SUBJECTS: Tax cuts, the floundering economy under the Liberals, Labor’s direction, penalty rates, John Setka, unions.

PATRICIA KARVELAS: Tony Burke is the leader of the opposition in the House of Representatives and the Shadow Minister now for Industrial Relations. Tony Burke welcome. So what is Labor's final position on whether or not it will support these tax cuts if the government refuses to split the bill?

TONY BURKE, SHADOW MINISTER FOR INDUSTRIAL RELATIONS: Well it's not a matter of whether they refuse to it is we’ll pursue it in the House of Representatives - fair to say we won't get over the line of the House of Representatives - but we then send it to the Senate and we'll pursue it in the Senate. And if it's carried in the Senate then you've actually got a resolution of one house of Parliament that says tax cuts can start immediately. And it’d be pretty extraordinary if the government said no to that.

KARVELAS: Jacqui Lambie will be the key vote in the Senate. Is Labor talking to her about the way she'll vote?

BURKE: Labor is, I’m not. Our senators and Jim Chalmers will be our lead on this. He'd be having those conversations but I’m not in a position to go person by person across the Senate crossbench, I haven't been part of that.

KARVELAS: The government says if you refuse to support the full bill you'll wear the decision from now until the next election. Are you prepared to risk that?

BURKE: They have said this before. Remember when the company tax cut, the big business tax cut, was meant to be the centrepiece of everything and they said ‘we're not splitting it, under no circumstances will we deliver anything other than the full package’? They ran that argument for ages and then eventually what happened? The Senate said this is all that's going to get through and they took it. So the Government will make these comments, they've made these comments before, and it's part of their strategy to pretend they are invincible. But ultimately it's - I don't know whether our members will be successful in the Senate or not, I know it's better for the Australian economy if they are - but the Government will continue as they have on other issues. They always start by saying they won't accept amendments to anything. But ultimately what you can get through the Senate is what you can get through and we'll see how that goes at the end of the week.

KARVELAS: So you're leaving the door open to supporting the full tax bill?

BURKE: No what I'm saying is we're pursuing our full amendments.

KARVELAS: And if they aren’t successful are you leaving the door open?

BURKE: This is standard for every piece of legislation. You never say we're going to try to amend something oh but by the way before we find out if we've got the numbers to do that we'll contemplate defeat and tell you what we do then. On every piece of legislation, if you’ve just got a support or oppose position then that's always public at the start. You worked that through. But if you're seeking to amend then you're arguing for your amendments and we're arguing for every taxpayer to be able to get a tax cut right now. Now that's what our amendments would do. That's what the Government's trying to prevent us from getting through and we are working with the Senate crossbench to try to form a majority to make sure that happens.

KARVELAS: So you're working with the Senate crossbench to try to convince them that your amendments should be supported?

BURKE: Correct.

KARVELAS: And do you think you can get Jacqui Lambie on board, and Centre Alliance?

BURKE: I just said I'm not personally involved in those conversations. With every amendment you work on the basis that if your arguments are right and your arguments are strong, you've got a decent chance of getting the crossbench. Ultimately their votes are their decision and they'll hear the counterargument from the government. But if we thought we had no prospect of getting these amendments across the line then we wouldn't be embarking on the strategy I suspect, but our view is we've got a good chance. But what we know is that it's better for the Australian economy. The Governor of the Reserve Bank has made clear that we need more economic activity. We need a lot more stimulus in the economy. What the government is currently embarking on are two strategies which do the opposite of that: one rejecting the concept of bringing forward the second stage of the tax cuts so that everybody, not just some people, but everybody would get a tax cut now. And the second thing of course they've done which has taken effect today is allow the cuts to penalty rates to go through. So at a time where we need more economic activity the behaviour of this government has been to deliver less.

KARVELAS: Can you explain how Labor has changed following the election loss, aside from a commitment to aspiration? What’s different about Labor now?

BURKE: Well the first thing is we are now working within the framework of what the Government's put forward. We already were in favour of the first lot of tax cuts but they didn't apply to everybody. What we've now done is we've said we'll accept the second stage as well but not only that we will bring them forward to now. And that's not just a better outcome for people, it doesn’t jeopardise the state of the budget in terms of the surplus. And you've got the added benefit that it is precisely what the economy needs. It's not like the state of the economy is some sideline issue. We are at interest rates now from the Reserve Bank, the cash rate, at lower than the emergency levels that are in place during the Global Financial Crisis. The Reserve Bank's getting to the limits of what it can do. And so what you need to make sure of is that people have a capacity to spend within the economy - that means you don't cut wages. And as of today 700,000 workers have had the penalty rates they would have been entitled to cut again.

KARVELAS: Cuts to Sunday penalty rates for retail, hospitality and restaurant workers came into effect today as you just mentioned, at the same time the minimum wage is rising three percent. Will that blunt some of the impact of this tax cut?

BURKE: Not if you relied on the Sunday rates. Oh I’m sorry, will it blunt the –

KARVELAS: Effect of the tax cuts.

BURKE: Sorry I was dealing with a different question. I apologise. Well for some people even if the tax cut goes through they'll end up with less, because of what's happened to their penalty rates. And the simplicity of it is this: you know people have always presumed the one thing that will happen with your wages is over time is they'll go up. We've had a situation where for most workers it feels like they flat-lined. And for these workers, some people will work the same shift this coming Sunday that they worked yesterday and they’ll suddenly be being paid less money for it. It's not just bad for the economy, it's fundamentally unfair. It's not like any of their bills will go down from last Sunday to this Sunday. It's not like from yesterday to this Sunday coming that the expenses and cost of living will be easier for them. And even the small business council has acknowledged that it hasn’t created an extra job. So what we've got is a situation where: bad for the economy; bad for those individual workers and terribly unfair to those individual workers; and in terms of business it's not creating employment anyway. The most important thing for small business right now would be to get people spending money. Letting workers keep their penalty rates does that. And the other thing that does that would be bringing forward the second stage tax cuts.

KARVELAS: The Labor Party has given the Victorian CFMEU boss John Setka an additional ten days to argue why he shouldn't be kicked out of your political party, the ALP. Why the delay?

BURKE: You've got to make sure in anything like this you follow procedural fairness and when the letter came through requesting an extra 10 days to prepare his arguments then in terms of procedural fairness I think it's neither here nor there, particularly given that he's already suspended. So it's not like he's acting as a member of the party in the interim. Anthony Albanese has made clear that we want him out of the party and that doesn't mean you give up procedural fairness in that - that will happen. People will hear the arguments but I don't think anything's going to be compelling, compared to the fact that in so many ways for so many years this man has brought the party into disrepute.

KARVELAS: Should he have been kicked out earlier?

BURKE: You can always argue that when you've got a cumulative situation, there's been a whole series of impacts here and I've had many days even back when I was environment spokesperson. It's one thing for me now answering questions about him when I hold the IR portfolio. But I remember there’d be days where I could even get a message up about the environment because every question was about John Setka. Today we had Michele O'Neill from the ACTU have a media conference with five workers to talk about penalty rate cuts. I met with those workers as well today, before they did the media conference wanting to come here to tell their story about what this means to them. What happened? One question about penalty rate cuts and 14 questions about John Setka. And I think that says it all about the fact that for the cause that we represent this individual is not advancing it. And it’s become a problem all round.

KARVELAS: Setka has pleaded guilty to using a carriage service to harass a woman who's identified herself as his wife. She says they've reconciled and they want to move on. Does that change the story?

BURKE: (Inaudible)

KARVELAS: I'm losing you Tony.

BURKE: Is that better? Look, there would be countless occasions where a partner has told a judicial process that they thought all was well again and the process has said well we're not going to ignore what's happened. And if we're serious about dealing with all forms of violence and harassment then we need to take into account that apologies or someone promising that something will not happen again is relevant. But it is not the end of the story.

KARVELAS: The Federal Government is reintroducing a bill which would allow it to deregister unions under certain circumstances. Are you worried that the controversy over John Setka has generated enough support to get those changes through?

BURKE: I am concerned that his name becomes a distraction to the whole bill because the principle behind the bill matters. And the principle and the reason that we opposed last time - and again they have said it's the same bill that's coming back so you know they'll get the same answer from us. We resolved that in the caucus room today as well, that we'd oppose it again. The principle is really simple. Our reason for opposing it is that workers should get to vote to choose who their representatives are. The representatives of workers should be chosen by workers not chosen by Scott Morrison, and there will be lots of times when people choose a representative who I think well I don't really think that's who you should have chosen but it's for them to choose. It's for them to make that decision collectively. And there's been a whole lot of conversations on this program and on all the media networks about some of the fundamental principles of our democracy and freedom of the press has been spoken about a lot. Freedom of association and the right to organise as a union is just as fundamental. It's critical to our democracy and the concept that the Government will set up a process where they choose who workers are allowed to have represent them is a path that a country like Australia should never go down.

KARVELAS: Tony Burke thanks for joining us.

BURKE: Great to talk to you.


Tony Burke