WEBVTT - The economic roundtable: Where is Labor’s ambition?

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<v Speaker 1>Hi, I'm Ruby Jones and you're listening to seven AM.

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<v Speaker 1>This week in Canberra, the press, unions, business leaders and

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<v Speaker 1>politicians have all been talking about one thing, the Economic Roundtable.

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<v Speaker 1>It's been spooked by the Government as a way to

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<v Speaker 1>address a core problem with the economy, sluggish productivity. But

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<v Speaker 1>what is actually on offer and will it make a

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<v Speaker 1>difference to the rising structural inequalities we face today. Executive

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<v Speaker 1>Director of the Australia Institute Richard Dennis on what's happening

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<v Speaker 1>behind closed doors in Canberra and the challenge and opportunity

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<v Speaker 1>labor now faces. It's Friday, August twenty two, so Richard,

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<v Speaker 1>welcome back to seven AM.

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<v Speaker 2>Thanks for having me on.

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<v Speaker 1>This week started with the Chair of the Productivity Commission,

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<v Speaker 1>Daniel Wood giving an address to the Press Club where

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<v Speaker 1>she laid out one of the big problems the Economic

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<v Speaker 1>Roundtable needs to address, and that is intergenerational inequality. Can

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<v Speaker 1>you just lay out for me how that is playing

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<v Speaker 1>out right now? Oh?

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<v Speaker 2>Absolutely, I mean intergenerational inequality is a terrible problem in Australia.

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<v Speaker 3>We all want our kids to grow up having better

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<v Speaker 3>lives than we have. We want them to be healthy,

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<v Speaker 3>to get a good education, to have more options in

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<v Speaker 3>their careers and perhaps even a bit more leisure time

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<v Speaker 3>than some of us have managed.

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<v Speaker 2>The reality is for someone that left UNI ten years

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<v Speaker 2>ago and started saving for their deposit teen years ago

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<v Speaker 2>for their house, they're on average likely to be further

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<v Speaker 2>away from a deposit than when they started.

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<v Speaker 3>That expectation that life will get better for each successive

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<v Speaker 3>generation is Australia's generational bargain, and for many generations we

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<v Speaker 3>have fulfilled that promise until perhaps now.

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<v Speaker 2>The housing market is very much stacked in favor of

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<v Speaker 2>people that own two or more houses, and stacked against

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<v Speaker 2>people that don't own any houses. The housing market is

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<v Speaker 2>stacked against people whose parents can't bail them out and

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<v Speaker 2>give them that magical deposit.

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<v Speaker 3>At their heart. These are productivity challenges, and by adopting

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<v Speaker 3>a growth mindset we improve our capacity to address them.

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<v Speaker 2>But let's be clear, not all young people are going

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<v Speaker 2>to miss out. Young people with rich parents are going

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<v Speaker 2>to get into the housing market quicker because the banker

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<v Speaker 2>Mum and dad is going to give them that head

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<v Speaker 2>start that everyone wants. But by definition everyone can't get

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<v Speaker 2>a head start, and when they inherit large amounts of

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<v Speaker 2>money that their parents have accumulated thanks to superannuation tax

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<v Speaker 2>concessions and thanks to the capital gains tax. Yeah, there's

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<v Speaker 2>going to be some really rich young people in the future.

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<v Speaker 2>So that inequality is just going to get worse because

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<v Speaker 2>of these I would argue deeply flawed structures that we've

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<v Speaker 2>built with advice from Treasury in the Productivity Commission. For decades, growth.

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<v Speaker 3>Has simply fallen down the list of priorities in policymaking.

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<v Speaker 3>This manifests not just in less economic reform, but in

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<v Speaker 3>decisions by governments federal, state and local, to pay less

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<v Speaker 3>attention to growth trade offs in pursuing other policy goals.

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<v Speaker 2>It's a terrible problem that's taken decades of neoliberalism to cause.

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<v Speaker 2>It's decades of deregulating the labor market, it's decades of

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<v Speaker 2>privatizing and outsourcing a whole range of essential services. Decades

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<v Speaker 2>of enormous tax concessions for superannuation have helped older generations enormously,

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<v Speaker 2>and now we're standing here with this sort of look

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<v Speaker 2>of shock, going how young people ever going to catch

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<v Speaker 2>up if their wages are growing slower than house prices.

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<v Speaker 2>So I just fear that we're kind of going back

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<v Speaker 2>to the same poisoned well to get more of the

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<v Speaker 2>bad advice that's caused the problem.

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<v Speaker 1>Well's talk a little bit about this week, this roundtable

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<v Speaker 1>and all of the framing around productivity. I mean, as

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<v Speaker 1>it kicked off, we heard from the treasurer. He talked

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<v Speaker 1>about making the economy more productive. He said that was

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<v Speaker 1>the best way to make everyone better off. So is

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<v Speaker 1>there a productivity problem that needs solving?

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<v Speaker 2>There is And look, so productivity it means output per

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<v Speaker 2>unit of input. The reason economists gets so excited about

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<v Speaker 2>productivity growth is it's kind of like magic. Productivity growth

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<v Speaker 2>says that we can get more stuff with the same

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<v Speaker 2>amount of labor input, with the same amount of land

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<v Speaker 2>input and the same amount of capital input. This magic

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<v Speaker 2>is widely discussed, but not widely understood. And unfortunately, while

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<v Speaker 2>the concept of productivity is very important in a country

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<v Speaker 2>like Australia, whenever someone with power would like more money,

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<v Speaker 2>the case they make is give me more money and

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<v Speaker 2>it will increase productivity. Right, So we have CEOs in

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<v Speaker 2>Australia saying you need to cut the company tax rate

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<v Speaker 2>for me so that productivity will go up, or you

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<v Speaker 2>need to make it easier for me to sack workers

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<v Speaker 2>so that productivity will go up. Or we need to

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<v Speaker 2>make artists give all their intellectual property away for free

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<v Speaker 2>to tech giants so that productivity will go up. So

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<v Speaker 2>it's just this lazy way of dressing up self interest

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<v Speaker 2>as national interest.

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<v Speaker 1>Right, So it's clear you don't agree with the case

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<v Speaker 1>that big business is making, but they are not the

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<v Speaker 1>only ones at the rout and table. Also, have there

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<v Speaker 1>been any ideas that have emerged that you think would

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<v Speaker 1>be effective?

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<v Speaker 2>Oh, look, I think there are some good ideas that

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<v Speaker 2>have been floated both in the lead up to the

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<v Speaker 2>round table and by people at the round table. For example,

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<v Speaker 2>how about we get rid of the enormous subsidies for

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<v Speaker 2>diesel use by the mining industry that had save US

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<v Speaker 2>ten billion a year that we could spend on more

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<v Speaker 2>productive purposes. How about we put a twenty five percent

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<v Speaker 2>tax on all gas exports, stop giving gas away for

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<v Speaker 2>free tax gas exports. That will encourage the gas industry

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<v Speaker 2>to provide more and cheaper gas to Australians while putting

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<v Speaker 2>another ten or so billion dollars into the government to

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<v Speaker 2>go and spend on more useful things. How about we

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<v Speaker 2>rain in the capital gains tax concessions. These are very

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<v Speaker 2>good ideas from the ACTU and while while the housing

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<v Speaker 2>stuff got a bit of a mention in the media,

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<v Speaker 2>because nothing sells newspapers in Australia like scaring baby boomers

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<v Speaker 2>about changes to capital gains tax.

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<v Speaker 4>So we're going to take a proposal that both negative

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<v Speaker 4>gearing and capital gains tax should be reformed, that they

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<v Speaker 4>should be limited to one investment property and grandfathered for

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<v Speaker 4>existing arrangements for five years to allow people to adjust.

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<v Speaker 2>So sorry, I think it's exciting and important that you know,

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<v Speaker 2>we gave a loud voice to Sally McManus to bring

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<v Speaker 2>what I think is a more more productive agenda to

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<v Speaker 2>the table. I don't think she'll persuade the business people

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<v Speaker 2>in the room, but that's the point. We've got to

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<v Speaker 2>stop giving them a veto over what we do. My

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<v Speaker 2>hope is that by ventilating these ideas at the round

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<v Speaker 2>table over the next year or so, we can build

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<v Speaker 2>some political awareness and support for doing that. So if

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<v Speaker 2>the government convince most of the people, then in a

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<v Speaker 2>democracy we should be able to crack on.

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<v Speaker 3>And do it.

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<v Speaker 1>Coming up, where is Labour's appetite for ambition. Richard, what

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<v Speaker 1>are your expectations that this Economic Ground Table could deliver

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<v Speaker 1>the kind of changes to the economy that really do

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<v Speaker 1>benefit everyone.

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<v Speaker 2>Oh, this summit is not an ambitious summit, to be clear.

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<v Speaker 2>As someone who's been interested in the things for decades,

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<v Speaker 2>I've got pretty low expectations about what will come out

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<v Speaker 2>of the summit. But I'm more focused on what's gone

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<v Speaker 2>into the summit. We now admit we have a productivity problem.

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<v Speaker 2>We've now got quite competing arguments for what we should

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<v Speaker 2>do about that. The Business Council think their members should

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<v Speaker 2>get a big tax cut. The ACTU think maybe we

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<v Speaker 2>should start taxing gas and stopping fossil fuel subsidies and

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<v Speaker 2>reiin in housing tax concessions. They are two quite different views,

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<v Speaker 2>and it's rare in Australia for us to hear quite

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<v Speaker 2>different views about what would be good for the economy

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<v Speaker 2>because the Labor Party is stuck so close to the

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<v Speaker 2>Coalition on so much of the sort of big economic

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<v Speaker 2>narrative that most Australians have just never heard that there

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<v Speaker 2>might be benefits from increasing taxes and spending more money

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<v Speaker 2>on nice things. I mean, imagine if we had a

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<v Speaker 2>tax on gas exports and made childcare free for all

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<v Speaker 2>this tin families. I don't think there's an economist in

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<v Speaker 2>the country that would disagree that taxing gas and helping

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<v Speaker 2>more families participate in the workforce would be great for

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<v Speaker 2>the economy. But those kind of ideas don't usually come

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<v Speaker 2>out of our very conservative election campaigns. Those sort of

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<v Speaker 2>ideas don't get much airplay in our major newspapers or

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<v Speaker 2>our public broadcaster. So you know, the reality is Labour

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<v Speaker 2>took a pretty thin agenda to the twenty twenty five election.

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<v Speaker 2>It's hard to see it taking more than more than

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<v Speaker 2>a year, probably less time to actually implement the policies

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<v Speaker 2>they took to the election.

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<v Speaker 1>At this moment in time, then there does seem to

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<v Speaker 1>be a big golf between the kind of ambition that

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<v Speaker 1>could exist and this particular summit. So does it seem

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<v Speaker 1>to you like there is any kind of genuine appetite

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<v Speaker 1>within the government for more fundamental change?

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<v Speaker 3>Oh?

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<v Speaker 2>Look, publicly, no, Privately yes, of course. I mean I

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<v Speaker 2>think the best example here is it in the Labour's

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<v Speaker 2>first term they were adamant for two years they wouldn't

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<v Speaker 2>change the Stage three tax cuts, and then they shifted

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<v Speaker 2>eighty billion dollars from high income owners to low and

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<v Speaker 2>middle income owners. That's fantastic. I'm glad they did that,

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<v Speaker 2>and so we're voters. It's one of the most visible

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<v Speaker 2>things they did, and according to polling we did at

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<v Speaker 2>Australia Institute, it's one of the most popular things they did.

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<v Speaker 2>So yeah, I think that at the moment, the loudest

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<v Speaker 2>message coming from the Prime Minister is very much as

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<v Speaker 2>steady as she goes. You know, we've got our election

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<v Speaker 2>agenda to implement. That's what we'll be focusing on. But

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<v Speaker 2>we're open to suggestions. So I think it's safe to

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<v Speaker 2>say the Prime Minister is not out there kind of

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<v Speaker 2>whipping up a frenzy of people saying, yeah, let's do

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<v Speaker 2>big things. But democracy, being as it is, politics hates

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<v Speaker 2>a vacuum. So I'm optimistic that once they get through

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<v Speaker 2>the small range of reforms they took to the election,

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<v Speaker 2>we've got a good two years to have bigger debates about, yeah,

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<v Speaker 2>should we stop giving gas away for free to Sevron

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<v Speaker 2>and BP, or should we reiin in tax concessions so

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<v Speaker 2>people who owned twenty or more houses or really radical

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<v Speaker 2>things like that.

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<v Speaker 1>And I suppose as these conversations about policy are happening,

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<v Speaker 1>it's in the context of millennials becoming a bigger voting

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<v Speaker 1>block than baby boomers. So there is now something that's

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<v Speaker 1>sake for the government if there is not meaningful change,

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<v Speaker 1>particularly on intergenerational inequality.

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<v Speaker 3>Oh.

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<v Speaker 2>Absolutely, And I think there's a real challenge but indeed

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<v Speaker 2>a real opportunity for Labor here. It's dangerous for Labor

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<v Speaker 2>to keep ignoring millennial voters. Here in Canberra, the Seed

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<v Speaker 2>of Bean was once one of the safest seats in

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<v Speaker 2>the country. It's now held still by Labor, you know,

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<v Speaker 2>but the margin fell from like fourteen percent to half

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<v Speaker 2>of percent. Similarly, in the Seed of Fremantle, again fell

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<v Speaker 2>from double digit margin to less than one percent now.

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<v Speaker 2>So I think it would be heroic of Labor to

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<v Speaker 2>assume that young voters will be happy with the status quo.

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<v Speaker 2>And similarly, the fact that the Liberals did so badly

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<v Speaker 2>at the last election, given that I think there's no

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<v Speaker 2>chance the Liberals can win the next election, it's going

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<v Speaker 2>to be hard for Labor to say, please, don't put

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<v Speaker 2>pressure on us to be ambitious, because if you ask

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<v Speaker 2>us to be ambitious, those nasty Liberals might win and

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<v Speaker 2>you'll get less than you want, not more. I think

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<v Speaker 2>it's been really helpful for Labor to be able to

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<v Speaker 2>kind of control younger voters and control progressive voters by saying,

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<v Speaker 2>if you ask for too much, you'll get even less

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<v Speaker 2>than you want, so back off. For me, what's important

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<v Speaker 2>is not how many seats Labour won at the last election,

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<v Speaker 2>but how many of the Liberals lost. The Liberals are

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<v Speaker 2>not a viable threat to Labor at the next election,

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<v Speaker 2>so in turn, Labor have really got no excuse for

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<v Speaker 2>not being more progressive on housing, on climate, on inequality,

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<v Speaker 2>on a whole range of issues.

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<v Speaker 1>Well, Writard, thank you so much for your taid.

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<v Speaker 2>Thank you.

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<v Speaker 1>Richard. Dennis's new book is called Dead Center, How Political

0:13:16.880 --> 0:13:27.760
<v Speaker 1>Pragmatism Is Killing Us. It's out now. Also in the

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<v Speaker 1>news today Benjamin Netanya, who has continued his public attacks

0:13:31.440 --> 0:13:35.120
<v Speaker 1>on Anthony Alberanzi despite Australian Jewish groups calling on the

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<v Speaker 1>Israeli Prime Minister to deal with disputes privately. The Executive

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<v Speaker 1>Council of Australian Jewelry this week said Nettanya, Who's labeling

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<v Speaker 1>of Albanese as weak was inflammatory, and provocative and was

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<v Speaker 1>affecting Australia's Jewish community. But in a new interview Benjamin Nettana,

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<v Speaker 1>who again called Anthony Albanesi week and said his record

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<v Speaker 1>is for ever tarnished by the weakness that he showed

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<v Speaker 1>in the face of these hamas. Terrorist monsters. And state

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<v Speaker 1>premiers say they were caught off guard when Mark Butler

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<v Speaker 1>announced changes to the National Disability Insurance Scheme. This week,

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<v Speaker 1>Disability and NDAs Minister Mark Butler announced a program called

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<v Speaker 1>Thriving Kids, which is designed to divert children under nine

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<v Speaker 1>with autism and developmental delays from the NDIS. The federal

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<v Speaker 1>government has confirmed two billion dollars for the scheme and

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<v Speaker 1>says states are expected to kick in. Victorian Premier Jacinta

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<v Speaker 1>Allen said she was not told about the changes ahead

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<v Speaker 1>of Butler's announcement, a sentiment backed up by ministers from

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<v Speaker 1>several states. Seven Am is a daily show from Solstice Media.

0:14:36.400 --> 0:14:40.680
<v Speaker 1>It's made by Atticus Bastow, Christenate, Daniel James, Sarah mcvee,

0:14:40.720 --> 0:14:44.720
<v Speaker 1>Travis Evans, Zonfecho and me Ruby Jones at The music

0:14:44.800 --> 0:14:47.760
<v Speaker 1>is by Ned Beckley and Josh Hogan of ombloc Audio.

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<v Speaker 1>See you next week,