SUBJECT/S: Syrian refugee drownings; national accounts; GST; ChAFTA

PETER VAN ONSELEN: Alright, let's talk to Ed Husic about this to start with. You're obviously as solemn as we are about it. Is there a realism here Ed that this is one of those moments - with multilateralism and globalisation - where the world should finally wake up to itself about the poverty in the world or is a cold hearted real politic that whether we like it, or not, there are going to be tragic structures like this in such a big world as we have?

ED HUSIC, SHADOW PARLIAMENTARY SECRETARY TO THE SHADOW TREASURER: Yes and no. I think there have been cases, and I represent a lot of Sudanese people, particularly now from what would be classified as South Sudan, who had been grappling with terrible things for many years. We still help them even though it may not be in the news (though occasionally what happened in Darfur burst on to the world stage and was the focus of attention for a considerable period of time) but there was still a lot of years where we accepted refugees and resettled people from Sudan, now South Sudan as well, Ghana, Nigeria. They made homes in parts of Western Sydney that I represent and we'd help them resettle and they've made great contributions to local communities.

You'd have to be heartless not to be affected by the vision that was put up on the screen, that Laura started talking about, and especially if you're a parent, like we are, you put that in your own context and recognise the impact that'd have on families.

And I didn't necessarily need to see those pictures to have my mind shaped. I was part of the Parliamentary Inquiry in 2010 that looked at the aftermath of the terrible event that happened at Christmas Island - 150 people losing their lives - I slept in places there that were used as morgues. That had fundamentally reshaped my approach - and I think we both similarly had a different view about on-shore processing and I've changed my view quite substantially that on-shore processing would just continue to lead to those types of situations and we do need to take steps to ensure that doesn't occur. It's difficult, particularly for people that feel it very strongly, but you do need to balance it out. You just cannot afford to have those types of situations replicated.

LAURA JAYES: Ed, hopefully this will not be an ongoing situation and I have to change to a topic that does pale in significance when you’re talking about something like this, but if we could go to domestic politics now and particularly look at the growth figures from yesterday. As I read it the one thing propping up this growth figure was government spending and, to a lesser extent, housing and retail. Those last two points really rely heavily on sentiment. So do you give the government some credit in that sense?

HUSIC: No well, everything they've said that should come to pass hasn't, or has gotten worse. So I think Joe Hockey had been saying prior to the election that the mere election of an Abbot Government would supercharge confidence and confidence since the election is down. That confidence is used by business to make decisions on investment - that investment is down. Unemployment, as a result of the growth figures, is not strong enough to sustain job growth, and so you've got joblessness higher. You've got wage growth basically at its lowest level since the late '90s and you look at that combination of factors and debt and deficit - they don't talk about that any more but that's higher -

VAN ONSELEN: What should the government have done differently though? I mean what could've been done differently to avoid the sort of numbers that we're seeing?

HUSIC: I think post, Peter, the 2014 budget - that really put the hammer to confidence and as a result business wasn't prepared to invest while consumer sentiment was down. I'm drawing off what the RBA picked up and has told us, and I sit on the House of Representatives Economics Committee, and they had said to us and they have said publicly for some time that that was something they were taking serious note of and they weren't going to invest until consumer sentiment picked up. The budget had the biggest impact on sentiment in the last twelve months. So -

JAYES: So one of the biggest -

HUSIC: I guess to answer your question very quickly before going to your question Laura, is they made a fundamental error in turning their back on the commitments, promises and assurances they gave leading in to the election when they smashed all of that through that budget - and it's been a long process -

VAN ONSELEN: Most of it didn't get legislated though -

HUSIC: Well, fortunately. We were criticised for the hard stand we took as an Opposition in relation to that budget. But if that had gone through and all those cuts had gone through, the type of thing that Laura pointed to in her question about government spending, we'd be in a way worse situation if we had let the Government do what it wanted to do in that 2014 horror budget.

JAYES: But largely we're seeing this figure of yesterday as such a big drop from the March quarter in the June quarter. A lot of that comes down to, again, falling terms of trade. You can't blame the Government directly on that can you?

HUSIC: There’s a mix of things that they could do differently. Certainly there is one of the things with the investment in mining tapering off you need to think of: where next for the economy? Where are the jobs going to emerge? We certainly believe, in terms of thinking ahead, for the jobs of the future you need to invest in education - which is why Bill Shorten had made those announcements in his 2015 Budget Reply Speech, in terms of STEM, in terms of supporting emerging companies, In terms of seeing the growth that has been replicated in our overseas rivals - when they invest and focus on innovation. We should be doing a lot of that - this Government is not doing enough and growth in these sectors is stalling at a time when they could take up the slack that we're experiencing in mining and the terms of trade fall that you point to in your question.

VAN ONSELEN: Okay, but what about the GST? Labor keeps ruling this out. Today we heard the Prime Minister, for the first time in a long time, really sound like he was going to show a bit more commitment to this in his interview with Alan Jones this morning. Labor always seems to rule this out as though it's got some sort of ideological problem with it yet when I independently ask Labor people who's the greatest ever Treasurer they say Paul Keating. Well he's the one that put GST reform on the table at the 1985 tax summit. How can the greatest Treasurer in Australian history, according to Labor, be so philosophically out of line with Labor thinking on the consumption tax link?

HUSIC: Sure, and a lot of us have enormous respect for Paul, but how did the 1985 summit go on GST?

VAN ONSELEN: Well, he wanted it but it got knocked on the head and thankfully a bit of courage came in to the political mix less than ten years later.

HUSIC: So two things. In an environment where growth is below trend and where consumer sentiment is down, where business investment is down is this the time when we should basically increase the GST by 50%? I mean, I don't think that's the panacea here. In terms of trying to - 

VAN ONSELEN: Well, as long as you bring down other taxes though, it's fine -

HUSIC: Well, that was going to be my second point. So in terms of consumer sentiment, spending, the type of things you'd want to see - the retail lift, you'd want to see that go up, the GST won't be the answer. In terms of your point, the second point -

JAYES: So what's the alternative? -

HUSIC: Well, hang on a second. The second point I did want to come to is: this change to GST can't be all things to all people. The Federal Government says that if it does this it'll also make sure, and we discussed this last week on the show, personal income tax cuts. The States are saying they need to see the increase to the GST by fifty per cent to cover the funding cuts that are being championed by the Abbott Government. What is it going to be? Personal income tax cuts? Or is it going to be saving funding cuts to States and Territories? -

VAN ONSELEN: But what does Labor do instead? -

HUSIC: What is it going to be? We have said -

JAYES: What options are left in terms of revenue raising measures?

HUSIC: In Government, we did not support an increase an increase to the GST. In Opposition we stand opposed to the fifty per cent increase to the GST. We believe there are other measures that could be taken - be it in making our taxation system fit for purpose with multinational taxation or company taxation. Or be it a change in the generous taxation concessions that are given to wealthy superannuants. These are, just off the top, two areas where you could make substantive reform -

VAN ONSELEN: They're not substantive. Come on Ed -

HUSIC: Sorry you -

VAN ONSELEN: They're dimes and pennies alongside the GST change here which is essential to reform. I mean all you're really saying is that a little bit of tinkering but other than that the tax system's hunky dory.

HUSIC: Well, if you want to sneeze at twenty billion dollars of revenue - you're entitled to do that. But we think they're-

VAN ONSELEN: We're a one trillion dollar economy -

HUSIC: We are thinking that they are fairly substantive measures and make sure that the call on government is managed in a much fairer way and where taxation concessions on superannuation - they're going to outstrip pensions. You've got to deal with them. This Government has said it won't.

JAYES: The China free trade agreement is pretty crucial, you'd agree, in this climate. There seems to be more of an ideological battle going on with Labor and the unions here and their opposition to it. We've heard time and time again from the Prime Minister today, from Andrew Robb, saying there are protections within the accompanying legislation to this China free trade agreement. What I'm encountering in interviews with the unions, with various Labor people is that they're focussing on what is actually, word for word, in the China free trade agreement - which to me seems disingenuous because many very well know, that have been involved in the negotiations for this China free trade agreement over, you know, the decade - and Labor should be given credit for getting this to, some credit to where it is right now, in a deal being done. So, I mean Ed, are you willing to risk this deal that took ten years by focussing on what seems to be a very small part of labour market testing which is actually supported by the 457 visa legislation?

HUSIC: Well, a number of things. Firstly: trade and opening up trade is very important for economies. It provides growth, jobs and it also strengthens relationships between countries. So that's crucial. We've supported agreements in the past and we'll continue to do so in to the future. We, in terms of China, we are the ones that forged the initial relationship with China in the first place in the early '70s through what Gough Whitlam did. So we recognise the value of the agreement. I would like to say though, it is important in this context where joblessness now is higher than what it has been in twenty years. Higher than after the GFC. And we are asking the Government - you can get this deal through but you can do, as what Craig Emerson wrote in the Financial Review in the space of the last few days, make sure the enabling legislation is there that when you do the labour market testing and the skills assessments - that it's done and it's not at the whim of policy within the Immigration Department -

VAN ONSELEN: Why do we suddenly need that when we didn't have that on free trade with ASEAN or with Chile? I just don't understand why suddenly when China is involved -

HUSIC: Two reasons -

VAN ONSELEN: You want extra protections from deals that were previously negotiated by Labor -

HUSIC: I guess there are two reasons, Peter. Firstly - the scale of this agreement, the projects that would be triggered by these provisions -

VAN ONSELEN: The red peril-

HUSIC: The fact that there's also unemployment which has become a lot bigger an issue and people do want to see, and I have had people in my area concerned that they're being displaced through losing their jobs and they see the jobs that they've done being performed by people who have been brought in on 457 visas. And while I'm also a supporter, as I've said of 457 visas, you do need to have the protections in place to ensure that people have confidence that the system is working right. The best way to provide the confidence is to get the legislation, the enabling legislation, in place to back in the China free trade agreement -

JAYES: Wouldn't that mean, in part, a renegotiation of the deal?

HUSIC: All it requires is for the Government to say that if they go ahead with this that they will require labour market testing. It then falls on the Government -

VAN ONSELEN: But is it a simple question then -

HUSIC: Wait, can I just, let me finish the point -

VAN ONSELEN: If that happened -

HUSIC: No let me finish the point Peter, and I'll come to your question -

VAN ONSELEN: And China scuttles the deal -

HUSIC: The question that I ask is - why is the Government so reluctant? Did they explicitly say that they would not have these protections in place and they would not require them to be in place? To come to something that I suspect you're about to ask me.

JAYES: Okay well when, at this point it doesn't really matter because none of those projects are even in the pipeline. This China free trade deal has, built into it, every two years a review. So are you really going to risk not passing this legislation in October, which would mean a delay in a tariff cut by the end of this year?

HUSIC: We're asking the Government to be able to be open, work with us on this and ensure that we can give the confidence to those people who are worried about their job security - that they've got nothing to fear.

VAN ONSELEN: Sounds like you're playing chicken though. Sounds like you'll ultimately let it go but you don't want to say that because then the Government will play hard ball against you. You're playing a bit of chicken here - ultimately Labor will, what, take to the election a policy that you'll bring that enabling legislation if you get in. Exactly as Laura says at the moment it's not a problem because these sort of projects are not in the pipeline.

HUSIC: No. I think what we're trying to do is make sure we've got those protections in place now when it matters - at the point of which the Parliament is going to ratify this deal -

VAN ONSELEN: So you would scuttle the deal -

HUSIC: And we're saying that there are some simple steps the Government can take to give people confidence that their job security is number one on this Government's mind. They're talking about jobs -

JAYES: You might be leaving this up to the cross-bench, do -

HUSIC: They're talking about jobs, they're talking about growth. They should put their money where their mouth is.

JAYES: This might very well still get through with the support of the cross-bench so, again, don't you risk at the very least dealing yourself out of relevancy here?

HUSIC: We think that we're dealing ourselves in to relevance within the minds of those people that want to know that their jobs are going to be protected.

VAN ONSELEN: Laura, everyone we've talked to about this has refused to answer the pretty simple question, let's try it. Ed Husic, you're a straight talking member of Parliament -

HUSIC: You always do this -

JAYES: He always does that -

HUSIC: He always sets this up -

VAN ONSELEN: It's a very simple question. Are you prepared to go to the wall on this and scuttle, to mix one metaphor, the deal if you don't get what you want with this enabling legislation?

HUSIC: Okay, so the problem with a question like that is it's easy for TV to be putting that question forward and go for the emotion of it. But what this needs is not emotion, and dares and all that type of bravado. What it does need -

VAN ONSELEN: At least he's accusing me of being emotional and not you Laura -

HUSIC: Ahh, no I'm definitely accusing you of being emotional, as is often the case on this great show. But what it does take is it takes people with common sense who've got a commitment to protect jobs, who've got a commitment to growth to be able to find a way through differences of opinion - I think we can do it.

VAN ONSELEN: I missed the answer there Laura Jayes, are they going to scuttle it or not?

JAYES: I don't think they will-

HUSIC: You always go in for that PVO 'gotcha moment' - not today. Not today -

VAN ONSELEN: No, I missed it, did you say you will scuttle it or did you say you wouldn't? I must've missed the answer.

HUSIC: Well, you're a very intelligent -

JAYES: We'll play the tape -

VAN ONSELEN: We'll play the tape and check it out -

HUSIC: Isn't it doctor?

VAN ONSELEN: Professor actually, but we're out of time. We're going to take a break.

JAYES: Ed Husic, a pleasure as always. Thanks for coming in for some half an hour of punishment from us -

VAN ONSELEN: I got a thank you as well, so.

HUSIC: Yeah, but I meant my thank you for Laura.


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Ed Husic MP
Federal Labor Member for Chifley

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