Interview with Patricia Karvelas, Afternoon Briefing, ABC

Subjects: News Bargaining Incentive, KPMG, government legislation passing parliament, superannuation Patricia Karvelas: It was a parliamentary week marked by legislative wins for the government, passing significant changes to the National Disability Insurance Scheme, gambling advertising laws and the News Bargaining Incentive. Daniel Mulino is the Assistant Treasurer and our guest this afternoon.

Daniel Mulino, welcome to the programme. Daniel Mulino: Well, thanks very much for having me on, PK. This News Bargaining Incentive was your biggest reform.

A powerful Republican-linked group is calling your news bargaining law a shakedown, and it wants the Trump administration to launch a Section 301 trade investigation. Are you prepared for this US retaliation? Well, we’ve been fully aware of the fact that there are some in the US administration that have not been supportive of this measure.

And we’ve been very open throughout the time that I’ve been in this role, as we’ve taken each policy step, and we’ve been very consultative, we’ve taken into account a wide range of views. But what lies at the heart of this measure is that we live in a world where public interest journalism remains absolutely critical for the health of our democracy. It remains critical in Australia to make sure that Australian stories are told with Australian voices.

But we know that traditional media’s business model is being undermined by technology platforms which are using news to their advantage but not paying for it appropriately. So, that strong public policy rationale has underpinned a measure that went through parliament and that I think will really strongly protect our media and make it sustainable going forward.

When you say you’ve been long aware of this being a sentiment in the US, does that mean you are prepared for retaliation? Have you been pre‑emptive in the way you’ve approached this? Well, if there is that kind of investigation that you’ve referred to, I think this policy would stack up.

We’ve made clear from the outset that this measure is an incentive that is – applies to digital platforms no matter which country they’re based in. It applies to some platforms from the US, but also to TikTok and the way it’s structured, it applies – it would apply to any digital platform that meets the thresholds of materiality that are set out in the legislation.

We’ve also stressed that what it is intended to do is to encourage commercial deals. We’re getting to the heart of the public policy challenge, which is that we don’t want digital platforms to simply walk away from genuine good-faith negotiations with the media. And so what we’ve said is we don’t want to raise any funds from this measure.

The ideal outcome is that there be commercial agreements between digital platforms and the media. And as we saw occur when the news media bargaining code was first brought in by the previous government. If, however, digital platforms refuse to enter into agreements in good faith, then any funds raised by the incentive will be passed straight back to the media based upon how many journalists they employ.

So, it’s very much based upon the government not raising any money. It’s passed straight through to the media, and it’s passed to the media based upon how many journalists they employ. You’re also the Minister for Financial Services.

The freeze on KPMG bidding for new Commonwealth work runs to the 30th of September. After everything that’s emerged, can you guarantee it won’t simply expire? So, what we’ve done is take strong actions under the procurement guidelines that are managed across government.

And we’ve, through Finance, indicated to departments that they need to examine any arrangements that they have with KPMG. But what I’m also responsible for is looking at the broader regulation of these firms. And so, in response to revelations that the PJC has made in relation to PwC and more recently KPMG, I’ve put out 2 discussion papers.

One relates to whistleblowers and ways in which we might strengthen the whistleblower arrangements for corporate and taxation arrangements, but also the broader regulatory arrangements around audit firms. And so I’ve received submissions in relation to those 2 discussion papers, and I’m looking at all the options that are on the table in a rigorous way. Sure, but you won’t, unless you’re the speediest minister ever, you’re not going to resolve that by the 30th of September.

So, what happens in this case? Well, so what Finance has said to departments is that they need to look at their arrangements with KPMG and that they need to look at their arrangements more broadly to ensure that the issues that have been raised in those hearings are not impacting upon the quality of services that they’re receiving. So, it would have to be extended.

Right? Well, I’m not responsible for that particular deadline, but what I would say is that Finance has been monitoring these situations and as the agency that is responsible for setting the broader guidelines for procurement, they’ve been ensuring that they communicate with government agencies right across the board and ensure that they do engage with KPMG in particular, but all of the firms that are affected by these revelations and that government value for money, but even more importantly, that the quality of the services and the avoidance of any inappropriate behaviour or conflicts is maintained.

Now, there’s been 3 significant deals done with the Opposition this week, actually, even 4, you know, news bargaining, which we’re talking about, which is very much your portfolio. Then of course, there’s NDIS, there’s gambling. Do you prefer working with the Opposition?

Is that because you know you can sideline the crossbench? Well, what I would say is that this government, as a general practice, is very open to dealing with all parts of the parliament. I engage with both the Opposition, with the Greens and also the crossbench, and I engage with regular discussions with the crossbench that are very productive on the matters that we raised in my portfolio, the NBI, we engaged in very productive conversations with both the Opposition and the Greens.

And look, there are occasionally paths for legislation through the parliament that have all sides supportive. Sometimes we end up making a deal with the Opposition, sometimes with the Greens. The bottom line for this government is that we want to see reforms land so that they can actually generate real benefits for people in the community.

Is it better for the major parties to work together? Look, I prefer to see things go through with all sides of parliament supporting it. But look, the measures that we saw go through in this sitting week are really substantial measures.

I think, for example, with the NDIS measures, it’s important that it go through with both sides of parliament, with both the major parties supporting it, so that we can lock that in as sustainable gains for the budget in the longer term. But importantly, I also just want to stress that with the NDIS reforms, they also, I believe go towards making sure that the NDIS delivers on its core promise, which is that it’s there for people who really need it, people with serious long-term disabilities.

It’s genuine reform of the scheme as well as making sure that it’s more sustainable. Where both the major parties support a measure like that, it’s likely to stick for the long term. Just final, big, big discussion this week on superannuation.

You announced reforms, of course, but then the broader scheme was being debated. One Nation raised this issue of early access to super. Now, of course it is available in exceptional circumstances, but is that worth reviewing – the kind of circumstances widening, perhaps the terms given, so many are doing it tough at the moment, which your government concedes.

In my view, the exceptional circumstances that are laid out in the legislation remain appropriate. What I wouldn’t want to see is a watering down of that core principle of preservation. Preservation is critical to ensure that superannuation remains able to perform the function that it’s there for, which is dignity in retirement.

The danger of attacking preservation or undermining it is that we have situations like what the then government, the now Opposition did during where they had people withdrawing large parts of their super and in some cases, clearing their super out to provide themselves with income support. And in the case of what One Nation is suggesting to deal with housing issues through super rather than dealing with the underlying issue.

We know that during COVID, 30‑year‑olds who withdrew $20,000 reduced their end balance on average by around $93,000 – – I get the compounding effect – – [inaudible] One Nation. – I get all that, yeah, but, but, but on the actual current rules, the most you can withdraw for severe financial hardship is $10,000 a year. Given inflation and the cost of living, $10,000, some would argue is not enough to deal with some of this hardship.

Why not make it higher? So, I think the better approach is to deal with the various challenges people face through public policy interventions that deal with the actual issues. So, let’s look at housing, for example.

The better approach is to build more houses, is to deal with the tax skewness of the system – – And it takes a while, and you know that – – Bringing the 5 per cent deposit – – It takes ages to actually change. It’s really – but, but to have people accessing their super to try and build up deposits will do nothing to help the housing situation. It will drive up prices and it will undermine superannuation [inaudible] – – On housing, I understand that, but for hardship is $10,000 it – set and forget?

Well, I think at the moment with, with those hardship provisions it is providing that basic safety net for extreme cases that I think it needs to. We also have a range of other measures for people through our broader safety net that support people in a range of circumstances – – Sure, but you don’t – that number won’t change? There’s no plan to change that number.

Thank you so much for joining us this afternoon.