SUBJECT/S: Malcolm Turnbull’s commitment to Tony Abbott’s policies; Scott Morrison’s wrong approach to the Budget; Question Time Tactics; The Government’s response to the Financial Systems Inquiry; Polls.

FRAN KELLY: Prime Minister Malcolm Turnbull standing by the Government’s record on spending cuts. Tony Burke is the Shadow Finance Minister and Manager of Opposition Business. Tony Burke, good morning.


KELLY: Labor was working overtime in Parliament yesterday to try and tie Malcolm Turnbull to Tony Abbott and some of his unpopular policies. But you’d have to say the polls suggest your strategy’s not working. Voters have had a look at the new PM and they appear to like what they see.

BURKE: Well at the moment we’re in that phase where Malcolm Turnbull stands up, he says he’s not Tony Abbott and people cheer. What we now need to work through is what will he actually do? We’ve heard the talk, but what will he actually do?

Now, on this, Scott Morrison has flagged very directly he’s not intending to change the strategy. Every time he says he doesn’t believe there’s a revenue problem, there’s only a spending problem, it takes you all the way back to the cuts to the household budget and consequently the hit to consumer and business confidence that occurred after the 2014 Budget.

That’s why we went measure by measure through those ones from the 2014 Budget that were still on foot when Malcolm Turnbull became Prime Minister; to ask whether he was continuing with them. In every case, when we put them to him, they’re still his policies.

KELLY: Well they are still his policies as you say. All existing policies remain on foot, that’s what he said, but the PM also left the door open to amendments saying ‘policies will change often,’ ‘they’ll be reviewed and considered’ and ‘they’ll change often to get through the Senate’. He’s flagging a more flexible approach than Tony Abbott every did, I’m just wondering where this particular strategy gets you?

BURKE: Well, let’s go through the different measures that we put to him in Question Time yesterday.

KELLY: Let’s not go through all of them.

BURKE: Well no, let’s start with the GP Tax. They want people to believe they’ve abolished the GP Tax. But what they’ve done, as Brian Owler the Head of the AMA has made clear, is they’ve simply introduced it by stealth; frozen the rebates for doctors so that you end up, year-on-year, seeing bulk billing rates gradually whittling away.

Now, that was a legitimate question, absolutely legitimate for us to put straight to Malcolm Turnbull and what’s the answer? He wants to continue with the exact policy Tony Abbott put in place.

Make no mistake, what happened in the 2014 Budget, Tony Abbott was already unpopular, but it was when he started making those decisions the view of voters crystallised that his policies were going to hurt their households. If Malcolm Turnbull is going to continue on the exact same path, you can bet Labor’s not going to let up on this.

KELLY: I understand that, but I imagine the voters are still looking and watching and there’s still a fair bit of room for a new PM to put his stamp on things. What was clear yesterday was a shift in Labor’s tactics. You went from effectively attacking the man last week over Malcom Turnbull’s personal wealth and what he did with it, to attacking his policies. Are we going to hear any more from Labor about Malcolm Turnbull’s investments in the Cayman Islands?

BURKE: On two days last week, in the second half of Question Time each day, we asked questions, not about whether or not…

KELLY: And a number of interviews, and press doorstops, and Parliamentary speeches.

BURKE: We asked questions not about whether he was wealthy, but about money being put in a very specific tax haven, which the Tax Commissioner himself has highlighted and which is often been a theme at G20 meetings.

That was a legitimate line of questioning and it was something that we were always going to ask those questions last week. But it was never going to be the ongoing only issue that Labor was going to talk about.

Of course the most important issues will always be how the Government’s policies hit households and how the Government’s actions hit the personal wealth of ordinary Australian households.

KELLY: Do you think given the Ipsos Poll, which they were out in the field at the end of last week after Labor had asked those questions about the Cayman Islands, do you think that backfired? Do you concede it was a mistake? Voters didn’t like, by the looks of it, didn’t like Labor playing the politics of envy, which all goes to the electorate crying out for a new approach to politics.

BURKE: I will say Malcolm Turnbull very cleverly tried to twist it so that the claim was being made our questions were about whether or not he had money, not about whether or not he had his money in a tax haven. So, that twist happened…

KELLY: Well you cannot deny some of Labor’s rhetoric was about him being a rich man, him being different to other voters. On this program Andrew Leigh said most people when they get a bit of extra cash put it on their mortgage, not into a tax haven – a managed trust – in the Cayman Islands.

BURKE: The questions that we asked Fran were very specifically about whether or not it was in the Cayman Islands; very specifically that’s what the questions were about – were about a tax haven. The issue that you raise, and I agree, the main issues that voters will be concerned about, will be how the policies of this Government affect them and whether or not the language of the new Prime Minister is all talk.

They will be asking the question: If he says he supports action on climate change, why isn’t he now supporting an emission trading scheme? If he says he cares so much about innovation, why is he still supporting $3 billion worth of cuts that went directly to innovation? You can’t just be all talk. For the first few weeks there’s a bit of elation that there’s been a change in Prime Minister, a feeling of relief and people want to know what’s next.

What comes next will involve Government decisions and if, as the new Treasurer has flagged, the theme of those Government decisions is going to be ‘oh, it’s just an expenditure problem,’ then the same mistakes that were made in 2014 and the pain that takes to the household budget, will continue.

KELLY: You’re listening to RN Breakfast it’s 16 minutes to eight. Our guest is Tony Burke, Shadow Finance Minister and Manager of Opposition Business. Never the less, if these poll numbers stay anywhere near this realm, where does that leave Bill Shorten? Peter Dutton told us yesterday Anthony Albanese was positioning for the leadership; how can Labor win an election with a leader who’s net approval rating is minus 24?

BURKE: Well first of all, if you’re wanting information on the Labor Party, I reckon you don’t go to Peter Dutton.

KELLY: That’s fair enough.

BURKE: That’s a reasonable call. But, two things I’d say on that: First of all, new leader, polls of that nature are not unheard of and not uncommon. Secondly, the style of debate if we do move into the sort of debate that you’ve described, actually suits Bill Shorten down to the ground.

While Tony Abbott was there, we were in a straight knock ‘em out argument back and forth and the sort of aggression that characterised Tony Abbott’s time as Leader of the Opposition and as Prime Minister. But if you look at Bill Shorten’s history, Bill Shorten’s history has been one of negotiation and has been one of bringing people together. If there’s a change in the political climate of that nature that we see in the coming months, I think you’ll find it’s going to suit Bill Shorten down to the ground.

KELLY: Can I just ask you, on a policy issue, the Government’s response to David Murray’s Financial Systems Inquiry, we’re going to get that this morning. Top of the list for David Murray was that banks be compelled to hold more capital as insurance against any future financial crisis. The banks warned then that would impose costs that would have to be shared with customers and last week Westpac increased its variable mortgage rate by 20 basis points in anticipation of these new rules.

Both you and the Treasurer, Scott Morrison, were highly critical of Westpac’s move, but isn’t it better for the banks to lift rates modestly now to make them stronger than rely on a tax payer bailout in the event of a crisis which David Murray said could run into trillions of dollars?

BURKE: If I can deal with it in two parts Fran. In the first instance, we want there to be, and we think it’s in the interests of the country and of that sector, for there to be as much as possible a bipartisan approach to the inquiry. So, we’re not getting out ahead of ourselves, we’ll wait until we see the Government’s approach and wherever we can provide bipartisan support, that’s the approach we want to end up with.

Secondly though, the criticism of Westpac, and I think the great frustration people feel, is every time there’s half an excuse for the cost of lending to be claimed to have gone up, you see interest rates go up straight away, and whenever the countervailing situation is there, and there’s a reason they might go down, you don’t get the automatic reductions.

I think people saw that back when interest rates – when the cash rate from the Reserve Bank was going up and interest rates went up in exact lock step, when the cash rate came down the banks didn’t match it. In the same way, when there was half an excuse and it went straight up again, I think that’s the great frustration people feel.

KELLY: Tony Burke thank you very much for joining us.

BURKE: Great to be back.

Tony Burke