VAN ONSELEN: It would be nice to get a look at that Commission of Audit report but maybe we’ll get to that in a moment. Let me bring you in, Nick Champion. You’re prepared to give your Party the two-fingered salute on the Carbon Tax, you said it should be repealed, you‘ve walked away from that, of course. How about giving me something on the GST? What do you reckon? That the GST, if not increasing it, what about broadening it? So that the tax base can get to where really senior bureaucrats say it needs to get – people like Parkinson and Stevens – these are not small men in the world of economics.
NICK CHAMPION: Well look, I joined the Labor Party to oppose regressive taxation in the form of the first GST proposal that John Hewson put up and I’ll go to my grave refusing to agree with regressive taxation. If you expand the GST, you’re taxing the poor much more harshly that you taxing…
VAN ONSELEN: But you can fix that on the spending side, Nick Champion.
CHAMPION: Well no, you can’t. You can’t. It’s inherently…
VAN ONSELEN: With all that revenue that comes flooding in from the GST.
CHAMPION: Well no, Peter. It’s an inherently regressive tax and if you look around the world where GSTs have been introduced and increased, it is the poor and the middle class that end up shouldering the revenue burden. And that is not fair and not the sort of society that we want to embrace. We don’t want…
VAN ONSELEN: Nick Champion, you calling it a regressive tax is a nice way for me to go back to Tony Smith and get him to defend the GST. It’s more than seems to be going on elsewhere at the moment. Tony Smith, jump to the defence of the GST for me, is it a regressive tax?
SMITH: Well I’m going to make a couple of points. Nick says all of that but from his whole time in government, he was happy to accept the 10 per cent GST that we brought in back in 2000. He was more than happy to accept that…
VAN ONSELEN: Well it’s like unscrambling an egg, isn’t it? You can’t do anything about it once it’s in?
SMITH: Well look, Nick didn’t voice his views when he was in government, that’s the point I’m making. But the other point I’ll make, Peter, this issue comes up. Sure, it’s a popular view in the business community and Martin Parkinson made some comments last night. But I’ll point out to you, when we were in government, after we got a Senate majority we did a number of things: we did WorkChoices – and we’ve spoken about that on previous programmes. We never sought to change the GST - what we sought to do back in 2000 was bring in an overdue reform and…
VAN ONSELEN: So you wouldn’t even support it, Tony Smith, in the aftermath of this election? You would be disappointed in your Party if it took GST reform to the next election, a little bit like what the Howard/Costello government did in ’98?
SMITH: Look, my perspective on this is we did a major reform back in 2000. The biggest issue now is the quality of spending within the Budget. And I think the Commission of Audit and our first Budget, that’s where the focus should be. Every time there’s an argument about spending, there’s this knee-jerk reaction that we’ve got to increase taxes. I just don’t subscribe to it.
VAN ONSELEN: Alright, Nick Champion, let me come to you. One thing that Martin Parkinson, in his speech, really did do was he slapped down this suggestion that came from Chris Bowen, that the Budget could be brought back to surplus in five years. Martin Parkinson basically said, and he used the kind of words that I am now, but he said that was a ridiculous proposition. Your response?
CHAMPION: Well, obviously we don’t agree. But look, if the Liberal Party want to talk about spending, I’ll give them a couple of saves right off the bat. They can get rid of Direct Action, which no sensible economist thinks that will work. It’s an unscientific scheme. And the second thing that they can get rid of is paying people $75 000 a year to have babies. I mean, we’re now subsidising high-income earners to have babies in this country. So if you’re going to talk about spending, if you’re going to beat your chest about it, you should actually cut it.
VAN ONSELEN: What about on your side though? You’ve sidestepped the question about Chris Bowen. He’s saying you can bring the Budget back to surplus in five years. Even Martin Parkinson is now saying that’s just impossible without massive changes to cut spending. You guys certainly don’t have a great track record when it comes to predicting bringing the Budget back to surplus. Who do we believe, Chris Bowen or Martin Parkinson?
CHAMPION: Well look, I don’t think it’s a question of believing individuals. What we’ve found since the Global Financial Crisis, and governments around the world have had to struggle with this, is that almost all of the economic assumptions that underpin budgets have begun to change very, you know, greatly, in what is a volatile economic environment. I don’t think you can blame bureaucrats or politicians for that. It is just a matter of the times we live in. So we have to sensible about these things. I’m confident that Australian can bring the Budget back to surplus. But Budgets are a matter of priorities, Peter, and this Government has got the wrong priorities.
VAN ONSELEN: And we’ll get a look soon enough in May. We’re almost out of time, gentlemen. But Tony Smith, let me ask you about the WA poll. Are you worried that the Liberals might not pick up the three senators that it did win irrespective of the dispute that went on between Labor, Palmer United, and the Greens?
SMITH: Well look, it’s a tough challenge over there for us, you’re right. On any count in the original election, we won three. This is a by-election, there are no House of Reps elections, and we don’t know what turnout will be, and it’s a very big ask. But, of course, today we had some other news there from Western Australia that will of course dismay voters, with that issue with the pre-poll centre…
VAN ONSELEN: That’s unbelievable. And you, of course, chair the electoral affairs committee, you must just be shaking your head?
SMITH: Well, as I said, voters are rightly dismayed. I mean, the saving grace is that all of those people can vote again. But it does go to the importance of culture within the AEC, and that’s why the Committee really requested the Auditor-General to be in there, and the Auditor-General is in there. But…
VAN ONSELEN: Still didn’t save the situation, Tony Smith. I’m looking forward to your report on all of this, whenever that comes out. We’ll come back to you on that in a while. But I’ve just got to quickly ask you, Nick Champion, before we lose you. Not very helpful for the Labor campaign, come Saturday, to have your lead Senate candidate have it revealed that he had an assault conviction, I think it was, Joe Bullock, that he hadn’t disclosed to his own Party, before becoming the number one candidate. Not helpful at all.
CHAMPION: Well, I don’t know anything about it Peter, so…
VAN ONSELEN: How convenient! He who sees and hears no evil!
CHAMPION: I haven’t seen the brief on it. No, truly haven’t. But look, you know, when you’re a candidate, everybody gets a good look at you, and I guess they make, you know, decisions accordingly. But I couldn’t comment on this matter.
VAN ONSELEN: Alright, you are well briefed if you ever have to front the ICAC inquiry. Nick Champion, Tony Smith, we’re out of time. Thanks both of you very much.
SMITH: Thanks Peter. Thanks Nick.