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Transcript of interview with Raf Epstein and Mark Dreyfus: Pollie Graph-ABC Melbourne 774: 27 July 2017: Canavan citizenship; trusts; equality; energy

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The Hon Alan Tudge MP Minister for Human Services



Topics: Canavan citizenship, trusts, equality, energy.


RAFAEL EPSTEIN: Submitting themselves for questioning today, Alan Tudge is the Minister for Human Services. He is also of course the Liberal member for the seat of Aston in Melbourne’s suburbs. Alan, good afternoon, welcome.

ALAN TUDGE: Good afternoon Raf.

RAFAEL EPSTEIN: And Mark Dreyfus is with us in Sydney today. He is of course the ALP member for the seat of Isaacs. He is also Shadow Attorney General and Minister for National Security. Mark Dreyfus, welcome.

MARK DREYFUS: Afternoon Raf, hello Alan.

ALAN TUDGE: G’day Mark.

RAFAEL EPSTEIN: Hey Mark, who gets the Shadow Home Affairs Ministry?

MARK DREYFUS: That assumes that we are going to get to a Home Affairs Ministry which is still being worked out.

We have had an announcement that has been made, but it is a bit like Snowy 2.0, where we have not had a feasibility study.

ALAN TUDGE: Straight into it Mark, straight into it.


RAFAEL EPSTEIN: Hold on, hold on, hold on. I was just curious about the division of the shadow portfolios.

However, let’s start with Matt Canavan. He was, until a short time ago, Resources Minister, Minister for Northern Australia. He is young, he is an LNP Senator in Queensland, there are issues it seems around his dual nationality - somewhat embarrassingly for the Government.

When two of the Greens had to step aside - Larissa Waters and Scott Ludlum - Malcolm Turnbull was reasonably scathing of the Greens internal processes.


MALCOLM TURNBULL: It is pretty amazing isn’t it, that you have had two out of nine Greens Senators did not realise that they were citizens of another country, and it shows incredible sloppiness on their part.

When you nominate for Parliament there is actually a question, you have got to address that Section 44 question, you have got to tick the box and confirm that you are not the citizen of another country. So, it is extraordinary negligence on their part.

[End of excerpt]

RAFAEL EPSTEIN: Alan Tudge, is it extraordinary negligence on Matt Canavan’s part?

ALAN TUDGE: I don’t think it is with Matt Canavan, because he had no reason at all to believe that he was a dual citizen at the time when he stood for election. This is the difference between him and Ludlum and Waters.

In those two instances, they were actually born in other countries. If you are born in another country, everyone knows you pretty much acquire the citizenship of that country, so your position would be - well I better check up on that.

With Matt Canavan, he was not born in Italy. His parents were not born in Italy, and he only became aware a week ago that he was in fact a citizen because he understood that his mother ten years ago signed him up for citizenship, unbeknown to him.

He did not sign any documents, and this is why it is a really interesting case, and it will go to the High Court, they will have to settle it as to whether or not he indeed was an Italian citizen under a proper process and whether or not that does count towards his disqualification or not.

RAFAEL EPSTEIN: Mark Dreyfus, do you feel sorry for Matt Canavan?

MARK DREYFUS: Oh, I feel sorry for all of these Senators. I do not think that there is any serious question about their allegiance to Australia. Not in the case of Senator Ludlum, or Senator Waters, or


Senator Canavan, so of course I feel sorry for him, someone born in Australia. But the Constitution has to be adhered to.

And I am tempted to say to Malcolm Turnbull who’s laughing now? He could hardly keep the glee out of his voice when he was talking about sloppiness and negligence on the part of Greens party Senators.

Now it is one of his own we are not hearing anything about sloppiness and negligence, and Alan’s seemingly attempting to say that there has not been negligence on the part of Senator Canavan.

And what has happened here is that there was not enough checking. Senator Canavan knows that his grandparents were Italians, that is something that puts you on notice straight away, and he has not done the work.

We also learned today something he did not say yesterday that apparently there was some family discussion about becoming citizens, and I have to ask why, if this has been known for a week, did it take a week for Senator Canavan to act on it?

RAFAEL EPSTEIN: Alan can I ask you, you do not have any knowledge I assume of Matt Canavan’s mother’s application process, however Mark di Stefano from Buzzfeed had a word to us earlier, Emma Alberici from Lateline - you can tell from their surnames - they have both looked into how they might apply for Italian citizenship.

It does not seem like the sort of thing someone can do for you. It does not seem like the kind of thing that can happen to you, acquiring Italian citizenship, without actually being interviewed and signing forms. I am assuming you believe Matt Canavan when he says he had no knowledge.

ALAN TUDGE: I do believe Matt Canavan. I know him well. He is a man of integrity, and that is what he says, that he had no knowledge that his mother apparently put in application forms.

That is why he is getting legal advice even as to whether or not in fact his Italian citizenship is valid because if he did not sign a form, then arguably it is not valid. He shouldn’t be a citizen.

These are the issues which need to be sorted through, and I think he has done the right thing. He has stood down from the ministry so it’s not a distraction, and he has immediately applied to the High Court to try to get them to adjudicate on it.

If they declare that he is a dual citizen, then he will have to step down from Parliament, but from what I understand, from what the constitutional lawyers have said today, it is a line-ball issue here, so the High Court will have to decide.

RAFAEL EPSTEIN: Mark Dreyfus, is it? Personally, I am in favour of having the High Court test it. Are you personally - and is Labor happy to have - I mean, taxpayer funds, it will be the Solicitor General representing Matt Canavan in the High Court. Are you happy with that?


MARK DREYFUS: The Commonwealth has to be in the case in any event in this kind of caught-on disputed returns matter. It is absolutely appropriate that it be dealt with the High Court of Australia, sitting as the Court of Disputed Returns.

That is what is about to happen, and it is correct as some of commentators have said today, this particular situation in the context of Section 44 has not been directly considered by the High Court in the past, so it will provide some additional clarity for what is a difficult provision of our constitution.

That is a good thing. I am expecting Senator Canavan to be fully frank with the High Court, and set out for not only the court but the whole of the Australian community exactly what has happened here. At the moment, we do not know.

RAFAEL EPSTEIN: No, and I am sure there are issues in gathering the family story there as well. 1300-222-774 is the phone number. You are welcome to put a question to Alan Tudge and to Mark Dreyfus as well.

Let’s move on to what the Opposition Leader Bill Shorten was speaking to Jon Faine about today, and also we think what might be revealed by Labor over the weekend, and that is having a look at family trusts.

Labor is running very strongly on the issue of inequality. Scott Morrison, the Treasurer, was upset with some of Labor’s claims about inequality, even going so far as to say they were a lie, which is an unusual allegation for a politician.

The head of the Reserve Bank though, Dr Lowe, has told a charity lunch in Sydney that inequality is an issue. Have a listen.



Well, it’s risen. It rose quite a lot in the 80s and 90s, and it’s risen a little bit just recently. Wealth inequality has become more pronounced, particularly in the last five or six years because there have been big gains in asset prices, so the people who own assets - which tend to be wealthy people - have seen their wealth go up.

[End of excerpt]

RAFAEL EPSTEIN: Alan Tudge, do you agree? Is the head of the reserve- wealth inequality has become more pronounced, particularly in the last five or six years?

ALAN TUDGE: From what I understand, the wealth inequality was high around the GFC, and has actually eased off since the GFC, that is my understanding.

And that is looking at what is called the Gini Coefficient, which is the best indicator of wealth inequality. I think when it comes down to it though, you want to have a reasonably equal society as much as possible.


It is good for social harmony to have a reasonably equal society. At the same time, you need to be able to provide incentives for people who want to work hard to be able to get ahead, and that is what we in the Government and we in the Liberal Party - firmly believe in. If you want to get ahead or work hard, we want to reward you for that.

RAFAEL EPSTEIN: I get that philosophical distinction, but don’t we need to have a description - I guess, an agreement on the problem. Is inequality a significant problem? Because Labor says it is. The head of the Reserve Bank, Dr Phillip Lowe, says it is.

ALAN TUDGE: He suggested it was potentially getting worse over the last few years. My understanding is that it has actually eased off us since the global financial crisis.

RAFAEL EPSTEIN: I just want to point out to you that is not what he said. Wealth inequality, which is different to the measure you are talking about, but wealth inequality has become more pronounced particularly in the last five or six years.

ALAN TUDGE: There are a couple of things here. There is always going to be some wealth inequality unless you live in a communist society, and you need to be able to provide those incentives for people to work hard and get ahead. You want to reward people for effort.

The other issue which is important here is social mobility. For example, if you come from a poor family, in Australia by and large you can get out of that situation by working hard and getting ahead, and if you have got good social mobility in society, then you can have a little bit more wealth inequality.

I think in Australia we actually still do have good social mobility. It does not matter where you come from, if you work hard, you get a good education, then the world is your oyster, and I think that is the most important thing in our society, and we still have that here in Australia.

RAFAEL EPSTEIN: Mark Dreyfus, I am sure you want to address inequality, but do you agree with Alan Tudge that we have got good social mobility?

MARK DREYFUS: We have got better social mobility than the United States. We have better social mobility than the United Kingdom.

That is a good thing about Australian society, but at least today Alan Tudge is not trying to tell people that we do not have 3 million people living below the poverty line in Australia, which is what Alan was trying to say in his speech last week that he was congratulated for by Alan Jones on Sydney radio.

ALAN TUDGE: Don’t verbal me in terms of what I said in my speech, Mark.


MARK DREYFUS: I read your speech, and I read the commentary about it, and Alan was trying to put forward last week some ridiculous proposition that we should not be using the standard measure of poverty that is used throughout the OECD.

But should instead be using some measure of absolute deprivation. So only if you are starving to death, apparently, does Alan think we need to worry about it. We have got a problem.

ALAN TUDGE: Again, I did not say that, Mark, but anyway, keep going.

MARK DREYFUS: I am glad to hear it, Alan. But certainly Alan was trying to define…

ALAN TUDGE: I am glad you read my speech though, Mark, that is good.

MARK DREYFUS: Alan was trying to define away poverty and the fact of the matter is we have got inequality in this country.

We have got inequality confirmed by the Governor of the Reserve Bank and what Bill Shorten was talking about last week in an excellent speech drawing attention to that inequality, was that we want to have a tax system which makes sure that wage earners are not paying more than their fair share.

That we continue to have something which has been a bedrock of Australian society for many decades: a progressive tax system where the wealthy bare a higher proportion of taxes than poorer people in Australia.

And supporting the idea that taxes remain a very, very important part of the Australian system of government because with taxes we pay for infrastructure, with taxes we pay for services that we all depend on.

RAFAEL EPSTEIN: But, Mark, can I just ask you to address, I guess, Alan’s point and I guess it is the philosophical one from the right wing, the right side of politics. If you adjust what happens with something like a trust, you remove the incentive for people.

They might not be anywhere near earning the top marginal tax rate of $180,000 or so. But if you attack something like trusts, or change that, you remove incentive for people to get ahead.

MARK DREYFUS: I think that Alan needs to engage with the fact, confirmed by the Governor of the Reserve Bank, that there is rising inequality in Australia.

In drawing attention to potential unfairness in the tax system, all that Bill Shorten, and we in Labor, are saying is that you need to make sure that the tax system operates evenly.


And of course there is a point at which tax rates will act as a disincentive and that is kind of a basis economics.

But we are nowhere near that level in Australia. We are absolutely nowhere near a level where tax rates are at such a level that it provides a disincentive for people to engage in economic activity, a disincentive to work. Nowhere near it.

RAFAEL EPSTEIN: People discouraged by tax rates, Alan Tudge?

ALAN TUDGE: Of course they are. I mean we are actually setting ourselves up here for a very stark difference between the Coalition’s policies and Labor’s policies.

I mean Labor has now, effectively, they have announced that they are going to put more tax on income, more tax on investments, more tax on your rental property, more tax on small business, more tax on trusts and they have not even ruled out yet having a tax on your inheritance as well...

MARK DREYFUS: Alan, stop announcing Labor policy. This is nonsense and you know it.

ALAN TUDGE: So basically anybody who is working hard, trying to get ahead, trying to make an investment, trying to make a quid, trying to start their own business, trying to get a rental property, Labor wants to tax them.

Now that is just a tax on people working hard to try and get ahead.

MARK DREYFUS: Right, can I have a bit of a go here, Raf? Since Alan’s keen to…

ALAN TUDGE: We want to reward and help and support people who want to work hard and get ahead. If they are working hard, good luck to them. Our nation is built on that. Let’s reward them for that.

RAFAEL EPSTEIN: Just a brief response, Mark Dreyfus. Brief.

MARK DREYFUS: We are committed to tackling inequality so that hard workers and wage earners are rewarded, not just the top end of town getting away with not paying its fair share of tax.

We have not announced any changes to the treatment of trusts. What we have said is that we are going to continue to examine and scrutinise tax subsidies and we are going to continue to improve the fairness of the tax system.

RAFAEL EPSTEIN: Okay. Just let me read some of the texts. I am from South Korea. I always feel that in Australia you are penalised, not rewarded, for working hard.


Someone else: Dreyfus is a doofus. There will always be the rich, middle class and poor in every society. Labor just needs to oppose everything the Coalition does.

Anne - so Alan Tudge, what about the 7-Eleven workers who worked hard, but got ripped off and the technicians at Crown worked hard - we spoke about this yesterday - got sacked and offered their jobs back at 30 per cent less. Inequality is real. Tudge is out of touch. That is from Warwick.

Your texts are welcome on 0437-774-774 and you can put a question to both of my guests, Alan Tudge and Mark Dreyfus on 1300-222-774.

[Traffic update]

RAFAEL EPSTEIN: Mark Dreyfus is part of Bill Shorten’s Shadow Cabinet. Alan Tudge is part of Malcolm Turnbull’s team, part of the Coalition Government. Nicholas is in Flemington. We talked about citizenship off the back of the former Resources Minister Matt Canavan. Go for it, Nicholas.

CALLER NICHOLAS: G’day Raf, thanks for listening or speaking to me. Look, you know, you tick a box and it is important to say to yourself oh do I know where I come from?

Do I know what my heritage is? Have I talked to my family, you know? And these other guys, the Greens, they fell on their sword. They stuffed up, they made an innocent mistake and you know, they are sorry.

Far North Queensland, they do not make the mistakes, mate. It is someone else’s fault, you know, it is always someone else’s fault.

RAFAEL EPSTEIN: Okay, look, thank you.

CALLER NICHOLAS: So, you know, two bobs worth there.

RAFAEL EPSTEIN: No, no, good to know. Stephen’s called from Mordialloc. What did you want to say, Stephen?

CALLER STEPHEN: Yeah hi, look, I want to say that I am a middle sized company. We have got about 250 employees. And what Shorten’s doing is absolutely strangling small business.

RAFAEL EPSTEIN: Which things in particular?

CALLER STEPHEN: Well, Labor just does not realise with all the employment laws that they put in place after Howard.


And Howard put in some very good employment laws, and after Howard, it went downhill dramatically with Labor. And getting rid of somebody is almost impossible for a company.

RAFAEL EPSTEIN: Okay so if I can refine that to a question, employment law makes it too hard for a medium size company like yours?

CALLER STEPHEN: Absolutely. No question. And not only that, not only that, the tax laws makes it very hard too because you have got to remember, we have got a huge amount of liability. We work seven days a week, 24/7 almost.

And to produce companies to employ people, our company employs 250 people across Australia, we are in every state and territory across Australia and the Government, the Labor Government is just making it so - I used to vote Labor...

RAFAEL EPSTEIN: Okay, so you are going to want to give Mark Dreyfus a chance to respond and Alan Tudge. So thank you.

Mark Dreyfus, I guess dismissal laws there and the tax laws that are already in place, well they are stopping Stephen’s company from operating. Two hundred and fifty people.

MARK DREYFUS: Stephen’s company is operating. Congratulations, Stephen, on your company thriving well enough to employ 250 people.

And can I remind you, however, that the Australian people resoundingly rejected John Howard’s work choices laws at the 2007 election and the Liberal Party’s been in power last time I looked for four years.

If you have got some complaints, you should be directing them to Mr Tudge, or perhaps to Mr Turnbull.

RAFAEL EPSTEIN: The principle of more tax is obviously - Stephen is unhappy about.

MARK DREYFUS: I think Stephen’s actual complaint was about not being able to sack his workers more easily, and I am actually in favour of unfair dismissal laws that protect people’s security of employment and I think most Australians agree with me.

RAFAEL EPSTEIN: I will get a response from Alan Tudge, but we will have a word to Morrie in Mt Eliza first. Morrie, what did you want to say?

CALLER MORRIE: Hi Raf, thanks for taking my call. This is a question to Alan Tudge. How can you possibly justify the negative gearing concessions that are available to middle to upper class members of our community and also the capital gains concessions available when it is absolutely patently obvious that it is a distinct advantage to the middle class in comparison to kids trying to get into the market?


RAFAEL EPSTEIN: Okay Alan Tudge?

ALAN TUDGE: Well it is mainly middle income earners who utilise the negative gearing principles. It is the police officers, it is the teachers, it is those people who are on $80,000, $90,000. That is what the research says.

RAFAEL EPSTEIN: But most of the benefit goes to the people earning more than that.

ALAN TUDGE: It is one of those things which people used in order to help themselves to get ahead. And we want to encourage that. We want to encourage people to work hard, save up some money, make an investment so you can look after yourselves and your children better.

That is the Coalition way. We want to reward people for doing that. And it is the contrary way - it is the Labor Party way - where they want to tax your investments, tax your rental property, tax your small business, tax your income, tax your trusts, tax anything else that moves. That is the Labor way.

RAFAEL EPSTEIN: To address Morrie’s point, it is an entrenched advantage for a privileged group of people.

ALAN TUDGE: I do not believe that is the case because, as I said, it is largely middle income earners who utilise the negative gearing principles in terms of investment properties.

That is what the research shows. It is your middle incomes earners, your police officers, your teachers, your everyday people. And it is their main vehicle for having an investment and getting ahead later on in life. And good luck to them.

RAFAEL EPSTEIN: Alan Tudge and Mark Dreyfus, thank you for your time this afternoon, it has gone quickly but I appreciate it.

MARK DREYFUS: Thanks very much, Raf, see you Alan.

ALAN TUDGE: Thanks Mark, Thanks Raf.

RAFAEL EPSTEIN: Alan Tudge there, Minister for Human Services. Mark Dreyfus, the Shadow Attorney-General.