Sunday Agenda

PETER VAN ONSELEN: Christopher Pyne, thanks very much for your company.

CHRISTOPHER PYNE: Nice to be with you, Peter.

PETER VAN ONSELEN: I’ve got to ask you about the local issue there from the state Labor government- they’ve gone and introduced a banking levy to follow the federal government’s banking levy from the May Budget. Is this a case of be careful what you wish for because- here we go, state Labor governments are now going to open Pandora’s Box.

CHRISTOPHER PYNE: Well Peter, the bid difference between the Commonwealth and the State Governments is that the Commonwealth Government provides an effective guarantee for the big banks, and in response to that the Commonwealth expects the big banks to make a contribution to getting rid of Labor’s budget deficit.

So putting the levy on the big banks is a perfectly justifiable thing to do at the Commonwealth level; one wonders what the justification is for a state government because the last time I looked they didn’t provide any kind of guarantee to the big banks. What this is from the South Australian Labor government is a smash and grab, because they love spending money and they love taxing business out of business in South Australia.

Sure it’s a matter for the South Australian government, but the reality is they don’t really need to make South Australian business any more uncompetitive than they already are. We have a South Australian government that has too much regulation; too much tax; an anti-development attitude; the highest unemployment in the land- consistently now for far too long, and now they’ve gone and said “actually, we’re going to put another tax on business to make it harder to do business.”

Now, if you can’t do business in South Australia you can’t create jobs, and all the jobs in the world that I can create in shipbuilding and submarine building at Osborne will simply disappear in comparison to the jobs that will be lost because of the South Australian Labor government’s approach to business. So it’s a bad economic move by South Australian Labor without justification.

PETER VAN ONSELEN: Having said that, though, when the federal government brought in the banking levy, Ministers, including the Treasurer, were quite deliberate in not saying that there was causality there, that you’ve got the implied bank guarantee and ipso facto, that’s why we’ve got the bank levy, but you’re now making it a little bit more obvious that one clearly leads to the other, and that’s why South Australia can’t do this.

CHRISTOPHER PYNE: We think the banks have a reasonable- are in a reasonable position to make a contribution to reducing Labor’s deficit and moving back into surplus, and the Commonwealth government has been very good to the banks. The reason- one of the reasons our banks are such great investments around the world, and among the most profitable banks in the world and are in the top 10 in terms of size in the world, is because there is a government guarantee. Now, I think the public understand that.

The other question the South Australian Labor Party have to answer is how does this fit with the guarantees and contracts they signed- agreements they signed with the Howard Government that they wouldn’t try and reintroduce the business debits tax or the financial institutions duty after they were abolished as part of the GST deal? We brought the GST in to get rid of a raft of state taxes, and now South Australia is trying to undo that, seemingly. Now, I haven’t looked at the legal implications for that, but I think there is a question mark as to whether they are even allowed to try and hit business with another tax in South Australia to drive more jobs out of my great state.

PAUL KELLY: Well, the Business Council of Australia has been extremely critical of the South Australian decision, as have senior bank executives and leaders of the financial industry in this country. Do you agree that this is an act of economic vandalism by a desperate government?

CHRISTOPHER PYNE: Well, Paul, I do agree that it is an act- another act of vandalism against the business community in South Australia by a government that is at the end of its tether; has no new ideas; can’t open a hospital that’s the third most expensive building in the world, and now are finding another way to hit South Australian businesses and therefore consumers.

Now, the banks are already talking about whether they need to increase interest rates in South Australia to deal with the fact they have this new tax, and if that happens- if that speculation is true, then South Australians will be paying higher mortgage rates in a state that needs less taxes- it needs more investment, it doesn’t need new impositions that make it harder for us to get out of the economic slump we’re in because of a government’s already got too much regulation; too much bureaucracy and an anti-development attitude.

PAUL KELLY: The West Australian Labor government has already indicated that it might look at taking similar action in the West. How concerned is the Turnbull government that we might see a domino effect here with a number of states taking this sort of action?

CHRISTOPHER PYNE: Well, every state, Paul, has got to justify why they would put more taxes on businesses. Now, around the world everyone is trying to get tax- company tax rates down, and we in Australia will be uncompetitive if we don’t head in the same direction. The federal government has done that, we’ve reduced company taxes for businesses with up to $50 million of turnover; we have a bank levy but we also provide a guarantee for the banks, one of the reasons they are so profitable and so safe. What would be the justification for the Western Australian government to follow South Australia’s lead in putting more liabilities onto the banks? And quite frankly I can’t see what that justification would be apart from governments – Labor governments, wanting to spend more, tax more and intervene in the economy more when the opposite is what- it has proven to be more successful in the past.

PETER VAN ONSELEN: Can we move onto education? You’re a former Education Minister- if Simon Birmingham, as the now-Education Minister, has gotten it so right with Gonski 2.0, how did you get it so wrong in 2014 with quite a different looking policy towards education?

CHRISTOPHER PYNE: Well, because you’re wrong, Peter. The policy in 2013 was that we would fund the four years of the government agreement that the states and the Commonwealth and the territories made in full, and that when that government agreement came to an end, as it is in 2017, in the next round of government agreements we would have a policy that more reflected what the Commonwealth could afford; the priorities of actually focusing on outcomes rather than just money, and a fair, consistent model across the nation.

You see, Peter, I inherited 27 secret deals that Labor had done with states and territories and different sectors- South Australia was duded; Western Australia and Queensland terribly duded by the former Gillard government; South Australia’s government- Jay Weatherill signed up as quickly as they could to give the Gillard government a win, and sold South Australians down the river. Western Australia and Queensland were punished by the Gillard government for not signing up to the new agreements. New South Wales, because it was a Liberal government the Gillard government was so desperate to get them on board, funded them far in excess of what was required, and as a consequence we had a total dog’s breakfast of school funding in this country. The Turnbull government has cut through that, and I am part of it, and I’m glad in the next 10 years we’ll have a fair, consistent model across all states and territories and sectors, treating all children the same with all those extra payments for things like disability and isolation of small schools etc., that have always been in place. This is a real breakthrough; it’s actually a lifetime achievement of Simon Birmingham to have been able to bring this about, and I think the public have responded very well to it.

PAUL KELLY: Now, how concerned is the Turnbull government about the attitude of Catholic education authorities and the threats they’ve made to campaign against the government- how concerned are you about that? Do you think the Catholic concerns are valid, or are they being deliberately deceptive?

CHRISTOPHER PYNE: Look, I think the Catholic- the National Catholic Education Commission’s concerns are not justified, I think they have been dishonest; they have pretended to have commitments from previous governments that were never funded. We all know that Labor was making wild claims towards the end of the Gillard government about how much money they would give to people to try and buy their votes; they never put that money in the Budget, Paul- it was never in the Budget. It was funny money that- if the Catholic Church relied on that money, well then they were not good managers to be doing so. The reality is, Catholic parents understand that if you are increasing spending, as we are, by $23 billion - and for the Catholic sector that’s about a 3.5 per cent increase at least – over the next ten years, then the idea that school fees would have to rise or schools might have to close in spite of massively increasing spending is not logical. So what we’re seeing in New South Wales and Victoria, in the Catholic commissions there, is the opposition of the transparency, opposition to the transparency that we’re introducing to the system, and they want the funny money that Labor promised but never delivered. Whereas in Queensland, the Catholic Church has supportive of the reforms. In South Australia and Western Australia, the Catholic Churches are not campaigning against the Government. The last time I was on your show I pointed out that I’d never had one constituent approach on this issue from my electorate. I said that and I’m still yet to have one from my electorate, because Catholic parents know that you can’t increase spending by billions of dollars and somehow the Commonwealth Government be blamed for fees going up. If fees go up in the Catholic Church, it’s got nothing to do with a lack of money from the Commonwealth Government. But the greatest concern the Catholics have is about the transparency that we’ve introduced into the system. But you couldn’t have transparency for every public school and every independent school, and say to the Catholic Education Commission, we’ll carve out the Catholic Education Commission and you won’t have to be transparent with your parents. That’s not a viable position.

PAUL KELLY: I think you’ve got a problem here, because the message from a significant element of the Catholic sector is that fees will be going up. And when those fees go up that’s going to impact on Catholic parents. Surely this is going to create a political problem for the Turnbull Government. How do you manage that?

CHRISTOPHER PYNE: Well, Paul, the only jurisdiction where there has been a material change because of an anomaly created by the Gillard Government with a score for Catholic schools - in fact, all schools in the ACT was based on the entire country’s average rather than on the ACT’s, so parents, families in Elizabeth, in my electorate, in my State, and some of the poorer areas of Australia actually boosted the ACT’s funding. And, Simon Birmingham is working with the ACT on that issue to resolve it. But there is no justification anywhere else in Australia for school fees in Catholic schools to rise. And if they do go up, and the Church tries to blame the Government for it, the answer will be, perhaps the Church always intended to raise fees in your school. Perhaps they wanted to actually get more money out of the parents in those schools, and they are using the Commonwealth Government as an excuse for something they might always have planned to do. And the Jesuits, for example- I went to a Jesuit school, as you know, the Jesuits have said quite the opposite. The Jesuits have written to their parents, saying we knew that extra deals that the Church have done with Governments over the last few decades were not sustainable. And we have been preparing for this day, and our fees will not go up because we have been preparing for the time when the special deals would end and every child in a non-Government school would be treated the same way. And that’s why I’m so proud of this reform, because it actually, for the first time, delivered a fair, needs based funding model that treats every child the same way rather than the special, shabby deals that the Labor Government did in the last Government.

PETER VAN ONSELEN: But Mr Pyne, if the Catholic schools do campaign when fees go up and try to blame the Government, which they said that they will do, how do you ensure that you don’t find yourself in a position where the scare campaign cuts through. Disingenuous or not, even just giving you the benefit of the doubt on that, that’s what happened with the Mediscare campaign. We all knew that was disingenuous, but it cut through and your side of politics knew it. How do you ensure that you don’t have that done to you in the education space at the next election?

CHRISTOPHER PYNE: Well I think we’ve learnt a valuable lesson from the Mediscare campaign, which is that you need to nail a lie like that early rather than assuming people will know it’s untrue. And the answer to that is not to simply throw more taxpayers money, Peter, other people’s money at a problem. I think you’ve overestimating the influence of the National Catholic Education Commission on the parents in Catholic schools. I don’t think the parents in Catholic schools are stupid, I think they understand fully that if you are increasing spending by $23 billion, including to the Catholic system, over the next ten years by at least 3.5 per cent and the National Catholic Education Commission says, we’re putting up school fees because of cuts, I think parents in Catholic schools are smart enough to work out that that can’t possibly be true. And I am very confident that the Catholic parents in my electorate understand fully that the special deals needed to come to an end. Labor’s 27 secret and shabby deals that treated students differently in different States and Territories, in different sectors, had to come to an end. For example, in the Christian schools, the non-Catholic Christian schools around Australia, they had been underfunded for a very long time and it was time to put all the non-Government schools on the same footing. And I think people in Australia get that. That’s a fair go. And if Labor wants to be the party that defends 27 secret deals to buy people’s support or silence, quite frankly I don’t think parents of school children want us to do that. They also want us to focus on outcomes for their kids. They want to end this school funding war, and Malcolm Turnbull and Simon Birmingham have ended it, and now we can focus on getting our outcomes up, because under Labor if we increase spending by 50 per cent over ten years and our outcomes went backwards, not just relative to other countries but in real terms. So it’s not just about money. It’s actually about teaching. It’s about parental engagement. It’s about independence of schools. It’s about curriculum.

PETER VAN ONSELEN: When you look through the numbers since Newspoll went fortnightly many decades ago, Malcolm Turnbull - having now hit 14 consecutive polls trailing Labor on the two Party vote - would have to make history to be able to get to the next election and win it. Every leader that’s’ hit 14 or more consecutive polls trailing their political opponents has either been knocked off before the election or the only one that got to an election was John Howard, and of course, he lost it in 2007. Can Malcolm Turnbull make history?

CHRISTOPHER PYNE: Well Peter, I’m not obsessing about the polls like you do. I know that every two weeks you write a column about the Newspoll, and every time you write a column it’s always about the crisis that’s engulfing whichever Government, whether it was Labor or Liberal. I’m not obsessed about polls because the election’s not for two years. And I look at the Newspoll, and I recognise that the Newspoll applies the preference distribution pattern from the last election. And One Nation’s preference distribution from the last election was about 50/50, when a lot of One Nation voters would have been assuming that the Turnbull Government was going to get re-elected. I don’t think that will be the preference distribution at the next election, so I don’t think the Newspoll actually reflects how people will be voting at the next election anyway. Now, it’s up to Newspoll how they do their methodology, that’s not my concern. I’m completely disinterested in it. But I would also say to you that all the people who rely on polls needs to look at the result in the United States, need to look at the result in the UK, and the Brexit result, where all the polls pointed to certain outcomes and they all got them wrong. So, if you want to make a lifetime out of obsessing about polls, I think you’re wasting a talent that could be used for other things.

PETER VAN ONSELEN: [Laughs] In fairness though, the comparisons to the UK and the USA- any political scientist will tell you that a non-compulsory voting system versus a compulsory voting system is why polls over there are so inaccurate. Polls in Australia have, traditionally, been very accurate because of compulsory voting.

CHRISTOPHER PYNE: Well, I think political scientists are often like economists. They always know the answer until the answer turns out differently, and then there’s always a reason why it’s changed.

PETER VAN ONSELEN: Alright, let me ask you about the CFMEU, if I can. Tanya Plibersek- we were interviewing her earlier, you might have heard this; she denied that Bill Shorten has not acted as per criticism from yourself and from the Government writ large. He may not have kept this particular union official from the CFMEU out of the Labor Party, but he has repudiated comments and actions. Is that enough?

CHRISTOPHER PYNE: Look, Tanya Plibersek was downplaying the statements being made by John Setka from the CFMEU. John Setka, last week in a rally, urged those people at the rally and indicated that the CFMEU was going to continue to intimidate and threaten the public servants who work fro the Australian Building and Construction Commission who are just going about their jobs. He was going to find them in their supermarkets, at the footy games where they were with their kids, shame them in front of their families, tell people where they live, just because they ABCC is trying to bring about the rule of law on construction sites in Australia. Now, when Kevin Rudd was the Prime Minister, he expelled Joe McDonald from the Labor Party. When Julia Gillard was Prime Minister, she pushed the HSU out of the Labor Party. When Bob Hawke was the Prime Minister, he deregistered the Builders' Labourers' Federation. Why hasn’t Bill Shorten got the ticker? Why hasn’t Bill Shorten got the ticker to do something about John Setka? Why won’t he expel John Setka from the Labor Party? And you have to think about that and look at potentially the reasons might be that the CFMEU was one of the unions that is propping up his leadership. They’ve donated $3 million to the Labor Party since he was the Labor Leader. They’re in the pre-selections and the policy forums of the Victorian Labor Party. While this continues to be the case, it is a canker in Bill Shorten’s leadership and his colleagues know it.

PAUL KELLY: But in terms of- you say this, but in fairness if you’ve repudiated the comments, if the Opposition Leader Bill Shorten has, time and time again, said that he doesn’t endorse them and that they’re not acceptable, and nor are the actions- to kick them out of the Party, Kevin Rudd, when he did that he didn’t exactly endear himself in the longer term with the Labor Party. I mean, at the end of the day can you really expect people to just be constantly kicked out of the Party because they’ve made comments that they themselves have then been willing to retract?

CHRISTOPHER PYNE: Well, yes. I do actually, because the membership of the Labor Party should be consequent upon reasonable behaviour. And when somebody has a routine poor behaviour- and in John Setka’s case he’s either been convicted or charged in over 40 offences, including assaulting police officers. And apparently, you say, as long as Bill Shorten says, I don’t agree with John Setka, then there’s absolutely no other sanction. Now, Bill Shorten has it within his power to show that he genuinely wants to clean up the Labor Party, and you’re saying it doesn’t really matter…

PETER VAN ONSELEN: [Talks over] But Mr Pyne, one of the things I’m asking though is, you’ve said that there are reports that he’s gone to people’s houses. In his statement, John Setka said, quote, we’ve never gone to people’s home or involved their families, and we never would. The thought of going to anybody’s homes is reprehensible. He just denies it.

CHRISTOPHER PYNE: Bill Shorten or John Setka?

PETER VAN ONSELEN: John Setka. In his statement.

CHRISTOPHER PYNE: John Setka said at a rally last week, which is a public rally where it’s transcribed and the footage was there for all to see, that the CFMEU would be telling people where the ABCC officers lived, would be chasing them down in their supermarkets or footy fields or where they hung out so that people knew what they did. So I don’t think his statement, if what you said is accurate, aligns with what he actually said at the rally. But if you want to defend John Setka and the CFMEU, Peter, go right ahead. I don’t have to. But obviously you feel the need to do so.

PAUL KELLY: Do you think the public is concerned at all about Labors appeasement, Bill Shortens appeasement of the CFMEU? Or do you think the public just is somewhat indifferent to this, just accepts this as being part of the baggage of the Labor Party. I mean, is this actually a political issue with the Party, or not?

CHRISTOPHER PYNE: I think that’s a very good question, Paul. I think the public have factored in that Bill Shorten is a union leader who has a whole lot of shady relationships from doing deals over decades within the Labor Party in order to get to the top of the ALP. I think they have factored that in. But that doesn’t mean he shouldn’t be reminded of his responsibilities as the putative Prime Minister of Australia, about distancing himself from those kinds of views and opinions and behaviour of union leaders. So he shouldn’t just get away with it because people have already factored it in. But because they’ve factored it in, that’s one of the reasons his approval rating is so poor, and his preferred Prime Minister rating is so poor. So, Peter van Onselen was talking about the polls before, but wasn’t mentioning the fact that Bill Shorten is consistently well behind Malcolm Turnbull as the preferred Prime Minister, and has, for a long time, had a negative leadership rating. One of the reasons for that is that I don’t think that people know that Bill Shorten can’t get out from underneath all the special deals he’s done in the back rooms of the Labor Party with the likes of the CFMEU and why he won’t expel John Setka from the CFMEU because he can’t afford to.

PETER VAN ONSELEN: Leader of the House, Christopher Pyne. I hope you get some time off over the winter recess. It’s going to be a busy second half to the year. Thanks for your company today.

CHRISTOPHER PYNE: It’s a pleasure, thanks for having me.