Sky News Richo
29 May 2013
20:15
SUBJECT/S: Ford, Superannuation, DisabilityCare
GRAHAM RICHARDSON: Bill Shorten, welcome to the program.
BILL SHORTEN: Good evening Graham.
GRAHAM RICHARDSON: Look, I recall even though I know this is not directly on your portfolio, I recall you defending all that money that we're giving to the car industry and I know why you do it, because there are so many jobs involved not only in the industry directly but in all those feeder industries. Do you still have that same position in the light of what happened with Ford?
BILL SHORTEN: Yes, I do. What happened with Ford is that they didn't keep up with consumer preferences. They also weren't exporting cars. Having said that the automotive industry generally, both the car companies and the component makers supply - employ 50,000 people. They buy a lot of our steel. They also generate R&D expenditure and they do support a lot of small businesses which are the backbone of employment in Australia. So I still believe building and making cars in Australia is something that government should support.
GRAHAM RICHARDSON: Well the problem is though that we have given Ford was it 1.1 billion over the last decade or so. That's all gone up the spout now and you'd have to worry about what happens particularly with General Motors. Now I've got to say that when you examine it, you hear all the reasons why Ford allegedly shut, I think you gave a pretty good one - no one bought Falcons anymore basically. But the reality is with General Motors that they've still got the same cost structure haven't they in reality? And you keep hearing that our workers are, you know, twice as expensive as Europe, four times as expensive as Asia. How do we keep competing?
BILL SHORTEN: Well the way we keep competing is we build cars that people want to buy. We don't build giant cars, we build smaller cars. The consumer wants more fuel efficiency. I drive a Ford Territory. I bought one of the early models and that was just a petrol guzzler. Now I drive one with a diesel engine in it. Diesel is a lot more efficient. I drove from Melbourne to Goulburn without having to refuel, nearly 800 kilometres. We need cars which are fuel efficient. We also need to be selling our goods overseas. We need to make sure that we've got proper research and development being spent in companies. I believe Australia can compete. It is not the time to run up the white flag and say Australians can't make things here anymore because I believe we can. We've just got to make things that people want to buy and things that we can premium price. We can't engage in a race to the bottom, but Richo the Germans build cars, the Scandinavians build cars. They're not low cost economies.
GRAHAM RICHARDSON: No, and they also subsidise...
BILL SHORTEN: The Japanese do and Japan…
GRAHAM RICHARDSON: ...their industries heavily. There's no doubt about that. The Germans subsidise their industries enormously, but...
BILL SHORTEN: Oh, much more than we do.
GRAHAM RICHARDSON: ...that having been said, don't we have a problem though with like General Motors is not a big exporter either. I realise that Toyota does do a fair bit of export and so they may stay here longer, but I just can't see how General Motors lasts in Australia.
BILL SHORTEN: Well first of all I don't want to be the person who runs up the white flag on the Holden motor car. What I do think is important is that we have a highly skilled workforce. We've got to make sure that the next generation of workers and employees in Australia gets the best education possible.
That's why Labor is spending and going to spend money on better schools which the Liberals aren't. In terms of manufacturing there are still 900,000 people. There are a lot of good news stories out there in manufacturing where we're exporting, in the food processing industry and environmental technology. You name it, Australians can make it. We just need to make sure that we don't talk the whole of manufacturing down because we've had some bad news with Ford.
GRAHAM RICHARDSON: No, but there's more to it than that. I mean they say in the auto industry that it's a $200,000 to $300,000 run you need, production run. We have $25,000 runs. I mean we're nowhere near that volume.
BILL SHORTEN: Volume is an important issue, but I'm not the last word in the automotive industry.
GRAHAM RICHARDSON: No, I know.
BILL SHORTEN: What I do know...
GRAHAM RICHARDSON: By the way Bill, I don't want to sort of ping you on all of this and I don't want you to be the one who has to run up the white flag. But no one ran the white flag up on Ford either and you get false hope and people move houses, get jobs there and in the end it all falls apart. I just hope it doesn't happen with others, but I want to move on. We've got plenty of things to cover. One of the things that Ford brought out is this whole issue of productivity. Do you think that's a factor?
BILL SHORTEN: Yeah, but labour productivity in Australia's gone up the last seven quarters in a row. The productivity problem was in the first decade of this Century, not the last three years. Productivity is up Richo, it's gone up and up and up seven quarters in a row. That's labour productivity. The workforce at Ford were productive, they just weren't making the right cars.
The other thing which we've got to recognise here is the high dollar. The high dollar is putting immense pressure on manufacturing, but the dollar's easing off a bit and I hope it eases off a bit more. I can't guarantee it will, but as the dollar eases off we have a sort of stabilising effect happening in the economy and all of a sudden imports are more expensive and our exports are more competitive.
GRAHAM RICHARDSON: Well it's dropped ten per cent in three weeks hasn't it?
BILL SHORTEN: Well, you know, the dollar has appreciated a lot in the last five years and now it's eased off a little bit and frankly as someone who likes manufacturing jobs in the manufacturing sector I don't mind seeing the dollar come off. I know there are people who like to go overseas cheaply on holiday, but I'm interested in domestic tourism, domestic services and domestic manufacturing.
GRAHAM RICHARDSON: Yeah, well I think we all should be but I don't even have a current passport so I'm not going to be spending any money overseas any time soon. So if productivity's not an issue and wages aren't an issue what about this...
BILL SHORTEN: But it’s, sorry, it's always an issue but the numbers aren't as bad as some of our conservative critics make out. In fact our numbers comprehensively outgun the numbers that happened in the Howard years, but we always need to - you're right, we need to keep working on productivity and innovation. They're the two challenges, innovation and productivity. That's how we create value.
GRAHAM RICHARDSON: But Bill, what about industrial disputes? I mean has Ford been free of them or not?
BILL SHORTEN: No, Ford's been an oasis of industrial calm. Let's be very clear about what's happened at Ford. It's not having exports, it's not connecting Ford into the global supply chain, it's not building cars that Australians want to buy in large number, but it certainly is all those things but it is not the workers to blame. It is not their current workplace relations system.
There has been more industrial harmony at Ford than there is in a debate within the Coalition Party Room between the National Party and the Liberals on paid parental leave, Tony Abbott's very expensive scheme which a lot of country Nats are concerned about.
GRAHAM RICHARDSON: Yes there are plenty of people concerned about that. I want to turn to the question of superannuation and I recall when you and Wayne Swan announced your super changes, which I thought by in large were pretty good. You didn't get much good press out of it though.
BILL SHORTEN: No, well, that's why we have to keep prosecuting the message each day. What has perhaps rescued the Government a bit is not only our reasonable message and it passed the House of Reps today. We've increased concessional caps. So all your viewers over 60 who are working will be able to put $10,000 more into their super each year and it will be concessionally taxed. And all your viewers over 50, from 1 July 2014, will be able to put in an extra $10,000 a year. That just passed the House of Representatives today. So when we decide we're going to do something, we get our skates on.
But what's made superannuation a political hot potato again was the bizarre speech by the Opposite leader where he said he wants to have a great big new tax on 3.5 million Aussies who earn less than $37,000.
The specifics of his great big new tax on superannuation, which really should be a no-go zone, is that currently if you earn less than $37,000 a year, under Labor you pay no contributions tax. So the money that goes into super, you don't pay any on it at all. Under Tony Abbott, if he's elected, he's saying he'll introduce a 15 per cent tax on low-paid employee's superannuation contribution.
GRAHAM RICHARDSON: Isn't this the problem wherever we go on super, we never seem to be able to get continuity. Both sides seem to have different views and if there's one thing that the average worker or indeed the high-paid worker - it doesn't matter who you are - you're going to need superannuation and you want certainty. You want to know where you're heading.
BILL SHORTEN: We do. As I tell you, the principles of superannuation. There should be no retrospectivity. It should be certainty going forward so you can plan properly with your tax. It should be about longevity and the fact we're living older. It should be sustainable and it should be fair.
That is why only Labor has a plan to depoliticise super. We want a charter of superannuation rights, so every citizen in Australia can see it, much like our constitution. We want a panel of custodians put in place and funded. Labor is ready to fund them, we've got the money to do it. These should be trusted, wiser heads.
It doesn't matter if they're Liberal, Labor, you know, ex-judges, ex-accountants, people that the whole of the community can trust. And whenever the government of the day, Liberal, Labor or whatever, proposes a new law on superannuation, the panel of custodians should have the power to give an independent opinion to the Parliament of Australia and the people of Australia. Is this a good idea or a bad idea.
So we've got a black-and-white proposition to depoliticise superannuation, to make this policy-setting a bit like the Reserve Bank, above politics. Yet Tony Abbott wants to freeze superannuation contributions at 9.25 per cent. It is crazy for 30 year-olds now to be told if the Liberals get in that they're not going to have their super increased from 9.25 to 10 per cent for two years if ever under the Liberals. That's going to cost a 30 year-old mechanic or a nurse on average wages $20,000 by the time they retire. Like that is just stupid.
GRAHAM RICHARDSON: Yeah, because it also means the public person in the end bears more in terms of pensions and that's...
BILL SHORTEN: Yeah, there's no free lunch. If we don't increase the superannuation gradually like Labor's proposed, someone will have to pay more taxes to pay for the increased aged pension, like you don't get out of jail.
GRAHAM RICHARDSON: We're running out of time, so I just wanted to turn on to a couple of other things. Firstly, the NDIS which you were sponsoring in a previous incarnation...
BILL SHORTEN: Sure.
GRAHAM RICHARDSON: ...before you got this portfolio. Now I keep reading that really until the trials, we don't know how much it will cost and therefore the estimates that you've put in may not necessarily be right. It may cost a hell of a lot more. What do you say to that?
BILL SHORTEN: I don't think that's right. The trials are making sure that we have a system that works. The disability insurance scheme, which is called DisabilityCare, that's about providing individualised package of support of adequate resources to people with disabilities or their carers, custodians, guardians or family.
I am utterly convinced that if you give $40,000 a year to a family of someone with a profound or severe disability - or the actual person depending on the nature of their impairment - they'll make that $40,000 go a lot further than giving it to well-meaning charity who's going to have a large bureaucracy behind it. It's going to - the disability insurance scheme will over time help pay for itself because you'll have more family and carers being able to have some time off from their caring responsibilities to other work. They'll certainly won't be as chronically ill, and…
GRAHAM RICHARDSON: But, see, that’s the – carers is one of the big issues, isn't it? Because that's the thing that is in such short supply in Australia.
BILL SHORTEN: Well, what we have been relying upon is love. We've been relying upon the love of family to do the job and we don't want to replace that. But I do think that occasionally those ageing parents who are perhaps brought up in a generation where they accept the responsibility till they're 80 or 90, the next generation that wasn't part of the deal they got in life. That doesn't mean they don't love their siblings, they do. But we do need to reinforce the support that carers provide to people. This is not about replacing families. It's about rescuing families.
GRAHAM RICHARDSON: Well, I mean, I wish you well with it. But these costs are so dramatic at a time when, you know, this year we've got this massive deficit of $19.4 billion.
BILL SHORTEN: But Richo, sometimes we've got to look at what the real bottom line is. If we do nothing, the cost of disability is going up seven or eight per cent per every year if we do nothing. State government systems are inefficient and broken. So that costs. There's a cost to carers, there's a cost to people with disabilities not participating.
It's not as if we didn't have the disability care scheme, it's not as if the world would stand still and wouldn't cost anything. All we'd have is the cost increasing in a chaotic unfair, discriminatory way or at least we can try and manage cost and make sure that we're putting people at the centre of the outcomes.
At the moment, if you or I have an adult child with a high level of autism, perhaps, you know the marriage is broken up, we can't get respite for one weekend in four or five, never get any time off. Sooner or later some parents and carers are driven to the point where they've got to give up their child or the way that they get care is by telling everyone there's an emergency.
GRAHAM RICHARDSON: I appreciate how difficult it all can be.
BILL SHORTEN: Chaos costs more than order. Chaos is not good for the bottom line.
GRAHAM RICHARDSON: You're talking about costs. Costs have blown out on so many things. Look, Bill, I have to leave it. I could talk to you all night, but unfortunately they won't let me do that. But thanks for your time on a busy parliamentary day.
BILL SHORTEN: If you know you've got a problem, then it's better to try and deal with it than not deal with it because it always costs more to delay dealing with a problem. Thank you.
GRAHAM RICHARDSON: It's hard to believe this could cost more no matter what we did, but I thank you for your time.
BILL SHORTEN: Good evening, Graham. Cheers.
- ENDS -
