Assistant Treasurer Daniel Mookhey Admits Early Knowledge of ATO Credit Card Ban Plans

Setbacks in Parliament and blowback from small business. Labor MPs are feeling the heat and the tension is on show. Is all this to be expected with difficult reform or is the government failing to see the consequences of its policy ideas? The Assistant Treasurer, Daniel Mookhey, joins us this morning. I'm David Speers. Welcome to Insiders. It's been another testing week for the government. The jobless rate rose as more forecasts warned of a grim year ahead. A major budget savings measure was tossed out of the Senate by the coalition and the Greens. The crackdown on trusts finally hit

Parliament fueling more small business anger and as the pressure mounted, a comment from the Prime Minister was interpreted by many as a dig at the Treasurer focusing attention on the government's most important relationship. Prime Minister, to your credit your door was open. My door is always open. Do I have an open door? Andrew did text me last Thursday morning. By Friday morning, we had an announcement. You engaged, you listened, and you acted quickly. You rolled by the PM. No, not at all. The wheels [clears throat] are falling off the wagon of this government.

How much more humiliation does the Treasurer have to endure before the Prime Minister puts him out of his misery and sacks him? We had the same view. We had the same Completely agreed by the Treasurer and myself. A psychodrama now within the government. When will this minister start listening to Australians and stop waging war on small business? I've been clear that small businesses should have been consulted on the credit card ban. This minister and this Prime Minister should be absolutely shamed and stoned in the square.

It is racist, it is misogynistic, and it should never have been said. To assist the household a series of high-stakes bills digital duty of care domestic gas reservation private health insurance amendment tax on discretionary trusts bill difficult negotiations over tax changes on trusts. Now, if we leave this issue for another day and for another government, the risks to the integrity and the sustainability of the tax system will only grow. You are going to send hundreds of thousands of Australians out of work. deeply concerned that there's some new carve-out for the wealthiest another economic blow with unemployment hitting its highest level since the start of the pandemic.

And this Labor government is now at war with the people who keep this country running. Our role as progressive people is not to scold those who see appeal in that message. He's only saying these things because Jim is worried about losing his seat. And you do that by starting not from a place of smug moral superiority. Jim Chalmers should drop his smug moral superiority. I haven't closed the door to reentering politics. Josh Frydenberg thinks the Liberal Party is circling the drain on your watch and he's right.

Only comeback I'm interested at the moment is power to finger. Love you everybody. Yeah. The bloke who is in danger of being sacked is sitting right there. But the question was about when this Prime Minister would sack his hapless Treasurer. And we're joined this week by political journalist and author Lenore Taylor, chief political correspondent for the Sydney Morning Herald and the Sydney Morning Herald in the age Paul and Anna Henderson the chief political correspondent for SBS very good morning to all of you. Lenore let's start on the well pressure on the government it's a whole combination of issues that's driving some grumpiness and some frustration internally as well. Is this

just what difficult reform looks like or is this a failure to properly consult and get the detail right? I think it's a bit of both. I think the government has seen a kind of a pattern of having reforms where there's a credible case to be made for them but that's getting completely overshadowed by an unintended consequence or how the reform affects a certain subgroup or small group of people you know hence we're talking about not why wealthy people shouldn't be able to minimize tax with discretionary trust but rather intricate details about how they affect small business. So it's partly that and partly I think it is a really difficult environment to prosecute reform. It's a difficult economic environment and politically there's one nation and now a

much more muscular greens on the other side so that raises the level of difficulty and it's kind of mid-term and I think the caucus is realizing that last election really was a high water mark and then some of them are not going to be there in a bit over a year. So put all that together and yes it's a difficult environment but there are also some mistakes. So Paul what's going on at the very top between the prime minister and the treasurer you wrote about this yesterday. What's that tension look like at the moment? Yeah I don't want to exaggerate it's not Morrison government level dysfunction treasurers and prime ministers are often at odds.

There's not a prime minister secretly swearing himself into different ministries. Exactly. Uh you know treasurers and prime ministers famously fight and have different intentions. Albanese and Chalmers have always been slightly suspicious and paranoid of one another. Uh this government's been remarkably stable Albanese is into it four and a half years as prime minister seven and 1/2 years as leader. That is pretty extraordinary on international comparisons. But for the first time, it is the case that people in the caucus and the ministry, this is not just a backbench issue, are genuinely worried about the economic and political management and general cohesion of the government.

Mhm. We're We're at the point of the term where all focus is on the government. There's no choice yet between coalition, One Nation, and Labor. That will probably come next year. So, it is the real um crunchy point of discontent inside Labor. It's natural in this environment there would be some concern. But if you listen to the Prime Minister's speech to the caucus on Tuesday, and one observer made this point to me, he's talking about kicking with the wind in the final quarter. This is his political kind of management line that he used last term to beat Peter Dutton. One observer said, "The Prime Minister is thinking about this problem in a political lens. He's thinking about how he can discombobulate his opponents

as he is want to do and he's as he is expert at." But this is not a political problem. One Nation is chaotic still and probably will fade. The coalition is still largely irrelevant. What's needed here is a renewed focus on the policy problem, the reality problem, which is that inflation is high, interest rates are high, and there is no solution from the Treasurer or Prime Minister on how to fix that. And that's creating the underlying tension and the continued sustained pressure internally and externally. to very quickly become a political problem if the government's whole unique selling point is we're the stable people, we're the credible people, we're the safe pair of hands, and suddenly

there is credible and a lot of division that makes people remember Rudd government, right? You know, that undermines their main political point, too, yeah? It's the flip side of the discipline issue, because it's been, you know, celebrated within Labor. The caucus has been behind us. No one asks questions in the caucus meetings. Everybody's leading from, you know, the back seats. Uh maybe if people who had a bit more experience in local areas had a bit more of a kind of critical lens that they'd taken to these discussions earlier on, rather than kind of taking the position, "Okay, we're going to support the government on all of these

measures. We're going to be back there behind them and not say anything." Maybe there would have been more signs earlier that some of these budget measures Interesting you say that. were um I had a problem with that. uh one minister to say to me yesterday that um they need more robust debate in cabinet. It wasn't a criticism of the Prime Minister who was argued is actually keen to test ideas more thoroughly in cabinet, but others aren't. There's a timidity and they need more robust debate. Yeah, it's sort of become a sort of un- unquestioning backbench position that if you raise concerns, that will cause problems. We don't want headlines where there's disagreement or where there any of the government's policies are questioned, but that has

kind of led us to a point where others have raised concerns for many months on many of the economic issues, and it feels like the government has not internally had those conversations. to the relationship between the Treasurer and the PM. Jim Chalmers in your piece yesterday, Paul, went on the record to say, "What was it that everybody can do better, me included." That's an important acknowledgement. Should others do the same? Well, one interpretation of his comments yesterday, which were quite extraordinary in some ways, just to remind his colleagues. He said on record, "I like and respect my colleagues." The reason he's been pressured into saying that is there is a

growing view in the caucus that Chalmers has become isolated, somewhat introverted, uh not responsive to the concerns of the caucus, and really an island uh outside on his own in the government. And that's that's another Doesn't do dinners. Yeah. And part of the reason he's he's acting that way is because for much of the life of this government, he's been seen as the obvious successor to Albanese. So he's not wanted to appear to be caucus management, but that's that's meant that relationships have drifted. So this is the other side of the equation to this question about the general discontent is there's an there's an annoyance with Chalmers some fair some not that's on the other that's um

uh coinciding with a really deep policy problem. And so all of these things are coming together to act to create a general sense of But even those who might be a little grumpy so it would be crazy to get rid of Jim Chalmers. We just deal with this I mean Lenore any government that moves the treasurer out to another role you've got problems there right? Is that going to happen? I not that I can see I think that would be absolutely crazy. I think people are also over egging some of the little signs that happen along the way. I'm not disagreeing that there isn't this sort of underlying tension. But let's get real here.

But if you get real I think it's not as bad as it's also being made out. But the fact that it's being talked about by Labor MPs even though it's highly unlikely we had a few Labor MPs who said Mark Butler might well be the treasurer next year and I think it's highly unlikely but the fact that it's being talked about is a sign of how quickly the confidence in the top ranks of the government has had has deteriorated over about the last six months. Yeah I don't I just don't think there's appetite for the PM to do that. right. But there he's a total political pragmatist and if it ends up that this these economic issues about the budget continue to balloon and are seized upon

by One Nation and the opposition they get huge traction with small businesses with everyday punters nothing's out of the realms of possibility when you go to the next election if you need to blame someone. You know the government kept on saying you know the Reserve Bank is the one lifting interest rates but at some point if they've got to pass blame within the government it's not out of the realms of possibility but I think a huge reality check and I think that the idea that they would change treasurer. So risky. Look just quickly um there are a lot of issues you know that creating frustration. The one though that's got Labor MPs um particularly concerned was the tax office thing and why on earth they didn't see this

coming and manage it better that the tax office would put the ban on credit card payments um which they've now put a fix in place till the end of the financial year. John Kehoe in the Financial Review yesterday reported that in fact Dan Mullin out Dan Mullin out our guest today and Jim Chalmers knew for months that this was something that the tax office was certainly considering doing. Um how significant is that? Well, it's significant in the point that I made at the beginning that they knew it was coming and they didn't think through the potential consequences and lots of the banks and the business groups were lobbying against it. So, the

consequences for small business and the consequences for small businesses paying their tax maybe should have been obvious sooner. And it goes to a government management question, doesn't it? See a problem coming Yeah. head it off. There have been backflips for quite a long time now. Some I forgot some of them when I went through them. There's the veterans health cap widows tax, superannuation going back to last term when the Prime Minister rolled the treasure on that. Bunch of different changes to the budget. Feeds into this broader sense in a segment of the caucus that has closer relations with the business community. Might have come from small business households that there

isn't a serious enough focus on the private economy and this goes to the core policy question. Labor did excellent in the last election by putting out a bunch of various high spending agenda items that were quite popular. It doesn't have those options now. They can't spend their way out of this dilemma and they'll have to spend the summer thinking of a different alternative. Some of it would have been built into their thinking. It was a very tough budget. In some ways you've got to have some measures that you can roll back so you sound like you're listening, but they still got through negative capital

gains tax. So, you know, the government still sees itself as getting some of those measures through even though they're about to lose possibly billions out of these negotiations. But the other issue around all of this is the potency of the campaign against the government. They don't understand small business and even though vested interests like the banks were the ones raising the concerns, they pretty much mapped out what has now unfolded. Like the warnings were there. All right, well, time to talk to the Assistant Treasurer, Daniel Mookhey. First, the classic questions of who knew what and when that are engulfing the government.

The government has been knee-deep connected to the problems associated with the ATO credit card ban and its impact on small business. Not only did Jim Chalmers sanction it, but he was an active participant in endorsing the process of the ATO credit card ban that is hurting small business. Daniel Mookhey, welcome to the program. Well, thanks very much for having me on, David. So, when did you first become aware the Tax Office was considering banning the acceptance of credit card payments? So, if we go back to a really important decision, and just for context, this is a reform of our payment system that is long overdue. Uh your people in the economy, consumers, have been aggravated

by paying surcharges for many years. Uh $1.6 billion on surcharges. We were an outlier, and so the RBA made the recommendation that we should get rid of surcharges, but also they recommended a holistic reform of the system where we also capped interchange fees. After the RBA announced those reforms in March, I engaged with government agencies not long after that to ensure that they were aware. The expectation was, of course, that they would comply with that removal of surcharges. Uh in July, uh the government became aware that the ATO was uh looking at options, and that at that point, their preference was to not accept uh credit cards, and we made it very clear that we wanted them to continue to engage with

credit card companies to seek the best possible deal for the taxpayer, and to explore ways in which they might be able to uh accepting credit cards. And we also made it clear that we wanted there to be a transition period. And so, those discussions with uh credit card companies continued. Uh it Those discussions didn't get to the point where it was uh possible for that to occur, and so the ATO made a call in late September to not accept credit cards with a transition period of 2 months. Uh it became clear after that uh government heard the message, I heard the message, as did uh the PM and the Treasurer, that transition period of 2 months wasn't long enough. And so, we acted very quickly to extend that transition period.

So, just on the timeline you've laid out there, in July you were told by the tax office that their preference was to ban credit card payments, and you said, "Go back to the drawing board and find another way." Is that correct? Well, they were already in discussions with the credit card companies, and so we indicated they should continue those discussions. Uh and that was uh something that was very important as part of the process. We also indicated uh that there should be a transition uh period, and that was something which was ultimately decided. with the tax office that the preference was to ban credit card payments with a transition period, but ban credit card payments?

No, this was ultimately uh their call, but what we indicated was that they should continue talking to credit card companies to seek the best possible deal, to see what options there might be. Sure, but what was your preference to ban the credit card payments at the tax office rather than uh the government fund the tax office to keep accepting them? So, it was the ATO's call uh as an independent agency. We left Yeah, we left the decision to them. No, the indication we gave to the ATO was that they should continue to engage with the credit card companies, and that there should be a transition period. That was what uh was indicated to the ATO from the government.

Engage with the credit card companies to lower the best possible deal lower the fee but to ultimately see credit card payments stopped. No, no, if they had been able to achieve a much lower fee from credit card companies, they might have been able to continue accepting them, but they didn't get to the point where that was on offer from the credit card companies. So our preference at that time in July was continue those discussions and those discussions have led to an improved offer is my understanding and those discussions in fact continue. One of the advantages of the extension of the transition period is that the ATO

and the RBA can continue those discussions. They didn't get to the point where it was possible to have an indefinite continuation of the acceptance. But if you knew in July this is where the tax office was heading except that you said keep talking keep engaging keep but you knew in July that this was where the tax office was heading. Is that correct? That this was going to be something that they had to consider in their decision as to where they would end up going and yeah as I said we flagged with them very clearly they should continue engaging with the credit card companies and that there should be a transition period. Then why was it not until October that the government ultimately

decides to help fund the tax office to keep taking the credit card payments? So they made the call in late September that there would be a two-month transition period and that two-month transition period was something that did have some support from government and then once that was announced in late on 1 October with the ATO having made the decision on 25 September we then received feedback that wasn't sufficient. Now the two-month transition period was the period of the busiest period of tax submission. So, the original thinking by the ATO was that would be a sufficient period. And the government as well by the sounds of it. Do you accept the criticism including from within Labour's own ranks

that you and the Treasurer don't have the business experience, didn't accept, didn't see what impact this would have on small business? Now, we rightly left the detailed design and implementation of the surcharge ban and the ATO's dealing with this to the RBA and the ATO respectively. The detailed design and implementation the assistant treasurer. Do you just take a hands-off and let it go or do you need to, as you ultimately did, step in earlier and fix it? It wasn't a hands-off approach. It was an approach where we didn't get into all of the details, but we made it very clear that they should continue to

negotiate with the credit card companies to get the best possible deal and those discussions did continue and have led to an improvement in the offering and they continue now. didn't you why didn't you more directly say back in July that you can't do this to small business? You need to actually keep accepting credit card payments. So, accepting credit card payments going on indefinitely would have very serious fiscal ramifications for the budget and that's why we always said that there should be a transition period, but the uh the policy position taken by Angus Taylor is one that has not costed Let's stick with the government. Let's stick with the government of the day. So, your view about these very serious

budget implications that suggests you were saying to the tax office this is going to cost too much. You need to ban the credit card payments. No, no. This was a decision taken by the ATO uh but in our discussions with the ATO that it's going to cost us too much to keep taking credit card payments. Now, the ATO made a decision and in making that decision we engaged with them and indicated that they should engage with the credit card companies to get the best possible deal. They did engage with the credit card companies

and improve that deal, but it wasn't good enough to get to a position where they could be accepted ongoing. But we also insisted that there be a transition period and that did occur. But the transition period as it turned out from stakeholder feedback wasn't enough and so that's where the government stepped in. So no regrets on your part for not stepping in earlier back in July? Well, I think it's appropriate that the RBA and the ATO have independence. It's it's appropriate that we had engagement with them. And look when we got the feedback you know, why didn't you step in earlier I guess is the point.

Well, we stepped in very quickly once the feedback came to us and I think it's it's a sign of a government that is genuinely listening. quickly you're arguing. You knew in July, you stepped in when this became a big mess in October. Well, in July what we did was to insist that there be a transition period and also we took action with the ATO to insist to arrange that was possible. That two-month transition period that the ATO originally settled on was the busiest period of tax submissions. Now, that was their call, their design. We worked with them to make sure that they are able to fund that. regrets, no apologies Dan Tehan?

Well, we've we've changed our position so I've listened to stakeholder feedback as has the PM and the Treasurer. So obviously we've we've changed tack and we've listened to feedback and that's a sign of a government that is putting in place important big reforms. And we're responding to that. that the problem that was coming down the tracks? Well, I think that we did tweak to the fact that there needed to be a transition period and there was a transition period for the busiest period of submissions. But it turned out the feedback was that two months wasn't long enough. We listened very quickly to that and acted.

Okay, let's turn to trusts. Small business aren't happy on that front either. They say you don't understand the impact this will have. Do you? So again, just to take a step back to the importance of this reform. What we're doing through the trust tax reform is a once in a 25-year tax reform is making sure that we better align the way that tax on income from labor is taxed compared to that from capital and from trust. This is really important reform from a fairness and an efficiency perspective. This is something that's been called on in every major review for 50 years. You go back to Asbury under McMahon and Whitlam all the way through Howard, all the way through Henry and

Abbott. Now, this reform is critical for our tax system to be fairer and more sustainable. When it comes to small business, we've heard loud and clear that we need to have restructuring arrangements. There are two different restructuring arrangements. One is for small businesses that want to restructure from being held within a trust to being a corporation and we've signaled that we're going to have rollover arrangements and a transition period and that they will not be taxed in relation to Commonwealth taxes. But we've added an extra restructuring option, which is really important, the election method where if a small business wants to be treated as a fixed trust, they can do so by indicating that

the beneficiaries will be allocated according to fixed uh proportions. go to why some want to stay as discretionary trusts in small business. They're widely used in the construction sector. A builder might have several projects on the go. One falls over for whatever reason and records a loss. Another projects does well, you have a profit. The moment, you can use the discretionary trust to take the profits to offset the loss.

Under your changes, you wouldn't be able to do that without a 30% tax hit on that profit, would you? No, so what you can do at the moment is you uh can transfer from being held within a trust to a corporation uh with rollover relief. Uh you can uh transfer uh to a fixed trust arrangement. stamp duty here though in some states, wouldn't you? Well, that's uh possible, but you know, that's something which we're continuing to discuss with the jurisdictions. the stamp duty hit here. So, what do they do? But look, the fundamental issue here and again, I think we need to go back to the point that uh discretionary trusts have doubled in number over the last 25 years. Uh we now have 800,000 discretionary trusts. And at the heart of this reform is the fact that

there are a range of options available to uh some taxpayers in our community that are not available to most, that aren't available to people who provide their labor. but I'm talking about where they're legitimately used. heart of this reform. Just look at where they're legitimately used. The building industry's one of them. Um will some end up paying more than 60% tax under these changes if they're using a trust and then separate companies for different projects? So, what we've done throughout this process is to provide uh a transition period. Uh there's lengthy transition periods to allow uh different structures to adjust. We've also provided a range of really important carve-outs. So, fixed trusts, uh charitable trusts,

I understand that. Will some pay more than 60% tax? No, that Look, I think the point is that uh there's a range of carve-outs which are really important and still pay that much tax? Look, I don't want to get into particular tax arrangements for particular uh companies uh because e- each situation is different, but the point here is uh that what we're setting is a very reasonable uh minimum tax. The 30% uh is a level that is really to better align uh taxation through trust income, through discretionary trust, with the kinds of tax that is paid But you can't deny that some will pay more than the 49% top marginal tax rate.

No, we've we've undergone a very detailed consultation process where we've added an extra restructuring uh pathway, which is very important, and that was informed by stakeholder consultation. We've exempted a whole range of arrangements, but at the heart of this reform is the need to better align taxation through uh trusts and labor income. Okay. All this restructuring that you're talking about will involve cost, legal advice, accounting advice, and so on. What is the government's estimate of how much this should cost a small business on average? All the compliance. So, it's difficult to pin that down to um particular businesses, but the work on this but the economy-wide costs are something in the order of uh $50

million going forward, um which is uh a reasonable kind of ongoing cost for adjustment across the economy for a tax reform of this magnitude. average cost for a small business, is it in the thousands, tens of thousands? What's What's the estimate? Look, it really depends on the kinds of uh arrangements that a small business uh has. It depends on the kind of restructuring pathway they undertake, but um it should um move be towards the former than the latter. Okay, towards the thousands, not the tens of thousands. Let me turn to private health insurance. Why do you want pensioners to pay more for private health insurance?

Look, this is a really important example of where um we need to make tough decisions in order to go down the path of fiscal sustainability. We did so with the NDIS uh taking uh measures to much better uh target and calibrate that huge program, very important program, uh but to do so in a way where it maintains its core purpose. Similarly, with the private health incentive, what we're saying is that there will be an incentive right across the board, but it'll be based on income measures, not age measures. Now, this is an example of where it's necessary to take tough decisions occasionally. The income that we're going to save from this particular measure will go towards much-needed investment in aged care and

our home care packages. What we're seeing from the opposition is it's all too easy to show a cavalier disregard for the bottom line and to take the easy political wins. This is a measure that is targeted again. Just on the consequences of this decision. The health department estimates nearly 80,000 older Australians will drop their cover in the space of just 2 years under what you're planning to do. Do you know how many would drop their private cover over 4 years? No, so this is a measure that is at its core designed to ensure that the government has more resources for aged care facilities. but I'm just going to what the health

department, your own health department is saying. Their estimate is nearly 80,000 drop their private cover in just 2 years. Has the government looked at the impact this would have on hospitals, on state budgets? Well, we do look at the impact holistically and obviously we are involved with major hospitals agreements with the states, but it's important as part of that overall arrangement where, you know, we help to fund the hospitals with states, but we also need to calibrate particular measures within that, including ways in which we help to fund private health insurance. Now, it's important that we

continue to do that, but do so in a more targeted way and do so in a way where it's based on income and not age. The Greens say you've got to carve out pensioners. Will you? So, this is a matter that's obviously not in my portfolio, but I understand that Minister Butler has said he's open to good faith negotiations. What we saw in the Senate uh was a frankly a bit of a stunt uh last week. What we need is for both the Greens and the Coalition to engage in good faith with the Minister. Dan Mulino, Assistant Treasurer, we appreciate you joining us this morning. Thank you. Well, coming up, what the Greens' latest crisis means for the party and their brand new leader. First, let's get back to our panel. Political journalist and

author Lenore Taylor, Paul to Carl from the Sydney Morning Herald in the Age, and Anna Henderson from SBS World News. Just back on the Tax Office there, Lenore, the Assistant Treasurer knew in July that this was where the Tax Office was heading. He's not making any apologies for how it was handled from there, but you would think that should have been a point at which the red flag might have gone up. Uh yeah, I think you did highlight some contradictions in the position in that interview between the Minister saying, "No, no, they weren't too hands-off." And then yes, when many months later the stakeholders told them what they

thought, they did intervene. I mean, both of those things can't be true, right? Yeah. Pretty clear admission they knew in July, I think. Um very bad error not to have realized how this would look. And on the trust matter and really the whole budget package, there's significant merit if you talk to economists and think tanks on a number of the measures the government have taken. And there's been long been calls to, you know, not have the tax base erode through tax concessions, which are massive. But taken as a whole and without an offset on um you know, giving businesses lower taxes or giving workers lower income taxes, the perception is that the government is against the private sector and against wealth. And

to throw this ATO decision on top just added to it. So, it's a perception problem and the fact that they didn't see it is really damning. And when you look at how Jim Chalmers has dealt with that question of when did you know? He's said sort of in the lead-up to ahead of he said. Uh and now we hear actually just that, you know, the government was well aware plans were a foot sometime ahead. My understanding is that others were making representations with vested interest uh far ahead as well about how this would play out. They were not under any illusions essentially uh if they read the briefings, if they listened to those

who raised this early. And I do think the idea of uh just in terms of um Andrew McKellar and the way the PM talked about their engagement uh on the budget. Uh you know, you know, the phone call was made, the deal was done. Sure, it seems like he's decisive in his listening, but it also sounds like people who have power can kind of send up to him. You know, get in touch with him and get a decision. And I don't know how that's going to play longer term for the government in the sense that those people can just you know, in a perceived way get a result. And for all the criticism of Chalmers, don't forget how hard Albanese went out about this surcharge ban. This ATO thing is actually just a spin-off of the of the policy itself. The government cast

this as a cost of living measure that may well bring down the price of your coffee tomorrow. Which never made sense cuz it was always going to be passed on, right? Always under fire. And of course no business will actually reduce prices. In fact, many went above and beyond the surcharge fee and increased by 50 cents. So, it displays a government still got the social media meme. We still got the meme, but displays a government that's kind of out of ideas on how to bring inflation down. I want to go to that uh defeat for the government in the Senate this week after the coalition, the Greens, and the crossbench all teamed up to torpedo

Labor's changes to private health insurance rebates for those over 65. The government is refusing to back down and staging an immediate rematch. To all those over 65 this evening, please go and have a sherry cuz you bloody deserve it. Well, this afternoon we saw the resurrection of the no coalition. The Albanese Labor government has declared war on older Australians. We are not going to let Labor punch down on pensioners in the middle of a cost of living crisis. Every time we bring a difficult save to fund new important services, politics takes over. We're going to reintroduce the bill tomorrow morning.

Don't bring that bill back up here today cuz that makes you look like a 2-year-old who's having a little dummy spit. And we intend to press ahead. I commend the bill to the house. When will labor stop waging war on senior Australians? It is not a higher rebate if you are older. It is the same rebate. The logic is simply not there. anything they're bringing forward that we could support. Carve out pensioners and protect pensioners in this bill and we'll pass it. I think the government would be well advised to leave it in the dustbin.

All right, I want to come to the Greens taking a hard line on this issue and whether that's the right one to go into battle on. But on the policy itself here, Anna, this was brought in under the Howard government, this more generous private health insurance rebate for people over 65. Is it a good policy? Is winding it back a sensible move? What do you think? I mean, the government has been arguing it has to find savings. It has to look across the budget and work out how it can rein things in where it can. I think there was a view within the government they could sell this because it was putting everyone on level a level playing field. And of course, from the very beginning there were concerns about whether people

would drop their private health insurance. But the government felt like it could navigate that. But in reality, in the kind of economic situation we're in at the moment, you know, pensioners being in that position is a hard sell and it's an easy thing for oppositions and kind of, you know, more populist elements to latch onto. For the opposition to be against, you know, pretty much every saving, like where are they going to find their savings? Well, exactly. Is the question. And they've got quite a list [clears throat] that's racking up now. But I think it's I think pensioners is a strong and potent line for political parties to go on Sure. against the government. But the overall

increase in the rebate for over 65 was brought in by Howard as you say when the Howard government had money coming out of its ears. And [clears throat] now it does seem like a logical place to look for savings, but I think at the end of the day that looks like the government's going to have to carve out pensioners and lose what a billion dollars Yeah, I think it's about 40% of the saving, Mark Butler. to get it through the Senate. I was looking at an article just before walking in here in the AFR in 2004 just before the election when Howard was looked like he was on track to potentially be defeated by Mark Latham gave out what was described at the time as a grey bribe.

There's Mike Reed in the AFR this week pointed out that there's no statistical statistically significant increase in the number of older people who took out private health that jumped out at me as well. So, did the policy actually get more people into private health insurance? The evidence suggests not and public health and the preference for public over private is core to Greens ideology. So, the fact that David Shoebridge has taken a hard line on this I think indicates that he's going to make life very hard for Labor. talk about that because it's a classic example, isn't it? It was easy to spend the money. It's much harder to take away something like this. The Greens have you know, well, we can talk about both ends really. Let's start with the

Greens. David Shoebridge came into the leadership couple of weeks ago. Clearly, you know, wants to be more assertive. Absolutely and this is the first place where he's, you know, planning his stick in the ground. So, you would think he's probably not going to back down on it and that's why I'm making the assumption that the government's going to have to accept the saving, but you would also think that the Greens are going to have to pass this in some shape or form because of their underlying policy position. Those I spoke to in Labor yesterday were pretty adamant we're not we're going to stare them down on this. And don't forget the Greens in their party platform are opposed to the private

health insurance rebate all together. Huge hypocrisy. Like what was the money going towards? It wasn't kind of going back to general revenue. It wasn't going to be. It was for other areas, acute needs and hospitals where there's bed block. Yeah, and as for the coalition to your point, Anna, you know, there they are bagging the government all the time for spending too much and making it very hard to take that spending away. But the reality is that the perception is left that the government wants to take money away from, you know, war veterans or from pensioners and, you know, struggling small businesses. The overall kind of optics of this is now getting pretty tough. But that's the job

of government. That I think as Madeleine King was saying at the press club, you know, we've got a lot of tough decisions and then they've got the challenge of things like, well, there was the possibility of a gas tax. Now, we don't need to re-prosecute all of that, but you do have those questions of where is the government going to get money and is it fair how they're playing that out? I think two things have happened in recent weeks that have created a circumstance where we're going to see a much more deadlocked Senate. One is Shoebridge's elevation. He's much more hardline than most people in his party,

particularly the Senate negotiator Sarah Hanson-Young. He feels like doing deals with Labor is immoral, really. He doesn't think doing a deal is a good thing. And it also gets him noticed. It gets him noticed. And on the other side, on the coalition side, Jonno Duniam, who's a right-wing senator, is a critical figure in the Senate. He's really, I think, the only coalition person who can go into the deep dark rooms of the right faction of the coalition, talk to guys like Alex Antic, and then also go and talk to the Greens and have really trusted conversations with Katy Gallagher and the Prime Minister.

Did you see the Katy Gallagher hug when Jonno Duniam gave his valedictory? For both the Greens and coalition, there's going to be a much more pressure internally and from the Senate leadership to block. And so we're likely to see a more difficult process for Labor to pass its legislation. The Greens, however, are still expected, I reckon, to pass the digital duty of care. They want some changes, but that's one where we probably will see the Greens work with Labor. Does everyone you I would agree with that because they've gone in so hard for it and because the government's really got nowhere else to go. And I think because Sarah Hanson-Young has credibility and status on this issue and she wants to work with Labor. If it

was Shoebridge's choice, it wouldn't be passed. No. That's interesting. Yeah. That's interesting. But it's big tech and absolutely Sarah Hanson-Young has been very strong on the need to tighten the rules there. The free trade agreement with Europe, just quickly want to touch on this as well. Because the Nationals leader Matt Canavan, Anna, has declared coalition's against it. Yes. Some Liberals privately don't quite feel comfortable with voting against a free trade deal because they never have.

Yeah. But what is the position at the moment? Look, there is this concern within the opposition around how the FTA has been constituted and whether or not will bind Australia to certain climate provisions that could end up being problematic with trade with the EU. That some climate elements where the government may not meet targets could mean that the EU can somehow, you know, have an economic impact out of that and that Australian businesses will be worse off essentially out of that. I don't think also have concerns about not enough access for agriculture. access. European cheese and so on coming in. Absolutely. And the Nationals, and Matt Canavan, they want to differentiate themselves. They want to stand up really

hard for the ag sector at the moment. Where does it leave the Libs? Um I don't think they're I think there are some who are at the negotiating table who do have very serious concerns. Want to see carve-outs. How you would do that now? It's already gone through all the processes. The idea of going back and doing new compromises is questionable. Just a quick side note, Don Farrell was on Patricia Karvelas' show this week and he was talking about how he was trying to negotiate with Matt Canavan and Ted O'Brien and they walked out of the room. Checked with them to find out why they walked out. They said, "Well, he ended the meeting." Like they can't even agree on what happened when they went into the room for the compromise.

That's right. There's some real cynicism in inside the coalition on how Don Farrell's handling this. They all respect him. He's you know, the Godfather who gets deals done. But a bunch of the Liberals who want to see this deal done think that this is something Farrell's mismanaged. He hasn't got bipartisan support in the lead-up to it. They see it as him doing a little bit of swan song before And the National Farmers Federation aren't on board. They're not on board. So that sort of The other business groups are. They're all urging the coalition Everybody else wants it. And the concerns they're raising about the climate provisions. As I understand it, the climate provisions are supporting the Paris

agreement, which last time I looked the coalition still supports. So I've heard some They don't want to say that too loudly, but they No, but they do. Yeah. I've heard some pro-climate Liberals who are in favor of climate action say that this FTA does have quite a lot of green components that worries them as well. Well, the WA Greens Senator Can I sorry, just to cap that off. Hasn't gone through Shadow Cabinet. That's a good point. It has not yet gone through Shadow Cabinet. This is Canavan wagging the tail of Getting ahead of ourselves. a little bit All right. WA Greens Senator Jordan Steel-John is on indefinite leave

following allegations of inappropriate behavior towards women raising serious questions about how the party's run. I received correspondence in relation to Senator Steel-John earlier this week. Greens Senator Jordan Steel-John under investigation within the party amid allegations of sexual harassment of women over a 9-year period. All warned me about that um Jordan Steel-John having the nickname um Feels on Wheels and also that I shouldn't be alone with him.

I, Steph, in the party room take these matters incredibly seriously. It is going to a fair and independent and timely process. Jordan Steel-John denies the allegations. Adding that quote I utterly reject this characterization of me. Will he be voting in the Senate or advocating for political causes or indeed the people of WA? Well, it's my understanding that leave means leave. My thoughts are with any women that may be impacted or being traumatized by this investigation.

They all the time want to have a go at One Nation. Well, you know, people in glass houses shouldn't throw stones. Multiple Green staff is indeed this is in the letter that you received have told me that his nickname is Field of Wheels. What's your response to that? Well, I come back to the need for a fair and an independent and timely process. And I've done everything I can to ensure that is the parameters under which this matter will be investigated. Thank you very much. So, first up a shoutout to James Massola, your colleague Paul at the Sydney Morning Herald in The Age for breaking this story and the follow-up that there was in fact a dossier for some 10 years cataloging complaints against

Jordon Steele, John, and workshopping how to handle any media requests about all of this. David Shoebridge, as we saw, was saying he knew nothing about it until this week. How credible is that? Well, I suspect he, like almost everyone in the parliament, knew that there were rumors here. These nicknames, which I won't repeat because they're defamatory and a bit uncouth, are widespread. Um but nobody's ever proved anything, and that's why I give my colleague James a lot of credit because I saw a bunch of people on Twitter, former staff and others saying, "Oh, these rumors have existed forever. The Greens have been

shopping around shopping this around for years." Well, these things are incredibly difficult to ever prove and to get on record in a news story. So, well done to James. Uh really tricky for the Greens. I mean, I suspect you won't see many people from the right who defended Bruce Lehrmann and called for due process to make the same arguments against Jordon Steele. I suspect you won't see people from the left who were very quick to judge Bruce Lehrmann do the same here. It's a good point. So, it's it's this is perilous. Nobody really wants to get into detail. There are no details around the allegations.

Yeah. But that dossier, uh David, to your point, is incredibly damaging. Well, that's what I think politically damaging. Let's say there's going to be an independent look at the allegations, but Lenore, I mean, you've seen these things over the years. If there's a dossier that the party's got on file, um that does that suggest more should have been done about this? Well, on the surface, yes, it does. And so, the Green the WA Greens are taking legal advice about how to set up an independent investigation into all of this, which I think is the appropriate thing to do. But I would hope that it

would also answer the question what happened over the 10 years that this was sitting around in the party, and whether there were any I don't know whether there were or were not any investigations over that time. But it's incredibly difficult to talk about because the people who wrote the letter are people who had heard of the allegations, Yeah. uh and were told about the allegations, but not directly uh witnessing or being subject to the alleged behavior. So, you know, it's a very murky and difficult set of circumstances, and I think that having an independent investigation absolutely is the right thing to do. I think the Greens have referred it to a workplace support services and the independent parliamentary standards

committee, but they can't do anything until there is a complainant. So, for David Shoebridge, you know, 5 minutes into the leadership, this lands on his lap. How's he handling it, do you think? Is he done the right thing? Look, he's he's come out and he's talking about it. He's answering questions. He's limiting those questions. Um he's he's making a few public comments. I think that it's it is very challenging because uh even in terms of the referral to uh the commission uh the independent parliamentary standards commission, they've had to redact the letter. So, the people who wrote the letter are not the alleged victims, and even their names are not, Right. public in that process. And on top of

that, uh so the WA Greens now work out the process. I'm told there are hopes that maybe they can get a retired judge or magistrate who's completely independent to assess the situation. They've got to have that sense of independence, but how do you achieve it is the quandary that they're now facing. Final issue, Josh Frydenberg. The former treasurer has been out and about promoting his new memoir, doing the media rounds as well, and publicly weighing up a return to politics. Um Uh Anna, let's start with you on this. The reception amongst his former Liberal colleagues, uh a reduced party room since he was once there, um versus the reception with broadly, they might be different things, but in

terms of the colleagues, the old colleagues in Canberra, how's the um what some are calling the festival of Frydenberg? How's it going down? Well, one of his backers uh during the week I saw sort of floating down the corridor and blew me a kiss as they got in the lift. This is a non-specific thing, but just like excitement. Oh my gosh, what is happening here? Maybe we're seeing, you know, thousand flowers on the moderate side bloom. And then on the other side, I had, you know, people who are quite senior within the Liberal Party on the front bench who have a visceral kind of almost disgust about

Josh Frydenberg inserting himself into the public debate right now. They're saying that it has implications for the Victorian election. He absolutely um disputes that. They're also saying though that he was the big spending treasurer that they're cleaning up the mess of in terms of their campaign. They're sort of blaming him for where they are now. I think that is quite an extraordinary um position perhaps that they're taking on this. have defended that spending, uh you know, back in the day, but apparently anyway. It is Look, polarizing is, you know, where things are at. Both sides are pretty um They've got their views, but the reality is the parliament has changed with the Liberal Party, so I don't think he has

as many people inside the parliament cheering him on. who's uh you know, helping him uh along the way here. He had John Howard launch the do the book launch in Sydney. He's got David Crisafulli on Tuesday. The premier, the arguably, you know, most senior Liberal in government in the country doing it on in Brisbane on Tuesday. Bottom line, is he going to run? Well, he's speaking privately to people in stronger terms about running this time than last time, when he again flirted with it, again annoyed his colleagues with the long period of flirtation. Uh, but I don't think that means he definitely will.

Uh, and many colleagues think it's still less likely than it is likely. This magical pathway back to the leadership as well is so complex. Uh, the set of results um in which he would win Kooyong with the Liberal Party primary vote is high enough to win in Kooyong, and where Angus Taylor, or perhaps Andrew Hastie, who knows who it is, does not remain the leader, is a pretty narrow segment of results. And to the point about the spending in COVID, this has become quite a big talking point, this rejection of the Morrison government's agenda among thought leaders on the right. Abbott, Credlin, even Angus Taylor at CPAC last

week say, "We overspent. We might have caused inflation. Uh, we might have set off the inflation surge. Uh, net zero was a mistake." And the big surge in migration that Labor was very late to clean up also started under Morrison. So, Frydenberg has this aura. He is this kind of perhaps the most well-known member of the Liberal establishment still active in political life. So, he has this credibility, but his legacy is this government that conservatives are now rejecting. So, to what extent can he reject that legacy while And how much of that is about trying to stop Josh, trying to block Josh Frydenberg, this sort of Yeah, and does that sort of new criticism about the spending that they

once upon a time defended, including Angus Taylor? I actually don't think it is about that. I don't it is or it isn't, he has this sort of multi-layered gamble to take, like whether he is going to run, whether he can win, and then what kind of party and what kind of policy agenda and what makeup of the party he would inherit if he did. You know, he could be the white knight that does gallop back into Canberra, and then he's got an entirely different army that doesn't see the world the way he does. And one Liberal on the right said to me this week, like if One Nation is the problem, how is Josh Frydenberg the solution? That's pretty reductive because there's a whole lot of people in the middle who may well, you know, have

a different voting intention if they had a different Liberal leader. But that was the issue that was raised. it is correct. I mean, Frydenberg has never been a moderate. He's never been a member of the faction, but his pitch at the moment is uh similar to the pitch that moderates are making. We need a return to the center. We need to speak to the city Urban seats. Arguably, that was Susan Ley's pitch at the Press Club when she went to Canberra. She left the door open for One Nation on cultural issues, and Hanson walked straight through. But also on traditional economic policy like reconsidering a GST, thinking about

taxation policy, which Angus Taylor slapped down in a heartbeat. Mhm. That was unfortunate, I thought. Our panel, Anna Henderson, Paul Sakkal, Lenore Taylor, back shortly with some final observations. Time now for Mike Bowers and Talking Pictures. I'm Mike Bowers, and I'm photographer at large for The New Daily. I'm talking pictures this morning with freelance cartoonist for The Point and Crikey, Fiona Katauskas, and a very warm welcome. Well, thank you, Mike. It's lovely to be here. Props here to Megan Herbert, who's who's drawn Jim Chalmers and Michelle Bullock in class.

Yeah, absolutely. I swear, miss, it wasn't me. Ask them as the teacher holds the inflation will be cushioned. And pulls his ear. Yeah, props to Megan for slipping in an indirect fart joke. Yeah, yep, the fart of the deal. Here's the Treasurer this week, and when the news is bad, you wait for the respective face that portrays that. Yeah. Oh, man, I've got to say I'm very glad no one is walking around taking photos of me. There is a beautiful composition. There's sometimes a bit of a Renaissance painting element to pictures of the front bench. it's Caravaggio style. Labor may be

doing it tough, Fiona, but the opposition's not in great form, either. It's a bad time to be in a main major political party, isn't it? Yeah, we've got Angus Taylor here in the shadow of Josh. Oh, this gives a whole new meaning to throwing shade, doesn't it? And also, it is a bit of a savage indictment when you're being outshone by, you know, Everyone else. Yeah, well, but we're not only by everyone else, but like, I don't know, they're not exactly a shining lot, are they? Yeah, Matt Golding's done a lovely job here overshadowing Angus. Yeah. Peter Broelman has drawn the classic cartoon fight here.

It is, it's great. The great cartoon classic dust cloud. Yeah. Sort of take that. Eat that labor. How's them apples, Albo? Suck eggs, labor. How do you like that, labor? We're going to get you, Albo. Take that, labor. In your face, labor. Whop, thwack, whack. David Pope here has drawn Albo as Clippy, which is just wonderful. I bet Clippy's connected to the Albo rhythm. Get it? I get it. Yeah. It's Chat ALP, actually. I see your parliamentary committee is writing a letter to Prime Minister about regulating AI. Would you like some help?

Guys, could we perhaps try a first draft without the chatbot? Oh, David, you're hallucinating again. You've got a suggestion here for some artwork out the front of Tech Bro HQ. Yes, so this is what they call putting the digit back into the digital duty of care. Who says we wouldn't lift a finger for user safety? I love the little bags of money around it. emerging. Trump always says that he's mastered the art of the deal, um, but whether he's got the good oil is another matter, and he's done a bit of diesel speed dating here, I think, with the David Rowe cartoon.

From Russia with love and diesel. Yeah. Mom, Dad, it's not me, it's him. Vladimir is just not my type. This is Vlad. He has his own diesel. This was all done Fiona over a phone call. Do you think they had an argument about who should hang up first? No, you hang No, you. Brett Lethbridge has got the Trump spray here where poor old Vladimir is getting a full diesel amount coming from Trump. Yeah, well, it gives a whole new meaning to under the pump, doesn't it? Oh, his is more existential. His is political, but uh Yep. Senator Jonathan Duniam gave his valedictory speech, and it's I always find it um ironic that they wait till

their final speech to actually admit that they quite like people from the other side. God, Mike, the world is so grim at the moment. Look, I'll take any moments of joy. I'll take any moments of uh bipartisan or tripartisanship. Abs- ab- absolutely. Fiona, it's been a great pleasure. I'm picking a very this week. I'll let you do the honors. Thanks, Mike, and back to you, David. Thank you, Fiona. Thank you, Mike. Let's get some final observations, Anna. Uh look, I know everyone's been hanging on my earlier final observation this year about imported Chinese windows. hoping you would return to it. But yeah, we're back here.

Uh so, there has been an interim decision made on this, which is interesting because uh there are a lot of big construction companies that are looking at imported Chinese windows and aluminum frames to help get and build 1.2 million houses. There's been this concern uh from the unions uh about whether or not China has been undercutting the local market with cheap windows. And uh the interim finding is that there has been an issue with dumping here. So, there is in the interim a suggestion uh that they're looking at what to do further on this. Uh and that potentially a tariff is in play. Uh and so, that's just I guess a bit of a microcosm of the sort of globalism around uh how we deal with building materials while we're looking at, you know, increasing housing

supplies. windows. Could we see the Chinese embassy provide a response? How would China retaliate if Labor did put in place a tariff? I just think it's an interesting one to watch. It is. Very bad for the double glazing community of Canberra. It is. It's uh transparently so. Um Donald Trump uh this week waved sanctions on Russia, sided by Putin's oil, and called for uh the Ukrainian leader to be removed. This is all extremely depressing if you're a supporter of liberal democracies. And obviously, Australia's not dispassionate in this. We rely on the US for security in our region, and who knows what China's intentions will be towards Taiwan. He looks like he might have a

really bad time in the midterms in November, and people inside the government and cabinet ministers are wondering when to flick the switch on becoming more aggressive towards the US for domestic political purposes, but also because that is their instinct. They are looking and they're a bit horrified. So, don't be surprised if next year the government is a bit more bolshie. It has already been bolshie on some policies like digital duty, but I mean rhetorically. Yeah, I think that's absolutely right, Lenore. And on digital duty of care, um you know, there's obviously room for differences of opinion, but I think it is starting to turn into a culture war.

Some of the arguments in opposition to it are really hyperbolic like that it's like the Stasi, that it's censorship, that it's Orwellian. I just hope when people see that they actually go and look at the detail cuz by my reading it's not those things. Thank you all very much for joining us this morning from Finally, it was a big week for Anika Wells, introducing that digital duty of care legislation, addressing the press club, and for a brief moment at least giving critics proof of exactly what they suspected. We'll leave you with that. Thanks for watching. Adults listen to Bananasphere podcasts where people post their views about the government or make memes or want to say the moon landing was fake. They can continue to do so without restriction.

We are controlling. We are not controlling free speech. You making us all feel very excited about being here.