Transcript - Two Chrisses - ABC 891 - 3 May 2010

SUBJECTS: Henry Tax Review; Liberal Senate pre-selection; Kingston pre-selection; Malcolm Turnbull

David Bevan: Now Christopher Schacht, well there's lots of things to talk about today, but up front we better declare your conflict of interest on one very important topic and that is that you are the director of a mining company, Marathon Resources, which is a uranium mining company.

Chris Schacht: (inaudible)

Bevan: Potential. And you've also got shares in BHP Billiton and shares in Centrix, the iron ore explorer....

Schacht: On Eyre Peninsula.

Bevan: On Eyre Peninsula. You're looking for stuff over there.

Schacht: Well they've already found it. They've got deals being singed with China. It could be a major mining development.

Bevan: As an old Labor man, you would be pretty keen on getting big fat mining companies to pay the workers something in the way of tax.

Schacht: Philosophically, the line of the Prime Minister, saying quite rightly I agree with him is that all the minerals in the ground belong to all the people in Australia, no matter where you live. And that that wealth should be shared with all the people because it does belong to all the people, but you do need investment from mining companies to get it out of the ground. So philosophically the super profit resource tax as Labor person has a lot of merit, but I also have the detail to say what is it going to do to the mining industry? The argument that the mining industry will put which I don't automatically agree with, but is going to be a very interesting debate. Will it affect investment in developing mines and so on? One mining person put it to me this morning for example, a lot of super funds or all super funds including those industry funds representing workers; they have a large proportion of their investment portfolio in Australian mining companies and so on....

Christopher Pyne: (inaudible)

Schacht: Well I'm trying to be even handed here; you can just be a typical Liberal.....

Pyne: I haven't even started....

Schacht: You're interjecting Christopher. All I want to say is there are-there's going to be a very interesting debate about this. Obviously when you have a resources boom that's going to go on for at least the next decade in particularly China; and again the Prime Minister pointed out Rio Tinto is very successful company. Well over a majority of its shareholders are not in Australia. So where is the benefit of all of that dividend?  Does it stay in Australia? It goes to foreign investors. But again, foreign investors say, "we put some money up to develop the company, to develop the mines."

Bevan: Chris Schacht, Marathon Resources, is it happy about (inaudible)

Schacht: Pardon?

Bevan: Marathon Resources, would it be happy about this or not?

Schacht: Well, all I can say on behalf of Marathon is that we have a board meeting coming up soon and I'm sure we'll have a discussion at that stage....

Abraham: Full and frank.

Schacht: And the spokes person will make any appropriate comment. I'm not going to do it because that's not the rule of the governing.

Abraham: David, you ought to know that sort of stuff. Chris Pyne, don't be shy now.

Pyne: I'm not going to be shy. I was trying to help C1 before, but he didn't want my help. Next time I'll throw an anvil instead of trying to throw him a life raft, but the problem with this government's response to the Henry Tax Review is that it's just another opportunity for them to get a new tax into the system. A resources rent tax. Nine billion dollars to be collected, of which three billion dollars is to be ploughed back into the economy through superannuation and six billion dollars is to go to the government for consolidated revenue for their latest spending proposals. The problem with the Government is that because they are addicted to spending they have to be addicted to taxing....

Abraham: As opposed to introducing the GST?

Pyne: Hang on; we left the budget with a 22 billion dollar surplus...

Abraham: Yeah, as a result of the GST.

Pyne: The GST all went to the states Matthew. Every single dollar went to the states as a growth tax.

Schacht: The GST is a federal tax....

Pyne: That goes to the states. Let's not muddy the waters. The GST a federal tax collected by the commonwealth and given to the states; every single dollar. So when the Howard Government left us with a surplus and money in the bank, it had nothing to do with the GST and everything to do with sound fiscal management. This Government on the other hand has never seen a spending proposal it doesn't like and so it has to tax the hell out of the public in order to be able to pay for it.

Abraham: (inaudible)

Pyne: (inaudible)

Abraham: If all the money, the billions and billions and billions goes straight back to the states, that means the money that Federal Government would previously have to be giving to states; because I'm assuming that the states spend it on things that people need, they don't have to. Therefore you're able to rack up a surplus. In other words it frees up Commonwealth money that was previously, or maybe it would have been earmarked for the states is now coming from the GST. The Commonwealth Government collects it, hands it back to the states, "you beauty, that money's going to you. We've got money here. We're going to start stacking it up or spending it on broadband rollouts or whatever." Is that a fair call?

Pyne: No I don't think so but I'm talking about the Henry Tax Review which was handed down yesterday rather than the GST, which was discussed at the 1998 Federal Election.

Bevan: Far be for me to rush the Chris Pyne's defence, but couldn't you argue that the GST was an attempt at reforming the tax system because what the Federal Government said to all of the states was, "look you've got all of these indirect taxes. Now you're going to get rid of them." They haven't got rid of enough of them...

Abraham: It was a root and branch reform of the tax system.

Bevan: Well I wouldn't go that far, but it was an attempt...It was something that was new and they got rid of a whole lot of smaller taxes and they brought in the GST....

Schacht: They got rid of some small taxes....

Pyne: Hang on; can we talk about the result of the Henry Tax Review?

Schacht: The GST was a brand new tax. Though it was given to the states it freed up other money the feds stopped giving to the states as a result.

Bevan: Now what it revolutionary about what was announced yesterday? It was just a new tax.

Pyne: 138 recommendations in the Henry Tax Review. The Government adopted two and a half of them out of 138.

Schacht: How many would you adopt?

Pyne: They spent four months, hang on, we had the Henry Tax Review for four hours yesterday so our response is hardly as important as a Government which had four months of sitting on it since before Christmas and then came up with yesterday the dampest squib I've certainly ever seen. Two and a half recommendations out of 138; it's like a comic opera. And one of those is a nine billion dollar resource rent tax, which as you quite correctly pointed out C1 isn't just a tax on mining companies; it's a tax on everybody who has shares in mining companies and a tax on every superannuation fund, which has shares in blue chip mining companies which will be every superannuation fund. This will flow through the entire economy. And there's a 20 billion dollar slug on small business to increase super from nine per cent to 12 per cent with no compensation for small business at all because most of them aren't companies.

Schacht: (inaudible)

Pyne: Hang on; let's just get the facts out there then you can put your spin on it. There's a company tax cut, which is two point four million companies, there are two point four million small businesses, and 720 thousand of them are companies. So the company tax rate affects 720 thousand small businesses. All the rest don't get any benefit at all and would have to pay for the super increase.

Schacht: Well first of all, in the announcements yesterday there were a number of major benefits to small business. One of them was the depreciation allowance was made much more generous to small business. That alone is a significant advantage for small business. It wasn't ignored at all. Small business wasn't ignored. What I'm interested in; the Government you say only made two major announcements out of 138 and the Liberals are saying we don't want any of that. On the other 136 will you come back in the next couple of weeks and tell us what are the other ones you think the Government has squibbed on that you would have taken?

Pyne: Well Joe Hockey said yesterday after having examined the document for four hours rather than four months like the treasurer said we would be interested in things like simplifying the way tax returns are developed in this country, especially for small business and for all individuals. We'll be interested in welfare reform....

Schacht: (inaudible)

Pyne: No, no. What the Henry Tax Review recommended was that the more income you earned, to move from welfare to no welfare, you don't get taxed to bilio so there's no point in doing so.

Abraham: I think we should say we have tried, I think it's fair to say strenuously to get someone from the Federal Government to talk to us when we were talking about us earlier. We did have the opportunity when we were talking to Tony Wright to talk to somebody, but we said, "Look that's not good." It would be a bit like holding them up during the weather on national news. So we'll talk hopefully tomorrow and that way we can do it properly. Maybe the treasurer Wayne Swan or "Swanny" as Kevin Foley called him.

Pyne: What's been fascinating I think is that some of the usual media commentariat which tends to support the Government.....

Schacht: Oh what?

Pyne: I said some of them. Some of the usual media commantariat....

Abraham: Outside of the Australian.

Pyne: That doesn't mean all the media. Some of the media which usually support the Government have been quite scathing about the Government raising expectations to the top of the tree and then coming up with this yesterday. It was like the expectations for the movie Australia. By the time you got to see it, you were always going to be disappointed because you're expecting a blockbuster and then you've got this comedy movie.

Bevan: Now you're getting stuck into Hugh Jackman.

Pyne: I think he's a very good actor. The point is when you get told you're going to see this movie, you're going to love it, it's the best movie you'll ever see and you get there and you think, "oh, I thought Titanic was better."

Schacht: Christopher, just name me the journalists who write in the Australian, Fairfax and on the ABC who you say are supporters of the Government. That will come as a big surprise to most of us Labor people. Maybe Bob Ellis supports the Labor Party.....

Pyne: I think he gets paid by the State Government to write their speeches.

Schacht: He attacks the Government sometimes for not being left wing enough. But I have to say, to just say that half the press gallery or three quarters are always supportive of the Government.....

Pyne: I wasn't saying that at all. You're just putting words in my mouth.

Schacht: You implied....

Pyne: No I didn't.

Schacht: You were implying....

Pyne: I said I was amazed at the very muted response to this outcome because the Government raised expectations and delivered two and a half recommendations out of 138 and one of those was a new tax and the other was a slug on small business.

Schacht: Do you disagree for example on the mining industry; the money is going to go to a major new infrastructure fund? I would have to say we need access to that fund as a person involved in the mining industry.

Pyne: I'm terrified of the Government getting access to another fund (inaudible)

Schacht: If we're going to grow the mining industry in South Australia; in the Eyre Peninsula, in the Gawler area, right up to Coober Pedy; we need investment in infrastructure, in transport, in ports, in housing for the workers etc. And part of that money will come from this new tax you're talking about and that is an important development and the balance of why you're raising a tax.

Abraham: Now look, just changing the subject, well let's go to Max from Valley View then I want to ask about the Liberal pre-selection for the Senate. We know one of Chris Pyne's people got up because we asked about what he's like and you said he's a fine (inaudible) man.

Pyne: (inaudible)

Abraham: Oh, they're both your people...

Pyne: They're all good people.

Abraham: We'll come to that in a moment, but Max from Valley View, hello Max.

Caller 1: How are you fellas? We have a tax on the super profits in the mining industry. Wouldn't the most logical procession now be to take a look at the obscene profits of the banking industry?

Abraham: Not a bad idea max.

Pyne: Max makes a good point. The Government in an election year is looking to put taxes on people that nobody likes. Apparently they hate Tobacco companies; I think that's a fair assumption. Now apparently they hate mining companies, who've been responsible for the capacity of the Australian economy to grow in the last 20 years, but now apparently they've got to be made into the bogie people, and of course the banking sector could well be next.

Abraham: Now the Senate pre-selection; Mary-Jo Fisher, Senator Mary-Jo Fisher got the top spot, the coveted number one spot....

Pyne: Well both the first and second spots are coveted.

Abraham: Sean Edwards, the party president got the number two spot so he's on his way to becoming a senator...

Pyne: Hopefully.

Abraham: And the number three spot, it's a recycled MP, is that right.

Pyne: Well I think that's a bit unfair, but David Fawcett has been chosen at number three....

Abraham: Rejected by the people in the Federal seat of Wakefield. He was the member for Wakefield. You'll give him the guaranteed spot in the Senate?

Schacht: Not a number three, that's not guaranteed.

Abraham: Ah, ok.

Pyne: Number three isn't guaranteed at all. Number one and number two on the Senate tickets for both (major) parties are like being given a safe seat, but there's nothing taken for granted.

Bevan: How many senators are up for election?

Pyne: Six.

Schacht: And every 14 per cent the party gets you get a Senate spot. So if you get 28 per cent of the vote state wide you get two elected.

Pyne: So Labor and Liberal almost always get that.

Schacht: And then to get the third one elected you need to get 40 per cent plus and a bit of preference flow...

Pyne: Which is a bit harder.

Schacht: Which is harder; to get three elected if it's a half senate. If it's a double dissolution then the whole 12 come out.

Pyne: But the advantage this time for the Liberal Party is that Nick Xenophon won't be running.

Schacht: An advantage for the Labor Party as well.

Pyne: And for the Labor party, because if he ran he'd be hard pressed to be defeated.

Abraham: What happens if one of his candidates ran?

Pyne: Well I don't think so to be honest, I mean I'd surprised.

Schacht: On the figures at the moment I think one of the major party's will get three, the other will get two and the greens will probably get the sixth seat on the preference flow.

Abraham: Well in the State election the Liberal primary vote was up quite substantially, and that wasn't reflected in the upper house.

Schacht: No, but if you took the house of assembly statewide vote for the federal election, it would have been three Liberal, two Labor and one Green out of the six. If...

Pyne: You're got to remember in the Upper House in State Parliament, Rita Bouros only missed out by a hairs breadth to be honest. And one of the peculiar things about that vote was that the fair land tax party preferenced the Labor Party over the Liberal Party in the Upper House, when in fact they were running various advertisements in the newspaper attacking the Rann Government and handing out leaflets attacking the Rann Government, but preferenced them in the Upper House.

Schacht: Can I just say about the Senate pre-selection....

Abraham: Your mate is Sean Edwards.

Schacht: I know him because of my involvement in the wine industry. I've known Sean for over a decade.

Pyne: There isn't too much in South Australia that you haven't got a finger in....

Schacht: No, no...

Pyne: You're a bit of a mogul aren't you?

Schacht: No, I've put my small amount of money I have where my mouth is in developing South Australia...

Pyne: Back to your old family roots in the establishment.

Schacht: Well on the Cleland side that's probably right.

Bevan: It's altruism is it? You don't make money out of it?

Schacht: I said to Sean Edwards last week, Sean as a cynical Labor Party person I hope you get beaten because I want the Liberals to select dills to put into parliament because it makes it easier for the Labor Party. But for South Australia and even for the Liberal Party his selection is an advantage for this state. Even though I oppose him philosophically and I won't vote for him.

Abraham: The seat of Kingston; a Labor held seat....

Pyne: A margin of four point four per cent.

Abraham: It's winnable for the Liberal Party at this election isn't' it?

Pyne: Yes.

Abraham: Pre-selections are open after the rather less than happy pre-selection for that seat.

Pyne: We haven't held a pre-selection for Kingston. You're thinking of Mawson.

Abraham: Yes, I'm thinking of Mawson, exactly.

Bevan: The former member for Kingston Kym Richardson, he was selected for the state seat of Mawson....

Pyne: Well for various reasons he decided not to run for Mawson.

Abraham: Which we won't go into. But Bond, Alex Bond who's 19 has put his hand up for pre-selection for Kingston and says he wants to talk to people and hear there views and yet has consistently refused even the basic courtesy of returning a call to this program.

Pyne: Well he's frightened by you probably. You're very intimidating.

Abraham: Oh yeah you look terrified.

Pyne: I am actually. Beneath this calm exterior is sheer terror.

Abraham: And so hear he is, ready for Federal Parliament is Alex Bond; 19, but he can't return a phone call.  Do you think he.....

Pyne: This (inaudible)

Abraham: Has he got a phone or has his mum and dad given him one?

Pyne: The party's closing nominations on Wednesday....

Abraham: Maybe he's run out of credit?

Pyne: The party's closing nominations on Wednesday on five o'clock for Kingston, Hindmarsh and Adelaide...

Abraham: I'm sure you're advising him not to call us.

Pyne: Well my advise to all candidates is to run the pre-selections for the seats through the Liberal Party where they're the ones with the votes, not through the papers. I mean you probably remember....

Abraham: We're not talking about newspapers we're talking about radio.

Pyne: Back in 1992 when I ran against Ian Wilson for pre-selection I tried to avoid doing any media...

Abraham: A very nasty thing you did there Christopher.

Schacht: You were knocking off a sitting member, no wonder you kept your head down.

Pyne: It's all water under the bridge. There's not bad blood from that. That's 18 years ago now. Everyone's moved on.

Bevan: How old were you?

Pyne: 24.

Abraham: He's (Bond) 19, which is ok.

Pyne: So on Wednesday we'll have pre-selection fields, hopefully large ones for all three of those seats and Alex Bond is one of the people putting up for Kingston. But I would advise all candidates for pre-selection to run it through the delegates in the plebiscite who vote...

Abraham: Don't talk to the people.

Pyne: Well unless they get pre-selected why would they be running things through the media?

Abraham: You wouldn't want to do that, let's keep it all in the back room.

Pyne: He's not a candidate yet so why would they....

Abraham: (inaudible)

Pyne: As a former State Director of the ALP what would you advise your candidates running for pre-selection when you were state director of the ALP?

Schacht: Well we had a very good system where people (inaudible) one at a time and therefore....

Abraham: There was no contest because it was all sorted out.

Schacht: It was all sorted out, yes.

Bevan: By the factions?

Schacht: By the factions and sometimes the factions make overwhelmingly good decisions and sometimes like any human group you make a bad decision. All I can say is, 19 year old kid having a go, good on him. I have to say up in Queensland I think one of the marginal seats up there....

Pyne: Wyatt Roy.

Schacht: What's he, 22?

Pyne: He's 19.

Schacht: He's 19, in a seat that you have to win to win Government.

Pyne: One point nine per cent (margin).

Schacht: And I have to say I'm all in favour of young people coming in, but I'm sure that a 60 year old pensioner is going to feel enthusiastic about discussing any matter of personal detail that they have an issue with a 19 year old boy.

Pyne: It depends on the person. I was a very mature 24 year old.

Abraham: Do you know what interests me by the way...

Pyne: We got a swing to us when I ran in Sturt in 1993 by the way.

Abraham: I know there was this brilliant strategy in the last election by both Liberal and Labor not to talk to the media if they're the candidates. Particularly if they're the candidates under the pump. We'll mention in that Lindsay Simmons and Vini Ciccarello, but the other campaigns that were under the pump; Leon Bignell, Chloe Fox and Grace Portolesi; they all talked and they held their seats.

Pyne: Yeah, but they're all members of parliament, so they should be talking to the press.

Abraham: So was Lindsay Simmons, so was Vini Ciccarello. You can't keep her quiet now.

Pyne: That's all about the spin and messaging you say you can't let the candidate of the leash because they might actually say something interesting. The point is if you want to run for Parliament you've got to be prepared to argue your case.

Abraham: Hang on, what are you doing? I tell you what you're doing by advising people like Alex Bond....

Pyne: But he hasn't been pre-selected yet....

Abraham: Hang on a minute. Do you know why? Because you're scared the he, and I don't know what he's like because I haven't had the courtesy of talking to him.

Pyne: He's a good fella.

Abraham: Well you're saying he's a good fella. You're a bit scared that people in the pre-selection colleges will hear him in an unguarded moment as he is as opposed to a nice confined party format, because what do you do? You make a lot of phone calls, and how long have you got to speak at the pre-selections?

Pyne: They speak for five minutes and ask questions for five minutes.

Abraham: Ten minutes and you make your decision in ten minutes and you make your decision based on that.

Pyne: You're missing a fundamental point. And not that I want to argue with the radio man because you've got the button, but the point is when someone's been pre-selected and they're seeking the support of the public to elect them they should put their views to the public. When they're seeking pre-selection within the party it's completely inappropriate for them to act like a spokesman for the Liberal Party.

Bevan: We've got to go to news headlines, but before we do that, Chris Pyne are you happy to have Malcolm Turnbull back in the game?

Pyne: I am thrilled to have Malcolm Turnbull running again because Parliament needs people with substance and ability and Malcolm has it in spades and I'm sure that he will continue to be a great addition to our team. He won't be joining the front bench before the election. If we win the election, I'd be surprised if he didn't become a member of the cabinet. If we unfortunately don't win the election and get rid of this rancid Government I imagine he'll join the front bench, but I think it's great that people of quality want to be in parliament.

Bevan: If you win the next election under Tony Abbott he would be leadership contender?

Pyne: No I don't agree. Whatever happens after the election I think Tony Abbott has really filled the role of leader extremely well. I think people are very impressed with him and I can't see any change to that into the future.

Schacht: Well I'm delighted he's running because we're delighted. Because for the Labor Party he'll be a reminder to the fact that they've (the Liberals) have had four leaders since the last election and that he's still around the place.  Being Malcolm is being Malcolm and he will always be a source of disagreement, that's his personality....

Pyne: I think it's great that he'll be there reminding people that the only party with a climate change action policy is the Coalition because you've junked yours.

Schacht: And you sacked him because he had one. You sacked him from leader because he had one; because he had a policy on climate change. You got rid of him.

Abraham: Shouldn't have stuck your head up on that one Chris Pyne.

Bevan: Chris Schacht and Christopher Pyne, thanks for coming in.

Ends