ABC 891

E&OE TRANSCRIPT ABC 891 September 3, 2014 COMPERE:  Christopher Pyne, Liberal MP for Sturt, Education Minister, Leader of the House, welcome to the program Chris Pyne. CHRISTOPHER PYNE: Good morning Matthew, and David and Mr Butler. COMPERE: Mr Mark Butler, Labor MP for Port Adelaide, he speaks for the opposition on environment and climate change, welcome. MARK BUTLER:  Good morning to both of you and to Christopher. COMPERE: Christopher Pyne can you explain to our listeners why their superannuation benefits has been cut in a deal with Palmer United to get the mining tax repealed? CHRISTOPHER PYNE: Well I think this is very good news for workers in fact because the superannuation increases were coming out of their wages as is the case and Mr Shorten himself admitted that in 2012 that every increase in compulsory super is a reduction in wages. What this will mean is that superannuation contribution will stay at 9.5% in the foreseeable future and the extra that would have gone up to 12% will stay in their pay packets every week. They can make the decision as to whether they invest it in their mortgage, whether they invest it in superannuation or whether they spend it on living expenses now and I think that’s a much better outcome. COMPERE: Is it a great outcome for Clive Palmer? He’s getting rid of a mining tax and he’s a miner and he doesn’t have to pay a superannuation levy as an employer? CHRISTOPHER PYNE: Well Clive Palmer, Ricky Muir, John Maddigan, David Leyonhjelm, Bob Day all supported the Government’s abolition of the mining tax, if Labor hadn’t made itself irrelevant by saying they were going to vote against everything all the time they would have been able to be part of the negotiations they are refusing to be part of government. COMPERE: Didn’t you promise no changes to superannuation during the election campaign? CHRISTOPHER PYNE: No adverse changes and this isn’t an adverse change. I’ve noticed that the…   COMPERE: How is it not an adverse change? Let’s just read from the front page of the Australian today. You haven’t got a problem with The Australian have you? CHRISTOPHER PYNE: Well I haven’t got a problem with The Age of the Sydney Morning Herald either so you can read what you like. COMPERE: According to the Australian today, a 40 year old listening to this program today, will miss out on almost $20,000 of retirement savings, so how is that not a change for the worse? CHRISTOPHER PYNE: Well it’s not an adverse change because the $128 billion that the superannuation industry says will not go into super, and let’s not forget they have something of a self interest in this, will actually be $128 billion that workers will have in their pay packets to spend how they wish. And I think we have amongst the world’s biggest reserve per capita of superannuation because we’ve had superannuation for decades. It’s not like Australia is now starting off on the super journey, we have been doing the super journey for a couple or more decades and I think workers would vastly prefer to make those decisions about how they spend their own money themselves without government constantly dipping into their own pockets and telling them what to do. COMPERE: Mark Butler, if the opposition had scrapped the tax that cost you government and two Prime Ministers, and for which the government had a very clear mandate to get rid of the mining tax, they wouldn’t have had to do this deal with Clive Palmer. MARK BUTLER: Let’s just respond to a couple of things that Christopher said. Every step of the superannuation journey as Christopher describes it, the Liberal Party has voted against. Every step of the last of decades where there’s been an attempt by the Parliament to, usually initiated by Labor to improve people’s superannuation and savings, the Liberal Party has voted against it. At the end of the day I guess yesterday was no real surprise. COMPERE: But they wouldn’t have had to do that, they wouldn’t have any excuse would they if you just said ok look it’s a useless tax, it’s not raising a lot of money… MARK BUTLER: I think we’ve had this discussion before, this was not a bill to deal just with the mining tax. This was a bill that dealt with a whole range of measures that went to superannuation, the school kids bonus that assists 1.3 million families with education expenses and with… COMPERE: Why didn’t you get involved? Why did you parlay with the government so you could have protected things that you think are important. MARK BUTLER: Well Clive Palmer was willing to do a deal with the government of this type but Labor was not willing to a deal that would benefit less that 10 major mining companies but cost millions of workers in extra super, 1.3 million families with the school kids bonus and something which hasn’t been talked about enough in this bill as well, although 9 or 10 big mining companies benefited, millions of small businesses lost significant assistance with their investment plans in terms of asset write off so…. COMPERE: If you had agreed as a party to get rid of the mining tax you could have protected these things which you think are important. MARK BUTLER: Such a proposition, that proposition was never put before the Parliament. The only proposition… COMPERE: Haven’t you done, really what the greens did when they refused to deal with John Howard over climate change and we ended up with what was considered to be less of a scheme… MARK BUTLER: Not at all COMPERE: You cut your nose off MARK BUTLER: Not at all, we’re not going, we were never going to do a deal that would benefit 8 or 9 or 10 major mining companies, cost millions of workers in retirement savings, small businesses and families with their education expenses. Can I come back…. COMPERE: That’s what you’ve done… MARK BUTLER: Can I come back…no we haven’t. Clive Palmer did the deal. We didn’t do the deal. Clive Palmer did the deal. Can I come back to this 40 year old case study. COMPERE: Before you come back to the 40 year old case study. Mark Butler, by sitting on your hands and pretending that somehow Clive Palmer can’t do deals with the Government you just…. MARK BUTLER: We’ve never pretended that Clive Palmer couldn’t do deals with the Government… COMPERE: You’re dealing yourself out of the game aren’t you? MARK BUTLER: We’re not going to be part of the a game that involves cutting superannuation in spite of Tony Abbott’s promise to the contrary, cutting support to families with school expenses and cutting support to small business. We just won’t do it. And can I point out this 40 year old case study is really important. Not only are they going to suffer very significant reductions in their superannuation savings, for a 40 year old listening today that person is also contemplating the fact that this government wants to make them work to 70. The highest pension eligibility age in the world. And also cut the rate of increase to the aged pension so if there is going to be some push back on the aged pension that this government argues for and we argue against, at least they could respect the capacity of people to put sufficient savings into their own superannuation account. COMPERE: Lots of people want to talk to Chris Pyne and Mark Butler. Kay from the mid north, what’s your view? CALLER: Um, I’d just like to question Christopher Pyne’s comments that this will mean money stays in employers pockets. This is the super guarantee that’s being affected, not voluntary superannuation payments. So the superannuation guarantee is paid by the employer and the Federal Government is one of the largest employers in the country, so the Federal Government is going to save all of this money. Employees are not going to see any of it. COMPERE: Christopher Pyne? CHRISTOPHER PYNE: No that’s not right Kay and I’ll tell you why. As Mr Shorten said himself in 2012 every superannuation increase came out of workers wages therefore if superannuation doesn’t go above 9.5% for several years the wages will continue to increase and therefore that will remain in employees pockets. And the good news about this outcome is that the mining tax is gone, the government has kept its promises working with the cross benches while labor tried to get us to break our promises, workers will be better off. The budget bottom line will be better off over time and Labor has dealt themselves out of the political agenda not only with this minig tax but also with the Carbo Tax. And I can understand Mark Butler’s frustration because Bill Shorten’s leadership is under serious threat today from people like Chris Bowen, who gave a much better speech in the chamber yesterday than Bill Shorten…. COMPERE: …Christopher Pyne, the superannuation was going to go up from 9.5 to 12 per cent. Now are you saying that 2 and a half per cent will now go into the workers pocket? CHRISTOPHER PYNE: Absolutely. The employer will now have to; it was going to be a compulsory increase, so the employer was going to have to pay into the superannuation, the employer will now have to give a 2.5 per cent pay increase to the worker. CHRISTOPHER PYNE: The point is that when the employer gave a wage increase to the worker, a proportion of that went out in super. They didn’t increase the wages plus super, they only increased the wages and took out the superannuation. So in other words, workers have been losing money in their pay packets but they got it back later in life through superannuation. COMPERE: And Mark Butler… CHRISTOPHER PYNE: 9 and a half per cent is high enough….over time it will rise to 12 but it will rise more slowly then was projected. COMPERE: Chris Pyne, What’s yours? It’s 15 per cent isn’t it? CHRISTOPHER PYNE: I have no idea what mine is. I just do exactly whatever the paymaster sends me in my salary every month and I just live on it. COMPERE: How nice… CHRISTOPHER PYNE: As do you Matthew at the ABC. COMPERE: Mark Butler, what’s yours? MARK BUTLER: Mine is 15, Christopher’s is a defined benefit. So Christopher gets a percentage of his final salary because he’s a very long serving MP who was around where there was a very generous superannuation arrangements for members of parliament. But can I say, Christopher simply can’t give that breezy commitment that this money will automatically go into the workers pockets…. COMPERE: Well Mark Butler, can I just ask. Peter Martin in the Age, quotes Bill Shorten, conceding 5 years ago that it would come out of wage rises. He said…and Peter Martin says, we’ve dodged a bullet. Had compulsory super contributions climbed, as legislated Australian workers would have lost half a per cent of their wages from their next pay increase, half a per cent from the following one and then half a percent from each of the following three. By 2019 they would be earning two and a half per cent less that if the government had left compulsory super alone. MARK BUTLER: Look, as a general proposition that is right. But wages now are set, largely workplace by workplace and when you do a bargaining arrangement, for say wage increases over the next three years, there’s no question that superannuation increases are on table. But Christopher simply can’t give that sort of breezy commitment that every single dollar that they’ve just taken out of retirement incomes will go into workers’ wages. At the end of the day, governments need to balance the need to ensure that people get decent wages today but also have decent retirement incomes. I mean the average 65 year old today in Australia is likely to live for another 25 to 30 years. We’ve got to think about how people have decent retirement income and every decision this government is taking is against that. COMPERE: Jim is an accountant and he’s rung 891 breakfast at thirteen minutes to nine. Hello Jim. CALLER: Hello, good morning gentlemen. Look I tend to agree. The notion that the superannuation savings from 9.5 percent to 12 per cent are going to be passed on to employees is ridiculous because there is no obligation to pass on the savings and generally, when employers sit down and set wages, they set an increase, it might be CPI, it might be less or it might be more and then the superannuation or whatever it is goes on top… COMPERE: Although generally, I think right from the start it was regarded when it was introduced under the Hawke Keating Government, it was regarded as you would trade off a pay rise, a certain pay rise because you would getting superannuation as well. CHRISTOPHER PYNE: Yes, can I add to that? COMPERE: I’m asking Jim. That was my understanding of it. Traditionally, right from the start, there’s been a trade-off on wages. CALLER: That might have been the case a decade ago when all of this was introduced, but times have changed and superannuation is seen as a very good form of investment and has been encouraged by governments over the years. So by cutting that and automatically saying that the savings will be passed onto the individuals pay-packet is just not right. CHRISTOPHER PYNE: Well let me just quote Bill Shorten, Jim to you. On the 21st of March 2012, on the Neil Mitchell program on 3AW, Neil Mitchell said, so you’re saying the superannuation increases will be paid for my absorbing money out of the wage increases. Bill Shorten - that’s the evidence. That’s when he was the Minister responsible for this area, so he admitted in 2012 that the superannuation increases came out of wages. COMPERE: So if you had negotiated an enterprise bargaining agreement for the next three years, in the expectation that you accept less money because you’re going to get these promised super rises you should be going back now to the employer saying wait a minute, we’re not going to get them now, we want that half percent, we want that 2 per cent please. CHRISTOPHER PYNE: Well it’s now 9 and a half per cent. It won’t rise again. COMPERE: No we want it on our pay though… CHRISTOPHER PYNE: Well exactly, that’s part of the bargaining process… MARK BUTLER: Well it’s a bit late now Christopher… CHRISTOPHER PYNE: No it’s not. Don’t be ridiculous Mark. You know as well as I do that employees who do not now need lose extra super over the coming year or two will be able to say to their bosses, since that’s not coming out of super, that needs to go into my wage. MARK BUTLER: So you support the re-opening of the enterprise bargaining agreements being re-opened? CHRISTOPHER PYNE: I support good relationships between workers and employers and I …. COMPERE: Do you support an enterprise bargaining agreement that’s been negotiated for three years, on the basis that employees would accept say a four per cent pay rise over three years because they are going to get, as well as that 2 and a half per cent super, now re-opening all those enterprise bargaining and there would be thousands of them. CHRISTOPHER PYNE: Well I haven’t suggested that, no. COMPERE: Well you’d have to be wouldn’t you? If you don’t re-open them, you’re not going to get the benefit in your wages that you’ve been promising people. CHRISTOPHER PYNE: This is something of a red-herring. This is something of a red-herring. The wage increases have been locked in. The superannuation guarantee changes will now not happen which means that in fact, the wage increases will not be reduced but the superannuation take out will be reduced which means they will have more money in their pay-packets. MARK BUTLER: But you’ve guaranteed that every dollar goers back into their wage packet. And if the enterprise bargaining agreement is not re-opened how can that possibly happen? CHRISTOPHER PYNE: Following your logic, if there’s an enterprise bargaining agreement which has wage increases locked in and the superannuation is now not to be taken out, the wage increases won’t be reduced, the wage increases will continue. MARK BUTLER: But you said they would be increased though as a result of the super being reduced…all of those dollars will be CHRISTOPHER PYNE: Their pay-packets will be increased. How much they keep at home each week will be increased because they will be getting less super being taken out. It’s logical. DAVID BEVAN: But to return to our original question that 2.5 per cent, which was going to go to super is not going to turn up on their pay packet. CHRISTOPHER PYNE: Yes it will. The wage increases keep going up if superannuation doesn’t get taken out, which means in fact they will. COMPERE: We may need to get an actuary in on that one. Chris Pyne thank you for talking to us, the Liberal MP for Sturt and Education Minister. And Mark Butler, Labor MP for Port Adelaide speaks for the opposition on climate change. [ends]