ELLEN FANNING: Christian Porter is the Minister for Social Services; he’s in our Parliament House studio. Minister, welcome to RN Breakfast – and should I say congratulations on your re-election in Pearce.
MINISTER PORTER: Thank you Ellen. Yes, good to be here.
ELLEN FANNING: You were at The Lodge for the Prime Minister’s get together last night. Was much made on that occasion of Tony Abbott’s absence?
MINISTER PORTER: Well, nothing. There were a few people who, because of travel arrangements or other issues, weren’t there. But, it was well attended, very collegiate, but no it was a non-issue.
ELLEN FANNING: Turning to the party-room today, the former Liberal Party President, Shane Stone, is warning against blame shifting after the loss of Coalition seats at the election, but I’m wondering why then is the Federal Director, Tony Nutt, and strategist, Mark Textor, going to be in the room addressing the party-room today, if the party isn’t already blaming them?
MINISTER PORTER: Well, it’s not an unusual thing. So we often have state directors both before and after elections come in to discuss strategy going into elections but also to discuss outcomes. It’s not a particularly unusual thing I must say. Having been in both state and federal Parliament, it’s almost routine.
ELLEN FANNING: The Coalition did go backwards. Should they take some of the blame for that?
MINISTER PORTER: An observation I would offer, particularly as Minister for Social Services previously, is that there would probably few governments in recent history that I can think of that went into an election with more known policies in very challenging areas. And whether, and you’ve mentioned superannuation, they were policies on the revenue side or whether they were policies designed to restrain expenditure growth in my area, such as social services – to give you an example, of ending the carbon tax compensation for new entrants to the welfare system. There are many, many examples of known, stated policies in very challenging areas. To have those policies known, put before an electorate at a full general federal election, and win the election, says something about the openness of the Government, particularly Malcolm Turnbull’s approach. But it is challenging and, again, if you contrast superannuation: we’ve made it absolutely clear how we say the revenue should be raised in that area; Labor has said they’ll bank the revenue but give no details about how they intend to do that. It’s a completely different approach and I’ve got to say, electorally, the approach of openness and honesty and transparency that we’ve taken is far more challenging in front of an electorate than the approach that Labor’s done.
ELLEN FANNING: We’ll talk about superannuation and what issues may have hurt the Coalition at the election. But just firstly, Malcolm Turnbull: what tone does he need to strike when he stands up in the party-room today? Does he need to sound somewhat contrite, given the loss of 12, maybe 13 seats under his leadership?
MINISTER PORTER: Again, the observation I would offer is that government is about governing and the conversations I’ve had with the Prime Minister indicate that he’s exactly taking the right approach, which is we’ve been elected as a government to govern with known policies that were taken to an election and our job is to get on with it.
ELLEN FANNING: He’s talking to his colleagues though today, not the electorate. Does he need to sound contrite? Does he need to make, to sound in some way apologetic for the position in which the Coalition finds itself today relative to before the election?
MINISTER PORTER: Well, there’s no election that you don’t learn lessons from. I mean, such a thing doesn’t exist. So everyone has to be honest about challenges that we faced and challenges that we’ll face going forward. But I think that’s different from the sort of sentiment that you’re expressing. But again, ultimately, we’ve been elected to govern, we have a majority, we obviously have cross-benchers to work with in the Senate. We have an extraordinarily large number of known policies, budgeted-for policies, policies we took to a general election. It’s just time to get on with the job
ELLEN FANNING: Over in WA, you’re in a safe Liberal seat, but you suffered a 6% swing against you. Do you think there was a message in there about the Government’s super changes? Did that hurt you?
MINISTER PORTER: Well, there are quite a complicated range of issues that affected my electorate of Pearce. I don’t think super was one of them, I must say. So my electorate is about one third country, regional, about two thirds outer-urban. The number of people in my electorate that would have more than $1.6 million worth of super in their account would be able to be counted on one hand I have to say.
ELLEN FANNING: What I’m trying to get at: do you buy the argument that the changes to superannuation, the savings as a result of those changes, hurt the Coalition at the election?
MINISTER PORTER: No, I don’t think it was a major factor. And the reality is, again, that if you have a situation or allow a situation to persist where a person can have two or three million dollars in a superannuation account and pay no tax on the earnings from that account, and in effect pay less tax than someone, as the Prime Minister has noted, stacking the shelves at Coles or Woolworths, if you let that situation persist I don’t think that you are a responsible government facing up to financial reality. And I think that the inherent fundamentals in the superannuation policy are correct. And I must say, that the…
ELLEN FANNING: The fundamentals or the whole policy?
MINISTER PORTER: The policy is correct and the policy is the policy – and the policy was taken to an election and tested and we won. Obviously all policies that require legislation from us with a Senate full of cross-benchers require negotiation, but the policy I think is very sound. And the notion that, somehow, there is a ground-swell of conservative opinion inside or outside the party against the policy – I mean, I would count myself as a conservative in our party, and a senior conservative, on ERC, on Cabinet. Scott Morrison, I would also count as a conservative, Mathias Cormann. We’re supporters and designers of the policy. So I think the notion that somehow the policy doesn’t have solid support is, less, rather than more true.
ELLEN FANNING: Maybe this accounts for why the questions are being asked. Malcolm Turnbull said the government, last week he said the government will deliver all the policies you took to the election. He previously said the super changes were “absolutely iron-clad”. Now, let’s have a listen to the language that he used yesterday.
PRIME MINISTER: The reforms are important, but obviously in the implementation and transition there is work to be done. There always is with tax changes. And they will go through the normal Cabinet and party-room process, and we are listening very keenly, I am listening very keenly and carefully to concerns that have been raised by my colleagues, and of course other people in the community as well.
ELLEN FANNING: OK, so he said that he’s listening to those concerns, those concerns that you’re suggesting, perhaps, aren’t legitimate. Can we assume then, Minister Porter, that the $500,000 cap on post-tax contributions will be adjusted? That’s what it’s looking like.
MINISTER PORTER: I’m not saying concerns aren’t legitimate. People who raise concerns about policy obviously do so in good faith and with intelligence and address issues. But, they are being listened to, as the Prime Minister said, and I’m not quite certain that I accept the proposition that the soundness and commitment to the policy is inconsistent with the comments that the Prime Minister just made. During the drafting process there are any range of issues that need to be addressed and need to be drafted in a way that both accepts and understands people’s concerns, but also accepts and understands the type of environment that we’ll be facing in the Senate.
ELLEN FANNING: There’ll be people listening this morning who are keenly interested in this issue. So let’s be plain about it. That $500,000 cap on post-tax contributions over the lifetime, is that something that the Coalition is looking to adjust?
MINISTER PORTER: Well, I mean, I think that the policy stands on its own. It’s well known, we have party-room this morning and obviously if there are concerns to be raised they’ll be raised inside the party-room. The policy, as I said, is the policy. The $500,000 cap is an integral part of the policy but during the drafting period, whether it’s transition to retirement or the cap, if there are concerns raised they’ll be taken into account.
ELLEN FANNING: For example, there’s ideas’ being floated this morning of exemptions for one-off transfers through inheritances, so an old relative dies you can tip that money in over and above the $500,000 cap. Gifts if, you know, some sugar-daddy comes along and gives you a gift, or sales of property held for a certain length of time, that those should be allowed to be tipped into superannuation over and above that half a million dollar post-tax cap. Is that the sort of thing that should be looked at?
MINISTER PORTER: As a lawyer myself, every rule has exceptions to it. And particularly, these are issues that you do sort out during drafting. So it’s not inconceivable that you could listen to concerns about particular narrow, limited circumstances that require exceptions to be considered. These things are just part of the drafting process.
ELLEN FANNING: So I’m confused. On one hand you say it integral – $500,000 is integral – and on the other hand you say, well, these transition arrangements have to occur. Which is it?
MINISTER PORTER: I think it can be both. The reality is that having a sound, rational limit on the cap that goes into superannuation funds is integral to the policy. And we shouldn’t forget that they’re already caps on the amount that can go in. Yes, they’re yearly caps, but nevertheless caps already exist, caps are part of the system and have been for a very long period of time.
ELLEN FANNING: And there’s also pressure at the moment from the Association of Super Funds of Australia, from the Australian Institute of Superannuation Trustees, to look at another of those caps. And that’s the reduction in the annual pre-tax contribution cap from $35,000 to $25,000. The industry seems to be concerned about that. Will the Government give ground on that?
MINISTER PORTER: Well, again, there’s no policy on the run. Policy has been taken to the full scrutiny of a general election and, again, that is a very sound, in my observation, part of the policy. It’s probably not unsurprising that the people that you’ve mentioned raise, inverted commas, “concerns” about that, but their concerns have to be balanced against the fact that there are issues around superannuation which have allowed a situation to exist where very, very large sums of money can be deposited into superannuation accounts and no tax is paid on the earnings. Now the idea that any government can allow that situation to persist, in all the fiscal restraints that we find ourselves dealing with, is just unworthy of any government to consider that situation can persist. Labor doesn’t think that situation should persist; they’re just unwilling to tell us what they’ll do.
ELLEN FANNING: We’re also expecting today, the new Turnbull Ministry to be announced. Two, probably three Ministers have lost their seats: Peter Hendy, Wyatt Roy, probably Senator Richard Colbeck. There have been these calls for Tony Abbott to be brought back into the fold. How do you view those? Are they just conservatives making trouble, who want to cause problems for Malcolm Turnbull?
MINISTER PORTER: Well, I must say, you wait for the phone call from the Prime Minister and you serve at the request of the Prime Minister, and it’s a matter of national service. I don’t get myself involved in speculating who will get what…
ELLEN FANNING: But you’d be interested in having a stable Coalition Government going forward for the next three years. Does Tony Abbott have a role to play in that?
MINISTER PORTER: These are matters for the Prime Minister. But my observation is that the Prime Minister has said there will be minimal changes to the Cabinet. As you pointed out, there are some necessary changes that need to be made to the Ministry and Outer-Ministry. That’s par for the course that those sorts of changes occur after an election. But if I were a betting man I would bet that you’re not going to see too much by way of change.
ELLEN FANNING: And now that Mr Turnbull’s won the election, what’s your view? Do those inside the party who oppose his leadership, who have been vocal about that, need to pipe down?
MINISTER PORTER: Well, again, this sort of perception that gets run in the media, that there are such people in existence, or that there are many of them… I must say, I, having been inside a state parliament under Colin Barnett, and having served two prime ministers in Tony Abbott and Malcolm Turnbull, I’ve never seen a group of people as committed and as lock-step behind a prime minister, or a leader, as I’ve seen in our party at the moment behind Malcolm Turnbull.
ELLEN FANNING: Really?
MINISTER PORTER: Absolutely.
ELLEN FANNING: You personally have been named a future federal Treasurer, and more recently a potential replacement for the Health Minister, Sussan Ley. Are you happy to take on either role now or in the future?
MINISTER PORTER: Again, I don’t get into that sort of speculation. But I must say that I’ve had nine months as Social Service Minister and there is a massive amount of work to be done in the Social Services portfolio. And, in fact, sitting down and taking stock as you do after an election and looking back over the last nine months, I think we have identified around $11 billion worth of savings over four years through reasonable expenditure restraint in my portfolio. A good example that I raised earlier is closing the carbon tax to new welfare entrants and redirecting all of that money to pay for the NDIS, by putting it into a special savings account to fill the $5 billion gap left by Labor. I find these issues of critical importance, incredibly challenging. I would be very happy to keep going and working in this field because the reality is when you have a Social Services budget representing in excess of one third of the total Commonwealth budget, around about $165 billion, and you’ve got revenue growing at 2.5-3% and that budget growing at 7-8%, then there is much work to be done, Ellen.
ELLEN FANNING: Mr Porter, thank you so much for being my guest this morning.
MINISTER PORTER: Thank you.