Subjects: Budget 2017; infrastructure investment; Bank Levy.
HOST: Today they join us for Two Tribes, good morning to you both.
PYNE: Good morning Will, good morning David, good morning Anthony.
ALBANESE: Good morning team, you should get that bloke to do the interview instead of you two.
HOST: Be careful what you wish for. He would have kept the PM on his toes that’s for sure. We will start with you if we can Chris. It’s a week since the Federal Budget was brought down and I want to ask you broadly about the reaction to it. I don’t think there is a conservative commentator in the country who has applauded this Budget. It’s been described as a high-taxing, high-spending, Labor-style Budget that is wholly designed to win you guys the next election. What do you make of that criticism?
PYNE: Well John Howard has praised the Budget and last time I looked he was pretty conservative.
HOST: He hasn’t praised the Bank Levy.
PYNE: He’s certainly praised the Budget. He said it was a very good document, a very pragmatic Budget. We’ve been criticised by the Far Right, we’ve been criticised by the Far Left. It probably means we’re doing a good job. We’re getting the things done that people want to have done and that is to fund the National Disability Insurance Scheme, which is critically important that it be funded.
We’re (inaudible) tax relief, which we’ve continued to do to reduce the deficit that was left to us by the Labor Party, to live within our means and to create jobs by massive infrastructure projects like the one that Malcolm Turnbull and I announced yesterday at Osborne for $1.2 billion of infrastructure in Adelaide.
So we’re just getting on with the job and criticisms come and go in politics I think. These days, given the way the media is set up and the obviously, the knife fight, between social media and print media and radio and so on, a lot of these commentators are simply trying to find a market share and I don’t necessarily think they are as angry as they sometimes appear when I watch them.
HOST: To you Albo, the criticism that’s been made of Labor is that, politically, you’ve been confronted with a Budget that is more in the Labor tradition. It includes a whopping new tax measure in terms of the Bank Levy. It doles out vast amounts of money for infrastructure …
ALBANESE: No it doesn’t.
HOST: It increases the Medicare Levy for the rich and in response, as Turnbull has tried to win back the centre, Bill Shorten is taking Labor further to the Left.
ALBANESE: What we’ve seen is the Government capitulate about ideas and policy frameworks that it, at its core, doesn’t support. It supports now the framework of Medicare, being the foundation of our universal health system. It supports now, rhetorically, needs-based education funding. It supports now, rhetorically, infrastructure even though, of course, it hasn’t delivered a single dollar for a new road or a new rail line, or the light rail project in Adelaide.
And even through it cut $1.6 billion from this year’s infrastructure Budget it supports it rhetorically. But it can’t bring itself to actually put in place the policy details and mechanisms needed to actually deliver those things of needs-based education, support for Medicare, where they’ve delayed removing the freeze on Medicare co-payments for another couple of years.
On infrastructure where Malcolm Turnbull talks about public transport but still won’t fund it and now isn’t funding roads either. The fact is that this is a pretty poor Budget when you look at the detail and that’s why it’s unravelling day by day and just like the 2014 Budget and all of their other Budgets that they’ve brought down it, doesn’t really have either a macro-economic frame for growth and jobs.
HOST: I want to give you both an opportunity now to answer this question because I think it affects you both equally. Westpac Chief Financial Officer Peter King speaking in the Australian this morning has responded to, I guess, the Government’s desire for banks not to pass this levy on by saying well, hang on, what assurances do we have that this isn’t the thin end of the wedge and that every single time that either a Labor or a Liberal Government wants to raise some money to fund a promise it doesn’t become the Bank Levy that goes up. He is saying that one way to make sure that doesn’t happen is to guarantee the levy rate in the letter of the law as opposed to using regulation. Is that a reasonable request Christopher Pyne?
PYNE: Well obviously we can always look at these requests from the banks, but quite frankly the banks have a Government guarantee. The large banks have a Government guarantee and as a consequence they are the best investment for any shareholder or investor in the world. They are the most profitable banks in the world and they are making tens of billions of dollars of profits between the five largest banks including Macquarie Bank, and the idea that they can’t make a contribution to the Budget repair is quite frankly ludicrous.
HOST: Ok, let me put it this way Christopher Pyne. Is it not incumbent upon your Government if you might trust your use of a levy like this, but do you trust Albo’s mob when they come into Government?
PYNE: Well of course I don’t trust Albo’s mob.
HOST: Isn’t it incumbent on you then to build something into this to make sure that it can’t be raised?
ALBANESE: Come on Christopher that was a chance to say something nice.
PYNE: Well I trust you Anthony, of course. I quite like you in spite of all your faults. But the problem is you’re in a team.
HOST: You fell in with a bad crowd.
PYNE: It’s kind of asinine suggestion because even if the levy rate was put in a piece of legislation, you can always just turn up and change the legislation and Anthony knows, you know, just because it is in legislation or regulation doesn’t mean it can’t go up or go down. So it’s just again the banks trying to throw up a smokescreen and quite frankly, I think they should stop it. I think that they should make their contribution. They are the most profitable institutions in the country. The taxpayer is giving them a guarantee. Yesterday the smaller banks’ representative, Jamie McPhee, was pointing out that the Reserve Bank estimated that as being worth $2.8 billion a year to the banks – this implied Government guarantee, this effective guarantee. And as a consequence I don’t think the Australian public have any sympathy for the banks complaining about them making a contribution to Budget repair.
HOST: Asinine is your new favourite word isn’t it Christopher?
PYNE: Yes, I quite like that.
HOST: You used it yesterday with regard to the minimum ship-building expenditure in South Australia. I’ll give you an opportunity to answer that question too Albo. Is it a reasonable request from Westpac and the banks to have something built in that at least makes it slightly more difficult to raise this levy in future?
ALBANESE: Well it’s a non-issue. If they actually know anything about legislation with regard to taxation, the normal course of events would be the rate would be included in the legislation. That’s just normal practice. Otherwise, guess what? Governments could change rates of taxation without having appropriate parliamentary scrutiny. So I see that as business as usual, not a big deal. I do note that when we proposed a bank levy of one tenth of what the Government has proposed, there was going to be, you know, pestilence and drought and the locusts were going to come and the world was going to end. And Christopher and his team were all a part of that cheer squad for the banks. We’re not playing politics with this. We’ll back it in. But we are concerned of course that the banks make sure that it is not passed on to customers and that is a job to make sure that the Government holds them to account.
HOST: Good stuff. Chris Pyne, Anthony Albanese, always great to catch up. We’ll let you both go and we’ll do it again next week.
ALBANESE: See you gentlemen. Did you note my statesmanlike ending there?
HOST: It was very statesmanlike Albo, uncharacteristically so.
ALBANESE: Christopher should try and meet that benchmark next week.
HOST: He was all right today.
PYNE: I didn’t point out they are playing politics with the NDIS because I wanted to avoid partisan politics.
HOST: We can tolerate the outbreak of love and affection every so often.
ALBANESE: I’m just about to speak at my old school.
HOST: Which school is that Albo? Marrickville?
ALBANESE: St Mary Cathedral in Sydney.
HOST: Sydney’s Inner West – good part of the world. You’d get to St Ignatius a bit for school reunions and stuff wouldn’t you Chris?
PYNE: Absolutely. Definitely. Yes, I am a very proud St Ignatian.
HOST: Good stuff. Good on you guys.
Leader of the Australian Labor Party, MP for Grayndler, Rabbitohs Life Member. Authorised by Anthony Albanese, ALP, Canberra.
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