Politicians superannuation reforms Mark Latham - Leader of the Opposition

Radio Interview with Catherine McGrath

Transcript - AM, ABC Radio - 13 February 2004

TONY EASTLEY: For Opposition leader Mark Latham this is his first big victory as Labor leader.

Mark Latham joins us this morning. He's in our Canberra studio, where he's speaking to our Chief Political Correspondent Catherine McGrath.

CATHERINE MCGRATH: Mark Latham good morning. The Prime Minister, you heard his comments there. He has a point doesn't he, saying this was really a political diversion, you brought it up in quite a populist way?

MARK LATHAM: Well, I think if you got out into one of the Australian work places this morning or a play group or a factory or an office and you said to a group of Australians what's the one thing you don't like about the political system, they'd say the double standard in parliamentary superannuation. So this hasn't been a diversion for the Australian people, it's actually been a long running concern, a long running concern about the trust and confidence they can have in our democracy.

CATHERINE MCGRATH: But is it a big issue people's concern about the political system as opposed to their concern about the economy, border protection, defence?

MARK LATHAM: Well there's lot of big issues and I think this is one of them because a democracy relies on the trust and confidence of the people and if you've got cynicism and concern about double standards then we're all weakened by that, Labor, Liberal and everyone else. So rebuilding a bit of decency and common standards in the system is very important.

So the Prime Minister said it was a two or three out of ten, I'd have it much higher than that based on what the Australian people have been saying about it for a long, long while.

CATHERINE MCGRATH: And let's be fair, previous Labor Prime Ministers have to take some flak this morning too, they've stood against this?

MARK LATHAM: Yes, no look if this was an easy thing to do it would have happened 10, 20 or 30 years ago and I pay tribute to the likes of Ted Mack and Peter Andren who have been pushing hard, they put it on the agenda and I'm very happy as a major party leader to have advanced it to the point that it is going to pass into the law.

CATHERINE MCGRATH: Let's look at the plan that the Prime Minister is going to put forward in legislation. You've said you'll support it but it's only new MPs that this will have any affect on, for current MPs they are still going to be getting those very, very high, around 69 per cent taxpayer contributions.

MARK LATHAM: Well the phase out scheme recognises that to wipe it out for existing MPs would leave the taxpayer exposed to a lot of compensation, but Labor's policy, and I'll be moving amendments on the bill, is to bring a cap into place for the highest levels of superannuation among the serving MPs, the Prime Minister, the Treasurer, the Leader in the Senate, three or four others, to cap that down to 72.5 per cent.

For the Prime Minister at the moment it is a 160 per cent and that amendment will also apply to myself as a principle and I said this on Tuesday, if you want to change the scheme for new members, the people doing it, in this case myself and the Prime Minister, should be making a superannuation sacrifice ourselves.

CATHERINE MCGRATH: But let's look at general MPs across Australia, current MPs in this Parliament, this rort will continue. I mean, what are taxpayers going to make of that?

MARK LATHAM: I think people will understand that it is the beginning of the end. That at the moment the scheme is closed to new entrants, it will phase out.

CATHERINE MCGRATH: But it's alright for current MPs.

MARK LATHAM: If you wipe it out for current MPs, the Constitution has got a provision that will provide a lot of compensation costs for the taxpayer and it's a defined benefit scheme and in the public service for instance, the thing to do is close it down and phase it out over time.

I was aware, though, that people would say what about yourself and I've said consistently over the last three days that I am willing to take a superannuation sacrifice of up to $1.9-million. I think the decent standard is to say is if you close it for new members, take a hit yourself and I'm prepared to do that and I'll be moving amendments that I hope the Government can support in the Parliament.

CATHERINE MCGRATH: In terms of judges, will you push to have changes made for judges, State and Federal?

MARK LATHAM: Yeah I think they need to move to the community standard as well. They've got a scheme that's even more generous than the politicians' scheme and it's made worse by the fact that there's not much transparency and accountability. Some criticism in the media this week that basically the taxpayers don't know about the accrued liability and it's a golden hand shake scheme that would be much better off having an upfront arrangement with a salary that is transparent, the taxpayers know what they're paying and people know what they're getting into.

CATHERINE MCGRATH: Now you have had quite a honeymoon, one that's even surprised you I think, but the reality is you could crash and burn very, very quickly. In a week or two or three this could all turn around. You know, one slip from you and this success will all be over. Particularly on the FTA you're going to be under a lot of pressure, can you clarify exactly what your position is going to be? Are you going to block the FTA?

MARK LATHAM: Well we've got a senate process to look at the evidence. It's a 500-page document that's not been made available yet, but our starting and ending point is the national interest. We want the very best for Australia and if there's a negative impact on Australia out of this agreement obviously it's not one that you can support. You've got to do things in the Australian national interest.

CATHERINE MCGRATH: But it's the world's economy we're talking about, a deal has been made with the United States, many other countries want it. There's access for industries, for sectors that didn't have it before. Surely as a Labor Party leader concerned about Australians across the country, you'd be there saying 'yep'.

MARK LATHAM: I want the evidence presented at the Senate process to see if it's a positive or a negative in Australia's national interest and I think that's the fair and decent way to judge it and at the moment you'd have heavy reservations. The Government itself said that if you leave sugar out that's un-Australian, but that's what we've done.

Most of the free trade economists are worried we've diminished our multilateral free trade credentials. I mean next time we knock on Japan's door and how about some ag. access they'll say "oh, Australia, you believe in ag. access? What about this thing you signed? No sugar, 18-years for beef" and beyond that this week we've also seen some unravelling in the economic forecasting and there's a lot of confusion now as to whether this is a net positive or a net negative for the Australian economy.

CATHERINE MCGRATH: Now what about ALP tax policy? Your success this week and in the last month has really papered over what are some very serious tensions within the parliamentary wing of the Labor Party about your tax proposals. Now how committed are you, can you clarify now, about lifting the threshold that comes in for the highest marginal tax rate and also dropping to 30 cents in the dollar the highest marginal tax rate?

MARK LATHAM: Our position consistently has been we believe in some relief for PAYE taxpayers. They're the ones being slugged under the Howard Government and also bringing down the effective marginal tax rates is important for putting reward back into the economy.

Our priority is low to middle income earners and what we can do up the income scales is contingent on the budget, but you know, you've got to understand that the Government itself, all the Treasury people will be beavering away at their work stations right now getting preparation ready for Government policy making, we've got to see what happens in the May budget before we can reveal our tax policy.

But naturally we are looking at options, we're not ruling things out, we're not ruling things in, we're looking at the options and getting ready for what we hope will be a very good and progressive Labor tax policy.

CATHERINE MCGRATH: But for voters around Australia who are listening to you, thinking that you're promoting an image of a very united party, there are very serious divisions about this. Do you accept that and it could create problems for you?

MARK LATHAM: Well I think the Party is united. I know the Party is united around the principles we've set out on tax.

CATHERINE MCGRATH: Well the concern about spending money, perhaps, on public services and infrastructure and more relief?

MARK LATHAM: Judge us by what we've done. Judge us by what we've done. We've got our big investment to save bulk-billing. I've announced our commitment to a dental program, reading initiatives, our higher education "Aiming Higher" policy. We're investing in services, but we're also going to have a tax policy.

CATHERINE MCGRATH: Mark Latham, thanks for speaking to AM.

MARK LATHAM: Okay, thanks Catherine.

TONY EASTLEY: And the Opposition leader was speaking to Catherine McGrath.

Ends. E & OE - PROOF ONLY