Thu, 08 Feb 2024 - 06:27



Shadow Minister for Science and the Arts

Shadow Minister for Government Services and the Digital Economy

Manager of Opposition Business in the House






MIKE JEFFREYS: The Honourable Paul Fletcher, MP, is the Federal Liberal Member for Bradfield, Shadow Minister for Government Services and the Digital Economy. He's on the line. Hello Paul.

PAUL FLETCHER: Good to be with you, mate.

MIKE JEFFREYS: Tax cuts. That still is a strong issue. Bit of a motion being displayed by both leaders. You say it matters that the PM broke his promise. Does it matter more than people getting money in their pockets?

PAUL FLETCHER: Well, it's clearly enormously important if you've got a Prime Minister who has said, either himself or one of his ministers, has said on over 100 occasions that they would honour the legislated Stage 3 tax cuts, and he then cynically dumps that promise. That is something I think all Australians should be concerned about, amongst other things. It means how can you believe anything this Prime Minister says to you about tax or anything else in the future? We've been asking questions in the Parliament this week, for example, about whether the Prime Minister plans to change the tax treatment of negative gearing. Many Aussies have an investment property. They work hard to provide for themselves. Perhaps that's the way they're saving for retirement. But people are rightly anxious that Labor might be thinking about changing the tax treatment of negative gearing. And the problem is that even if Mr Albanese now says he doesn't plan to do that, how can you trust him? Because when it came to the Stage 3 tax cuts, he said, he and other Labor prominent figures said over 100 times that they would be maintaining the legislated Stage 3 tax cuts. Of course, those were legislated by the previous Coalition Government several years ago. He said before, during and after the 2022 election, no plans to change. And then, of course, on January the 25th this year, he announced that they would be changing.

MIKE JEFFREYS: I don't think this is good in the bigger picture because I believe there used to be a healthy scepticism in this country, particularly about government and our politicians. But my reading of it now is it's become more like a dismissive cynicism. So I don't think it does the whole process any good. Do you think I'm overstating the situation there?

PAUL FLETCHER: I think it does reduce people's confidence in the political process. And one of the important points here is that the whole thing about the Stage 3 tax cuts is that they were a structural reform of our tax system. What we wanted to do was encourage people who wanted to work hard to get ahead, aspirational Australians. And so the whole design of this was that between $45,000 and $200,000, anywhere in that range, you would know that you are only going to be paying 30 cents in the dollar. So if you were thinking about doing some extra shifts or getting an extra qualification so your earnings went up or maybe starting a business, you would know that right up to $200,000, the most you'd be paying is 30 cents in the dollar in tax. And that was a very deliberate intention, a major policy change, getting rid of the 37 cent tax bracket. So we would now have the 30 cent bracket and the 45 cent bracket. That was the plan and indeed that remains in legislation right now. But what Mr Albanese has said is that he's going to change that and of course the government introduced legislation this week to change it. I also make the point, of course, the reason it's called the Stage 3 tax cuts is because the Coalition and government first introduced a Stage 1 and a Stage 2 which were very much focused on reducing the burden on low and middle income earners. And the whole point of Stage 3 is that people can look at the tax arrangement, the tax bracket, tax structure and they can say, well, no matter how much I'm earning now, I know that if I earn more, my tax rate is not going to change. So it was a long-term structural reform legislated several years ago due to come in 1 July this year. And one of the things that Mr Albanese has done in this cynical political decision is that he's really made it much harder for any future government that wants to engage in serious reform of our tax system.

MIKE JEFFREYS: The cost of living, I mean, there are so many significant reasons why the cost of living is such an issue for so many Australians. But how can we change it? You know, my favourite Irishman, somebody said to him, how do you get to Dublin? He said in the first place, I wouldn't be trying to get there from here. But here we are. Where do we go to?

PAUL FLETCHER: Well, the first thing we have to see is a government and a Prime Minister that realises how serious this problem is. Because, of course, for most of last year, the Prime Minister and his government were much more focused on The Voice. They couldn't explain to us exactly what it was and how it was going to work, but that's what they seem to spend most of their time on. Even as Australians were feeling more and more pressure in terms of gas and electricity bills up by more than 20 per cent, food, which is up by almost 10 per cent. And of course, mortgage interest rates up 12 times under this government. Now, bear in mind that Mr Albanese came to power promising he was going to reduce energy bills by $275. On average, they're now up by around $1,000. So not down, but up. Similarly, he said life, he promised cheaper mortgages. And by contrast with what he's promised, for many Australians, life is now considerably more difficult. In fact, we put out some numbers, Shadow Treasurer Angus Taylor put out some numbers recently pointing out that if you take somebody on the average wage, their real net disposable income is now down about $8,000 in just 18 months. It's about $150 a week people have gone backwards in 18 months. And yet somebody on that same salary, that same wage, the effect of the tax cuts that Mr Albanese is now proposing, will benefit them to the tune of about $15 a week. So they're down $150 a week based on factors like the real breakout inflation that we've seen, the rise in mortgage interest rates. And at the same time, the tax changes that Mr Albanese is making will benefit people on that wage by only about $15 a week. The fact is, most Australians are feeling considerably worse off than they were 18 months ago when this government came to power. And the reason they're feeling that is because they are considerably worse off. So what we need is a government that is getting government spending under control rather than putting on more and more public servants. And we need a government that has got its policy settings designed to get inflation down as quickly as possible. And most of all, we need a government that is focused on these issues rather than is often seems to be the case with Mr Albanese, focused on things that are not the day-to-day concern of most Australians.

MIKE JEFFREYS: Government spending is certainly a factor, but the real standout when it comes to cost of living for so many people is housing. The promised number of houses is not going to be met. There's just nowhere in the world. Rents are so high. The driver here is the very high rate of immigration. If the coalition were to get into power, would they cut the rate of immigration?

PAUL FLETCHER: We have certainly highlighted the point that we've seen a very sharp rise in the numbers of what's called net overseas migration. And at the same time, we are not seeing, as you rightly say, the number of new houses being built that we need to keep up with that. Indeed, new housing starts are down significantly over the last year or more. There are various promises that Mr Albanese has made in terms of housing, but we're actually seeing new housing starts going in the opposite direction. And similarly, when it comes to infrastructure, we had a huge focus on infrastructure when we were in government, and I was Minister for Urban Infrastructure for several years. Projects like Western Sydney Airport, like WestConnex, new rail projects, new rail in Sydney and Perth, all around the country, North-South Corridor in Adelaide. But what we've seen under this government is they've actually cancelled quite a range of infrastructure projects. And that's a real problem because as we see our population grow, you need to support that with infrastructure and you need to support that with housing. So that connection you're pointing out is absolutely right. This government doesn't seem to have a plan to deal with it. They've let the net overseas migration numbers increase sharply. At the same time, housing starts not keeping up with that and they're actually winding back, they're cancelling infrastructure projects rather than delivering new ones.

MIKE JEFFREYS: So if you were to, say, get into power in the next federal election, you would inherit this situation. Would you cut back on the migrant numbers?

PAUL FLETCHER: What we would of course want to do is make sure that we had an integrated policy approach where we were looking at these issues in their totality. Now our immigration spokesman, Dan Tehan, has been speaking about these issues a fair bit, as indeed is our housing spokesman, Michael Sukkar. And these are issues that we will continue to look at closely as we move to the rest of this term and move towards the next election. And certainly in advance of the next election, we'll be very clear with the Australian people about how we'll be dealing with these issues, as indeed we would be clear about how we're going to be dealing with the tax issues. And we've made it clear that what we intend to do is go to the next election with a tax reform package that is very much in keeping with the stage three tax reforms, a package designed to deliver lower, simpler and fairer taxes.

MIKE JEFFREYS: To an issue that directly connects to your shadow government portfolio, you say a review is needed of Services Australia and Centrelink. What do you envisage?

PAUL FLETCHER: There's a clear problem with Services Australia. You know, if you look at how long it took in the last year, the year ending June 23, to get, if you lodge an application for the age pension, it was taking on average 33 days for that to be processed. On the most recent figures, that's now blown out to 61 days. So you've gone from 33 days to 61 days. And we see that pattern across a whole range of services that people might be applying for. If you call up Services Australia in 2021-22, the year that was almost entirely under coalition government, if you called what's called the disability sickness and carers line, on average you're waiting just over 20 minutes. On the most recent numbers, under this government, that's blown out to 28 and a half minutes, nearly half an hour. So we are seeing the experience you have when you call Services Australia being much worse, you're having to wait much longer. When you apply for benefits, it takes much longer for that to be processed. And the reason that's happening is because service standards are slipping under Bill Shorten, who's not focused on doing the detailed work to maintain service levels. And what we need to see, what I've been calling for, is a root and branch review of service levels in Services Australia. We need to see clear plans from this government as to how it's going to return to providing top quality service levels, service levels Australians deserve, from Services Australia.

MIKE JEFFREYS: So if you were to investigate why things are the way they are, and it certainly sounds pretty dispiriting for anybody who's going to these particular groups, Central Inc and Services Australia, how would you go about it? Would you have internal investigations or would you bring in the contractors so as to not have the bureaucrats examining them, the bureaucrats examining themselves?

PAUL FLETCHER: I think what you need to do is have a close look, a root and branch review of how services are being provided. And I think it would be a very good idea to be drawing on perspectives from the private sector about how services are efficiently delivered. But we know there are some decisions that Bill Shorten has made that seem very hard to understand. For example, Services Australia used to have a contractor with a business called Serco who are a big provider of services including call centre management. And Mr Shorten chose to get rid of them. More than 600 call centre staff were set to lose their jobs. And since that decision was taken, we've seen those called hold times really blow out. So there have been some decisions being taken by Mr Shorten that are very hard to understand. And what I would certainly like to see is a root and branch review. And as part of that review, I think Services Australia should be having a look at what is best practice in the private sector so that if there are good ideas that Services Australia can adopt from what's done in the private sector, you know, big banks or insurance companies or telcos in the way that they deal with their customers and the way that they manage incoming calls from customers, then I think Services Australia should be having a look at that. But unfortunately, under Mr Shorten, there's not much of a focus on serving Australians. Sadly, he's more interested in playing politics.

MIKE JEFFREYS: Paul, appreciate your time and comments. Thanks for coming on the program.

PAUL FLETCHER: Thanks indeed, Mike.