ABC 774
21 JANUARY 2011
SUBJECTS: Flood Levy
WALEED ALY:
Bill Shorten is the Assistant Treasurer for the Federal Government and he has been good enough to join me this morning. Good morning.
BILL SHORTEN:
Good morning.
WALEED ALY:
Now, the reason for this ostensibly is to ensure that Australia returns to surplus by the nominated date, the date that your Government has nominated. The question I would like to ask up front is why make the surplus such a sacred cow like that?
BILL SHORTEN:
Well, you said the reason for this. What are you referring to? The reason for the Government to respond on the floods or are you talking about one particular option which is being discussed?
WALEED ALY:
The reason for trying to introduce a levy or proposing introducing a levy to respond to that as a way of trying to protect the surplus.
BILL SHORTEN:
I think you'll find that the driving issue in front of Australia at the moment, not just the Government, but Australia, in particular people in flood affected areas, these floods have been a tragedy. Obviously at the top of that list of the tragedies is the loss of lives.
In addition, it would appear that even though there is not hard numbers and definitive numbers because the floods are still affecting people in Victoria, it's going to have a pretty big economic cost. The question is, what is the best way to recover?
One of the issues which we've said, going to your specific issue, is that we believe it's in the best interest that after the GFC and the difficulties of the global financial crisis, that by 2012/2013 we should get into a budget surplus.
In addition, I understand that the Prime Minister discussed last night that we have to look at all options as to how we can reconstruct. We've got two goals here, not one goal. One goal is the budget surplus. That's always been our goal, but having said that, these floods are a fact of life. They're a tragedy.
WALEED ALY:
Circumstances have clearly changed now. You've got even business leaders coming out and saying, look, don't worry about the surplus. It's more important to spend the money to get the nation back up on its feet. Anna Bligh has even said that by spending that money, you'll actually get into surplus quicker than if you don't.
BILL SHORTEN:
We welcome everyone's opinions, but Australia is a nation which is capable of doing more than one thing at a time. On one hand, having a budget surplus is prudential. We've got the lowest public debt of most first world nations, but as a proportion of the total economy.
These floods, it's too early to give a forecast exactly of the final cost, but there's no doubt it's been costly. There's significant damage on our economy and budget and communities which will have to be accounted for.
WALEED ALY:
We had - I'm sure you just heard a caller, Max from Sunbury, who made the point that this is a complete disincentive really to donate to flood appeals in the future if you know that you're going to end up getting - having to make compulsory donations I guess by the Government. What's your reaction to that?
BILL SHORTEN:
I respect people who have donated to this and to other natural disasters, but this is also a significant economic disaster which donations alone aren't going to be able to deal with. I don't think that we can simply tell the thousands of people who have been affected by these floods that charity is going to do the job and it's not. That doesn't take away from the generosity of what's happened.
As I said, this levy is one option. I think a Government is prudential to look at all options. I think people are probably legitimately concerned if they don't have full detail. We can't have full detail yet. I think if you have a look at in the last Howard Government, they introduced six temporary levies. It's not…
WALEED ALY:
Sure. I [indistinct] that you'd picked that up because the opposition of course are going to quote you on this. They are well aware of those levies, but they criticise you on another ground. Here's what Tony Abbott had to say.
[Start of excerpt - interview with Tony Abbott]
TONY ABBOTT: You don't need a levy here because there is out of control Government spending which can easily be reined back and reprioritised.
[End of Excerpt]
WALEED ALY:
I guess that's the point that you're going to be facing endlessly isn't it Bill Shorten?
BILL SHORTEN:
Yes. I guess it's easy for people to make mischief in an opposition politics at this stage because we can't finalise yet what our options are. We've got to still see what the best estimates of the cost are. This disaster is still unfolding.
In a vacuum of course, it's easy for people to grab a headline. Talking of what Tony Abbott and the opposition have said, Ron Boswell, who is perhaps not so well known down in Victoria. He's a National Party Senator in Queensland. On the 5th of January said he wanted to establish a flood pool. They just want everyone to pay flood insurance just for flood affected areas. [Indistinct] is one flood. Barnaby Joyce is probably better known.
WALEED ALY:
Yes.
BILL SHORTEN:
He wanted to see a household insurance levy. There's a chap called John Williams, he is a New South Wales National Senator, his nickname is Wacka. He wants a national fund.
WALEED ALY:
That's fine. You can quote Wacka. That's fine.
BILL SHORTEN:
Hang on. When you quote to me the opposition doing what they do best which is knock. I just want to say, let's put all of the opposition commentary out there. What we have…
WALEED ALY:
Fine, but I think you've got to take the views of the leader and give them due weight given the views of the levy. The simple…
BILL SHORTEN:
Barnaby Joyce is a Front Bencher.
WALEED ALY:
It's a central…
BILL SHORTEN:
The National Party are in arrangement, if they were to win the election, some of these people would have serious economic positions.
WALEED ALY:
This is the - the position that is being put there, there is a serious underlying premise. That is that there is a whole lot of other money that's around that's being spent on other things that could easily be diverted and that are probably better diverted.
BILL SHORTEN:
I have no doubt that again this is a bit of a vacuum and the Government has still got to work out what are all the costs. I have no doubt the Government is looking at all options, including reprioritising existing expenditure. I have no doubt. The Prime Minister said that.
What doesn't help is that we've got the floods. The reason why we're having this debate about the levy is for no other reason and it's even an option, is that we've had terrible floods. People have died. For the last two weeks we've seen footage of communities being economically drowned. That's the priority. The Government's doing the right thing…
WALEED ALY:
I don't think anyone disagrees that that's the priority. It's a question of what the appropriate response is though.
BILL SHORTEN:
Exactly and that's all we're doing. To some extent, it would be smart for a Government never to do any media in between the disaster and the final position because we can't say categorically that option (a) is going to be the plan or option b or option c.
Because there is any debate in consideration, I think it's appropriate that Government Ministers say, well we've got a serious issue and we're going to have to look at various options. I will just counsel people who may get hot under the collar about some aspects of media reported. To be fair to the journalists, they don't have all the facts. To be fair to the Government, I guess which I would be, because I'm in it, we're working through these issues.
I just would say to people not to you know, this is - I know people want answers right here, right now, but Kerang the tide is just receding [indistinct] for next week.
WALEED ALY:
I appreciate that and we'll be covering that throughout the morning because we've been covering it, but the point…
BILL SHORTEN:
The Government has to consider that if we don't have all the evidence Friday morning, we don't.
WALEED ALY:
I understand that, but you have floated the idea of the flood levy, not anyone else. The Government has..
BILL SHORTEN:
The Government has.
WALEED ALY:
…raised that. That makes it a topic. Are you sure they wouldn't float that if it wasn't something that you were taking quite seriously.
BILL SHORTEN:
That's right. It's an option. We have been up front with the Australian people. The floods have caused massive damage.
WALEED ALY:
Then surely you've got to respond to criticisms that say that there's all this other spending. An example…
BILL SHORTEN:
Can I be very clear and very succinct? We have to look at every option to pay for the massive damage of the floods. This will mean cuts, that means to existing programs and it may mean a levy. That's it.
WALEED ALY:
Yes. The question is whether…
BILL SHORTEN:
The question is, is it one or the other? We're saying it will mean cuts. We're saying that we will have to look at how we reprioritise existing expenditure.
WALEED ALY:
It's possible…
BILL SHORTEN:
It may mean a levy.
WALEED ALY:
It's possible that something like say the first home buyer's grant could be…
BILL SHORTEN:
Now you're asking me to say which particular program the Government's going to cut. I'm not in a position to do that.
WALEED ALY:
As a matter of principle. It's nothing beyond that.
BILL SHORTEN:
I'm not going to hypothesise so that everyone who gets any Government support anywhere says, maybe we're going to be on the chopping block. That's unhelpful.
WALEED ALY:
Slightly separate question then. Given the impact that this has had on the mining industry, particularly in Queensland, is it time to rethink the mining tax given the change of circumstances?
BILL SHORTEN:
The mining industry will recover. The mining industry has been doing very well so we will add mining rent resource tax. I think that's appropriate. Public assets are going to be refunded and rebuilt which will help the mining industry get back on its feet. I don't see the Government changing its desire to having a mining rent resource tax.
I've just come back from Hong Kong in the last couple of days promoting Australia. There is an
insatiable appetite for Australian resources regardless of the floods.
WALEED ALY:
I suspect you'll be able to get some opposition on that from some mining groups, but nonetheless I appreciate…
BILL SHORTEN:
Some of them haven't been happy to pay tax.
WALEED ALY:
Of course. Thanks very much for your time Bill Shorten. We have to move on. I appreciate it.
BILL SHORTEN:
Thank you. Bye.
WALEED ALY:
Bill Shorten, The Assistant Treasurer, speaking to me there.
