Ross Greenwood speaks to former president of Business Council of Australia, Tony Shepherd, who says the Opposition Leader has taken a page out of British Labour leader Jeremy Corbyn’s book.
Introduction: Is Bill Shorten deliberately lurching to the left?
Ross Greenwood: Let’s go Bill Shorten, is a deliberately lurching to the left or is he doing it for popularity. As you may be well aware, the seat of Batman is up for grabs with David Feeney having stood down last week. David Feeney only having one up by a whisker. The Greens of all and the greens that remember didn’t win it only because the Liberals gave their preferences to the Labor party.
That’s an important thing to recognize this time around liberals are going to lay dead. The Greens are going to win it. But in the meantime Bill Shorten continues to say things that make people go, “Hang on, this seems a bit crazy.” Also remember the success of Jeremy Corbyn. The British leader in the UK elections again has made people suggest maybe he’s seeking to channel Jeremy Corbyn. Some are even saying he’s ripping off his ideas, maybe parts of his speeches. One of those people is Mateus Colin. Of course the finance minister he spoke last week about this. Here’s what he said.
Mateus Collins: “What Bill Shorten is pursuing and what he has outlined in his Corbyn copy speech the other day was a socialist agenda which would lead to lower growth, less investment, fewer jobs, higher unemployment and lower wages.”
Ross Greenwood: The question about this is how could any of those things go because Bill Shorten at his very esscence remember called for what he called a living wage. He was advocating it would appear for significant increases to the minimum wage. Because, the justification is wages are not growing very quickly at the moment. The interesting thing is that when Labour was in Paris I’ve told you before, labour did not advocate for lower minimum wages when at the time wages were growing very very quickly. In fact quite the opposite, they continued to argue for significant increases in the minimum wage. So what happens in power and what happens when you’re not in power are two totally different things. Let’s however go to Bill Shorten himself at the Press Club last week, this is what he had to say.
Bill Shorten: “The system’s not working and my real fear is that if we don’t do something about living wage, we don’t reverse the cut depending on the wage, we don’t do something about the gender pay gap, we don’t fix up the bargaining system. We are going to create two Australians. We’re going to create a left behind of society. The people in that left behind society, they’re already feeling it. The kid who drops out a university because he can’t juggle the second job and go to university. The family who’s on a waiting list for public housing but has to wait 20 years left behind. The older worker left behind because of the discrimination in the workforce against older people. You can look at example after example after example.”
Ross Greenwood: Yes there are examples of discrimination, Bill Shorten is right. But the answer is not always to throw buckets and buckets of money in it. Do bear in mind that last year 400,000 Australians found work. That was impressive there’s no doubt. Remember also that government does not create long-term large-scale employment. For that you need businesses. Businesses to be prosperous. Businesses to be investing and you need businesses to be hiring people.
One man who understands that fully, the former president of the Business Council of Australia. The man who wrote for the government, the national commission of audit, he was the chair of that. He’s been arranging different boards. Been in business himself, run them. He knows this inside out. Tony Shepard, is my guest on the program. Many thanks for your time Tony.
Interview with: Tony Shepherd, Former President, Business Council of Australia
Tony Shepard: My pleasure Ross.
Ross Greenwood: Do you get a sense that Bill Shorten is lurching to the list for his own populist if you like outcomes?
Tony Shepard: It certainly is a lurch to the left there’s no doubt about that but it’s getting closer and closer to Jeremy Corbyn everyday. But we don’t know whether he’ll swing back if he wins power and he’s in government. Of course is a midpoint we’d be at risk to find out in my view. But I thought that was a terrible prescription for the future of Australia. Frankly it was really getting back to this high taxed low growth sort of strategy. I think in the end with that ageing population an increasingly global competition, I think that’s a recipe for failure for Australia. Not a recipe for success.
Ross Greenwood: Okay. Let’s spill out some of the things that he’s suggesting. He’s basically saying that Australians are paying way too much for private health insurance. He’s arguing that the private health insurance section of our community that the company’s apart are making way too much money. He’s also saying that the electricity prices are out of control as compared with previous wages.
Tony Shepard: Let’s pick those apart. Power, energy prices. Absolutely true. It’s 15 years of energy policy failure by successive federal and state governments in Australia have led us to this situation. This is not an accident of history. We went from being a country with abundant cheap and reliable energy to the direct opposite. That is a failure of government. His answer to that is to go for 50% renewables [laughs] in the not too distant future. That is the formula that got us into the bomber in there. That’s what people have had their electricity bills double in the last 10 years only that. By the way it drove a lot of businesses in manufacturing and what-have-you out of business in Australia as well. I can’t see that as an answer.
Your health in health costs are going through the roof there’s no doubt about that. We recommended that we bring in a co-payment with obviously protection went through a safety net system. We recommended that the people on hiring comforts like you and I Ross, we cover ourselves through a private health insurance arrangement. I don’t think that’s unreasonable either.
We certainly recommended reforming the private health insurance market to give them greater incentives to provide efficient and cost effective health management. Deregulating price setting. Allowing health funds to expand their coverage into primary care. Relaxing community rating to allow health funds to vary premiums through cancer lifestyle factors. All those things we believe is would help the private health fund become a lot more efficient, a lot more economic. We might end up with better health and healthier outcomes. That is noble concept as well.
Ross Greenwood: Healthier outcomes will be good given the fact we are living longer and broadly, we are healthier as we live longer. Just one thing about Bill Shorten saying that he believes that Australia is becoming more divided. That there are two Australias, those who can afford it and those who can’t. But the advocates it would appear as though companies in particular should pay higher rates of tax so that individuals can pay lower rates of tax or in his mind have this so-called living wage. For those people on lower incomes. To bring them up.
Tony Shepard: We got the highest, highest minimum wages in the world. This equating us the United States is absolute and complete rubbish. We are nothing like the United States. We have far more equity in this country and I support it wholeheartedly. We have one of the highest minimum wages. The Gini coefficient that measures the degree of inequity in Australia is hardly moved in the last 10 or 15 years and that’s because we have a progressive tax system which is very effective and a very effective tax office. We have a very strong social welfare and health care system. The level of inequity in Australia has a third in fact I think more people are much better off today than they were 20 years ago. There’s certainly a lot better off than when I was growing up, that’s the truth.
Ross Greenwood: In other words Tony Shepard what you would say therefore is that Bill Shorten’s comments, which appear to try divide Australians, the butlers versus the silver tiles or whatever it might be, is all about politics. This lurching his message to the left has got nothing to do with the reality of the situation in Australia. There have always been butlers. There will always be butlers in our community, but by the same token the broad Australian population has been going okay through their super funds, their house price whatever it might be. The fact that most people have got a job these days is the thing that means that they at least are not at the welfare door as it were.
Tony Shepard: Yes. It’s a question of opportunity. It’s a question of providing people with opportunity. Not having them relying on government to support them but a question of opportunity. Over 50% of households and families in Australia now net tax takers not taxpayers over 50%. We can’t afford to be in that situation in a country with an ageing population.
Our productivity growth has been atrocious for a well-educated, stable and happy country, productivity growth has been lousy. That’s the reason that real wages haven’t increased is because it’s a lack of productivity. Our lack of ambition to improve our productivity, the lack of government settings to help us lift productivity have been very disappointing. That’s what I would be suggesting to Labor is go back to the whole kating year when the focus was on growth. On growing the pie. Make sure that we have a really strong safety net, that’s the Australian way. We all support that but focus on how do regrow the economy. Get the pie bigger so everybody gets a bigger slice.
Ross Greenwood: Is the situation with the Adani coal mine, right now, is that the classic example of what’s taken place?
Tony Shepard: It’s just lunacy.
Ross Greenwood: Because labor supported this right the way through but all of a sudden it’s got the Batman by-election, the Greens look like they’ll win it. The Greens are running an anti-Adani campaign. They’ve put in the boss of the ACTU who says she thinks that, again, Adani looks like a done deal, it’s not going to happen. Bill Shorten seems to be nodding his head and saying, “Yes, I think that’s what’s going to happen.”
Tony Shepard: I wonder what the AWU’s doing. They were the strength behind labor in Queensland. They were pro-growth, pro-mining, what-have-you. I can’t understand how they could stand back and look at this. I mean, this mine, the development of the Galilee Basin will add considerably to our exports. Ross, the thing that just really gets up my nose, is this anti-resources underlying philosophy in Australia. It’s subtly throughout the press, the media, the community, the education system.
If it weren’t for the resources sector, we would be in a lot of trouble. We would be a very average performer in terms of western economies. It’s the resources sector that is the icing on the cake that’s making it happen for Australia. That’s where the growth is. That’s where the profits are coming from. That’s where the company taxation and the royalties are coming from. That’s where the jobs are being created, in the resources sector. That is one of our few strong points in our economy. That and agriculture are the two sectors where we are really, globally competitive.
Ross Greenwood: That, also, is the reason why you can afford the welfare system that Australia has. Why you can afford the healthcare system that Australia has. Notwithstanding, probably, you’ve got to be very careful that you don’t overspend in those areas.
Tony Shepard: Exactly. We’ve reached the limit. The commodities sector saved our bacon in the GFC. It’s still going really strongly with the price of iron ore above what we projected when we did the commission of audit. Thank God for that because it’s helping us significantly. That’s what we’re based on at the moment. Until we can find some efficiency in the rest of our industries, we’ve got no option but to go ahead and develop our resources.
Ross Greenwood: Tell you what, always great to have on the program. He speaks such common sense to so many people. This is the reason why, when you hear Bill Shorten on these messages, really trying to give these populous messages out there, remember that what he says is fundementally different, you imagine, to what he would do if he became prime minister. That is the key to calling him out. I think that’s got to be done sooner rather than later.
Tony Shepherd, the former president of the Business Council of Australia. The man who was the chair of the National Commission of Audit. Key paper for the government. Tony, always great to have you on the program.
Tony Shepard: My pleasure, Ross.
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