ABC Afternoon Briefing - 7 November 2019



PATRICIA KARVELAS: On the panel this afternoon Liberal MP Jason Falinski and Labor MP Stephen Jones joins me now. Welcome to both of you.
Stephen let me start with you because it's your big review. The report outlines the reasons that Labor lost the election and essentially it said that there was a weak strategy and your party didn't adapt to change and had a cluttered policy agenda. How do you take this document now and change the Labor party so that you're in a winning position at the next election?
STEPHEN JONES: The first thing we're going to do is learn the lessons of the review, learn the lessons of the 2019 election and I think Anthony Albanese has in a sense pre-empted many of those you've talked about, like the big end of town narrative. Anthony's made it quite clear that he wants an agenda which is based on growing the pie not just about dividing it and an agenda based on increasing wealth and ensuring that we don't lose sight of dealing with inequality, but we want to grow the national income as well. Frankly, I've got to say, I think we ran a pretty good opposition but a lousy campaign. I think the government over the last four years ran a pretty lousy government but a very good campaign. They won't catch us napping again. We're going to learn the lessons of the 2019 election and ensure that we don't make the same mistakes again, either throughout the next three years or when it comes to the campaign in 2021/22.
KARVELAS: But you have to now be responsible for the policy change. I mean this diagnoses the bigger broader macro problems, but you need a pretty significant policy shift don't you? I mean they talk about the economic message that was used, they talk about a cluttered policy agenda. Do you have to now dump the franking credits policy for instance?
JONES: Patricia we had over 300 costed policies going into the last election and I defy anyone to name more than 10 of them. Frankly, you couldn't, and that would include many of our own MPs and candidates. Too many individual policies and not enough of an overarching narrative about our story about creating a fairer society, creating an economy that works for all Australians and ensuring that we had a nation-building agenda. It was there, but by God you had to look hard to find it amongst all the individualised policies. I think the second thing that really rang true for me was ensuring that Labor didn't just become a party of individual grievances. That we don't just respond in an atomised way to every individual grievance that comes up. We've got to ensure that we take a Labor agenda to the next election and not just and an agenda which reflects every individual protest group. I think that really struck a chord with me. There were problems with the campaign. The management of the campaign and problems with the strategy. We let the government and their allies, including people like Clive Palmer get away with telling lies that weren't thoroughly countermanded. I think they had a lucky win in 2019 and we made a number of mistakes. We won't do the same thing again.
KARVELAS: Okay, I want to bring you in Jason Falinski because one of the elements of the report looks at truth in advertising. Obviously Labor felt pretty stung about some false advertising particularly on the internet that was running about death taxes and interestingly, this is something you're interested in as well. Do you think there should be truth in advertising laws?
JASON FALINSKI: Yeah, I do, to be blunt. How that would work and who would be responsible for it, that's that's the tricky part. The difficulty is in the detail, because you certainly don't want to outsource that necessarily to public servants who are unelected and not necessarily responsible or answerable to anyone. And so that's going to be the difficult part about it. But look, there are a number of models from overseas. Some of them seem to work well. Some of them seem to work very badly and I think it's something that we should have a thorough look at, and ensure in a way that actually improves our democracy and improves our elections and improves public debate that, we have truth in advertising.
KARVELAS: I want to move on to…
JONES: I agree with Jason on that. I agree with him.
KARVELAS: Okay, everyone on this panel, at least, believes in truth in advertising. I even think it would be really important reform, but it would be good to just have the truth. I'm just in favor of the truth everywhere. I want to ask you Jason Falinski about something else that you are really passionate about. You suggested that the government revisit the idea of allocating the state's a percentage of income tax and then allowing them to set their own individual rates over time.
KARVELAS: Walk me through this. Why is this important to you?
FALINSKI: Well, look, I think so. There's a debate that's been set off by Dom Perrottet the reforming Treasurer in New South Wales. He has been talking about, look here are some medium to long-term problems that the States are going to have in terms of funding services that our community relies on whether it's a Labor or Liberal government and whether it's New South Wales, Tasmania or the Northern Territory. The key though, is at the moment our Federation works that the Commonwealth collects roughly 80% of the taxes, but the states provide 80% of the services and do 80% of the spending. The problem with that is twofold firstly at state and federal elections, there is, the voters don't have a proper nexus. So it's state elections people can continue to promise, you know, increased spending on health education transport police on the belief that the Commonwealth government is going to pay for it. When we get to Commonwealth elections political parties compromise lower taxes and higher transfer payments or vice versa. And the result of that is that there's not that sort of option if you want to spend more money on health. Well, it means you're going to have to have higher taxes. So that people can actually evaluate the benefit cost of a particular party's proposal. The second problem is that so much of the economic reform that we're looking at in Australia at the moment sits with a States, whether it be planning law, transport, infrastructure, etc. But the problem they have is as they improve productivity and their state economies they are disincentivised to do that because the Commonwealth gets all the gain through higher tax receipts and at the Grants Commission, the Grants Commission actually punishes states that are outperforming by allocating funding to states that are underperforming. So the incentives that at a federal level or in our federated system are actually on the downside and suboptimal. And I think we have this moment where you've got the Andrews government, The Berejiklian government, the Marshall government and the Tasmanian government talking about looking at these reforms and seeing how we can design a better system in Federation. And I know Josh Frydenberg and Michael Sukkar are also hot to trot on this as well. So I don't think we should waste this moment and it's an opportunity that all political parties should put aside politics and really grab with both hands.
KARVELAS: They're not so much hot to trot on this specific proposal that was States raising their own revenue.
FALINSKI: Well, I don't know that that's true. I think that everyone in this debate has been burnt. So as you'll remember Malcolm Turnbull in about 2015 proposed that the federal government fake a part of the income tax system hand that over hollis bolus to the states and they could after a period of time set their own rates and what income levels and you would have a competitive federal system where people are states were setting income taxes at different levels and having that debate about we all spend more on health, but it means our taxes are going to be high you could have that debate and in the United States, you see that in California that has relatively high public services, but very high public taxes. Whereas in Texas, they don't have an income tax, but they don't have the same level of spending on public services as well and people get to make that comparison and get to make that choice. That's how Federation should work or competitive Federation should work and I think it's something that we should you know, all of us come to the table and realize yes, this is politically going to be difficult but the benefits to our nation as a whole and Australian people are quite huge.
KARVELAS: And just finally to you on this Stephen Jones. I don't imagine you're an enthusiastic backer of what's being proposed here.
JONES: Look, Jason's identified half the reason why he's kicked in this debate and why the New South Wales treasurer has kicked off this debate. It's absolutely true that the state governments have got problems with their budgets in part that's about the government, the federal government not keeping pace on its side of funding agreements, whether they be health or in the education sphere, but Jason also knows the Commonwealth government has got a fiscal problem, a big fiscal challenge coming its way. In part the 95 billion dollars worth of unfunded round 3 of tax cuts, but he also knows that with an Aged Care Royal Commission looming with a final report looming in less than 12 months time. The only answer to a lot of those problems is more money into the aged care sector. They know that their budget surplus for the next or the current financial year is in part funded from a 4.6 billion dollar one-off underspend in the NDIS. So there's a crunch time coming down the track. There is a revenue problem. Jason can see it and state governments can see it. Unfortunately, I think he's probably pulling on one of the wrong levers here, but I welcome the fact that they realised that a whole bunch of the things that they campaigned on not six months ago are actually not true. And that we have some significant revenue problems that we’re going to need to solve in this country. It would be good if we could do a lot of those in a bipartisan way.
KARVELAS: Imagine bipartisanship. Look, thank you so much to both of you for coming on the show this afternoon.