May 16, 2018
SKY NEWS – NEWSDAY
WEDNESDAY, 16 MAY 2018
SUBJECT/S: North Korea, Tax Cuts, Live Export
LAURA JAYES, HOST: It’s time for Peter Khalil and Craig Kelly. They join me live now. Thanks so much for your time, both of you. First of all, to you Peter Khalil, I want to get your reaction to this news about Donald Trump and Kim Jong-un potentially not meeting in Singapore. It seems like it’s all fallen apart in less than twenty four hours?
PETER KHALIL, FEDERAL MEMBER FOR WILLS: Well Laura, not quite yet. I saw North Korean state television reports on this, this morning. Of course when I’m not watching Sky, I’m watching North Korean state television! But initially it was around the South Korean-U.S. military exercises and they’d pulled out of the talks that were scheduled with South Korea. And the statement really said that there was some doubt around the summit with the U.S. So they haven’t completely pulled out yet. This could be a bit of manoeuvring before that to try and draw further concessions. That’s one way to read this. It could be that Kim Jong-un’s gone back and some of the General’s around him and others, the hard liners, have pushed back hard against the summit itself and any concessions and any opening up. So it’s very hard to tell with such an opaque regime like North Korea. But, well, time will tell.
JAYES: Absolutely. And this is why the Foreign Minister, the Prime Minister and those other Ministers in Cabinet have warned to have cautious optimism when it comes to statements by Kim Jong-un ahead of this summit. Craig Kelly, can you see any kind of deal if the north is…perhaps it is a bit of posturing as Peter Khalil says, but if the north will not completely denuclearise, surely it’s not a good deal at all.
KELLY: Cautious optimism are the exact correct words…
JAYES: [interjecting] A lovely diplomatic term.
KELLY: …are the exact correct words in this case. This is certainly not going to be easy. There will be a lot of hurdles along the road. Anyone that thinks that all of a sudden North Korea will just give up all nuclear weapons and denuclearise, as we would like them to, I think that’s a bit of a stretch. Let’s hope that this can be put back on track, because those people suffering, living in extreme poverty in North Korea, deserve the opportunity as their South Korean cousins do.
JAYES: Absolutely, they do. And there’s around twenty million of them living in abject poverty in North Korea. Let’s bring it back home to domestic issues. We just heard from Chris Bowen at the Press Club. Craig Kelly, we’re hearing from Labor they’re promising bigger surpluses sooner than the Government over the next four years.
KELLY: Well, this Labor. Remember Labor haven’t delivered a surplus since, I think it’s sometime in the 1980s was the last time….
KELLY: ’89 was the last time of their last surplus, so this idea that Labor are going to deliver a big surplus. Really, you know, we get a rolled gold guarantee that they’ve going to deliver the surplus. Look, one thing that Labor seem to misunderstand that you’ve also got to grow the economy. You’ve got to have incentives in there for people to go out and invest and to take risks. It’s not just a matter of slicing the pie up and giving one slice to someone else. This is the greatest difference between the Coalition and the Labor Party. There’s nothing in that Labor Party whatsoever that will help grow the economy or create any incentive.
JAYES: Peter Khalil, what do you say to that and to the point that Labor hasn’t actually delivered on a surplus promise since the late ‘80s. I think it was ’89.
KHALIL: Well, I think Chris Bowen’s speech really nailed it in the sense that, he talked about us, Labor, making the big calls and getting them right. And that’s exactly what he’s done, and Bill Shorten and the team have done, with their budget reply. They’ve got reforms in place to really repair the budget. We’re talking about tax reforms around negative gearing, around the capital gains tax, around dividend imputation. All of these really have a huge impact on the bottom line going forward, which allows Chris and Labor to ensure that we go back to surplus at the same time as the Government is projecting but also make sure that we have a longer and deeper budget repair that goes beyond the never never.
JAYES: What exactly do you mean though when you talk about a healthy surplus, Peter Khalil. I mean, are we talking about 1% of GDP? Are we talking about what? 5 billion? 5 to 10?
KHALIL: What I’m talking about is, structurally in the budget, what Chris and Jimmy Chalmers and the entire Labor team have done is ensure that structurally, they’re addressing the deficit in the budget over the longer term. And it’s because of those reforms that I just mentioned really having an impact on the bottom line. And beyond that, the big calls that they talk about are also the investment that they make. 10 million Australians, low and middle income earning Australians, will get tax cuts that mean something….
JAYES: [interjecting] They will get tax cuts under the Government as well and I just want to bring up this line with you. You cut out. There’s analysis done by The Australian, I’m not sure whether you dispute it, but essentially you’re drawing a new line. You’re marking those down earning $95,000 a year or more as rich.
KHALIL: No, that’s not true. If you look at the way that progressive taxation works, you get tax cuts in each slice of your pay. So in the first $18,000 you don’t pay any tax, the next, I think, $19,000, you pay a small percentage, then the next $50,000 you pay a higher percentage. So even people on $200,000 are not paying that marginal tax rate of 45%. They’re paying different rates at different slices. So we’re making sure that maintains that progressive tax rates right through and that people who are low and middle income earners are getting the greatest benefit. They’ll be spending the money in the economy. When Craig talks about not growing the economy – these are the people who will be spending the money in the economy and that’s what’s important. We’re also investing in TAFE, in Universities, we’re investing in public hospitals, we’re investing in education. These things make a huge difference to the economy over the longer term. And that’s what it means to have a real structurally sound budget that goes back into surplus.
JAYES: Craig Kelly, what have your electorate told you over the last week. It’s been a week for the budget to settle in. Are they satisfied with this tax cut that the Government is offering? Are people disappointed that you haven’t made bigger inroads into paying down debt?
KELLY: A few things on the tax cut. Look, no one’s out there saying ‘I demand a tax cut’. They’re understanding that this is a long, hard slog to get the budget back into a surplus and then to pay down that deficit. So, people are grateful for a small tax cut, but they’re not out there demanding a tax cut. Also, you were right Laura, the point that you made out. What Labor’s plans are. Anyone that earns over about $95,000, they’re going to be worse off.
KHALIL: That’s not true
KELLY: Under Labor’s tax structure, they’ll be worse off. You’re raising the highest rate of marginal tax back up to 47% so we want people to go out there and to encourage them to strive and to work hard. And Peter says, yes, we want people to go to university so they can hopefully earn a higher income. But if we’re having a tax rate of 49%, 50%, on our high income earners, we’ve got all these disincentives. We don’t live the world by ourselves…
KHALIL: You have just ignored what I said…
JAYES: [interjecting] On that point that Craig Kelly has just made about people earning $95,000 and over, he said they would be worse off under Labor. Would they be worse off under Labor? Would they be better off under the Government, though?
KHALIL: Craig has just basically ignored what I just said about how tax rates work. Maybe he doesn’t understand how tax rates work. I mean, the fact is this Government was going on however many years ago about a debt and deficit disaster. Well, they’ve doubled the debt, they’ve tripled the deficit. It’s remarkable the narrative that they play out, that they’re actually good economic managers when all the facts demonstrate that they have not been able to manage the economy effectively and that we’re the ones actually doing the right things…
JAYES: If you’re earning $95,000 a year, should you vote for the Government? Would you be better off?
KHALIL: No, you should vote for Labor, because it’s not just… I mean, there’s a whole range of policies that actually impact people’s lives, if they’re making $95,000 a year. Education, health care, infrastructure. These are things that we’re investing in that make a difference to people’s standard of living; to their quality of life, which this Government has effectively dropped the ball on.
JAYES: Alright, I want to talk about the live sheep trade now. As Sky News broke at 12 o’clock today, on Newsday, the Government will hand down the McCarthy report tomorrow. It will not seek to ban the live summer trade, it will not seek to ban the live sheep trade at all. But it will impose strict new measures on exporters that might see, as I understand it, at least one of the five exporters just see it as too hard to operate under these conditions. Craig Kelly, what’s the read in your electorate? Are people concerned about this? Do you think that the Government should go further?
KELLY: Oh, look, people are concerned. Obviously they’ve seen those images on TV which are shocking for anyone to look at, but you’ve got to… you can’t act emotionally on this. You’ve got to look at the hard facts. You’ve got to look at the economics. That’s why we’re having this study. Those results are out… that report is released tomorrow. Let’s see what they say. Yes, these conditions absolutely need to be toughened up and that may, by its self, put this industry in jeopardy, just depending on how hash those conditions are.
JAYES: So what are the conditions though, that they need to impose? I mean, a reduce, a reduction, a significant reduction in stocking density? That’s certainly on the cards.
KELLY: Oh, look, there’s a lot of things that they could do, Laura. I’m not a veterinarian. I don’t expect to, you know, try and pretend that I have any expertise in this area.
JAYES: But you don’t support an outright ban like Sussan Ley…
KELLY: No, I wouldn’t support a ban. I would want to look at what the report says. I want to look at the expert advice from the veterinarians to see what can be done and then consider that.
JAYES: Peter Khalil, Bill Shorten said he would wait for this report. It is a week and a bit late, but he still said he’d wait to see what was in the report before he made a decision. That didn’t happen. Labor’s going to move to transition out of the trade altogether.
KHALIL: That’s not factually correct, I mean, we made a very strong statement about what our policy positon would be if we win government and that is that we would be calling for an end to the trade during the northern summer months, in that very hot weather, and also looking at a phase out of the entire live export trade of sheep. And that’s something that was made, a statement that was made by both Bill Shorten and the agricultural spokesperson, Joel Fitzgibbon. This is really disappointing, Laura. This is another failure of leadership by this government…
JAYES: So if you’re not willing to change that position, it means that you’re ignoring this crucial report from a respected vet.
KHALIL: Well, we want to see the report. They said it was going to come out today. There’s been no sign of David Littleproud who is the agricultural minister. There’s been nothing. I think Matt Canavan…
JAYES: You’ll see it tomorrow.
KHALIL: Well, we’ll see it tomorrow, that’s great. The point is this. There is a need for leadership on this. There’s a need to actually take action and these Coalition MPs like Craig are backtracking at a hundred miles an hour….
KELLY: [interjecting] Oh come on, Peter. What does ‘phase out’ mean?
KHALIL: Weeks ago I was on this program…
KELLY: [interjecting] What weasel words are those. Explain to us what they mean.
KHALIL: I’ll tell you what a phase out is. It means in a timely manner…
KELLY: [interjecting] Yeah but how will it work. Timely manner. Peter, those are weasel words.
KHALIL: Well, let me answer the question. You start to look at setting up structures to allow abattoirs to be set up in northern Australia, you do the diplomatic work necessary to maintain our markets in the middle east so that you can export chilled meat products to the middle east. They have fridges in the middle east. I mean, they are able and capable of taking halal chilled meat products or importing those products from Australia. So that can be done and it should be done. And weeks ago on this program I said, this is absolutely atrocious. There should be an immediate cessation of the trade in the northern summer months, before the report even comes out, and then beyond that, obviously with the report and other facts that we have seen come to light, there should be a phase out of the live export trade. That’s a decision our party has made and the Government is now squibbing it.
JAYES: Well, we will see the full report tomorrow, but I can tell you that the Government is not going to move ahead with banning the live summer trade; indeed the live sheep trade altogether. Peter Khalil, Craig Kelly, always a pleasure. Thank you.
KELLY: Thanks Laura.
KHALIL: Thanks Laura.
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