17 May 2018
Transcript - #2018026, 2018

Interview with Raf Epstein, ABC 774 Pollie Graph

Subjects: John Setka, wages, Wayne Swan’s promised surpluses, Personal Income Tax Plan, aviation security

RAF EPSTEIN:

Look let's get into the politics, we had a word to the CFMEU boss John Setka, He is, I guess for the Coalition he is notorious, and the most significant criminal charge to come out of the Trade Union Royal Commission was an accusation of bribery levelled at both John Setka and Sean Reardon, who is his 2IC here in Victoria, it got dropped today. The prosecution said 'nup, we are not proceeding with that'. This was what John Setka told me.

JOHN SETKA:

They withheld having a royal commission into the banking sector. They had to get dragged to have that kicking and screaming, yet they didn't mind having one into the trade union movement. That's the bottom line. It was a witch hunt. Anyone that stands up to the system these days, if we don't agree with the Government, we're criminals.

RAF EPSTEIN:

That's what John Setka told us about an hour ago. Kelly O'Dwyer, does it undermine the outcome of the royal commission?

KELLY O'DWYER:

No it doesn't, because of course it's entirely appropriate that Victorian prosecutors make these decisions, but I think what John Setka is trying to suggest is that somehow this means that he's been a choir boy in all of his behaviour, and that somehow this means that the CFMEU is absolved of any bad behaviour. I mean let me say this, we had a royal commission that has seen a number of people convicted of fraud, blackmail, obstructing Commonwealth officials, giving false testimony, the CFMEU...

RAF EPSTEIN:

How many people convicted?

KELLY O'DWYER:

Well I don't have those figures in front of me...

RAF EPSTEIN:

Is it more than two?

KELLY O'DWYER:

As I said I'm not the minister who is responsible for that but certainly we have seen those outcomes from the royal commission...

RAF EPSTEIN:

Not at all embarrassed that the most high profile one has fallen over?

KELLY O'DWYER:

The CFMEU, let me say this, the CFMEU of course has been accused by judges in courtrooms of being completely recidivist in their behaviour and having had some of the worst behaviour of any union. We've seen more than I think about $15 million worth of fines only last month they received another lot of fines, about half a million dollars from their unlawful activity there and we have seen John Setka himself convicted of about 59 offences including...

RAF EPSTEIN:

A lot of them are historical.

KELLY O'DWYER:

…including for assaulting police officers...

MARK DREYFUS:

They're old.

KELLY O'DWYER:

…and kicking and assaulting people. So let's be pretty upfront about the sort of people we're talking about here and the union's role.

RAF EPSTEIN:

Not embarrassed at all?

KELLY O'DWYER:

Well it's not a decision that we've made.

RAF EPSTEIN:

No I understand that.

MARK DREYFUS:

I think Kelly should be upfront with an apology and ought to be embarrassed by this. The Government dined out on these charges against Setka and Reardon and they were far and away the most high-profile charges to come out of anything to do with the royal commission. I think it's time for the Government to sit down and reassess its position and stop being obsessed by unions and acknowledge the legitimate role that unions play in the Australian industrial system.

RAF EPSTEIN:

$15 million in fines, the CFMEU?

MARK DREYFUS:

I'm not justifying lawbreaking for one moment but the Government dined out on these charges and they have now been dropped and it does cast I think into sharp relief the obsession that this Government's got with everything to do with unions. The Government seems incapable of accepting that there is a legitimate role for unions, seems incapable of accepting the good work that unions have done for many years and improving conditions for Australian workers and it's quite important.

RAF EPSTEIN:

Just one moment, Michael's called from Footscray. Go for it Michael.

CALLER:

I wanted to say that I think the Government has to admit that they royal commissions into the union movement have borne virtually no fruit compared to the royal commission into the banking industry. And can I say that it occurred to me that Parliamentarians get increases automatically through a system that's been created for independent review and increases. Workers don't get that, we have to fight for everything...

RAF EPSTEIN:

I'll get onto wages growth in a moment, but if I can restrict you to that one point, I mean his point. The bank royal commission's already exposed more wrongdoing than all of the trade union royal commission. Do you agree?

KELLY O'DWYER:

Well certainly it's exposed a lot of wrongdoing, a lot of wrongdoing though that was already being investigated by the corporate regulator. And in fact in many cases there have been public settlements already in relation to the wrongdoing that's occurred. Very serious, there's no question. And there's no doubt, that there has been very serious misconduct as well that has been exposed by the trade union royal commission. Look I just want to take issue with something that Mark has said, we absolutely believe that unions have a place in our society...

MARK DREYFUS:

Great, say it more often.

KELLY O'DWYER:

…and can do great things for workers, however I think you should also acknowledge that in fact there are some unions that behave particularly badly, the CFMEU is one, you quite rightly wouldn't defend all of those fines and certainly they have engaged in some instances in incredibly damaging behaviour. Threatening individuals, making it completely and utterly hostile for people to actually go to work, and in fact in many cases stopping people from working.

RAF EPSTEIN:

I'll get a response from you in a moment Mark, but Ally's called from Mount Eliza. What did you want to say?

CALLER:

Hi, thanks for taking my call. I wanted to say I've been working in and around the construction industry for the better part of ten years. I've had one construction manager have a bomb put under his car, the CFMEU are a bunch of thugs, there's enough legislation now to protect workers in the construction industry, not to mention you've got 18 year olds earning over $100,000 per year and you've got architects leaving university earning $45,000 a year. There is no place for the CFMEU anymore and they make so many threatening calls to people in administration and it's just not ok.

RAF EPSTEIN:

Mark, I'm going to let you field that one.

MARK DREYFUS:

I'm not attempting to defend law breaking. I want everyone, I want companies to obey the law, I want banks to obey the law and I want unions to obey the law. My point was that the Government has dined out on these charges against the two senior unionists and it has now fallen in a complete heap. They used them to justify the holding of this union royal commission, this is a Government that had to be dragged kicking and screaming to the banks royal commission but couldn't wait, barely a day after they got into office, Abbott was rushing to spend $80 million of Commonwealth Government money on this inquiry into the union movement and it has not produced hardly any convictions contrary to what Kelly has suggested.

RAF EPSTEIN:

I will try to take that up with Michaelia Cash, the Employment Minister. My numbers I had about 13 people mentioned, two people convicted and 10 or 11 of the prosecutions are either people who have been found not guilty or they've fallen over. But can I, I want to talk about how much people get paid Kelly O'Dwyer, while we're also talking about the Budget. There is a new wages growth figure out today, it effectively says if you include inflation people aren't getting any extra money. Inflation's about two per cent, wages growth is about two per cent, so that it's been like that for a while. Number one that's a problem, number two your Budget assumes far more positive wages growth. Is the Budget going to hold up in a year or two's time if the figures today are really low on wages growth?

KELLY O'DWYER:

Well certainly there are more figures still to come and we always make sure that the figures that we have in the Budget are conservative, are conservative relative to the Reserve Bank, the IMF, the OECD and we have done that in this Budget…

RAF EPSTEIN:

You've been more optimistic, what's it? 2.75 and then three per cent very quickly.

KELLY O'DWYER:

…we've done that in this Budget as well, so you know we will obviously see. But let me also say this, the assumptions that we have relied upon, I mean the Labor Party to do their figures have relied upon the same assumptions in their Budget and it's interesting that under previous Labor governments, when they were surprised they were always surprised in a way that took us into the negative. We've been surprised when we've done Budgets on the upside and you can see that in the revenue figures.

RAF EPSTEIN:

Is that you or Treasury? I ask that seriously because Wayne Swan would say Treasury underestimated and for a long time Treasury have been overestimating for you, so is that you or is it Treasury?

KELLY O'DWYER:

We have always been incredibly conservative in our estimates, now obviously Treasury put together the Budget, the Finance Minister, the Treasurer, the Expenditure Review Committee of which I am in fact a member, we always make sure that the assumptions that we put in there, whether it be commodity prices or anything else, are very conservative. Labor always have incredibly high assumptions which is why their Budgets are pretty often unbelievable.

RAF EPSTEIN:

Does it matter Mark Dreyfus, I mean, I'm happy to go where Chris Bowen went to today, the Shadow Treasurer, he's talking about a bigger tax cut and a bigger surplus, are you permanently or are you for the medium term tarnished by Wayne Swan getting up again and again saying surplus budget surplus budget and it never happens, is that a problem for you at the ballot box?

MARK DREYFUS:

No I think there is a general problem with assumptions and the one you've mentioned wages growth is one where I think that the Government's assumptions are heroic, the Government says we can get to 3% wages growth in a year's time.

RAF EPSTEIN:

You are using the same numbers.

MARK DREYFUS:

We're obliged to because we've got to go on the much better information that is provided by Treasury. Treasury's in command of a far greater amount of information than we've got, we also use the Parliamentary Budget Office which is actually improved to some extent economic debate in this country and in addition we've got our own...

RAF EPSTEIN:

They're great aren't they?

MARK DREYFUS:

They are, we've got our own... everything we put out has gone through the Parliamentary Budget Office plus a costings panel...

RAF EPSTEIN:

But to my question do you worry that the Wayne Swan promised surpluses cost you at the ballot boxes at this time.

MARK DREYFUS:

I worry that the way in which Kelly talks about this causes there to be a continuing debate. This is a Government that doesn't want to acknowledge the excellent work done by Wayne Swan steering Australia through the global financial crisis. They want to pretend that the global financial crisis didn't happen, so that's a problem, the Government that doesn't want to talk about what actually happened.

KELLY O'DWYER:

Well I'm happy to talk about it Mark, let me talk about it.

RAF EPSTEIN:

Just briefly Kelly.

KELLY O'DWYER:

I'm really happy to talk about it because the one thing of course that Mark doesn't mention is the fact that Peter Costello and John Howard did a fantastic job....

MARK DREYFUS:

Sure in the mining boom!

KELLY O'DWYER:

...repaying back the 96... well actually you had the (laughs) higher prices actually during your term of government in terms of commodity prices but anyway let's put that one side. The Howard Costello Government paid back over $96 billion of Labor's debt and left a $20 billion surplus. If you want to know what the Howard Costello Government went through we had the Asian Financial Crisis, the dot-com boom, we were able to be steered through that, yet when it came to a Labor government of course they not only spent money but they then locked in spending over the trajectory of 10 or so years into the future and promised that they would deliver surpluses. Wayne Swan in fact announced 'the four surpluses that I deliver tonight'.

RAF EPSTEIN:

He did.

KELLY O'DWYER:

You can't believe anything that they say.

RAF EPSTEIN:

Can I pause it there because I fear we are going to get into the territory of then opposition leader Malcolm Turnbull supporting one package of surpluses and not two and I'm not sure we get that far into history.

Lots of texts about who had what benefits when. 'Labor promising a budget surplus HAH!', someone else saying 'rivers of gold during the mining boom', 'Kelly might have a cold but I'm getting vertigo from all the spin'. I do want to get onto whether or not the AFP will end up being able to ask anybody for their ID at airports but Gerard has a query on Budget detail calling from Jordanville, what is it Gerard?

CALLER:

Thanks very much Raf for taking my call I just wanted to address this question to Kelly and in regards to her Government's decision last week in the Budget, people on very low incomes you know, sort of $40,000, $50,000 and even up to the average wage in Australia of supposedly $80,000 are going to be taxed the same rate as people on an income of $200,000. Now, can she explain to me and the listeners how she can see that as fair and justifiable in a place where now wages are just stagnating and there's no flow down effect in terms of you know industry experience and...

RAF EPSTEIN:

Understood, let Kelly O'Dwyer address that Gerard.

KELLY O'DWYER:

So we've got a progressive taxation system Gerard, and obviously the more you earn the more you actually pay in tax. We've got a seven year tax plan that would see people who are on between $41,000 right up to $200,000 pay no more than 32.5 cents in the dollar, we would actually abolish the 37 per cent rate. Let me just explain what that would mean to people who are on lower incomes and higher incomes, because somebody who is on $30,000 would pay around about $16,000 in tax right now, they would get tax relief of $1,400 under our plan, which is 8.3 per cent, that's the difference. Somebody on $200,000...

RAF EPSTEIN:

I don't think, if I can Kelly O'Dwyer, I don't think Gerard's query is about the size of the tax cut between then and now.

KELLY O'DWYER:

No he's saying how is it fair, he's saying how is it fair.

RAF EPSTEIN:

Yes he is, he's saying how is it that people on disparate incomes, rich and poor, get the same marginal tax rate.

KELLY O'DWYER:

And what I'm saying is...

RAF EPSTEIN:

The query isn't about the shift, the query is about once we get to that, why is it fair to have the same marginal tax rate.

KELLY O'DWYER:

What I'm saying is we actually need to have a competitive taxation system, and we need people who work hard to be rewarded for their effort. Right now people can face very high effective marginal tax rates if they take on additional hours, if they work longer hours, if they get a promotion, if they come back into the workforce in different jobs, and we're saying...

RAF EPSTEIN:

Does Treasury say there is evidence that it stops people from taking the extra work?

KELLY O'DWYER:

Absolutely, there's a lot of evidence that demonstrates...

RAF EPSTEIN:

From Treasury?

KELLY O'DWYER:

...that if people – well you know there is a lot of academic work out there that says that it is absolutely a barrier for people, but can I just finish my point Raf because if think it is important for people to understand that if you're on $200,000 the benefit to you is around about 2.5 per cent, relative to somebody who is on $30,000, so the proportional benefit...

RAF EPSTEIN:

So that's a 2.5 percent change in the tax that you pay....

KELLY O'DWYER:

Indeed, indeed.

RAF EPSTEIN:

... as opposed to 8.3 per cent change at the other end, the lower end.

KELLY O'DWYER:

Indeed, absolutely right.

RAF EPSTEIN:

Ok. Mark, it can be very appealing if I'm on $50,000 and I'm hoping to earn up to $80,000 and maybe one day to earn $200,000 to know I'm going to get the same marginal tax rate no matter where I am on that scale, the Coalition's betting that's going to be very popular and appealing.

MARK DREYFUS:

Let's be direct. This Liberal Government wants to make our tax system less progressive and that means it will be less fair. The principle is a really clear one, people who earn more pay tax at a higher rate, that's what the progressive system means, it's not simply as Kelly is trying to pretend that you pay more in total, obviously you pay more because you earn more, but for many decades the Australian taxation income tax system has involved people who earn more paying at a higher rate, this Liberal Government wants to remove that, that's not fair....

RAF EPSTEIN:

Will there be a substantial difference because over the medium term Bill Shorten and Chris Bowen also want to remove one of the tax brackets...

MARK DREYFUS:

For lower paid workers...

RAF EPSTEIN:

Yeah but how, how significantly different is it going to be?

MARK DREYFUS:

Well, for a start it's two elections away, but for a second thing its removing the progressiveness of our tax system which is making it less fair and that's what everybody can see and why the Government is persisting with it I don't know.

RAF EPSTEIN:

I guess we've got a number of elections where we can all pass judgement on it

KELLY O'DWYER:

Well actually no it doesn't require a number of elections, it requires a vote in the House of Representatives and a vote in the Senate.

RAF EPSTEIN:

If it gets through.

KELLY O'DWYER:

And then it's legislated for seven years.

RAF EPSTEIN:

Sure.

KELLY O'DWYER:

The only thing standing between people and their tax relief, and their tax cuts, is actually the Labor Party right now, because we're brought the legislation into the Parliament, it's been tabled, it can be voted on anytime.

RAF EPSTEIN:

Do you really think ... let's just say, I think it is unlikely given the crossbench, but let's just say you pass it all before the next election do you really think discussing marginal tax rates is not going to figure in the next two elections after this one surely?

KELLY O'DWYER:

Well it might, it will provide I think for people a very clear distinction between those who believe in higher taxes for individuals who work hard for that money. And I think this is the thing that the Labor Party don't understand ...

RAF EPSTEIN:

They're different approaches...

KELLY O'DWYER:

...the money doesn't come from a money tree, it comes from individuals who work hard and who give their money to the Government in their taxes and I just think that the Labor Party seem to think it's their money.

RAF EPSTEIN:

Can I press pause, Ganesh has called from the City, Ganesh what did you want to say?

CALLER:

Hi, yeah I'm one of the lucky guys you know I've got a pretty good job and I've worked straight through for the last 20 years, I paid $50,000 for my graduation at Monash University and it's taken me 20 years to get to where I am, so am I being punished for being successful, working hard over a long time, that I have to pay more tax?

RAF EPSTEIN:

So you're a fan of where the Coalition is going with tax brackets?

CALLER:

Absolutely, absolutely. We do pay more tax...

KELLY O'DWYER:

You do

CALLER:

...it's not that we pay less tax, but yes I agree that it is a fair percentage, so is it wrong to be working hard and being successful and taking the right career moves in one's career?

RAF EPSTEIN:

I'm going to take that as a rhetorical question if I can because Kelly O'Dwyer, I want to ask you, I did speak to another Government minister whose portfolio this is yesterday, it's still not clear to me if the Government has an answer. If an AFP officer in the future at an airport comes up to me, I'm farewelling my parents on a flight to Sydney, and asks me for my ID, I often actually don't carry my licence, is there a punishment it I don't have ID on me?

KELLY O'DWYER:

Well I'm not the relevant minister so I can't give you a direct answer on that but I'm very happy to come back to you on it, but certainly the concern we have and the reason why we actually want people to be able to say who they are is because where you've got police at airports who are concerned about behaviours and concerned about individuals at airports....

RAF EPSTEIN:

But they can arrest me if they think I'm guilty of a crime.

KELLY O'DWYER:

Well right now they need reasonable suspicion to be able to do that, but if you're doing odd things, and I actually had someone who was telling me the other day about somebody who he saw at an airport taking photographs of various things....

RAF EPSTEIN:

So the police can ask what I'm doing, if I don't answer they can arrest because that's suspicious.

KELLY O'DWYER:

…and they should know who you are.

RAF EPSTEIN:

But it is an extra power that we haven't given anyone in this country.

KELLY O'DWYER:

That's right.

RAF EPSTEIN:

To ask for ID when there is no suspicion, are you comfortable with that?

KELLY O'DWYER:

I am very comfortable with that because I believe that we need to keep people safe. We have had, through intelligence, through our enforcement agencies and our security agencies, the disruption of 14 terrorist attacks.

RAF EPSTEIN:

Would any of them have been stopped if they could ask for ID, because I'm not aware of any court case that shows the powers are necessary?

KELLY O'DWYER:

I don't know, I don't sit on the security committee. But I can tell you that we don't make these decisions lightly, we believe one of the primary duties of Government is to make sure that its citizens are safe and we will take the action that is required to ensure that we can keep our citizens safe and I actually think that is something on which both Labor and Liberal parties can in fact agree.

RAF EPSTEIN:

Can I ask you Mark, you're the Shadow Attorney-General, are Labor going to back this one?

MARK DREYFUS:

We are waiting to see what the detail is. You've asked a very good question, Raf, I'll be interested to see what Kelly's answer to the question taken on notice is.

RAF EPSTEIN:

The principle of asking for ID, we don't do that anywhere else?

MARK DREYFUS:

It's a.. many people have said, Malcolm Crompton I have heard for example on ABC earlier today, he's a former Privacy Commissioner, saying when extraordinary powers are given to authorities we need to see what checks and balances are going to be put in place together with those powers. It's an obvious question – are we now to see a requirement that Australian's carry ID with them at all times, that's not something...

RAF EPSTEIN:

Well that might not necessarily be a requirement they might just have the power to ask you for one.

MARK DREYFUS:

Well is it to be accompanied then by a power to arrest you and detain you if you are unable to provide identification?

RAF EPSTEIN:

Can you give me a positon on the principle, are you open to giving police at airports the power to ask for ID? Are you open to it?

MARK DREYFUS:

Oh we will look at that power and we will hear what the Government's got to say about why it is in fact needed.

RAF EPSTEIN:

So yes, with appropriate safeguards?

MARK DREYFUS:

Well it depends on what the safeguards, what the checks and balances are, and what the Government's intentions are as to whether or not other places where risks occur, which are all places of gathering, like railway...

RAF EPSTEIN:

So can I try hypothetically, if they say it won't be extended and there's no punishment, but we're going to give the police the power, would you be open to something like that?

MARK DREYFUS:

I think that Australians are prepared to see airports as places of particular risk. We've seen overseas that there have been attacks at airports, there have been people with guns at airports, there's been people – Glasgow for example, about five years back where someone drove a vehicle into Glasgow Airport...

RAF EPSTEIN:

That wouldn't have stopped anything...

MARK DREYFUS:

Well quite so, I know, I know, I'm just saying...

RAF EPSTEIN:

But that's the point, I haven't seen a terrorism case where it's going to make an ounce of difference if you ask someone for ID at an airport.

MARK DREYFUS:

They have attracted attacks.

RAF EPSTEIN:

Sure. There's bombings at airports, busses, airports...

MARK DREYFUS:

...Brussels recently...

RAF EPSTEIN:

Sure but he wasn't acting suspiciously. He's a bloke with a backpack.

MARK DREYFUS:

...all of that, that's why we need to see the detail but I think the starting point has to be that airports are places of risk and of course Labor with the Government will always look at what is needed to keep Australians safe.

RAF EPSTEIN:

Okay. Look I will leave it there, there are plenty of calls that I will get to but I have to get to news headlines and apparently Kelly O'Dwyer and Mark Dreyfus have day jobs, so I'll let them go. Thank you very much for joining us.

KELLY O'DWYER:

Great pleasure.

MARK DREYFUS:

Good to be with you.