Transcript - RN Breakfast [Inequality]




Frank Kelly: The former Treasurer, Wayne Swan, says his party, The Labor Party must also do more to address what he sees as the mounting discontent in the community to politics as normal. His advice, Labor needs to put rising inequality at the heart of its agenda for the next federal election that includes a thorough consideration of the so called Buffet Rule where wealthy Australians would be slugged a mandated minimum rate of income tax but that pitch puts him directly at odds with the shadow treasurer Chris Bowen. Wayne Swan is in our parliament house studios, Wayne Swan welcome to Breakfast.

Wayne Swan: Good morning Fran

Kelly: You gave this speech yesterday to the AWU in which you said the American lesson for us was not to go down the American road what do you mean by that?

Swan: Well going down the American Road is going down a road of massive concentration of income and wealth at the top, a hollowed out middle class and the creation of a vast army of working power so growing inequality in America and in other parts of the developed world just eats away the heart of society; it breeds disdain, it breeds envy, it breeds hopelessness and it breeds resentment. And that's precisely what we've seen in the United States, the political polarisation that has flowed from the increasing concentration of wealth and income at the top has produced in the case of the United States a very extreme right wing backlash in that country.

Kelly: Sure but we a different system here, we have a strong wages system, we have a welfare system, are we in danger of overstating the problems or the similarities here?

Swan: Well we've done better over the last 30 years than the United States, for example median incomes in Australia over a 20 year period increased by 50 per cent but in the United States they flat lined, that is there were savage real wage cuts in that country but we are standing on the cusp of a similar set  of circumstances if you just look for example to the national accounts and some of the data has come out in recent times, wage growth in this country is stagnate, the temporary nature of work in the workforce, casualisation is now hitting 40 per cent. We are now on the cusp of becoming much more unequal and at every turn the Turnbull government in particular and the Abbott government before it want to kick away the great enablers that have made sure that middle income and lower income earners in this country have done better than America in particular their attack on progressive taxation and their attack on the whole industrial relation system which has been the key platform that has meant we have done so much better in this country than they've done in America.

Kelly: But when you say in that part of the speech we can't let parts of America become the "Down Under' version of their mid-Western communities whose skills are no longer in demand and get thrown to the scrap heap. I mean to some degree in some regions of Australia that has already happened and it happened under a Labor government as much as it’s happened under a LNP government.

Swan: Well, we had in place Fran a lot of policies to address these issues. We were not trying to destroy the wage system, we were not trying to bring down penalty rates, we were trying to reinforce worker voice in our economy, we were pushing for progressive taxation.

Kelly: But we still lost those jobs for those workers, they've gone and there was nothing Labor or the Coalition could do to stop it

Swan: Well there certainly was and when you come to the car industry it’s a classic example where they simply told the car industry to get out of the country and off they went. They had no plan for the future of manufacturing in this country and there are large swaths of this country where manufacturing is currently under threat. The Government has got its head completely in the sand for example when it comes to the cost of energy and the future of the manufacturing industry. So there are a whole range of policies in those areas.

Kelly: You're listening to RN Breakfast our guest is the former Treasurer Wayne Swan. Wayne Swan in this speech another quote is "There is a strong a growing risk that Australia will become a place where ordinary people's views are drowned out and only those with the most expensive megaphones get a say" - now I've spoken to you about this before but at the moment in Australian politics isn't it fair to say that it is not those with the expensive megaphones that are influencing policy it is those where you say ordinary people's views, the people who have voted and brought us the rise of One Nation and in other states other protest parties, they're the ones influence policy at the moment.

Swan: I don't think so. I think the policy of the Abbott government and the Turnbull government when it came to, when it comes to taxation for example, the increase in the GST, the attack on  the industrial relations system, the attack on Medicare, there has been a real fight back in this country against their attack on the social safety net and their attempts to make the country more unfair but what you've seen in Australian similar to America is the radicalisation of the right side of politics what has quietly happened in this country is the Labor Party has occupied the position that we normally occupy on the centre and left of politics. What’s occurred on the right of politics is that they are fracturing because in Australia under Tony Abbott in particular tea party influences came to dominate the Liberal Party, small L liberals are no more in the Liberal Party and the Liberal Party is scared of its right, namely Pauline Hanson.

Kelly: Two quick points before we go, you speech was very much a call to arms, you said Labor must sharpen its pitch on inequality ahead of the next election and you say that includes taking a close look at the so called Buffet Rule which Chris Bowen has already said is not good policy. Who would you like to see paying the tax and what level would you set it?

Swan: Well what we have to do is to get rid of rampant tax evasion and rampant tax minimisation in both the personal tax system and the company tax system. I don't believe there is a difference of opinion between Chris Bowen and myself on that objective you can call it a Buffet Rule, call it whatever you like but the truth is there are too many people on very high incomes who are not paying the tax they're supposed to pay and whether you have a Buffet Rule or some other form of arrangement that has to be dealt with as we have to deal with aggressive minimisation and evasion by some of our largest and most respected corporates like BHP

Kelly: And just finally you also talk about progressive social issues dominating the news and getting in the way of the everyday concerns of the people that you're making a defence of here. What does that mean? That Labor shouldn't be engaged in the issues of same sex marriage or 18C, I mean Bill Shorten says same-sex marriage is one of the top things on his agenda.

Swan: No, I think they're very important but sometimes in the debate working people don't hear the message they're looking for if your job is under threat and you're in Wollongong or you’re in Logan city and all you hear  is the discussion of those issues, as important as they are you get start to get the feeling that your economic interests are not to the forefront  of political decision makers and what I said very clearly in my speech; the Labor party was formed to look after the economic interest of working people and to ensure they got in the fair workforce but a fair go in society, that does include those progressive social issues but we've got to have the economic issues right up front.

Kelly: Wayne Swan thank you very much for joining us.

Swan: Thank you