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Transcript of interview with Patricia Karvelas: RN Drive: 8 February 2016: tax reform; Stuart Robert

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Kelly O'Dwyer Minister for Small Business Assistant Treasurer




ects: Tax reform; Stuart Robert.


RICIA KARVELAS: Kelly O’Dwyer is the Assistant Treasurer and the Minister for Small Business, welcome back to RN Drive.


NISTER O’DWYER: Great pleasure to be with you, Patricia.


VELAS: Has Labor’s campaign against the 15 per cent GST on everything, which is what they call it, defeated you or are reports of its death exaggerated?


ISTER O’DWYER: Well I think reports of a conclusion to the tax debate are somewhat exaggerated, Patricia. I think it is important to note here that the Government is very, very focussed on ensuring that we lock in high living standards for all Australians. We have had 25 years of uninterrupted economic growth but we know that our prosperity is not predestined and we need to get the economic settings right going forward. Now one of the big levers at our disposal as a Commonwealth Government is taxation policy. We know that we need to think very carefully if we are to look to change taxation policy. There are problems that exist when you have got the average wage earner moving into the second highest tax bracket as of next year. When you consider that only really 15 years ago about 80 per cent of all of those people paying tax were paying 30 cents or less in the dollar. Now this is a problem because it means that those people who are working hard are not being rewarded sufficiently for their efforts. So we are considering a whole range of options.


VELAS: Sure but with respect you say that but do you agree that it looks like Labor has scared you off regardless of the economic realities because it really doesn’t take a political genius to hear what everyone is saying in the government now which is that basically the GST is off the table.


NISTER O’DWYER: Well I would say to you, Patricia, that that hasn’t in fact been said and…


VELAS: So it is still on the table then?


ISTER O’DWYER: What I would say to you is we are still considering a range of taxation options that we will take to the Australian people before the next election. But they have to deliver the right sort of outcomes. They have to help deliver growth to our economy which in turn will help to


deliver jobs. Now we are not lazy about this we are prepared to work through all of the options. I know those in Labor simply want to rule things out because they take a very lazy approach to our national economy and a lazy approach to budgeting, a very lazy approach to dealing with taxation matters. They simply want to hike up taxes and not think much further about it. We take a very different approach, we think you need consider about changing the taxation mix. If you want to cut income taxes you have to consider options that might pay for that. We want to though lower the overall taxation burden and we want to make sure that any changes that we potentially put to the Australian people are fair and they are simple. So it is going to take a little while yet, Patricia, before we have all of that finalised but we are working hard at it and that is what the Prime Minister said over the weekend.

KARVELAS: Sure but Kelly O’Dwyer you might say you are keeping your options open but I think a lot of people see confusion or mixed messages. When he called the leadership spill in September, Malcolm Turnbull really criticised Tony Abbott’s failure on economic leadership and his ability to

communicate and sell a message. Isn’t the Prime Minister now guilty of the same problem?

MINISTER O’DWYER: Not at all, I think the Prime Minister has been patently clear on what the objectives are and the process that we are going through in order to make sure that we can deliver on those objectives. We are not going to simply do something for the sake of doing it; it actually has to achieve the right sort of outcomes. It needs to make sure that we grow our economy and that we are locking in higher living standards for all Australians. This is not some sort of contest for who can be brave for the sake of it. This is a contest…

KARVELAS: So if you could have your time again in this tax debate which we have been having…

MINISTER O’DWYER: This is a contest about the best tax policy for Australians and we will make sure that we do the work to get that right.

KARVELAS: If you could have your time again would you have played it the same way leaving this debate wide open and really creating no narrative about the parameters which is how it looks - it looks pretty disorganised.

MINISTER O’DWYER: Well I think we have been clear on the parameters, I think I have mentioned that to you I won’t repeat myself again. I think we have been very clear on the parameters and I think we have also been clear that we want to hear all of the ideas and all of the evidence; we want to examine every single bit of the evidence. You can’t make a properly informed decision without listening to all of the ideas and examining all of the evidence. That is the only responsible way to consider taxation policy and that is exactly and precisely what we are doing.

KARVELAS: On RN Drive, my guest is the Assistant Treasurer and the Minister for Small business Kelly O’Dwyer. Our number here: 0418 226 576. I wonder of what you guys make of the tax debate and where it’s moving, is the GST off the table or well, certainly its chances have been radically reduced. 0418 226 576. Kelly O’Dwyer, The Australian newspaper says that the Government is looking at other tax measures worth $10 to $15 billion a year, including $6 billion from trimming superannuation tax breaks - something you raised in your National Press Club address too. That now becomes imperative doesn’t it - reform around superannuation.

MINISTER O’DWYER: Well we’ve always said, and what I actually said in my Press Club address, is you’ve got to make sure that concessions are properly targeted. You need to evaluate that from


time to time and again that is precisely what we’re doing in this case. But let me say this Patricia, we need to make sure when we think about superannuation policy, first and foremost, we are thinking about the retirement incomes of those Australians who are going to need to rely on it. We need to be very clear on what the objectives of our superannuation system are and that is to make sure that those people who have superannuation don’t need to rely on the aged pension either in full or in part. And that’s why we’ve made a number of announcements regarding superannuation about achieving world’s best practice in governance, in making sure that people have choice of their superannuation fund, in making sure that we have a transparent system so that people can properly compare products before making their decision. These are just some of the elements of our superannuation policy that we have announced to date and there will be more to come.

KARVELAS: Reports also suggest you’re looking at saving several billion dollars by putting limits on negative gearing. That’s obviously a very delicate issue, I’ve watched a couple of election campaigns go round and negative gearing is the one thing that everyone feels very afraid of touching on both sides of the political fence, you’ve got to say. Where do you sit? What do you think? Do you think that negative gearing is too highly exploited as it stands?

MINISTER O’DWYER: We’ve got to be very careful here as well, that we want to ensure that we continue to build the housing stock that we need in this country for people to be able to either purchase or rent so we have to be very careful when we examine these sorts of changes like any other taxation changes that we’re not going to lead to unintended consequences that might in fact damage our economy so we don’t just think about the changes themselves but we look at what will be the result, what will be the first round results of it and what will potentially be the other results if we were to change policy. And again, I think that’s the only considered way to actually look at these sorts of issues.

KARVELAS: The Prime Minister talked in the language in relation to the GST about being convinced and that he was unconvinced that the GST was necessary on economic grounds. How do you feel about negative gearing in terms of on economic grounds whether it needs reform, have you been convinced that it needs reform?

MINISTER O’DWYER: I’m not convinced yet. I always come from the starting point that if you are going to change something you need to make the case for change but I’m but one voice at the moment and…

KARVELAS: And why are you at this stage unconvinced that negative gearing should be touched?

MINISTER O’DWYER: I think you need to be able to make a really compelling argument for change - that’s not to say that I won’t change my position if more compelling arguments are put on the table but let me say this, Patricia, you have to consider it holistically though in the broader tax discussion and you can’t pick off just one element and talk about it separate to those other elements that it will interact with.

KARVELAS: Just on another topic, Human Services Minister Stuart Robert is facing questions about his trip to China in 2014. I know you won’t tell me he should resign but do you agree that he should have done more to avoid the appearance of Government approval to a mining deal involving a very big Liberal Party donor?


MINISTER O’DW YER: Well as I understand the circumstances Patricia, an d obviously I’ve read what yo u’ve read, I understand it was a private trip and I understand, th at this matter has now b een referred by the Pr ime Minister to the secretary of his department to se e if it is li ne with the Ministerial conduct.

KARVELAS: Thank you so muc h for your tim e.