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Hi. I'm Annabel Crabb. Coming up on 'The Drum', Kevin Rudd titillates the Top End with the promise of tax cuts. Question marks over the Coalition's direct action scheme.And Peter Slipper vows to continue his political career. Joining me on the panel tonight - Minchin, Miriam Lyons and Aaron Patrick, but first Kathryn Stolarchuk with the latest news.There is strong international condemnation towards Egypt's bloody crackdown on protesters in Cairo as a state of emergency is declared in the country. Egyptian officials say around 280 people have been killed as police tried to clear pro-Morsi Muslim Brotherhood protesters. The violence has spread beyond Cairo with Morsi supporters and security forces clashing in other Egyptian cities. A Brisbane woman whose twin toddlers died of malnutrition has been given 8 years' jail but she will be eligible for immediate parole. She pleaded guilty to the 18-month-old boy and girl who died in 2008. Her Supreme Court trial heard she was suffering from a major depressive episode at the time N sentencing, the judge took into account her early guilty plea and her cooperation with police.Afghan troops have killed a former soldier who wounded three Australians in an insider attack in November 2011.Mohammed Roozi opened fire on a group of Australian soldiers while they were operate ago longside Afghan colleague colleagues at a patrol base in Oruzgan. Roozi escaped and had been on the run ever since, but earlier this week he was located and then killed by Afghan forces in a joint operation with Australian troops.And a fire has badly damaged medical facilities on the Pacific island of Nauru. The blaze destroyed four buildings, the medical storeroom, the X-ray facilities, the medical facilities office and the pharmacy. Some patients have been moved. It's thought the fire was caused by an electrical fault. That's the latest news. Now back to 'The Drum' with Annabel Crabb.

This Program is Captioned Live.

Hello. Welcome to 'The Drum'. I'm Annabel Crabb. Coming up, Peter Slipper is back in the ring for another swing and his wife takes on the media. The Climate Institute says the direct action plan will cost more than advertises. And Kevin Rudd wants a special tax economic zone in the Top End, but did he poach the idea from Tony Abbott? Our panel tonight - Nick Minchin, former Howard Lyons, Centre for Policy
Government minister, Miriam

Development, and Aaron Patrick, journalist with 'Financial
Review' and awe author of the book 'Downfall'.And you can join in on Twitter using the hashtag the Top End hashtag "thedrum".Welcome to which we the Top End of the show in which we repair directly to the Top End of Australia and Kevin Rudd's new policy for the Northern Rudd's new policy Northern Territory.My personal objective for the Territory, given its unique remoteness given its unique remoteness is that it would be great to have a company tax rate here b one-third lower than that of the rest of the country.But there are plenty of unresolved factors in this policy. The PM says the 30% tax cut is just his preference. There is no estimate of how much it will cost and it isn't likely to happen until 2018. Maybe Mr Rudd will need five years to talk David Bradbury around. This is what the Assistant Treasurer had to say about the idea of a differential tax rate for the Top End back when the Coalition floated the idea in February.This is a plan that will divide Australia, a plan that will relocate tens of thousands of jobs from places like Western Sydney to the far north of Australia.And back then, David Bradbury wasn't the only critic. The idea was also described as wacky by this guy. # Sings) # And it's shocking me right out of my brain # Shocking me right out of my brain... # I'm sorry, there was no legitimate excuse for that. Although actually I think there may have been some thought in government given to thought in government given to a compensate tri-tax cut for Whyalla after Craig Emerson's debut smash hit, by I dody Grice. The Tony Abbott, in Tasmania to promise a Hobart airport upgrade, found the idea flabbergasting, probably because it was his originally.He doesn't have a plan actually to grow our economy.Aaron Patrick, this policy has very little detail. Is the political payback you get for announcing it on site in the Northern Territory worth the fact that it's been roundly pre-criticised by your own Assistant Treasurer and others?Well, maybe not. I don't know. The Northern Territory - developing the Northern Territory has been this article of faith for a lot of Australians for decades, and the sense is you have this great unused area, so in that way, I think Kevin Rudd is tapping into something deep in the Australian psyche, but one of the things that this shows is actually the influence of Gina Rinehart on the campaign, because as Gina Rinehart has been pushing this, funding this think tank and I think that was part of the reason the Coalition picked up on it and now you have Rudd matched what the Coalition are dog, so in a fascinating way she is kind of influence ing the policy.Nick Minchin, you are the most recent, as far as I'm aware, serving federal finance minister on our panel to date. About how much will this cost? If you cut company tax and the whole of the Northern Territory by a third, what ballpark?Well, who would know. Look t probably wouldn't cost a lot, because there aren't that many companies up in the Northern Territory..Well, after 2018 there could beYes, that's one of the points. The smart accountants will find the smart way to rort the system.Become the Dell aware of AustraliaThis sounds like the NBN dreamt up on the back of a coaster. Kev was on the way to Darwin. " I've got to have a policy for Darwin, guys. What can you give me." The Libs have talked about that, gazump them, no costing, 2018, only new businesses, it's discriminatory. What about the businesses that are already there, they don't get it. My businesses in my State of SA, they don't get it. I think he will lose more votes than he gains by this. Crazy stuff. He just needed story for the Territory, but it will sink.So did you hate the idea when Tony Abbott proposed it?Yes, I'm always opposed to it. It's actually illegal to do it amongst the states. The Territory is not a State so you can purport to get away with it, but that's not the way to encourage development in the Northern Territory, and to the extent that you lessen company taxes in one place, by definition you've got to increase taxes everywhere else, so I'm opposed to it and I hope the so I'm opposed to it the Coalition doesn't go down this path either.Miriam, are there un intended consequences that flow on from this sort of meddling with the tax system?Absolutely, starting from the fact that this is a ridiculous area, I absolutely agree, un intended consequences for clever accountants, but also I think one, it may not actually cost that much because Australia has dividend imputation, right, so the only companies that are likely to benefit from this and the only investors that will benefit from this will be overseas shareholders, so then you have a
the question of is it actually a good idea to try to encourage break-neck development which, from what I gather from the policy s supposed to be mostly agricultural development in the North, and that really shows just how little either Kevin Rudd or Tony Abbott actually know about agriculture in the north of Australia, and the state of the environment up there. And we have enormous potential in Australia to make the most of the growing demand for food internationally. We could have a serious food boom that we could really gain a lot from, but we can only do it if we learn from the mistakes we've made in the past. At the moment in the west and in the wheatbelt, there is a loss of something like half a billion dollars a year from soil degradation. We need to learn how to do that better, and in a lot of the NT, soils are 500 times prone toer Rogues as they 500 times they are in all of the productive agricultural land in the south. There are small, small things that could the south. There are done, we could grow more food crops for small things that could be
done, crops for cattle, so the done, we could grow more food crops for cattle, so the beef
production up north is much more stable, about you that kind of thing is something that you can do with good, like long-term funding for CSIRO development programs, fund extension offices, re-re fund agricultural research and development into Australia back to the levels we used to have. We could build a railway to Darwin!Yes, that's the kind of - we actually need serious policy here:This is really silly.
Kevin Rudd - second week of the campaign and he is stealing another Coalition policy.Yes, get off our territory, Kev. What will it be next, industrial relations?They have been swapping policies for days.It's all about narrowing it down the potential.It's like cross-dressing. The emphasis of cost of doing business in the Territory. Darwin has been 150 years and still only 80,000 people there. Tough place to liveExpensive place to buy a house. The cost issue is huge but you've got to lower the cost across the board for all businesses around Australia. We should be lowering company taxes but for everybody. Darwin - I worry as a former finance minister that both parties could end up wasting a whole lot of dough to stimulate development in the North where there are huge barriers development there.Nick, just quickly, you've accompanied more Liberal Leaders on campaign election trails than I can readily remember, but what do you think when you see policies surfacing like this that seem to have not all that much background and research and does it tell you anything about the campaign or the state of the campaign?Well, it seems to wreak to me of some sort of disconnect between their campaign headquarters and the travelling team. You would never put out a policy like that without first checking what has been said on this issue by Labor people, and the ABC itself came up with the Dave Bradbury quote condemning this, let alone the singing Emerson, so the first thing you do, if you came up with an idea like this, let's see what our people have said about this. That didn't happen. It does sound like it's on the run. Mark Butler has been brought onto the campaign team. One of his jobs apparently is to improve communication between the campaign headquarters and travelling team. Clearly big problems surface.Moving on, cigarettes
look like they trying to keep below the look like they will be more look expensive no matter who wins the election. Tony Abbott hinted that the Coalition might be forced hinted that be forced to keep Chris Bowen's excess hike and the bank levy. Here he is.As for the Here he is.As for cigarette excise, we will make our position absolutely crystal-clear. I'm not going to say today what our final position will be.PEFO has been out for days and days, about you there is still no sign of the Coalition's much discussed policy costings. Shadow Treasurer Joe Hockey has promised they will appear at least two days before polling day, but he is worried the whole costings thing might prove tedious for the election-viewing audience.If the whole election will be about costings, rather than policies like we're announcing today, then I think everyone is going to bore the Australian people to death and we don't want to do that.Penny Wong wants the Opposition to come cleanWhat he said was yes. Yes, yes, that's what he said - yes.The reality is this really demonstrates, really confirms what the Liberals' plans really are. They have in their sights cutting to education, cuts to health, cuts to the things families need, but they won't tell Australians what those cuts are, they keep ducking and weaving, refusing to be upfront with what those cuts really areMiriam, it means you're keeping it, doesn't itMost likely. I think it's a bit rich for Joe Hockey to come out and say people will be bored for costings after so many years after the Coalition bashing Labor over the head for not delivering a the start of this year saying, "We will deliver a surplus in our first year and every year "We will deliver a after that." Then in our first year and after that." Then in April
they started backing away after that." they started backing away from
that. They've said that they are going that. are going to cut the mining are tax, cut the carbon price and yet there is going to be other tax cuts yet there is going to tax cuts introduced, still a business tax cut on the way, so it's true - it just doesn't add up, and I just think... A bit like the Government's...Absolutely, but if you're making your big pitch as, "We're going to deliver a bigger surplus haster than the other guys, it it is a bit rich, if that's the sole basis. Three and a half weeks to go, Miriam. Plenty of time.This is one of those things, what's that saying, when the tide goes out, you can see who has been swimming naked, and actually both Labor and the Coalition...Thank you for that heBut they've both been caught out.A whole range of unsustainable taxes cuts madeTax cuts towards the end of the Howard Government and then Labor copied the further promised tax cuts in the lead-up to the 2007 election, and it turned out that they were in Malcolm Turnbull's terms, unsustainable tax cuts, and... They weren't until Labor came into office, they were sustainable.No, we actually had a lot of criticism from the International Monetary Fund which fingered the final years of the Howard Government for being fiscally profligate for making those tax cuts. Those were the days when we had surpluses. Remember those days?Yes, I do and the reason you had those surpluses because of the one-off massive windfall from the mines. Which we saved into the Future Fund.About 3 day noose the 2007 election campaign, about $35 billion worth of personal income taxes. Looking back, Nick Minchin, and it was not your decision at the time, do you think it was hasty of Kevin Rudd and - to sign up to that without blinking? Well, if...See what I did there, so you could be critical of them. Thank you.My pleasure. We didn't know about their spending plans then. Given what Labor wants to spend, they should have kept the revenue. When you are in Opposition, you keep shadow-boxes with the Government and I can understand why the Coalition in 2007 didn't want Labor. Government to get one up on them. But even with that 20% tax cut, we ran a surplus, so for all intents and purposes, that tax cut was affordable.For a few years. I remember we used to be attacked for the size of surpluses. People would say it's outrageous that you're running these big surpluses. Give it back to us or spend it." We could have spent it on infrastructure that would... What, like, school halls and...Just on Nick's point about the $20 billion surplus which just shows how different times are these the last times are these dates because
the last three months,s Budget has the last three months,s has deteriorated by $30 billion. has deteriorated by billion. Unbelievable.The
things has deteriorated by $30
billion. things is Joe Hockey and Tony Abbott nailed Wayne Swan over the surplus, now, we may well be on the cusp of a Coalition government with incredible volatility in revenues and you have a leader who has the propensity for spending. Look at the paid parental leave. I'm sure if you were in Shadow Cabinet, you would be pulling him back. He is paying for it with a tax rise.If see a Coalition Government , we will probably see the same dynamic between Abbott and Hockey, as you do with Abbott and Costello.Hockey is always there with his eyeballs flashing for help as Tony says, "Sure, we will do that." "Call the police." So who will be the hard man to hold the line. Andrew Robb will be an outstanding Finance Minister, I'm sure.Ultimately Australians have justifiably high expectations for the quality of the social services that we have in one of the richest countries in the world. We cannot have both sustainable budget and we're talking structural surpluses as opposed to the cyclical surpluses that you got when the mining boom was at its peak, so we need that, and we need high quality public services. The only thing really we can do is stop being one of the lowest taxed countries in the rich world. The sixth lowest taxes in the OECD at the moment. Something just does not add up there and cracks are starting to show. I think we need to start a conversation about why Australia should pay more tax.I'm interpreting Nick's deep sighs as disagreement. You want us to be like
Europe.We don't need to go all the way to Europe, just go up to the average. Europe to the Europe has doesn't brilliantly.Some have taxes at 45% of GDP.You You don't create wealth by raising taxes.Well, you don't create it by cutting to the bone, or austerity spending in the downturn which we assume the Coalition will do. If only. If only.It sounds like, Nick opposes the Coalition's 1.5% levy, tax levy on most businesses. Well, I do because I oppose the parental leave scheme, and Tony knows that.I don't think you're necessarily alone in the current or former Coalition partyroom there.. Climate change is still the most noticeable differences. Tony Abbott is promising to abolish the emissions trading scheme and replace it with direct action, a plan to buy carbon abatement measures but a new report from the Climate Institute predicts the policy will be $4 billion dearer than the Coalition claims.We estimate they would reduce emissions in the order of 200 million tonnes which is about the annual emissions of the national electricity sector, about you that only gets us to halfway to the 5% target and not within coup we of, cooee of the 25% they've committed to. So stronger regulation in various parts of the economy or spend more money out of the Budget.Greg Hunt dismissed the report as wrong, partisan and silly. Tony Abbott seems to agree.We don't accept the report. People have a right to put forward a position. The Climate Institute is obviously entitled to put forward its position, but I simply don't accept that report.OK. So, Miriam, where do you think the vulnerabilities are in the direct action scheme?Well, obviously the fact that - I've kind of had a quick look at the Climate Institute report and from what I can see, they've actually been quite generous to the direct action scheme, so they've assumed that all of at baitment that is supposed to be delivered through one of the schemes actually will be delivered which there is not a huge precedent for internationally, that all of the projects will go ahead, which again with similar schemes there is not a big precedent for internationally. They've also presumed that all of the soil carbon that is supposed to be storing CO2 will actually do that, which I think that soil carbon is really important for agricultural productivity, at the moment our soil science is not actually well funded enough to know whether or not this is going to deliver the kind of CO2 emissions cuts that the Coalition is hoping for. So on all those fronts I think it is a little bit vulnerable. I guess the other thing that is probably worth mentioning is that that criticism of Climate Institute that that criticism of the as a way of responding to this, that kind of attack, that the climate stins Tuite actually rated the rated the Coalition's policy as better for emissions reduction than Labor's in the lead-up to the last election. So they're seriously just looking on this...In the last election, that was the public consultation Commission and the cash-for-clunkers, though, wasn't itAbsolutely.Different animal.I think Labor had a very thin policy at that election and the Coalition has a very thin policy this election. The fact that the 5% cut is bipartisan really indicates just how unambitious our current climate policy is as a country. A whole lot of other countries are actually acting extremely fast. California is streak ing ahead. China is on track to meet its emissions reduction targets, we've got a whole world that is actually trying to put fossil fuels out of business, and I think that Australia is in danger of being left behind.Nick, you're a climate sceptic.Indeed.Everybody in the world knows that. What do you make of the direct action plan in general?I think it is trading
a lot better than an emissions trading scheme. I think we are learning from the experience of foresaw, emissions trading
Europe that as many of us

schemes simply don't work. They are open to enormous corruption and fraud, they are manipulated by governments who just flood the market with permits when they see their industries all leaving the country and Europe is industry to America and other places, so is basically exporting jobs and
industry to places, so much better industry to America and places, industry to America and other a direct action scheme than that, and simply on budget, direct expenditure at buying reductions I think is a direct expenditure at reductions I think is a lot better than this nonsense of an emissions trading better than this as a sceptic, of course, I think Tony as a sceptic, of think Tony could have used the budget disas ter we now have - $6 o o budget disas ter we $6 o o 0 billion in deficiting over the next three years that. Would have been over the next three Would have been a great excuse
for my point Would have for my point of view for him to for my point of view scale back this whole direct action thing Ma jig.Is he a bit lukewarm on the whole thing. WhyThe consensus position in the Coalition is that the Coalition needs to be seen to be doing something on this issue and quite rightly, and Greg Hunt is right on this, he is a believer, but he understand better than anybody why emissions trading scheme is no good and this is his program and I think it is better than emissions trading scheme, but sceptics have been prepared to go along in - in the party have been prepared to go along with this proposition because it is not emissions trading, and because it is targeted at from
buying reductions in emissions from those who are emitting, which is more sensible. Far less damaging to the Australian economy and damaging to our exports and everybody else. So better for the economy.Do you think there is an expectation among your colleagues in the partyroom or your fellow travellers in this regard that it will be kind of necked in view of the budgetary position? Is that where the money is within the Coalition?I think Tony takes seriously his...I'm not suggesting he doesn't, just that a lot of people are leave
thinking that paid parental leave might get sort of...If Tony commits to something, he will see it through. For those sceptics like me, that's a worry, I suppose. The Climate Institute is strongly supportive of a carbon tax and that's completely legitimate. It doesn't make the report wrong. This is one of these issues where there is a genuine philosophical difference between the parties and Nick Minchin suggested that the Coalition in favour of direct action, maybe there is some truth to this report that it won't do a lot.How cynical of you. Maybe the PM is moving towards your position, inching towards there because he wants to move to a floating price a year early. The European price is $5, $6 a tonne, the current price is $24, so those carbon sceptics have got to be a little bit sceptic about that.What are the carbon emissions from burning money?, do we know?I don't want to pile onto the people who completely write off the Coalition's climate policy because I think that - investing in soil carbon is a good idea. Doing some buybacks is probably a good idea. A lot of things we should be doing simultaneously. I'm very confused by why you think the Coalition's scheme would be less damaging to the economy than the Labor Government's scheme currently is. Because you're not putting a cost on every business that generates emissions. Adelaide...All of the trade-exposed industries have been compensated. BlueScope Steel is actually better off under that scheme than they would have been without a carbon price. That's the level of compensation. I share your concern about the European scheme. The reason that the European emissions trading scheme has ended up having its price plummeting is because all of the large polluting companies were so effective for lobbying for free permits in the first place. Exactly. political schemeThat is
something Exactly. Because it is a something that happened here. something that The 'The Economist' as a magazine originally supported emissions trading scheme. They magazine originally love a good market mechanism, has actually said that a carbon tax would be better because it gives us more gives us more political certainty and it's more transparent. So they're basically backing what the Government has had for the last couple of years. You're right.We've got to move on, unfortunately, but for anyone who wants further response from Tony Abbott, I suspect it may beed tonight when Leigh Sales interviews the Opposition Leader on '7:30' at the obvious time tonight on ABC1. One of the most interesting characters from the recently departed and not universally mourned 43rd Parliament has pledged to continue his political career. Former Speaker, Peter Slipper, says he will recontest the seat of Fisher at the next election. He will be taking on former Howard minister Mal Brough. He admits the contest won't be easy.This is a David and Goliath effort. This is my most difficult election ever because I'm up against the major parties, but one of the reasons I'm standing is to provide real choice for local people.Mr Slipper has had an eventful few months. He has been accused of sexual harassment, charged with misusing Cabcharges and photo shopped to look like a rat on the front pain of Telegraph'. Mr Slipper's wife, Inge, has stuck by her husband and this afternoon she took aim at the media.The last 18 months have been extremely difficult, made some difficult in some respects by actually you guys. This was a direct hit on our marriage. Our marriage is real. I have stuck by Peter. I love Peter. There are so many understand
things you guys don't understand about him. He has made some mistakes, yes, but he is actually a really nice, decent, kind-hearted guy.We'll just move quickly through this one. Nick Minchin, fair to presume that Mr Slipper's support might haver roded somewhat since the last election. Mal Brough would have to be the smart money there, but Queensland... unusual place?You never know. Slipper has no chance of winning the seat. He ran it on his own party. He took the silver dollar from Julia Gillard when she needed a knew Speaker to shore up the numbers when will ke left.That's when the Coalition realised how dreadful he was?He was a dreadful speaker. Appalling to see him in the chair supporting a Labor Government. He will get smashed and I look forward to seeing Mal Brough winning seat.Aaron Described the reporter caressing the bonnet of her car to see if it was hot or cold, and then talked about the media swooping her house in a helicopter. Tour de force of matrimonial...Public displays of affection during the press conference, although we're barely through the second week. Miriam, do you think that kind of espousal display of affection is useful in the circumstances?I have no idea. I guess nobody would do it unless there was evidence it worked. I kind of wish on behalf of all politicians that there was an option for leaving it out. I know that everybody loves to see them with their family and remember that they're human, but wouldn't it be great if people could judge them on their own merit. I think it's wrong. I respect her and I respect her sincerity, but really I think that's the pits.Righto. Let's move on. Labor has launch offed its first attack ads, last night aimed squarely at the Opposition Leader, commercials hit the airwaves last night. Let's take a look at one that wept to air. ADVERTISEMENT: What are you hiding, Mr Abbott? I reckon when you were ago aggressive, negative, angry just gone quiet. Talk about about everything. Now you've the money you just gone quiet. the money you want to save. So what the money you want to save. what are you going to cut?
Schools? what are you going to Schools? Our hospitals are already stretched . What jobs are you going to cut? Teachers? Nurses? I just feel like you're hiding things and I get the feeling that if you win, we lose.What's with the whinging ladies? They really are a regular campaign feature. Just for fun, let's check out Bob Hawke's whinging Wendy from 1987 asking hard questions of Opposition Leader John Howard. ADVERTISEMENT: Look, Mr Howard, now your 3 cents in a dollar stuff is a proven lie. Does that mean all the things you want us to believe are also proven lies. No wonder you won't answer the question, Mr Howard.Let's see it through!Kevin Rudd did promise an end to old politics when he called the election, but Tony Abbott is claiming he is running a campaign of non-stop negativity.This is a desperate Labor Party which will peddle any lie if it think it is will give them a political advantage, and the trouble with the Labor campaign is they are peddling lies everywhere.Nick, you've authorise ed a few of these things in your timeIndeed.Do women make better whingers, more convincing?I've got to say
it's outrageous

it's outrageous of the Labor it's Party to portray Australian women as a bunch of whingers. They have been doing it since 1987.In 2001, whinging Wendy was nice, "Listen, Mr Howard, really sorry, nothing personal, but you really have to go." She was at least polite about itOK. The problem with this, as Tony said, Rudd tried to make a virtue out of the end of negative politics, all positive and upward and onward. 10 days into the campaign, he is running all the negative ads. This is why they say he is a fake. Says one thing, does another.Tricky for the Coalition to be...Well, we aren't purporting to be the all of sweetness and life.Anymore I am Yes, a classic case of Labor's short-termism coming back to bite them. A promise they probably not able to keep and probably shouldn't have made, because it is actually fair enough to call the Coalition on what it is that they're planning to cut and the fact that their budget doesn't add up any more than Labor's currently does, probably more. I don't think we are going to see an end to this until we actually see Labor willing to come out, and I think the same on the Coalition side, actually. Bipartisan negativity here, and...At least it's consensus on something? We won't see an end unless both parties are willing to stand up and say, "This is what we believe in and we're willing to make this trade-off." On Labor's side, they could have run a different line, simply by saying, "We stand for narrowing the gap between rich and poor. We are willing to have higher taxes on the rich, willing to borrow during economic downturns in order to do that." Isn't that the Wayne Swan cred, credo? And look what happened to him? Fair enough F the Coalition was willing to say, "We put growth first. That's our top priority. We're willing to wear more inequality. We believe tax cuts will hurt everybody, but we will...(Inaudible) At least that way you would have the positive before you had the negative. The attacks would be coming - whereas at the moment they have to if he cuss in on the negative because it ises only way they can point out the trade-off that they're not willing to own up to themselves.A simple way of explaining, it Miriam. Aaron, I notice no sign yet of the ads that we all imagined with all of Kevin colleagues of Kevin Rudd's former
colleagues their public views on what colleagues lining up to give lunatic he is. their public views lunatic he is. Do you think we lunatic he will see those?I'm sure we will. I actually thought it was quite a good ad. It was incredibly nostalgic to see the Union Jack under Hawke. The Coalition's greatest problem is that Australians yet don't like Tony Abbott, and they're starting to warm to him and starting to be more of a human, but the polls have shown that that's the next bridge, the final bridge that the Coalition have got to cross. As for your point, Miriam, unfortunately you can't tell the truth in doesn't
election campaigns, it just doesn't work because that's how you lose, and I think those ads where you have the cabinet ministers rolling up and saying what they really think of Rudd will be rolled out towards the end and I think they will be really, really damaging to the Labor Party.Thank you for that uplifting contribution. We're not just here to talk about selfies, sex appeal and dad moments during this campaign. There are a few crucial policy areas out there even if hardly anyone is paying attention to them and house something certainly one of those. It's stipted more than half a million households spend so much on rent or mortgage payments they have to go without basic needs like food or health care. Housing could be a key issue for this year's election. Australians for Affordable Housing have crunched the numbers to see which electorates are under
most pressure. which electorates are of them are in the traditional battleground of them battleground of Western Sydney. Our guest battleground of Our guest tonight is Joel Pringle, the campaign manager for Australians for Affordable Housing and joins us now from Melbourne. How are you doing?Very good, Annabel.Thanks for joining us. I'm aware you've just completed this study of Census figures looking at the pressures of housing affordability. Can you tell us what you've found?As you say, Western Sydney is overrepresented. Not a surprise. This is where a lot of young families used to go to find an affordable house to buy or just an affordable place to rent, but there hasn't been enough supply added in that area, hasn't been the infrastructure to support new housing developments, it's not the case that housing just isn't affordable, there but it is an issue right across the country.I notice that the 'Financial Review' today is reporting this hidden agenda infrastructure in this federal election campaign. Laura Tingle chartered a bit of the expenditure promising that was going on more in urban Areas than in regional and rural areas. Is that in part a response to this increased superb sure?Look, I'm not sure where that's coming from, but what we know is that - well, one of the asks we're making of the major election campaign is that the planning for infrastructure is tied more closely to the planning for housing development, and that - so the different arms of government aren't working counter to each other and that would support more affordable housing.So you think expenditure on housing follows infrastructure in an urban context. Tell me, we are in a really low interest rate environment at the moment. Is that universally good for people who are wanting to buy a house, or is it a mixed effect depending on where are you?Traditionally we might have thought that, but what we've seen lately, in spite of having record low interest rates, first home buyers in disappearing
some places are completely disappearing from the market. For example, in NSW, 4% of mortgages taken out at the moment for properties, to purchase a property, are for first home buyers. In Queensland it's only 6%. So, low interest rates aren't helping first home buyers. Low interest rates combined with our current tax settings are encouraging investors to outbid and crowd out first home buyers.So what are the ramifications for the rental market in that context?Well, interest rates themselves don't have a direct impact on the rental market...I'm just thinking investors and so on, does that have we're concerned about is the low interest rates we're concerned low interest rates might
encourage a return we're concerned about is the encourage a return to encourage speculative investment which
would drive up prices without necessarily would necessarily adding to supply. Now, that speculative investment, once Now, that investment, once it drives up investment, prices, over time increase to match prices, over prices so that's of increase to match the higher prices so that's What we need is prices so that's of a concern. What we need is to see new construction and we haven't had that new construction.Joel, it's a couple of years now since the since the Rudd Government, first time around, announced the big social housing packages that were part of the stimulus response to the global financial crisis. What effect has that tranche of spending had on the problem?Well, that tranche of spending provided new public and community housing which was welcome stock for people on low incomes, but it was only a short program. It's not delivered any ongoing investment in new low-income and affordable housing. We need to see more Commonwealth funding sighed - tied to new construction of new properties, but another program that was developed around that time, the national rental affordability scheme which is an incentive for private investors to build new properties and lease them out at a 20% discount to market rents, it's been - it's taken a while to get off the ground, as many new programs do, but proven to be very popular, very successful, after this fifth and final round, it's just closed, no guarantee of a future for that program, so it begs the question whether there is still a commitment from the Government for affordable housing.Miriam Lyons has a question for you, Joel. I'm wondering if you've got recommendations on, say, limiting negative gearing to new houses or shifting the capital gains tax incentive which is something that currently is fostering investment to pile in on existing housing and not really increase the supply?We are very often asked about negative gearing, but really, when we have a look at negative gearing, it is a failed program. It is $5 billion per year, around about $5 billion per year, deliver new housing stock,
supposed to lower rents. What we see is over 9 o o o 0% we see is over 9 o o o 0% of we see is over 9 o o o negatively geared properties are existing new housing Simply providing extra capital and more incentive Simply providing extra and more incentive for
investors to pile into and more incentive investors to pile into the existing stock investors to existing stock which increases prices, pushing out first home owners. (90%)As a tax expenditure, we have to ask what other program worth around $5 billion a year would escape the kind of evaluation of this sort. Joe, can I ask if you have a view about the rate of population growth and the floor that puts under the demand for housing and therefore the problems that you're alluding to? Because I've got to say that I was staggered to see that we had immigration of 236,000, 17% increase on the year before, total population growth last year of nearly 400,000, and all of them needing houses. I just think for someone like you, this is an issue that is quite pertinent and needs to be raised?We do have a growing population in Australia bu, we are a smart enough country and we're quite a wealthy country to deliver the infrastructure and infrastructure also means houses and public transport and schools and hospitals, to support a growing population.What we need to get right is those policy settings, and the government investment in infrastructure to make sure that we can support that population growth.Can I float an idea? Float away, Miriam. Got two minutes.I was interested in your article on the cost of abolishing the petrol excise, that that was costing something like $5 billion a year now. What if we re-indexed the petrol tax to inflation and put that money directly into bus transit in a whole lot of the outer suburbs that were really poorly served by public transport, put it into that kind of infrastructure so that you're actually able to have some kind of urban planning to allow more dense housing.More taxes? I don't know. I think the question you might be looking for there is who - who would re-index...Really popular thing to do.Was a very expensive front page of the 'Daily Telegraph' - remember they put Howard and Costello on the front page as oil sheikhs, and several days later the decision was made to cut petrol excise forever. It is a lesson in just how sweeping the changes that can come from political pressure. Do you think in retrospect and you've got about 20 seconds that was a bad move or good move?I'm sorry we had to do it. I think you're actually right in a policy sense, better to index at the excite rate, about you we were being murdered at the time. We had to do something. Blame 'The Telegraph'.Newspapers still do have an influs, don't they. That's all for 'The Drum'. Thanks to our panel - Nick Minchin, Miriam Lyons and Aaron Patrick and Joel Pringle who joined us there at the end of the program. Check out the website at Julia Baird is back hosting the show tomorrow night, but I will catch you next Monday. Thanks and goodnight.

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