Subjects: National Redress Scheme; Labor’s Tax Policy
GARETH PARKER: The Attorney-General is Christian Porter. He joins me, as he does most Thursdays.
Christian, good morning to you.
ATTORNEY-GENERAL: Good morning, Gareth.
GARETH PARKER: Thanks for your time today.
Earlier this week there was a bit of a back and forth between you and your West Australian counterpart, John Quigley. It's over this issue of the redress scheme that you want to set up for victims of institutional child sexual abuse.
I notice there's sort of an incremental development reported by Phoebe Wearne in the West Australian this morning. John Quigley, the WA Attorney-General, says that the Commonwealth is seeking to shirk its responsibility to child migrants. What do you say about that?
ATTORNEY-GENERAL: It's a smokescreen and a delaying tactic.
So, let me explain what the Royal Commission said for your listeners. The Royal Commission said that the basic principle of the redress scheme has to be that the responsible institution pays. So, whether that's the Commonwealth Government, a state government, the Catholic Church or a charity; if they were primarily responsible for the harm for the abuse done to the person, they should pay the redress. And of course, that's very important because that stops what's known as moral hazard, where one organisation pays for the abuse and moral wrongdoing of another organisation.
Now, where child migrants came to Australia under, obviously Commonwealth immigration settings, the issue is not how they came to Australia, the issue is which organisation, church, charity, the Commonwealth, the state was responsible for the sexual abuse that they suffered.
So, for instance, if someone came to Australia as a child migrant and they ended up in South Australia or Western Australia, let's say in Western Australia they were placed in the Bindoon Boys Home and that organisation, run by the Catholic Church, was responsible for the abuse, that organisation will be responsible for paying the redress, and that was what the Royal Commission recommended. It is what the legislation, which has been available since halfway through last year, clearly sets out and that's the basis upon which other state, New South Wales, Victoria, and others that have given indication that they will join, are joining, and there won't be any change to that, so this is a smokescreen.
GARETH PARKER: Quigley seems to be saying that because the 1946 act of Parliament said that the Commonwealth are the guardians of these people, therefore the Commonwealth is responsible for the abuse that followed. That seems to be his position.
ATTORNEY-GENERAL: Well, it's just a position that is unsustainable.
For instance, what if it were the case, as it will definitely be, that some children in some of these institutions had their relevant state, whether that's WA or South Australia, as the guardian? That should not, and under this scheme would not, by itself make WA or South Australia responsible for the abuse.
If WA was the guardian but the child was in a home run by the Catholic Church or another church or another charity, and it was that church or that charity that did the wrong, that committed the sexual abuse, it is that organisation that committed the sexual abuse that must pay redress, and that is the fundamental underpinning of the scheme that the Royal Commission recommended.
If what John Quigley is saying is that whoever happened to be the legal guardian at the time should - without (unclear) - pay redress, he is saying that we should breach the single most important and fundamental recommendation of the Royal Commission, and we won't do that.
GARETH PARKER: So, your position is pretty unambiguous, it doesn't sound like it's going to change. I mean, the thing that strikes me about this, Christian, is that there's – well, according to Phoebe's report – 3000 people, former child migrants, whom this affects. They seem to be the political football here.
ATTORNEY-GENERAL: Well, they must be beneficiaries of redress, and the organisation that pays the redress to those survivors, those victims, must be the organisation that did the harm, the wrong, and the abuse to them. Now, I mean, that is considered in the national redress scheme on a case by case basis. But I would say, based on my reading of the Royal Commission's finding and evidence before the Royal Commission, overwhelmingly the responsible organisations will be the churches and the charities, who were actually the institutions whose employees or in whose settings or under whose auspices the wrong, the harm, and the abuse occurred.
So, in a sense, John Quigley is anticipating a finding that is unlikely to be made on a case by case basis anyway because, say for instance using the terrible things that happened in the Bindoon Boys Home as an example, without pre-judging every individual matter, it's quite clear that it was the Catholic Church and its priests and its organisational structure and administrative failings that was the cause of that abuse and wrongdoing, and they should pay.
GARETH PARKER: So, in that case it would be the Catholic Church that copped that liability, not the state.
ATTORNEY-GENERAL: Correct. No, the state, or any state or the Commonwealth, will be responsible under the legislation where the independent assessor, in every matter, looks at all the circumstances and asks this question which is in section 21 of the act: who is the primarily responsible entity? And the things that they will consider is the circumstances in which the abuse occurred; who was the participating institution; where were the premises; what were the activities; and the person who actually did the abusing, who were they the employee of and who did they operate at the direction and regulation of? These are the central questions that are meant to match moral responsibility with the payment of redress.
And John is just wrong on this, and he's so wrong and such an experienced lawyer I can only conclude that it's a delaying tactic.
GARETH PARKER: OK. On another matter, I have been getting calls all week and a lot of emails from self-funded retirees who are very unhappy with …
ATTORNEY-GENERAL: …so am I.
GARETH PARKER: Right, you have been getting that? OK. People are very unhappy with Bill Shorten's plans to change the way that imputation credits are dealt with by the tax system. It seems to me that, for the first time in a while, the Opposition Leader has given your side of politics an opening, something to attack him with. Are you going to miss this opportunity, or are you going to exploit it to the fullest?
ATTORNEY-GENERAL: Well, we're going to fight it because it is bad for the one million Australians that it affects.
And Gareth, this policy has barley lasted a day before the backtracking and, well, we'll change this, we'll change that, we'll compensate these people. But here are the facts around this policy: companies already pay tax on their profit, and if there's some left over, in some circumstances some companies pay that as a dividend with a franking credit to a shareholder. If the shareholder doesn't have any other tax liabilities to offset that against, they will get that difference in a cash tax refund from the ATO, and about one million Australians get that tax refund; and of course they are people without other tax liabilities, which generally indicate that they're not very high income earners. Of those one million people, 250,000 of them are pensioners, and those 250,000 people will basically have their tax returns taken by Bill Shorten if he were to go into government and this policy were to succeed.
GARETH PARKER: To me, Christian, the point is this, is that people make plans. They didn't set the rules, but they make plans for their retirement, they try to provide for themselves, they try and do the responsible thing, stay off the government welfare roll as much as they can. Those people are now facing extreme uncertainty, and $2000 might not sound like a lot of money to some people, but for these people it's the difference between paying the rates or not.
ATTORNEY-GENERAL: Well, $2000 is a lot of money to most Australians, and Bill Shorten's characterisation of this submission was that it would only affect wealthy Australians.
Well, 97 per cent of the people who receive franking credit refunds have a taxable income below $87,000, which we certainly wouldn't consider rich, but more than half of all the refunded franking credits are paid to individuals who earn less than $18,200.
Now, if you're earning that and this takes $900 off you or $2000 off you, that fundamentally changes the basis of your finances, particularly if you're retired. And I reckon this is an absolute shocker of a policy, terrible for the one million Australians it affects. It will push Australians who are self-funded retirees, which is what we all want in Australia, back onto the pension. So, it will actually have a negative effect financially in that regard, but, as you say, fundamentally there are 250,000 pensioners. 50 per cent of the one million people this will affect earn less than $18,200.
So, these people are either pensioners or part-pensioners, or they're self-funded retirees with very limited income coming in, and you change the goalposts on them without any warning whatsoever. So look, it's a shocking policy and it will be shocking for them politically, and we will do everything in our power to ensure that they don't get elected, and if I were an elector in Batman this weekend, I'd send them a pretty strong message about this.
GARETH PARKER: Alright, we're out of time. Christian, thanks for your time today.
ATTORNEY-GENERAL: Thank you. Cheers, Gareth.