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Transcripts
June 1, 2025
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ANDREW CLENNELL: Joining me live from Melbourne is the Coalition's new Finance, Government Services and Public Service spokesman, James Paterson. I might just start, James Paterson, thanks for your time, I might start with that answer from Amanda Rishworth on the superannuation tax and whether politicians and those on defined benefits pay it straight away in the fashion that people with self-managed super funds will have to on their unrealised gains. My clear impression from that, tell me if you think differently, is that if you're on defined benefits like these former politicians or Anthony Albanese, you'll be paying the tax later.
JAMES PATERSON: Well, good morning, Andrew. It's very polite of you to call that an answer. I'm not sure whatever that was, was an answer. It was an excruciating couple of minutes of television, but good on you for persisting with the Minister to try and get an honest and straight answer. Let me be helpful and answer the question. Yes, it is deferred. You do not pay it during your working life if you're on a defined benefit pension like Anthony Albanese. Every other taxpayer, if they exceed the threshold, has to pay it in their working life. But people like Anthony, on a defined benefit pension, only have to pay it after they retire. Now I think there is a very important question that arises out of this. Jim Chalmers has written rules which are favourable to his boss. Did Jim Chalmers ever discuss this with Anthony Albanese? Was it ever discussed in Cabinet or the Expenditure Review Committee of Cabinet? Did the Prime Minister exempt himself from that discussion? Did he remove himself from the room because of the significant personal conflict of interest that he has?
ANDREW CLENNELL: Her argument seemed to be that this is the same with other super taxes, so whether it's the 15% now or whatever, I'm not sure what she was alluding to. Is that your understanding of the situation?
JAMES PATERSON: Well, it wasn't really clear from the Minister's answer what she was referring to, but what they are proposing to do in this new tax is something very different. They're proposing to tax unrealised gains. They're proposing to tax paper profits that may never actually materialise, but people will nonetheless be assessed on that and have to pay a tax on that, and they'll have to do it during their working life. So to do that for some category of superannuation, but not for others, is a really important and significant thing. And I think the government has to be open and transparent, much more transparent than the Minister just was and I think the Prime Minister should stand up today and explain his understanding of this different treatment between different categories of retirees, and in fact working people, and why he benefits from it and whether he participated in that decision.
ANDREW CLENNELL: Could you see any circumstance where the opposition might support the tax if the government decided to take it off unrealised gains, for example?
JAMES PATERSON: We would have to assess the legislation when it is reintroduced into the Parliament, but our starting point is that we are completely opposed to what the government is trying to do. We think the principle of taxing unrealised gains is wrong. It will introduce massive complexity into the tax system that isn't already there.
ANDREW CLENNELL: I understand that, but what if it wasn't on unrealised gains? What if it was when you draw down the money over three million?
JAMES PATERSON: That's what I was going to say. That's our first and most important objection, but it's not our only objection. Our other objection is the fact that they're failing to index the threshold. So over time, average working people will be caught up in this. It is not something which will only capture the super wealthy, as the government likes to say; ordinary working people will be impacted by this. So that's another pretty fundamental objection. If you took away those two things, I'm not sure what else would be left in this policy. They're at the heart of this policy, and I'd be very surprised if the government walked away from either of those.
ANDREW CLENNELL: Is finance the job you wanted, and what approach will you take that's different to the one Jane Hume did?
JAMES PATERSON: I'm very honoured that Sussan Ley has asked me to perform what is a very senior role at the heart of our economic team. I'm delighted to be working with Ted O'Brien, with Andrew Bragg, and Tim Wilson as part of that Shadow Cabinet team on the economy. I've made no secret, Andrew, that I'm a very passionate about the national security challenges facing our country, but the economic challenges facing our country are also very profound. And if you don't get the economic settings right, if you don’t have a strong budget, then you can't deliver the investment that we need in national security. In terms of what I'll do differently in this role. Look, I think Jane Hume did an outstanding job as our Shadow Finance Minister in the last term, but we will face different circumstances in this term than we faced in the last term. We have a very serious emerging challenge in international bond markets when you have 10-year US Treasury bonds selling at over 5 per cent, when you have Japanese bonds struggling to get buyers at their 20, and 30, and 40-year horizons. That is a very loud warning to the Australian economy that a period of great economic uncertainty is coming. And what that means is the focus on getting our fiscal house in order must be the first and most important agenda item for the economy. We must rebuild our fiscal buffers. We must return to surplus. And just as it's the time that we need to do that the government is doing the opposite. They've turned surpluses into deficits, and deficits as far as the eye can see, and they plan to rack up 1.2 trillion dollars of debt. I think that's a reckless thing to do in this economic environment.
ANDREW CLENNELL: You said Jane Hume did an outstanding job. Did she do an outstanding job with the work from home policy?
JAMES PATERSON: We candidly admitted in the middle of the election campaign that we got that one wrong, Andrew. We freely admitted that, and we accept our responsibility for making the wrong call there. We won't be pursuing any policy like that in this term.
ANDREW CLENNELL: You were the campaign spokesman; you would have been in on all the meetings. Were you encouraging Peter Dutton to dump the policy?
JAMES PATERSON: Andrew I don't think it's appropriate for me to disclose private meetings that occurred in the leadership group of the party during the campaign, but let me say I fully support the decision to walk away from that policy. We absolutely accept it was a mistake. Obviously the Labor Party weaponised it, obviously they turned it into something that it was not. But it still sent the wrong message because frankly I'm 37 years old and in my generation, particularly of young families, parents with young children - I don't t know anyone who doesn't have some kind of flexible, hybrid working arrangement. Anyone, certainly in the white-collar industry, has that arrangement. It's not always possible in blue-collar industries, but in white-collar industries it's just so common. And we have to accept that that's part of the modern workplace and part of making modern family life work.
ANDREW CLENNELL: Do you ever work from home?
JAMES PATERSON: Yes, I do. I work from home, I work from the road, I work from the office. A political job is a job that kind of is always on; you're never completely off. But yes, sometimes I work from home as well.
ANDREW CLENNELL: Is this why Jane Hume got dumped? What do you think of her being dumped from the Shadow Ministry altogether?
JAMES PATERSON: Well, I think it's very tough for Jane and very disappointing personally, and she's a friend and a colleague and a highly valued one, and I'm very confident that she'll be back in a frontline role in due course. I don't know what the reason was for the decision not to include her in the Shadow Ministry this time, except to say that it is a really difficult thing for a leader to do. There's no worse job in politics than having to do a reshuffle, because what you deal with is people's expectations, realistic or otherwise, and their hopes and their dreams of their political future and the contribution that they can make. And that's not always easy to reconcile and so it's a tough choice, not a job I would ever want for myself to have to make that decision.
ANDREW CLENNELL: Was it a mistake not to promise tax cuts at the last election when the government did?
JAMES PATERSON: Yes, I think it was. I don't think we should have opposed the government's tax cuts, as meagre and miserly as they were. In the core of the Liberal Party's DNA is lower taxes. And we should never oppose a tax cut. We should never allow the Labor Party, as audacious a claim as it was, to go to an election to claim to be the party of lower taxes. The Liberal party must always own the space of lower tax, and under Ted O'Brien's role as Shadow Treasurer and me as Shadow Finance Minister, that will be the case.
ANDREW CLENNELL: Did you ever argue against that when you were part of that campaign team? Did you argue for things like the tax offset?
JAMES PATERSON: This is a decision made prior to the beginning of the campaign, the decision to oppose Labor's tax cuts. And then there were decisions during the campaign about what we could offer, what was able to be offered. Again, I don't want to go into the private conversations that occurred in the leadership group and at campaign headquarters, except to say that it has always been my view that the Liberal Party should be true to its values, that our policies should be a reflection of our values and core at the heart of our values is why many people join the Liberal party, why many people vote for the Liberal Party, is to deliver lower taxes and we should always argue for lower taxes.
ANDREW CLENNELL: What did you think of Peter Dutton's campaign performance?
JAMES PATERSON: Peter is a great Australian and a good friend and someone who cares deeply about our country and its future, and I was very proud to serve as his campaign spokesman, I was proud to be part of his leadership team, I'm proud to have been part of his Shadow Cabinet. Obviously, none of us put in a flawless performance in the campaign, and there is collective responsibility to bear for that. Peter took all the responsibility on election night. I don't think that's fair, I think we all share in that, whether it's the professional campaign team, whether it's the parliamentary party, whether it's the advertising team, whether it was the polling, we all share responsibility.
ANDREW CLENNELL: What mistakes did you make?
JAMES PATERSON: Well, I think with the benefit of hindsight, looking back at the last term, I should have spoken up more, I should've pushed back more, I should have contested ideas more. I think all my colleagues in the parliamentary party have had that conclusion. We prized unity over our robustly interrogating policy ideas. Now, unity and discipline in politics is a critical feature of a successful political party, and we will need that in this parliamentary term. But it should never come at the expense of really contesting those ideas, of really robustly considering them, making sure that they are fit for public consumption, making sure they contribute to the public believing that we are ready to govern.
ANDREW CLENNELL: Did it ever concern you during the campaign that the Freshwater guys were polling for you? Did it ever concern you that their polling was wrong? Did you ever wonder why Anthony Albanese was going to Liberal seat after Liberal seat, seats like Banks, Bass, Braddon, that you thought you had in the bag? Did you even pause and say, hang on, maybe our guys are wrong?
JAMES PATERSON: Yes, I was concerned that there could be polling errors, particularly because there was a gap between our private polling and the published opinion polling that newspapers and media outlets were running. And we did ask lots of questions and had lots of discussions about the polling and what was different between our methodology and the methodology of the public opinion polls. And all the time, convincing or seemingly convincing explanations were given for what that discrepancy was caused by, and we were given confidence that the polling that we were investing in was delivering better results. But obviously it was wrong, and we will have to look very closely at why and how that was so wrong.
ANDREW CLENNELL: Are you angry at this polling firm, Freshwater, for their errors? Do you think they deserve the money they were paid?
JAMES PATERSON: Angry is not really my style, Andrew. But I'm disappointed on behalf of my colleagues who lost their seats because had we been told, had we known that David Coleman was in trouble in Banks, that Jenny Ware was in in trouble, in Hughes, that Keith Wolahan was in trouble in Menzies, that Michael Sukkar was in trouble in Deakin, that James Stevens was in trouble in Sturt, and all those Queensland seats - had we known that, then we would have conducted ourselves differently during the campaign, and we particularly would have spent our resources differently. We wouldn't have had such an aggressive map going after safer Labor seats in the outer suburbs, places like Hawke and Gorton in Melbourne, had we known that we needed to be spending more to defend those seats of our own. And that relies on polling. You have to rely on polling for that kind of intelligence. And so that is a real problem, and I feel terribly sorry for my colleagues who are victims of that.
ANDREW CLENNELL: Let me ask about this big story that broke yesterday morning, Donald Trump increasing steel tariffs to 50%. What's your reaction? The position of the opposition last term was always, "you guys could have done better in negotiations on these matters". Do you still think that's the case when he's doing it to all of the world?
JAMES PATERSON: Well, I stand by completely what Amanda Rishworth said on your program earlier, what the Trade Minister has said, what our Shadow Trade Minister, Kevin Hogan, has said. This is a deeply disappointing decision from the United States government. It is not consistent with the US-Australia free trade agreement. It is harmful to our otherwise very good relationship with our most important ally and strategic partner, and I don't understand how it's in the United States' interests either, but it's a matter for the U.S. administration to decide their own trade and foreign policy and other policies. All we can do is think about how we best respond, and it is about making sure that we've got opportunities in other markets around the world. It is about making sure that our economy is as competitive as possible so that we can withstand what is a very volatile international economic policy environment. I mean, even if you didn't have the President changing his mind about tariffs, you have U.S. courts periodically overturning and then upholding the tariffs. So this is a really volatile period. What it requires from us is competitiveness, firstly, and secondly, restoring our fiscal strength and those fiscal buffers.
ANDREW CLENNELL: Anthony Albanese, what approach do you think he should take in his meeting, or is there anything you can do in that sort of meeting?
JAMES PATERSON: Well, he has got to robustly stand up for Australia's national interest, and Australia's national interest here is very clear. We are a small, open trading nation. We benefit from the international free trade system, and we need to defend it. We need to robustly defend it and he should lay out the case to the President both why these tariffs are unwise and unjustified generally, but particularly why they're unjustified when it comes to Australia, a country with which the United States has a trade surplus and has had a trade surplus for all of my lifetime and probably all of yours as well, Andrew. And I think it's very important that the Prime Minister does that in a way that is respectful but assertive.
ANDREW CLENNELL: And will it make any difference? I mean, Donald Trump seems to say this is great for America. He ignores the fact prices are going up.
JAMES PATERSON: Well, it's his judgement what is good or bad for the United States. I find it hard to understand how it's good for the United States, but it’s certainly not good for Australia. And we have to put our best foot forward because the workers in these industries deserve a government that is robustly fighting for them and is taking up every opportunity to do so. I think it is unfortunate that if the Prime Minister does meet the President at the sidelines of the G7, that will be the first time that they have met in person since the President was elected in November last year. It has taken an inordinately long period of time for him to go over there and have that meeting so we can have that face-to-face opportunity to build a personal rapport and to advocate for our interests.
ANDREW CLENNELL: We've had the U.S. Defence Secretary, Pete Hegseth, ask several countries, including Australia, for increased defence spending, and the Deputy PM said he told Mr Hegseth he was open to it. That must be a bitter pill to swallow for you, after that was one of your key promises in the campaign.
JAMES PATERSON: Well, let's see what this government actually does rather than what they just say, because when it comes to defence and national security, often they talk a good game, but they deliver very little, and Richard Marles is in that category. He talks all the time about how this is the most dangerous and uncertain strategic environment since the end of World War II, but defence spending has been flat. They don't plan to increase defence spending until the end of the decade, and that doesn't meet the challenge of the moment. One of the policies I was most proud of that we took to the last election was to increase defence spending to two and a half per cent of GDP within five years and to three per cent of GDP within a decade. That reckons with the environment that we are dealing with in our own region. It takes it seriously and responds to it to make sure that we can safeguard our own sovereignty and our own freedom. This government has failed to do that, and sadly, I predict they're going to continue to fail to do so.
ANDREW CLENNELL: Now you're backing the tax cuts and now you're in Finance, where are you getting the money, if you want to persist with that?
JAMES PATERSON: Well, tough choices will have to be made, there's no question about that, but there's no alternative to making tough choices when it comes to the budget. Because if we fail to make those tough choices, if we allow Labor's 10 years of deficit and 10 years in increasing the debt to continue, then over time that will put pressure on the services that Australians rely on and it will require higher taxes and that's what this government plans to do, increase taxes.
ANDREW CLENNELL: So there has to be cuts?
JAMES PATERSON: Well, I knew you'd go there, Andrew, and it is very early in my stewardship of this portfolio. I'm not even a week into the job yet. We've got three years to outline our alternative economic plan, but I think there are some good principles that we can agree to up front, which is that the economy should grow faster than government spending. And if the economy grows faster than the government spending, then that allows you to sustainably restore fiscal buffers over time. It allows you to eat away at that deficit, return to surplus and ultimately start to pay down that debt and put Australia in a stronger position to deal with the next international shock, which could come at any moment. But right now, we're very ill-prepared for that because Labor is heading in the wrong direction.
ANDREW CLENNELL: Well, there are two elements to that, one's growth and the other's spending. You'd have to do cuts, wouldn't you?
JAMES PATERSON: Well, let's talk about the growth, because we do need our economy to grow…
ANDREW CLENNELL: No, sorry, I'm not asking about the growth, I am not asking about the growth. Let's talk about the cuts.
JAMES PATERSON: Well, it's actually quite important when productivity…
ANDREW CLENNELL: Let's just compartmentalise that. You would have to cut, wouldn't you?
JAMES PATERSON: I don't think we should set that aside. No, I don't accept that premise, Andrew. What it requires is fiscal discipline. What it requires is restraint. What is required is not agreeing to increases in government spending. That's not necessarily reductions in government spending, and it requires an ERC that does the heavy lifting, that does the hard work, that doesn't just sign off on every hair-brained idea that ministers or even shadow ministers come forward with and want to add to spending because they have lots of good spending ideas. We've got to make sure that every dollar that is spent, because it is raised from Australians in tax, or borrowed against their future income, is spent in a way that actually makes a difference to our country.
ANDREW CLENNELL: We've run out of time. Let me ask on the target of net zero by 2050. There's huge debate in your Coalition about it. Some city based MPs think if you dump that policy, you've got no hope of winning city seats back. Many of the Nats want it dumped. Is this one you see the opposition dropping the net zero target?
JAMES PATERSON: I'm not going to get ahead of my colleagues on this one, Andrew. I'm not going to publicly canvass my views on this issue. We're going to go through a methodical process that reviews all of our policies from the election and make sure that they are fit for purpose in the new political environment that we're in, that the agenda we take to the next election is capable of earning the trust and support of Australians, whether they live in cities or suburbs or regions or remote Australia. And we will have more to say about that in due course.
ANDREW CLENNELL: Interesting. James Paterson, thank you.
JAMES PATERSON: Thanks, Andrew.
ENDS