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June 2, 2025
LAURA JAYES: Let's go live now to the Shadow Finance Minister, James Paterson. James, congratulations on your elevation. Can I just ask you about this defence spending request from the United States as well? During the campaign, you spoke about having that at 3% of GDP, but 3.5% would be billions more. Would you be willing to go that far?
JAMES PATERSON: Good morning, Laura. Well, I certainly think we should be increasing our defence spending. I'm very proud of the commitment that we took to the last election to do so. But we should increase our defence spending not because our American friends have asked us to do so, but because it's in our national interest to do so. And Australians who are respected on these matters, like former Opposition Leader and Defence Minister Kim Beazley, former Chief of the Defence Force Sir Angus Houston and many others have advocated that we do so. Because right now they don't think, and I think they're right, that we're spending enough to be able to defend ourselves in what is the most dangerous time since the end of World War II, which you'll hear from Richard Marles all the time, but you won't see the action to match it.
LAURA JAYES: Well, you're spending $350 billion on AUKUS. That is bipartisan. Why does it have to be, you know, x amount of GDP? Because you and I both know, James, that the waste historically in defence can be legendary. So why not just spend on what you need? Why does that have to this arbitrary figure and a percentage of GDP?
JAMES PATERSON: Well, Labor say that as a defence for not increasing their defence spending further, but actually they have a percentage of GDP target. It's 2.33% by the end of the decade, and prior to previous elections, they've said they would match us on our past targets of 2% of GDP. So, Labor's quite happy to measure it that way, and that's the universally globally accepted way to measure these things, when it suits them. But when it doesn't suit them, they try to distract away from that. I think it's very clear that Labor is cannibalising capability in Army, Navy and Air Force to pay for AUKUS. And while we should all be committed to AUKUS and delivering AUKUS, it shouldn't come at the expense of current and near future capability which we need to help deter and hopefully prevent conflict in our region.
LAURA JAYES: What about 3.5% though? Can we afford it? When should we do it by?
JAMES PATERSON: You won't be surprised that five days or so into my tenure as Shadow Finance Minister, I'm not going to nominate spending targets like that.
LAURA JAYES: I'm not surprised, yeah.
JAMES PATERSON: We've got three years to produce an election policy, and I'll allow our Shadow Minister for Defence, Angus Taylor, to talk more about this today. But we're very proud of the commitment that we took the last election. We think that reckoned with the strategic environment that we face. You can't on the one hand say this is the most dire strategic circumstances we've faced since the end of World War II, and then on the other hand not actually match that with the investment required to provide the capability we need to defend our country.
LAURA JAYES: Okay, what about this super tax? This has been on the books for quite some time now. Labor only needs the Greens in the Senate to actually pass it. How are you going to deal yourself into relevance here? James, can you put a proposal on the table that might be palatable in terms of fairness and the required revenue that it needs to raise to look at the budget pressures?
JAMES PATERSON: Well, we're going to fight this every step of the way because we think it's wrong in principle and unless the government was willing to walk away from the two key principles in this bill, which is taxing unrealised gains and failing to index the threshold, then there's no conceivable world in which we could support it. And we're very proud to oppose it because we think it is bad tax law. As we've seen with the complication of defined benefit schemes and the sweetheart deal that Jim Chalmers has done for Anthony Albanese to exempt him, this is going to be a mess to legislate to implement and to administer. And I've got to ask the question, Laura, where is Jim Chalmers? He's barely been seen or heard from since the election. He's letting other ministers like Amanda Rishworth front the Sunday shows to try to explain his complicated, confused, and contradictory policy. And he's in hiding. I think he should front up today and explain the rationale for this dodgy exemption that he's given his boss and whether or not Anthony Albanese participated in the decision to grant that exemption.
LAURA JAYES: Okay, so James, it is early on you need a review because of the historic loss you've just suffered at the election, sorry to remind you and put it to you like that, I'm sure you have a bit of PTSD from it, but what's the reset here? In broader terms, what does the Liberal Party now need to frame itself as? You've admitted that the work from home was a mistake. The polling really complicated matters during the campaign, if I can put it that way. But also, one of these errors was made in the budget in reply, and that was to not match the tax cut. It was a clear wedge from Labor. But this is how politics rolls. And you kind of walked into that trap in many ways. Labor couldn't believe their luck. So, do you get back to the party of lower taxes, the individual, small business? Are those principles still true? What else?
JAMES PATERSON: The short answer to your question, Laura, is yes, we must be consistent with our values. I think our values are timeless and that past elections have earned the overwhelming support of the Australian people. But some of the policies that we took to the last election were inconsistent with those values. And even though Labor's tax cut was meagre and miserly and wouldn't have made much of a difference, it doesn't matter. The Liberal Party should never oppose a tax cut. We should never go to an election proposing to increase taxes, and we should never allow Labor to make the audacious claim that they are the party of lower taxes. That is the core of who we are; it is core to our DNA as a Liberal Party and our National Party colleagues as well. And in the next election we must take a bold, ambitious economic policy that gives people hope for the future, that gives them hope that their lives and their personal circumstances will be better off if they vote Liberal and National, that our country will be stronger and better off. And that's the hard work that I'm going to do with Ted O'Brien and Tim Wilson and Andrew Bragg and our whole economic team.
LAURA JAYES: You've kind of got, because of this result, a bit of freedom. If I could put a silver lining on it, might we finally see an attempt at wide scale tax reform that looks at some of these inefficient taxes that the Henry review complained about all those years ago? That was under the Rudd government.
JAMES PATERSON: Look, the revenue side of the house is Ted O'Brien's responsibility as Shadow Treasurer, and my responsibilities are on the spending side. But I don't want to duck your question. I think we do have to look at some of the flaws in the tax system, some of the inefficiencies of the tax system, tempered by the fact that as an opposition there's only so much that you can do. And we tried a very ambitious policy at the last election on nuclear energy and although I think that was the right decision at the time, and the right thing for our country, it did consume an enormous amount of time and energy of the limited resources of the opposition. So we've got to very carefully choose what agenda we can realistically take to the next election from opposition.
LAURA JAYES: Okay, so is it realistic to re-prosecute nuclear for the next three and potentially six years?
JAMES PATERSON: I think the form in which we take nuclear energy to the next election will be different to what we took to the last election. I think it's very unlikely that we'll be taking taxpayer-financed nuclear power sites to the election. I think that it's much more likely, consistent with our agreement with the National Party, that we will be repealing the moratorium on nuclear energy in this country, but then leaving it up to the energy industry to decide what is the best mix of energy generation going forward. It's a much more market-based principle and it will hopefully prevent the Labor Party from running the shameless scare campaign they did at the last election around the taxpayer-funded cost because there wouldn't be a taxpayer- funded cost.
LAURA JAYES: It doesn't matter, though. It worked, and then that is ingrained in people's minds, which I know you're acknowledging here this morning, but also getting back to that first Liberal Party principle of letting the market decide. Is that what you're saying as well when it comes to energy?
JAMES PATERSON: Well, politicians on both sides of the aisle in the past have often said we should have a technology agnostic approach to the energy industry, but we've never actually had a technology agnostic approach because nuclear power has been prohibited at the federal level for the last 30 years in Australia.
LAURA JAYES: And there are subsidies everywhere you look for fossil fuels, for renewables, for green hydrogen. So yeah, you're right. It's never really technology agnostic is it? Every government picks a winner. So, what winner will you be picking?
JAMES PATERSON: Correct. And the Labor Party's choice of picking winners hasn't worked out very well for energy users, whether they're in business or households, who have suffered massive increases in their electricity and gas bills over the last three years. And really, now that they've won the election, given the majority they have, given the control they've got with the Senate with the Greens, it is on the government to demonstrate how their plan is going to lower prices. Based on their past performance, I have no confidence that they'll be able to do that within this term, but we'll be judging them on their record, and I don't think the Australian people will be judging them too.
LAURA JAYES: I think so. James, thanks so much for your time, as always. We'll speak soon. And congratulations once again.
JAMES PATERSON: Thanks, Laura.
ENDS