6PR Mornings Interview with Gareth Parker

Gareth Parker: The Minister for Population, Cities and Urban Infrastructure is Alan Tudge. He is here for a range of things, including meetings with his state counterparts. Minister, good morning.

Alan Tudge: Good morning, Gareth.

Gareth Parker: Thanks for your time. So the announcement came on Saturday that Western Australia, or Perth to be more specific, would actually now be added to the list of regional parts of Australia for migration purposes. What does this mean?

Alan Tudge: Yeah, that's right. So this is a good development for Western Australia, and Perth in particular, because what it will enable is for more international students to come here in particular but also for businesses to access a broader list of occupations for which they'll be able to sponsor people into the country. Now that overall will mean stronger population growth in Perth, with stronger population growth, you are likely to get house price increases and stronger economic growth.

Gareth Parker: I did make the point earlier before the break that the first thing Mark McGowan did when he was Premier was write to Malcolm Turnbull and ask for Perth to be taken off the regional list.

Alan Tudge: Well, that was a decision of the Premier then, and I’m not going to criticise him now for changing his position. Perth has had pretty weak population growth for several years now, and that impacts the overall strength of the economy and house prices, that means that Perth is missing out on some of the opportunities which the eastern cities have. The eastern cities at the moment are going gangbusters in terms of population growth. Particularly my hometown of Melbourne, it's been growing by about 2.5 per cent per annum and that means it has huge economic vibrancy to it. Now, with some respects, Melbourne's really feeling the pressure from that population growth, whereas Perth is almost the opposite, it hasn't had that growth, hasn't had the opportunities, and therefore this change that we're making now will support Perth's aspirations. And I think it just means stronger population growth for the city, and therefore better business growth, more international students, more vibrancy and the like.

Gareth Parker: Right, I’d like to test that with our listeners. Are you on board with strong population growth or stronger population growth in Western Australia, and in Perth in particular? 922 11 882.

I'm glad that you acknowledge some of the downsides there, Minister. I mean, anyone who’s been to Melbourne in recent years knows that it has changed a hell of a lot. Traffic's dreadful, house prices are through the roof.

Alan Tudge: Absolutely. I mean, that is my hometown and we’re really feeling the congestion pressures in Melbourne.

Gareth Parker: So why do we want that here?

Alan Tudge: Well, you’ve had about 1.1 per cent population growth into Perth, averaging about 1 per cent per annum, where the national average is 1.6 and there’s advantages to population growth. If you don’t have the infrastructure keeping up with that, then there can be significant disadvantages. But certainly from an international students’ perspective for example, you bring international students into Perth and they bring money, they bring their families to move and to visit, and that means they’re going for the tourism activities, going to the restaurants, et cetera. So there's real benefits from international students. But as well, businesses that can’t find workers, they're able to sponsor people in to fill those skills gaps, and that means overall the economy grows more strongly. You get more jobs, more opportunities for young people, and that's what a strong population growth does provide as well.

Gareth Parker: Say businesses can't find workers, yet unemployment in Western Australia's higher than the national average at the moment.

Alan Tudge: Well a business is only able to sponsor a person into the country if they are unable to find an Australian to do the job first, but nothing changes in relation to that. And we’re about to strengthen those rules so that people have to demonstrate that they have advertised multiple places and illustrate they can’t find an Aussie. But then if they can’t find an Australian and that the position is on the jobs skills shortage list, then they can fund for somebody to come into the country to fill those roles.

Gareth Parker: But surely we'd be better off training our own?

Alan Tudge: Absolutely.

Gareth Parker: I mean we've got higher unemployment than the national average. There's new data out this morning that says that the number of apprentices has fallen 30 per cent in five years. There's a disconnect here, there's a gap. I'm sort of trying to make these dots connect and I can't quite do it.

Alan Tudge: Absolutely, we’re going to be training better our own, and we’re going through a whole exercise with the Prime Minister to completely revamp the training system so that people are better trained into the positions that are available, so we're looking into that. But I agree, you always want to provide the opportunity to an Australian that’s willing, capable, and has the skills to be able to do so. But where there isn’t an Australian to do that job, then you do want to give the business the opportunity as well to sponsor somebody in to fill the shortage. Otherwise, that business doesn't grow as quickly as it could, and that impacts overall on the wealth of the city and of the country.

Gareth Parker: Okay. There’s a big push. A lot of economists, commentators are calling for more to be done by the Federal Government in terms of stimulus. And the Treasurer Josh Frydenberg and indeed the Prime Minister and the Finance Minister also pretty set on delivering the surplus. But is there recognition that we need to get on with some of these big projects to get the employment happening?

Alan Tudge: Yeah, I mean we are. In states across the country, we’ve got 130 major projects underway as we speak, employing and supporting over 50,000 people into work. That's happening as we speak, and there’s another 160 in the planning now. And we’re speaking with each of the state governments and saying: if you've got projects that can be brought forward, then let us know because we will be able to consider bringing funding forward to be able to get those projects going. So, they’re conversations which I know the Prime Minister has been having and I’ve been having across the country too. But, you know, there’s an infrastructure boom across the country actually, in addition, we've cut the income taxes and that means money flowing into people's pockets as soon as they put in a tax return of which tens of thousands of people already have. For most people, that's an extra thousand bucks they'll get back to be able to get additional stimulus into the economy as well.

Gareth Parker: With these changes to the migration system, how much extra growth would you expect this to add to the WA economy? I mean, has anyone modelled it or are we just throwing darts?

Alan Tudge: It is very difficult to estimate that. What it does is provide the opportunity for an expanded skill shortage list to be able to access. But the most important change and I emphasise this, is on international students. Now, international students, believe it or not, has been one of the major parts of population growth across the country, yet the international student numbers have actually been in decline in Perth. So, by being considered a smaller city or regional location, it means you get additional incentives for international students to come to Perth rather than go to one of the other destinations on the east coast. That additional incentive is an extra year’s work rights.

Now, that means that they're likely to get far more international students and that supports the population growth. But importantly as well, it brings money into the country directly and brings their family members often over here to visit Perth as well, and that's also stimulating the economy and adding to business growth, et cetera.

Gareth Parker: 922 11 882. Are you on board with this agenda to increase the rate of population growth in WA? Give me a call.

Minister, we’ll just ask you about a couple of other quick ones. There's a new poll out today in The Australian that says that people think that owners of electric vehicles should contribute to the cost of road infrastructure in the same way that people who drive petrol and diesel vehicles do. As everyone knows to our great chagrin, we pay petrol excise every time we fill up our tanks.

You’re going to have a looming problem here, aren't you? As electric vehicles take off over the next 15 years, there's going to be a huge gap if we don't do something to change the system.

Alan Tudge: Well, I think that is something that we'll have to look at because you're right when you go to the petrol pump, you're paying a fair bit of that petrol price is in tax and that goes towards the infrastructure. But if you're using an electric vehicle, you don't pay that price. So, at the moment, only a very small percentage of people are actually driving electric vehicles it tends to be wealthier people and many people, many stakeholder groups are now saying that there should really be a road user charge for people driving an electric vehicle. I think that is something that we will have to look at down the track but it's not on our agenda right now.

Gareth Parker: How far down the track? Because you’ve got to get it quicker than later I would’ve thought.

Alan Tudge: It’s just as I said, at the moment it’s only a very, very small percentage of the overall vehicles that are electric vehicles. So it’s not a considerable issue right now. What some stakeholder groups are forecasting is that, well, it may be a higher proportion down the track and that means less fuel excise to be able to invest in the infrastructure is the argument they are making. And also just from a fairness perspective, if you're driving a petrol car, you're paying a tax whenever you fill up. You know, should the same tax be applied to electric vehicle users if they're using the same roads is the argument to be made.

Gareth Parker: So would you charge people as they travel per kilometre rather than get rid of fuel excise altogether and charge every vehicle whether it's petrol, diesel or electric, wind power, I don’t care? But charge them all to drive X cents a kilometre?

Alan Tudge: Well, the argument, which people like the automotive associations, are saying is that there should be a per kilometre charge for electric vehicle users. That's their argument, in effect to match what the price is that a petrol car, an owner of a petrol car would pay. That's what they're saying, almost from an equity perspective as much as maintaining the tax revenues which is invested back into the road infrastructure. Now as I’ve said, that's not in our plans at the moment, but I think it will be something at some stage that will have to be examined.

Gareth Parker: And last of all, your West Australian colleague, Senator Dean Smith, thinks that the GST should be either broadened or the rate increased to 12.5 per cent to get rid of payroll tax. Good idea?

Alan Tudge: No. It’s not on our agenda, not in our plans. We don’t have a mandate. We’re not going to be doing it.

Gareth Parker: Not a good idea?

Alan Tudge: Not a good idea.

Gareth Parker: Why not?

Alan Tudge: Well, we just have no proposals at all to increase the rate of GST and we’re not going to be increasing the rate of GST. [Inaudible] changing our [inaudible] we had a government unless we had a mandate from the people and we don't have that mandate.

Gareth Parker: You'd love to get rid of payroll tax though, wouldn’t you?

Alan Tudge: Oh, I'd love to see payroll tax lower but that’s a state tax. But it is up to the state governments around Australia to do that. We look after income tax, the corporate tax. We collect the GST revenue. Of course, all of that GST revenue actually goes back to the state governments and as you know, we did a big deal for Western Australia just last year to ensure that you get your fair share here in Perth and in WA.

Gareth Parker: All right. Minister, thank you for your time this morning.

Alan Tudge: Good stuff, Gareth. Thanks very much.

Gareth Parker: Good on you. Alan Tudge, Minister for Population, Cities and Urban Infrastructure.