Peter Costello

Media Transcripts

Labor risk to superannuation - Interview with Alan Jones, 2GB

Interview with Alan Jones
2GB

Tuesday, 20 November 2007
7.45 am

SUBJECTS: Labor risk to superannuation

TREASURER:

Hello Alan, I can because you recall that the Budget before this last one, I announced that we would be taking all tax off payments for people over 60 who are in the normal taxed superannuation funds.

JONES:

Correct.

TREASURER:

And interestingly enough, Labor didn't say at the time whether they supported it or whether they opposed it. They said they would consider it. And they spent months and months and months considering it. They never came out and said this was a good policy, they never congratulated the Government on doing this, they never said that this is something that they would be committed to for the next 20 or 30 or 40 years. And bear this in mind: it is all very well to think about next year or the year after but if you are putting money into superannuation Alan, you may not be taking it out for 20 or 30 or 40 years...

JONES:

That's it.

TREASURER:

...right, and so you want to know that everybody who is going to be anywhere near the management of this economy is totally and absolutely and utterly committed to this.

JONES:

Especially since people have put millions of dollars in and can't get hold of it until they are over 60. These people might be 28, 35, 42.

TREASURER:

If you were a 30-year-old putting super in now...

JONES:

That's it.

TREASURER:

...you are putting money away which you would be thinking of taking out in 2037, right...

JONES:

Absolutely.

TREASURER:

...in 30 years' time.

JONES:

And you put it in on the basis of a policy announcement that you made.

TREASURER:

And you put it in on the basis that the Coalition Government has announced the abolition of these taxes. And I must say that the Labor response has been extremely mealy-mouthed about this. And there were certainly numbers of people in the Labor Party who said: ‘oh we don't think this is fair, this will help the middle class, you know, we should...'

JONES:

Well you have got to stop this Dr Pragnell who is listening to all of this now, Dr Brad Pragnell, I don't know what advice he gives to the public, he says Paul Keating is not a member of the Opposition. Paul Keating is an influential thinker within the Labor Party and he warned that it might not survive a future Labor Government. I don't know what that means.

TREASURER:

Well there are two other points I would like to make while we are discussing superannuation, Alan. It is not just a taxation of course...

JONES:

It is the nine to 15.

TREASURER:

Well it is that. It is also whether or not governments can put their hand on people's superannuation. Now, Kevin Rudd, as we know, wants to raid the Future Fund, right, which is the fund that has been built up to cover public service superannuation liabilities. He has said that if he gets elected, he is going to direct money, which is currently held in that fund, out for his own pet projects for investment. A point I have always made is once the Government start touching your money for its pet projects, once you establish that principle - and that ought to be an inviolable principle in my view - then everybody's superannuation can be directed towards government pet projects. And to be frank Alan, this is something the superannuation industry ought to be very, very concerned about.

JONES:

Absolutely, absolutely. This fellow Pragnell is telling me, almost a mouthpiece. And I will just come back to this bloke, Dr Pragnell. The Treasurer is saying this is something you should be shouting from the rooftops. You should be on our behalf, getting a guarantee from the Opposition that this will not ever happen.

PRAGNELL:

Well we have raised all of these issues with Labor. We have raised the issue about the tax benefits...

JONES:

And what have they told you? Jump in the lake?

PRAGNELL:

No, no, no, they haven't told us to jump in the lake.

JONES:

Well where is the statement from you that you have secured that kind of guarantee on our behalf?

PRAGNELL:

Well I think you need to raise it, well, first of all, let's talk about the other issues that...

JONES:

No, no, no, hang on. I want to go back to the Treasurer here but look, thank you Dr Pragnell. I think that Dr Pragnell hasn't got an answer. This is a fellow who is the policy adviser with the Association of Superannuation Funds. I can't get an answer from anyone here. But their job on our behalf is to say, well we have nailed both parties down here. Now when you release this, I am talking to Treasurer Costello, this is what we are talking about. You actually announced, Treasurer Costello said, because there is two things you can do. You can give tax cuts back to people or you let them keep their super without tax. And you said, righto, we are not going to take $7 billion out of your pocket over the next four years. I think that was the comment you made, didn't you?

TREASURER:

Well the comment I made was that everybody should know, if they put their money into this superannuation - whether they are 20, whether they are 30, whether they are 40, whether they are 50 - when that money comes out, you won't be taxed on it.

JONES:

That's it.

TREASURER:

And Alan, this is very important for people making long term financial decisions.

JONES:

But this is a potential gold mine. If a government decided in the future to tax, there is billions of dollars, you can tax it at any level.

TREASURER:

You are talking about $7 billion now, but you are talking in 10 and 20 and 30 and 40 years...

JONES:

As baby boomers come through. Yep.

TREASURER:

...hundreds of billions and you are talking about very big money. Now, the other thing I keep coming back to is you know, and that Dr Pragnell and you know, and ASFA, to be frank, ought to be a little more interested in this.

JONES:

Yes, absolutely.

TREASURER:

The raiding of the Future Fund and Labor's policy to take superannuation funds for their own pet projects. Now this is how WA Inc started, this is how Tricontinental started, this is how the West Australian operations started, the South Australian State Bank - when you had Labor politicians at the state level deciding they knew where to invest the funds of these banks and these financial institutions, they went off in pet projects. At the end of the day, the taxpayers lost their money and paid the cost. Now it is all very well for these people to say, ‘I have got a good pet project, I will take some of this superannuation, I will take some of that superannuation.' It is your money and if it is lost, it your retirement savings.

JONES:

Okay, well thank you for talking. I am trying to get some answers, I know that you can't give answers for the other side but this is one of the reasons why obviously, Kevin Rudd picks and chooses where he goes because those are answers that only he can give. We will keep at it nonetheless but it is a very, very big issue.

20 Nov 2007

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