WAYNE SWAN MP
MEMBER FOR LILLEY
SBS THE GALLERY
FRIDAY, 6 APRIL 2018
SUBJECTS: Malcolm Turnbull’s 30th Negative Newspoll; Labor’s Fairer Tax Plan; Corporate Tax Cuts; Global Financial Crisis; Media Landscape; Carbon Pricing; Coalition Budget.
BRETT MASON: This week, the Prime Minister chalks up his milestone 30th consecutive Newspoll loss, the very benchmark he himself set for ousting Prime Minister Tony Abbott. Someone who knows a little bit about the impact of ousting a sitting Prime Minister is the former Labor Treasurer, Wayne Swan. Mr Swan, hello.
WAYNE SWAN, MEMBER FOR LILLEY: G'day.
MASON: What would you be doing on Monday morning when that Newspoll drops if you were Malcolm Turnbull?
SWAN: Well I think the problem that Malcolm Turnbull's got isn't the 30th Newspoll, it's just the failure of his government. And he has not been able to face up to that. His trickledown agenda – you know, the $65 billion corporate rate cut – is deeply unpopular in the community, and the Liberal Party's not facing up to the key problem here. It's the substance of what they're doing. It's not the style or the personality. The Liberals have gone into hyper-trickledown, if you like, in terms of a policy solution for the challenges of this country – one that was nearly rejected at the last election, and their reaction to that is to double down and to do it even more.
MASON: Malcolm Turnbull's been telling nervous colleagues – particularly some of his own moderate faction colleagues – that they should hold their nerve, and if it comes down to a fight about the economy at the next election, the Coalition will win. Why do you think he has that confidence?
SWAN: Well he shouldn't have that confidence. I mean, the Coalition's trickledown agenda is one that's going to deliver much more inequality in Australia into the future. It's taking us right down the American road. And until the Liberal Party as a whole faces up to the consequences of their policies – the substance of what they're doing, rather than the style – then they'll continue to be in deep electoral trouble.
MASON: The announcement by Labor, the Shadow Treasurer Chris Bowen, about the franking credits plan seemed to cause some problems for Labor. They had to come out and announce this pensioner protection plan. And the Treasurer Scott Morrison made a lot of mileage out of that in Question Time. How damaging was that to Labor's economic credentials?
SWAN: I don't believe it was damaging at all. It showed that Labor is absolutely serious in putting forward an inclusive model of growth, which means eradicating all of those loopholes exploited by the very wealthy in the tax system at the expense of ordinary wage-earners. Because what that all means is either higher taxes for them or less services, or a bit of both.
MASON: But wasn't that line of attack entirely predictable? Shouldn't Labor have seen that coming and thought about the messaging around pensioners before it rushed that policy out?
SWAN: There's always a bit of fine-tuning that'll take place with a large policy such as that one. Always a bit of fine-tuning. But it was always only at the edges. The substance of the policy is correct, just as the substance of our policy on negative gearing is correct, just as the substance of our policy on trusts is correct. The fact is that the conservatives in this country want to make our tax system much more regressive, much more unfair. The central challenge from the Labor Party is to make it much more progressive, so that we can grow fairly. And that's what our bold policy is all about.
MASON: The Coalition have been working on crossbenchers in the Senate to get its company tax cuts policy over the line. Labor is opposed to that. What are your concerns about the policy being proposed by the Coalition?
SWAN: Well the fact is that 58 per cent of the public oppose the company tax cuts that have been put forward. What the Australian people want is to grow, but to grow fairly. And they want access to the universal services upon which they depend – particularly health and education. But if the Liberal Party wants to throw $65 billion away to some of the wealthiest multinationals in the country, the consequence of that is higher tax rates for ordinary wage- and salary-earners and less services in terms of health and education. That is the very clear contrast that people are seeing. And it's not a question of whether it's Malcolm Turnbull or whether it's Tony Abbott. They've both been offering this trickledown solution to Australians, and Australians are saying they don't want to go down that American road, which is now best exemplified by Donald Trump.
MASON: You yourself, the Shadow Treasurer Chris Bowen, and the former Prime Minister Julia Gillard have all spoken out in favour of company tax cuts in the past though.
SWAN: Well I think that's a complete distortion of what I've said in particular. Because when I was looking at the tax system and received the report of the Henry inquiry, what we were looking at doing was changing the nature of the company tax mix. We were talking about increasing some company taxes whilst decreasing others. But we were going to keep in place the total company tax take. So it wasn't a huge company tax cut at all. And that has been a distortion that the Liberals have been dragging across the screen to hide their embarrassment at the public rejection of this largesse that they are providing to some of the largest multinational companies in the world.
MASON: Moving along; as Malcolm Turnbull faces an anniversary of the Newspoll variety, this year marks the 10th anniversary of the Global Financial Crisis and also the Lehman Brothers collapse. What are you reflecting on at these anniversaries, from your time as Treasurer?
SWAN: Well I think it's important to reflect on what caused the Global Financial Crisis and why our response was correct. Because if the demonisation of our response that we've seen from the conservative parties over the last ten years were allowed to stand, then the next time there was a crisis – and there is always a crisis – then we would have an Australian Government that would sit there and let a recession rip through the Australian economy and result in massively higher levels of unemployment. Our quick action to put in place the effective stimulus policy that we put together in wake of the imminent global recession saved this country from recession and we were one of the few advanced economies in the developed world that didn't experience prolonged and high levels of unemployment, and all of the social and economic dislocation that that brings to an economy. So the lesson is: have a good, close look at what Australia achieved during that period and don't believe the propaganda of the crowd out there, like the liberal party in Australia and the Tea Party in the United States who adhere to a belief that a recession is good for us. It's not. It damages a country, it damages its economy, and it damages a society. And of course, what that then leads to is the acceleration in growing income and wealth inequality. And that's what we've seen in those countries in particular where the recession was let rip much, much harder than it had any impact in this country.
MASON: How stressful was that time for you personally, as Treasurer?
SWAN: Well it was an incredible rollercoaster ride. I mean, basically the global economy, from the end of 2008, through the earlier part of 2009, was falling off a cliff. You were seeing countries' economies shrink before our very eyes. People were seeing reductions of growth of 3, 4, 5, 6, 7 and 8 per cent. Unemployment around the world was rising at a rapid rate. So we were acutely aware that unless we took very substantial and swift action, through the end of 2008, through early 2009, then we would have been the subject of a pretty deep recession. The interesting thing is is that there's been some polling taken last year on the public attitude to what we did. And what that polling found was that 62 per cent of Australians agreed with the proposition that a recession would have happened if it were not for Labor's stimulus package. Why is that important? It's important because if you listen to the conservatives, their critique of Labor is "no response was required", "it wasn't a major event", and/or "even if there was a response required, somehow that response was disproportionate to the challenge and it resulted in the waste of precious resources." That's not true. It was never true. And it was not accepted by the public of Australia, despite the fact that certain media arms continue to misaccurately diagnose and report on what happened.
MASON: Fake news. You've also written some opinion pieces talking about the media's distortion of priorities. What concerns you about the media landscape in Australia at the moment?
SWAN: Well the Murdoch media in particular is essentially signed up to a global neoliberal agenda – one that I call trickledown economics – which is basically the proposition that if you give tax cuts to the rich and the powerful, if you deregulate large corporations, if you hack into the social safety net and if you suppress the wages of the great mass of workers, that will somehow deliver prosperity. And they are constantly pushing that sort of economic description down the throats of average Australians. And it's simply not right. Not right in economics and it's not right socially. It leads to higher levels of inequality, and we know that inequality not only poisons our society, but inequality crowds out our democracy, because it gives greater power in the political system to those who are accumulating large wealth and income.
MASON: Alternatively, conservatives would say that some of the highest corporate tax cuts in the OECD don't help workers either.
SWAN: Well I don't know why they'd say that. The truth is this. Where there have been large corporate tax cuts, they certainly haven't been helping workers. But they've certainly been helping the rich and powerful, and making them even richer and more powerful.
MASON: Let's turn to current political issues. We've seen this coal-fired power debate over the last few days. What do you make of that?
SWAN: It just shows that the Liberal Party's in the grip of right-wing ideological fanatics, like the Tea Partiers of the Republican Party in the United States. A complete denial of the science of climate change. And a complete denial of the sort of economic description we need to make the transition from fossil fuels through to renewable energy. And in so doing, they have dramatically pushed up the price of energy, which is punishing ordinary people in this country right now and threatening some of our most important export industries.
MASON: So what's Labor's solution to those soaring electricity prices? What would you do to make electricity cheaper for mums and dads?
SWAN: The reason that they're soaring is because basically the Coalition trashed the carbon price that we'd put in place back in 2012-2013. The consequence of that has been a handbrake on the development of renewable energy, which is cheaper, not dearer, than fossil fuels. And the consequence of that has been the disaster we've seen in energy markets which have plagued this country for the last couple of years.
MASON: The Treasurer and Prime Minister are being very tight-lipped about what we can expect in the May 8 Budget. We're hearing that baby boomers, though, will be the centre of the Treasurer's financial plan. That upsets a lot of younger voters who are very concerned about the prospect of never being able to afford a house.
SWAN: I think it shows you how clueless and lost the government is when it comes to economic policy. The truth is that they should be concerned with increasing the consumption power of average people, whatever their age. The biggest problem in the Australian economy is very low wage growth, which is leading to weaker-than-expected economic growth, and leading also to a much weaker labour market and higher underemployment than is required for a strongly growing economy. So what we actually need is a set of measures that will boost the spending power of all Australians on modest incomes – that's what we need. For them to run around and try and carve out some particular political demographic, whose vote they want to get in the next federal election is not an economic solution, and is probably not even a credible political solution.
MASON: Wayne Swan, you've spoken about the Trumpification of Australian business. When you speak to people in the United States, part of the attraction of people like Donald Trump is their authenticity. You're chalking up your 25th year in Australian politics; do you think there is a lack of authenticity, a lack of realness in politics these days?
SWAN: I think people are fed up with what they see as the spin of politics. And of course, Donald Trump, who was elected because they thought his opponents were inauthentic is perhaps more inauthentically authentic than any other living politician. So I think that people are deeply sceptical about the political processes. And I think that flows from the rampant inequality that we've seen, particularly in the United States. Because essentially, as societies become more unequal, it breeds distrust. It breeds disdain. It breeds envy. It breeds arrogance. And as people who've been – as working people in the United States have seen over 30 years, many on median incomes have not seen a real wage increase. That's what's produced the political revolutions in the United States. And I think it was the failure of basically the Democratic Party in the United States to put up a credible alternative to Donald Trump that has led to the political outcomes we've seen there. But they are economic based in the first instance. Too many people have been left out for too long, who have been on the receiving end of declining living standards. And that is the origin of the challenge to conventional politics that we're now seeing across most of the developed world.
MASON: Wayne Swan, you've announced that you will not recontest your seat at the next election. Are you going to miss Parliament?
SWAN: As I said when I announced that I wasn't running again, I said I was getting out of Parliament, but I wasn't necessarily getting out of politics. I still want to be involved in the debate about the future of our country. I still want to use the experience that I've used over 20 years in the Parliament and six years as Treasurer to be part of a debate that sees Australia on a pathway to not only a strongly growing economy, but a fairer society as well. And I intend to continue to contribute to that debate. I just won't be doing it as a Member of Parliament.
MASON: And just finally, drawing on your 25 years of Parliamentary experience. How do you predict things will play out for Malcolm Turnbull and his leadership?
SWAN: I think things are going to play out very, very badly for Malcolm Turnbull for all of the reasons that I've outlined in this interview. If you look at Malcolm Turnbull, he is the quintessential trickledown plutocrat who lives in a pink house on Sydney Harbour and if he went to Western Sydney wouldn't know a worker if he fell over one.
MASON: Do you think he'll lead the Coalition to the next election?
SWAN: I don't know. But I don't think he's going to be electorally successful, because he lives a life which is, if you like, encompassed by what I call the blindness of affluence. Like many of his colleagues – and many people in the business community – he and they have very little to do with average working people, either in their workplaces, in their shopping centres, or in their sporting fields. They live an isolated existence in a select few suburbs and have little understanding or comprehension of the challenges facing ordinary Australians.
MASON: Wayne Swan, the former Labor Treasurer, thank you very much.
SWAN: Thank you.
MEDIA CONTACT: DANIEL DE VOSS 0403 775 158
This podcast originally appeared at: https://www.sbs.com.au/news/audiotrack/gallery-episode-8
Authorised by Noah Carroll, ALP, Canberra