13 May 2017

RON BOURKE: We say good morning to local federal MP Brendan O’Connor. Brendan, good morning.


BOURKE: Labor doesn’t really have much to complain about in the Budget does it? Scott Morrison has adopted a lot more of your schemes – Gonski on school funding, putting a tax on the banks.

O’CONNOR: Not at all. I mean quite frankly there’s a $22 billion shortfall in education. We think the best way for Australia to grow and to compete in the world is to have the best education system in the world. A $22 billion cut to funding for education over the medium and longer term is a bad idea.

BOURKE: But the system is now in place, which I never thought I’d see a Liberal Government do. When Labor wins Government again, which you’re a fair chance of winning the next election, you can up the funding. You’ve already got the model in place.

O’CONNOR: And that’s what we’ve made clear, that we would return the commitments to funding for all of the school – the government and non-government schools in Melton and every other community in Australia because we reckon everyone deserves the opportunity of a good education.
So whilst the Government might say they support the principals of need-based education, they are taking $22 billion out. And remember they are spending $65 billion on providing tax cuts to big business.

BOURKE: Just on the schools, though. They’re being brave enough to probably upset some of their core voters by taking money away from private school. I have to congratulate them for that.

O’CONNOR: Well, they have chosen to do that. In terms of the elite schools, none of which are in my electorate, none of them. No schools that would be losing money there. I don’t have a problem with that. I do have a problem with local government schools in Melton and the non-government schools and in particular, as you’ve noticed, those small Catholic parish primary schools and schools generally will behaving to pay more fees. And we think that’s unnecessary and unfair.

BOURKE: So will that apply to the parish schools in Melton, because I’ve heard a lot of stories about schools in the ACT, not about any in Victoria.

O’CONNOR: There will be some in Victoria too, you can be assured of that. In fact the Catholic Education Office will provide – I’m seeking the advice to be provided where the shortfalls will be in Victoria - there will be shortfalls. And in indeed you’ve seen the NSW Liberal Minister for Education come out and attack the Government for taking money out of the NSW schools.
So it’s not just the Catholic Schools system, its government schools and non-government schools. And we think the best way to grow our economy, to compete in this globalised world is to have the best skills and the best education we can possibly have.
So that’s why we are disagreeing with the cuts there. But also, we don’t believe you give $65,000,000,000 to big business, and the same time, impose taxes on people between $21,000.00 and $87,000.00 a year.

BOURKE: Bill Shorten in his budget reply speech last night said that he opposed the increase in the Medicare levy if he was Prime Minister, it would only apply to people earning in the two highest tax brackets, and not to everybody.

O’CONNOR: The reason we have said that Ron is that we were concerned firstly that wage growth is at its lowest in a generation. People’s wages are not going up.
Secondly, there was a tax cut for people earning over $80,000 last year, and now they are lifting the 2% levy on the top 2% of the workforce. What we say is that what that’s means is that the people who will be slugged in the budget are those earning below $87,000 a year. At the same time that happens, millionaires get a $16,400 tax cut, and big business gets a tax cut.
We think their priorities are wrong, and they are slugging low and middle income earners, and that’s not fair.

BOURKE: A couple of points. I get really annoyed when I hear things like “Millionaires in Australia don’t pay any tax”. One of their biggest deductions is paying people – clever accountancy people – to get them out of paying what I would say is their fair share. Even up to a million dollars they are paying.
O’CONNOR: It's extraordinary.

BOURKE: Wouldn’t it be better just to pay the tax? [laughs]

O’CONNOR: Yeah, you would think so. These people are willing to pay their lawyer, their tax mates before their tax office. But, look. If you asked anyone in the street of Melton how much do you pay your tax accountant to do your tax, you might hear they  save several hundred dollars, maybe for people with more complex tax arrangements might say, possibly $1000.00
There are people who have been able to use this provision to avoid paying any tax. We have now said that the threshold, particularly for those who have complicated tax arrangements, should be up to $3000.00. We have just got to stop this rort that’s been going on for years for people who have been able to avoid all taxes by paying up to $1 million.

BOURKE: Well, isn’t it a solution? Labor has been in Government in recent times, isn’t the solution to make some of these deductions not applicable?

O’CONNOR: Well, we can go through that, and there’s reasons for and not for having deductions. We have tightened up the deductions, and I think you can always re-examine that.
I have no problem with providing some deductions for my constituents in Melton who might pay a tax accountant, and I want people to go to tax accountants if they are not sure how to file their tax. That’s fine. But not this rort that’s being used by the big end of town.
Not many people in my electorate, I am sure, are availing themselves of thousands and thousands of dollars and tax deductions in this way. That’s why Bill Shorten said let’s put a cap on it.
Now, that will upset people on very very big incomes, well, too bad. It should be changed, and it will change if we are elected.

BOURKE: The other thing that I think Labor is on to a winner here – I even saw a text on Q&A on it the other night – where it said “Get rid of negative gearing and give the little bloke a go”. I think that sums up a lot of people’s attitudes to negative gearing, where the Government is actually helping people buy 2, 3, 4, 5, God knows how many properties, which is pushing up the prices, keeping young homeowners or potential home owners out of the market, and also the concessions on the capital gains tax. I would have like to have seen that in Scomo’s budget. But of course Labor is promising to do that if you win the next Election.

O’CONNOR: Yeah, well I think that’s right. I mean I think that it’s got to the point now that people are turning up to buy their seventh investment home at an auction and their competing against a young couple who are trying to buy their first home. And the problem is we give all the incentives and the tax breaks to people buying their seventh investment house and we’re not really helping people who are trying to buy a home.
So what we say is, you need to change negative gearing. Now what we’ve made clear is, if people have already made economic decisions, it wouldn’t apply to those that have done that now. But it would mean that you’d only get the tax breaks on new home, homes that are going to be adding to the housing supply of the country. I think that’s a fair balance.
But the Government is scripted on that too. They should have and I think that’s the real problem. I mean what’s happening now Ron as you know, people are turning up at auctions, the investor buys the home and turns to the young couple and says but it’s ok you can rent my house if you like. And that’s just got to stop. We have got to give people a chance of the Australian dream- . which is if they want to buy a home, they can afford it. We need to take that speculation out of the system.

BOURKE:  Indeed. I come from an era when everybody in a moderate job, earning a moderate wage was able to buy a house with a bit of scrimping and saving.

O’CONNOR: Yes it’s getting harder and harder.

BOURKE: Well it’s virtually impossible if you’re in that situation. The other big thing in the budget of course is this tax that’s been imposed on the banks or will be imposed on the banks. Labor says it will support that, but there’s been a lot of people saying we don’t like it because banks are going to pass it on us. It’s not them that’s going to suffer it’s us, us mortgage holders, lucky enough to have a mortgage and they’re going to impose more fees.

O’CONNOR: Well, Malcolm Turnbull has said that this is going to be a tax on the banks and it won’t be passed on. He has to, as Prime Minister of this nation with his Treasurer who handed down the budget make sure – ensure - that the banks do what they are told and not pass this on. Now if he can’t stand up to that…

BOURKE: Good luck with that

O’CONNOR : Quite frankly that’s why Labor believes we need a Royal Commission into banks. If the banks won’t do the right thing here then firstly Malcolm Turnbull and Scott Morrison have to be held to account for saying that it wouldn’t be passed on.
That’s the first thing. The second thing is, if elected whatever happens, Labor will start a Royal Commission into banks. We’re sick and tired of the scandals and the financial problems that occurred in the banking industry where there have been so many victims, whether it was Com Insurance or whether it was any other form of insurance scheme that has been unfairly implemented by the banks. There’s lots to examine there and that includes about transferring costs to customers.
So there will be a Royal Commission into banks if Labor is elected and we expect Malcolm Turnbull to stand up to the banks and prevent them from just passing this onto their customers. The Prime Minister’s got to stand up for once to banks instead of just folding every time they say “boo”.

BOURKE: If he is successful in doing that and they don’t pass it on, does that take away the need for a Royal Commission?

O’CONNOR: No it doesn’t. Firstly we think it should happen as a matter of course. I mean if I am taxed something, if you’re taxed something, if your listeners are taxed they don’t get to pass it on to anybody. And by the way this Budget is currently looking to tax everybody between $21,000.00 and upwards on income, and that’s why Labor is opposing the taxes on workers up to $87,000.
We believe there will need to be a Royal Commission because of all of the scandals and also the failure of the banks to respond to those scandals sufficiently. They have been very high minded and very arrogant in many respects and I think we need to examine exactly how we can put in place a regime where our banking system works very well but it also treats its customers properly and doesn’t think it can do what it wants.

BOURKE: One out of left field before we go. There has been Russian interference in the French elections and previously in the United States elections, do you think the Russians would be interested enough to try and hack into our electoral process and do some interfering here?

O’CONNOR: Well look, in a modern world, in a globalised digital based economy you have to be mindful of the possibility of cyber-attacks. There have been attempts to interfere with our government agencies in the past, there has been hacking into the United States and Canada and other places, from certain sovereign states. So let me put it this way - we have to have a rigorous system in place so it is very difficult for any sovereign state to look to interfere with our electoral processes.
So we should be mindful of that it’s always possible, but you’re right. It is very interesting what is going on in the United States and yes again it is a reminder that you can have situations now where through the use of technology other countries can interfere improperly, and we should certainly be guarding against that and putting systems in place to prevent it from happening.

BOURKE: Another reason why we shouldn’t have computerised elections, stick to the old paper and pencil. [laughs]

O’CONNOR: Well you see there are some upsides to the old school, the old way of doing things.

BOURKE: That’s right. Thanks for talking with us this morning. Hopefully we can do it again.

O’CONNOR: Not at all. Thank you for the invitation, I really appreciate it.

BOURKE: Yep that’s good. Thank you very much. That is our local Member, the Member for Gorton.

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