Subjects: Inequality; Home Affairs Department; immigration; Greens Political Party.
DAVID LIPSON, PRESENTER: First tonight, it's been a week it seems of clear winners and losers in politics. Just days after Greens Senator Scott Ludlam stood down because of his dual citizenship, his colleague and fellow party deputy Larissa Waters followed suit.  Peter Dutton, on the other hand, has received a major promotion after being named head of a new super ministry for Home Affairs. As for the general public, well, the Prime Minister sounded a warning about the likelihood of an interest rise in the future.  Speaking at an economic and social outlook conference in Melbourne, Malcolm Turnbull said, it is important for all of us to be prudent. At the same conference the Opposition Leader today sounded a different note - one that seemed a little like he was gearing up for the next federal election campaign. Bill Shorten said tackling inequality would be a defining mission for a Shorten Labor Government. To discuss the week in politics, I was joined earlier by Industry Minister, Arthur Sinodinos and Shadow Infrastructure Minister, Anthony Albanese for our late debate. Gentlemen, welcome to Lateline. We heard what Bill Shorten thinks about inequality today. He's outlined the problem. Anthony Albanese, what do you think could be some of the solutions?

ANTHONY ALBANESE: Well, what we know is that before you get to a solution, you have got to identify the problem and we have certainly done that as a party in recent times. What we're saying is that we need to address the current taxation system, whereby PAYE taxpayers, ordinary working families, earning money to put food on the table of their families, are paying more than their fair share. So, we need to look at ways in which we can address that. We've already put on the table the capital gains tax and fringe benefits tax reforms. We've already put on the table the fact that people should have a limit on how much they can claim as a tax deduction for their accountant, and there are other measures ...
LIPSON: So should those sort of measures go further? I mean should we go further on negative gearing, capital gains, family trusts?

ALBANESE: I think we have got it right when it comes to the housing affordability package. But we will look at a range of other measures and make announcements at the appropriate time. Inequality is at a 75-year high and we know that. The direction of this Government, that has seen big tax cuts essentially for people on my income, whereas people at the lower and middle end have missed out, let alone people who have lost, for example, their energy supplement. We know that the system isn't working for the majority of people at the moment and it needs to be addressed.
LIPSON: Minister, do you think we have a major problem with inequality?
ARTHUR SINODINOS, INDUSTRY MINISTER: Well, all of us in Australia want people to have a fair go and have a go and we want people to have as many jobs as possible. If you want to have an economy where goods and services and incomes are equally spread or more fairly spread, the most important thing is to get people into work. So, the focus has got to be on equality of opportunity - removing the barriers to people getting into the workforce, helping to educate and train people for the workforce, helping them now with the pace of change accelerating, be able to train and retrain for the jobs of the future. So I think it's about equality of opportunity. Bill Shorten, to me today, seemed to focus too much on divvying up the existing pie, rather than how we grow the pie and make sure everyone has a fair go in getting an increased share of the pie. Otherwise, what you end up doing, you make it sound like a zero sum game and that's what he does. It is almost like you have to keep putting taxes up, you've got to be very careful how you do that, because you can run out of people at the top end to keep putting taxes up on. You start raising more taxes on the middle, and then you get into the situation where you are actually deterring people from wanting to work longer, because they feel every extra dollar they are going to be paying half of that to the taxman. So we have got to have incentive. He has to talk more about incentive and risk taking if he wants the motivate people to grow the pie.

ALBANESE: Well, David, the nurses out there, earning $50,000 a year, know that they are paying more tax than many people who earn 10 times or 20 times...
LIPSON: I will stop you there because Bill Shorten actually spoke about the nurses today and he was referring specifically to family trusts. Have a listen to what he had to say.
BILL SHORTEN, OPPOSITION LEADER: Almost all of this is perfectly legal but when a nurse on $50,000 asks why someone who earns 20 times more than they do pays less in tax, saying it is legal is not satisfactory.
LIPSON: So specifically on family trusts, $3.5 billion a year is lost in taxation that could be gathered through these loopholes. They are perfectly legal and in many cases appropriate but do you think we should be getting more tax out of family trusts?

ALBANESE: Well, quite clearly what I think is that the current tax system isn't fair enough and that there are people who currently...
LIPSON: Are you talking specifically about that area of family trusts?

ALBANESE: I'm talking about high income earners using various mechanisms in order to minimise their tax in a way so that when you have people, if you earn a million dollars a year, and you are paying less than the nurse earning $50,000 a year, then there is something wrong with the system and a fair society is an inclusive society. The other thing is that Arthur, to take up what Arthur said, with respect, we're not talking about just maintaining the existing pie and carving it up differently. What we're saying is that greater equality is also good economics because people at the lower end and middle end of course, don't save their income, they spend it. They spend it. They create jobs, they create that economic activity.So there is a lot of evidence, from economists, that shows that good equality is also good macroeconomic policy, as well as good policy in terms of social justice.
LIPSON: Arthur Sinodinos?
SINODINOS: I'm a bit of a veteran of the tax wars. In 2001 we looked at taxing trusts as like companies and there was a huge backlash and where did it come from? A lot of it came from small business, and from family farms and the like. So, these structures are quite widespread throughout the economy and they're not being used for tax dodging, often they are used as a way of saving, saving income for later of whatever.
LIPSON: It is skewed towards the wealthy. They are the ones getting the most advantage out of this.
SINODINOS: You can say that of almost anything in the tax system, that if you're better off you may have more of an opportunity to take advantage of the provisions of the tax law. The important thing here is that this is the thin end of the wedge. Labor talk about how they are going to crack down on just one part of town, because politically they think that will sound great. But ultimately if you keep spending money and spending keeps going up, you will be taxing people more and more and more of that burden falls on particularly low and middle income earners.
LIPSON: We saw this week the announcement of the creation of a Home Affairs department, a super department. Dennis Richardson is very well respected by both sides of politics and probably more credentialed than anyone around at the moment. This is what he had to say about it.
DENNIS RICHARDSON, FORMER ASIO DIRECTOR-GENERAL: There is a reasonable argument in respect of immigration and bringing immigration closely together. But I think beyond that, it is primarily presentational.
LIPSON: "Primarily presentational". Arthur Sinodinos, what do you think he meant by that?
SINODINOS: Well, you would have to ask Dennis what he meant but I'll tell you what the Prime Minister meant ...
LIPSON: Well, I can tell what I think he meant which is that he is talking mostly about optics, ie politics.
SINODINOS: Well, I reject that because after the election the Prime Minister was briefed by his department about options around something like this. He asked for work to be done on it over the subsequent period, without interfering in the normal day-to-day work of those agencies. And he's done due diligence, including talking with officials overseas about this, and came to a considered view that given the way the war on terror and everything else is evolving, having our structures evolved to reflect that, having a central department of Home Affairs, which coordinates these agencies. The agencies continue to all report to the minister, none of them are cut off from ministerial contact, having the Attorney-General now with a clear line of responsible for oversight and for integrity, I think is a much cleaner way to go.
LIPSON: We have had silence, though, from those on the front line this week. The Federal Police, ASIO. I mean they are not people who normally comment on day-to-day but this is such a big change you would expect them to be standing beside the Prime Minister. Was that silence somewhat unsettling?
SINODINOS: Well, I don't think I would reading anything into the silence. As you say, it is not their role to be going out there providing public commentary and remember, at the end of the day, this is a Westminster system. The Prime Minister takes responsibility for the machinery of government and the structures of government and I'm satisfied from the work I have observed that he did due diligence on why it was necessary to go down this route.
LIPSON: Labor has blamed this move on politics but you are not opposing it as such. So which is it because you can't have both?

ALBANESE: Well, we're waiting for a full and proper briefing. I mean, my concern frankly, is that if this was about substance rather than about appearance then that briefing would have occurred beforehand. There would have been a briefing, for example, of myself as the transport shadow minister, the office of Transport Security which importantly as an agency that is connected up with airports and aviation, will now be taken away from the Transport Department, put into this new department of Home Affairs, not have that line of sight to the Transport Minister but to someone else, I assume Peter Dutton. That is of some concern but we will examine the detail. We want national security issues to be bipartisan. So we will look at the detail but we will look at it in the light as well, I think of, I was concerned to see Malcolm Turnbull out there with military personnel, with masks on, with guns, for an announcement the day before. That seemed to me to be completely inappropriate frankly.
LIPSON: One of the things that Laura Tingle pointed out this week is that this announcement actually puts immigration further into the realm of security rather than economics. What do you think about that, Anthony Albanese?

ALBANESE: Well, certainly immigration has been an important element of economic policy as well. We need to look at the intergenerational issues that are there, the ageing of the population. We need to look at skill sets and migration departments and ministers historically have played that role, rather than just the national security element. Of course, we need to have those checks on people who come here under whatever category but I think it's a legitimate point to ask, as part of briefings that we get, for what are the implications for immigration policy and its oversight of removing it from what's been its traditional space.
LIPSON: Is the Government sending a signal here that it believes immigration is more of a security issue than ...
SINODINOS: No, no, I don't believe so but it is more complicated than it used to be and immigration issues, citizenship issues, have all gotten caught up more in the whole security frame in which we find ourselves. Dutton will be supported by two ministers, one on the justice side, and one on the, more on the immigration side. But he's an experienced Immigration Minister, and I think he was keen to retain that overall policy setting responsibility for immigration. Malcolm Turnbull, strong believer in the nation-building role of immigration, always trumpets our success as a multicultural society. So I think he will certainly continue to take a strong interest in the nation building aspects of immigration.

ALBANESE: But it shouldn't have been about, to take up the point that you just said there, it is about him, you are suggesting, as the reason why immigration is in the Home Affairs department.
SINODINOS: No, I'm saying he has got the experience to provide continuity for that.

ALBANESE: It should be about the right structure and then you look at the personnel.
SINODINOS: Yeah, sure.

ALBANESE: I think the concern of the public is this has been about Peter Dutton being placed ...
SINODINOS: No. My only response to that is government structures continue to evolve and they will.
LIPSON: We saw this week another Greens senator drop off the political perch. This was Larissa Waters announcing it.
LARISSA WATERS, FORMER GREENS SENATOR: I just want to apologise to my party and to all of the wonderful Queenslanders that I have been so proud to respect in the last six years. It's been a real honour to speak for them and to stand up for things that I'm really passionate for.
LIPSON: Arthur Sinodinos you work with both Scott, worked with Scott Ludlum and Larissa Waters in the Senate. Is this fair, what's happened to them?
SINODINOS: Well look, I know both of them quite well. I think they are quite sincere. I don't necessarily agree with a lot of what they went on about clearly. But where there are rules, there are rules and we are all subject to them.
LIPSON: Are those rules outdated, do you think?
SINODINOS: Well, that's a debate we can have. The danger with having that debate now is it can look a bit self-serving, if we suddenly do it off the back of a couple of cases like this. I think it is better if the debate is in a, maybe in a slightly broader context and in fact, plays into the issues we were just talking about, about what is the concept of citizenship today and how do you assess that. And there is a lot of common ground and where possible we should focus on the common ground in this area, because the signal we don't want to send to our fellow Australians is, you know, they see a lot of stuff out of Canberra which always looks like it is just narkiness. A bit of emphasising what we have in common I think would be really good going forward.
LIPSON: Anthony Albanese?

ALBANESE: Well, I think this is a failure clearly of the Greens' political structure that has caused them other problems as well, with Lee Rhiannon being one out against nine Greens senators wanting to go one way and it would appear that after being excluded from the party room, the one has been more ... stronger than the nine.
LIPSON: You are not suggesting that she had anything to do with ...

ALBANESE: Well, who knows? It is quite clearly that you have had within the Greens a great deal of turmoil. I certainly had a fair bit to do with Scott Ludlam. I regarded him as a person of integrity, who was good to deal with but, you know, it is pretty careless as well...
LIPSON: And just really briefly on the Constitution. I mean what do you think about that? Is this an outdated section? Not that it's easy to change.

ALBANESE: Well, the Constitution, it is what it is and what's more, you sign a form saying that you don't have other allegiances. So it's not like they haven't made a personal declaration as well.
LIPSON: Gentlemen, we are out of time. Thanks for joining us.
SINODINOS: Thank you.

ALBANESE: Good to be with you.

[ENDS]