SUBJECT/S: Labor’s plan to fund health & education – and balance the Budget; Newspoll; Coalition split over an effects test; Senate voting reforms





HELEN DALLEY: I’m joined by Shadow Minister for Small Business, Michelle Rowland, who’s in our Canberra studio. Michelle, thanks for joining us.


DALLEY: Let’s talk tax policy first as that affects small businesses, your shadow portfolio. While the Government has savaged Labor’s proposed changes to curb negative gearing for investors on existing properties, it appears the Newspoll results show that it’s quite well received among voters. 47 per cent of voters in favour of your plan, 31 per cent oppose it so there’s still a section that are undecided, but won’t the changes Labor is proposing hurt people in your Western Sydney electorate?

ROWLAND: I think there’s a couple of points to be made there, Helen. Firstly in my part of the world, people are concerned about housing affordability and they’re concerned about jobs and job security. The important thing to note about Labor’s proposals in this area is that we will be addressing both. First, the issue of housing affordability and increasing housing stock. The electorate that I represent basically has one of the urban fringes where new houses are going up every single day and people need to save for a very long time just to become a first home-buyer, and just to save up a deposit takes years, takes far longer than it did when I bought my first home many years ago. So I think it’s really important to note that the policy that we have put forward recognises that 93 per cent of negative gearing at the moment goes into existing properties, it’s not going into creating new housing stock. And secondly, when you incentivise that new housing stock you have so many other benefits that go with it. Everything from construction jobs to purchasing services, purchasing appliances and so forth. So I think that not only is this policy important for budget repair and also for providing services that people expect and need, obviously in important areas like health and education, but I think it serves a very important purpose of addressing home ownership and also the very important issue of jobs.

DALLEY: All right, but in that you are saying that most people are doing negative gearing in existing properties. We know a lot of Australians do engage in negative gearing as a tax concession if you like, a tax incentive to invest, won’t you be annoying those people who have decided well that is one of the best ways I can put my money, won’t you be annoying them by changing it for investors?

ROWLAND: The important thing to note here is that while the changes would come into effect on the first of July next year, all existing arrangements are grandfathered, there’s nothing retrospective about it. There’s nothing stopping investors who seek to have negative geared properties, the only requirement is that they be new stock. So you can still engage in it and anything that you currently have will be grandfathered.

DALLEY: I want to ask you a little more about the Newspoll results and I guess this is your chance for a free kick. It was a good result for Labor in the two party preferred vote, it is now neck and neck with the Coalition. But does that say more about Malcolm Turnbull’s honeymoon being over and perhaps the confusion about the government’s tax policies than it does about Bill Shorten’s popularity with voters?

ROWLAND: I think it says a few things, Helen, and I know many people are loathe to say that they look at polls, but quite frankly when you have a result like this when you’re coming off a time where we have a new Prime Minister, he rolled a Prime Minister and he’s come in on the promise of new economic leadership, you have to ask yourself what does this person stand for? We’ve been saying this and I think the public has been responding in quite a similar manner. You only have to look at the fact that the only party that is actually proposing difficult reforms, reforms that will be of great structural benefit to the economy is the Labor Party. We have the Government acting like an Opposition and I think that that is what’s reflected in these polls.

Would you concede that it is more about Malcolm Turnbull’s honeymoon being over, I mean on the question of preferred PM Bill Shorten has only improved a touch to 21 per cent while Malcolm Turnbull has fallen four points, yes, but he is still at 55 per cent preferred PM.

ROWLAND: At the same time, Helen, we have had Labor releasing a substantial number of policies and being prepared not only to articulate them but to actually argue for them. I don’t think it’s any coincidence that we have seen this turnaround coupled with Labor having the guts, unlike this Government, to actually put forward difficult reforms. Now, I’ve been saying for some time that people will wake up to Malcolm Turnbull sooner or later. He only has to act like Malcolm Turnbull for people to see what he is and I think the fact that he has proven that he stands for nothing reflects very poorly on him, but I also think it reflects well when a party, when an opposition is prepared to have detailed and costed policies, take them to the electorate and be prepared to argue for it. Let’s face it, that’s exactly what Malcolm Turnbull said he would do when he decided to roll Tony Abbott. Instead he is engaged in the very type of scare campaign and negativity that he said he was opposed to. He said he would treat voters with intelligence and he hasn’t done that.

DALLEY: I wanted to move on to competition policy. New Deputy PM Barnaby Joyce is talking up his ability to get tough with market players, all the big companies. He said on Australian Agenda yesterday he’s pushing strongly to include the controversial ‘effects test’ recommended by the Competition Review to make sure that playing field is fairer for small businesses. So you must support Barnaby Joyce on that?

ROWLAND:  Well what this exposes, Helen, is the enormous divisions within the Government on this issue. 10 out of 12 inquiries that have been done into this matter have concluded that an ‘effects test’ would be the wrong policy way to go. Not for a moment do I deny the fact that we have serious issues with market power, and the very definition of competition is the absence of market power. We have serious issues with market power in some markets and in some sectors, but if you think that going down this policy road which, bear in mind, this Government has kicked down the road and not made a decision on, if we go down this path it will create not only uncertainty in the law -

DALLEY: Sorry which path are you saying we shouldn’t go down?

ROWLAND: An ‘effects test’ path.  

DALLEY: So you don’t support the ‘effects test’ which might make a fairer playing field for small business?

ROWLAND: Labor does not support that because we don’t believe that will end up being the outcome. I will say this Helen, we do recognise that there are some serious issues, but you are not going to resolve them by changing a provision in Section 46 of the Competition Law. You’re not going to resolve it by doing that alone. We are consulting very widely on some practical and immediate reforms in this area that we’re going to announce very soon, but it doesn’t matter what the law says at this point, you need to be able to have the resources, you need to have the means and you need to have the case to be able to actually bring it to get relief and I think what this exposes -

DALLEY: Sorry, as Shadow Small Business Minister, you are saying that you don’t agree with what Barnaby Joyce is trying to push and that you do agree with the other senior members of the Turnbull government who might be reluctant to bring in an ‘effects test’, you’re saying you agree with that?

ROWLAND: Well I believe that we should have reform in this area, but what is being proposed by Barnaby Joyce is not the way to go. This is not going to achieve what he calls a “level playing field”, it will not have that desired result. In fact you would need to be waiting several years before you even get good law in this area. I want immediate relief for small businesses Helen. I want to see them being able to bring actions to be able to prosecute cases where they think they actually have a claim to be able to get relief and not be relying on some provision which Barnaby Joyce and others appear to think is going to the panacea and make everything better. But certainly it does expose deep divisions when you have this person who is now the Deputy Prime Minister of Australia, and will be the Acting Prime Minister of Australia in some cases, you really have to question the economic credentials of this government.

DALLEY: Just finally on Senate voting reform, Labor so far appears to have been dealt out of the picture. Do you support the proposed changes to Senate voting?

ROWLAND: We only saw the legislation today when it was introduced and it will be going through our proper caucus process and our policy making team there. But Helen I will say this, I’ll make a couple of observations, I note that by all reports a deal has been done between the Government, the Greens, and Nick Xenophon. Now I am immediately suspicious of a government which seeks to do deals, particularly with the Greens when they are meant to be their sworn enemy on so many fronts. Secondly, I am very concerned and will analyse this further, as will the entire caucus, on this issue of whether or not this encourages informal voting. In my part of the world and unfortunately in my seat I have one of the higher informal voting records from the last couple of elections. I also think it’s important to note -

DALLEY: The PM said today you could vote just one above the line.

ROWLAND: You can do that, but the other option of course is to number 1 to 6 for example. Now whether or not that does increase informal voting is something that remains to be seen, But I am very concerned when you have a proposal as substantial as this about the fundamentals of our democratic process being rushed through, with the Government seeking to get this through the House of Representatives this week, you really have to query their intentions. The last point I’ll make on this Helen is when you have such fundamental changes being proposed, you need to factor in a proper education campaign for the electorate. I note the Government is very quick to want to talk about this and very quick to want to do a deal, but in nearly 6 months they are happy to talk about doing deals and counting votes, they’re not so happy to have a coherent economic plan.

DALLEY: All right, well you’ll be able to argue with them all this week in the Parliament. Michelle Rowland, we’ll have to leave it there. Thanks for joining us.

ROWLAND: My pleasure.