Interview with Raf Epstein, ABC Melbourne
10 October 2022
RAF EPSTEIN: Jane Hume joins you in the studio. She is the Shadow Finance Minister in Peter Dutton Shadow Cabinet and also one of the Liberal Senators for the great state of Victoria. Good afternoon.
JANE HUME: Good to be with you Raf.
RAF EPSTEIN: Did Peter Dutton lie about the submarines?
JANE HUME: Of course he didn't lie. I think that's an extraordinary accusation. What frustrates me most about this conversation, though, Raf is that four months into government and the Labor government are still talking about the former coalition, rather than the issues at hand that it has to deal with and they seem to be they now seem to be front running, cuts to defense. Why on earth would they be talking about this if they weren't front running cuts to defense? You know, they've put out a defence strategic review. It's being run by Stephen Smith, who was in fact the architect of the last round of cuts to defence. And that's why when we came to government, we had to essentially clean up the mess that Labor had left us. They had not invested in any defence capability whatsoever. They'd seen our defence capabilities dwindle. So we had to then increase our defence spending, set a floor at 2% of GDP. And we're on a trajectory to catch up from those six years where we'd fallen so far behind and invested over $270 billion in our defence capability in our nine years in government.
RAF EPSTEIN: They were there for six, you were there for nine.
JANE HUME: That's right.
RAF EPSTEIN: It’s a bit weird to be blaming them isn’t it?
JANE HUME: oh, it's extraordinary that they stopped investing in defense in those six years. But but this is the thing Raf, you know, it's so important to maintain our defense capabilities. They let it fall so far behind so we were always playing catch up and that's why the former coalition government embarked on the most and you know, this the most significant naval shipbuilding enterprise since since World War Two and that included one of those building and upgrading over 70 defense vessels in Australia's shipyard and that's supported around 15,000 defense jobs.
RAF EPSTEIN: Did you have too many defence ministers?
JANE HUME: I don't think that's a relevant consideration.
RAF EPSTEIN: I mean, just, your colleague is Luke Howard. So he's the shadow Defence Industry Minister. He did say to sky today. I accept there was too many Defence Ministers. Six Defence Ministers in nine years. Do you think that's too many?
JANE HUME: No. I think it's important to have a good defence minister and I'm not going to make aspersions on Richard Marles. I think Richard Marles is a good bloke and I'm sure he will make a good defence minister but he needs to concentrate on his job rather than other people's.
RAF EPSTEIN: Just a sort of an honest reckoning with people. You're out of government and you can be a bit I mean, no one really wants to have three prime ministers in nine years when they're in power. I'm assuming you don't think that was all like a great idea. Because you had three prime ministers. You had six Defence Ministers. Surely that, not casting aspersions on those six people, but there's a problem wasn't it?
JANE HUME: Surely the record is the program that you leave behind and during that period of time we delivered upgrades to bases, upgrades to defence health facilities. We have upgraded training right across the country.
RAF EPSTEIN: And you don’t regret not having a subs contract? We've got no idea where there'll be be built when, who, why, how, we have no idea.
JANE HUME: And of course, that strategic alliance, that AUKUS announcement was so fundamentally important. That's the greatest sort of strategic shift that we've seen in this country since World War Two and incredibly important so we can know if you really were in summary that's a really hang on. broad question, not going to build to fit you're not going to build nuclear submarines, within a year of it announced no other major strategic upgrade and let's not forget, you know, we weren't able prior to this to get that technology from the UK and the US and in fact, it was Peter Dutton as defence minister was able to secure that. That Labor would get on with the job of delivering AUKUS and the other projects that we commissioned to when we were in government, but they failed to commission when they were in government.
RAF EPSTEIN: I'll get on to cause in a moment 1300 222 774 You don't think it's a problem? We don't know where the subs are coming from?
JANE HUME: Well that's a decision that will be made. Taking into account all of the information that we have to hand at the time that not we have turned up sorry, forgive me, I'm having, I'm having a little government flashback here. That the government should make with all the decisions well, all the information that has available to it at the time. But the good news is we now have access to that technology. And we never had that before. And that's because of the negotiations of the Coalition Government, the previous Coalition Government.
RAF EPSTEIN: It is 13 minutes after five. Jane Hume is in the studio with us one of the Liberal Senators for the State of Victoria and Ian is calling from Sky shifting our attention to tax cuts and what do you want to mention?
CALLER: Hi, I'll just ask the Senator, why the richer portion of the country needed more assistance than the poor section of the country. With the tax cuts, Stage Three tax cuts, benefiting the richer in the town, but more than the poor in detail. Why do they need more assistance?
RAF EPSTEIN: Why did, you're saying why did the rich need more assistance Jane Hume?
JANE HUME: Well, I think most importantly, what you're asking about is why tax cuts are important in the first place. And they are important because they encourage aspiration. They're good for business, they're good for individuals, and they're good for the economy overall and hard work should be rewarded. You should be able to keep more of your own money. And that's why the Coalition introduced the personal income tax plan. Stage Three is just one part of that tax plan. But because of our policies right now, because of our tax policies, right now, a person earning $90,000 for instance, is paying $3,000 less tax today than they did under the previous Labor Government. So the progressivity of our tax system remains in fact, even after Stage Three tax cuts come in, the top 5% of income earners will still pay 1/3 of all income tax paid in Australia.
RAF EPSTEIN: Maybe I'll ask you this question in a different way. Under Stage Three someone on 80 grand will get $900 a year, someone on 200 grand will get $9,000 a year so someone on 80 grand receives a 10th of what someone 200 grand gets. Do you think that's fair?
JANE HUME: So stage one and stage two of the personal income tax plan was specifically targeted at low and middle income earners. Stage Three was at the higher end, but most importantly, these tax cuts as a package deliver lower, simpler and fairer taxes.
RAF EPSTEIN: So you do think that is fair?
JANE HUME: That’s got to be good. That has got to be good to kind of it's part of a package and that package made and understand what the Stage Three tax cuts actually do. First of all, they they bring two tax brackets together, they merge two tax brackets together.
RAF EPSTEIN: Can I ask about the merging of the tax brackets?
JANE HUME: But they increase the threshold, so that they actually capture more taxpayers. And then they lower the tax rate to 30 cents on the dollar.
RAF EPSTEIN: Can I ask you about 30 cents in the dollar? You said that's progressive? Everyone on 45 grand to 200 grand, he's going to pay the same marginal tax rate. Is that really progressive?
JANE HUME: Well, it is because there is still a higher tax threshold has higher tax rate for anybody over $200,000
RAF EPSTEIN: Only the top 5%,
JANE HUME: Only the top 5%, who pay 1/3 of all tax paid in Australia.
RAF EPSTEIN: But my question is not a question about the very rich. It's a question about people earning $45,000 to $200,000, which is a huge chunk of the country. Is it really?
JANE HUME: Exactly right. In fact, it's 95% of taxpayers and that is a really good thing because it removes that bracket creep which is so insidious. It's part of a long term plan. So if you live you change jobs, if you take on extra hours, highrise whatever it is, and you move into the next tax bracket, well, that's actually a disincentive by maintaining the same tax rate throughout that whole threshold. You haven't got that disincentive to take on that extra hours to get that promotion.
RAF EPSTEIN: How do we then pay or how do we keep the budget manageable, you doubled the debt in the nine years, you were there before COVID. So if you've doubled the debt and we're headed towards a trillion dollars, if you give away the stage or if you've legislated the Stage Three tax cuts, how do you begin to address the debt?
JANE HUME: So understand that tax cuts are not a gift that have been given to you by some sort of benevolent government Overlord, it's your money and you get to keep it from a critic government.
RAF EPSTEIN: What do you do with the debt?
JANE HUME: That’s the government's responsibility is to make sure that its payments work within the envelope of its revenue.
RAF EPSTEIN: Yes.
JANE HUME: Now in 2019, that's exactly what the coalition government did. When we hit a balanced budget.
RAF EPSTEIN: You doubled the debt.
JANE HUME: Hold on. At MYEFO, we were $700 million away from a truly balanced budget, which is essentially, believe it or not, I know it sounds like an enormous number, but it's almost a rounding error in budgetary terms. Without those budget surpluses or balanced budgets.
RAF EPSTEIN: There was no surplus.
JANE HUME: It's very hard to pay down to there was very hard to pay down the debt. But that's where we got to we were ready to go and then of course. Hang on. And then COVID hit. COVID Just a question, but how, but now this Labor government are actually planning on increased budget deficits and they went to the election saying that they will go do governance, but that's what you're asking me is that how are we going to pay down the debt when we've got budget when we've got budget deficits?
RAF EPSTEIN: I'm just wondering if there's a policy that you'd put forward to help pay down debt if we're not going to proceed? If we're not going to change Stage Three tax cuts. What would you do?
JANE HUME: Absolutely, we would make sure that we that spending is curtailed and maintained and that's the real role of this government right now, because the only way that you can do two things. One is bring the budget back into surplus but also give indicators particularly to the RBA that you're trying to keep inflation under control. Well then otherwise, you know, the RBA is gonna have to do all the heavy lifting and keep raising interest rates just to keep inflation under control. But right now, the job is to maintain a budget that, a cautious and sensible budget that looks after that, that addresses spending and we know that labor and enormous spending agenda
RAF EPSTEIN: Will come maybe to that and to more of your questions. Let's get some traffic first with Dan Belly.
RAF EPSTEIN: Jane Hume is answering your questions. She is Shadow Finance Minister, part of Peter Dutton’s team, our mark is in Cardillo. Mark, what do you want to answer?
CALLER: I just want to know basically why we haven't done anything with defense really? Since 1945. My uncle was on Air voluntarily during the Second World War, gulf wars which were a decoy to the Japanese, Laha air field there. They were running.
RAF EPSTEIN: Come forward a bit for me, Mark, what's your query about what would you like us to be doing that you don't think we are?
CALLER: Well, we should be selling stuff of what it's worth one instead of talking about tax cuts and carrying on and everyone else you know, I said, you know,
RAF EPSTEIN: I'm going to try and get you to reframe, I think you rang about defense Mark, can you give me a defense?
CALLER: Why the hell haven't we done why both parties been sitting on their hands since 1945? And don't jack shit about anything else.
RAF EPSTEIN: Okay, I'll take I'll leave. I'll just go to James in wander north I think I'm trying not to swear when you're answering a quit asking a question that makes our lives simpler. James, what's your query?
CALLER: Sorry, Raf and Jane. I was just querying about how you were saying how the defense budget is quite an important budget and I wanted to know how much we've spent on actually defending our borders versus actually just attacking other nations.
RAF EPSTEIN: Jane Hume.
JANE HUME: Well, we're not at war with any nations so we don't spend money attacking other nations. We actually spent around $270 billion in the last nine years on defense capability. And that's obviously on you know, not just building new equipment, but it's also on defense health training, grades, databases, all sorts of things.
RAF EPSTEIN: That might be a query, because the wars were usually involved in Vietnam, Afghanistan, Iraq, they are not military exercises on our border. Their military exercises in other countries. So is that attacking other countries or is that defending our country?
JANE HUME: I'm really not sure what the point of the question is Raf, are we talking about peacekeeping operations that we participate in, in other countries?
RAF EPSTEIN: James do you want to try refining your question?
CALLER: Yes. So I just want to note, yeah, the same words that you're talking about how much money we've spent on, in those other nations attacking them versus actually just defending our borders?
JANE HUME: Look I'm very sorry, James. I can't tell you what it would have cost to fight wars in years gone by. What I can tell you, though, is that it's really important that we get our strategic capabilities right, right now for the situations that we face in the future. My concern is that this government has already started raising the white flag on its defense funding, rather than focusing on the task at hand, is simply talking about the previous Coalition Government. There is an increasingly complex and challenging global security environment right now. And this really is not the right time for Richard Marles or Anthony Albanese to be cutting defense or delaying decisions that really need to be made.
RAF EPSTEIN: Carly is in Richmond. What did you want to ask Carly?
CALLER: Hi there, I just wanted to clarify something. You mentioned that you know, Stage Three tax cuts are good because it's more people being able to spend more of their money. But isn't the whole point of what we're trying to combat at the moment with inflation trying to stop that and get inflation under control and pay off debt. To me as a layperson, it seems pretty counterproductive to be doing those tax cuts when the two biggest things we're trying to combat are debt and inflation.
JANE HUME: That's a really good question. But in fact, the Stage Three tax cuts don't kick in for another two years. They come into effect until 2024. But they've been legislated since 2018. So they've been already embedded into every budget since then.
RAF EPSTEIN: And inflation was under 2%. When you designed them, they could be counterproductive. Couldn't they wiggle inflation when they come in?
JANE HUME: Well, in two years time, I would imagine that the economic circumstances that will be faced if the Treasury forecasts and the RBA forecasts are right will be very different. And in fact, that may well be a time when we would want to see more stimulus but the fact is that there are other ways to control inflation and one of them is through controlling your budget spending. And we know that the Labor government came in with a very high tax high spend agenda, it said so it was a really.
RAF EPSTEIN: Sorry I have to interrupt there. You doubled the debt. You are the second highest taxing and spending government in Australia's history. Is there really evidence for you to suggest that Labor's going to somehow tax and spend more than you there's there's not a single budget document that says
JANE HUME: Well actually there is Raf. There is. They came to government saying that they were going to have higher budget deficits. They said that in their election commitments, it was as clear as day.
RAF EPSTEIN: That’s different to being higher taxing per person, you know that the highest taxing per person government in Australia's history is John Howard's the second highest tax and government was yours.
JANE HUME: In fact, the last two years have been spent dealing with COVID and you know, that Raf. Which was at a point in time where we had essentially balanced the budget we then faced COVID. We threw the kitchen sink at it because we wanted to save lives and livelihoods and at the end of that period of time, we saw a budget that was coming that was improving their budget bottom line was improving. We saw that through the announcement just the other day of an additional $50 billion and that was gained through increased tax revenue and low welfare payments and an economic situation where we saw lower unemployment with a three in front of it and getting lower triple A credit rating and a growing economy. There is a fiscal dividend for good economic management and that is what we experienced under a Coalition Government. Now, the most important thing that a Labor government can do is get that budget under control because the price of failure is great not just for the not just for getting inflation under control but for unemployment or for broader economic, and we don't want to go the way of the UK and the US.
RAF EPSTEIN: No we don’t. Just a few questions before we get to the 530 news headlines. You are doing the review of the Federal Election Campaign. I'm not going to ask you for a preview but did you learn things in that campaign? Clearly you lost, you lost significant seats to independence? Did you learn things that you think could help Matthew Guy in the lead into November?
JANE HUME: Look, if you ask 20 Different people why the coalition lost the election, you'll get 20 different answers and Brian Loughnane’s job and my job is to gather together all the evidence from as many people as possible and find those recurring themes.
RAF EPSTEIN: Any little gems you could share with us?
JANE HUME: Well, I won't be airing them in public but, you can rest assured that if there was anything that would help the Victorian team to victory in November, that we will be sharing it with them or we may have already done so.
RAF EPSTEIN: Did you spend too much money on that campaign, especially that there was a lot of money spent in the seat of Kooyong to try and keep that seat and Josh Frydenberg hands did that use up money that means there's less now available for the end of November in the state division?
JANE HUME: That wasn't really a factor that came up. But I don't want to front run the review though. I know you're going to try. Look I won't front run the outcomes to the review you'll hear about what it is that the Liberal party feels it needs to do differently next time in future.
RAF EPSTEIN: So I'm sensing maybe you did spend a bit too much in seats like Kooyong?
JANE HUME: No. You're putting words into my mouth.
RAF EPSTEIN: Do you think that you Matt Guys gonna win?
JANE HUME: I really hope Matthew Guys going to win. It's been a very long eight years under this state labor governments. We've seen crisis in our healthcare system. We have crisis in housing. And I think it's time for a change as you walk through the CBD, it's a scarred state Victoria and it's time for things to change.
RAF EPSTEIN: Do you think the Liberal Party is safe in or do you think the Liberal Party is going to win Hawthorn back? Do you think the Liberal Party will keep Kew and Caulfield there are a lot of liberal people who are nervous about those seats especially with the teals?
JANE HUME: I very much hope so. You know, I think that John Pesutto-
RAF EPSTEIN: Are you nervous about those seats?
JANE HUME: No, I very much hope that we will win those seats back John Pesutto obviously is, you know, an extraordinarily experiences candidate of the seat of Hawthorne, and David Southwick, in Caulfield, Jess Wilson in Kew, I've known for many years. These are really high caliber candidates, just the sort of people that you want to have in state parliament, leading the progress and prosperity of our state.
RAF EPSTEIN: The Greens want to decrim-, legalise I should say legalise marijuana.
JANE HUME: I didn’t inhale.
RAF EPSTEIN: What do you make of that?
JANE HUME: I don't think it's a good idea at all. I think there are so many sort of sad and tragic stories of people that have been damaged by cannabis use and sometimes unexpectedly sometimes not even all that heavy usage
RAF EPSTEIN: Not even easier, maybe easier, to control if it was legal?
JANE HUME: I would really like to see the laws not change on cannabis use and you know, if this is a subject for the state election, we'll bring it on because I think that all it will do is is polarised, potentially the the left of the Labor Party and but I don't think you'd find anybody from the coalition thinking that this was a good idea at all, not for the health and safety of our public.
RAF EPSTEIN: I promise you this is not a question about Matthew Guys $2 flat fare proposal for most of not all of it most of the tray, but I was asking earlier in the show. I don't know the last time you bought something for $2. Or maybe something you regret you can no longer buy for $2 Do you remember the last thing you picked up for two bucks?
JANE HUME: I picked up two of them. I have this real thing about Fry’s Turkish Delight. It's like, it's like my biggest weakness. You can get them for $1 Right? Yeah, that's fantastic.
RAF EPSTEIN: You're the second person today suggesting the $1. You’ve got to stay away from the chocolate aisle when they're on special. Jane Hume, thank you.
JANE HUME: Thanks Raf.