SKY NEWS PM
SUBJECTS: Australia’s Relationships with China and the USA, Morrison Government’s Attacks on Working People’s Retirement Savings
TOM CONNELL, HOST: Joining me now is Labor MP Peter Khalil for some more on this and a few topics doing the rounds today. Peter Khalil thanks very much for your time today. Some interesting comments made by Richard Marles yesterday. Do you agree with everything he was saying?
PETER KHALIL, MP: Well I reckon Richard was spot on Tom. He is observing and reporting on basically the state of the relationship. And it’s really funny coming from Scott Morrison, a criticism that somehow Richard Marles is immature by observing the reality of our international relations, when this government, whether it was Shirtfront Abbott, whether it was Malcolm Turnbull, like the basil fronty of foreign affairs fawning over the US and fawning over China one minute and then talk tough the next minute. Whether it is Morrison stomping around like Bigfoot trying to be big mates with Donald Trump. I mean it is incredible that he is levelling that kind of criticism at Richard, who knows his foreign affairs, who knows his international relations, who understands the importance of having a very strong relationship with both the US and China and being sophisticated about it and I made a criticism of Scott Morrison last week for all the hoopla in America, for all the hoopla in his visits to President Trump in the Whitehouse. What he should have been doing is making sure that he convinced, using any influence he has, Donald Trump to actually resolve the trade war with China, right? That is what he should have been doing, because that is what is in our national interest. And yet, he got side tracked and tried to redefine China’s economic status and so on.
CONNELL: That’s not the first time you mentioned that. But can I ask as well, drill down to the heart of who needs to do what between Australia and China, but as Richard Marles said ‘Trust has been lost in Australia China relations and it is up to us, Australia to fix it’. Do you agree with that?
KHALIL: Well we have a responsibility to make sure that we have the best possible relationship with China which we have a comprehensive economic relationship with. An important partner, particularly for our prosperity and for Australian’s prosperity in Australia’s future prosperity in this region. Absolutely it’s an extremely important economic partner and at the same time we have to maintain and enhance our extremely important strategic and security and our economic relationship with our key ally the United States. Now I think, we can do both. I think if Australia and Australian leaders are as sophisticated enough they can do both those things at the same time, they can walk and chew gum at the same time Tom. This false dichotomy that we got to choose is just that, it’s false.
CONNELL: But this is also a message, not the government but Australian Labor is putting out there, that it is up to us to fix the trade relationship. What about the fact that it is widely reported and believed that China hacked Australia’s parliamentary IT system? Doesn’t the fixing of trust go both ways?
KHALIL: Oh look they have a responsibility as well. If they want a good relationship with us and a good friendship and a good trading partnership and expanding that relationship beyond trade of course to not just economic matters but a whole range of other areas and Richard was talking about and discussing some of the engagement with our defence cooperation and humanitarian relief and so on, they have a responsibility as well to make sure they are a good partner absolutely. I’ll be the first to be critical of China and any other country that seeks to diminish or damage our national interest by their actions. We’ve spoken up, as has Richard, on issues such as the South China Sea and the importance of abiding by international law. You can do that in a mature relationship. The criticism that Richard’s making and I’m making is that this government despite what Scott Morrison said today, has actually been woeful in their management of international relations. They have actually stuffed it up over the last six years and it has brought us to the point we are at today.
CONNELL: Alright. Superannuation is all the talk today as well, a bit of a fight over who is going to be on the review committee of all things – it all sounds a bit niche. But the core of the issue: Why is 12 percent the holy grail for superannuation?
KHALIL: Can I just say Tom – and I’ll address the issue around why 12 percent is important – the reason Australia has one of the best savings programs or structures in the world is because of the Labor Party and Labor in Government. We put the universal superannuation scheme in place, we’ve protected it and we’ve been defending it against the coalition over many decades as they tried to rip into it, and now we are seeing the same sort of backbenchers on their side trying to diminish-
CONNELL: Sure you put it in place, but higher doesn’t just mean better in this area. And you could also point to Australia having some of the biggest fees in the world in our superannuation system.
KHALIL: To address the 12 percent point: If you look at the US and their social security system, and the strain on their system and the struggle that they’re having. The foresight and the vision of Keating and Hawke and all of the other people in Government even prior to that during the Whitlam era as well when it started to be thought of. The foresight in putting that together has basically ensured that our budget bottom line has been spared from the massive stresses of the aging population on the pension system. Okay? That’s why the commitment to 12 percent is important for the future. We know we’ve got an aging population. We know that life expectancy is rising. We know that we need to address this and that structurally the budget absolutely needs this.
CONNELL: Just to go to the point though. None of that goes to why twelve is better than nine-and-a-half percent, and again applying that to every employee.
KHALIL: It’s two-and-a-half percent more than nine-and-a-half percent. We talk about-
CONNELL: Then why stop there? Why not 20?
KHALIL: Well okay. Some people have made arguments for 13, 14, 15. But there’s a commitment to 12 percent. This Government – this Coalition Government – keeps saying they’re going to abide by it by 2025. It should have been between ’13 and ’19, but we’ve delayed that. And I’m concerned, frankly Tom, that they’re just using this review as another pretext to either gut pensions again, to delay further the rise to 12 percent. We’ve got someone who you mentioned at the top of this interview, Dr Rahlston, who they put on this board. Someone who believes in dismantling the superannuation system, onto this review. It’s a joke, and I think it’s unacceptable. Look, we will work with the Government at face value. We will do everything we can to ensure the system is even better than it is. We always want to improve it. But there’s some serious concerns about this review, the way it’s been put together. You’ve got backbenchers like Senator Bragg saying it should go voluntary to people under $50,000. Does he know that would actually mean a tax increase for people under $50,000 of almost a thousand dollars a year? I mean, these people don’t really think about the benefits for the working class and the middle class Australians in the superannuation system that has been a great boon for this country.
CONNELL: What about working class Australians Peter Khalil? So someone on $50,000 right now, over the time that the super increase kicks in, given what we are looking at in terms of average wage increases at the moment, they could be looking at a pay cut if you factor in inflation, with super going up.
KHALIL: Again Tom, you’re repeating this false correlation between wages and an increase in the super system. You’re making assumptions based on some modelling that’s been done which is contestable and very questionable. And I don’t accept the premise of the question in that respect.
CONNELL: What is the correlation though? It might not be 100 percent but it’s certainly not zero in terms of where super comes from. It comes from wages in part – what would have been wages otherwise. We are talking about the overall remuneration to an employee…
KHALIL: Again you’re saying the offset always happens from the wage increase and that’s not necessarily the case. It doesn’t always work that way. What I do know is that if we were to go down the path of Senator Bragg, who says that people under $50,000 should be able to opt-in to super or opt-out voluntarily they’d be looking at a tax increase on their bottom line of $1700. So another thousand dollars for those people.
CONNELL: That’s fair enough, you’ve made that point. But what about that employee I’m talking about on $50,000. Can you say that it’s not going to come from their wages?
KHALIL: I know that the super increases that we have committed to and that this government has committed to don’t always necessarily come from the wages. That’s not necessarily the case. There’s some modelling that’s been done on that which I think is very, very questionable. And there’s other economic modelling that gives you a different picture of that. The point though is that looking at the future of those people – working class people – and their retirement and their quality of life down the track… And also the fact that if we don’t have the universal super that we do, if this government or some members of this government get their way and try and make it voluntary, you’re looking at paying more taxpayer dollars into a pension that’s going to get bloated and bloated out even further and we’ll be all paying for it.
CONNELL: Peter Khalil, thanks for your time today.
KHALIL: Thank you.