Interview with Michael McLaren – 2GB Sydney – Monday, 16 January 2017

MONDAY, 16 JANUARY 2017                     

SUBJECT: Australian Jobs, Energy Prices, Company Tax Cuts, 457 Visas.

MICHAEL MCLAREN: Jason Clare is the Shadow Minister for Trade and Investment, Labor spokesman on this. He’s on the phone. G’day Jason.


MCLAREN: Well, thanks. Bill Shorten on the march here, talking a lot about Australian jobs. Going to be tough though isn’t it with a 50% renewable by 2030 policy?

CLARE: Well there’s nothing more important than a job. If you don’t have a job you can’t put food on the table, you can’t pay the mortgage, you can’t pay the rent. The problem we’ve got at the moment is full-time jobs in Australia have gone down over the last 12 months, not up. You mentioned Queensland – it’s particularly chronic there. You’ve got places like Cairns where the youth unemployment rate is around 28%, Townsville’s not much better it’s got a youth unemployment rate of 18%. So it makes sense to focus on this, it’s what the Government should be focused on – trying to make sure that we create as many jobs as we can for young people and for older Australians as well.

MCLAREN: Yeah, I know that. I mean that all makes sense, but I suppose from an everyday persons point of view, they look at say a Labor state like South Australia and with that renewable energy target there, they see the lights go out they see the big industries argue that they might have to go interstate or overseas because they can’t guarantee that state base load power, they can’t keep a cap on the prices in any way it’s a bit difficult to do business so a lot of jobs are going.

CLARE: The key point here, Michael – and I know that Tony Abbott suggested we should get rid of the renewable energy target on the weekend and he was slapped down by his own side on this – but the key point for listeners to know is that heavy industry is exempt from the renewable energy target. So those big businesses, that heavy industry is separate from the renewable energy target. It’s not part of it-

MCLAREN: Yes but, they’re not exempt from the consequences of it, they’re not exempt from blackouts, they’re not exempt from fluctuating power prices or gas availability.

CLARE: Certainty and security of electricity is critical. All of the research that’s been done by the CSIRO as well as by the Government’s own Chief Scientist says that the cheapest and best way to do that is through the sort of scheme that we took to the last election. The Government was floating the idea of doing this then parts of their party rebelled against that, even though all the research shows it to be $15bn cheaper to do it that way

 MCLAREN: Yeah, I mean look a lot of the listeners will be sceptical, they see the South Australian example but then they understand that federal Labor under you and Bill Shorten want to have an even more aggressive percentage of renewable energy targets for the entire nation by 2030. Look you’re not going to be able to even get 50% renewables by 2030, you know that but that’s still the proposal, you’re going to aim for it. It comes at a cost and the one thing Australian business as you know, particularly manufacturing, which Bill Shorten has correctly focused on today,  the one advantage it has, it doesn’t have cheap labour we have high wages, it doesn’t have quantities of scale compared to China or Vietnam but it could have if we let it have it cheap energy, yet we don’t have that in this country.

CLARE: There are a couple of things that any business person will tell you they look for when they’re trying to make a business stack up in Australia – energy’s one of them no doubt about it. They’re looking at the tax framework as well but something that you’ll hear every employer say without exemption is the importance of having a skilled and good work force. This is another one of our advantages in an age where technology is getting more and more important and we’re going to have more people replaced by computers, the work that we do to skill up our workforce compared with workers overseas is just as important here. Bill Shorten’s been talking about that and if we don’t focus on that – making sure more kids finish school so we can reduce those youth unemployment rates or for that matter making sure that we increase the number of apprentices that businesses pick up rather than fewer, and we’ve seen over the last 12 months the number of apprentices go down – then we’re putting ourselves at a disadvantage compared to the rest of the world and you’re discouraging businesses from investing.

MCLAREN: On the issue of tax Labor are certainly opposing a number of business tax cuts which the Coalition want to bring in – I’m sure that’s not helping business confidence.

CLARE: Let me clear that up. What we’ve said is that we’ll support a company tax cut for companies with an annual turnover of less than $2 million. For larger companies we’ve said, frankly the budget can’t afford that and it’s not just the Labor Party saying that. Peter Costello said – last week said, I think – that this is not something that the Government should prioritise. He actually said that the Government should focus on income tax cuts for workers rather than tax cuts for companies.

MCLAREN: Sure, but if you’re focusing on manufacturing firms most of them have a turn over more than $2 million a year, so you’re not going to include them. Yet you’re saying you want more manufacturing jobs and tax is important.

CLARE: We’ll focus on the small businesses, some of those bigger larger multinational companies are companies frankly that if they got a tax cut today a lot of that money would end up back in the United States or back in Europe or back in Asia, so focus on the small companies. Particularly when we’re being told that a tax cut in the order of $50 billion – which Malcolm Turnbull is talking about for companies – would only increase GDP by 0.1% in the next ten years. Given all of that we think we should focus on the smaller companies, not the multinationals.

MCLAREN: Even though in America if Trump gets his way company tax is going to be chopped to its lowest level for a very long time if not ever, in the UK they’re following suit now that they’ve broken free from the EU – I mean are you sure we’re going to be competitive with some of these bigger trading partners taking tax down, down, down?

CLARE: Let’s wait and see what happens in the United States. As you say Trump is going to become President on the weekend and one of the things he wants to do is ditch the TPP as his first order of business. We’ve said if you want to make tax cuts for Australian businesses let’s focus on small businesses first, we think that is the priority. Rather than big tax cuts for big multinational companies.

MCLAREN: Talking about building, making and employing Australians first I mean I appreciate that, I applaud that initiative I think it makes a lot of sense, I mean no one else around the world wants to help us out, charity starts at home and all of those clichés all rolled into one. But does building, employing and making Australian first always look a bit like the South Australian shipyards? Because if that’s the case we simply can’t afford it.

CLARE: I’ll tell you what it looks like. It’s simply saying to companies that want to invest in Australia or that are set up in Australia if you want to bring workers from overseas to come and do work in Australia, before you do that you’ve got to check and see if there’s an Aussie who can do the job.

MCLAREN: So we’re talking 457 visas?

CLARE: Yeah that’s right. One of the changes we made in Government is to require this labour market test where you’ve got to go out, put ads in the paper, find out if there’s an Australian who can do the job before you can bring people in from overseas. We’ve said we would toughen that up if we win the next election. But there’s been talk today about the Trans Pacific Partnership, this trade agreement which is now dead, if that was to ever happen one of the clauses in that agreement was to remove this labour market testing for 6 different countries. In other words people from 6 different countries around the world can come to Australia and work without their employer having to first check if there’s an Aussie who can do the job. You know that’s just silly. I would think most people listening to this right now would think it makes sense to require businesses to check if there’s an Australian who can do the job before you go and look overseas.

MCLAREN: Yeah makes a lot of sense, I think there’s a lot of, well let’s use the word rort. I think there’s a lot of rorting going on.

CLARE: I don’t think that’s too strong a word. There’s plenty of evidence to prove it.

MCLAREN: Alright just before we go, back on that issue of energy because this is the one that seems to get a lot of people’s back up, and look I’m a layman I’m not a scientist – I’m none of that. But I just don’t understand how Labor can nationally having seen what some Labor states are doing and the effect its having on their industries and employability, advocate that the entire nation aims in just 13 years’ time to have half of our energy produced by renewables and still ensure that we are economically competitive particularly in energy intense industries like manufacturing. I mean you can’t surely, Jason guarantee base load power using south Australia’s example nationally. You can’t guarantee that we will be energy cost effective. I mean it’s your voters the blue collar boys and girls out there in the factories that are going to be hurt.

CLARE: My electorate in the heart of western Sydney’s full of blue collar workers.

MCLAREN: Why would you want to put their jobs on the line so that we can appease the United Nations and Paris?

CLARE: The last thing I’d want to do – I’ve seen my community suffer a loss of jobs in manufacturing since the GFC, people who’ve lost their jobs because factories have closed because of the high dollar. More often than not. The dollar is lower now it’s making manufacturing more competitive.

MCLAREN: Yeah but you can’t do anything about the dollar, with respect unless you get rid of the independence of the Reserve Bank but what you can do is affect power prices you as the Federal Government with your State colleagues can directly bring down power prices with policy, yet every move seems to be to put them up.

CLARE: Let me make two points, and perhaps I’ve made them before but let me reiterate it. It is very important that we’ve got a national approach to renewable energy targets. The work the government is doing to make sure that we’ve got a national approach, not just a state by state approach is legitimate and they should keep doing that. The second point is if we want to keep electricity prices as low as we possibly can, if we want to make sure that we meet the targets that this Government has signed us up to in Paris, then we need to make sure that we set up the sort of scheme we took to the last election, because it’s not just me, it’s not Jason Clare, it’s not Bill Shorten saying this is the cheapest way to do it, it’s the CSIRO and its Malcolm Turnbull’s own Chief Scientist who last year said that the cheapest and best way to do it – it’ll save us $15 billion – is to set up that sort of energy intensity scheme.

MCLAREN: Yeah it’s the cheapest way to get to the target I don’t know that it’s the cheapest way to get jobs. Look I appreciate you coming on and I thank you for giving us some time, I think Bill Shorten’s stolen a march on Malcolm Turnbull here and we’ll keep an eye on him and how it unfolds, Jason have a good afternoon.

CLARE: Good on you, thanks Michael.