891 ABC Adelaide - 4 May 2016

SUBJECT/S: Malcolm Turnbull’s Budget for big business over battlers; Superannuation and retirement plans.

HOST: It takes a lot to make you happy, can you accept that enough has been done for South Australia?


NICK XENOPHON, SENATOR FOR SOUTH AUSTRALIA: Well, no. It does take a lot to make me happy because the auto sector in South Australia in the country is closing down at the end of next year that will involve tens of thousands of jobs at risk and I think that this budget was a safe one for the Government, I think they want us, it’s a treading water budget. But in terms of manufacturing jobs, if you look at the Budget paper, the one sector of the economy that’s going backwards rapidly is manufacturing jobs and my concern is that there isn’t a plan to deal with the massive loss of jobs we’re facing at the end of the next year.


HOST: But there are tax concessions for small businesses, the small business threshold goes up to $10 million, the Government has promised a lot of naval shipbuilding work to be in South Australia over decades. You can’t even be just a little grateful?


XENOPHON: No, no, no, I am very grateful that we’ve got the subs contract but that won’t start in earnest in terms of the jobs that it will create and the significant jobs it will create for a number of years. Right now you’re facing many thousands of South Australians who work for GMH, who work for suppliers, who are affected by the multiplier effect of those industries, who by the end of next year are looking at a pretty grim future. And that’s all I’m saying is that we also need to look at that as well.


HOST: Kate Ellis, Shadow Minister for Education, Labor MP for Adelaide, can you find something positive in this Budget for South Australia?


KATE ELLIS, SHADOW MINISTER FOR EDUCATION: Well, I mean I think it’s incredibly disappointing that we have 75 percent of all Australian workers waking up today to learn that they haven’t got a cent out of the Budget but they’ll pay the price for the huge cuts to education, huge cuts to health, cuts to pensions. So no, I think this is a fail.


HOST: You say ‘cuts’, spending to actually going to go up isn’t it? It won’t reach Gonski levels but there has been more money put back into education.


ELLIS: Well, there will be $29 billion less in our schools as a direct result of the actions of this Government.


HOST: You mean compared to what it would be if Gonski was fully funded?


ELLIS: I mean compared to what it would be if the legislation that is currently in place continues and if the agreements which have been signed, which the Government said they were on a unity ticket about, were allowed to continue and weren’t torn up.


HOST: But for people who might struggle with that, what exactly that means, what you’re saying is that under Gillard she promised us Gonski funding which would go out into the out years, we’re now approaching those out years, you’re saying it’s not going to reach that funding level even though in real terms money has gone up, it’s just not as much as it otherwise would have been?


ELLIS: Well, absolutely. What I’m saying is that when we went through an independent review to determine what Australian schools needed to be internationally competitive this Government has now said they’re throwing away the outcomes of that review and they’re making Australian schools pay a $29 billion price for their wrong priorities. 


HOST: You both wanted to take superannuation money away from people, you wanted to take away negative gearing and capital gains tax benefits, you’ve both had identical tobacco tax policies, you’re almost getting down to splitting hairs are you not? In terms of difference between Tweedledee and Tweedledum?


ELLIS: Well, I think that there’s no doubt that we have done the hard work in identifying where money can come from in the Budget. And I think there’s an argument Scott Morrison should have to share some of his salary with Chris Bowen. What they’ve done is jumped on-board, adopted a range of Labor policies but unfortunately they haven’t adopted the areas where we would direct that spending to benefit Australian families and Australian workers that being health and education which are really going to pay a very big price as a result of this Government’s priorities. 


HOST:Simon Birmingham, Liberal Senator for South Australia, Education Minister, is this a copycat Budget?


SIMON BIRMINGHAM, MINISTER FOR EDUCATION: Ah no, far from it in fact. What this Budget demonstrates is that the Turnbull Government has a very clear plan for jobs and growth, plan that will encourage investment in our economy by making especially investing in small and medium sized businesses more attractive, that’s critical to the South Australian economy in particular. The Labor Party will go to this election promising higher spending but also promising much, much higher taxes than the Liberal Party, so we do have some strong contrasts that will run into this campaign, and importantly they’re contrasts about whether or not we support the Australian economy to transition out of the mining boom, out of some of the largesse we’ve seen in the past, into what is a challenging period of time. We’re getting good jobs growth at present but we cannot be…


HOST: When you say ‘largesse’ in the past what are you talking about? Are you talking about the superannuation breaks that you’ve taken away from people in this Budget? Which were put in place by Peter Costello, a Liberal Treasurer?


BIRMINGHAM: We are addressing a range of issues in this budget to achieve sustainability. Importantly every new spending commitment we’ve made, including additional spending for schools, is offset by savings elsewhere in the Budget, so that we are not growing the overall level of Government spending, in fact over time we’re bringing it down, and that’s important because that enables us to ensure that the overall level of taxation does not grow over time. Labor will spend more in tax and their policies are quite transparent about that. We think Australian’s pay enough tax already, we think if you want to encourage small and medium sized businesses to actually create more jobs in the future, we need to do something to help make them more internationally competitive. And that’s what our changes to company tax do, while also providing modest income tax relief as well.


HOST: Simon Birmingham, you’re the Education Minister, should we just get over Gonski? You are putting more money into education but ‘get over it, it’s not going to be Gonski?’


BIRMINGHAM: So we are putting more money into education, education funding for schools will grow from around $16 billion this year in 2016 to $20.1 billion by 2020…


HOST: But it’s not as much as the Gonski proposals?


BIRMINGHAM: Not as much as the Labor Party is promising and -


HOST: and that you promised to match -


BIRMINGHAM: We promised to match the Budget when came to Government and we have matched it and in fact exceeded the budget spending when we came to Government, because we had to tip money back in for States that Labor had left out, like Queensland and WA. But beyond what was in the Budget in 2013 we’ve now put spending onto a more sustainable pathway and we think that that gives real funding growth into schools, we’ve got a real reform plan that focuses on how that can most effectively be used in our schools. It’s not just about how much money is spent, it’s about whether our kids are actually learning to read effectively, whether we’re getting enough people to undertake in maths or science…


HOST: So we should all just get over Gonski?


BIRMINGHAM: Well we should adhere to and we will adhere to good principles around needs-based funding, so schools in low socioeconomic areas, students with disabilities, they will all get more funding than others…


HOST: Okay, money for everyone -


BIRMINGHAM: No, no. It’s not a case of money for everyone, it’s money carefully targeted as to who it goes to, carefully targeted to reforms in how it’s spent and it’s money that is affordable into the future unlike the type of big spending of Labor which will cripple jobs and growth. 


HOST: Nick Xenophon, were you really expecting, on the back of the subs announcement, and the largesse as some have said, handed out in the weeks running up to this Budget that for instance there would be more specific funding for Arrium and Whyalla? Do you agree that that really almost needs to be a separate negotiating point?


XENOPHON: It would have sent a strong signal if money was set aside for our steel industry but it’s also issues of anti-dumping, of procurement policy because the Commonwealth does spend $59 billion here on goods and services and there should be a buy local first, buy Australian first policy in my view. I’m seeing the administrator of Arrium, Mark Mentha, in Canberra tomorrow morning because obviously it has major challenges. If we don’t have a steel industry in this country you can basically say goodbye to a strong manufacturing sector in this country. But look, we do face challenges in terms of jobs in this State and my concern is that the Budget hasn’t set aside either a plan or the funds to deal with the crisis we’re going to have in the auto sector.


HOST:Okay, I’ll just come back to Simon Birmingham. A text has just come in from the Premier, Jay Weatherill, “If we pay enough tax already as you say, Simon Birmingham, why does the PM encourage the states to raise their taxes to cover health and education cuts?”


BIRMINGHAM: The PM doesn’t encourage the states to raise their taxes but he does say to them if they want to spend more then they should take some responsibility for raising revenue themselves, that’s their decision as state and territory governments.  As a Commonwealth we don’t want to grow and will not grow the level of taxation. Only the Labor Party is proposing to grow the level of taxation in South Australia.


HOST: Can we ask each of you, Simon Birmingham, Kate Ellis and Nick Xenophon, how are you planning, we don’t want to go into too personal details here, but how are you planning to fund your own retirement? Are you going to rely on your super or have you got something else up your sleeve? Simon Birmingham?


BIRMINGHAM: Well, look I have compulsory superannuation contributions like everybody else. All three of us are on a superannuation system that is identical to other Commonwealth public servants.


HOST: But is that is? Are you just relying on your super? Or have you got something else that would supplement that?


BIRMINGHAM: My wife and I seek to save where we can, but really it’s a case of super, savings, we of course are all receiving very good salaries as Members of Parliament that builds our superannuation. I don’t think that our situation is one to worry about…


HOST: Okay, Kate Ellis… we’re not worrying about it. I don’t think our listeners are worrying about you…


BIRMINGHAM: I would hope not.


HOST: They would like to know, since you are in the Parliament which decides how they get to save for their retirement, they’d be interested in what your plans are. So your savings and your super.


BIRMINGHAM: So important to note, I think the three of us will all pay more tax on our superannuation as a result of changes in this budget. However, lower income Australians will be much better off.


HOST: Kate Ellis, are you just relying on your super or do you have a stack of investments? Because some people think well you’re just a mug if you’re relying on superannuation now, you need something else.


ELLIS: Look, to be really honest with you. I intend to work for many many more years and I hope that I will have a very long time to think about my retirement income. Obviously some of that is in the hands of the good voters of the people of Adelaide. But my focus is absolutely on the working years at the moment.


HOST: But your strategy is super I assume? Is it? Because Governments including your party, political parties, they get to decide increasingly how people can use their super, how much they can stock away and how much the Government is going to start taxing.


ELLIS: Well absolutely. We are incredibly supportive of a strong superannuation system. We’ve been pushing for concessions for low income earners, which this government wanted to scrap. But I’m being really honest with you in saying that my concern at the moment is not about my own retirement, my concern is about the pensioners who were hit again in the Budget last night, the policies that are being put in place which are affecting people retiring right now.


HOST: So you’re pushing 40 and you haven’t got a retirement plan apart from your super?


ELLIS: I think that is fair to say and I intend to keep working for decades in order to be able to have a fair retirement plan in place. But I’m not looking at putting my feet up any time soon.


HOST: Okay, Nick Xenophon, Independent Senator for South Australia.


XENOPHON: I’m not planning on retiring. I’m planning to work till I die. Whether it’s in politics or not, if it’s not it will be a yiros bar or who know, talk back radio.


HOST: That’s a bit grim isn’t it, honestly, really?


XENOPHON: Well, what talk back radio? It is a bit grim isn’t it?


HOST: You cannot really seriously work till you die, are you?


XENOPHON: Well it depends how long I live for. But…


HOST: But I mean, do you really want to work till you die?


XENOPHON: What are you guys? Are you my mothers this morning?


HOST: Nick Xenophon, it is a serious question because many of our listeners right now would be thinking “how am I going to plan for my retirement?”


XENOPHON: And that’s what I want to address.


HOST: So how are you doing it? What are you doing? What’s your example?

XENOPHON: My example. Well I’m not planning on retiring, but my example, is that I have superannuation from state and federal parliament. I also, because of parents Greek heritage, my father was a builder, I have investment properties, that are not negatively geared, but I’m planning to work for a very long time. What I’m worried about, similar to Kate, is there are many people out there, particularly women in the workforce who have very little in by way of super retirement savings. And that is a big challenge that we need to tackle.


HOST: Why haven’t you negatively geared?


XENOPHON: They were negatively geared, but now they’re positively geared.


HOST: Okay, fine. And you got the roller in the shed?


XENOPHON: That’s right, that’s right. And the Yaris.


HOST: Kate Ellis, coming back to you, as Labor MP for Adelaide why would Bill Shorten and the Labor Party have a problem at all in giving small business tax breaks?


ELLIS: We don’t have a problem in giving small business tax breaks.

HOST: Well just listening to Bill Shorten on AM he does, he opposes the extent of the tax breaks given to small business in this Budget.


ELLIS: No that’s incorrect. What we’ve said is we support the concessions for small business. What we don’t support is changing the definition of ‘small business’ so it increases from a turnover of $2 million up to a billion dollars which is in the Government’s announced plan last night. We support the measures for small business but we will not be supporting rewriting the definition which is actually just a way that this Government can give tax breaks to big business under another guise.


HOST: Simon Birmingham, I thought the limit was now $10 million not a billion, is that correct that it’s a billion?


BIRMINGHAM: So the initial proposal is that in the 2016-17 year the turnovers of less than $10 million will enjoy a reduction in their rate and that’s a tax decrease for around 870,000 small businesses, small and medium sized businesses, if you want to use those words, who employ about 3.4 million Australians. So that’s the first step. We’ve outlined a longer term proposal to ultimately reduce the company tax rate across a range of other sized businesses - and that’s really important to make Australia a more attractive country…


HOST: Up to a billion dollars in turnover?


BIRMINGHAM: …in which to invest. Ultimately we want to get all Australian businesses onto a company tax rate closer to 25 percent, but in the first instance we’ve outlined affordable steps to achieve that and South Australia is an economy based on small and medium sized businesses…


HOST: And just as with the Gonski thing you can’t really worry about anything that’s 10 years off, it’s all pie in the sky anyway.


BIRMINGHAM: Well the South Australian economy is based on small and medium sized businesses and this is great news for the SA economy to actually have this tax cut for small businesses flowing through, and it will really help tradies and builders and all of those types of businesses to invest and employ more South Australians in the future. 


HOST: Liberal Senator Simon Birmingham, Education Minister. Kate Ellis, Shadow Minister for Education and Labor MP for Adelaide. Nick Xenophon, who’s going to work till he drops dead, Independent Senator for South Australia. Thank you.