8 December 2014
Transcript - #2014050, 2014

Interview with Rafael Epstein, 774 ABC Drive

EPSTEIN:

The Coalition MP. He’s also the Parliamentary Secretary to the Treasurer, Steve Ciobo thanks for joining us.

CIOBO:

Pleasure Raf.

EPSTEIN:

Firstly the clippings file that must land on your desk every morning doesn't make happy reading. Does it matter to the government though? You've got every single person from the breakfast TV host through to people like Alan Jones sticking the boot in.

CIOBO:

Well of course it matters, I mean we are the government though, we've been elected to do a job and that job is to get Australia's finances under control, to restore our budget. We had a situation, Raf, where we were, as a country seeing deficits on an ongoing basis that were tens of billions of dollars, debt that was forecast to reach $667 billion dollars. We were elected to make sure that we did something about getting that under control. Now we are trying to do that.

We've reduced the total peak debt from $667 billion dollars by over $300 billion dollars. We've also achieved a number of other things in terms of stopping boats, putting in place free trade agreements with Korea, China and Japan, of course a trillion dollars worth of environmental approval have been fast tracked. We’ve got job growth at double the rate it was under the Labor Party. We have done a lot of things this year; it’s been a year of good achievements…

EPSTEIN:

People do not seem to be listening Steve Ciobo before we get onto the Murray Inquiry.

CIOBO:

Well look, I mean this is part of the challenge that any government has. I think it’s fair to say Raf that we've taken some decisions which we know are not universally popular, there's no news flash in that. But we've made those decisions because those are decisions that serve our national interest. We've done it in an environment where the Labor Party and in particular Bill Shorten runs around saying, "Well we don't like what the government has done here. It’s not fair. They shouldn't do it. We don't think that's the right thing to do.” That's fine, that's Labor's prerogative, they can just oppose ...

EPSTEIN:

Aren't you actually in trouble because you said one thing before an election and another after and there's any number of examples that can be thrown your way? I'm deliberately not engaging with the merits of your argument on debt because I'm not sure that that is working. Isn't your significant issue that you said one thing before and another after?

CIOBO:

Well I don't think that's entirely fair. As a government, we said that if you elect us, we would get Labor’s reckless spending under control and that we’d work to restore the budget. That's precisely what we are doing. I mean I don't think you can cherry pick and just focus on charges made against us, when I say you, I mean in terms of the plural you.

EPSTEIN:

Sure.

CIOBO:

Put forward saying, well you haven’t honoured that. I mean there's a lot of things where we have completely honoured our commitment, many many things. Restoring the budget, we've always indicated was front and centre. The number one priority for us as a government, we said we'd stop the boats, we've done that. We said we’d abolish the mining and carbon taxes, we've done that. We said we'd have a one stop shop when it came to environmental approvals, we've delivered on that. I mean there are a raft of areas where we have done absolutely well, what we said we were going to do. Now...

EPSTEIN:

Can I give you one example and I do want to get on to the Murray Inquiry because that’s the reason we asked you.

CIOBO:

Sure.

EPSTEIN:

I was just interested in an exchange the Prime Minister had with Chris Uhlmann on AM this morning. Chris Uhlmann put it to the Prime Minister that you were going to be a no excuses, no surprises government. He said that the GP co-payment effectively was a surprise. Just have a little listen.

ABBOTT:

Well the GP co-payment was very extensively talked about in the lead up to the budget and...

UHLMANN:

Not before the election.

ABBOTT:

Well it certainly wasn't ruled out before the election.

UHLMANN:

You weren’t asked about it much as I recall.

ABBOTT:

Well that's right, but it was something that was certainly talked about extensively in the lead up to the budget.

EPSTEIN:

So Steve Ciobo the quote there, especially that it was talked about extensively in the lead up to the budget. You probably know because this is doing the rounds today. Just three months before the budget, the Prime Minister specifically ruled it out. He was asked about campaigning for the by election in Kevin Rudd’s old seat in Queensland. He specifically said, "Nothing has been considered, nothing has been proposed, nothing is planned." Now again I'm deliberately not getting into the merit of the GP co-payment.

CIOBO:

Sure.

EPSTEIN:

I acknowledge that. Isn't your issue you say one thing in February and do another in May?

CIOBO:

Well as the Prime Minister said in relation to the reductions in ABC and SBS funding. We are facing a situation where we've had to take decisions in order to deal with the financial reality that befalls Australia. Yes we have reduced ABC and SBS funding from $5.5 billion to $5.2 billion. One of the reasons we've done that is because we face the situation where we were under the impression based on the economic forecasts prior to being elected, that the budget deficit was going to be $18 billion.

EPSTEIN:

You were specifically asked again and again if the budget's worse than it seems after the elections will you need to change your commitments. I'm actually looking at the chair that Tony Abbott was sitting in as Opposition Leader when he said to John Faine, "Things won't change even if the budget's worse."

CIOBO:

Well look, I can't comment directly on that other than to say I think ultimately the Australian people and the challenge for us, is to make it clear to the Australian people that we are taking decisions that we believe to be in the national interest. There's no joy I can tell you Raf in any of us as members of the Coalition running around delivering a political message that people don't want to hear.

EPSTEIN:

I'm sure.

CIOBO:

It’s not how I wake up and choose to start my day.

EPSTEIN:

I'm sure that's the case. Let's get on to the Murray Inquiry. Steve Ciobo is with me. He is the Parliamentary Secretary to the Treasurer, 1300 222 774 is the phone number. Steve Ciobo we have, well at least internationally we've got decent debt levels, I don't want to get into a debate about that. We do have a lot of tax revenue slipping away on super concessions, negative gearing and those sorts of things. I just thought it was interesting both the Commission of Audit under Tony Shepherd and the Murray Inquiry are calling for changes to superannuation, those concessions that benefit the rich. You've got two of your, I guess the people that you have entrusted to have a look at things, calling for that sort of change. Is something going to happen in that area, superannuation concessions?

CIOBO:

Well I'm not going to be announcing policy, sorry to disappoint you right here and now. What I would say in relation to the Murray Inquiry is that it’s a report to government and not a report of government. David Murray is a highly regarded former CEO banker obviously as well someone with a deep and broad understanding of the financial services sector. Financial services in Australia have for many decades under government of both persuasions, been a growth industry and an important growth industry. If you look at superannuation, you raised superannuation, it’s gone from roughly $300 billion to now being worth $1.8 trillion. There are a raft of recommendations from 44.

There's a whole host of observations more broadly about tax matters, all I would go into to say is that we are going to look at them all very closely, we are going to consult with stakeholders, with consumer groups, with others to get a solid feeling about where people feel we should be going forward. Then we are going to incorporate that feedback and in the near future make an announcement about which recommendations we'll adopt, which recommendations we might change or tweak slightly and which ones we will reject.

EPSTEIN:

I’ll get peoples calls in a moment 1300 222 774. I understand too Steve Ciobo if you don’t want to give me policy on the run, I think that's an eminently responsible thing to do. However the budget has copped a lot of criticism for unfairly targeting those on lower incomes. The Government says, "Well listen, if you cut back on government expenditure, it’s inevitable." But there are many people too saying, negative gearing, capital gains, superannuation concessions, have a go at some of the concessions that the wealthier receive, would I be a stupid person to bet on something like that in the budget next year?

CIOBO:

Well I think it’s important to understand what's superannuation is about. In this respect, this is one of the key tasks of the inquiry. I mean the purpose of superannuation is to provide an income stream for people moving into retirement. Now frankly it’s a nice problem to have that people would be in a situation where they have assets in their superannuation. The reason that's a nice problem to have, is because it means that fewer tax payer resources are being called upon to fund the retirement of people who are retirement age or older. Honestly that's a good policy problem to have. Ultimately, we want the system to work so that people make a contribution, a fair and equitable contribution for the tax base, but that we also create incentive for people to provide for their retirement.

EPSTEIN:

I guess I am asking you about the political or the policy direction of the government. We I think give away more in superannuation tax concessions and negative gearing than any other country in the developed world. Is that something that is worth looking at?

CIOBO:

Well I think you've got to look at horses for courses. What I mean by that is that it’s important to make a valid comparison. Now tax...

EPSTEIN:

Sure, we’ve got a better super system than every other country as well.

CIOBO:

Correct. We do have a better super system. We do have a, it’s a policy success. Under the Labor Party, and under the Coalition, it’s a policy success that has brought about good outcomes, good policy outcomes for our nation. Especially at a time when we've got an ageing population, it is a very good outcome that's being achieved. Also it’s important to look at things and take for example you say, "Well we've got huge tax concessions on capital gains." Well you know what? In the United States, yes, they get charged Capital Gains Tax on for example their principal place of residence. By the same token, they get to claim the interest repayment on their housing mortgage.

Now in Australia you don't get to claim the interest on your mortgage repayments, but you get it capital gains tax free. I just cite that as one simple example just to highlight that it’s important to compare apples with apples. Often a lot of the information that is cited, although it might technically be accurate, it betrays the truth or the true state of affairs because it’s not making valid comparisons. That's why I just highlight that example.

EPSTEIN:

OK. If I can return in a sense to where I began, I was actually looking at some of the comments made by Tony Abbott in opposition about government advertising including, I think generally regarded as outrageous advertising around don't come here by boat advertising here when perhaps you should have gone overseas. But, the advertising campaign launched today for the higher education changes that you have proposed, is not part of the anger directed at the Government, directed at you because you do things like this. Those proposals were knocked back in the Senate last week. Yet you are using tax payer funds to advertise the policy that you propose, it’s not even law yet. Isn't that the very thing that drives people nuts? I mean you're not alone in doing this, but doesn't it just aggravate people?

CIOBO:

Well I think it’s important that there isn't allowed on an ongoing basis to be a culture of misinformation. If you look at higher education for example...

EPSTEIN:

But you’re the Government Steve Ciobo; we get you on all the time. That's fine. If you think there's misinformation about your changes and I've had lots of debates about the policy merits of higher education reform. That’s fine but you're using my money and the money of everyone who's listening to try to persuade me of the value of your argument, isn't that what drives people crazy?

CIOBO:

Well and if that's what we are doing, then that would have some validity. But that's not what we are doing. We are not trying to persuade you of the value of our argument. What we are trying to do is to make sure that people understand the facts and the factual information. Now you get advertising from local Councils, State Governments, Federal Governments. What's important and what we've always adhered to is it’s got to be factual information. Now take for example higher education. We know that people are running around, not the Vice Chancellors themselves, not the universities who actually want reform, but others are running around saying, “If reform goes through, we are going to end up with everyone having to pay $100,000 for a degree.” It’s completely false.

EPSTEIN:

Can I just stop you there Steve Ciobo because you're saying that you're not advertising the changes you're proposing or trying to persuade me with my money. But you are. On the front web page it says: “true or false? Universities in rural and regional Australia will benefit from the changes.” Now again I'm not arguing whether that is right or wrong. That is not law, that did not pass the Senate. You may have 36 out of 37 universities as you say; I think Government saying, agreeing with you. That should be paid for by the Liberal Party and the National Party not by the tax payer.

CIOBO:

Well I think it’s important if the Government is trying to put through policy, that’s what we are trying to do. We are trying to govern in the national interest; we are trying to make sure that Australia’s tertiary education sector appropriately reflects the best world class institutions; that we should as a nation like Australia aspire to have. And when we are faced with a wall of misinformation, parties claiming that there's $100,000 degrees in the offering and that universities are going to profit gauge students.

EPSTEIN:

The Labor Party thought you were wrong on the Carbon Tax. They didn’t pay for government advertising to say you were wrong.

CIOBO:

I remember a very very big, very very big campaign in relation to the Carbon Tax.

EPSTEIN:

If they did, you've refreshed my memory, they shouldn’t. Can I read you two more things off your website? True or false, new scholarships will help students that really need it. I mean that's a proposal, that's something you couldn’t persuade the Senators of.

CIOBO:

But this is entirely the point Raf. We have a job to do as a government; we were elected to take positions in the national interest. Now we are as a result of the reforms which as you said, are supported by 36 out of 37 universities even though there are unfortunately some Senators who just refuse to acknowledge that and continue to spread misinformation. I think it’s important that the Australian public understands that there will be the creation of record numbers of Commonwealth Supported Scholarships. I think that is a good thing that Australians actually know the facts.

The important thing is this isn’t just gut feeling. I mean the Department of Education between July and September this year, attended something like 45 tertiary studies and career expos. What they found and the feedback from them and then further research that has been undertaken, is that there's widespread misinformation and misunderstanding about what's taking place. I think that it’s important that there be a factual accurate record of what the proposed reforms are.

EPSTEIN:

Steve Ciobo thanks for taking the time and taking the questions.

CIOBO:

That’s a pleasure.