Interview – Sky News with Kieran Gilbert
E&OE TRANSCRIPT
KIERAN GILBERT, HOST: Let’s go live now to the Minister for Workplace Relations and the Leader of the Government in the House, Tony Burke. Thanks for your time this Sunday morning, Minister.
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Morning, Kieran.
GILBERT: Do you accept the speculation and the changes to the superannuation? Although that voter in Parramatta thought it was a good idea, do you accept that it all looked a bit untidy and rushed?
BURKE: Look, it’s a very modest change. Whenever you start a tax conversation in any way, you get straight to detail, some of which is still being — where consultation is still going on, as the Prime Minister and the Treasurer had announced. I think that’s the nature of the start of any tax conversation. But most people get the two key facts here. One, this is a modest change, a tiny percentage of people with superannuation accounts of more than 3 million and for those people, they’ll still get a concessional rate. The top tax bracket is 45 cents in the dollar. If you’ve got more than three million for the amount, more than three, you’ll be paying 30 cents in the dollar and for everything up until that – 15 cents in the dollar. So when the top tax bracket’s 45 cents in the dollar, it’s still a highly concessional rate.
But the second thing is, people know that we do need to raise additional revenue. We’ve been left with a trillion dollars of Liberal debt. Just the mere servicing of that debt – I remember when it first ramped up, the previous government was saying, “oh, no problems at all with the debt” because interest rates were so low. Well, they don’t stay low forever. It’s now the fastest. Servicing the debt is now the fastest growing section of the budget and, you know, it’s getting up towards $20 billion a year on that. And so, people understand that you do need to look at various measures to be able to look at the budget bottom line.
GILBERT: One of the bits of detail that you mentioned needs to be worked through, and it’s been put to some of your colleagues, is for those super funds, like self-managed funds, where there might be, say, an unrealised profit on paper, but, say, a property or some other investment, a farm in someone’s self-managed fund, if it’s unrealised, if it’s on paper, how do you tax those funds?
BURKE: Yeah, the concept of those unrealised payments occurs whether you’re in a self-managed or whether you’re in a general superannuation fund. So, if I start with a general example, every time someone logs onto the app for their superfund to check what their balance is, that balance involves a whole lot of estimates as to the ultimate value of assets where the profits on them have not yet been realised. That’s the nature of what you’re looking at on your phone every day. But similarly for self-managed funds, those figures, in terms of what the account balance is are already provided by the trustees to the ATO every year. So that information is already provided. There are more complicated ways of doing it. But the simplest way, and what Treasury is advising us is you look at the growth in the account balance for the account holder, you look at the growth in that balance each year and that’s how you work through what would be applicable above $3m.
GILBERT: Well, what do you say to the critics that have argued this hasn’t been done in any other taxation anywhere else, that this is a one off, that you’re taxing unrealised profits in this way?
BURKE: Well, let’s not forget we already have taxation on superannuation. It’s concessional. It’s already there, it’s already an advantage to have your money in superannuation. For the very small number of people – you know, half of one per cent, so for 99 and a half percent of Australians, this doesn’t apply, but for half of one per cent, they will still get the 15 per cent concessional rate on everything up to $3 million. But for whatever they’ve got above $3 million, they will still get a concessional rate. There’s still an advantage, they’re still going to want to keep their money in superannuation. And when you’re faced with a trillion dollars of Liberal debt, you have to make sure you’re making decisions about the bottom line.
This is a very modest change. It’s one that takes, you know — people have got a few years before this, in fact, kicks in, so if they want to organise their finances accordingly, they can. The previous government might have felt you could ignore a trillion dollars of Liberal debt. That’s not our view.
GILBERT: The Prime Minister immediately rejected the notion of touching capital gains tax exemptions on the family home. It was immediate and instinctive. He rejected it, the Treasurer didn’t –
BURKE: – five hours later.
GILBERT: Yeah, indeed. But then the Treasurer took five hours for him to make that mea culpa that Andrew spoke about a few moments ago. Does it show a tension there that a number of people around this place have been noticing between the Prime Minister and Treasurer in terms of one wanting to make savings and cuts and so and the other being more pragmatic? Is that something you’re noticing?
BURKE: Look, I don’t read that interaction that way for a minute, Kieran. What you had there, I think Jim explained it later in the day and his words speak for themselves on that. But the important thing for people to know is the clear Government position is no changes on the family home.
GILBERT: But it gets to this point, how do you say to people, reassure them, that that change that you said affects half a percent isn’t the thin edge of the wedge when it comes to tax.
BURKE: Yeah, it’s an odd argument and I know you’re putting it to me because it’s been put by others, but it’s a very strange argument when the Government has come forward and said, “this is exactly what we’ll do, this is the change that we’ll be legislating and it won’t be starting until after the election, so there’s plenty of time.” Like, you’ve had really clear ring fencing here on this measure that the Government’s put forward. And how can we have a situation where we keep hurtling towards a time where superannuation tax concessions cost more than the age pension, which is where we’re heading, and we end up with some balances, where there’s this extraordinary level of tax concession for people who clearly don’t need it for their retirement, where it’s being used as a broader asset management tool?
Yeah, if you’ve got $3 million in your super, you’re going to have a pretty good retirement. If you got more than $3 million, good on you. You’ll still get help, you’ll still get a tax concession, it just won’t be as generous as for what it is for the 99 and a half percent of Australian balances.
GILBERT: Now you’re the Minister for Workplace relations, as I mentioned, there’s this issue around the engineered stone bench-tops for kitchens. It’s led to some really problematic health outcomes for tradies, a number of them working in this space with silicosis. Mike Freelander, one of your colleagues, says you should just put in a ban, immediate ban on them, on the import of these things. Why not do that?
BURKE: The previous government had a situation where we weren’t going to even consider whether there would be a ban until June of next year, and that’s when the work would be started. I took the view and the state ministers, regardless of political colour, took the same view, which was we needed to start that work now. When you talk about a ban, there’s actually some complexity in terms of where you draw the line. So, engineered stone, some of it can be up into the very high 90 per cent of silica content there and they’re the examples where we’re finding the real risks of silicosis for workers. Where you get to other percentages – so you can get engineered stone, for example, where it’s only 40 per cent silica. In those situations, you sometimes have an engineered stone, a lower percentage of silica than what you get in natural stone.
So, we need the work to be done to work out, okay, what would a ban look like? Where would you draw that line and how do we phase it out? No matter what we do, this will be a problem in Australia for the next 40 or 50 years, because while whoever might have engineered stone in their kitchen or bathroom at the moment it’s installed, it’s safe, it’s not going to cause them a problem, the moment they come to renovate or if there’s a knock down rebuild happening, we’re going to be back in the same sort of world we’ve been with asbestos.
So, there’s a whole lot of legacy issues that need to be dealt with Safe Work Australia. Everyone would always like this done yesterday. We’re going to do it sensibly; we’re going to work out what the proper options are and then state ministers will meet at the latest in six months’ time but we’re all hoping the work will be done much sooner than that to work through what we can do unanimously. You also need to bring the states with you on this. All of these laws, it’s not a Commonwealth jurisdiction on its own. We’ve got nine different governments, all with regulatory powers here, and we need to work together.
GILBERT: On a couple of other matters. I know that the shoppies union has brought a claim to the Federal Court on behalf of thousands of workers at McDonald’s, across 1000 sites or thereabouts, their claim is seeking around $250 million. This hasn’t got a lot of attention, but it’s a big story. Have you got any update for our viewers this morning on that claim and the Government’s position?
BURKE: Yes, so that case has been running and we’ve been basically standing back, leaving it to the courts to work it through between the union and McDonald’s. What’s happened more recently is one of the litigation law firms, Shine Lawyers, have turned up effectively making the same claim, but through class action. Now the claim they’re making is for a lower amount, it doesn’t involve interest, it doesn’t cover all the same workers. But a lot of the same workers are covered, and the courts are now deciding, well, do they go with the original claim from the union or does the litigation law firm’s claim now take over?
The problem is this, if the litigation law firm claim takes over, then all the costs that law firms claim and the percentages that they claim come straight off the balance of what the workers would otherwise get. And so, I’ve taken the view, and the Government’s taken the view, that we need to intervene in this case. So, we’re now notifying the parties and the court that the Government’s going to turn up. It’s for the court, obviously, to determine how much is owed here but whatever is owed, I want to make sure that the workers get every cent of it and none of it gets diverted off to law firms.
GILBERT: So, what does the Government intervention mean? Does that mean that you’re there on behalf of the workers? How does that work?
BURKE: We’re there basically saying the Government of Australia has an interest in this. As you know, the Government’s got very strong policies about wage theft and about making it a criminal offence. We’ve been doing everything we can to get wages moving and we’re trying to cut those loopholes that undercut wages and people being underpaid is a critical one of those. This is right at the core of what the Government is trying to deliver. To have a situation now where something in the order of 25 per cent of an underpayment claim might not get to the workers, that’s something the Government has an interest in.
So, we’ll be turning up to court and making the legal case as to why the case from the union – where the workers would get 100 per cent of the funds – is the one that should be allowed to proceed.
GILBERT: One final question, another workplace matter, this is Monique Ryan and Sally Rugg, the former Chief of Staff to the Independent. Is this a test case for what is reasonable work hours in the Parliament?
BURKE: Well, you’ve had very few cases of this nature, actually, not often they’ve been settled over the years. So, to the extent of it being the first time that I’m aware of that it’s got to this sort of public point, those principles will be worked through. What I will say is everyone in the Parliament, whether they are Members of Parliament, whether they’re the staff, or indeed, whether it’s the people working in the Press Gallery, everyone works hard. Everyone works hard. We’re all trying to deliver better balance across that, and I’m not going to form a view, I don’t know enough about the facts between the different parties here. But it’s a workplace where everyone works hard and we’ve got a job to do to make it a better workplace for everybody there.
GILBERT: Tony Burke, appreciate your time this Sunday, thanks.
BURKE: Great to talk to you, Kieran.