See you in a couple of hours
Now it’s early I know but I’m not nearly finished for the day, even though I’m folding this edition of Politics Live for now. I need to duck off for a bit and record one segment for this week’s campaign podcast, and then come back for another burst of live coverage this evening.
I will be covering the Labor leader Bill Shorten, live and solo at the people’s forum in Brisbane, and I’ll also cover the prime minister Malcolm Turnbull’s interview on the 730 Report this evening. I’ll be back in the live chair from about 6.30pm. I hope you’ll join me.
Let’s wrap the day.
- Today, Labor stopped circling around the economy and budget management, and engaged directly, setting some parameters about a return to budget balance. Labor admitted their numbers would be worse than the government’s over the forward estimates, but better than the government’s over the ten year cycle, courtesy of structural savings, like curbing negative gearing concessions. We still haven’t seen the numbers of course, and likely won’t for another couple of weeks. It’s a significant political gamble by Labor: will voters look at the four year position or the ten year position?
- The Coalition argued voters should look at the four year position (because that is what is required under the charter of budget of honesty and because ten year positions are inherently unreliable) – perhaps forgetting their own election centrepiece is a ten year plan to cut taxes for business, boosting growth and jobs, notwithstanding recent rebadging. Malcolm Turnbull and Scott Morrison warned that Labor’s stance over the forward estimates would threaten Australia’s AAA credit rating, and Labor had no plans for growth, only plans to thump the economy with taxes on investment.
That’s been the day. The evening beckons. See you then.
I don’t entirely understand all the interpretations in this story but it’s interesting. Fairfax is reporting this afternoon that Liberal MPs are using their taxpayer-funded office allowances to pay a company, Parakeelia Pty Ltd, $2500 a year to use “Feedback” software. This is a data mining operation basically. Intriguing.
Also the environment minister Greg Hunt is hitting back (not quite the right characterisation I know) at the US talk host Ellen Degeneres, who has been campaigning to save the Great Barrier Reef.
.@TheEllenShow Just last year @UNESCO recognised the unprecedented steps we've taken to protect #GBR & praised Aust as a global role model
— Greg Hunt (@GregHuntMP) June 8, 2016
#It’sAllGoodEllen
On the floods, the early advice from the prime minister’s office is both leaders are likely to be in Tasmania tomorrow, provided conditions on the ground are amenable to that, but they may not appear together. There may be separate programs.
But in any case, it looks like both the campaigns will head south tomorrow.
Labor folks are also telling me this afternoon that Bill Shorten plans to travel to flooded areas in Tasmania tomorrow. He’s apparently approached the prime minister with a view to making it a joint visit. I’ll check with Malcolm Turnbull’s folks to see what they are saying.
As if it weren’t already obvious from Bill Shorten calling Donald Trump’s views “barking mad”, Shorten has provided a further endorsement for his opponent, Hillary Clinton. After news that Clinton now has enough delegates to secure the Democratic nomination, making her the first female candidate of a major party, Shorten tweeted “ImWithHer” in support:
#ImWithHer https://t.co/IMddN3s3IO
— Bill Shorten (@billshortenmp) June 8, 2016
While I’m catching up, some Instagram views of the campaign.
Backtracking briefly, excitements, in helicopters.
PM Malcolm Turnbull sits in a Romeo Seahawk from 816 Sqn. HMAS Albatross near Nowra @murpharoo @GuardianAus pic.twitter.com/qDATdukmuw
— Mikearoo (@mpbowers) June 8, 2016
Catching up again, the Labor leader, Bill Shorten, has been meeting apprentices in Brisbane ahead of his people’s forum outing later this evening.
Updated
Now we are on the other side of the National Press Club an update on preferences. Greens MP for Melbourne, Adam Bandt, has confirmed his party will give Labor its second preference in five inner city seats. The seats affected are: Batman and Wills, both Labor seats targeted by the Greens; Melbourne Ports, held by Labor’s Michael Danby; Higgins, held by Kelly O’Dwyer for the Liberals and targeted by the Greens; and Bandt’s seat of Melbourne. However, the big unanswered question is whether the Greens will preference Labor or run open tickets in other marginal Liberal seats. There have been reports that the Greens may run open tickets in Liberal suburban marginals in return for Liberal preferences in the inner city. Expect more details of preference deals by all parties to ooze out over the weekend, as nominations close Thursday and parties lock down how-to-vote cards before pre-poll opens on Tuesday.
Into closing statements now.
Mathias Cormann looks well pleased with his hour, he says it’s been a good discussion, and the results are Labor hasn’t answered key questions and we are superior budget managers so vote one Coalition, July 2.
Tony Burke says he’s not sure if the debate ever climbed out of the talking points.
Moments of the debate have been like an argument with Siri.
Eighth question is on spending growth. The Coalition has increased spending growth since coming to office, how does it account for that record, and will Labor send a signal on the spending cuts stuck in the Senate? Will Labor back some of those cuts?
Mathias Cormann says the government has worked to constrain the growth in expenditures – and whatever you think of the Coalition’s record, it is always better than Labor’s.
Tony Burke says of the zombie measures, the government is only interested in binary arguments. It’s not either/or. You can come up with alternative savings measures, in other words. He says it’s a long campaign. Don’t leave town. (Well that last bit was me, not Burke.)
Mathias Cormann says the government is confident it has the policies to combat avoidance by multinationals.
Tony Burke says the Coalition was slow to act on avoidance. Now, he says, some of the assumptions don’t pass the laugh test. Burke says companies aren’t going to pay more tax because the rate is reduced to 25%.
Seventh question is on avoidance.
Mathias Cormann:
The Coalition gets tax avoidance.
Tony Burke:
That’s certainly true.
Sixth question is the fragility of the forecasts and the limits of ten year plans. Cormann is asked why the Coalition has put a ten year business tax cut on the credit card in the current climate, and Burke is asked why he’s ruling out spending cuts post election given the current budgetary climate.
Mathias Cormann says the company tax cut is funded. He says Labor isn’t supporting it for political reasons, not economic reasons.
Tony Burke says by year ten, the cost is escalating to “a $13bn hit to the budget in a single year.” You don’t get tax cuts for free, Burke says, and you can’t do what the Coalition is proposing on company taxes without a massive hit to the budget. On spending, Burke says Labor is confident about its structural savings, confident that they will do the job.
Tony Burke is blasting trickle down economics.
Mathias Cormann:
It used to be your policy.
Burke ploughs on. He says the government has taken to announcing Labor policy.
Mathias Cormann:
I’m better at it than you.
Fourth question is on the super guarantee. What are your plans?
Mathias Cormann goes through the purpose of super. He says Labor’s plans to increase the guarantee to 12% weren’t funded, so the Coalition delayed the proposed ramp-up by six years. The government remains committed to that timetable, Cormann says.
Tony Burke says super is one of the great Labor reforms. Further announcements on the guarantee are coming, he says. Burke says whatever Labor does on this will be affordable.
Fifth question is on return to balance. How can Labor or the government claim a return to balance in five years if the budget numbers are dodgy? Do you reserve the right to delay the path back to surplus?
Tony Burke says he hopes the budget assumptions are right, but if they are wrong, it’s a much bigger problem for the government than it is for Labor, because of the impact of structural savings over the medium term. He says Labor has promised a mini-budget if it wins.
Mathias Cormann says the budget forecasts are the best available data. He says the government has full confidence in the forecasts. If forecasts don’t translate to lived reality that’s often because there are external factors outside the control of Australia.
The two men are tangling now about spending growth. Trajectories at 20 paces.
Updated
Second question is on the merit of 10-year plans. Both sides have them but suggest the other side shouldn’t have one. What gives?
Mathias Cormann says the test in the charter of budget honesty is the forward estimates, not 10 years. Thus far there’s lots of rhetoric and not a lot of substance about numbers over the four years, he says.
Tony Burke says if 10 years is off the table then we can never have a serious discussion about long-term budget repair. Take Labor’s negative gearing policy. It doesn’t yield much over the forwards because people’s investments are grandfathered. But over time, there is heavy lifting, Burke says.
Third question is spending cuts. What assurance can you give the voters that you won’t spring spending cuts on them after the election, like happened in the 2014 budget?
Tony Burke says Labor has given “the hard message first.” It has been upfront about revenue measures.
Mathias Cormann says Labor has not laid out how it will improve the budget bottom line, not with any specifics. And tax increases hamper economic growth. How much lower will economic growth be under Labor?
Updated
First question is on the AAA rating. Does Tony Burke accept higher deficits mean it is now under threat?
Burke says Labor is doing precisely what Moody’s recommended, looking at both revenue and expenditure to manage the budget. He repeats what he said in the opening, no one is delivering the outcomes in the budget – not the Coalition, not Labor – because of the zombie savings.
Cormann says the budget is the plan, the Coalition is seeking a mandate for the plan. He says if the government wins on 2 July, then it will seek to implement the plan outlined in the budget papers, including chasing the $18bn in savings.
Burke says some of the savings measures are legislated to take effect from 1 July, the day before the election, so there is no way these savings are happening. Many of the proposals will “never make it through the parliament, never.”
Mathias Cormann:
You used to say the same thing about the schoolkids’ bonus and now you support [the abolition]. What other savings measures are you going to end up supporting?
Updated
Finance minister Mathias Cormann says Labor is using weasel words. Deficits will be bigger under Labor over the forward estimates, not because of external factors beyond their control, but because of deliberate spending decisions taken during this election cycle. And the ratings agencies, they won’t like it. Deficit goes up over the forward estimates, Australia’s triple A credit rating is at risk. And today’s glossy?
All pictures, no costings.
Finance ministers debate at the NPC
While Hillary Clinton is taking her moment in New York, proceedings are underway at the National Press Club. Labor’s Tony Burke is opening the batting. Presently he’s talking about zombie measures embedded in the budget. He says the Coalition’s policy manifesto is full of holes because savings are being assumed that will never clear the Senate. Burke’s pitch is Labor is doing the hard yards on structural repair in the budget. Neither side is promising a surplus over the forward estimates, Burke says, but Labor is implementing reforms that will deliver for the budget bottom line in the medium term.
Updated
I won’t post a summary this lunchtime because I’ve done two in the course of the morning. Today is about the economy and budget management. That’s all you need to know in the event you are just tuning in with your sandwich.
Press club is coming up, and the Liberals are shaking off Labor on their Facebook page with a hip Taylor Swift reference. Yes, I actually did that, punning my way to polling day. People are being very rude in the thread. “This is what happens when the Liberals let teenagers run their Facebook page.”
Brisbane [sad face]
Back to square away Julie Bishop.
Q: The PM has chosen not to appear on the Sky News forum tonight to debate the opposition leader. Is that a sad decision for the people of Brisbane who may have wanted to ask the PM questions?
As if to counter Brisbane’s sadness, Julie Bishop smiles to full wattage. It’s amazing how good she is at dialling up the wattage when she’s delivering bad news – it is a real skill, and the foreign minister is master of it.
Julie Bishop:
I think it is an exciting idea to have a leaders debate in a new forum, using Facebook. Hopefully it will reach a whole new audience of people who might otherwise not been engaged in the political debate. With no offence to Sky News and its viewers, this is a great idea of embracing a new way of reaching more people and hopefully it will be a broader audience. I think it is an idea that is worth pursuing and I am pleased that the PM’s suggested it and it is going ahead.
Meanwhile, in another election season.
Ready. pic.twitter.com/y6qupOwX9K
— Hillary Clinton (@HillaryClinton) June 8, 2016
I repeat what I said earlier, good luck, you will need it.
Julie Bishop was also asked about a police shooting in Papua New Guinea.
Q: We have seen shocking reports out of Papua New Guinea this morning with four people dead and several injured, from a police shooting, is that acceptable?
Julie Bishop:
I am aware of the reports of this tragedy in Papua New Guinea. There have been student protests for almost five weeks, protesting against the government and I have spoken to the Australian High Commissioner Bruce Davis, who is located in Port Moresby. He updated me. We are still seeking to determine the actual outcome - I know students have been shot but we are still trying to determine whether there have been deaths and how many have been injured.
We call on all sides for calm, to deescalate the tensions, and certainly call on all sides to respect the peaceful and lawful right to protest. We will be monitoring the situation closely. There are about 70 Australian Federal Police officers in PNG spread throughout the country and our high commission will be working with the Australian AFP who are there to monitor the situation and keep me and keep the Australian government informed.
Q: Will you speak to the PNG government about it?
Julie Bishop:
I anticipate when we have details from our high commission and from the AFP officers there, I will make a call to my counterpart in PNG. If people have been shot in this incident, it is a tragedy and we urge for calm, to deescalate tensions between the students and the police. We ask that the right to protest peacefully and lawfully be respected.
The foreign minister Julie Bishop is campaigning in Brisbane and is also asked about Afghanistan, as the prime minister was this morning. There must be a news report around somewhere that I’ve missed.
Q: Has Australia been asked by international partners to increase our defence contribution in Afghanistan?
Julie Bishop:
We are constantly monitoring our contribution but Australia is one of the most significant contributors to the coalition that has been operating in Afghanistan for a long time. We continue to monitor our support there. We are working with the Afghan government to build the capacity of the Afghan national security forces so that they can control their borders, they can maintain peace and security for the Afghan people.
Q: Have you been asked to increase our defence contribution though?
Julie Bishop:
These are matters that the minister for defence would be handling. There has been constant monitoring of our contribution but they are matters that the defence minister would handle on a day to day basis. I deal with our counterpart, the Secretary of State John Kerry, and there hasn’t been a request by him to me.
Good luck Hillary, you'll need it
I should, for political tragics everywhere, note that Hillary Clinton is going to be the Democratic candidate for president, it’s official, and Donald Trump opposes something called the PP. I believe that translates to the TPP. At least I hope that’s what it translates to.
Good luck Hillary Clinton. I don’t mean that in any way as a partisan statement. I just mean I’ve seen a female political leader in action, and how she was treated, and in truth I can feel only trepidation for Clinton, even though it’s obvious she’s tough as old boots.
I feel no sense of “milestone” at all because feeling that would require comfort that something had actually changed. Before Julia Gillard, I was entirely smug in the confidence that feminist progress was a real thing. You only need to see once that progress is not what it’s cracked up to be.
So good luck Hillary. You’ll need it.
Looking forward, there’s a debate coming up at the National Press Club today between the two finance spokesmen (and campaign spokesmen) – Mathias Cormann and Tony Burke.
Just in case you were wondering, I will also cover tonight’s Sky People’s forum in Brisbane, where Bill Shorten will have the stage to himself courtesy of the prime minister’s desire to give Rupert Murdoch a campaign head-to-head on a different platform consumed by a great many more readers and viewers (news.com), and I’ll also look in on the prime minister’s interview with Leigh Sales on the 730 Report.
How I’ll pull that off simultaneously? (One woman, one brain, two events happening on different channels at the same time ..) Who knows .. Tune in to find out.
The view from Tasmania.
Constant, cascading torrent of water down the Gorge! #floods pic.twitter.com/XYxArcwiYV
— Andrew Nikolic (@andrewnikolic) June 7, 2016
Labor, I presume.
BREAKING: Melbourne, @AdamBandt announced #Greens16 will be preferencing Labour #2 in all inner city campaigns including #MelbournePorts.
— Steph Hodgins-May (@sjhod) June 8, 2016
Prime Minister Malcolm Turnbull tours HMAS Albatross near Nowra this morning, Wednesday 8th June 2016. Photograph: Mike Bowers for the Guardian
I’ve given you my thoughts on the economic positioning today. Laura Tingle from the Australian Financial Review wonders whether Labor can buck the orthodoxy of economic policy thinking in Canberra that has defined the political conversation since the Hawke/Keating period.
It will be fascinating to see Bill Shorten and Chris Bowen argue the case that so goes against the orthodoxy of the last few decades – that a political party can go to the polls actually acknowledging its policies will result in a short-term deterioration in the budget position, arguing that it is however putting the structural changes in place to address problems longer term.
Updated
Compare the pair.
2016 - Labor's 10 year plan for Australia's economy booklet
— ellinghausen (@ellinghausen) June 8, 2016
2013 - The Coalition's 'Our Plan' booklet pic.twitter.com/5iTlknpZxd
I don’t know whether Penny Wong is standing up to execute a quick getaway.
Scott Morrison has moved into company taxes now, and he’s citing the Murphy modelling that I just referenced. He says higher taxes are bad for economic growth, full stop.
Scott Morrison:
A decade of black holes is not a plan for jobs and growth.
The treasurer, Scott Morrison is giving a speech in Perth. The Australian reported this morning that Morrison will draw on modelling by the economist Chris Murphy to back in its plan to cut company taxes.
I haven’t had time to read Murphy’s paper but here’s an excerpt from the abstract that gives you a flavour.
Of the major taxes, company income tax is found to be least efficient, with a marginal excess burden of 139 cents per additional dollar of tax revenue. For open economies the literature finds that company tax is among the most inefficient of taxes because it suppresses labour supply and the capital to labour ratio and leads to profit shifting to lower taxed jurisdictions. For Australia, company tax is even more inefficient because of its above-normal company tax rate and the erosion of the final revenue yield through the system of franking credits.
The government has been sand bagging the company tax cut plan for the last couple of weeks, rebadging the budget measure as a policy improving the fortunes of small business, not big business. The prime minister now presents the big business tax as off in the mists of time.
Back to Morrison, in Perth, he’s currently into Labor’s glossy from today, which has more pictures of Bill Shorten in it than facts, he says. Blue Steel economics.
Scott Morrison:
If Derek Zoolander was launching an economic plan, this is what it would look like. Australia does not need Derek Zoolander economics from Labor.
Morrison says Labor has given up on the budget task over the forward estimates, which is the measure required under the charter of budget honesty. Four years, not 10 years. The treasurer says the ratings agencies, like Moody’s, will be looking at four years, not 10 years. He says Labor is just not serious, and can’t be taken seriously.
Updated
Ok, what just happened?
Up and up and up. Morning to Mike Bowers, travelling with the prime minister on the south coast of NSW.
Prime Minister Malcolm Turnbull sits in the cockpit of a Romeo Seahawk from 816 Squadron at HMAS Albatross this morning, Wednesday 8th June 2016. Photograph: Mike Bowers for the Guardian
Let’s just close our eyes against the whipping word wind of the past 90 minutes and establish today’s terms of engagement.
Labor:
- After a month of dancing around the economy and fiscal management, Labor has begun the task of moving in for closer combat. It has used this morning to define the terms of the conversation: on the budget, please look at our medium term projections, don’t look too closely at the traditional four year forward estimates cycle because the story there ain’t pretty. Look at our structural savings, because they are fighting the good fight on the deficit. Labor is saying on the economy, we have a different approach to the government. We aren’t interested in trickle down, we are approaching the task of transition from resources boom to next phase by boosting the position of the middle class, in health, in education – that’s a productivity enhancing investment as well as an equity investment. That’s the pitch, in essence. An economy with people at the centre.
The Coalition:
- The Coalition has been sitting squarely in the economy throughout the 2016 contest. It has staked its electoral fortunes on the core message that the government has a plan to boost jobs and growth by reducing the tax burden on business and eschewing new taxes on investment, which is typical neoliberal economics, but it has also overlayed that with a dash of stimulatory activity, of old-fashioned industry policy, with a huge defence spend. Economic and budgetary management is a traditional strength for the Coalition and a traditional weakness for Labor. The Coalition is aiming to keep economic management a weakness for Labor by arguing Labor has not yet produced numbers that allow for considered judgments about fiscal recklessness or otherwise (entirely true, as of today), by asserting constantly that this Labor opposition is the most anti-business opposition we’ve seen in Canberra since the Jurassic period (big call, with evidence scant, unless you are a person who is happy to characterise not giving an interest group a handout as a “war”), and by the daily presidential-style framing: Malcolm Turnbull is highly successful self-made man who is the business and economy whisperer from central casting.
That’s our contest. Today, both sides are leaning in.
If you care about the battle of ideas in election campaigns, lean in too, because this matters.
That frenzy of activity needs some sifting. Give me a minute and I’ll be back with some sifting.
Last question on house prices.
Q: Just on the RBA decision, they’ve said that house prices are likely to come under downward pressure as a result of the construction boom. Do you expect even without Labor’s negative gearing changes that house prices will come down?
Malcolm Turnbull thinks the housing market is delicately poised, and doesn’t need to be whacked with Labor’s wicked negative gearing policy.
There is real softness as the bank observed in several sectors of the market, particularly in the apartment sector of the market.
So I would say that the housing market, there are many parts of the housing market that are delicately poised and where growth has either stopped or is going backwards.
Now, what do you think Labor’s ban on negative gearing will do to that market?
Labor is a threat to the value of every home and it is a threat to rental affordability ... because its policies will only send rents one way, and that is up.
(Like the carbon “tax” campaign: up and up and up.)
Q: ASIC has moved against NAB, it follows on from what happened with ANZ. What would you say to bank customers and shareholders getting increasingly nervous about the industry and behaviour in the industry?
Malcolm Turnbull thinks this shows the regulatory system is working.
The watchdog is on the job, the watchdog is sinking it fangs into a few suspected culprits and doing his job, that’s what he should do.
Pre-Facebook, imagine children, if you will
Q: Can you honestly tell Australians that anyone is going to return the budget to surplus in 2020 or 2021?
Malcolm Turnbull:
We have set out a path to do so. It’s been set out in the budget and confirmed by the secretaries of finance and the treasury in the PEFO. We have a very clear plan. Labor has not produced its numbers.
Q: Glossy brochures as you know aren’t very rare in campaigns there, was one in the last campaign, in fact it had your photo on there as well as Tony Abbott’s and it was “our plan”. It didn’t have costings in it and that’s what oppositions do and oppositions ask governments to release their detailed costings which they’ve done today. Will you do that, your detailed 10-year costings?
Malcolm Turnbull says ten year costings aren’t reliable.
There are always risks with forecasts. I think everyone understands that. The further out you go, the more speculative those assumptions are. Ten years - let’s go back ten years. Ten years ago, 2006, there wasn’t an iPhone. People didn’t have smartphones. Facebook was 1-year-old.
It was a different world.
A very different world.
Q: Do you admit that not going ahead with company tax cuts has basically allowed Labor to make all these big-ticket promises that you can’t do during this election campaign?
Malcolm Turnbull:
The Labor party has given us no indication of how they are going to fund their promises. They’ve indicated about $100bn of new taxes over the next 10 years. They have got - they are proposing, taxes, which will actively slow economic growth. Let’s be quite clear about this.
Those wicked taxes on investment.
They’re going to increase capital gains tax by 50%. That can have only one result: less investment. They’re going to ban negative gearing, the ability of ordinary working people to invest and offset losses against their personal income, they’re banning negative gearing on every asset class - shares, business, property, commercial property, residential property except for new dwellings. What is that going to do? That will also restrict and reduce investment.
A question about a complaint about the Chinese foreign ministry about the Kidman sale. Do we need a clearer foreign investment framework?
Malcolm Turnbull:
The Chinese people and the Chinese leaders understand very clearly that Australia’s government has the sovereign right to determine who invests in Australia. That is our right. That’s the right of the Australian people through their elected representatives. We have a very clear foreign investment arrangement or regulations. They’re well understood. The vast majority of foreign acquisitions and investments are approved, as indeed are the vast majority of investments from Chinese investors, so nobody has anything to complain about.
Calla mentioned the prime minister is inspecting helicopters.
Q: Just on the choppers themselves, many of these choppers may be deployed to the South China Sea. We’re seeing European nations agitate for more freedom of navigation, a pushback against Beijing. Is Australia doing enough?
Malcolm Turnbull:
Yes, we support freedom of navigation and overflight in the South China Sea and it’s an issue that we’ve demonstrated that and it’s an issue I have raised robustly and, frankly, with the Chinese leaders with whom I’ve met – president Xi, on four occasions now.
Slightly left field, this question.
Q: Do you anticipate Australia will increase its commitment to Afghanistan in the near future?
Malcolm Turnbull:
We’ll consider requests for additional support, obviously, we stand shoulder to shoulder with our allies in Afghanistan.
Q: Has there been a request so far?
Malcolm Turnbull:
I can’t comment on any recent requests. I can assure you we’re staying in close and constant contact with our allies, in particular of course the United States.
Malcolm Turnbull speaks to reporters in Ulladulla
Never mind the contractions.
What Labor has is a glossy brochure, that’s all they have, another pamphlet, another glossy pamphlet which set out a list of promises, a list of complaints, no way to pay for them and no demonstration as to how they are going to drive the economic growth that we need, that our children and grand children need to secure their future.
This is Malcolm Turnbull speaking to reporters on the South coast.
Q: When are taxpayers going to know definitively how much they’re going to fork out for your policies? Is it going to be week 7, week 8, not the Thursday before?
Bill Shorten:
We will make sure every Australian will have the full Labor program well before 2 July. What I’m is also committing to today is to make sure that we are making very clear there will be no new spending on unannounced programs, that we’ve outlined our priorities, and we’ll keep do it.
Q: There is a credible economist in the media this morning, Chris Murphy I think, saying there is very considerable flow-through from the tax cuts you haven’t adopted and remain a deep critic of. Is he right or are you right? Can I also ask now we have a 10-year Labor economic plan, can you say to business with a turnover above $2m: “You will not get a tax decrease, a tax cut, under a Shorten Labor government in a decade”?
Chris Bowen says he’ll stick with the treasury modelling rather than modelling that assumes a “morality dividend” from corporates suddenly paying a 25% tax when they haven’t been happy paying a 30% tax.
Chris Bowen:
The Liberals do not have a plan for jobs and growth. They have a slogan. Isn’t it interesting that the prime minister today isn’t talking about 10-year plans, he’s walked away from his. He doesn’t want to talk about his corporate tax cut. He says, “Don’t worry about it, it’s in 10 years time and three elections away, and you can vote us out.”
Q: This morning on radio Malcolm Turnbull said your plan is highly speculative. Does he have a point considering how do you know where we’ll be in ten years time?
Bill Shorten, persisting with the campaign standard of look over there:
I think it’s shameful Mr Turnbull is not prepared to navigate a course to the future looking at ten years time. What’s happened to the old Malcolm Turnbull who had vision and drive? It has been swallowed up by his right wing Liberal party.
Q: You say you’re going to stick to your word and Mr Bowen you said in your speech you’ll improve the budget without walking away from a single policy. You’ve already backtracked on restoring the school kids bonus, how can the Australian people believe you’re going to do what you say you’re going to do?
Chris Bowen invokes how about that other mob.
We have been very clear. Unlike the Liberals who announced their 2013 election policies in the 2014 budget, eight months after the election, we have been outlining our policies and yes, they’re not all popular, but we’ve made tough decisions for budget repair.
The obvious question.
Q: If you’ve got bigger deficits over four years and you’re returning to balance in the same year, what is doing the heavy lifting?
Bill Shorten is a distance short of specific in the answer. He nominates negative gearing, and Labor not implementing the Coalition’s company tax cuts.
In the longer term, we’ve got a good glide path towards a very strong balance by our changes, for instance, to negative gearing.
Questions now.
Q: Why won’t you reveal your plans to further cut welfare benefits? Why are you waiting until the end of the campaign?
Bill Shorten:
I said in my speech and Chris said then that in coming days we’re going to talk more about our numbers and we’re going to be much more transparent than any opposition has been in previous elections.
We’re not going to dodgy-up our numbers in the short-term by promising cuts the Senate is going to fight and fight, and secondly, we’re not going to rely upon retrospective changes in order to pump up the tyres of an otherwise unlikely budget vehicle of the Liberals.
Chris Bowen says further savings are coming. It’s a two month election campaign. “We will have all our figures out there.”
Shorten is accompanied by the shadow treasurer Chris Bowen. He says over the medium term, there will be stronger surpluses, because the structural savings Labor has come up with during this term in opposition deliver for the budget in the longer term. “Our reforms build over time and provide a greater return to the budget over the decade.”
Bill Shorten addresses reporters
The Labor leader has exited his speech in Brisbane and is speaking to reporters now. Bill Shorten says Labor’s program in government is the program it will outline between July 2.
Bill Shorten:
It is not the start of a debate, it will be the program we implement, it will be the discipline to which we administer to our policies. There will not be then new programs and new spendings if Labor was elected on July 2, it will be the program that we have outlined before July 2. Labor’s very committed to investing in jobs, education and health care, we’re very committed to rigid budget discipline, we’re committed to building the nation-building infrastructure, our roads, our rail, our NBN, our energy grid that Australians need, we’re committed to fair taxation, we’re committed to restoring the dream of important for your first home and the equal treatment of women. This will be our guiding principles not just for this election but for Australia in 2025.
'Our solution to the structural deficit rejects unfairness, does not attack demand and confidence and avoids retrospectivity'
Here’s the section of the speech that balances the fiscal imperative with Labor’s current policy inclinations on inclusive growth.
Bill Shorten:
It is true that Labor will not have the same degree of fiscal contraction as the Liberals over this period. This is because our solution to the structural deficit rejects unfairness, does not attack demand and confidence and avoids retrospectivity.
Our plan rejects vicious cuts to health and education in the short-term. We will deliver better and bigger structural budget improvements over the decade, savings that accumulate over time and stand the test of time. Unlike the Liberals, our fiscal plans will pass the Senate because they are fair and because we are seeking a mandate to implement them.
We will achieve more savings than spending over the decade. We will reduce the deficit each and every year. Based on current budget forecasts and projections, under Labor the budget will be in balance in the same year as the Liberals.
Over the medium term our budget improvements will significantly outstrip the Coalition. Labor will deliver stronger surpluses and a more sustainable budget for the long-term and for future generations.
We will fix the national budget without smashing the family budget. We will create the jobs of the future, without cutting the things that help our economy grow. We will deliver budget repair that is fair and we will provide certainty and confidence for business and for families.
The worst thing we can do for an economy changing gears is pump the brakes and kill the engine. You cannot create jobs by hurting families earning less than $100,000 a year. You can’t grow the economy if you are trying to shrink the middle class. What Australia needs is an economic program to kick start growth today and boost productivity over the long-term. This is Labor’s plan. A plan to meet and master the defining forces of the decade ahead.
On fiscal contractions and pivots
Thanks Calla, good morning everyone and welcome to Wednesday. I’d been wondering when Labor would get off the social capital spending travelator and get on to the critical business of framing the budget and the economy more generally. Well today’s the day.
Labor overnight dropped a campaign document which aims to get the opposition past the political inconvenience that the budget under a Shorten government looks less favourable over the four year forward estimates cycle than the Coalition’s road map. Labor would like Australians to look at the medium term, over ten years. Bill Shorten has said this morning the budget will be back in balance the same year as the Coalition, but “it is true that Labor will not have the same degree of fiscal contraction as the Liberals over this period.” Like a quick trip to the labour ward – fiscal contraction, you wince at the mere mention of it.
In a speech just now in Brisbane, Shorten has been fleshing out Labor’s alternative on the Australian economy. He’s outlining an alternative path to growth and prosperity that prioritises inclusion and equity, and pitches squarely at people who are feeling the other side of the story in the national accounts data, the side of the story that says economic growth is happening, but living standards are declining. “You can’t grow the economy if you are trying to shrink the middle class,” Shorten has just said, encapsulating the core argument.
This morning’s outing is quite an important pivot in the campaign, even though we still don’t have all the information we need to test Labor’s bonafides. We need the costings to understand the sum of the parts, and we don’t have that yet. But Shorten has clearly decided to step in and prosecute the economic dimension of Labor’s conversation with the voters rather than run the alternative more passively on a parallel track. Voters will either buy the policy story that Labor is selling, and lean in for a good hard look at Bill Shorten over the weeks that remain between now and polling day, or they’ll stick with the known quantity. That’s the transaction at its simplest.
Let’s press on. A reminder today’s comments thread is open for your business. If the thread’s too bracing for you, Mike Bowers and I are up and about on the twits – he’s @mpbowers and I’m @murpharoo. If you only speak Facebook you can join my daily forum here. And if you want a behind-the-scenes look at the day and the campaign as a whole, give Mike a follow on Instagram. There’s some beauties there from yesterday. You can find him here.
Mind the contractions, here comes Wednesday.
Meanwhile, in Western Australia
Colin Barnett will attend the opening of WA's first Aldi store today.
— Calla Wahlquist (@callapilla) June 7, 2016
The actual premier. Opening Aldi.
Perth does like its international store openings - it set a world record for most doughnuts purchased on first day of trade when Krispy Kreme opened its first WA store in 2014 - but this seems a bit much.
For those wondering: Barnett did not attend the opening of Krispy Kreme, possibly because the queues were too long.
On that note, I’m going to hand over to my august colleague Katharine Murphy, who will guide you through the rest of the day.
Updated
Meanwhile, the prime minister has arrived in Nowra on the NSW south coast. He’s looking at helicopters.
PM is touring HMAS Albatross near Nowra. This is a Romeo Seahawk, part of the 725 Squadron of the RAN @abcnews pic.twitter.com/iNUNmzRHOE
— Frank Keany (@FJKeany) June 7, 2016
The Prime Minister is coming to HMAS Albatross to see @Australian_Navy's Romeo helo fleet pic.twitter.com/7s4EJ2chgI
— Andrew Greene (@AndrewBGreene) June 7, 2016
Updated
A fair point. Let’s try to keep the rhetoric in the realm of a pre-2013 Republican.
Does Turnbull really plan to cut "every single dollar" from schools? Political rhetoric continues its way to Trumpification.
— David Crowe (@CroweDM) June 7, 2016
And, while we are critiquing political language...
"We will fix the national budget without hitting the family budget"; budget repair that is fair" Bill Shorten promises, in a win for cliches
— James Massola (@jamesmassola) June 7, 2016
As well-constructed a prefabricated hen-house as ever there was.
A budget rigorously disciplined
Bill Shorten has begun his economic pitch in Brisbane by confronting the truism that Labor cannot be trusted to be responsible with the national coffers.
He said:
Every decision that we make will be governed by our solemn understanding that taxpayer money belongs to the taxpayers. We recognise the national mood of concern about wasteful spending. It is a concern that we share. We will not be a big spending Government. We will apply rigorous budget discipline.
That discipline, he said, will differ from the discipline shown by the Coalition in that it will involve spending money on things like renewable energy and Medicare, which Labor argues will grow the budget. There will be savings measures too, but Shorten says they will be sensible and measured and, importantly, not retrospective.
We will not ambush Australians who have made investments based upon one set of tax laws in order to simply try and pump up numbers in the short-term in the Budget. Our changes, we give due notice of, they are prospective and we do it for the long-term
The result, he said, will be a budget that returns to surplus at the same time as the Coalition said it could return the budget to surplus. That’s 2021, for those playing at home.
Let’s be clear, both sides of politics will be in deficit over the four years of the forward estimates. It is true that Labor will not have the same degree of fiscal contracts as the Liberals over this period. This is because our solution to the structural deficit rejects unfairness, does not attack demand and confidence and avoids retrospectivity.
We’ll unpack that plan as the day goes on.
While Bill Shorten debates an empty chair at the Sky News debate in Brisbane tonight, the prime minister, Malcolm Turnbull, has made other plans.
Cancel your evening plans and stay in - my guest tonight on #abc730 is the Prime Minister @TurnbullMalcolm
— Leigh Sales (@leighsales) June 7, 2016
Anticipating a flurry of articles contemplating Turnbull’s rapport with and inferred preference for Sales, in the vein of that weird 1950s piece about the budget night interview.
Of course, the attraction to 7.30 could be that it is the only prime-time free-to-air television program to offer long-form political interviews.
A pre-announcement run.
6.5km morning run along the Brisbane River pic.twitter.com/uv7TrAuKWs
— ellinghausen (@ellinghausen) June 7, 2016
Bill Shorten and Chris Bowen are about to begin that address outlining their economic plan at the Brisbane Convention Centre.
#Ausvotes fan favourite Pauline Hansen has launched her election campaign and hit back at comments from Malcolm Turnbull and Bill Shorten, who said she was not welcome in Australian politics.
Hansen told ABC Radio National that she was annoyed at the “sheer arrogance” of Turnbull’s comments, which she said are disrespectful to voters.
He’s saying to people ‘we won’t work with her, she’s not welcome in the parliament’ and I hope people say for that reason, ‘no, let’s vote for her’.
Asked if she would negotiate with either of the major parties if elected, Hansen said that the major parties could negotiate with her. She’ll work with anyone and support any legislation that she thinks is in the best interests or Australia.
Supporters vox-popped at the campaign launch said they supported Hansen because she was “honest”.
Here’s a first look at that glossy, glossy booklet.
Labor's 32-page booklet for its 10-year plan #ausvotes @9NewsAUS pic.twitter.com/YkEZkBiVm1
— Lauren Gianoli (@LaurenGianoli) June 7, 2016
Chris Bowen and Bill Shorten are due to launch the plan at the Brisbane Convention Centre this morning.
Malcolm Turnbull tells Jones that Labor’s economic plan, which Chris Bowen will begin outlining about now at an address in Brisbane, is “entirely speculative”.
That was in response to Jones’s previously mentioned soft opening salvo, in which he read out an angry letter.
Soft? Never.
“What’s your response to that kind of letter, I’ve got a stack of them.”
“Well Alan, the writer is absolutely correct. The Labor Party does not have any plan for economic growth, any plan for jobs, any plan for living within our means. The spend-o-metre keeps on whirring.
Bill Shorten may talk about fairness, Turnbull said, but we all have a “fundamental understanding” of what fairness means, and:
“There is nothing less fair than putting up one billion dollar promise after the other on the national credit card and leaving it to our grandchildren to pay for it.”
Alan agreed.
“That’s the guts of it.”
The pair then spoke about that modelling from Chris Murphy leading The Australian today.
Shouldn’t the PM be going stronger on this?
“I suppose this could be an implied criticism of you - have you gone strong enough on this - the Labor Party - Penny Wong has said exactly what you’re saying.”
The apparent lack of toughness also a concern on superannuation.
“See, where people are critical of you, I guess, is that on some of these things they don’t see you going strong enough.”
Now to the friendlier topic of hating the Greens. Do these 10-11% (“a preponderance of people,” says Alan) who plan to vote for the Greens understand what they’re about?
Can someone educate the public to understand what the risk is if these people are elected to the senate?
Turnbull:
“Well Alan, you’re absolutely right.”
So who are the Greens?
“They are an extremely left-wing party… they are in favour of every form of spending and every form of tax. They would send the Australian economy backwards at a rate of knots. They basically are like a magnet pulling the Australian Labor party to the left.... It’s one of the reasons why, for example, you simply cannot trust the Labor party on border protection. It doesn’t matter what Bill Shorten says, his party, his base, his members and influential people on his front bench have to be going in that more left direction in order to protect themselves from The Greens.”
A final point: why did Turnbull not attend the repatriation ceremony for the returned bodies of Australian Vietnam war veterans, and was Tony Abbott told not to attend?
Turnbull says we need to remember that the governor general, Sir Peter Cosgrove, attended and was, it’s implied, a much more illustrious representative than any current or former PM.
He doesn’t know whether Abbott was invited.
Jones:
“Should he have been?”
Turnbull:
“I have on several occasions paid tribute to Tony Abbott’s leadership in organising this. The initiative at the time came from the veterans affairs minister at the time, Michael Rondaldson, and he was there...
Enough of that. Alan, a busy man, cuts Turnbull off.
“You’ve got to go and I’ve got to go. Next week I want to talk to you about this industrial relations dispute and the CFMEU that has got people absolutely inflamed.”
Until next week.
Malcolm Turnbull is on the line with Alan Jones for their third interview so far this election campaign.
Jones opens by reading a letter from the paper that was highly critical of Labor’s economic bona fides.
He concedes this may be considered a bit of a free kick.
“Your critics and mine would say this is a soft question but...”
Turnbull thinks the letter writer is “absolutely correct”. Bill Shorten, he said, is even worse than Labor leaders past.
“He must be the most left-wing anti-business Labor leader we have seen in a generation.”
The leaders suspended their campaign yesterday to survey storm damage in Sydney. Three people are still missing following the deluge on the weekend - two in floods in Tasmania, and one in Sydney.
Mike Bowers was shadowing the PM
Photograph: Mike Bowers for the Guardian
Here’s a bit more on Labor’s overarching economic policy, ahead of the formal announcement in Brisbane later today.
My colleague Gareth Hutchens reports that the plan will support on six key “priority areas” to support Australia’s economic transition, boost productivity, and boost living standards.
Those six areas are:
- Boosting the quality of education and training
- Investing more in rail, roads and the NBN
- Driving investment in renewables and new industries
- Providing tax relief for startups and small businesses
- Better targeting tax concessions to middle and “working class” families
- Ensuring greater female participation in the workforce
Said Bill Shorten:
Labor is the only party with a fair policy agenda that will ensure a successful economic transition, by investing in nation building infrastructure, and growing a stronger and more productive economy in the future by investing in our best resource – our people
You can read Gareth’s report here.
Good morning
Day 31 of the election campaign and it’s all about the economy, stupid.
Labor is set to release its 10-year economic policy – named an economic blueprint, to distinguish it from the economic plan of the Coalition – and the treasurer, Scott Morrison, still in Perth, is on the attack.
Meanwhile, the PM is hugging the coast in New South Wales talking about mental health and community projects.
Make a cuppa and let’s crack on.
The big picture
The opposition leader, Bill Shorten, and the shadow treasurer, Chris Bowen, will outline a reportedly slow-and-steady approach to returning the budget to surplus at an event in Brisbane today. The economic blueprint will be spelled out in a 32-page glossy brochure, a fact that has been mentioned with a regularity that suggests glossy pages are somehow less economically serious than good sensible matt pages. Anyway.
While Labor releases its plan, Morrison has redoubled his attacks on Shorten over his opposition to the Coalition’s proposed company tax cut, which will see the company tax rate cut from 30% to 25% over five years. The treasurer has accused the Labor leader of backflipping on company tax cuts, and previewed ads yesterday that apparently showed Shorten speaking in favour of the policy five years ago.
(Kristina Keneally, former NSW premier and regular Guardian Australia columnist, has taken umbrage with this particular argument. She writes here that Shorten historically supported a modest company tax cut of 1% to 2% and still did: Labor has said it would accept a cut of one cent in the dollar for companies with a turnover of up to $2m.)
The Australian’s David Crowe reports that Morrison will discuss new economic modelling today that will show the “consumer benefit” of the $48.2bn tax cut will be worth more then twice as much as it will cost to introduce.
The modelling was produced by the Independent Economics director, Chris Murphy, in his capacity as visiting fellow with the Australian National University. It’s the second lot of modelling he has produced supporting the policy – the first was released through his thinktank. Meanwhile, the Grattan Institute and Australia Institute have released modelling that shows the benefit of the tax cut will be minimal and a long time coming.
In an opinion piece in the Oz, Murphy writes:
… the new study finds a consumer benefit-to-budget cost ratio of 2.39 from the proposed company tax cut. If our company tax rate had already been cut to 25%, the benefit-cost ratio for a further cut to 20% would be more modest at 1.96. And without a franking credits system, it would also be more modest at 1.85.
This consumer benefit-to-budget cost ratio for the company tax cut of 2.39 compares very favourably with the option of cutting other major taxes. For personal income tax the ratio is 1.31 and for GST it is lower still at 1.18. So the proposed cut to company tax is the top priority for tax reform in Australia.
In other economic news, Penny Wong has announced Labor will review three free trade agreements signed by the Abbott/Turnbull governments to remove the investor-state dispute settlement clauses, which allow foreign corporations to sue the government.
That would mean reopening the Trans-Pacific Partnership, the China free trade agreement, and the Korea free trade agreement.
As Gareth Hutchens reports, the tobacco giant Philip Morris relied on the ISDS clause to sue Australia over the plain-packaging laws.
ISDS clauses allow foreign corporations to sue the Australian government in an international tribunal if they think the government has introduced or changed laws that significantly hurt their interests.
The tobacco giant Philip Morris used an ISDS provision in the Hong Kong-Australia bilateral investment treaty, signed in 1993, in its attempt to sue the Australian government over the introduction of plain-packaging laws by former prime minister Julia Gillard in 2012.
The proceedings went for years, but in December 2015 an international tribunal ruled in Australia’s favour, saying Philip Morris Asia’s claim was an abuse of process.
Unions have reportedly begun robo-calling against the China free trade agreement.
On the campaign trail
Malcolm Turnbull will start the day in his own electorate to announce funding for CCTV at The Gap, a notorious Sydney suicide spot, before heading to Shoalhaven on the NSW south coast to campaign with the Liberal MP for Gilmore, Ann Sudmalis.
Bill Shorten is in Brisbane to announce Labor’s 10-year economic blueprint with Chris Bowen. He will stick around this evening for the second Sky News debate, which threatens to become a televised monologue owing to Turnbull’s non-attendance.
The campaign you should be watching
If there was any doubt the Liberal party was concerned about losing the South Australian seat of Mayo to the new threat of the Nick Xenophon Team it was resolved yesterday with the sudden and ominous appearance of the former prime minister John Howard, whose presence on the campaign trail is a nationally recognised symbol of an MP in trouble.
The troubled MP is of course Jamie Briggs, who resigned the frontbench in December after admitting he behaved inappropriately towards a female diplomatic staffer on a night out in Hong Kong.
Nick Xenophon thanked Howard for all the attention and said he knew he liked him, really.
And another thing(s)
The next debate will be on Facebook, and it will be innovative.
After shunning the Sky News debate in Brisbane tonight (he says he wasn’t properly invited) Malcolm Turnbull has announced he has organised an interactive Facebook debate, hosted by news.com.au, next week. Bill Shorten has said he’ll go along, because who could resist the chance to make so many digs about the national broadband when the live feed inevitably starts buffering?
Updated
