did as prime minister, across a whole range of policy areas, the ones you have named as well as climate change, defence, border protection, foreign policy, productivity, IR, education, same-sex marriage, the republic, there is very little difference. So then what was the point of knifing Tony Abbott?

PRIME MINISTER: Well, I don't want to buy into those sort of unpleasant metaphors.

LEIGH SALES: But it is something that people have been discussing in a policy sense?

PRIME MINISTER: Can I just say we shouldn't be using violent metaphors like that.

LEIGH SALES: Ok, I withdraw it – replacing Tony Abbott. So, what was the point of that because there has been very little policy change?

PRIME MINISTER: Well, that is quite untrue, if I may say so. Let me run through a few.

Firstly, we dealt with Senate voting reform – that was not on the agenda and it's done, it’s been voted in and done. Secondly, we have a cities policy. We are not limiting our support in cities and generally to roads, we are supporting mass transit and public transport. Media ownership reform – kicked into the long grass, never to be seen again apparently, taken out it is now the Government's policy and we will be proceeding to bring our media ownership laws into the 21st century. And right across the agenda of innovation, that is an innovation if you like of my Prime Ministership, that we are supporting investment in new start-up companies. We’re ensuring that our universities and our best minds and our big research institutions work closely with and collaborate with business. I mentioned the point about business continuity and changing corporate bankruptcy laws. Right across the board – between Tony and myself, Tony Abbott and myself – there is continuity. Of course, I was part of his government, part of his cabinet but there is also a great deal of change. So, as you go from one Liberal prime minister to another, you have continuity and you have change and there has been a lot of change.

LEIGH SALES: So when voters come to vote on election day, are they voting for three years of Coalition government, because it's not – you’re not a new Government?

PRIME MINISTER: They’ll be voting – well, voters always look forward. They will be voting for the next three years and they will be voting – they will be deciding who do they think is best able successfully to manage the transition of our economy so that we can ensure that our children and grandchildren have good, high-paying jobs in this, the most exciting time for Australia and this the time of the greatest economic opportunities. And the choice is between me and Bill Shorten.

LEIGH SALES: Let's drill down into your long-awaited economic policy. You’ve said numerous times that tax reform is an essential part of your economic plan. Is that still the case and will you be bringing out a tax package before the Budget on 3 May?

PRIME MINISTER: Well the Budget will be on 3 May and all of our tax measures will be set out in the Budget as they normally are.

LEIGH SALES: And why has it taken so long to bring out a tax package? Because when you first became Prime Minister you were saying that it was imminent that you’d be bringing something out.

PRIME MINISTER: I don't believe I did, Leigh, as a matter of fact.

LEIGH SALES: Well, you did in an interview with Fran Kelly. You said that it would be coming very soon.

PRIME MINISTER: 3 May is very soon.

LEIGH SALES: It wasn’t back in October though.

PRIME MINISTER: It is very soon. We are now very close to the Budget. Can I just say, I know, look, Leigh – the media craves constant news and it wants to have, it wants politicians to make decisions on the run and provide some new revelation every day. My job as Prime Minister is to make the right decisions and to do so carefully...

LEIGH SALES: But you have been in for six months now?

PRIME MINISTER: But after due-consideration and if you want a contrast, consider what Labor and Shorten have done. They have come out with a so-called negative gearing housing affordability policy which will stunt investment. At a time when we need more investment, they’re going to increase capital gains tax by 50 per cent. Now if you wanted people to do less of something, you put up the tax. Want people to smoke less, put up the tax on cigarettes. If you want people to invest less, put up capital gains tax. Is that what we want to do in Australia in 2016? Do we really want less investment? I think we want more. Labor clearly thinks we want less.

LEIGH SALES: Let me ask you about your tax plans – Arthur Sinodinos was yesterday floating the strong possibility of company tax cuts. On this program in December when I asked you about that, you said that the problem with it was affordability and that a company tax cut would be an enormous charge on the Budget at this time. Is that still your thinking or not?

PRIME MINISTER: Well, the problem is I was offering you, frankly, a penetrating glimpse of the obvious and I apologise for doing so. But any tax cut is a charge on the budget. And so…

LEIGH SALES: But you were implying then that it was going to be a big ask.

PRIME MINISTER: No, you see, this is the problem with the...

LEIGH SALES: So now you think the Budget can sustain a company tax cut?

PRIME MINISTER: This is your – your enthusiasm for putting words in my mouth is commendable.

LEIGH SALES: I just like clarity.

PRIME MINISTER: Yes, and you should let me finish my sentence and then I can be clear. Any cut in taxation in revenue is obviously a cost to the Budget, ok. So all of these – and everything has to be affordable and not all of the things you want to do in any Budget can be afforded. So the choice is always – and this is why Budgets have to be prepared with great care – the choice is between all sorts of competing priorities. And so all of these measures, all of these things that people have an interest in, there are dozens of submissions being made to the government about the Budget, people want this tax lowered, that benefit increased, that benefit lowered, here over here, that benefit increased at the expense of somebody else's benefits. All of those submissions are made…

LEIGH SALES: And so company tax cuts…

PRIME MINISTER: And our job is to weigh them up..

LEIGH SALES: Are you now leaning towards company tax cuts?

PRIME MINISTER: I'm leaning towards the Budget on the 3 May and all of those details will be in the Budget.

LEIGH SALES: By taking – I accept your point about wanting to work through things, but if I take that at face value, by taking so long, though, to release a comprehensive economic policy, haven't you allowed Labor to set the agenda so far in that area and don't the polls show the public marking you down for that?

PRIME MINISTER: Well, let me give you the point I was – continue the point I was making about Labor. So at a time we need more investment, they’re increasing the tax on investments. Is that well thought out? I don't think so. At a time when we want Australians to have a go and be enterprising, start new businesses, start small businesses, they are – with their negative gearing policy – they are going to prohibit anyone from offsetting an investment loss against their personal income unless it is a new residential property.

LEIGH SALES: There are countries overseas that have far less generous negative gearing policies than Australia. Their economies still tick over, they’re stock markets still grow, businesses still open up?

PRIME MINISTER: Let me finish. So that means under the guise of housing affordability you would not only be to not only buy an existing flat or a house and negative gear it against your personal income. You couldn't buy a shop, you couldn't buy a warehouse, you couldn’t buy an office suit. What’s that got to do with housing affordability? You couldn't buy a portfolio of shares in a public companies. What has that got to with housing affordability? You could not capitalise with a partner, a private company, to start a business and offset that against your income. Now, the reality is that most of us start off with only our human capital and we start off in life earning some money for ourselves, in our profession, in a job and we leverage that, we borrow money and leverage that to start something else. Labor is saying you can't do that anymore.

LEIGH SALES: But in your first interview with this program as Prime Minister, you said that the first principles of the Turnbull Government would be the free market. So why are you now violating that principle by backing negative gearing which is a Government intervention that distorts the market?

PRIME MINISTER: That is so wrong, Leigh. I'm sorry.

LEIGH SALES: It's a Government policy, it’s not free market.

PRIME MINISTER: No, Leigh, I’m so sorry. Negative gearing is income tax 101. It's not a tax concession at all. What it means is, it's a fundamental principle of tax law and has been forever, that you can deduct from your income the interest expense of money that is borrowed to purchase an income-producing asset.

LEIGH SALES: It is a Government incentive.

PRIME MINISTER: It is a normal tax deduction. The incentives – there are incentives given. We are providing incentives to invest in start-up companies, superannuation is full of incentives. There are incentives to invest in certain types of projects, water projects for example. Right across the country there are tax incentives. Negative gearing is not an incentive, it is simply a basic income tax principle.

LEIGH SALES: You’ve raised housing affordability, as well. You assume – you seem to assume – Australians want housing prices to keep rising when housing affordability is an issue of great concern to many Australians who might like to see housing prices fall?

PRIME MINISTER: Well, I don't think many Australians who own houses want housing prices to fall.

LEIGH SALES: But they want their kids to be able to afford them?

PRIME MINISTER: Let me go on. The reason why housing is not as affordable or accessible as it should be is because we are not building enough houses. Now, let me give you an example of what Labor's policy would do. If you take – under Labor’s plan, the only housing that investors can invest in and deduct their losses against their income would be new housing. Now, if you go out to the outer suburbs of Sydney or Melbourne you will find lots of new subdivisions and new houses and young couples will be buying house and land packages. And they are the bulk of those buyers for that. Under Labor's plan they will now be competing with investors.

LEIGH SALES: Isn't this going to my point that Labor is setting the agenda here because you are responding to their policy?

PRIME MINISTER: Well, they have put out a policy that is so ill-considered and so dangerous that it has to be it responded to. But just let me come back into the city.

LEIGH SALES: Briefly, because I want to [inaudible].

PRIME MINISTER: So we get into the city and we get close to the city and we have lots of apartment building. Most of those apartments are often tenanted, so people are renting them. The owners – naturally – are investors. Under Labor's plan, those investors when they sell can only sell to homeowners. So what will happen is the number of tenantable, rentable properties will contract. Rents will go up, people who can't afford a home but need to rent will have fewer apartments to rent and, of course, you will end up, because that will bring prices down, fewer new dwellings will be built.

What we need is a comprehensive approach to cities, which is part of my Government's policy, which will ensure that when we invest in infrastructure in cities, we get outcomes that will deliver more housing availability, planning outcomes, that will ensure more dwellings can be built and hence, there will be more affordable housing.

LEIGH SALES: Alright – now before we run out of time, a couple of quick other things. Why didn't your Treasurer Scott Morrison know before this morning that the Budget was moving forward to 3 May?

PRIME MINISTER: Well, Scott Morrison – the Budget was set down for the 10 May until I announced it was going to be on the 3 May.

LEIGH SALES: That didn't just happen at 10 o'clock this morning. You must have been thinking about it for a while. Was your Treasurer not in the loop?

PRIME MINISTER: I know, again, some people think politicians should engage in a sort of thinking allowed process. The Budget was on the, set down for 10 May until I stood up and announced it was going to be on the 3 May.

LEIGH SALES: Why was your Treasurer not a part of that process, though?

PRIME MINISTER: Well the Treasurer was aware that we were considering a whole range of options, but until I made the decision to change the date of the Budget, the Budget was on the 10 May.

LEIGH SALES: And do you think that your relationship with the Treasurer is functioning effectively?

PRIME MINISTER: Of course it is, it's excellent. I've known him for many years, decades in fact.

LEIGH SALES: Just finally before you go – when the Opposition Leader Mr Shorten was on the program last week, I asked him if he would make the same commitment as previous Australian political leaders which is to do two prime time lengthy interviews on this show during the election campaign. He said he would be keen to do that – would you like to?

PRIME MINISTER: Why only two? Are politicians so dull? It could be a long election campaign. Maybe we should have more!

LEIGH SALES: Excellent! Well if you both want to come on once a week – great! I’ll throw that back to him next time he’s on.

Malcolm Turnbull, thank you very much.

PRIME MINISTER: Ok. Thank you very much.

LEIGH SALES: Thank you, Prime Minister.

Transcript 40252