2 September 2014
Transcript - #2014028, 2014

Interview with Francis Leach, 774 ABC Drive

LEACH:

Steve Ciobo is the Parliamentary Secretary to the Treasurer in the Federal Government. He joins us here on 774 ABC Melbourne this afternoon.

Hello Mr Ciobo how are you?

CIOBO:

I'm very well Francis, good to be with you.

LEACH:

How come this took so long to do?

CIOBO:

Well basically because the Australian Labor Party and the Greens aren't respecting the mandate that the government has got.  We took a very clear commitment to the Australian people at the last election and that was if we were elected, we would abolish the Mining Tax because it was making Australia less competitive and it was discouraging investment in Australia.  We also said, as a consequence of that, we'd abolish the spending that was associated with the Mining Tax that included, for example the school kids bonus. Because it was a continuation of Labor's policy which saw nearly $17 billion of expenditure against a tax that was raising basically no revenue.

LEACH:

PUP also have the mandate in the Senate and Clive Palmer claims it's there to actually moderate people’s opinions and the excesses of both the major parties and its work. Let’s have a listen to Mr Palmer.

PALMER:

This is one of the reasons why people voted for Palmer United at the election.  This is one of the reasons why the Labor Party, the Liberal Party doesn't have control of the Senate so that we can assure that there's some sort of moderation in our society and ensure that policies are good for all Australians are retained.

LEACH:

Steve Ciobo, is Clive Palmer right that your policies; one thing to get rid of the Mining Tax but the suite off sets were just far too extreme and people put Palmer United in the Senate in order to moderate that.

CIOBO:

It's a great academic question Francis and I think a lot of people could chat ad nauseam, but the fundamental fact is this. We were elected with one core objective, there are more commitments than that, but one fundamental core objective which was to get this nation back on track in terms of its fiscal policy and in terms of living within our means.  A consequence of today's amendment, and I think it's a good outcome, but a consequence of today's amended bill is that we're going to be 6.6 billion dollars worse off over the next four years as a consequence of the changes.  People can make a decision about whether they think that's a good thing or a bad thing.  From my perspective, when we're already borrowing a billion dollars a month just to pay the interest on the debt that Labor left behind, I think accruing even more debt isn't a good thing…

LEACH:

So why did you agree to it, why have you gone ahead with this if you're now painting the picture for the disaster that it is? Well you made these compromises.

CIOBO:

This is a good outcome, it's the best deal that was available on the table.  The Greens and the Labor Party have completely walked away from any financial sustainability or responsibility, so we've got to deal with those Senators that we can deal with.  We are delivering in full our commitment to repeal the Mining Tax.  We're also delivering on what we know is not a popular commitment, but our commitment to also get rid of the spending associated with the Mining Tax.  Because ultimately, this about the long term national interest and it's about the fact that we as a Coalition, are not prepared to stand idly by while future generations of Australia have their futures mortgaged to pay for today's spending.

LEACH:

You've also walked away from making sure that the current generation of tax payers have enough superannuation to look after themselves in retirement, particularly as you've pushed the retirement age even further out.  You are going to be asking more and more people to actually fund their own retirement; you can't have it both ways.

CIOBO:

That's completely false Francis.  What we're doing in relation to the superannuation guarantee is keeping at 9.5 percent for three years longer.  Bear in mind that we've had all the lectures from the Australian Labor Party about how immoral this is.  This is the same Australian Labor Party who imposed nine billion dollars of new taxes on the superannuation industry.  The same Labor Party who promised not to change superannuation one bit, or one iota.  So frankly it all comes back to this Francis; these sorts of changes would not be necessary if Australia was in a stronger fiscal position.  But when you're borrowing a billion dollars a month just to pay the interest on the debt that Labor left behind, we are not in a strong enough position to be able to continue to afford each of these things.

I get people say, ‘well hang on this is popular, we want it to stay.’  You know what, we'd love for it to stay too.  We'd love for the increase to 12 percent to happen sooner rather than later, but ultimately it comes down to the financial standing of the country.

LEACH:

Mr Ciobo, this tax as poorly designed as it was, barely raised any money.  The so called impost it was supposed to have levied on the mining industry that was going to grind the wheels of our primary industry into the ground, our resources industry into the ground, didn't exist.  This is a political myth was it not, that this tax was a lead weight on the economy.  This was just political smoke and mirrors.

CIOBO:

Absolutely not Francis, I don't agree with assertion at all.

LEACH:

How can a tax that doesn't provide any impost on those that are paying it, be in any way a ball and chain?

CIOBO:

The reason it's a ball and chain is because of the massive compliance burden associated with this tax.  We had, I'm going off memory here, more than 1,000 resource companies that are required to undertake the full compliance exercise.  Lodging the forms, doing the reporting, undertaking all the work associated with complying with the Mining Tax, not paying any revenue.  That's the reason why, just another example of why this was such a spectacular failure of a policy by the Labor Party.

LEACH:

Well it's been repealed now so the school kids bonus that the Prime Minister described in 2012 was a bribe and you're prepared to sit with that?

CIOBO:

What we wanted to make sure that we could do and we're very clear with the Australian people.  We wanted that school kids bonus gone, not because we want it to go away, but because it was unaffordable.  The best deal that was on the table, was the deal that the Palmer United Party were prepared to make.  They were prepared to take decisions in the national interest, unlike the Labor Party who have simply made themselves irrelevant, walked away from any negotiation on this issue and the fundamental point is this; the school kids bonus is a very interesting one Francis and the reason why is this.  It's those children, those very children that are at the epicentre of this debate around the school kids bonus.  They're the same kids who have had their futures mortgaged for the next two or three decades by the level of debt that was accrued over the last six years.

The reality is that every single dollar that was going to be paid out was going to be a dollar that had been borrowed.  We're now making sure that we're no longer borrowing money, mortgaging their futures, but actually trying to live in a sustainable way.

LEACH:

Steve Ciobo, is it a conflict of interest for Clive Palmer with these vast mining interests, to be involved in a vote and a deal on the Mining Tax?  Is there any danger that this is all just self-interest for Mr Palmer?

CIOBO:

I think that there's a danger, but ultimately that's a question that's got to be put to Clive Palmer.  I've seen journalists pose that question to Clive Palmer today and he's made his arguments about why he doesn't believe there's a conflict of interest.  Ultimately though, he didn't have a vote in terms of the Senate.

LEACH:

He controls the votes there, you know that.

CIOBO:

That's your assertion, not mine.  From my perspective, as I said it's a question that can be answered by Clive Palmer, I'm not his agent.  It's not my job to defend the guy.  I repeat again, we would liked to have had our mandate respected, the Labor Party walked away from it, the Greens walked away from financial responsibility and only the Palmer Party and Ricky Muir were willing to have a conversation that put the national interest at the epicentre of this discussion.

LEACH:

What other things are you prepared to trade off then, it is going to be horse trading isn’t it for things like the Medicare co-payment. What else is on the table in order to get the rest of those contentious budget items through?

CIOBO:

Don't forget Francis that we've got more than 99 percent of our budget through now.  The vast bulk of all the budget initiatives, the multiple tens of billions of dollars of savings have all gone through the parliament.

LEACH:

The budget emergency you and your team were talking about a couple of weeks ago is no more?  I get very confused; I can't keep following the message.

CIOBO:

It's pretty straight forward Francis, the message is very straight forward actually.  Australia as a nation has a significant problem, because we are spending much more money than the governments raising, so we're having to borrow money constantly.  Without policy changes, we would have had peak debt reach $667 billion and we would have had $123 billion of budget deficits.  We're making changes, we know that it was unsustainable, we're making changes.  A lot of our changes have gone through, what we're left with is some big structural changes that will need to take place and that's as I said, about making sure that Australian children aren't paying off tomorrow the money that people want to spend today.

LEACH:

Good to talk to you.

CIOBO:

A pleasure thank you.