5 March 2017
Transcript - #2017005, 2017

Interview with Patricia Karvelas, Sky News

SUBJECTS: penalty rates; payroll tax; corporate tax; housing affordability; National Accounts; 18C; same sex marriage

PATRICIA KARVELAS:

Kelly welcome.

KELLY O’DWYER:

Great pleasure to be with you Patricia.

PATRICIA KARVELAS:

Tony Abbott says the Prime Minister is not doing enough to defend the fair work decision. Is he doing enough?

KELLY O’DWYER:

Well it’s very clear that this decision has been a decision of the Fair Work Commission. They have looked at a lot of evidence, they have determined, along with the requests of many small businesses, that there needs to be a greater alignment between the penalty rates of those people who work in retail and hospitality sectors on a Saturday and those that work on a Sunday. Now they have taken hundreds and hundreds of pieces of evidence from people and they have done that on the basis that it’s going to deliver more opportunity, more employment overall. When I was the former small business minister, I heard from small businesses right around the country that there were many small businesses not opening up on a Sunday because it simply cost them too much money to do that.

PATRICIA KARVELAS:

So it sounds like you’re defending the decision? You think it’s a good thing for the economy?

KELLY O’DWYER:

Well I’m simply making the point that small businesses are very clear that they either don’t open if they can’t afford to open or, in the case of many small business people who work very, very hard, they can’t afford to employ anybody else to work on the Sunday if, in fact, they do open their doors.

PATRICIA KARVELAS:

So Tony Abbott is saying the Government is not getting out and making that argument enough.

KELLY O’DWYER:

Well look, I don’t accept that criticism at all. I think it’s been very clear that this whole review was set up previously by the Labor Government, in fact, by Bill Shorten himself when he was the previous Minister for Employment. He actually went to the Fair Work Commission and said you need to look at this issue and the reason he said –

PATRICIA KARVELAS:

He did, but voters don’t care what happened in the past, they know now that you’re the Government and that the Government has been sitting on the fence and still allowing the decision to go through. So it looks like a wishy washy response.

KELLY O’DWYER:

Well no, no I think it is very important to understand this because even Bill Shorten, trade union official extraordinaire, understood that there was a very significant issue for many small businesses right around the country. And so he commissioned the review, the independent umpire has come down with a decision. It’s not the ordinary practice to actually interfere with the decisions of the Fair Work Commission, so much so that Bill Shorten himself gave a categorical assurance that he wouldn’t do that.

PATRICIA KARVELAS:

But now the issues of the implementation are very much front of mind for everybody, really. Particularly, of course, those people affected. Would you like to see that workers are not worse off, because some workers stand to lose up to $6000 a year as a result?

KELLY O’DWYER:

Well look, the matter of the implementation will be a matter that’s obviously discussed at great length and I’m sure there will be many discussions over the next couple of weeks and months –

PATRICIA KARVELAS:

But would you like to see that workers aren’t worse off?

KELLY O’DWYER:

I think it’s critically important to understand that this is a decision that the Fair Work Commission has made in order to try and grow employment and opportunity more broadly. They –

PATRICIA KARVELAS:

But the issue of the base rate going up so that you could deal with the fact that they’re losing penalties.

KELLY O’DWYER:

They have made that decision on the basis that there will be more employment opportunities in the retail and hospitality sector. It’s there in their own decision making. Now, you hear Bill Shorten talking about this issue and you would think that he has never traded away workers’ entitlements or pay in enterprise bargaining agreements. Well he has on several occasions. And he has done it in such a way that he has been directly conflicted because there has been a direct payment to the unions. So he was trading away workers’ conditions and pay rates.

PATRICIA KARVELAS:

So you think it’s good for the economy? Should the Government be making that argument in the public sphere much more strongly?

KELLY O’DWYER:

The Government has said, quite clearly, what is factually correct, which is, this is a decision of the Fair Work Commission. The Fair Work Commission has made this decision on the basis that small business will be advantaged because small business will have the opportunity to open their doors on a Sunday, whereas previously, they may not have had the opportunity because the cost was too significant for them.

PATRICIA KARVELAS:

Nick Xenophon says there is merit in the former workplace minister Eric Abetz’s idea of effectively grandfathering those on penalties at the moment. Is there merit? Because Nick Xenophon is obviously a crucial crossbencher. He thinks it’s a good idea, your former workplace relations minister thinks it’s a good idea.

KELLY O’DWYER:

Well as I said there are going to be many discussions and there’ll be many perspectives and points of view on the Fair Work Commission’s determination on this particular question.

PATRICIA KARVELAS:

Do you think exemptions might be a good idea?

KELLY O’DWYER:

I’m not going to get into hypothetical situations here. I’m simply going to say that this is a decision that’s been made by them, it’s a decision that has been made, in their view, in the national interest and it’s one that I’m sure will be the subject of much discussion going forward.

PATRICIA KARVELAS:

Pauline Hanson wants payroll tax reduced in a deal with the states instead of corporate tax cuts. In fact, she’s said this morning on the ABC that she’s not supportive at this stage of corporate tax cuts. That puts your corporate tax cut plan in some difficulty, doesn’t it?

KELLY O’DWYER:

Well I think people might be calling this a little bit early –

PATRICIA KARVELAS:

I watched the interview, I heard what she had to say.

KELLY O’DWYER:

We’ve had a lot of people say we’re not going to get the ABCC legislation through, or the registered organisations legislation through, and we have been able to, through negotiations and discussions, achieve very good results in actually getting that bit of legislation through. We know that cutting the company tax rate will, in fact, boost growth and boost employment in Australia. We know that because even Bill Shorten, when he was the relevant minister at the time, actually said cutting company taxes delivers more jobs.

PATRICIA KARVELAS:

OK, but back to what Pauline Hanson wants to see, which is a reduction in payroll tax, is that something that the Government should more vigorously pursue with the states?

KELLY O’DWYER:

Well the Government did pursue this issue very, very vigorously with the states. In fact, when Prime Minister Malcolm Turnbull came in and when Treasurer Scott Morrison came in to their roles, they had meetings with the respective Premiers and Treasurers of the states, they highlighted the fact that there was a grand opportunity to work with the states on significant tax reform. Payroll tax was obviously an issue that came up in the context of those discussions. The states said all they were interested in was increasing the tax take to them. They were interested simply in putting up the GST but not in reforming any of their tax space.

PATRICIA KARVELAS:

So what’s your message to Pauline Hanson then, given she’s given a suggestion that you don’t think that you could do much with?

KELLY O’DWYER:

I would encourage her, very strongly, to speak with the state Premiers and Treasurers. I think she’s right in suggesting that this is a very significant issue for many businesses, both big and small, and I know that there would be many who would like to see some changes. This is an issue that is entirely within the states’ control and the Government has previously gone to them to say we are interested in looking at how we can reform our taxation system more broadly, and they have simply said they’re not interested.

PATRICIA KARVELAS:

The OECD says a downturn in the housing market could cause rising loan defaults and falling household consumption and we may need a Government stimulus. Is that something we might need to consider?

KELLY O’DWYER:

There’s a lot of commentary always about the state of the Australian economy but let me tell you, we had our National Accounts come in only last week and in the December quarter we saw a growth rate of 1.1 per cent, overall that’s 2.4 per cent for 2016. That is a very significant achievement. It means we are growing, faster than other G7 economies and faster than other economies in the OECD and growth is important because without growth we will not be able to maintain our living standards, or employment –

PATRICIA KARVELAS:

But with debt at these levels, households are looking at spending and it’s a difficult thing to do. I mean when your debt levels, your mortgage levels are at these rates?

KELLY O’DYWER:

Well, the Government has said that all of our economic focus is on ensuring that we continue to have that growth; we continue to increase the opportunity for investment because investment will lead to growth and will lead to employment opportunities, which will lead to more jobs. And the way we are doing that is by setting out a very clear plan, including our company tax cuts, which will ensure that the children of today get the opportunities that the generation before have had with the high living standards that they have been able to enjoy.

PATRICIA KARVELAS:

Do you accept, back to the housing policy part, that whatever you come up with in the May Budget, you are not going to do much are you? If you have ruled out widespread taxation reform, you can’t help much given what we’ve seen?

KELLY O’DYWER:

Well, the Treasurer has made it very clear that one of the focuses for him in the Budget will be to look at what reforms can the Federal Government pursue…

PATRICIA KARVELAS:

But do you accept that it is going to be very difficult to turn this one around?

KELLY O’DYWER:

…that will assist people in not only being able to purchase a home but also for those people, and let’s not forget those people who will never be in a position to purchase a home, but who increasingly are seeing higher and higher rents. For them, affordability is about having lower rents and more security of tenure.

PATRICIA KARVELAS:

So will that be more of a focus? A rental focus, given there are so many people locked out of housing?

KELLY O’DYWER:

Well, the Treasurer has said that both of those areas should be of significant focus and he’s right to point that out. But he’s also said that this is not an issue that one level of government alone can solve, and there’s no one silver bullet to solve it. It’s something that the Federal Government, along with the state governments and local government, need to come together to actually resolve. It is an issue that’s been live for probably the last 30 years Patricia and it’s not one –

PATRICIA KARVELAS:

Not like it is the last couple of years, but just a quick question because we are running out of time, but 18C Racial Discrimination Act, is this something that is raised with you, do you think that is an urgent issue?

KELLY O’DYWER:

Look, many issues are raised with me because I have mobile office meetings right across my electorate.

PATRICIA KARVELAS:

Is it one of them that people are upset about? That they want reform on?

KELLY O’DYWER:

People have raised the issue with me. I wouldn’t say it is raised with me every time I go out and do a mobile office meeting. But certainly people want to see that we defend freedom of speech in this country. It is very, very important.

PATRICIA KARVELAS:

Should the words “offend” and “insult” be taken out of the act?

KELLY O’DYWER:

There are limitations that we place on freedom of speech in order to protect other people’s rights and there has been what is I think a very sensible report.

PATRICIA KARVELAS:

Sure, but the report puts the ball back in the Prime Minister’s court, do you think the words “insult” and “offend” should be taken out in your personal view?

KELLY O’DYWER:

Well, I know you’d love me to share that with you, but I will share my personal view with the Cabinet when this issue –

PATRICIA KARVELAS:

Can you give me an indication, do you think those words –

KELLY O’DYWER:

I will share my personal view with the Cabinet when it is discussed.

PATRICIA KARVELAS:

And just finally, it is Mardi Gras weekend, last night was the parade. I know you’ve been outspoken about the issues of marriage equality before, do you think there should be a vote of the Parliament before the next election?

KELLY O’DYWER:

Well look, as I’ve been on the record many times before and before I came into this role, I am a strong advocate for same sex marriage and I believe that it is a fundamental tenant of the Liberal Party to have a free vote on these issues. We did take a policy position to the last election to have a national plebiscite –

PATRICIA KARVELAS:

And the plebiscite didn’t work out, so has it changed, has the situation changed?

KELLY O’DYWER:

The question is will there be any movement on the question of a plebiscite? I’m not sure it’s as clear cut…

PATRICIA KARVELAS:

It seems to me, it is absolutely dead.

KELLY O’DYWER:

…but, look my view is that this is a change that we should make. I’m certainly someone who will advocate strongly for a change, just as there are people within my party room who’ve got a different point of view and I respect their point of view.

PATRICIA KARVELAS:

But on that question, would you see it as a broken promise to have a Parliamentary vote?

KELLY O’DYWER:

Well let’s see if the plebiscite is in fact dead, buried and cremated?

PATRICIA KARVELAS:

That’s my language.

KELLY O’DYWER:

As you might put it. And in terms of the next election and going forward, obviously there will be a discussion in the party room well before the next election as to the position that we will take.

PATRICIA KARVELAS:

Kelly O’Dwyer, thank you for coming in.