Australian Government coat of arms

Prime Minister of Australia

The Hon Malcolm Turnbull MP

Interview with Neil Mitchell, 3AW

17 March 2017

Prime Minister

Subjects:

Budget repair, interest rates, Snowy Mountains Scheme 2.0, tax, secure and affordable energy

E&OE

NEIL MITCHELL:

The Prime Minister Mr Turnbull, good morning.

PRIME MINISTER:

Good morning, great to be with you.

NEIL MITCHELL:

The Business Council of Australia who are your supporters in a sense, say we all face cuts in services, lower living standards, higher taxes, if you don’t get the Budget right. They say there is no strategy. What’s your answer?

PRIME MINISTER:

We do have a strategy. In fact, we’ve made over $20 billion of savings, gross savings in the Budget since the election and we have more to go. We’re -

NEIL MITCHELL:

But they know that and they’re still making this criticism.

PRIME MINISTER:

Well what they’re saying is, they’re encouraging the Senate to support our Budget measures. So that’s what we’re negotiating at the moment, Neil.

NEIL MITCHELL:

Are they right that if, you know taxes per household could go up $5,000 a year?

PRIME MINISTER:

Neil, if we don’t reign in the deficit – and we have a plan to do so and bring the Budget back into balance by 2020/21 – if we don’t do that, the inevitable consequence is that we will and particularly our children, will have either lesser services or higher taxes or both. That’s why there is a solemn obligation on us to live within our means. That’s our commitment, to do so. We call on the Labor Party and all the crossbenchers in the Senate to support it.

NEIL MITCHELL:

So we need more cuts in this Budget.

PRIME MINISTER:

What we need to do is to make savings. We need to make savings and we’ve set out a number of them, which will enable us to deliver that trajectory towards a balanced Budget by 2020/21.

NEIL MITCHELL:

Do you need more in this Budget than you’ve already done?

PRIME MINISTER:

We’ve set out a plan that will get there. If we can achieve what we’ve set out in the last Budget and in MYEFO, but of course we are negotiating with the Senate, so you see -

NEIL MITCHELL:

There’s no more pain? We know the pain that we’re going to get, there’s no more pain about to unfold upon us?

PRIME MINISTER:

All the measures that we’re seeking to achieve, are set out in our Budget last year and updated in MYEFO at the end of last year.

NEIL MITCHELL:

That’s enough? That’s enough to avoid this disaster that BCA says is coming?

PRIME MINISTER:

It’s certainly enough to bring the Budget back into balance by 2020/21. That’s what the ratings agencies, that’s what the community expect us to do. But we need the cooperation of the Senate to do so. While we often talk about the crossbench, let’s focus on the responsibility of the Labor Party. Because obviously, anything we agree with Labor can sail through. So the obligation on Mr Shorten is to take up the responsibility and help us to bring the Budget back into balance. But as you know, he went to the last election with an economic plan that had a Budget deficit that was $16 billion higher and had higher taxes to boot.

NEIL MITCHELL:

Prime Minister the NAB has put up some of its rates, other banks are expected to follow. Are they having another attack of greediness?

PRIME MINISTER:

The banks have got to be accountable for their business decisions. The good thing is that because I’m bringing them regularly, several times a year, before the House Economics Committee, they’ve got to face up to their representatives and the Australian people and defend themselves. So that’s what they’ve got to do.

NEIL MITCHELL:

So what’s your view, here and now. They’ve done it, is it justified or not?

PRIME MINISTER:

Well it’s up to the banks to justify it Neil. That is their responsibility. They’ve got to justify it in terms of their funding costs and how they defend it.

NEIL MITCHELL:

But you understand the banking industry better than anybody. Is this justified?

PRIME MINISTER:

[Laughter]

Well Neil that’s very flattering, but the banks run their own businesses. They’ve got to face up, they’ve got to come forward and explain it. They’ve got the opportunity to do so and indeed the obligation to do so, regularly, before the Parliament.

NEIL MITCHELL:

So you’re not willing to say whether it’s right or wrong?

PRIME MINISTER:

What I’m saying is, the banks have got an obligation to deal with their customers fairly. They’ve got to recognise that increasing interest rates puts pressure on households, on families on businesses. So if they choose to increase rates, as they have done, as NAB has done, they have got to defend it and justify it. They’ve got to prove that they’re not just simply trying to up their profits at the expense of their customers.

NEIL MITCHELL:

Look, I agree with that, but what I’m getting a is, have you got a view on this interest rate rise? Is it justified or not?

PRIME MINISTER:

Neil it’s up to the banks to justify it.

NEIL MITCHELL:

Yes, I agree. Do you have a view on it?

PRIME MINISTER:

Well the banks have got to explain. They would say, I believe, that there has been an increase in their cost of funds. They would point to the increase in rates in the United States. I’m sure that’s what they would do. But it’s up to them to prove that. Now, it’s easy for a politician to say: “Well, it’s not justified,” or “It is justified.” It’s the banks business. I’ve required them to come before the Parliament regularly and defend themselves. They’ve got to explain it. If they don’t explain it, then customers, NAB customers, will go somewhere else and I’d encourage them to do so.

NEIL MITCHELL:

Speaking of such issues, this is gaining quite some currency now – are you considering allowing access to super for some housing buyers?

PRIME MINISTER:

Neil I know there’s a lot of discussion about that. Housing affordability is a huge issue. But we’re now in the pre-Budget speculation period, so I’ll focus on getting the Budget ready, working with the Treasurer to make sure that we’ve got the Budget. But I just say this: on housing affordability, I make one general observation. The reason housing is not as affordable as it should be – particularly in Sydney and in Melbourne – is because we have not built enough houses, enough dwellings. That has been because of restrictions on planning and zoning that have not allowed developers to get on with the job of meeting demand. So it’s a supply and demand issue.

NEIL MITCHELL:

Okay but the point remains I guess on what we were talking about earlier about the Budget. There isn’t much room for you to move with any handouts is there? Even if that allows people, accessing super?

PRIME MINISTER:

Again, you’re entitled to make that comment. We’ve got, we obviously, constraints in terms of our budgetary situation. We’ve got to bring the Budget back into balance, so it’s not like the Howard era where we had big surpluses. We’re battling to bring down a deficit and we’ve got an Opposition that has not been supportive of bringing that down. So we’ve got to live within our means. We’ve got to make sure that we make every dollar that we spend count and get the maximum impact from every taxpayer’s dollar that we spend. 

NEIL MITCHELL:

So we don’t look for a generous Budget?

PRIME MINISTER:

Again, it will be a fair Budget. It will be a fair Budget, that’s critical. The first thing a Budget has to be, is fair. Then it’s got to be responsible and it’s got to be –as part of that – has to be and it will be one that will continue to support strong economic growth and jobs. Every element of my economic plan, of our Budget last year, every element is driving economic growth and jobs. There is nothing you can point to on the Labor side that would support a dollar of investment or one job being created.

NEIL MITCHELL:

If you’d like to speak to the Prime Minister, if we’ve got time, we’ll take a call. The new Secretary of the ACTU Sally McManus posted this on social media.

“Turnbull is such a nothing. As a leader he has no presence, no central beliefs he acts on nothing to define him as even existing.”

I hear that criticism a bit, what’s your answer?

PRIME MINISTER:

Well this is a union leader who said that the unions are above the law. She believes that you only have to obey the law, unions only have to obey the law if they agree with it. So on that basis if people thought taxes were too high, they wouldn’t have to pay their tax. Or if they thought the speed limit was too low, they could speed with impunity. I mean what she’s done is defied the whole rule of law. This is the culture of thuggery and lawlessness that - the CFMEU of course is the great example of– this is the culture of the union movement. It’s the culture of the Labor Party in 2017. These are the people, these are the values, or lack of values, that are driving Bill Shorten. So he doesn’t care about the truth. He doesn’t care about the law.

NEIL MITCHELL:

OK, but what about her criticism? You have no central belief that you act on, nothing to define you?

PRIME MINISTER:

Well that’s just abuse, isn’t it? I mean my commitment to freedom, my commitment to the liberty of the individual, my commitment to driving economic growth, my commitment to nation-building infrastructure that will transform our electricity market. Look what we announced yesterday in the Snowy Hydro Scheme.

NEIL MITCHELL:

Yeah I’d like to get to that in a moment but you’re eight months in to this period of Government. By the look of the polls you’re on the nose and this – admittedly she posted this last year before she was this, the new Secretary. But is it criticism that’s coming through of the Government, that it, sort of, stands for nothing, that its undefined. Do you think you’ve had a good eight months? Do you think it’s been a successful start for your Government?

PRIME MINISTER:

Well it is Neil. Let’s go to why the unions are so angry. We had, I had the courage as Prime Minister, to dissolve both Houses of Parliament so that we could get passed laws that would restore the rule of law to the construction sector and deal with the lawlessness and criminality of the CFMEU in particular. Now a lot of people said we wouldn’t succeed. A lot of people, very knowledgeable people in the media, said I’d never get it through the Senate. Those laws have been passed. So that’s an achievement that people said we couldn’t make. We’ve reformed super. We’ve taken on the mess that we inherited form Labor in VET fee help. We have announced and got started on the biggest investment in Defence capability in peacetime in our history. Now these are just some of the very substantial achievements of my Government.

We’re getting on with the job. We are building the infrastructure of the 21st century, we are building the navy of the 21st century -

NEIL MITCHELL:

So why are you on the nose?

PRIME MINISTER:

Well Neil, it’s up to you to provide the character analysis and the political analysis. I’m -

NEIL MITCHELL:

There seems to be a dearth of leadership, not just you personally but if you go to the average person in the street, they say we are crying out for strong leadership at a state and federal level – Liberal and Labor we’re not getting it.

PRIME MINISTER:

Well yesterday, I’ve announced our commitment to increasing the capacity of the Snowy Mountains Scheme by 50 per cent. That’s leadership. That’s nation-building.

NEIL MITCHELL:

Why won’t we look by the way, at nuclear power?

PRIME MINISTER:

Well people talk about nuclear power all the time but for Australia to go down that route would be a very long process. Even if you had bipartisan support and you would need it realistically and you clearly don’t, then it would be more like a decade before you could get something built. So we need action now. I’m taking action now. I’m providing leadership now and results now.

NEIL MITCHELL:

Can you work with Sally McManus? Despite these comments?

PRIME MINISTER:

The answer is, if she doesn’t believe in obeying the law, if she believes the law only applies when it suits her, then I don’t think we’ve got a lot in common in terms of values. This is a nation governed by the rule of law. If she thinks that she and her unions are above the law, then there is not much work we can do with her I’m afraid.

NEIL MITCHELL:

Peter, go ahead please Peter.

CALLER:

Good morning Mr Turnbull. I’d just like to take a bit of issue with you about the CFMEU and the unjust laws. You’ve obviously heard of the Eureka Stockade; the Sydney Mardi Gras, the Sydney Mardi Gras is where it is today because of the unjust laws. Grocon over a two or three-year period had three workers killed on their construction site and will fined $250,000, that’s about $80,000 a life. The CFMEU protests against unjust laws, nobody was hurt, nobody was injured and they get fined $1.2 million.

NEIL MITCHELL:

So what’s your point Peter?

CALLER:

Do you think that’s fair?

NEIL MITCHELL:

Is it fair? Okay, Prime Minister?

PRIME MINISTER:

The law applies to everybody. If people feel the laws need to be changed, they should make the case for changing them and change them through the Parliament. But you cannot have a culture, particularly with large organisations like unions, standing up there and saying because the CFMEU is so powerful, because it is so rich, it decides that it alone is able to break the law, while everyone else has to comply with it. I’m sorry, the law applies to everybody, whether you are the CFMEU, whether you are BHP, whether you are the Government, whether you are a private individual. 

NEIL MITCHELL:

On the issue of penalty rates, will the Government make a submission on the best way to roll out the penalty rate cuts?

PRIME MINISTER:

Well we’ve been asked to make a submission on some technical issues and we’re going through, they are quite complex. In terms of what the Commission has recommended, which is to transition them in, we’d welcome that. They have said, they’ve made a provision decision that they would phase them in over two years, possibly longer. But not as long as five, which they’ve done in the past. I would certainly welcome that. Because the object is, under the modern awards system, is to ensure that when changes are made as far as possible, workers total take home pay is not reduced.

NEIL MITCHELL:

So will you make a submission?

PRIME MINISTER:

We will definitely make a submission Neil, yes.

NEIL MITCHELL:

Okay, I’m just a little unclear, do you support the cut to Sunday penalty rates or not?

PRIME MINISTER:

Well we do support it Neil and I’ve been very clear about that. I just want to be very clear about something else too. This was not a decision of the Government. It was -

NEIL MITCHELL:

I understand that. I’d just like to get a reaction because it’s relevant to this. Bill Shorten the Opposition Leader had a robocall out and about last night. I’ll play you the start of it.

BILL SHORTEN [Excerpt]:

“Malcolm Turnbull’s cuts to penalty rates will rip off 700,000 workers, losing up to $77 per week.”

NEIL MITCHELL:

Then he goes on to talk about a rally. He is saying “Malcolm Turnbull’s cuts to penalty rates”.

PRIME MINISTER:

He is lying, just like he lied to you.

He was in April last year and he said he would support the decision of the Fair Work Commission on penalty rates, even if they resulted in a reduction in Sunday penalty rates to bring them closer to Saturday rates so he knew exactly what was going on.

He promised to you and your listeners here he would accept that decision and support it and he challenged me to do the same. Well of course, we always said we’d support the independent umpire and we have.

So he is the one that’s broken his word and he’s lying there. But Shorten has no regard for the truth, any more than Sally McManus has a regard for the law.

It was a decision for the independent umpire and they made after carefully considering hundreds of witnesses from small business. From pubs and cafes and restaurants and their conclusion was that by bringing Sunday rates closer to Saturday rates, you would create more jobs and more opportunities for employment and we welcome that. The Fair Work Commission -

NEIL MITCHELL:

You agree with that?

PRIME MINISTER:

We agree with that yes. The Fair Work Commission decided to back small business and we back small business but it is important to remember, this was not a decision of the Government. This was an independent, carefully considered decision of the independent umpire the Fair Work Commission. Every member of which was appointed by a Labor Government. Three of whom, were appointed by Bill Shorten.

NEIL MITCHELL:

The feasibility study you’re running on the Snowy idea that the Snowy -

PRIME MINISTER:

It’s more than an idea. The project has been designed actually.

NEIL MITCHELL:

What if the feasibility says it’s a dud, what do you do?

PRIME MINISTER:

Well, it won’t say that.

NEIL MITCHELL:

[Laughter]

What are you having it for then?

PRIME MINISTER:

Thanks Neil. I’m glad you’ve asked that -

NEIL MITCHELL:

If it’s going to say it’s okay, why are you having a feasibility study?

PRIME MINISTER:

Because the project was designed in the 80’s and there has been a lot of changes in technology since then, particularly with respect to boring tunnels. So instead of doing it with jackhammers and gelignite, they’ve got those big tunnel boring machines. So they’ve got to re-examine the geology to make sure that the alignment of the tunnel is still the right one. Obviously they’ve got new technology for generation. So it’s basically updating it.

The company’s Chief Executive expects it can be completed before the end of the year and if the environmental approvals are given swiftly, work can commence next year.

NEIL MITCHELL:

Victoria is the second biggest stakeholder behind New South Wales, the Commonwealth third. Have you spoken to Daniel Andrews about it?

PRIME MINISTER:

I haven’t spoken to Daniel Andrews, no. Josh has spoken to Tim Pallas and he has sought to reach Lily D'Ambrosio the day before yesterday but he spoke to Tim Pallas. The Victorian Government has always wanted to sell out of Snowy Hydro in fact, and if they do we’d be certainly looking forward to having a word to them about it. We believe this is a vitally important piece of national infrastructure and we are prepared to back it.

NEIL MITCHELL:

About four years?

PRIME MINISTER:

That’s what the Chief Executive of Snowy Hydro has said. He said it will take about four.

NEIL MITCHELL:

Do we have to live with fragile power in the meantime?

PRIME MINISTER:

Well, what we need to do is make sure that the energy market and the system is secure as it can be. But obviously big storage facilities like this take some – you can’t bring them on instantly.

NEIL MITCHELL:

So are our power supplies fragile for the next four years?

PRIME MINISTER:

The fact that Hazelwood is closing down reduces about 22 per cent of this state’s own generation capacity. So that puts more reliance on other sources of energy and that’s one of the reasons that we -

NEIL MITCHELL:

So are they fragile for the next four years?

PRIME MINISTER:

I wouldn’t use that term Neil.

NEIL MITCHELL:

What term would you use, Prime Minister?

PRIME MINISTER:

Well I would say that there is more pressure on the network and we need to make sure that we’ve got gas available. In particularly for peaking and that’s why I secured this week a guarantee from the gas producers on the east coast that there would be gas available for peaking power in times of peak demand – really hot days for example.

NEIL MITCHELL:

Prime Minister, a couple of quick ones. Tax Commissioner’s quoted today as saying the biggest revenue problem you’ve got is not the big corporates dodgy, that the average taxpayer is dodgy and rorting their sort of - 

PRIME MINISTER:

Which is the cash economy and so forth.

NEIL MITCHELL:

As well as expenses and -

PRIME MINISTER:

Again, he is in a better position to make a judgement about that than me. But we believe that tax is compulsory, we are in favour of lower taxes but we don’t believe that companies or individuals should take a self-help approach to tax reform so we’ve brought in the toughest anti-tax avoidance measures. Particularly dealing with multi-nationals. 

NEIL MITCHELL:

But do you need to get tougher on individuals?

PRIME MINISTER:

Compliance is important. Everyone has to pay their share. But you see, there you go, we are talking about the importance of everyone paying their share of tax. And you’ve got Sally McManus from the ACTU saying you should only obey the law when it suits you.

NEIL MITCHELL:

The Chief Executives weighing in on gay marriage, writing you a letter saying just legislate and get it over and done with. Minister Dutton says they should keep out, should they?

PRIME MINISTER:

I think what they should be doing is talking to Bill Shorten and saying to him – ‘Why have you gone back on your word, three years ago?’ -

NEIL MITCHELL:

But he wants to legislate as well -

PRIME MINISTER:

No, but hang on, Bill Shorten said three years ago – he gave another pledge - that he would support a plebiscite. If we’d had the plebiscite, if he’d supported it in the Senate, we would’ve had the plebiscite, it would’ve been passed and gay couples could be getting married now.

NEIL MITCHELL:

Well they are saying legislate. Would you just like to legislate and get it over with?

PRIME MINISTER:

We have a commitment on a plebiscite which we took to the election so that’s our policy. So the way to ensure that gay marriage is allowed is to have a plebiscite, that is our policy.

NEIL MITCHELL:

Just finally, are you looking as part of the deal with the crossbench at cutting the gambling ads on TV during sports events?

PRIME MINISTER:

Again, I read all about this speculation, gambling advertisements is clearly an issue. But any of these issues that are under discussion and they will remain – if they are on the table, I’d be interested in the views of your listeners about gambling ads - it’s a controversial issue.

NEIL MITCHELL:

How is Tony Abbott? Is he your mate now?

PRIME MINISTER:

Well he is a colleague. I’ve known him for well over thirty years I think.

NEIL MITCHELL:

Are you talking at the moment?

PRIME MINISTER:

Yes of course, from time to time.

NEIL MITCHELL:

Okay. Thank you very much for your time.

PRIME MINISTER:

Thanks Neil.

[ENDS]