SUBJECTS: Liberal Party Leadership Crisis, Company Tax Plan
LAURA JAYES, HOST: It is now time for Craig Kelly and Peter Khalil. Both gentlemen join me in the studio. Great to see you in 3D, this is quite a treat.
PETER KHALIL, FEDERAL LABOR MEMBER FOR WILLS: I know, great.
CRAIG KELLY, LIBERAL MP: (inaudible)
JAYES: And what a week. Craig Kelly, let’s get to company tax cuts. You’ve dropped them.
KELLY: Well look…
JAYES: Good idea.
KELLY: This is the reality of the Senate. Firstly, we were a hundred percent right to pursue the reductions in the corporate rate of tax. Every nation you have to have an internationally competitive corporate rate of tax. Now, we used to have that. Peter Costello dropped that rate from 36% to 30%. That gave us a real competitive rate. Investment was attracted, the economy grew, employment grew, and actually, corporate tax revenue grew as well. But now we’ve had Peter’s mob combining hands, holding hands with the Greens in the Senate, I think the Katter party, running like misleading lions, and unfortunately we’re left with no alternative.
JAYES: What’s your economic plan now? What are you selling to your electorate?
KELLY: Well, this will have to be reworked. We’ll have to see what we can do. Maybe we can take this into some type of different tax reductions in other areas, but to me it’s disappointing. But, the Prime Minister, the Treasurer, the Finance Minister, they were correct to pursue it, and now it’s blocked in the Senate, so correct to back it down.
JAYES: Craig though, wasn’t it a mistake for them not to announce an alternative policy today? We’re months out from an election, we’re in the midst of a leadership challenge. Wouldn’t you have liked to have known what the plan is? Because this was the centrepiece of your economic agenda, and now the Turnbull government is without a centrepiece.
KELLY: Well that’s why it will have to be reworked. This is the disappointment we’ve had. This is the obstruction that we see from Peter’s mob in the Senate.
JAYES: But how do you get that economic growth that was promised under this plan?
KELLY: Laura, our nation would be poorer for not getting those corporate taxes through. Peter’s mob has given us uncompetitive international tax rates. They want to give us uncompetitive electricity prices. Now, you can’t have that and higher wage growth and high economic growth that pays for all the social services that we want to pay for and do in this country.
JAYES: What do you think of that, Peter Kahlil?
KHALIL: I’m trying to understand what he’s saying. That’s a really amazing spin. Are you saying that you wanted to go back to the Senate? Because Mathias Cormann, actually I think, made a statement about this might come back. So do you still support company tax cuts to multinationals, which is about giving $80 billion to the top end of town?
KELLY: Oh Peter it’s not about that! This is why we’re in such a mess.
KHALIL: Is that what you want? Is that what you want?
KELLY: It’s that line that you run, “you’re giving money away”.
KHALIL: You are.
KELLY: You’ve got to have an internationally competitive tax rate. And if you don’t, it costs the economy money.
KHALIL: Mate, you should never have put this forward in the first place. It got defeated…
KELLY: You guys agreed with it!
KHALIL: No we didn’t. We’ve never supported tax cuts above $50 million.
JAYES: The … (Inaudible) … said that you actually get that economic growth from giving tax cuts to corporations because they’re more likely to hire more people and get more jobs…
KHALIL: I’ve heard those arguments, Laura.
JAYES: You don’t buy them?
KELLY: Worked every time in the past.
KHALIL: There’s economic arguments and modelling that shows the “trickle-down” economics does not work.
KELLY: It’s not “trickle-down” economics.
JAYES: Well, what’s your plan for economic growth?
KHALIL: If you look at some studies in the US, the corporates have actually kept most of the tax cuts and they’ve passed it on in stock buy-backs.
KELLY: The US economy is booming.
JAYES: This plan is dead. So what is Labor’s plan for growth?
KHALIL: Well I’ve said this before. Investment in education, investment in health care, these are things that actually have a real impact on the economy.
JAYES: But pertinent question here, though. If you are criticising “trickle-down” economics from giving corporations a tax cut and you’re doubting that actually translates into jobs and economic growth, what’s your plan? Is that “trickle-up” economics?
KHALIL: We’re talking about investing in things that actually make a difference to the middle class or working middle class in Australia.
JAYES: Yeah sure, but…
KHALIL: Education, apprenticeships, TAFE; these are things that actually make a difference in an economy.
JAYES: But you don’t believe that works on that end. How can you believe that those payouts, those direct investments will translate to growth?
KHALIL: They’re not payouts, Laura. They’re investments in the economy.
JAYES: Where’s the evidence of that?
KHALIL: Because there is evidence of that. The more that you invest in education, the more that you invest in apprenticeships you are actually investing in the economy. There’s a growth.
JAYES: That’s a very long term strategy.
KHALIL: Well why shouldn’t we be long term?
JAYES: We should but is there a medium term strategy?
KHALIL: Why shouldn’t we be investing the future of Australia? Why shouldn’t we be investing in the growth of Australia? I think that’s really important. Chris Bowen and Jim Chalmers have a very good economic policy and plan for Australia’s future, and we’re sensible and we’re smart about it, and this mob in all over the place.
KELLY: Chris Bowen wrote a book about the importance of…
KHALIL: You read!
KELLY: He wrote a book about the importance of reducing company…
KHALIL: You read it!
KELLY: Yes I hired it from the library here.
KHALIL: Oh did you?
KHALIL: I hope you gave it back because other people would want to read it.
KELLY: I gave it back, I’m sure.
JAYES: I’m glad we’re talking about policy and this particularly, but Craig Kelly, I’ve got to ask you about a suggestion put forward by Peter Dutton today. This is removing a GST from energy bills for pensioners, for self-funded retirees, and for families. Is that a good idea?
KELLY: Look it depends. I don’t think you could do it in the long term. Maybe you could do it as a one-off hit in a quarter. We could have a spike in electricity prices in the first quarter of next year.
JAYES: Why would you do that though?
KELLY: Well I think a lot of the states could actually have to give this revenue up. They’re making a fortune. The Queensland State Government making a fortune from higher electricity prices, they’ve sold off their networks, which they’ve gotten a lot of money from. So the states are making a motser out of high electricity prices at the moment. I think it doesn’t hurt them to give a bit back to struggling families and households.
JAYES: So this is a bad plan then?
KELLY: No, I’m not saying it’s a bad plan. I think it can be targeted for a short period of time. We have a crisis in electricity prices in this nation.
JAYES: So send out $7 billion over 4 years. You don’t think that…
KELLY: I’ll tell you Laura. I’ll give you an alternate plan: simply we drop the subsidies to renewables. $3.6 billion this year…
KHALIL: You want to subsidise coal!
JAYES: No… I just want to talk about Peter Dutton’s plan though, because this… Scott Morrison says will cost about $7 billion over 4 years, and Peter Dutton has said there’s no compensation for the states. Is that a good plan?
KELLY: Well, as I understood and as I thought I heard Peter Dutton talk about it, it would be short term, one quarter.
KELLY: Especially when we’ve got the next quarter of next year, we’ve got a spike coming through on wholesale electricity prices.
JAYES: But if there’s no compensation to the states, where does that money come from?
KELLY: Well the states are already making a motser though higher electricity prices.
JAYES: Yeah but that money’s got to come from somewhere. Where do the cuts come? Schools? Education? Hospitals?
KELLY: No, it comes from the higher money the states are already making. The states are making a fortune from higher electricity prices.
KHALIL: Voodoo electricity prices.
KELLY: And you’re putting more money into people’s pockets.
KHALIL: Voodoo. Who do you support? Dutton or Turnbull? Which plan do you support because there’s…?
JAYES: He’s getting to it.
KELLY: Peter do you want this time? We’re going to have a situation this summertime when there’s going to be pensioners and families that can’t afford to turn their electricity on.
KHALIL: Yeah and we have been talking about for how many years now saying that the energy supplement should not be cut to pensioners…
KELLY: There’s no cut. It’s not cut, Peter.
KHALIL: Which is what your government was going to do, and this morning they said they weren’t going to cut it, finally.
KELLY: Peter, pensioners that are already getting the energy supplement continue to get it. It was for people going onto the energy supplement before. So remember, that was originally compensation for your disastrous Carbon Tax. That’s what it was originally for.
JAYES: So is this a good idea or not?
KELLY: Well I think there’s merit in looking at a short term reduction in the GST on electricity prices. We’ve got to do something. People… we can’t continue where we are going with the high price of electricity in this nation.
JAYES: Sure, but if you don’t compensate the states where does the money come from?
KELLY: The money will come from the extra profits the states are making.
JAYES: The states aren’t saying that.
KELLY: Well of course the states won’t say that.
JAYES: But they’ve got to cut… they would threaten to cut schools and hospitals…
KELLY: Well we’ve seen the (TRANSMISSION ERROR) price of electricity.
JAYES: Yeah but you don’t write their budget.
KELLY: Of course we don’t write their budget, but they can’t have it on both ends. They can’t say “we want to gouge you with higher electricity prices, and we also want to pocket more GST from the higher prices.
JAYES: Can I just ask about Labor’s plan to bring down prices? We keep hearing more investment in renewables but there are no guarantees with Labor’s plan, is there?
KHALIL: Well hold on, Laura. Renewables are cheaper.
KHALIL: Than fossil fuels, we know that.
JAYES: But there’s no guarantees.
KHALIL: There’s also a need for certainty, and we have a government that has absolutely failed to provide certainty to the market.
KELLY: $10 billion worth of investment at the moment!
KHALIL: We have tried to negotiate when you put forward an ETS, an Emissions Trading Scheme. You backed away from that. We tried to negotiate with you when you put forward a clean energy target with a chief scientist. Then you ran away from that because of you guys. We tried to negotiate with you when you put forward Emissions Intensity Scheme. You ran away from that. And then the fourth option, the NEG, got close and then you ran away from that.
KELLY: Because we want electricity prices lower, Peter. That’s what we want.
KHALIL: You guys are hopeless. Australians deserve better. Australians are sick and tired of the craziness and the disunity and the division that you guys display. And the lack of certainty in energy policy, in education, in health care. Labor is going to provide a sensible and stable government.
KELLY: (Laughs) Well good luck.
KHALIL: Well don’t laugh. We have had five years under Bill Shorten and his leadership has been stable and sensible in a difficult period. That is no small matter to have that kind of unity we’ve had in our show, and if a predictor of future behaviour is current behaviour, we’re going to provide sensible and stable government and good policies.
KELLY: I’ll agree with you on that because your policies in as the copy South Australia. 50% renewable energy target, the highest electricity prices in the world. That’s your policy. History will repeat if you guys ever get to implement that.
KHALIL: And electricity prices have gone up under you. Gas prices have gone up under you. You failed to actually pull the trigger on gas reservation. This government, your government, has failed miserably to keep prices down, and you’ve just now this morning suddenly decided, “Oh we better give the energy supplement back to the pensioners.”
KHALIL: I’m sorry; you guys are a big F of all of them.
JAYES: Ok, let’s talk about leadership, Craig Kelly. It’s the elephant in the house at the moment. What’s going on?
KELLY: I don’t know, Laura. You have to ask…
JAYES: Has anyone called you today?
KELLY: No one has been calling me today. I’ve been getting on with my job down here, trying to make sure the ideas of this bloke has.
KELLY: Explain to people how detrimental they would be to the economy…
JAYES: Did you support Peter Dutton?
KELLY: Yeah, I voted for Peter Dutton, yeah.
KELLY: The vote came on by surprise. I had some concerns about some of the things we were doing in energy policy, and I thought that was a way of making my voice heard. I didn’t understand or I didn’t realise that there were 10+ cabinet members that had also done that. It’s one thing for a few of us, you know, sort of at times cantankerous and noisy backbenchers to vote that particular way, but for the members of the executive I thought that was a significant issue.
JAYES: Is now a second challenge inevitable? Peter Dutton has not ruled it out.
KELLY: Look, I don’t… I have no idea.
JAYES: He says if he has the numbers, he’ll have another crack. Do you think you’d win with a second strike?
KELLY: Look, I don’t know. Nobody’s talking to me about numbers. I’m getting on…
JAYES: But it was seven short, as a surprise as you say.
KELLY: Look, I’m getting on arguing the policy; the policies that the Prime Minister, the Treasurer and the Finance Minister have announced this morning.
JAYES: But Craig Kelly, aren’t you treating voters with contempt saying this? Because everyone knows this is such a huge distraction. I was speaking to people from the departments, and ministers all over the shop are cancelling meetings. This is a huge distraction.
KELLY: They’re not governing.
JAYES: How do you fix it?
KELLY: Look Laura, I don’t know how you fix it. I’m not the one. It’s up to Peter Dutton to decide what he wants to do. There are people running around the building counting numbers. I’m not one of them.
KHALIL: Are you going to be Minister for Environment in a Dutton government? Is that your job that you’ve been promised?
KELLY: As long as I can keep arguing with you, that’s all I care about.
KHALIL: But look, to be fair Australians are sick and tired of this kind of disunity on both sides of politics. Labor, you know, went through this over the last decade.
JAYES: 8 weeks ago we were talking about Anthony Albanese.
KHALIL: Well no, I think that was whipped up by the media. We’ve had five years…
JAYES: Just like this? Just like this?
KHALIL: This is real. This is real. You’ve seen this is real. There’s been a challenge, you know that. We’ve had five years of unity…
JAYES: Hang on, whipped up by the media? Give me a break, Peter Khalil.
KHALIL: To be fair, Labor has learned their lessons. They’ve learned their lessons…
JAYES: You sure about that?
KHALIL: The people that were there during the Rudd/Gillard years have learned their lessons. And we’ve had five years of unity under Bill Shorten. We’ve had good policies. We’ve been very forward with our policies. We’re delivering, we’re announcing policies, which are very brave in opposition, and there’s a united team, there’s high morale, and we are ready to govern. The important question here is…
JAYES: You said there was a bit of a sliding doors moment there after the…
KHALIL: No, I don’t.
KELLY: Longman by-election, Peter.
KHALIL: No, she gets upset because I actually blame the media, but I think, you know, you’ve got to give credit to the opposition. For five years in opposition there’s been unity in this team and Bill’s done a really good job on that.
JAYES: Tony Abbott: should he be in cabinet?
KELLY: Look, that’s a decision for the Prime Minister of the day.
JAYES: Tony Abbott says he’s been given 110% assurance that he would be in a Dutton cabinet. Is that sensible?
KELLY: Oh look Laura, that’s a question for… if there was ever a change of leadership that would be a decision for… the Cabinet is always a decision for the Prime Minister.
JAYES: Yeah but this is a question your colleagues are asking themselves. Would they support Peter Dutton if he’s given that kind of assurance to Tony Abbott?
KELLY: Well Laura, I don’t… My support… My vote is not dependent on who gets…
JAYES: He’s a former Prime Minister; he’s an important figure in the party. Should he be sitting around a Dutton cabinet?
KELLY: The Prime Minister, whoever he is should always have a free hand to pick whoever he wants.
JAYES: Do you think he has a free hand?
KELLY: Oh god, I hope so, yeah. Otherwise…
JAYES: We’re talking about Peter Dutton, yeah? Do you think he’d have a free hand or does he owe people if he got (INAUDIBLE)?
KELLY: Look Laura, that’s a question you’d have to ask Peter Dutton when it comes around to him… if it comes around he’d ever have to make those decisions.
KHALIL: Let’s not forget that Craig voted for Dutton who was voted the worst Health Minister in Australia, and that’s not a mean feat when you’ve got Greg Hunt and Tony Abbott as former Health Ministers as well. I mean, and this guy slashed the health spending in the budget in 2014, ok?
KELLY: We’ve got record spending on health! Record Spending!
KHALIL: This is a guy who accumulated so much power around himself in home affairs, and I’ve spoken about this publically, the amount of power that accumulated in home affairs. I don’t care if it’s Dutton or Mother Teresa that’s the Home Affairs Minister, that’s too much power in one minister.
JAYES: Too much power for Shane Newman?
KHALIL: Well, ok. He’s the Shadow Immigration Minister.
JAYES: Yeah but, (INAUDIBLE).
KHALIL: So Dutton has a record here…
KELLY: So you’ll wind it all back?
KHALIL: …of failures as Health Minister and you voted for him.
KELLY: You’d wind that back? You’re going to wind it all back?
KHALIL: You voted for him. (INAUDIBLE). If we win government…
KELLY: You’re going to break up the home affairs ministry?
KHALIL: No I didn’t say that. We’d be looking at…
KELLY: Well you complained about it. You said it was too concentrated of power, so it therefore goes without saying that you want to break it up.
KHALIL: There is a concentration of power of Peter Dutton.
JAYES: How would you fix it?
KHALIL: Well we can’t talk about that now. You’ve got to look at this in government.
JAYES: We could be in an election tomorrow, you never know.
KELLY: Well Pete, surely…
KHALIL: I’ll tell you one thing that I think is really important. Immigration, the securitisation of immigration, is a real problem for me. Immigration as a portfolio is more than just about security; it’s about economic, cultural elements, it’s about citizenship and it’s about multicultural affairs, and that’s a really important thing. And I’m concerned, and I’ve said this publically in the parliament, that way that the concentration of power with Dutton, that those elements of immigration get lost in the bigger piece. The minister doesn’t pay enough attention to that element and I think that’s an important part of our narrative and our story as a multicultural country.
JAYES: Well I think we’ve covered a lot of ground.
KHALIL: We did, and we fixed it, too.
JAYES: Craig Kelly and Peter Khalil, we fixed it. They should just listen to us, hey?
KELLY: Thanks Laura.
JAYES: Thanks, speak to you soon. See you next week.
JAYES: Whatever that week may look like.