Transcript - Speers




SUBJECT/S: Barnaby Joyce; Retirement at next election; Global Financial Crisis; Home Insulation Scheme; Corporate tax cut; Minerals Resource Rent Tax; Henry Review; Trump tax cut; Adani mine.

DAVID SPEERS: In other news over the weekend, the former Treasurer Wayne Swan has confirmed that he won't be going around again at the next election. He'll be leaving Parliament, making way for a new Labor candidate in his seat. And he joins me now. Wayne Swan, thanks for joining us.


SPEERS: Let me just pick up on this Barnaby Joyce saga. Are you satisfied that the Ministerial Code of Conduct has been followed?

SWAN: No. It's a farce. I was in Question Time today. They're claiming that the woman that the Deputy Prime Minister has a relationship with is not his partner and therefore the Code of Conduct doesn't apply. Well, that's breathtaking. Tell that to any Centrelink recipient who's having this argument about cohabitation.

SPEERS: Just explain that to us, this is a good point. 

SWAN: Well, it affects your entitlement to certain benefits, whether you're living with someone or not.

SPEERS: And Centrelink deems you to be in a relationship...

SWAN: Well they have a range of rules–

SPEERS: But it's all codified–

SWAN: It's just common sense, I mean, the debate we've had – everybody is uncomfortable with the debate about someone's private life. And everyone feels very strongly that Barnaby Joyce's family is in an incredibly difficult position. But this has now moved into the public sphere because of these employment relationships. And it's very clear that the Code of Conduct is no longer worth the paper it's written on.

SPEERS: So, your view of this is, there is some dodgy behaviour on the part of the Government here to keep Nikki Campion in a job that she shouldn't have been in. 

SWAN: Well I don't think they've followed the Code of Conduct. And a lot of people out there, including many in the National Party, are going to take a very dim view of these double standards.

SPEERS: You've been around politics a long time; can he survive this?

SWAN: I can't see it, really.

SPEERS: You can't see him surviving?


SPEERS: Let's get to your future. What led you finally to come to the position that it's time to go, at the next election anyway?

SWAN: Well, time stops for no one, not even former Treasurers. I'm just getting to that stage in life where I think it's getting increasingly difficult to put 110 per cent into the electorate. Because when you're in Parliament, you're away half the year, and when you're home, you're out of the home a lot. And it's getting harder and harder to reconcile those absences with the sort of passions that I want to pursue, including more family time – we've got a new granddaughter – but not just that. Keeping fit and healthy, having a bit of fun in life, if you like. So I've come to the conclusion that I want to continue to be part of the political debate, but it's not consistent with representation in a highly marginal seat. So I want to go out and do some new things. I want to stay highly engaged in this debate about inequality and the policy platforms and programs we need to keep the fair go alive in Australia. But I can do those things out of the House, out of the Parliament, and I can do it in a way that I've got a bit more time for family, and a bit more time for myself.

SPEERS: When we look at your legacy, you're regarded as a Labor hero within the Labor Party for the handling of the Global Financial Crisis. That's the same issue, though, that the Government loves to heap on you, for various things. This is obviously the key moment of your political career, isn't it, when the Global Financial Crisis came along?

SWAN: Sure. And there is no question that our response was world leading. We were one of only two countries that didn't go into recession. If you look at the analysis of the policy program that we put in place, all of the international organisations, most of the responsible business community in this country and abroad looks at Australia and our program as being the best and the most effective in the world. Now, we had a lot of flak from the Coalition – they would have been happy to see the country go into recession. And since that time, they've conducted a huge campaign against deficit and debt. Indeed, you will well remember that Mr Hockey and Mr Abbott promised a surplus in their first year of Government, and every year after that, in every term after that. Now their critique was hollow. If their recipe at the time had been put in place, Australia would have experienced a pretty sharp recession. And tens of thousands of Australians would have otherwise lost their jobs. The consequence would have been higher debt and deficit because of higher unemployment and less economic activity. 

SPEERS: There were mistakes along the way though, you've acknowledged that. 

SWAN: Of course there were. But they were not dramatic. They weren't dramatic mistakes. We were operating– 

SPEERS: Except for the Home Insulation Scheme.

SWAN: Well, we can have a talk about the Home Insulation Scheme if you'd like. And the industrial accidents that occurred were appalling. They were not, however, a direct consequence of the stimulus. They were a direct consequence of what occurred in workplaces and the non-application of industrial law. We've had a whole Royal Commission into that and it didn't find the Labor Cabinet culpable for what the Coalition and many others have campaigned on.

SPEERS: Can I ask you about another thing that you as Treasurer proposed, at least for a while? It was a company tax cut, a big issue right now. What's the difference? The government loves to point out that you were an advocate.

SWAN: Well it's a question I would love to answer, because the circumstances were entirely different. 

SPEERS: How were they?

SWAN: Because it involved switching towards super-profit-based taxes. So the recommendation to us was for a mining– a resource tax, if you'd like. A super resource tax. And there was to be a switch from company tax to higher taxes on extremely profitable companies. That was the central recommendation of the Henry Report. So to say that we just blindly said there should be a tax cut across the board, and there shouldn't be an increase in taxes, in other taxes is simply a lie and a complete misrepresentation. It depends on the tax mix.

SPEERS: Of course, that mining tax that was proposed ultimately didn't raise the money that you thought it would.

SWAN: Yes, but all of the measures, just about, that had come from Henry that we tried to implement were opposed by the Coalition in their various forms. You see, the number one recommendation of the Henry Report was for a Resource Rent Tax.

SPEERS: When you listen to Heather Ridout, who was part of that Henry Tax Review; last week she was talking about the need to return to that, but as part of–

SWAN: Part of a broader program.

SPEERS: Do you agree with that still?

SWAN: Well of course.

SPEERS: So company tax, as long as there's what, income tax relief?

SWAN: Well, no there's a threshold question about what is the per cent of GDP we require in tax to remain a first-world, first-class economy. So we can deliver the drivers of economic growth in terms of investment in physical and human infrastructure. And when you answer that question, yes of course the tax mix that makes up that overall tax take, the extent to which we give incentives to business to invest, the extent to which we give incentives for workers to work harder, they're part of that. And getting that balance right is very important.

SPEERS: So what does that look like, in broad-brush terms. If there's some company tax relief, what's got to happen?

SWAN: Well in broad-brush terms, you've got a third of all companies at the moment that are not paying any tax. We've got a massive problem with tax evasion by some of our largest corporates. BHP, for example, out there today arguing for a cut to the company rate, when in fact they are among the biggest tax avoiders in this country, as ranked by the Tax Office.

SPEERS: Ok, but getting back to this. If you were to put together a wholesale tax reform package, what would it look like?

SWAN: Well first of all, we'd want to ensure that the company tax, as it currently applies, has a base that is as broad as possible–

SPEERS: And if you could do that? If you could fix that?

SWAN: If you could assure people that, in fact, companies were meeting their responsibilities, when in fact they know – because of our tax transparency legislation – that many companies are not, and that breeds a distrust amongst the population–

SPEERS: And if you could do that? You would reduce the rate?

SWAN: If you could reform company tax, you may well be able to reduce the rate, but it would depend what you do in all the other areas. Because it's not just a question of company tax. There are a whole host of other taxes on the record. For example, the Henry Report, which Heather Ridout was talking about, went on about land tax and a series of other areas. There are trusts, which the Party has sensibly put on the table now. So if you have, overall in terms of business taxation, one that had integrity and you could ensure wouldn't be evaded, then you may be able to deal with the rates. And ditto when you get to the personal income tax area. What we're doing in terms of negative gearing is putting a lot more integrity back into that tax system. So if you deal with all of those things, yes, at some stage you can sit down as a community, if we could get the degree of common sense and sensible approaches, you might be able to come up with a bargain.

SPEERS: Is there a risk that we're becoming less competitive internationally?

SWAN: Look, no. I think that is one of the real phony arguments that is being put forward. And if you look to what is going on in the States, that tax cut that has been put there is not going through to the workforce–

SPEERS: Well it is for Walmart, Target, Starbucks–

SWAN: Well Walmart were in the process of already putting up their [wage] rates because they were so fantastically low. Where it is going, and where it has gone here – because don't forget, profits are at a record high in Australia and the wage share is at record lows – where that record profit share in Australia is going is into executive salaries and into share buybacks. If you look to the United States, it is little different. So this debate about where the benefits of this US tax cut are going in the United States is still wide open. Just this morning I saw a number of only 14 per cent that was going into wages. 

SPEERS: Final one. As a Queenslander and former State Party Secretary up there in Queensland, the Adani mine issue – there are obviously different views in the north of the state to the rest of the country. Is there much risk of damage to Labor if they...

SWAN: Well I've led the debate that there should be no federal grants to Adani.

SPEERS: What about blocking the mine altogether?

SWAN: Well we have to go through the correct procedures, both in terms of economic evaluation and in terms of environmental evaluation. I don't like it, by the way, and I don't think it's a fantastic project. But effectively, the law of the land has to apply at each stage of the approval process.

SPEERS: And they've passed those approvals, so it should be allowed to go ahead?

SWAN: Except the question mark that everybody's always had about the Adani mine has been dodgy economics. Well, we'll wait and see. Because in many ways they're in the hands of their financiers.

SPEERS: That's for them to work out though; that's for them to sort out.

SWAN: It's certainly not for us to sort out, which is why we've had the approach we've had, and why the Queensland Government have had the approach that they had.

SPEERS: Wayne Swan, thanks for joining us, and no doubt we'll talk before you do go, whenever the next election is. 

SWAN: I'm sure I'll be back to talk with you before then.

SPEERS: Appreciate your time, thank you.

SWAN: Thank you.