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Leadership Matters: speech, Western Australia



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PRIME MINISTER

THE HON. MALCOLM TURNBULL MP

TRANSCRIPT

13 April 2016

Leadership Matters speech followed by Q and A session

Western Australia

E&OE...

PRIME MINISTER:

Well thank you very much for that very kind introduction. It is always great to be in Western Australia. For many, many years, I have always appreciated coming to this state and being inspired by the spirit of enterprise and entrepreneurship. Your spirit of innovation. Your spirit of practical, get-up-and-give-a-go, and if it doesn’t work, have another go. That is what has made Western Australia.

Can I say to you, all of you, Kerry Stokes, all of you here today, every single one of you - you live in a state with the most formidable natural resources. That’s true.

Your iron ore is building cities around the world. You built China. I’m going to China tonight to cities that have been built with steel made from the iron ore from Western Australia. Your LNG is driving the energy, the industries, lighting up homes right across the Asia Pacific. But the greatest resource of Western Australia is not under the ground. It is you. It is the men and women of this state. It’s your sense of entrepreneurship. Your imagination. Your energy. Your courage. That’s what makes this state great and that is what has made it the export powerhouse of Australia for so many years. So I congratulate you and I’m honoured to be among you.

Can I say to you too that you have a remarkable team in the federal Parliament, many of whom are here today.

Western Australia accounts for one tenth of Australia’s population, but one fifth of the seats around the Cabinet table. Just look at the calibre of those Cabinet Ministers. The incomparable Julie Bishop, our Foreign Minister, Deputy Leader of the Liberal Party, who makes us so proud to be Australian every time she stands up for us on the international stage. Mathias Cormann, our Finance Minister, keeping his steady hand on the financial tiller and shepherding through historic reforms in the Senate that will put power back in the voters’ hands, not the preference whisperers and back-room dealers. A real blow for democracy. Can I acknowledge in that, as I regret to say, a solitary island of consistency and integrity on the Labor side; Gary Gray, who was a great advocate for Senate reform

and stuck to his principles when the rest of his Party regrettably decided to change their position. Christian Porter, your former state Treasurer, and Attorney General, brings his intelligence, his youth, his enthusiasm to our Cabinet table. His experience of what it is like to operate both at the state level and the federal level, extremely valuable at the Commonwealth Cabinet table. He brings that and his fresh vision to Social Services. And of course Michaelia Cash, Minister for Employment and Minister for Women. She is doing a magnificent job right now, saving family trucking businesses from being put out of business. Confronting union lawlessness on construction sites and spearheading our response to domestic violence.

In addition to that we have here today Michael Keenan, Minister for Justice. We have Nola Marino our Chief Whip, the first woman to be the Chief Government Whip on our side. We have Ken Wyatt, our Assistant Minister for Health, and Senator Linda Reynolds and Senator Dean Smith. You have and we have a very powerful West Australian delegation in Canberra. And of course my West Australian colleagues have been quite assiduous in making sure that I know more about the arcane complexities and sometimes perverse outcomes of the Commonwealth grants system than perhaps one ever wanted to know.

[Laughter]

In short, Western Australia has been allocated the lowest share of GST of any state or territory, precisely at the time that revenues have been squeezed, as the commodities boom has subsided. That’s not reasonable. That is why our Government has stepped in this week to ensure that WA’s not unfairly treated. So we have announced this year, as indeed we did last year - $490 million in extra infrastructure funding for Western Australia next financial year. And, yesterday of course we announced an addition $261 million investment in the Perth Freight Link. That’s on top of the $676 million investment in the Gateway Project, the completion of which was celebrated yesterday.

These are investments in nationally significant economic infrastructure. Infrastructure Western Australia needs for its successful transition from resource investment driven growth, to one which is still very dependent and very reliant on the strong resources sector, but is also more diversified. We are working with you there to build the infrastructure that will reduce transport congestion. Drive productivity. Competitiveness. Jobs and growth. This vital infrastructure will make it easier for Western Australians to get where they need to go. For businesses to get their products to market. For less disruption and inconvenience. We know that infrastructure is a key lever in our efforts to ensure we have the new sources of growth and exports as the mining construction boom subsides. As it always destined to do. We need every lever of Government policy working towards that same objective.

Friends, this is the big test of leadership in this country. Implementing the right policies to continue our successful transition to that stronger, more diversified, more innovative 21st century economy. In order to remain a high-wage, generous social welfare-net first-world economy, our priority must be to ensure that we are more innovative. More competitive. More productive. The successful transition, which we are delivering, is what will ensure that our children and grandchildren have the great jobs they deserve. Not just today, but tomorrow and in the years to come.

That’s where my first economic policy announcement, set of measures, was the $1.1 billion Innovation and Science Agenda. It will bring more Australian ideas to market. Incentivise entrepreneurship. And invest more in education and research. That’s why as part of our commitment, to an additional $29.9 billion dollars in Defence investment over the next decade, through our Defence White Paper - fully costed - the first since 2000, we are investing $1.6 billion in

initiatives to build the skills, capabilities and competitiveness of our own Australian Defence industry sector. This will ensure as much of our Defence dollar is spent in Australia as possible, with investment in innovation, in the Defence sector, creating thousands of jobs and bringing tangible benefits to local businesses and communities. And the spill-over of benefits to the broader economy that you see that you see from a strong indigenous defence sector.

That is why tonight I am flying to Shanghai with more than a thousand business leaders. To ensure that we make the most of the China-Australia Free Trade Agreement, which we brought into force four months ago. The most ambitious Trade Agreement of its kind, that China has ever signed. If we are to make the most of these exciting opportunities, in the world’s most dynamic economies, we need to be highly competitive and innovative. In catering to the demands of Asia’s growing middle class for high quality services, high value-added consumer products. Our future is defined by the skills, the talents, the ingenuity of our people. Our greatest asset is our people. It’s you.

That is why we are introducing the $3.2 billion Child Care subsidy, which would bring the equivalent of 20,000 full time workers back into the workforce. It is why we are investing $7.8 billion into the NBN this financial year. Which means that by June 2018, three in four Australians will have access to the NBN. Many of you here in this room, perhaps more in this room than in most rooms, have been involved in big projects. I think you know, normally, regrettably, the melancholy fact of life is bad projects only get worse. The NBN was a very poorly conceived project. In every respect a bad project. In fact it completely stopped in Western Australia. We’ve turned that around with new management, a pragmatic, businesslike approach. We are at the point whereby 30 June this year there will be a quarter of all Australian households having access to the NBN. That has been a very big turn-around. We’re very proud of that.

We have eliminated around 3,000 mobile black spots nation-wide -mobile phone blackspots - through round 1 of our program, with an additional $60 million to be invested in round 2. Last month we established a new $1 billion Clean Energy Innovation Fund to invest $100 million every year in cutting edge Australian clean energy technologies and businesses. To drive jobs and innovation. But also to play our part of the global community in reducing carbon emissions. The May 3 budget will include changes to the tax system, designed to generate jobs and growth, to promote investment, innovation and enterprise.

Overarching all of this however, is the fundamental fact of life. Governments at all levels and all Australians concerned for the future economic security of our country, have to accept the reality; that we must live within our means. The only way to ensure we have great jobs in the future, to ensure that we have the revenues that will enable us to deliver the great schools and great hospitals, is to have a strong and successful economy.

Excessive taxes, excessive debt, serve only as a handbrake on economic growth. So everything we are doing - innovation, competition, trade, investment, infrastructure - is focussed on powering economic growth. If we don’t keep constantly building on this plan for a successful transition, our economy will stall. Jobs will go. Opportunity will be lost.

And so as I’ve indicated earlier, this election year is all about leadership on one central issue. Whether we complete our transition to the new economy, or whether we lose that opportunity. This transition is one I have talked about for years. It has been plain that in this vastly bigger, vastly more globally connected economy in which we are operating - where the pace and scale of economic change is utterly without precedent - the changes that we have seen in our lifetimes have no precedent in human history. For the size or the pace.

These are extraordinary times. These are the most exciting times with the greatest opportunities but we have to be far more innovative, competitive to take advantage of them. Of course they are the strong suits of Western Australia.

The contrast with our Opponents could not be more stark.

Take, as an example, their plan to ban negative gearing on all assets other than new dwellings. The policy is clearly calculated to reduce investment, discourage entrepreneurship, and reduce the value of every home and indeed every commercial property.

Labor’s ban on negative gearing does not just apply to residential homes, existing residential properties. It applies to every single asset class except for new dwellings. Commercial properties, shares in public companies or in private companies.

Plainly Labor wants people to invest less, to take less risk, borrow less, build businesses less, create less jobs.

You add to that of course their proposal to increase capital gains tax by 50 per cent.

Now when we want people to invest more in start-up companies we provide capital gains tax exemptions, we provide tax incentives. We know if you reduce the tax on something people will do more of it. If you increase the tax on something people they’ll do less of it.

That’s been proved true by Governments for hundreds of years. So what do we say about Labor who is increasing the tax on investment?

Clearly they want to have less investment.

Now as we have read in the reports this week the Shadow Treasurer, was warned about all of this last year, when he was presented with a report by the respected economic research firm BIS Shrapnel. One of the two leading economic real-estate consulting firms.

Despite all of those clear warnings, despite of all the modelling and all the advice about the damage this would do Labor has pressed ahead with it. All of this is calculated to have these consequences lower home values, lower property values, higher rents. Just think about this consequence.

Under Labor’s approach, anyone who owns, an investor who owns a residential property is only going to be able to sell that residential property to a home owner. Unless you have an investor who is prepared to absorb net rental losses out of their after tax income.

Inevitably what will happen is investors will need to have higher rents to get the same after tax income and of course the stock of rental properties will contract over time. That is the inevitable consequence.

So you have an extraordinary set of proposals that will drive down property values and at the same time drive up rents, reducing housing availability.

It is the mining tax fiasco all over again.

Labor continues to stand in the way of the successful transition to a more productive, more innovative, more enterprising economy.

We see this in their obstruction in the Senate.

Right at the heart of the economic reform we need is restoring the rule of law to the labour market.

Two major pieces of legislation will address this.

One is the Registered Organisations Bill which anticipated many of the recommendations of the Hayden Royal Commission by requiring unions and employer organisations to have similar rules of transparency, accountability as apply to corporations. You would think that is common sense. The other is legislation to re-establish the Australian Business and Construction Commission to restore and enforce the rule of law in the construction sector. It employs over a million Australians.

Now a competitive and productive construction is critical if we are to have the infrastructure of the 21st century at a price the Australian taxpayer can afford.

We had hoped that after the Royal Commission the case for restoration of the ABCC and the Registered Organisations bill would be irresistible even to our opponents.

But they ignore the mountain of evidence produced by the Commission. They appear not to care that the CFMEU has 108 officials before the courts right now relating to more than 1000 breaches of industrial law. They appear not to care about the damage to the economy of the disruption and delays on construction sites across the country.

Having secured reform to the Senate electoral system, we are recalling the Parliament on April 18, on Monday, to give, ensure that the Senate three full weeks to consider its opposition to the ABCC and Registered Organisations bills.

And we will seek the support of the Senate to abolish the RSRT - the Road Safety Remuneration Tribunal - a body that has an Orwellian name because there is nothing at all to do with road safety. A tribunal designed to advance the membership of the Transport Workers Union by putting owner-drivers out of business.

We must not allow Labor, Bill Shorten, and their backers in the unions to stand in the way of advancing this nation’s long-term interests.

Now under our Government by contrast we are seeing strong confidence and growth in the economy - 3 per cent real GDP growth last year; over 300,000 new jobs created - the highest since 2007.

And Western Australian resource projects are leading the way.

The huge new LNG trains I visited at Barrow Island this week are a stand-out example - helping Australia to soon become the largest LNG exporter in the world.

And the same can be said about the innovation of our leading mining companies. The automated iron ore trains that are coming on stream this year - each 2.4km long - will be the longest and heaviest robots in the world.

I know it’s been a difficult period of this adjustment for many Western Australians. But the untold story, or at least the story that has not been told nearly enough, is that we are already most of the way through this readjustment. There is great resilience in this city, and in this state. Western Australians know the cyclical nature of the mining and resources business - and they have proved time and again how adept they are at being able to pick themselves up, dust themselves off, and have another go.

That is the spirit that has kept this state strong and optimistic even as it has travelled through the eye of the greatest terms of trade storm in this nation’s history.

It was of course Western Australia and its strength which came to the rescue of the national economy during the Global Financial Crisis.

And it is this state, with its sheer resilience and commitment to enterprise that is setting our exports on track.

But none of us - here or anywhere else in Australia can afford to be complacent.

Success is not guaranteed.

My government will provide the economic leadership to steer the right course.

Our economic plan will ensure that Australia is more productive, more competitive, more innovative; our kids are learning the skills of the 21st century. Our cities are more efficient and more liveable. Our tax system is sustainable and encourages investment and jobs. And, Australia remains the best place in the world to live, to invest, to realise your dreams.

By using the keys of innovation, technology, investment, infrastructure and free trade, we are unlocking the exciting new growth markets for Australian business.

That is our clear vision; that is our economic plan - every measure, every policy, counting towards the achievement of the great jobs, the great opportunities, of this the most exciting time in history, the 21st century.

Thank you very much.

[Applause]

ANDEW PROBYN:

Prime Minister I think we should start by clearing the air somewhat but I am willing to tell an abridged version of this story. How it is that you almost came to own this great masthead and bear in mind that Kerry Stokes is sitting right there.

PRIME MINISTER:

Well Kerry was not the counter bidder and there is no doubt that if he had been I wouldn’t have even tried. No, it was, in the late eighties or early nineties I think, when the West Australian newspaper group was sold. And there were two syndicates, there was one that was put together by our very good friend John Poynton and Hartley Poynton. And there was another that involved Chris Corrigan, and my own firm and Ron Briley had some money in it as well.

ANDREW PROBYN:

There was a fair bit of hostility to that attempted takeover wasn’t there?

PRIME MINISTER:

Well it, I don’t know if there was hostility, we felt…

ANDREW PROBYN:

I think there was..

PRIME MINISTER:

We felt we had a better bid but of course we had one very big disadvantage that we weren’t on the home team.

ANDREW PROBYN:

Was that your first experience of West Australian entrepreneurship?

PRIME MINISTER:

No not at all, I’ve had a lot to do with business in this state over many years, in fact a firm that Lucy and I started over here a software and technology business called FTR which still operates here in Bentley to global business now. We are long out of it, but it was a, it had the world’s leading product and still does I believe for digitally managing court proceedings and hearing room proceedings, it’s a niche product but nonetheless it won the best exporter of the year award for Western Australia in 1996 so I’ve always loved the spirit of adventure and entrepreneurship here, it is, this is a very exciting time.

ANDREW PROBYN:

Can I pick up on that theme, something that you touched on in your speech, you were talking about innovation and how it might apply to this state. Now you and I were on Barrow Island earlier in the week. It was, it’s a gobsmacking project, monumental in its proportions both financially and physically in scale. But the man who is behind that company, that built Gorgon was saying only yesterday that such projects would be 40 per cent cheaper if it were built by Gulf of Mexico nations. What can you do and your government do to drive down costs?

PRIME MINISTER:

Well I think, this is where the measures like the ABCC are very important, there is no doubt that the, you know this Andrew because you talked to all of these businesses and their leaders. There is no doubt that the approaches, the tactics of the Union movement in many parts of Australia and the construction sector have added very materially to costs. I think the BCA has estimated that it adds, the lack of compliance with industrial laws, adds about, at least 35 per cent to construction costs in Australia. So that means that every living side LNG trains, every hospital, every school, every road is that much more expensive.

ANDREW PROBYN:

So to unlock the next big infrastructure surge to workers have to expect less? PRIME MINISTER:

I think what you have actually got is an industrial environment that works against the interests of workers. The truth is, if you had a, if the rule of law prevailed in the construction sector as it should do, I have no doubt there would be more construction and more jobs for construction workers, more cranes in the sky, more activity, it is, this is a, the lawlessness, and that’s a fair description of what we are facing at the moment.

I mean with 70 per cent of all industrial disputes in Australia are in the construction sector. The evidence is overwhelming, and Shorten turns a blind eye to that. He’s a former head of the AWU of course, he says that that’s not a problem. Well it is a problem, and competitiveness is key, and if you can build, there is a lot of gas around the world, as the executives at the LNG 18 are reminding us, and they have options. Now Australia has got a lot of attractions, close to markets, politically stable and all of those things, but we cannot afford to have such a gigantic cost differential because they have got options.

ANDREW PROBYN:

Now growth is a big thing, we have heard it from you and Scott Morrison in recent months, the IMF is actually predicting that economic growth will stay under 2.5 percent. Now how does this effect government thinking when it comes to hastening efforts to fix the budget for example?

PRIME MINISTER:

I won’t argue with the, or contest the IMF’s forecast. As you know we had 3 per cent real growth last calendar year. Scott and Mathias will be working hard on the growth forecast which will be built in to the budget. We have strong economic growth here relative to other countries; in fact our growth last year was higher than any other, any G7 country for example.

ANDREW PROBYN:

The IMF is still pushing their case for an increase in GST and lower corporate taxes, are these made impossible by the politics of it, and perhaps by the state of the budget?

PRIME MINISTER:

Well I’m not going to comment on what’s in the budget.

ANDREW PROBYN:

You could Prime Minister….

PRIME MINISTER:

I know I could. I could just between us you won’t tell anyone I’m sure. But let me just say something about the GST. We looked as you know at the arguments for increasing the GST, and there was an argument, there are cases being made, lots of people have argued we should put up the GST. States have said you should put up the GST and give us the money. Other people have said put up the GST

and cut company tax or put up the GST and use it to reduce personal income tax. The challenge that we faced when we looked at it, and Scott and I in particular worked through, looked at all of these options carefully as we said we would. If you were to increase the GST by 5 per cent you would raise around $30 billion of additional revenue a year. But of course the price of most things, other than GST exempt things would go up. So you would get an impact on CPI, pensions would go up by, automatically, by around $6 billion.

ANDREW PROBYN:

So we are not going to revisit that?

PRIME MINISTER:

No we are not. Let me just explain, Andrew. So you would have $24 billion left, but at that point, 91 per cent of people in the bottom 20 per cent of incomes, and about 74 per cent in the second bottom 20 per cent of incomes, were worse off. And so by the time you ensured that people in the two bottom quintiles were not worse off the amount of money you had left was actually less than half of the 30 you’d raised, so that’s. There’s a number of reasons for that, happy to explore them. That is why the GST tax mixed with thesis, actually on close distributional analysis did not stack up.

ANDREW PROBYN:

On tax cuts I think it’s fair to say you have had mixed messages from both yourself and Scott Morrison. We had for example Scott Morrison earlier in the year talking about personal income tax being the higher priority than company tax cuts, but that has since changed. Can you clarify for us here and now what is the higher of the priorities, company tax cuts or personal tax cuts?

PRIME MINISTER:

Well they’re all important.

ANDREW PROBYN:

But one was more important back in January.

PRIME MINISTER:

I don’t accept your premise and May 3 is not very far away.

ANDREW PROBYN:

The treasurer said.

PRIME MINISTER:

Just wait. Settle. It’s not long to go.

ANDREW PROBYN:

Is bracket creep the crisis that we were being told it was a few months back?

PRIME MINISTER:

Well, I’m not given to using language like that. Bracket creep is obviously an issue and always has been. But again, stunning interrogator though you are, I am not going to accidently reveal the budget. Yes it is just us.

ANDREW PROBYN:

Okay, well also on tax. You are in WA, how can we not talk about the Commonwealth Grants Commission. You know, as you were saying before. We have got a tenth of the population in WA, a fifth of your Cabinet are Western Australians. It gets 3 piddling percent of the GST take.

PRIME MINISTER:

There you go. Well..

ANDREW PROBYN:

I haven’t asked my question yet Prime Minister.

PRIME MINISTER:

You are as good as Kerry O’Brien his go on for hours and hours. Kerry O’Brien used to give an editorial and by the time he got to the end I had forgotten what he said at the beginning.

ANDREW PROBYN:

Well Prime Minister, Western Australians have heard sympathetic noises from Prime Ministers before about the poor take that GST gets, that WA gets from GST, and you know I’m sure the state does appreciate the $490 million that it has received. It is a billion dollars over the past two years. Doesn’t that in itself prove that the Commonwealth Grants Commission is producing a distribution that is unfair and unconscionable?

PRIME MINISTER:

Well it is certainly producing a distribution that is seen as unfair in Western Australia and it is a distribution that is in percentage terms gives such a low share to this State as to be, in my understanding without precedent in the history of the allocation of the distribution by the Commonwealth Grants Commission which as you know is - administers a process called horizontal fiscal equalistaion.

ANDREW PROBYN:

Don’t bore us with that one, please Prime Minister.

PRIME MINISTER:

Yes, which is that everyone in Australia should be able to get the comparable services and schools and hospitals.

ANDREW PROBYN:

What’s actually happened Prime Minister is that WA has been clipped on the way up and now it’s being clipped on the way down.

PRIME MINISTER:

Yes, this has been drawn to my attention.

ANDREW PROBYN:

It has been I’m sure it has. Okay, now we have…

PRIME MINISTER:

If I could just add to this Andrew, the formula is backward looking. I mean, Mathias would be able to give a better chapter and verse description of it but the formula is backward looking. It looks back three years and so you are, even though the mega revenues, royalty revenues have subsided your GST take is still being suppressed if you like because of that.

Now in future years you’ll get back to more conventional levels and I think there is a general view that the Commonwealth Grants Commission needs to be reviewed, but I have to stress to you that this is not our money. We raise it, it is all raised by the Commonwealth but it’s shared between the states.

ANDREW PROBYN:

Why should the Commonwealth Grants Commission always have this kind uncle who slips WA another half a billion? What about this…

PRIME MINISTER:

You’re not seriously suggesting we shouldn’t have done it, are you?

ANDREW PROBYN:

I’m saying the system the formula…

PRIME MINISTER:

You’ll lose the room if you do that, I can tell you.

ANDREW PROBYN:

What about the idea of a floor?

PRIME MINISTER:

Andrew, again, thanks for the suggestions and the questioning.

ANDREW PROBYN:

It’s not my suggestion, you’ve heard it many times before. PRIME MINISTER:

I’ve heard it from West Australian leaders, Colin Barnett and I had a very good discussion about the Commonwealth Grants Commission and GST earlier in the week. I’m very alert to these issues but they will need, they will need to be put on the table at COAG and discussed and settled between the states.

ANDREW PROBYN:

Well talking about COAG we had a very eventful COAG and in the days leading up to it. In fact WA was the only one who supported you with your state income, well an income tax sharing suggestion. Now the West Australian Treasurer, Mike Nahan, has actually proposed an idea for you, Prime Minister. He says if you do win the next election he would like WA to run a trial of income tax sharing as you proposed at COAG. Are you interested?

PRIME MINISTER:

Well it’s something that can’t be done.

ANDREW PROBYN:

He says it’s constitutional.

PRIME MINISTER:

Again, with respect to the State Treasurer. Commonwealth Taxes have to be uniform across the country so you couldn’t have the Federal Government levying less tax, income tax and if you like making way for the WA Government in just one state. So that, would not be feasible. But nonetheless, states have got to consider their own tax bases. There is a lot of opportunity for tax reform at the state level. The most inefficient taxes in Australia, that is to say the taxes that have the biggest brake on economic activity, are actually state stamp duties - particularly on real estate - and if you look at a tax reform agenda across the country it really needs to involve state taxes. We tend to overlook that.

ANDREW PROBYN:

Was Christian Porter part of the design team for the idea you took to COAG?

PRIME MINISTER:

All I can say to you is we, the proposal that we put to the states for their consideration which with the exception of Colin Barnett there was somewhere between very little to absolutely zero interest was considered by the whole of the Cabinet.

ANDREW PROBYN:

What I’m asking is was it really legitimate plan or was it just a devious plan to smoke out Premiers who are happy to accept money but not responsibility?

PRIME MINISTER:

Well, you’re asking me to subscribe to one of your opinion pieces so…

ANDREW PROBYN:

No, no, I haven’t actually written that, I’m asking you.

PRIME MINISTER:

No, no, it’s important. The states have been coming to us and saying, raise the GST - not all of them but many of them - raise the GST, raise income tax and give us the money and we said to them, well how about you raise some tax, part of one of these big tax bases and if you choose you can raise it and they didn’t seem to be so much interest or there was no interest actually. So the good thing about that was it all ended absolutely in agreement, we don’t want to raise taxes and neither to they hence we have to live within our means. So it had a very sensible ending as far as I was concerned.

ANDREW PROBYN:

I’m sure it did Prime Minister. Now next Monday parliament resumes you talked about it before. Again, I’m asking about your intentions here. What happens if the Senate does pass the ABCC?

PRIME MINISTER:

And the Reg Orgs bill? If they pass both of them then there won’t be a double dissolution election on 2 July.

ANDREW PROBYN:

Do you concede that will be another confusing sign for voters? I think almost the entire nation has prepared itself for a double-d. Are you doing this thinking it’s going to be rejected?

PRIME MINISTER:

Well, every indication we have is that they will be rejected, you’ve got to remember the Senators voted against the ABCC once. It hasn’t shown any inclination to pass it to date, it’s actually voted down the Registered Organisations bill not once, not twice but three times so if the past is any guide to future performance then you would expect it wouldn’t be passed but they have the opportunity to pass them and we’d be delighted if they did and if they did pass them then there would not be an election, at least a double dissolution election on the 2nd of July.

ANDREW PROBYN:

A seven week campaign it’s an awesome thing to contemplate….

PRIME MINISTER:

Well it’s two weeks longer than a normal campaign.

ANDREW PROBYN:

Well it’s still very long, historically. It’s very long for a brand new Prime Minister, for a brand new team in essence. What’s it going to be about? Is it going to be about the ABCC or is it going to be about something else?

PRIME MINISTER:

Well the election campaign as I have just said in my speech will be about, I think the main issue will be overwhelmingly economic leadership. Who do you trust to successfully manage and lead Australia in this transition of our economy to one that is more diverse. One that is better able to take advantage of these enormous opportunities.

We have set out the measures and the plan to do that, we believe Labor’s policies will actually undermine our efforts, they will actually be blockers to that progress and so we believe Australians will have a very, very clear choice of economic leadership.

ANDREW PROBYN:

Bill Shorten is growing in confidence, I must say it is quite extraordinary that political fortunes have been so turbulent the last six years. He does think that he’s onto a big winner with the Royal Commission on banks. Do you think or concede that it was a mistake for the Government, not a government under you I concede although you were in Cabinet, to cut $120 million from ASIC?

PRIME MINISTER:

Well ASIC has some very substantial resources, there’s no evidence that they’ve been dilatory in pursuing wrongdoing in the corporate sector including in the banks. Indeed the cases brought against banks relating to the alleged, I hasten to add, alleged manipulation of the bank bill rate BBSW has been brought by ASIC but can I just say this to you, I made this point in my speech at LNG 18. We believe, we are committed to ensuring that as far as possible our tax system is obviously sustainable. It’s got to generate the revenues we need but that as far as possible it promotes investment, enterprise, jobs. Growth, economic growth. That’s our commitment.

But, at the same time, it is our absolute commitment that every Australian, every business whether it is Australian owned or foreign owned has to pay its fair share of tax and it has to do so in accordance with the law and we have taken strong measures to strengthen those laws. You know, last year we made a number of important changes to the taxation legislation to give the ATO greater teeth to deal with multinational tax avoidance or the opportunities that are available for multinationals to avoid tax.

I have to note that the Labor Party voted against that bill and Scott Morrison did a great job in navigating it through the Senate with the support of the Greens, an unlikely supporter you might think but nonetheless, we got the numbers and we got it through the Senate despite the opposition of the Labor Party.

ANDREW PROBYN:

On the banking Royal Commission do you think the politics are with you here? The politics are going to be crucial ahead of a long campaign. You’ve said that a Royal Commission into the banking sector would undermine confidence; wouldn’t it improve confidence in the banking sector if they are proven to be not as damaged in their systems as has been promoted?

PRIME MINISTER:

Let’s just think about it. Of course, there’s been plenty of experience - we’ve all had plenty of experience in royal commissions. Royal commissions are no more than an inquiry. They are an investigation and they have the power to compel people to give evidence and to produce documents. They cannot prosecute anybody - they can’t really do anything other than to write a report at the end of the inquiry.

ASIC and APRA for that matter have considerable investigative powers - they have all of the powers of royal commissions plus they have the power to actually do something. ASIC can ban somebody.

ANDREW PROBYN:

It’s not public though.

PRIME MINISTER:

They are able to have a public hearing if they choose. They’ve got the ability - Andrew this gets to my point - if there is a specific issue then the regulators have the ability to deal with it. And they are dealing with it, as I mentioned earlier with respect to the bank bill rate matter. What Labor is proposing is to spend hundreds of millions of dollars on a multi-year inquiry which would have no objective other than to attack the banking system - attack the integrity of the banking system and it would have the consequence of undermining confidence in it.

Now, where there is a specific issue, a specific allegation or area of misconduct or alleged misconduct the regulators have the tools to go in, force people to give evidence, get documents and they can then take measures.

See what the public want - they want action - they don’t need another long inquiry. They want governments and the agencies appointment by governments to get on with the job and deal with the problems at hand rather than have a, what would amount to be 2 or 3 years, who knows - royal commissions have run longer than that. And, a great feast for the lawyers, lots of headlines possibly good for some newspapers and journalists. But, enormous damage to the banks which are - I have to tell you - for all of their imperfections, the solidity of our banks are absolutely fundamental to our economic security.

ANDREW PROBYN:

Can I turn to a happier subject for you, hopefully? Your wife Lucy - I think there is a general perception that with Malcolm it’s a two for one deal - you get Lucy who is a dynamo, who is very keen on cities policy and she is highly successful in her own right. What sort of role will she have and does she have in policy making and decision making?

PRIME MINISTER:

Well Lucy, as you well know, is a lawyer and businesswoman and she has been very successful. She was Lord Mayor of Sydney. She was Deputy Chair of a COAG cities reform panel actually established by the previous Labor government. She is regarded as one of Australia’s leading authorities on urban issues. She’s now the Chief Commissioner of the Greater Sydney Commission which is a new

planning body that the State Government of New South Wales has set up to better coordinate city wide plans. Lucy is previously Chair of the Committee for Sydney. She speaks on, particularly, urban issues all the time.

ANDREW PROBYN:

Does she influence on you in terms of your decision making….? Always?

PRIME MINISTER:

Lucy is by force of her intellect and her advocacy - she has influence everywhere.

[Laughter]

[Applause]

ANDREW PROBYN:

Well answered.

[Laughter]

Now, Donald Trump?

PRIME MINISTER:

Yes…

[Laughter]

PRIME MINISTER:

What’s the question?

ANDREW PROBYN:

Senior Liberals including John Howard have expressed an anxiety at the prospect of Donald Trump being United State President. Do you share that anxiety?

PRIME MINISTER:

Can I say to you that despite your kind invitation I am not going to comment on any of the personalities involved in the American elections, other than that I am sure the American people will make a wise decision at the end of the day.

ANDREW PROBYN:

He’s an amazing phenomenon. Can you explain without getting into a diplomatic storm as to why someone like Donald Trump in modern day complex politics can be so successful?

PRIME MINISTER:

Well, again that’s really getting into the area your job Andrew of political commentary.

I just, you know, as your Prime Minister, I think it am better that I don’t engage in commentary on current American politics. It is really - this is a matter for the American people and there are plenty of very able commentators who are writing millions of words, almost by the minute about that very question.

ANDREW PROBYN:

And lastly, you’re heading off to China today?

PRIME MINISTER:

I am.

ANDREW PROBYN:

Is it possible to have a sort of robust discussion with China about international world order without threatening economic ties?

PRIME MINISTER:

I’ve met with Premier Li and President Xi on a number of occasions now. I met Premier Li some years ago as well. I have had very frank, very cordial, friendly, but very open and honest discussions with them. I have not - I don’t hold myself out as a China expert at all, I might say, but I have had a reasonable amount of experience in China. I founded, established a mine in China in the 90s. And I’ve spent a lot time in that period in the Provinces, you know outside of Beijing and Shanghai - so I’ve got around a bit. I think the important thing - you know, I’ve made this point publicly elsewhere - the important thing is to be very honest, very open, and very consistent and that is how you respect it. And I think we stand up for our position. Chinese understand that and that they respect that just as we respect and understand their standing up for their positions.

ANDREW PROBYN:

Prime Minister, you have been very generous with your time. Thank you.

Ends