Australian Government coat of arms

Prime Minister of Australia

The Hon Malcolm Turnbull MP

Interview with Neil Mitchell, 3AW

25 November 2016

Prime Minister

E&OE

NEIL MITCHELL:

Yes – It’s a long way, but the Census – you told me back in August heads would roll over the debacle with the Census. We’ve got a report in now, who is accountable?

PRIME MINISTER:

The IBM has acknowledged responsibility, they’ve apologised, they’ve made a very substantial financial settlement with the Government. There have been a lot of personnel changes at IBM as a consequence. I suppose heads have rolled there. And we’ll be working through the recommendations of Alastair MacGibbon’s review of the incident with the ABS and indeed with other government departments to make sure that we learn the lessons from this failure.

NEIL MITCHELL:

So there is no heads rolling within public service, within government? Because they should have seen it coming.

PRIME MINISTER:

Well there has been criticism of the ABS, they should have supervised the contract better. There’s no doubt about that. But the important thing is to make sure that the lessons are learned and the Australian people get a better service from the government and from government agencies in terms of managing these IT contracts. Look, I have to say, and I’m not trying to protect anyone here at all but overwhelmingly the failure was IBM’s. They’ve acknowledged that, they’ve paid up, they’ve accepted the blame and they should have. They were being paid big money to deliver a particular service and they failed.

NEIL MITCHELL:

Can you tell us how much they paid?

PRIME MINISTER:

It is confidential but it’s a lot of money.

NEIL MITCHELL:

Does it cover our costs?

PRIME MINISTER:

Yes it does. It absolutely does.

NEIL MITCHELL:

So the whole debacle cost the Australian people nothing?

PRIME MINISTER:

The costs, the additional costs were well covered by the settlement yes, indeed.

NEIL MITCHELL:

Well –

PRIME MINISTER:

Look, can I tell you I did not – it would not be an exaggeration to say that we had a collective sense of humour failure about IBM’s performance here. They have fessed up, they have paid up and we’re going to learn the lessons of this incident very diligently.

NEIL MITCHELL:

This was estimated it cost us multi-millions of dollars. You’re telling us it’s not costing us anything now. So IBM has paid up that much?

PRIME MINISTER:

IBM has paid up many millions of dollars, yeah.

NEIL MITCHELL:

Will they ever get any work with government again?

PRIME MINISTER:

All government contracts are assessed through a proper tender process and all of these things are, you know, there is a very clear probity process Neil, but obviously everyone’s performance and track record are all taken in to account when tenders are assessed but they’re not assessed by me.

NEIL MITCHELL:

How do you reckon we’ll do the next Census - online or paper?

PRIME MINISTER:

I think online will continue. I think that trend, you see it in every other aspect of our lives. I think that’s a trend that’s unstoppable. The failure here, let me summarise it very quickly – this was not a particularly clever attack or some great international assault on the Census. This was a common, or series of common or garden utterly predictable, utterly foreseeable denial of service attacks, which is really, is not hacking, it’s really just bombarding a website with a lot of hits so that the server is clogged up. It’s like parking a truck in front of your driveway so you can’t get your car out. It’s completely predictable. IBM had a contractual obligation to deal with it and they failed. And that’s what happened and how and why that happened has been examined, but it was very basic stuff.

NEIL MITCHELL:

Okay. And now everybody in Government is going to be educated further on the basics of cyber space?

PRIME MINISTER:

Exactly you’re right – absolutely. We need to have much greater awareness. You see, one of the problems you get in governments, and I might say in companies too, is that a lot of the cyber internet technology issues are left to the systems administrators, left to the information officer, the technical officer and the CEOs, the bosses, the directors, they don’t have to be the programmers but they’ve got to be aware of what the problems are and what the fundamentals of network architecture are because otherwise they don’t understand the risks they’ve got to mitigate.

NEIL MITCHELL:

So our people didn’t understand?

PRIME MINISTER:

I think that what is very clear is that ABS put too much faith in IBM and look to be fair - IBM is one of the biggest brand names in the computer world. It is almost synonymous with the 21st century technology. They used to say, here’s a good bit of irony Neil, there used to be a saying no one got fired for buying IBM -

NEIL MITCHELL:

Yeah but you haven’t fired anybody?

PRIME MINISTER:

I can assure you the lessons will be very very carefully learned, I can assure you of that.

NEIL MITCHELL:

The backpacker tax – now this sort of is causing enormous angst. Can you guarantee that if you get this through it’s not going to increase the price of fruit and vegetables?

PRIME MINISTER:

The price of fruit and vegetables is determined by a whole lot of things, mostly of course of which is the weather -

NEIL MITCHELL:

Including the picking costs and the backpacker tax will affect that?

PRIME MINISTER:

Neil, can I say that the bottom line is this, if – let me just get back to the [inaudible] here. Non-residents pay 32.5 cents tax from the first dollar. What had been happening was that backpackers, working holiday-makers who are for the most part by definition not residents, were filling in forms saying they were residents and getting the benefit of the tax free threshold.

NEIL MITCHELL:

But they were entitled to do that?

PRIME MINISTER:

Not entitled to do it if it is untrue. In fact it’s a rort if it’s not true.

NEIL MITCHELL:

So the backpackers were rorting the system?

PRIME MINISTER:

Well the forms are being filled in generally by labour hire companies.

Now what happened was the ATO cracked down on that and that’s their approach. So what the ATO is doing is enforcing the law and so what we have done is said, okay, let’s change the law to make the tax 19 per cent from the first dollar and that will give backpackers a net remuneration that is competitive with other destinations like New Zealand and so forth.

That’s what we are seeking to get passed through the Senate.

Now the fact is, Peter Whish-Wilson from The Greens, I heard on the radio this morning, he was saying: ‘Oh well if the 19 cents isn’t passed by the Senate on the second attempt and the law stays the way it is, backpackers will continue saying their residents even if they’re not residents but because the sums are small the ATO wont chase them up.’ Well, you know if we took that approach to the tax system no one would be paying any tax.

NEIL MITCHELL:

Okay. But you’re still determined to get it through at 19 cents?

PRIME MINISTER:

Yes, of course we are. Look, we understand the nature of the Parliament. But if we abandon it, if we do nothing, we have not changed the law to make the tax 32.5 cents. I want to be clear about this. The only thing that has changes is the Australian Taxation Office has decided to enforce the law

NEIL MITCHELL:

Okay, this is not about money – it’s about fairness, is it?

PRIME MINISTER:

Yes, of course it is. It is about fairness and the fact is the ATO is doing its job and enforcing the law and unless we change the law people who had previously been able to get away with saying that they’re residents when in fact they are not residents will be caught and that is the point. There is this idea that the law said that you didn’t have to pay tax if you’re a backpacker and the Coalition Government changed the law to make it 32.5 cents – that’s not true. All that has happened, the change was the attitude, the enforcement of the ATO.

NEIL MITCHELL:

We are talking to the Prime Minister in our Canberra studio. Is the Australian of the Year system broken and being dominated by activists, lobbyists and leftists as has been speculated? Are you happy the way it is working?

PRIME MINISTER:

Well I think like a lot of people I’d like to see Australians honoured, I don’t want to talk about any individuals in the past obviously, but I’d like to see Australians that have not just done their day job, but have something out of the ordinary, extraordinary. I mean Rosie Batty is a very good example. Ian Kiernan - going back. Ian is an old friend of mine I should disclose. But you know, Ian who founded Clean Up – what an extraordinary thing he did. I see Twiggy Forrest has been nominated.

NEIL MITCHELL:

Have we got it right at the moment?

PRIME MINISTER:

Well we haven’t appointed anyone for this year.

NEIL MITCHELL:

But the past few years there has been criticism of it.

PRIME MINISTER:

There has been but Neil, I don’t want to embark on criticism of individuals because they’ve all got their virtues, but let me just identify one person that has been nominated this year, I think, from Western Australia, Twiggy Forrest.

NEIL MITCHELL:

Twiggy Forrest.

PRIME MINISTER:

Now there’s Twiggy – he has built in the face of competition from Rio and BHP, he’s built a massive, one of the big iron ore companies. And of course he’s been such an enormous philanthropist and campaigner for social justice.

NEIL MITCHELL:

But he’s also described as an anti-slavery advocate. That’s an indication of the sort of nonsense that goes on around this award – an anti-slavery advocate! Because he’s campaigned for aboriginal -

PRIME MINISTER:

Well there’s nothing wrong with being against slavery.

NEIL MITCHELL:

No, but they’re relating that to his work with aboriginals.

PRIME MINISTER:

No.

NEIL MITCHELL:

No?

PRIME MINISTER:

Let me correct that. He’s done a lot of work on indigenous empowerment and he’s had the whole sort of indigenous employment thing. He has got another agenda which is totally separate which is campaigning against slavery, enforced labour in -

NEIL MITCHELL:

But not Australia?

PRIME MINISTER:

Which is not a major problem in Australia – no. It’s a developing world issue. And what Twiggy argues is that companies in the developed world should be obliged to and should be very alert to whether their goods are being made in those sort of slavery conditions.

NEIL MITCHELL:

Just a related thing, also from Western Australia – Fremantle is delaying Australia Day two days, well three days – the 28th of January because of invasion day. What is your view of that? Do you think we stick with January 26?

PRIME MINISTER:

Yeah - I think there is obviously some controversy about it. There is controversy about most things. 

NEIL MITCHELL:

Yes.

PRIME MINISTER:

But let’s stick with Australia Day on the 26th.

NEIL MITCHELL:

Now the Registered Organisations Bill, on the unions, it got through. Part two is going to be harder, the Building Commission. Are you confident? You’ll persist with that? Do you need to persist with that? Or are you happy?

PRIME MINISTER:

Oh absolutely and let me give you some good Victorian examples. There are 270,000 Victorians working in the construction industry. There are 22 Victorian CFMEU representatives before the courts for breaching of industrial law. In Victoria over the last decade the CFMEU has been fined $4.3 million – to the highest level in any state. And they have been found to breach the law on building sites in Victoria on including a project for 58 schools, road and rail projects, Mitcham and Rooks Road rail separation, Southern Link upgrade, the Florey Neuro Science Institute at Heidelberg, the Simpson Army Barracks, Melbourne Institute of Technology.
I mean the CFMEU’s lawlessness in Victoria is so well known. Now, if we can get the rule of law reimposed, restored in the building sector, that will increase productivity, it’ll increase the ability of people to work in the industry because they won’t have to get past the union, being able to dictate which subcontractor, which tiling contractor for example can get a start and of course it will, by reducing that industrial lawlessness, you’ll reduce the cost of these union jobs.

NEIL MITCHELL:

But aren’t you, in those figures you run through, aren’t you just showing they are subject to the law? $4.3 million in fines, all these other convictions?

PRIME MINISTER:

The problem is the fines are too low, Neil. They treat them like parking tickets. I mean this is a very, this is a union that gives millions of dollars to the Labor Party and The Greens. This is a union that campaigns in its own right very aggressively. This is a powerful union and they’ve got the Labor Party absolutely by the throat.

NEIL MITCHELL:

Would you like to see it deregistered?

PRIME MINISTER:

Well, the feasibility of that is, that is a very hard thing to do.

NEIL MITCHELL:

It happened to its predecessor, the BLF.

PRIME MINISTER:

I know. My advice is that there are many legal obstacles to do that and the route we are taking is one where we simply restore the ABCC and the rule of law is applied. But you know, you raise a very good point. Because, you know Bob Hawke, former president of the ACTU, when he is was Prime Minister of Australia, he deregistered the Builders Labourers Federation. He didn’t take this lawlessness from them. What Bill Shorten is doing, he is defending the CFMEU and which of course a component part is the BLF.

NEIL MITCHELL:

Well the BLF leadership, some of the leadership went to jail for corruption. It was at a rather different level -

PRIME MINISTER:

Well hang on there is a few union officials going to jail for corruption, being charged with corruption now. That’s one of the good things we’ve achieved with the Registered Organisation -

NEIL MITCHELL:

Yeah but they’re entitled to due process.

PRIME MINISTER:

Well of course they are. I’m not suggesting anyone should be denied due process.

NEIL MITCHELL:

Okay, speaking of unions, the hospitality unions in Queensland say if Sunday penalty rates are dumped they’re going to force them to be paid anyway. What’s your reaction to that?

PRIME MINISTER:

The matter for penalty rates is a matter for Fair Work Australia and that is being dealt with the independent umpire.

NEIL MITCHELL:

They’re saying they won’t cop it. The unions are saying they won’t cop it, that  they’ll force through an arrangement, they’ll force the employers to pay it.

PRIME MINISTER:

Well I think you’ll find what they’ll have to do then is they will have to comply with the law. So I can’t – I don’t know what the specifics are but the law should be enforced. Everyone must obey the law.

NEIL MITCHELL:

In simple terms, what does Minister Dutton want to achieve attacking Lebanese people and linking them to terrorists? What is he actually saying?

PRIME MINISTER:

Peter Dutton has been recklessly misrepresented by Bill Shorten.

NEIL MITCHELL:

What’s he saying?

PRIME MINISTER:

What he has said is that the crimes of a minority, a very small minority should not be allowed to besmirch the reputation of the rest of the community. Whether you define the rest of the community as the Muslim community as a whole or the Lebanese Muslim in particular - 

NEIL MITCHELL:

But wasn’t he blaming Malcolm Fraser for letting their parents in?

PRIME MINISTER:

No.

NEIL MITCHELL:

No he wasn’t?

PRIME MINISTER:

What Peter Dutton observed, Peter Dutton was in an interview and it was put to him that the Fraser – it was called the Lebanese Concession where a large number of – where normal immigration rules and restrictions and qualifications about skills and so forth were waived in the 1970’s, was over 40 years ago. It was put to him that that had been a mistake, it was controversial at the time, it has been much criticised in the past. But the fact is, as Peter said, Peter said talking about the people who came, he said I am not going to allow people who are hardworking, who have done the right thing by this country, who have contributed, who have worked hard, who have educated their children to be defined by those people who have done the wrong thing. And so the reality is we are a multicultural nation.

We are a nation of immigration. We’ve got a very diverse community. That is one of our great joys, but we also have to make sure that our immigration program both is diligent in the way it screens people. You know the 12,000 Syrian refugees we are bringing in? About half have got here now. We have already screened out 22 people who were security risks. And some people have said, ‘why didn’t they all arrive in the first week?’ Well that’s because we’ve got to go through it carefully. We take this responsibility very seriously.

NEIL MITCHELL:

I know you need to get away. Two very quick things on tax, are you looking at a user pay systems tax on the roads? Do away the petrol day and user pay per kilometre of travel?

PRIME MINISTER:

Well, no, the answer is we are not. We are certainly not contemplating that but it is an issue that has got to be looked at over the long term and can I just explain why. If you have got a – and there is equity here – if you’ve got an old gas-guzzling older car, you are probably paying 4.5 cents a kilometre in terms of your petrol, fuel excise. If you are a wealthy person and you’ve got a Prius or a Tesla, an electric car, you are not paying anything. And so one of the concerns that people in the transport sector have got, and they’re saying well as we move to more electric vehicles we’re going to get to a point where that fuel excise which is in effect a transport tax, because obviously the more fuel you burn, the more miles you drive the more tax you pay - that is going to become less and less. And the people who will pay it are the people with the older cars who generally are people on lower incomes.

NEIL MITCHELL:

And the other quick one, will you review the negative gearing policy?

PRIME MINISTER:

We haven’t got any plans to review the policy we took to the election on that. Can I just say to you that the issue of housing supply and housing affordability is overwhelming a question of supply. What we need to do and we are working with state governments now to do that is to zone for more density, for more housing, for more affordable housing. The critical thing is to build more dwellings, that’s what you need to do.

NEIL MITCHELL:

Thank you very much for your time, I appreciate it.

PRIME MINISTER:

Thanks a lot. Thank you.

[Ends]