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June 3, 2025
STEPHEN CENATIEMPO: All right, well, let's try and get some honest answers. The newly appointed Shadow Finance Minister and Shadow Spokesman for the Public Service, James Paterson, is with us. James, good morning.
JAMES PATERSON: Good to be with you, Stephen.
STEPHEN CENATIEMPO: Now, one of the biggest problems the Coalition had with the last election was their public service policy. Not necessarily that it was a bad policy, but it was communicated badly. You've taken a different approach, though, or you're talking about a non-ideological approach. What do you mean by that?
JAMES PATERSON: Well, I think it's very clear that our public service policy, whether it was the working from home aspect or the numbers of public servants and our hiring freeze was not well received around the country, along with our whole policy agenda, because this is not a close election defeat, this is not a close loss, this is a comprehensive loss. And we would be kidding ourselves if we told ourselves that just slightly better communications would have solved this problem for us. I think our policy agenda needs to be and is up for review. On the public service, specifically when I say non-ideological, I mean on things like outsourcing and consultants. We're not going to take a pro-outsourcing approach or an anti-outsourcing approach. We're going to take the approach that whoever is best placed to do a job should do the job. Often, that will be a public servant. Sometimes that will be a consultant or a contractor, but whoever can deliver the capability in an affordable way for taxpayers is who will get the job under the Coalition.
STEPHEN CENATIEMPO: The difficulty you're going to have here, though, is that the public service needs to be efficient. I mean, in and of itself, and this is one of the problems that we have here in the ACT, is we seem to think that the public service is a Ponzi scheme to prop up the ACT government when it is, in the name itself, it is there to serve the public. The difficulty you're going to have from a policy perspective is that you're kind of at the mercy of most of your other colleagues, and I'll use one example, the NDIS for instance, which is incredibly inefficient, and if it was made efficient we'd need less public servants working on it, but you can't actually affect that. It's going to be one of your colleagues that actually comes up with a policy regarding the NDIS.
JAMES PATERSON: Well, the Coalition certainly will be expecting the public service to be good stewards of taxpayer dollars, to have respect for the taxpayers' money, which they have responsibility for, and also to deliver the services that Australians expect and are entitled to. Now, the government has promised quite a big change on the NDIS, and they've now got a full term in which they're going to have to deliver it. They're going to supposedly bring growth down in the NDIS to 8% a year, which would still be a very fast rate of growth, but more modest than it has been in recent years. And we provided them with the bipartisan support they needed to pass the legislation they said would get that job done. So, now is the time to judge their actions on things like NDIS and its sustainability, and we'll be watching very closely.
STEPHEN CENATIEMPO: I want to talk about defence spending for a moment because, apart from Ted O'Brien and yourself, the rest of the frontbench team seems to have gone missing. But there seems to be this mentality that we need to increase defence spending, but we're not going to do it because the U.S. told us to. Well, who cares who tells you to do it if it's the right thing?
JAMES PATERSON: Well, that's my argument - that we should increase defence spending because it's in Australia's national interest. And regardless of whether our American friends think it's a good idea today or tomorrow, I think it is a good ideas because we're in the most uncertain strategic environment since the end of World War II, which you will hear Richard Marles say, but we're spending like it's a normal, a peacetime environment. And that is naive and it's dangerous and it is not adequate to defend our country.
STEPHEN CENATIEMPO: But how do you get that message across? Because I think there's still a problem with messaging for the Coalition because the government's out there saying we've got record defence spending. And that's true, but that doesn't mean we've got it right. I mean, they're talking about increasing defence spending to 2.4% of GDP, but that's a decade away before we're going to see that money.
JAMES PATERSON: Well, when they say it's record defence bidding, they're not telling the truth, because you only have to go back to the 1980s in the Cold War when Kim Beazley was Defence Minister. We were spending up around 3%, 3.5% of GDP in some financial years, and there was no threat of imminent outbreak of conflict in the same way that we have today. When someone like Sir Angus Houston, who was a former Chief of the Defence Force who completed the Defence Strategic Review, says right now is the most dangerous strategic environment since the end of World War II, then why are we spending far less than we have on average over that period of time? So, we really need to heed the advice of people like him, Kim Beazley and others who say this is not enough to defend our country.
STEPHEN CENATIEMPO: Well, there's no doubt about that. And again, I come back to that messaging issue because the super tax policy that the government is going to try and ram through in its entirety, there are two parts of it that are absolutely appalling. The actual policy in and of itself, I don't think, is that bad, increasing the tax rate from 15% to 30% on balances over $3 million. But there seems to be a view that Ted O'Brien's out there saying it's a dog of a policy, but we're willing to negotiate on it. Well, if it's a dog of policy, it's a dog of the policy. Why not come out and say, well, there are only two bad parts of this, the rest of it we're okay with.
JAMES PATERSON: We're going to fight this policy every step of the way because it is wrong in principle. We think it is wrong to tax unrealised gains.
STEPHEN CENATIEMPO: But that's the point that's bad.
JAMES PATERSON: Yeah, and that's one of the points that's bad about this policy. The other is that they plan not to index the rate at which it applies, so over time it will capture a very large proportion of taxpayers, including young people today who are average income earners. We think that's wrong in principle as well. And so we're going to fight this and we're going to find it hard, because frankly, I don't think tax increases are what the Australian economy needs right now either.
STEPHEN CENATIEMPO: Well, no, and that's, yeah, I’ve heard you out there saying that you shouldn't have opposed tax cuts during the election either, because it is an anathema to liberal principles. If you get back, and as I've said to a number of your colleagues privately and publicly, if you go back to that we believe statement, you might be in a good position.
JAMES PATERSON: Yeah, I think that's very fair advice. Our values are timeless and have earned the support of the Australian people many times, but frankly, our policies have not always consistently reflected those values, and my mission as Shadow Minister for Finance is to make sure they do.
STEPHEN CENATIEMPO: Good on you, James. Good to talk to you this morning.
JAMES PATERSON: Thanks, Stephen.
ENDS