Transcript | ABC Insiders | 08 June 2025

TRANSCRIPT

Sunday 08 June 2025 

Interview on ABC Insiders  

Topics: Albanese Trump meeting, exemptions from U.S. tariffs, beef biosecurity, critical minerals stockpile, defence spending, tax reform, Labor’s super tax grab, budget management, Bradfield recount  

E&OE…………………………………………………………………………………………………. 

DAVID SPEERS: James Paterson, welcome to the program. 

JAMES PATERSON: Good morning, David. 

DAVID SPEERS: So before the election, Peter Dutton was, of course, suggesting he could convince Donald Trump to drop the tariffs entirely on Australia. Do you now have a more realistic expectation of what can and should be achieved by the Prime Minister when he does sit down with the President? 

JAMES PATERSON: Well, David, we don't control the decisions of the Trump Administration in the United States, but what we expect of the Prime Minister, including if he does meet with him next week on the sidelines of the G7, is to put our best case forward, because the workers and the families of people in industries who are affected, particularly in something like steel and aluminium, deserve nothing less than that. And I do recall when it was suggested during the election campaign that exemptions could be achieved, that that was generally dismissed and downplayed. But of course Keir Starmer has now achieved a partial exemption from the steel and aluminium tariffs and Australia is at least as good an ally of the United States as the United Kingdom is and so there's no reason why the Prime Minister shouldn't at least be able to secure that exemption. 

DAVID SPEERS: So on that, the UK has done a deal with Donald Trump and that involves granting unprecedented access for American beef to the British market. Are you saying Australia should do that? 

JAMES PATERSON: No, I'm not saying that David. We should not compromise in any way, shape or form on biosecurity and those issues of traceability that Jane Norman outlined, I think framed the issue very well from our point of view as well. We have no in principle objection to American beef being exported to Australia but it must meet our high biosecurity standards. And we will be holding the Prime Minister to his commitment that he will not compromise on that in any way, shape or form. 

DAVID SPEERS: Okay, but you're just essentially saying he should get the deal that Keir Starmer has got without doing what Keir Starmer has done to get it? 

JAMES PATERSON: No, I'm not saying that David, I'm just saying that Keir Starmer proves that it is possible to get an exemption - it is not an impossible task. And what we ask and expect of the Prime Minister is that he put our best foot forward, that he makes those arguments. And I have to say, I think that would have been much easier if, like Keir Starmer, the Prime Minster had made the effort to go and meet the President earlier than he has now. It's seven months on since the President was elected, and other world leaders like Keir Starmer and Emmanuel Macron have made the trip to the United States and have met with the President multiple times in multiple forums. The Australian Prime Minister has not yet done so. 

DAVID SPEERS: On critical minerals, because clearly this seems to be the big offering from Australia for Donald Trump, where does the Coalition now stand on this, because it was a little confusing before the election. Do you support the Australian government setting up a stockpile of critical minerals and offering access to the US, to that stockpile? 

JAMES PATERSON: Well, we haven't been briefed David on what the government's intentions in this area are and there's only been media speculation about that, they've not publicly outlined exactly what they have in mind. But any sensible steps that represent an economic opportunity for Australia and an opportunity for us to demonstrate that we are a good alliance partner of the United States is something that we would offer bipartisan support to. Now, there's been some informed reporting, I suspect, by Phil Coorey and others in the AFR over the weekend that talked about off-take agreements and stockpiling and other issues. We're open for a conversation about that and we're open to providing bipartisan support, subject to the details. 

DAVID SPEERS: Ok, because prior to the election, the Coalition, I think, was opposed to a stockpile. You're now open to it? 

JAMES PATERSON: Well of course we're open to any sensible steps in the national interest that takes advantage of the extraordinary opportunities that are present in the critical industry market. This is a market which is dominated by China, strategically they've gone out and sought to dominate it. We have many of those critical minerals here in Australia, processing them is not something that's straightforward or easy to do, but it is something that Australia could do which would represent an economic opportunity and a strategic contribution. 

DAVID SPEERS: With government resources to do that, government supporting the mining and processing of critical minerals. This is a threshold question. You're now open to that? 

JAMES PATERSON: That might be necessary, David, and we're very happy to see what the government is proposing here. I can't commit to it in principle without having seen the details, but we're certainly open to it because we think critical minerals is an opportunity for Australia. 

DAVID SPEERS: On defence spending, the Trump administration wants Australia to go to three and a half percent of GDP in terms of defence spending. Can you just clear up what the Coalition's position now is on this? Is this something that's going to be subject to your policy review, or are you still committed to what you took to the election, which was to increase to 3% of GDP defence spending within a decade?

JAMES PATERSON: Well, about five weeks ago, David, we told Australians that it was critical for our national security that we get to 3% of GDP defence spending and in the last five weeks, I don't know about you, but I don't think the world has become a much safer place. So we are committed to reaching that 3% of GDP target. Of course, the exact profiling of that increase is something that we'll determine through our policy process and closer to the next election we'll be completely upfront and transparent about that. But yes, we have an objective of reaching the 3% of GDP because we think it's in our national interest. 

DAVID SPEERS: One of the criticisms at the time was that you made this commitment without saying what it was for, what sort of kit you wanted to buy with this extra, well I think it would be an extra $30 billion dollars a year or thereabouts. Is this the same issue now that you're still committing to this spending target without saying why or what we need it for? 

JAMES PATERSON: Well we've got three years to outline exactly what we could spend that money on, but there's plenty of good advice out there in open source that suggests some good areas for investment. One is spending to resolve the recruitment and retention crisis facing the ADF. Another is to make sure we have the munitions stockpile we would need to survive a conflict, god forbid, if that should break out. Other things like hardening our northern bases, air and missile defence, drone defence, purchasing our own lethal drones - there is no shortage of good things we could spend on that would increase our ability to defend ourselves and safeguard our sovereignty. And many of Australia's best informed national security experts advocate that we do so. There's no two private citizens better informed about the risk we face than Professor Peter Dean and Sir Angus Houston because they completed the defence strategic review for the Albanese government and they have both since said that we should be spending at least 3% of GDP. Now I think it's reckless in the extreme to ignore advice like that, particularly when your own government has commissioned it.

DAVID SPEERS: And neither of them suggested we needed extra joint strike fighters, and I noticed in the list you just gave us, you didn't mention them either. Is that now dropped as a Coalition policy? 

JAMES PATERSON: Well, the Albanese government has cancelled a lot of defence capability that would have arrived over the next few years before the AUKUS submarines arrive. Included in that is a fourth squadron of Joint Strike Fighters, but also infantry fighting vehicles, self-propelled howitzers, the military satellite communications technology, referred to as JP9102. I mean, these are really important capabilities that have been cancelled. Now, the world is going to move on over the next three years by the time the next election approaches. I'm not going to commit on your show now to which capabilities we should acquire, but I'm confident there'll be many good things we could invest in which would make our country safer. 

DAVID SPEERS: You know your stuff on defence by the sounds of it there, James Paterson, but you are the finance portfolio holder now as Shadow Finance Minister, let me turn to that. Because if you are going to commit, as you have, to this 3% target, that's a big uplift, as I say, around $30 billion extra a year. You'll be responsible for trying to make the numbers add up. Can you at least give us a sense of your approach here, your preferred approach here to finding money? Is it through higher taxes or is it through spending cuts?

JAMES PATERSON: David, you're right - it is unusual to have a Shadow Minister for Finance enthusiastically advocating for an increase in spending in any portfolio, but that's the advice of our experts and that is the environment we find ourselves in and so I'm very comfortable doing so. And we will do the hard work over the next two and a half years or so to put in place some good strong fiscal rules that allow us to take to the next election a strong budget that invests in the things that Australians need, including the critical services they rely on domestically, but also on national security and defence. Forgive me if I'm not going to outline the details of that ten days into this new job on the program this morning, but I assure Australians we'll have that information. 

DAVID SPEERS: No, I appreciate that. It was more about the preferred, the principle, it was more about the principle. I appreciate you're going to, you know, take your time to work on exactly how you do it, but what's the principle here? Your Deputy Leader and Shadow Treasurer Ted O'Brien has been saying that you're against Australians having to cop higher taxes, so should we interpret that as no higher taxes under the coalition to pay for the various things you want to pay for? 

JAMES PATERSON: It's certainly in the Liberal Party's DNA, David, to argue for and advocate for lower taxes whenever they can be afforded and whenever they are achievable. And that's what you'll see under Sussan Ley's leadership and also under the Shadow Treasurer Ted O'Brien and me as Shadow Finance Minister. Because frankly, as I've said recently David, I think we made a strategic mistake at the last election by opposing a tax cut and taking to the election repealing of that tax cut. And that is not a mistake that we'll repeat. 

DAVID SPEERS: So then it brings us to superannuation. Are you open to any change on the way superannuation is taxed in Australia? 

JAMES PATERSON: If the Albanese Government and the Treasurer Jim Chalmers were talking about genuine tax reform, holistic tax reform across the board, that for example, reduced the collection of taxes in inefficient areas and collected that revenue in less distortionary ways, we'd be up for that conversation. We'd be happy to sit down and have that. But that's not what this is. This is a grab for revenue from people's family savings in a way that will have severe unintended consequences. At a time in which the Australian economy desperately needs more investment Jim Chalmers is proposing effectively a tax on investment and we think that is both wrong in principle and the wrong decision for Australia right now. 

DAVID SPEERS: So this is interesting, you would be open to some other sort of superannuation tax increase on higher income earners if it meant we could trade that off with lower taxes, income tax for working Australians, company tax, if it's part of a bigger tax reform? 

JAMES PATERSON: Well, you've overcooked that slightly, David. That wasn't what I was saying. We are opposed to higher taxes. We do not think we need higher taxes, but I think a lot of experts recognise that the way we collect revenue in this country is not as efficient as it could be. There have been numerous reviews into the inefficiencies of the Australian tax system and if the government was genuinely serious about a broad-based tax reform process then we'd be up for that conversation. Now the government has to take the first steps there, they just won the election, they have a big majority, they have a majority in the Senate with their Greens coalition partners and they have all the resources of government. But if they're genuine about that, of course we would sit down with them, but of course, we would have our own principles in that. We're not going to be party to raising taxes, we're not going to party to making it easier for a Labor government to increase taxes, that's not in the DNA of the Liberal Party. 

DAVID SPEERS: But isn't that tax reform? You're gonna have to put something up to cut somewhere else.

JAMES PATERSON: We're happy to contemplate tax reform, David, we're happy to talk to the government about tax reform. But we are not interested in increasing taxes, because I don't think that's what the Australian economy needs right now. Business investment is at decade lows, productivity is declining, per capita GDP is declining. I mean, we have an economy right now on life support and Jim Chalmers has no plans and no ideas to get us out of that. And I'm very worried about what that means for the future of our children and grandchildren.

DAVID SPEERS: Just on the super tax that he is putting before the Parliament, obviously you have a problem with the unrealised gains being taxed and the failure to index this tax, but in saying you're not going to engage in any negotiation with the Government, aren't you leaving this to the Greens to do a deal with Labor?

JAMES PATERSON: Well, the truth is, David, because of the extent of the government's win at the election, if they don't want to sit down and negotiate with us, they have other pathways available to them that they didn't have in the last parliament...

DAVID SPEERS: And is that responsible though?

JAMES PATERSON: In fact, even if the entire crossbench and the Coalition opposes it, they can still pass things with the Greens. Now, the Greens are a more natural ally for the government on something like a tax increase, because we are never going to be party to a tax increase, we're never going to make that easier for the Government, and we're fighting this because we're opposed to it in principle and we're proud to do so.

DAVID SPEERS: Alright, so if you're opposed to tax increases, any tax increases but you've still got to find tens of billion dollars a year for defence spending and anything else you want to do, that brings us to where you're going to cut. And again, I don't want to get too far ahead of the process that you've got to go through, but I know you've made some comments about the public service job cuts that you did take to the election. You've said some of the language used around that was unfortunate. Was the policy itself also unfortunate?

JAMES PATERSON: Well, like all of our other election policies, that policy is up for review and we're making no specific commitments about what we'll do at the next election because between now and then there'll probably be three budgets, there'll probably be three MYEFOs, we'll have a lot of assessment of where we are financially to be made. But I'm being quite candid about this, I think we got the tone of that conversation wrong. We want a productive and respectful relationship with the Australian public service. I have seen in my previous committee roles, particularly on the Intelligence Committee, how professional and patriotic and dedicated our public servants are, they deserve to be respected for the role they do. We of course expect them to be good stewards of taxpayer dollars and the Liberal Party will always want to spend that money as efficiently as possible, but we want to do so in a way that's constructive.

DAVID SPEERS: Okay, so the tone was wrong, but you might still go back to public service cuts, it's under review?

JAMES PATERSON: Well, all of our policies are under review, David, and I can't commit now what our policy is going to be in two and a half years' time. It will depend on the choices that the Albanese government makes between now and then and the state of the economy. Right now we're headed for a decade of deficits and $1.2 trillion of debt and it doesn't seem like Jim Chalmers has any plans to close that gap.

DAVID SPEERS: Just finally, the final recount in the seat of Bradfield confirms the Liberal Party lost the seat to community Independent Nicolette Boele. There are only 26 votes in it though. Any decision yet on whether the Liberal party will challenge this in the Court of Disputed Returns?

JAMES PATERSON: Not to my knowledge, David, I understand the NSW Liberal Party is reviewing our legal options and I really hope that we can find a way to have Giselle Kapterian in the Parliament in this term because she's exactly the kind of person that would make the Liberal Party better, the Parliament better and our country better. She's got great insights, great professional experience, she's a person I hope to be playing a big role in the future of our party. But it will be up to the NSW division and then ultimately if we do decide to make any application, the Court of Disputed Returns to decide that.

DAVID SPEERS: And if they did, the only way forward would be a by-election. Giselle Kapterian, your Liberal candidate you referenced there, such a good candidate, as you say. She says the position on net zero has been put to bed by the Liberal Party. Has it been put to bed?

JAMES PATERSON: I'm not sure you're right about that by-election there David on that issue, in the past for example in the seat of McEwen, there was an appeal to the Court of Disputed Returns that changed the decision of the AEC count, so it's not necessarily the case. On something like net zero, as I've said before David, as Sussan has said, all of our policies are up for review. Yes emissions reduction is important to us and will be an important feature of our policy. We have a Shadow Minister for Emissions Reduction and Energy in my colleague Dan Tehan, but so is affordability and reliability and we'll get that balance right.

DAVID SPEERS: I guess the point is, if the court did say there's got to be a by-election in Bradfield, could the Liberal Party really fight a by-election in a seat like Bradfield without a position on net zero?

JAMES PATERSON: Look I'm not going to publicly engage in a debate about an internal policy issue like that. I've got the opportunity to do so through the shadow cabinet process. But if there is a by-election I would back Giselle Kapterian because she's an outstanding candidate, an outstanding Liberal and someone who's placed to make a very big contribution to the future of our country inside one of the major parties that will ultimately form government in this country. That's not something that an Independent can do. And if the independents were relatively inconsequential in the last parliament, they're going to be even less relevant in this one. 

DAVID SPEERS: Senator James Paterson, thanks for joining us this morning.

JAMES PATERSON: Thank you, David.

ENDS

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