Interview with Tom Connell - Sky News Afternoon Agenda

TOM CONNELL, HOST: Alright, that time of the week. Let's get to our political panel. Assistant Minister to the Prime Minister Patrick Gorman and former Liberal MP for Mackellar Jason Falinski, who hasn't graced us with his presence. That's not a sledge, Jason. I'm not starting that way. This is my way of saying 'you get to go first.' So, the Donald Trump meeting with Anthony Albanese. How will you or what markers will you consider this meeting a success once it's wrapped up? What does he need to achieve? Or perhaps, what does he need to avoid?
 

JASON FALINSKI, FORMER LIBERAL MEMBER FOR MACKELLAR: Tom, I'll declare it a success, if it actually goes ahead. This has been - what - almost twelve months in the making. So, you know, we're all waiting with bated breath to see what happens. Let's hope it goes better than the one with Zelenskyy went. But you know, we'll just have to wait and see.

CONNELL: Which one, I guess? Because the latest report, that Zelenskyy was - Donald Trump was saying he's sick of all these maps, sort it out. So lucky, we're not in a war with Russia, I guess on several fronts. Pat, you can do the limbo under those expectations if you want from Jason, on if it goes ahead and is successful. What would you say would be a big tick for the headlines, if you could be writing them now ahead of the meeting?

PATRICK GORMAN, ASSISTANT MINISTER TO THE PRIME MINISTER: Tom, it is probably good that I do not write the headlines. But what I will say, is we are pleased that the Prime Minister has arrived in Washington, DC. We are looking forward to this meeting happening. Obviously, it comes off the back of a range of engagements the Prime Minister has had with President Trump. Phone calls, they were at an event together in New York last month. It is a good thing for Australia that we are able to share our views and the contributions that Australia is making on the world stage with the President of the United States. I think you can look at the President's own comments about Prime Minister Albanese, that as President Trump said, 'he is a friend of mine.' I think that sets us in a good place for this meeting to happen, while most Australians will be sound asleep in the hours ahead.

CONNELL: So, I mean, if I think about this meeting, Jason, you've got to go in, make sure you don't annoy the person - that they think they're brilliant and all the good things were their ideas that even if they were your ideas. Is that, just like, say, a backbench Liberal MP meeting with the Prime Minister?

FALINSKI: It sounds very similar, very familiar circumstance you're describing there Tom. But it's also called diplomacy. And look, I'll say this, I mean, there is one way for sure that I know this meeting could go better, and that is, if Pat was there with him. I'm a bit nervous that he's meeting with the president without Pat holding his hands, but unfortunately, we'll all be asleep when it happens. But hopefully we'll wake up to good news, not bad news. I just know if Pat was there, I'd be feeling a lot safer, I have to say. 

CONNELL: But we know that the man with Anthony Albanese on that tarmac was Kevin Rudd. And he was a shadow of the man he is now. Before, he had Patrick Gorman working for him, Kevin Rudd. So, you've shaped Kevin Rudd, Patrick - what would you be telling him as well in this sort of diplomatic area?

GORMAN: You are both setting me up on this.

FALINSKI: [Laughter]

GORMAN: I will just say, I do think Ambassador Rudd has done a great job at advocating for Australian businesses. The work that he has done in the embassy, you see, that has been well regarded by a range of Australian businesses who are active in the United States. He is obviously hosted the treasurer in the last few days. I know that our embassy officials in Washington, DC will be working very hard over the days ahead, hosting the Prime Minister. 

CONNELL: And no leaked videos too. After the complicated language. Still the classic. If you search 'Kevin Rudd' and 'complicated language,' it'll probably come up in your feed. Jason, Sussan Ley, amidst all the various helpful advice on the sidelines giving a speech today, she's spoken about tax reform. This line - I paid some attention to - '45 and under is the new forgotten age', and so that's a big tick, because I still get into that bracket, only just. Given the struggle to balance the budget, what does this mean? Does she need to, perhaps, say to wealthier retirees - and I'm ready to get, you know, yelled at by people out there saying yes, you've worked hard. I know that, not saying it you haven't - but wealthier retirees that might be able to take on some more tax impost to mean that under 45s get a better go?

FALINSKI: Well, the answer to that question, Tom, is probably not. But it's more complex than that, which is to say, as Milton Friedman famously pointed out, the rate of tax doesn't matter. What matters is how much government is spending, because spending is actually your tax. So, they're either paying for it today through higher tax, or they're paying for it tomorrow in even higher tax, when you put interest on top of it. And I'm not sure Sussan's at the point yet where she's ready to sort of go out and say that. But ultimately, the discussion in Australia around the economy and the opportunities and the economic chances that younger Australians deserve - like our party is about broadening and deepening access to the Australian dream, and at the moment, the tax system is absolutely tilted against that because government spending is so high.

CONNELL: Well, yeah, and you can say - I mean, the reason I ask it, and I get your point, and it's entirely a valid one, when you see the spending a percent of GDP, which just hasn't gone down again since Covid. But at the same time, when you see the tax impost on what someone earns - right - but the effective tax rate of someone at different cohorts, and you're actually much worse off when you've got a mortgage and maybe kids at school and so on, compared to a retiree. That's what I mean around that balancing act.

FALINSKI: Well, that's because retirees don't - because there's an over-reliance in our tax system on income tax and company tax. And retirees aren't earning income, therefore they pay less tax. Whereas, when you're younger, you tend to be selling your labour, which is representative wages. But the ultimate part about all of this is that our tax system is completely top-heavy. It relies - that the only people really paying net tax in Australia are resource companies, and people who typically work for resource companies. Even partners at KPMG largely rely on income that they derive from government contracts, which means they're relying on taxpayers. And what that means is that the Australian economy and the Australian Government is completely or over-reliant on exports to China, and that's something that should worry all Australians.

CONNELL: That's so many paths that go down, we'll have to do it another day. Patrick, I wonder if there's a hint in your superannuation policy, which is put a bigger tax on people with a heap of cash - so $10 million balances - then you don't have to go as hard on others. Would Labor ever contemplate a new - an indexing of - or a new rate of income tax on people earning a lot, million dollars plus, and then everyone else could pay a bit less well?

GORMAN: Our focus when it comes to income tax reform has been to be lowering taxes on low and middle income earners. We have done that in those tax policies that you refer to, that the Treasurer outlined last week, which are about also boosting superannuation balances for low and middle income taxpayers. Similarly, the tax cuts that we will implement in 2026 and 2027 supporting lower - 

CONNELL: They were tiny. Could they be bigger, if you went, here's a new tax on people earning a million dollars plus?

GORMAN: We have got the tax brackets that we expect to have. When it comes to tax on high income earners, obviously, there are already some taxes, and some of them you would be familiar with, that came in from the Turnbull era when Scott Morrison was Treasurer, that added some additional taxes for that bracket. But when it comes to Sussan Ley's speech today. It was big on vibes, but absolutely embarrassingly short on detail. 

There was not a single costed policy in that speech. There were no assurances that they wouldn't return to the cuts on the public service. We still do not know exactly where they are landing on questions that they have been publicly debating for months and months, such as climate action. I really thought that by now we would start to see some detail on at least one policy from the leader of the Liberal Party. The fact that Sussan Ley cannot do that, tells you that there are obviously even more fights happening internally than the fights that we are seeing every day that are happening externally. 

CONNELL: We're nearly out of time, so very quick word association is my chief way out of this one. Barnaby Joyce. What does that name mean to you Jason Falinski? 

FALINSKI: Pauline and Barnaby - Barnaline. It's been decades in the making, Tom, and I wish the two of them the best of luck in the future.

CONNELL: Pat, you want to top that?

GORMAN: I can't top that, Tom. My word association word would just be 'former.'

CONNELL: Former. Former or future. I'll say future, because who knows? All right. Patrick, Jason - 

FALINSKI: I've got a lot more to say on tax. I've got a lot more to say on tax. 

CONNELL: I know you do, and look, we'll get into it one day, Jason - 

GORMAN: We need a long form interview for that. 

CONNELL: Yeah, 'in conversation.'