TRUDY MCINTOSH, HOST: Joining me to discuss this and more is our political panel, Assistant Minister to the Prime Minister, Patrick Gorman and former Liberal MP Jason Falinski. Great to see you both on a Monday. Let's start with the non-politician amongst us. Jason, you're free of the shackles of politics. Should the GST be raised?
JASON FALINKSI, FORMER LIBERAL MP: There's definitely – we need tax reform in this country. It's a major reason that living standards are going backwards. Our tax system is dangerously unbalanced, as well, towards high income earners and multinational corporations. Something that most Australians don't realise. I don't agree with what the – I think there's a lot of what the Grattan Institute has said today that's worth looking at. Certainly broadening it is one good thing that should be done. And also removing welfare out of the tax system and leaving it in the welfare system is also something positive as well. But look, we need to make progress on this issue. It's long overdue. We haven't really had tax reform since 26 years and it is holding the country back.
MCINTOSH: Pat, I'm sure you'll agree with everything that Jason just said there. Are we going to be brave enough to have this debate about the GST? You tried to make a lot of hay last week of the former Treasurer Josh Frydenberg making the case. It's not as easy to dismiss the Grattan Institute, is it? Is there any merit, at least to having this debate?
PATRICK GORMAN, ASSISTANT MINISTER TO THE PRIME MINISTER: Trudy, I'm happy to be brave and say that I think it's a bad idea when Josh Frydenberg suggests it. I think it's a bad idea when the Grattan Institute suggests it. And I think it's a bad idea that – we know that some of Angus Taylor's shadow cabinet support. But what we're talking about when – let me just decode a little bit of what Jason just said. When he says broadening –
FALINSKI: Thank you, Patrick. Thank you. [Inaudible].
GORMAN: When he says broadening the GST, what he actually means is adding an additional tax on fresh food and vegetables. When he says tax reform, what he means is doubling the GST rate. That means everything from your Foxtel subscription to your weekly shop at the supermarket, will have an extra 10 per cent cost on where we currently are. And it's not tax reform. Our government has done tax reform. We have done difficult decisions when it comes to negative gearing. We did difficult decisions when it came to lowering taxes for people on low and middle incomes and creating the working Australians tax offset. We will keep doing serious tax reform. But this is just a fetish that the Liberal Party and others have about increasing taxes on hardworking Australians. And I'm not going to support it –
MCINTOSH: Pat, I don't think you can say it's just about increasing taxes if this is part of the grand bargain. This is what the Grattan Institute and even Josh Frydenberg last week was saying. You increase the consumption tax in order to pay, largely, for massive income tax cuts. Not tinkering around the edges with a couple of dollars but something that every Australian taxpayer would feel.
GORMAN: I don’t see why we would need to double the taxes every time people go to the shops. There is no strong rationale for it. I know there are some people in the Liberal Party who are secretly supportive of this idea. We saw that in The Australian newspaper last week. But it isn't a good idea. It is definitely a terrible idea in the middle of the cost-of-living pressures that people are experiencing. And you know, just one example is that this would currently increase the price of fuel by an additional sort of, 24 cents a litre. What a terrible idea.
MCINTOSH: Let's go on to another – let's go into another issue that's bubbling around today, the EU Free Trade Agreement. Jason, would you encourage your Liberal friends to defy the Nats and support this deal?
FALINSKI: No, I think the National Party's right on this. And Trudy, you don't know how hard it is for me to say that. But the fact of the matter is that we keep putting all these extrajudicial regulations inside these free trade or international agreements, which then gives the High Court the head of power that they need to impose international law on Australians. It's undemocratic because it takes power out of the hands of Australian voters and it puts it in the hands of unelected and in many cases unaccountable officials who continue to impose laws from elsewhere on Australians.
MCINTOSH: Patrick, do you buy that? Are you at risk on the separate argument that the Nats are putting forward – put Jason's to one side. Are you throwing beef and sheep farmers under the bus as well?
GORMAN: Well, firstly, I don't know what sort of deep dive Reddit threads Jason's been spending his evenings on, but I'm not reading the same as Jason. And we're trying to get more Australian produce into the massive market of Europe. This is good for Australia because it's good for jobs. If you think about the critical minerals opportunities in my state of Western Australia, that means more customers for our critical minerals and it means that mines can get up and running for all of those minerals that will make sure that we can have the renewables that we need for the future and the computing power we need for the future. If you think about the opportunities when it comes to getting, you know, indeed more beef sold into Europe – all of these things, we've had over the course of our government, some $300 million –
FALINSKI: Do you acknowledge that there are farmers in this country, you know, the voice is being given to them by the Nationals, that don't believe this deal is good enough. That there should be an ability to go back and say to the EU, we want a better deal.
GORMAN: This is a good deal. It is good deal for Australia. It is a good deal for getting our products into –
MCINTOSH: And they just don't know it, the beef farmers?
GORMAN: Look, people will always look for an opportunity to criticise when it comes to economic policy – anything that the Albanese Government does – and I'm not surprised that the lead criticiser-in-chief is Matt Canavan. But let's be clear, I don't think that when push comes to shove – I don't think we're going to see the Coalition oppose a free trade deal. That would be a radical departure from their standard practice. It would be very strange.
MCINTOSH: I don’t know. It sounds like they're gaming up to do that, Pat. Jason, I suppose the point, as Pat is saying there, is if you're the party of free trade, it is going to be pretty awkward if you're in the Senate and voting against a broadening of free trade with the European Union massively.
FALINSKI: I mean, this is like Orwell's 1984. I mean, you know, apparently the Labor Party lowered tax, but they're sitting on record tax receipts as a percentage of GDP. And this is free trade, but it imposes a whole bunch of sovereign risk on Australians. And the people who would know most about, you know, trade in terms of lamb and beef are sitting there saying, we don't think this is going to work and we think we're going to be on the wrong end of this deal. But apparently we're all wrong. We're just living in some alternative universe and Pat knows it. And, you know, maybe Pat should spend a bit more time reading Reddit. I'm not sure what's on there, but it sounds like a good place to go.
MCINTOSH: Don't send everyone to Reddit. We want them to be watching Afternoon Agenda, you two. A final one. I'm sure you won't agree on this either. This issue of the credit card surcharge – the ATO over the weekend. This confirmation that in fact, yes, Government Ministers did know in July that they were planning on stopping taking credit payments. Three whole months, Pat, before small business was given just a few hours notice. Why wasn't there some sort of public consultation? Why the secret?
GORMAN: I think we had Minister Mulino out on the weekend explaining that the Government indeed did ask for the Tax Office to undertake further consultation and make sure that they did this in a careful and considered way. Our government then stepped in to make sure –
MCINTOSH: Well, that didn't happen, did it?
GORMAN: Well, our government stepped in to make sure that those adverse impacts that were going to impact on small businesses with that rapid change of approach, where there was too short a time given, was ameliorated. We dealt with that and that was the right thing to do. And I say, I'm always going to accept that when people advocate for themselves, that's a good thing for government. We listened, we acted. That is what I expect from a mature government. That is the sort of government we are and that's what we did.
MCINTOSH: Well, Jason, there you go. Just because they acted on it doesn't matter that they didn't tell small business for months. Do you buy that?
FALINSKI: Three for three. So, tax cuts that actually end up in tax increases. Free trade, that's not free. And consultation, that never happened, but was going to happen. What's going on here, Pat?
GORMAN: Jason, what we've done, as we have just outlined, is – we did not agree with the approach that the Tax Office had taken.
FALINSKI: So, who's in charge of the Tax Office Pat? Is the Government in charge of the Tax Office or is the Tax Office in charge of the Government?
GORMAN: We're the Government, we take responsibility. I'm being very clear about that. I think we've come to a good landing point. Maybe –
MCINTOSH: Is this going to be a cost that has to be permanently absorbed by the ATO, Patrick?
GORMAN: The details that Minister Mulino outlined was that this will – the transition period will go until the middle of next year.
MCINTOSH: So, then we'll be having the same fight again in the middle of next year. Jason, do you think it should be a cost the ATO permanently absorb or does small business have to accept that this is going to come to an end?
FALINSKI: I think the ATO should permanently absorb this. If there's one group in our society or one organisation that – it's the Federal Government. This was their bad law. It was a stupid law. It was always going to end up causing a lot of harm. And if there's one group that should actually pay the cost of that, it's not small business, it's the Federal Government, starting with the ATO. But I'm still confused as to how the Government said that it didn't want the ATO to do it and the ATO ended up still doing it.
GORMAN: The ATO is not doing it.
MCINTOSH: It's a confusing – well, they weren't – they're only not doing it because it came out publicly and then there was pressure on them not to do it. Isn't that right?
GORMAN: We listened. We acted. That is what you expect of a mature government.
MCINTOSH: Patrick Gorman, Jason Falinski, we're not going to solve that here, are we? Nice to see you both, as usual on a Monday. Appreciate it.