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Tanner eyes next election -

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Tanner eyes next election

Labor's Lindsay Tanner fell out with Mark Latham after the last election and went to the backbench.
Now, under Kim Beazley's leadership, he's back as finance spokesman. He says in the lead-up to the
next election, the challenge is to build the positive reform agenda to get away from focusing on
the negative response to Prime Minister John Howard.


BARRIE CASSIDY: In Bernie Lagan's book he talks about how you went to Mark Latham and said you
wanted Shadow Treasurer or nothing so he found a nice spot for you down the back. Is that how it

LINDSAY TANNER: Mark's memory is faulty in this instance and it's hardly surprising given what was
happening at the time. I made it clear in my statement that I put out at the time that I didn't
have any complaint about how Mark was dealing with me personally, my concerns were about the
broader direction of the party and where he and the party at large were heading. If I were of a
view that I would only take Shadow Treasurer or nothing I wouldn't be sitting here today as Shadow
Finance Minister.

BARRIE CASSIDY: What was it about your discussion that led you to go to the backbench?

LINDSAY TANNER: I'm not going to reveal the inner details of my discussion with Mark. My broad
concern was about Labor's direction,the fact we were focusing on marketing issues, rather than
content. The fact that we were not addressing the key issue that's been there for nine years which
is - what do we stand for, and what is our broad reform agenda to take us forward and focusing on
what's wrong with Australia and what we as a party intend to do about it, rather than what's wrong
with John Howard? That's been our problem for nine years. We've been too reactive. We've failed to
build an appropriate reform agenda for the future of the country. Everything I saw in the wake of
the election suggested that was actually getting worse rather than better and I preferred to go to
the backbench to be able to speak out more broadly about that.

BARRIE CASSIDY: Why couldn't he be persuaded of that fairly basic approach?

LINDSAY TANNER: It's not necessarily fairly basic but it's a fundamental issue and that's the big
task in front of us. Mark suggested we don't stand for anything. He's not the first person to say
that. It's my job to prove him wrong and we are going to prove him wrong. I think I'll put his
words in my office up as additional motivation like the footy coaches do to make sure we do prove
him wrong.

BARRIE CASSIDY: You're saying there were no ultimatums put by you?

LINDSAY TANNER: Absolutely not. I indicated I'd like to be Shadow Treasurer but the discussion was
about more detailed issues than that.

BARRIE CASSIDY: You put the sign up on the office and you know this view that Kim Beazley stands
for nothing is out there. It's shared by others apart from Mark Latham. How should he respond,
what's the challenge?

LINDSAY TANNER: The challenge is to build the positive reform agenda to get away from focusing on
the negative response to John Howard. We've got a big challenge because of the change in the
Senate. And that's what's going to produce the best in Labor, in my view. We've got to build that
big economic and social reform agenda focusing on issues like completely rebuilding the Federal
structure so that the bizarre and ridiculous arrangements with health and education and age care
and other areas are reformed. Tackling workforce participation, in particular ensuring that we get
people with disabilities greater opportunity to both enter the workforce and remain in the
workforce, tackling problems in the tax system, and also tackling the issues of skills formation.
We need a lot more public and private investment in education and training. They're the big picture
issues that we've got to deal with and we've got to put forward the big positive reform agendas on
that front. That's what will ultimately deliver us Government because it's good for the country.

BARRIE CASSIDY: That's what Kim Beazley needs to do as leader, can you really afford to have these
ideas come out in the rush of an election campaign, or do you need to get them out now?

LINDSAY TANNER: We don't need to get the precise detail out now, but we need to build the
foundations now and gradually add to them and be central to the debate. I think part of our
weakness in recent times has been producing policies out of the blue very late in the day that have
been incubated in small smoke-filled rooms with a handful of people. We need to have the courage to
put broad ideas and themes out there early, to be central to the debate, not worry about a bit of
flak but to actually drive public debate and gradually build an agenda in that way. And you're
seeing that now, you're seeing Kim Beazley get out there and talk about the fundamentals of the
Australian economy which are in big bother. We might have a superficially good situation but on
productivity we have been declining relative to the United States since 1998. We have been below
the developed world average growth rate in productivity since 2002 and we are going backwards in
productivity. Our manufacturing and service exports we are crucial to diversifying our export base
have been in big trouble for the past five years and our foreign debt and overall level of debt has
been spiralling for a number of years. They're the issues we've got to focus on and building an
agenda for those problems. That's what Kim is starting now.

BARRIE CASSIDY: And how quickly should this happen? You're saying a final judgment ought to be
suspended on Kim Beazley in terms of this notion that he stands for nothing for what -some months-
now that he has the opportunity to get the ideas out there?

LINDSAY TANNER: Leaders are being judged all the time - that's fair enough. But this is a long haul
process and what we're going to do is ensure over that period we both build a policy agenda and
drive public debate. That's the thing that's been missing all too often from Labor in the past nine
years, with one or two exceptions we haven't driven public debate. We have to inspire people and
reassure them.

BARRIE CASSIDY: Kim Beazley was leader for a lot of that time, so he'll have to change his spots?

LINDSAY TANNER: Not necessarily Barrie. Because ultimately this is a collective responsibility.
People in the media are obsessed with individual personalities and issues about leadership. That's
important but ultimately, we've got a collective responsibility and I'm happy to take part of the
blame for part of the last nine years for much of the time I've been involved. We've all got a
culpability there. We have got to change our approach. We've got to ensure Labor is fulfilling its
traditional role of being the party of reform, the party of ideas and driving a better future for

BARRIE CASSIDY: Let's go to taxes. You've already said that taxes ought to be lower, so should
spending but taxes first. According to the book Mark Latham wanted to cut the top rate at one stage
but Crean, McMullan and Macklin opposed it and he abandoned the idea.

LINDSAY TANNER: I wasn't part of those discussions but there's no question there is a need for
fundamental reform of Australia's tax system, including a significant strong case for broadening
the base and flattening rates. That's what Paul Keating did in the 1980s. He reduced and top
marginal rate from 60 c to 47 but it didn't alter the balance of the tax system unfavourably to
lower and middle income earners because he also broadened the base with capital gains tax and
fringe benefits tax. The crucial question ultimately is what's the overall impact? So we're
certainly not going to be about giving free kicks to higher income earners but we are going to
focus on improving the system and the number one target has got to be the highest marginal tax
rates in the country which impact on lower and middle income earners with effective marginal tax
rates because of the interaction between the tax system and the family payment system. Wayne Swan
has made that clear. He's done a lot of work on that over the years.

BARRIE CASSIDY: He's not so clear on the top marginal rate, but you are?

LINDSAY TANNER: I regard that as one issue among many. But the ultimate test is if you bring that
down as Paul Keating brought it down, it has got to be part of a broader reform agenda that doesn't
change the balance of tax adversely to lower income earners. That's what John Howard did with the
GST. He shifted the tax burden more onto lower income earners and less onto higher income earners.
That's what he's done on his tax cuts. Over the past three Budgets the tax cuts he's introduced
have reduced the effective income tax burden on people with incomes between $60,000 and $100,000 a
year by about 12% and on people with income between $40,000 and $50,000 a year by only 3 or 4 per
cent. You won't see that from Labor- We're opposed to that kind of thing.

BARRIE CASSIDY: When you talk about broadening the base? How do you do that? Do you make
adjustments to capital gains tax or negative gearing?

LINDSAY TANNER: I'm not in a position to speculate on specifics. Barrie, I'm not going to get into
the discussions about these things. Tax is not the responsibility of the shadow Finance Minister.
Revenues is essentially Shadow Treasurer territory. Spending is basically my territory. So I'm not
going to speculate on the possibilities other than to say that clearly we do need major reform in
the tax system. All John Howard can deliver is handing out a bit of largesse to his supporters in
the higher income brackets.

BARRIE CASSIDY: Spending cuts will be part of your responsibility. Where do you cut? You want cuts
across the board, that's not the usual mantra of the left?

LINDSAY TANNER: John Howard has been spending like an ageing tycoon throwing parties and buying
jewellery for his mistresses. In 2004, Federal Government spending on its own activities increased
by over 10% in real terms. That's the biggest increase in 30 years and a lot of that has been on
rubbish. A lot of that's been on things that local councils should be doing, things that have got
minimal relevance to Australia's competitiveness and productivity, minimal relevance to economic
strength and minimal relevance to improving social inclusion and equity. It's all about buying
votes. We've exposed some of it but there is a lot of rubbish spending in there and have no
illusion about where I'm going to come from. These decisions will be made collectivity ultimately
but my starting point is that Middle Australia is paying too much tax and getting too little back
for it and that we have a responsibility to clean up the system and get rid of this rubbish

BARRIE CASSIDY: You also talk about protection for certain industries. Qantas you've mentioned the
commercial media industry, but you've also mentioned farmers. Do you think they're overprotected in
this country?

LINDSAY TANNER: John Howard made a statement the other day that we need to maintain a critical mass
of farmers in this country for reasons of national identity regardless of whether they're
economically viable or not. A lot of clothing and manufacturing textile workers in my electorate
lost their jobs so you and I could buy cheaper shirts. Some of the panellists have taken advantage
of that. That's fine, I support competition. What I don't like is how selective John Howard is.
He's in favour of competition for people who he thinks vote Labor. He wants low income workers to
compete against one another. He's introducing collective bargaining for small businesses,
protecting pharmacists from competition, protecting Telstra from competition. So in other words
those clothing workers who've had to find new jobs, it's OK for them to make the sacrifice in the
national interest but they can't get cheaper medicines or cheaper phone calls as a result of
competition being applied to others. I support competition, Labor supports competition and as far
as I'm concerned what's the rule for one should be the rule for all.

BARRIE CASSIDY: How are farmers oversubsidised? Where do you start?

LINDSAY TANNER: I haven't suggested farmers are oversubsidised. What I'm indicating is as far as
I'm concerned the question about Government assistance should be about economic viability,
productivity, and enhancing competitiveness, not propping up people who are not economically
viable. The key theme you get from people in the economic union in the European economic union when
you talk to them about their subsidies is precisely the same they thing that John Howard said about
our farmers. How can we go to Europe and say drop your subsidies, drop your tariffs so we can have
genuine competition and our cheaper more efficient farm products can get in if at the same time
we're saying exactly the same thing here, that we're going to keep uneconomic farms in operation.

BARRIE CASSIDY: Thanks for your time. It's time for the cheap shirts to get right of reply.