9 October 2015
Transcript - #2015014, 2015

Interview with Leon Byner, 5AA

SUBJECTS: Penalty rates; providing real opportunities for Australians who want to work, save and invest; Trans-Pacific Partnership; Free Trade Agreements; Victorian Liberal Party; education, training and innovation in South Australia; submarine competitive evaluation process; Tax White Paper; mental health policy; immigration portfolio

LEON BYNER:

I have with me the Treasurer of Australia, Scott Morrison. Scott, thank you for joining us.

TREASURER:

Great to be with you here in Adelaide, Leon.

BYNER:

Now, I am not going to ask you to swear on a set of Bibles but what I have got is a number of sacred scrolls – coffee scrolls.

TREASURER:

You do.

BYNER:

So, I will ask you that your answers are true and faithful according to these scrolls.

TREASURER:

According to these great scrolls that sit before me. You're very generous.

BYNER:

Look, I want to ask you first of all about penalty rates. We have just had Professor Andrew Stewart on the air who is an industrial relations expert and he said that the first thing we have got to look at is the ability of state governments to create a higher wage on a public holiday just by gazetting, for example Christmas Eve and New Year's Eve are public holidays. What are your thoughts on this?

TREASURER:

Well, look, penalty rates are set by Fair Work at the end of the day and back in March of this year in South Australia the Shoppies and the South Australian Chamber of Commerce actually came up with a new set of arrangements around penalty rates. That was done through existing rates through Fair Work, it was done through consultation and that is what the process allows for and I think it is important that we have a system and we have employers and unions working together to actually help get young people into jobs. That is what this is actually about. It is not about some arcane us versus them, capital versus labour, industrial relations debate. What we want to do is get young people in work in South Australia.

BYNER:

Do you want lower penalty rates?

TREASURER:

I want young people in work and I want businesses and the Government and the unions and everyone else working together to that objective.

BYNER:

Do you want lower penalty rates?

TREASURER:

I have answered the question, Leon. I want to see people working together to get young people in work and not ruling things in and ruling things out based on ideology and old boring industrial relations rhetoric. What people get paid is very important and what businesses have to pay is very important and Fair Work has a way of resolving those issues and we have a productivity commission process in train at present. We have already seen in March of this year unions and business come together. Now, how well that is doing at the moment, that is a matter for others to judge, but the fact that they are able to do it here in South Australia I think indicates that the Fair Work process has already got options available to it to allow people to work through these issues.

BYNER:

South Australia is very vulnerable as a former, very strong manufacturing state, as you well know. We have just had Alinta Energy bring forward their plans to get out – there are over 400 jobs that are going there. We have got the car industry that is going to retire from South Australia. Now, I need to ask you this question about the transition fund. There is hundreds of millions of dollars in there but the criteria that enable you to access it are very narrow – you would know this. Are we going to do something to make that fairer for those people in the auto industry to transition to something else?

TREASURER:

Well, this is something that Christopher Pyne and I have been talking about in recent weeks since the change in our various portfolios. They are discussions I have been having with people like David Fawcett last time I was down here in South Australia I was with Senator Fawcett talking about these as well as with Nick Xenophon and it is not just about that programme specifically. It is a range - those involved in the aftermarket and things like this who are also impacted by the transition that is going on and it really is about how we are ensuring those who have a very viable future here and who do have the sort of technology in the markets to play into, that there is the right sort of arrangements to allow them to excel. That is what we are focussed on. You make the point about manufacturing, well manufacturing in South Australia is about 8 – 9 per cent of the economy here. It is about the same in terms of employment but when you look at things like the health and community service sector that is almost 15 per cent of jobs. You have got education at 8 per cent of jobs, you have got hospitality at over 6 per cent of jobs and what we are seeing particularly with our trade agreements and another one just concluded in recent days by Andrew Robb, this is opening up new opportunities in all of those sectors.

BYNER:

Can I suggest to you that if you want to allay the fears of the public about Trans-Pacific Partnerships or trade agreements, there is one way to get an independent umpire like you do with the Industrial Commission, you want everyone working together – fantastic. Why don't you get the Productivity Commission to have a look at the TPP and do an independent report?

TREASURER:

There is umpteen analysis of this…

BYNER:

But hang on a minute the Productivity Commission is generally regarded as the bees knees of in terms of the bang for the buck why wouldn't you give it to them to have a look at and say here we have gone to the body we normally go to for this and this, they have had a look at it, here is the result?

TREASURER:

Well, look I am not necessarily opposed to any of those processes in terms to being able to I think demonstrate the benefits of what is an outstanding arrangement that I think covers some 40 per cent of the world's trade, 12 different countries, opening up opportunities, particularly in beef, opening up opportunities particularly for the wine industry and the seafood industry. The seafood industry is mightily assisted by particularly the CHAFTA agreement which was able to be struck. So, look, we will continue to make all of these arguments because the only reason we are entering into any of these agreements, Leon, is because we believe they are good for jobs, particularly here in South Australia.

BYNER:

The only reason I say this is because some of the detractors, you couldn't call political pilots if you like, they are just people who have read what everybody else has read and they are saying there are dangers in the text. Hilary Clinton has come out and said the same things. So, why wouldn't you want to put it, if you want to convince the public that the Government is doing good things and this is a good thing, why not give it to them?

TREASURER:

Well, I am happy to do things that are going to assist the public understand the benefits of all of this whether it is what we are doing in trade or how we can change the tax system to reward people who what to work, save and invest. How we want to deal with competition policy to open up new markets.

BYNER:

So you will give it to the Productivity Commission?

TREASURER:

No, I'm not getting into that, Leon. What I am saying to you is that I agree that we need to continue to explain the benefits but I am not going to allow the unions or anyone else dictate to the Government that somehow people should be scared into poverty in this country and that they should be held hostage to the fear campaigns of the unions and the Labor Party.

BYNER:

But the Productivity Commission aren't going to do that.

TREASURER:

Well, no, the Productivity Commission is not going to do that but the premise of the question is that people are going to be frightened about these Trade Agreements.

BYNER:

The premise of the question is that is if you want to convince the public that what you are saying is absolutely right then getting it, like you have the Industrial Commission, you have got an independent umpire saying here are the numbers.

TREASURER:

I think we are going down a bit of a red herring trail here, Leon. What I am saying is that the benefits are there. We will do everything that we need to do to communicate the benefits of these agreements but ensuring that the seafood industry, wine; we can sell wine into Malaysia, we can sell wine into China. Now, that is good news for South Australia – it is great news for South Australia. The education opportunities for the South Australian economy, they are a big employer here and it has got a big future for the jobs, not just for the current people out there in the workforce but the young people coming out of universities and out of primary and high schools now.

BYNER:

Do you think the alternative energy sector can provide a lot of the employment slack that is being divested from manufacturing?

TREASURER:

Look, I think it can contribute to it but I am even more excited by what can happen in the services sector, in the hospitality sector, in the education and the health and community services area. All of these are very big employers and they are big employers here in South Australia and they have got big prospects here in South Australia.

BYNER:

I want to get this implication right. You are saying to those in the manufacturing sector who might face redundancy at some point, for a whole lot of reasons, that they should be looking to those sectors and the Government will assist them to do so to retrain into say the education sector, the health sector which clearly they would have to do.

TREASURER:

Well, people make their own choices about which path they want to take, Leon, and what I am saying is that we can't, you know, jump into bed and pull the doona over our head and pretend that what is happening in our economy globally and otherwise is not happening. It is happening and your listeners understand that, they are smart about this, they know the challenges, they feel the challenges and what we are saying is that we back the ability of every Australian, every South Australia, to be able to make this transition and we will do the things we need to do to support that and it is up to the South Australian state government as well, as I am sure they will seek to do, to support the South Australians to do that as well.

BYNER:

Let's talk to Daniel of Lockleys. He has a question for Scott Morrison, Scott meet Daniel, Daniel meet Scott.

TREASURER:

Hi Daniel.

CALLER:

Hi Scott, how are you?

TREASURER:

Good thanks.

CALLER:

The reason I am talking to you is I am a small business owner and I am actually a Young Liberal as it is. I am just, almost going to plead with you that after last week with Bill Shorten coming out and you know going on about penalty rates and what he did. What that man doesn't understand is that penalty rates kill small business and the public holiday we just had on Monday was a perfect example where I have just opened a new business in probably Adelaide's newest shopping centre and our centre management came around and asked every single store – every store – if we wanted to open and not one store said yes because it was just going to cost too much to open. He thinks it's, he says it helps them get through High School and all of that – it costs kids. Especially kids our age who come out of high school. If I have anyone over the age of 21 unfortunately I won't work them on weekends because they are just too expansive. Especially on a Sunday when I have got to pay nearly $35-40 just to stand there doing the same thing they do on a Monday to Wednesday. I feel sorry for them and I've said to myself, I'm sorry, I wish I could put you on but they are just too expensive. Unfortunately with my parents small businesses they have got an agreement that they can have with them that they pay the older one a little bit more during the week but then it comes to penalties and they don't get it. They don't get penalties but they get paid more during the week. Now, they have got that agreement – that is all legislated – but I am not allowed to offer that because I am in a different award and I think that is what needs to be spread out a lot through small businesses because it is killing kids in university and all of that who don't necessarily work Monday to Friday. It is not like they are working Monday to Friday and they are working extra on a weekend. You know they might be going to uni two or three times a week and then they are losing a weekend shift because they are just too expensive.

TREASURER:

I think you make a lot of very good points there and you really zero in on, I think, the key concern we all have which is that we want to see young people in work and supporting themselves and small business in particular want to do that as well. I mean the small business people, like yourself, that I speak to get a real kick out of being able to create jobs for people. That is one of the reasons they love being in small business is that they provide those opportunities. I think we have to get to this practical level of discussion about these things and not in this old are you for or against one element of the workplace relations system and the Opposition Leader is focused on penalty rates but there is a much broader discussion here and that is what we are encouraging people to engage in and not single in on this feature or that feature. At the end of the day we want your business to grow and we want you to be able to employ people and we also want to be able to ensure people aren't left worse off for their work.

BYNER:

Scott Morrison is with me and we will get to Jess, and Ron and Alex after this.

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BYNER:

I have got Scott Morrison, the Treasurer, with me in the studio. Scott, before we take some calls the Victorian Liberal Party report that since Malcolm Turnbull has become PM they have had quite a rush of donations. Has that been the experience of the Federal Party across the country?

TREASURER:

Well, I am not too close to those sorts of things. I was in Victoria last night with the Victorian President Michael Kroger and he was certainly reinforcing those points to me and so that is very encouraging. We welcome the fact that people are responding well, I think, to what is a very optimistic message and again I know things have been bad and are continuing to be quite tough in South Australia. There are things happening in the South Australian economy that are also exciting and optimistic and these are things we need to also reflect on.

BYNER:

If you had to pick out one that really is very optimistic – what is it?

TREASURER:

Look, the thing I often think about in South Australia is education. This is one of the great education states of the country and the opportunities that have come in terms of exporting of education products and training and services that relate to education as well as students who…

BYNER:

You are talking about training. You would be aware, and this is Simon Birmingham's responsibility, we have had a real controversy here where the private providers have had their funds taken off of them and put back into TAFE and I know Simon Birmingham is considering what he is going to do with funding next year but that is not a great message for training when many of the people who do training programmes that are award winning are saying we are in trouble.

TREASURER:

But the opportunities in a lot of these sectors whether it is in education or in community services and health it isn't just about what is the Government going to fund into them. It is how these are going to move into a new phase where they are actually engaging in the private economy not just what the public sector is spending in it and that is where there will be real jobs growth in the future. Australia is a services hub. It is a services…

BYNER:

Scott, are we really admitting that manufacturing is a bit like the Dodo bird?

TREASURER:

No, we are not, Leon. We will continue to have high value added precision engineering and manufacturing and we continue to have…

BYNER:

You talk about 9 per cent, right?

TREASURER:

About 8 per cent – 8-9 per cent.

BYNER:

What wouldn't you want it to go below?

TREASURER:

Well, it would be, ultimately, what the market will be able to support and how we will be able to ensure we have got a competitive industry which has access to international markets and is agile and is innovative. We now have in South Australia not only the Cabinet Minister for Education and Training but we also have the Cabinet Minister for Innovation in Christopher Pyne. So, Education and Innovation is centring right here on South Australia with those two Ministers.

BYNER:

Well, let's get to our callers. Jess of Parkside you are talking with Scott Morrison.

CALLER:

Hi, Mr Morrison.

TREASURER:

Hi Jess.

CALLER:

I have just got a question about the submarines here and I just want to know where we are up to with the subs and you know I have read conflicting reports. I just want to know how many are we talking about delivering now? It was 12 but is it eight now? I just want to know where we are up to?

TREASURER:

Well, that process, the competitive evaluation process that was commenced earlier that year, we understand that will be reporting back early next year and they will be considering all of those issues.

BYNER:

What are they considering – eight or twelve?

TREASURER:

Well, they're the issues they are working through and I will leave those issues to the Defence Minister to comment on in terms of the overall capability that we are looking to put in place. The other point I make is the bring forward of the frigate programme. This is very important for South Australia because as a result of the previous government's non-decision on these issues; whether it was on submarines or whether it was on other parts of the shipbuilding programme it created this black hole and that is what we have moved to fill. Not just on that but with the offshore patrol boats and things like that.

BYNER:

But Jess and other callers want to know how many subs are we looking for tendering? We don't know?

TREASURER:

No, what I am saying is that I will leave those matters to the Defence Minister.

BYNER:

Alright, let's talk to Ron at Valley View. Hi Ron.

CALLER:

Yes, good morning gentlemen. Thank you for taking my call. Minister, with regards to all of these agreements we are signing right, left and centre – especially the latest, why is the public kept in the dark about what the detail is and stop feeding us these mushroom theory where you keep us in the dark and fees us on B-S. I would just like to know when are we going to know the detail? Thank you.

TREASURER:

Well, let's run through it 14-20 per cent tariffs on wine that will be progressively eliminated over four years on the China Free Trade Agreement; 12 – 25 per cent tariffs on beef over nine years will go; 12-23 per cent tariffs on sheep meat will be eliminated with eight years and a duty free country specific quote for wool.

BYNER:

What does China get from us?

TREASURER:

The point is all of this detail, Leon, is out there and I know that the unions and the Labor Party, who aren't supporting these agreements and they basically want to scare Australians into poverty over these agreements. What they are saying is seeking to scare people about this and there is a lot of information out there and I am happy to provide it.

BYNER:

What are we giving up? I mean when you do a deal there is a pro and a con – what are the cons?

TREASURER:

You don't sign a deal that is not going to leave you better off and that is, with respect this is the change that needs to happen.

BYNER:

But the respect has got to be that if you are going to forego something that is going to affect an industry or people is a workforce or people running businesses or whatever they need to be told.

TREASURER:

Sure, and all of that detail is out there and the reason we are signing these agreements, Leon, is because they are enabling us to be able to engage in an economy that is going to be there in five years, ten years, 15 years, 20 years from now. We can't allow our economy to be shackled to the past. If we do that then we are basically saying to our young people that there is not going to be an economy for you in the future. So, all of these agreements are entered into because they are in the national economic interest and they are going to provide jobs and opportunities for business and people are employed for many, many years to come.

BYNER:

Do you happen to be across, and I will respect the fact if you are not, but we have got a major beef asset in Australia called the Kidman Company which is an amazing company. It is the largest piece of privately owned real estate on earth. It is going to be sold. We understand there are six bidders – four of whom are multinational. Now, we have got a beef issue in South Australia and across the country with shortages and then there are also people who run slaughter houses and so on who can't get workers – who cannot get workers. Now, you have heard this. I am not the first one to tell you.

TREASURER:

No, it is the great irony. When I was in immigration when as the Minister there I was very aware of those businesses who were really struggling to get particularly abattoir workers and one of the things we moved on there was, particularly through the refugee settlement programme, was to try to link up those who were coming under those programmes and directing them into those areas so that they can be taking up those jobs.

BYNER:

But on the Kidman empire, what is the Government's take? If a sovereign entity wants to buy that it will have to go to the FIRB.

TREASURER:

That's true and there are FIRB issues around this right now, Leon, and as the Treasurer I am responsible for those. I am limited in terms of what I can…

BYNER:

I understand but I need to take some kind of bus stop as to where we are with it. So, when do you think it might be resolved?

TREASURER:

Well, again, Leon, it is because of the sensitivities around these things I have to be very judicious in my commentary on that and I am afraid I can't go much further than that today.

BYNER:

On a general question though, a lot of Australians will note that many people, investors or sovereign entities can come in and buy but we can't necessarily do the same things backwards, reverse, under the same circumstances.

TREASURER:

Well, we have to do what we believe is in our economic interests and we don't have the opportunity to control what the rest of the world does. If something is in our economic interest, if something is going to support investment in this country…

BYNER:

Because you know Bill Heffernan is on this case like there is no tomorrow.

TREASURER:

Heffo is a very good mate of mine and we have known each other for a very long time and we talk about these things often.

BYNER:

His issue is…

TREASURER:

Well, we have tightened up the disclosure rules, we have tightened up the scrutiny rules, we have tightened up the thresholds and whether it is in agriculture or in agricultural businesses, agri-businesses, whether it is in residential real estate the penalties that are associated with this, the registry so we can actually know how much is owned. These are the things we have already moved on.

BYNER:

Let's just rush through some questions.

TREASURER:

Sure.

BYNER:

Alex of Birdwood, you are talking with Scott Morrison.

CALLER:

Oh hi. Leon, you asked what we are giving up – we are giving up our clean, highly regulated food supply to 1.2 billion people. That is what we are giving up. If all of these free trade agreements are going to make us so prosperous why is the Government targeting workers' wages when we have one of the highest cost of living in Australasia. So, can you please explain how people are not going to be driven into poverty and lower living standards if their wages and penalty rates are cut?

TREASURER:

Well, I don't know who is telling you that is what the Government wants to do because it is just not true. I mean what we want to see happen is we want to see real wages grow in this country and real wages growth in this country over the last few years has been very, very flat and the way that you increase people's take home pay is you increase the growth of the country economically. You increase the productivity of the country. What does productivity mean? It is a term that is thrown around all the time. What it simply means is that if a business can realise its potential far better then an employee can realise their full potential and when productivity goes up people's real wages go up and that is what we want to see happen. We want to see people earn more in this country.

BYNER:

George from Dernancourt, hi.

CALLER:

Hi, good morning. I would like to speak, I spoke to you last week Leon regarding penalty rates. Now that Mr Morrison is here I would just like to put something to him.

TREASURER:

Sure.

CALLER:

Ok, there should be, the award rate should be the same for all seven days; on Sundays, all overtime no tax paid at all. If the Government is serious about improving things they should say, right, you do not pay tax on overtime. People will work, they will be better off, there will be better tourism, no problem about payroll tax because most of the tourism does not pay payroll tax.

TREASURER:

Well, one of the things I like about what you have just talked about then is that you are thinking broadly and widely about how overall as a system people can be better off and you are not getting into whether it is this rate or that rate. I think this is very important. Without being drawn specifically on your proposal I think it is very important that we have that sort of discussion about how does the overall system work better, whether it is tax or other areas. So people who are working more, saving more and investing more are going to be better off and look there are some interesting ideas there.

BYNER:

Are superannuants, that is people who have got their super nest egg, are they going to pay more tax in or out?

TREASURER:

Well, we have said in recent times that there is nothing on or off the table but I can assure you of this - the Liberal Party has always believed that people's superannuation that they have saved for their own retirement is their money. That is the principal that we are working on. We will have more to say about this in between now and the end of year. Importantly, I think they can trust the Liberal Party on its values on this and we know that if you have saved over your lifetime to provide for your retirement and that is what you plan to live on and that is how you made those decisions off your own money then we respect that.

BYNER:

Just quickly I know your time is short now. Bill Shorten is making an announcement today pledging to reduce the suicide rate by half if they win the next election and they can do it without new money for mental health. What do you think?

TREASURER:

Well, of course we would all love to see those sorts of outcomes, Leon, and the question is how that can be achieved and I don't think there is a member of the Australian Parliament or the Australian community that wouldn't want to do what they could to achieve that. I think we have made a lot of positive steps here in the area of mental health. I mean Headspace itself for young people, that was the inspiration of Christopher Pyne many, many years ago when he was a Parliamentary Secretary for Health. I think that is an area where obviously Parliamentarians must work together and these are good aspirational goals that he has outlined. The key is implementing them and actually paying for them and getting them done and everyone is going to work towards that sort of a goal but whether that can be achieved or not, you don't want to go around raising people's expectations particularly in areas like that. Bob Hawke said no child should live in poverty as well by a particular year. I think these are great aspirational goals but what matters is what you do.

BYNER:

As former Immigration Minister are we selective enough in who we allow into Australia?

TREASURER:

As a country we have been very well targeted I think over a long period of time and you compare that to say the United Kingdom or Germany or other places where they haven't had the skills base selective immigration programme. The cohesiveness of their society is very different to ours. For example you go to migrant communities in both of those countries you will find higher rates of unemployment, lower rates of educational attainment, higher rates of incarceration. Now, in Australia you won't see that. You will see it in line with the rest of the country. So, we have a selective immigration programme but there is one rule, when people come to Australia you come to join us not change up, you respect Australians, Australia's values and respect will be a two way street and they can enjoy the respect of Australians when you come and join.

BYNER:

Thanks for coming in, good luck with your meeting with Treasurer Koutsantonis.

TREASURER:

Yes, I am looking forward to that. Thank you.