Latest / Uncomfortable Conversations with Josh Szeps / “Don’t F*** it up, Australia” with MP Allegra Spender

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“Don’t F*** it up, Australia” with MP Allegra Spender · Uncomfortable Conversations with Josh Szeps

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Good day, humans. Welcome to The Safe Space for Dangerous Ideas. Today's guest is one
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of the most recognisable politicians in Australia. She's a federal member of Parliament.
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And the uncomfortable conversation, the dangerous idea we are plumbing with Allegra Spender,
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is that the way that our governments spend money and the way that they raise it in taxation
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massively benefits older people, wealthier people, and massively disadvantages younger people
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who are trying to build their wealth for the future. And that if we are going to hold society
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together and keep liberal democracy robust, we need root and branch reform of things that
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sound incredibly boring but are actually really important and are fundamental to young
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humans building productive lives, basically taxes and productivity. As I mentioned, Allegra
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Spender is a member of Parliament, but not just any member of Parliament. She's an independent
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federal member of Parliament. So to our American listeners, imagine a person unaffiliated with
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a political party running in a congressional district against a Republican candidate and
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a Democratic candidate and beating both of them and going to Washington as a member of
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Congress. That's what Allegra Spender did with some help. She was part of a wave of independence
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in the 2022 election that swept aside the moribund decade-old Conservative party in Australia,
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not through a massive victory from the left, but through a victory of these centrist-centred
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right independence called the Teals, who largely ran on climate change, economic reform,
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political integrity, and gender equality. Allegra Spender recently was part of a big analysis
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of Australian taxation and Australian economic reform, and she has emerged from that balancing
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with a spring and her step about the importance of economic reform, not just in Australia,
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but also in the United States and overseas. A significant chunk of this conversation is
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about something called negative gearing, which is a strange Australian property tax phenomenon
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that we will go into. Nonetheless, her insights apply equally to all liberal democracies. Prior
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to her political life, she was a management consultant at McKinsey, and she was a corporate
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executive, so she knows the business side of things as much as she understands politics. I hope
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you enjoy it as much as I did, the one and only Allegra Spender.
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Look, I'm been looking at the tax system for the last three years, and really trying to put
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tax on the agenda, because I think we've got some big challenges facing the economy, I think,
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intergenerational equity, young people aren't doing as well as they should be, and it hurts.
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We've got issues in terms of business productivity and investment, and we have issues in terms
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of how to make this climate transition as cheap as possible, and all of those are affected
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by the tax system. So I put forward a green paper last term on the basis that both the
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major parties didn't want to talk about tax. It was too hot to handle, but if you've got
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big issues, you actually have to look at all your options or your levers and taxes to
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be able to ignore. But isn't part of the problem that the last
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time someone did try to look at it seriously, they were wiped out in an election, which
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was Bill Shorten. Yeah, I think, I mean, there are lots of reasons why Bill Shorten was wiped
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out in that election, and interestingly, in his final speech to parliament, his value
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of victory speech, he said, what I should have done is given everything back in income tax
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cuts. And I think so, that was his reflection, not that he had to necessarily, some of the
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elements were wrong, but that he was trying to do it in terms of raising government spending
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rather than actually returning more money to the people. Which was John Howard's insight
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during the GST, which is if you make it revenue neutral, then no one can accuse you of introducing
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a new tax, even though you're introducing a new tax.
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And to be honest, that was poor heating as well. Like if you look at the big successful
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tax changes that have been, you know, have managed to make their way through, and where
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I think most people and also most, you know, governments of all stripes would recognize
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that the heating reforms and the held reforms were positive things for the Australian system
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and for the Australian community. They were in revenue neutral. And I think that is the
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only way you can do this. And while I tax, I mean, I understand that
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it's important from like a one-keep perspective, but like even as you start to explain it,
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I can hear listeners' ears glazing over with boredom. Like what, it's such, it sounds
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like such a, like nobody likes tax. We don't like paying tax. We understand that it's necessary.
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Yeah, yeah. But how much difference does it really make, whether you take this bit from
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here or that bit from over there? Look, it really matters. And just, it's boring, but important,
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I would say. And I think, you know, there's people have a lot of fear about tax. And, and
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it's sort of go, you know, I don't understand it. And it's, and they're most even difficult.
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But, you know, so I look at what's going on around the world and around here. And I think,
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you know, let's talk about young people. If we cannot help this generation of young Australians
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and coming generations feel like they've got a stake that they can achieve the same milestones,
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you know, have kids, have a house, have stability as previous generations, then we have big problems,
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I think, in our country. And when I look at the rise of Trump, I think that a significant part
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of that was a bunch of people looked forward and saw no hope. And I think that Australians,
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you know, I talked to your strands of all stripes who are saying, thank you for taking and talking
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about tax because I, young people are falling behind. And we actually need to do something about
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this. It is a ticking time bomb for the whole of society. And it's just unfair. So we have to talk
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about tax. It's big. It is linked to housing. But those two things are distinct and they play
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into each other. Right. And housing is also, is, is, is going to be very hard and slow to solve as
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well. So you've got to, I think you really have to look at both of them. So it sounds like you've
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got two subtext really when you're talking about tax. One, one you've identified there, which is
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housing. The other is correct me if I'm wrong. The intergenerational transfer of wealth as the
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boomers retire and suddenly need and many care becomes more expensive. And so, you know, I'll just
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use Americanized terms because we have about as many American businesses as we do Australians.
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Social security or the pension becomes more and more expensive. Not such a problem here because
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we have privatized superannuation as well. But so where the rubber meets the road, it sounds like
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is that the way that the tax system, I mean, is there any tax system that can avoid the inevitability
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of having fewer workers paying for a larger number of people who need more services?
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No, look, I think, you know, there's an ageing population around the world in Australia as well.
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So you do have that challenge. The question is who should be paying it? And, and let's look at,
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so the Australian tax system and my view is that we've got a tax system that sort of, I think
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slightly by mistake and certainly without, without intention of a lot of people has ended up being
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one that doesn't work well for young people. So two households on a hundred grand, living next
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to each other, one, you know, in their early 30s, one retired, on average, the retired household
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plays half the tax of the young working one. Now, this is a time when you're, you know, in your 30s,
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you know, you've got probably a big hex debt, a big sort of student debt, you know, you're trying
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to buy a house, you're probably renting, you know, you're trying to raise kids, you want to get
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them into childcare, all that stuff, you've got massive expenses and that's when you're paying
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on average, twice a tax as your retired neighbours. And then you say, as you still look at the system
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as a whole, in the last, in some of the last decade up until 2016, which was the last data we had,
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you know, the average wealth of households over the age of 65 in this country grew by around 50%.
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The average wealth of households under the age of 35, pretty much flatlined. And now, I don't think
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most Australians would say we intentionally want a tax system where if you're older, you know,
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you are getting more wealthier on average than previous generations. But that's a tax system we've
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got coupled with asset inflation over the last 20 years. Yeah, I mean, the second half of that,
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the wealth increase half of it is basically just a property boom, right? It's not only a property
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boom. It is an asset boom. And it's a reflection that if you have capital, you gain more capital,
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right? And so, and you look at this in Australia, it's a country and I think America, you know,
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it seeks to, it has the same aspiration as we do here, which is that if you are someone who,
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it doesn't matter how rich your parents are. If you know, if you give a go, if you, you know,
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work hard, if you try really hard, you should be able to create a good life for yourself.
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And I'm worried as someone, you know, who has actually had a lot of advantages in my life,
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that that is not playing out now for young Australians, unless they have family, you know,
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backing them, being able to give them deposits and things like that to buy housing, but also just
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frankly to get ahead. And I think we've got to work out how to have a system where, you know, we,
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we don't tax young workers as much so that they can build wealth and they can, you know,
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build security for themselves, you know, and ultimately hopefully buy a home, but, you know,
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that may also not play out exactly as everybody wants. Well, let's talk about that not playing
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out as everybody wants to because it seems to me that like we almost have passed the rubicon on this
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question. Like if you don't have parents who can help you out with a deposit, it's impossible
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to imagine how a personal and average income can save up. As you say, while they're paying for rent,
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while they're paying for childcare, while they're doing, while they're not at the peak,
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they're peak earning capacity yet. Someone in their 20s can save a deposit in a market like Sydney
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or Melbourne, where it costs over it, it costs seven figures to buy basically anywhere.
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Do we need to start thinking about accepting the fact that we might be like a northern European
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country where most people rent and there are better protections for renters and 10-year leases and
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20-year leases and you can't be kicked out or something? Like at what point do we go with just
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lost this battle of making housing affordable? Look, I think we, I don't, I think you've got to say,
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we've got to do both. Like I think we actually need to bring in stronger protection for renters
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and longer-term leases. And I also think that we need to make housing, you know, more affordable.
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So people, if they want that, they can have that. You know, I've been a big push and I'm glad
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the final estate government did do it in terms of things like cutting out no-fold evictions,
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but that, but the next piece, I think is exactly as you say, having longer-term leases,
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which create more protection. And you know, that is enabled by things like build to rent and other
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kind of types of, you know, types of development of property. But the other side is that on housing,
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you know, housing is something that it's, it is a right, it is something that every, you know,
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I think more, all Australian see that as, you know, shelter is your basic, is a basic need and
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we want to be a country where everyone can access that. And that includes, you know, owning that if
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needed. And so I think we need to, we can't give up on that aspiration. We need to, we need to bring
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in all the policies that we can to make that more achievable. But recognizing that, you know, this
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is a problem that's built up over 20 years, it is not going to be solved quickly.
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And even if you do, even if you throw everything at solving it, most of the experts who I talk to
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is say, the best thing you're going to be able to do is slow the rate of increase or, you know,
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best, best case keep prices steady. The idea that a $2 million property is going back to $700,000
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the way that it was 15 years ago is not happening and would cause a massive uproar in itself. Because
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a lot of people have bought in the past 15 years myself included. And I, I'm going to weigh that
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money to the bank regardless, you know, I'm going to, I mean, owe that overinflated. So when I
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hear like the Greens, for example, talk about how, you know, we want property to become much, much
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cheaper, I do feel that there's, there is an unspoken tension in the argument around equity,
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which is not fully sort of articulated in the media and in the political parties,
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which is yes, of course, young people should be able to afford a home. And at the same time,
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people who paid these, yeah, if in 1980 you paid $30,000 for a place that now costs four million,
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I'm happy with that four million dollar property going down to two million or one million or something.
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But if like me, you had to bend over backwards for decades just to be able to get into a market
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that was inflated, then how do you manage that? Like, I mean, I, is there a system where you could
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look at the equity that has grown over the course of a person's ownership of a property and
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use that as a way to, to create tax incentives or something or disincentives if they've owned it,
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if they're particularly large beneficiaries? Look, there could be, I guess where I'm approaching
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this and trying to work on this is I think what you want is incomes to be growing faster than
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housing prices, right? Because then that is the way that over time housing becomes more affordable.
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That's not going to happen really quickly, but that is kind of, that is the mix that, you know,
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you want. And so therefore, and so a lot of that comes into sort of how do we actually grow the
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economy? How do we grow productivity? But then also I keep on coming back to the tax system and
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saying, look, I think we should be trying to pull down, reduce our taxes on income, wage income,
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which is the thing that most people can access and switch that balance towards, you know,
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more, you know, into other parts of the economy, including passive income from, you know,
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property is an example. That's the, that's the slip that I think Australia can do at the moment,
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which gives the right incentives, gives people a chance, you know, like you, you know, you worked hard,
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you know, you've done everything you can, you know, gives you a chance to keep on, on building on
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that, but and some rebalances retilled set back towards younger people being able to own homes.
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Right. Okay. So that brings us to negative gearing, which is this strange system that Australia has,
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where, I mean, do you want to explain to non-Australians? Because it sounds weird when you
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explain negative gearing. So negative gearing basically is if you own an investment property,
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and it means that you can offset any losses on the investment property, including the mortgage
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costs in your investment property, against your other taxable income, including you say your wages.
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So, you know, yeah, that's basically, that's basically it. And I always thought it was logical,
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because any investment that you have, you should be able to deduct the losses in that,
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if I have a shop and, you know, then the things that I have to spend money on, like the renovation
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of the shop and my, the equipment and all that sort of stuff, I should be able to deduct off the
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revenue before that is taxable, because I don't have any choice. That's part of running the business
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until I was explained to me that that's not what negative gearing is, because you're not just
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deducting the cost of your mortgage, the interest that you're paying the bank off the revenue
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that you're getting from the property, as if it's a business. You're crossing it over to this
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completely unrelated line of work, your income, your salary, and you're deducting it off that,
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which is not legitimate in any other form of investment. If I own the shop, I don't, and the shop
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makes a loss, I don't get to cross-deduct those losses onto my completely unrelated side gig
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as an Uber delivery driver. To be fair, it's to be fair if you own shares and sort of
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give them in this way, you could do that. So it is consistent with other assets, but not to you
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having a business. But I think the point that is being made is that, you know, what's weird about
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the Australian tax system is that we sort of tax things really differently, like, you know, if you
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don't have a savings account, you know, your tax at your top marginal rate. So, you know, when you're
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in your interest, if you have a negatively geared property, you know, you can be actually reducing
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your tax. And so this is where some of the inconsistencies of our tax system are working. And part of
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the problem with both negative gearing, but also capital gains tax discounts on property, on investment
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property, means that we sort of, we have effectively, we supercharge the attractiveness
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of investing in property. In other words, there's a massive incentive if you're in the top income
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bracket to acquire as much investment property as you can because every cent that you spend on
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the interest or on anything to do with that is then going to come off your salary. And because
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the top income bracket is almost 50% in Australia, the government is basically chipping in half of
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all of the costs and pay off half of the interest on your investment property loan. It doesn't work
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that way in the States. There are some funny little things like up to $750,000 in the States. You
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can do this and that. But, you know, let's not get bogged down. In the States, the big different
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thing is that you get to do like the interest on your own home, which we don't have here. So what
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do you do about this? So what I think is a is a fair way that we need to look, I think there are
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lots of things you have to do to actually address the tax system in relation to property. One of them
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is to stop stamp duty and instead have what is called land tax. So, you know, stamp duty which is,
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you know, you pay a big tax whack whenever you buy a property. That's a tax on divorce. That's a
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tax on moving and it's not very fair. If you've owned your property for 30 years, you're not paying
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any tax. If you have to move every three years, you're paying lots of tax. So instead moving to or
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more of a land tax basis where you just pay a tax based on the property every year. And I heard
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sub-woodly mobile young people, you know, go people like myself and overcome myself young. But like
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we have a growing family and so we have to, as they grow, then our incomes grow, we then grow
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up into new places and every, as you say, three years. We have to pay $150,000 or something in
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tax at the government for the transaction. Yeah, it doesn't, and versus someone who's parents
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helped them out buying their forever home when they're 30. Yeah. That's really the, so that is a
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kind of, that's an equity piece. And just a pause on that for a second. Don't lose your
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train of thought. How do you make a land tax equitable if people are, you know, what about the
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the horror stories of grandma? She doesn't have a lot of income, but she's sitting on a place
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that is worth $10 million through no fault of her own. Now all of a sudden she's going to have this
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annual tax of $50,000. She's not going to be able to, she doesn't have the cash flow for that.
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Yeah, look, I think one of the numbers, those numbers are really big. So I'm not sure that that
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would end up with that sort of, anyone's going to be paying $50,000 worth of annual land tax. I
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think that you would get riding the street. But the other side is that there are different ways
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being put forward to say, okay, that can only, you know, you can accrue that as a debt that only,
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you know, gets paid as your property is sold or something like that. There are ways of dealing
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with people who don't have a lot of income, but do have assets that they want to hold on to.
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Well, you know, it's important to them to live nearby their friends and family where they've,
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you know, been for generations. But in to come back to the other point, so you're trying to
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work out how do you solve the sort of tax system more broadly? I think one, a fair way to do this
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and certainly a bunch of countries are doing this and we're looking at now some trying to cost up
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some options of this is like you hold your income on your, you know, working income, your wage income
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and you tax it in one way and try and lower the taxes on the wage income. And separately,
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you have your sort of asset income. So you have your passive assets income, whether it be shares,
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whether it be, you know, in property and other things and you're trying to be more consistent in
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the in the taxation of that and and lower some of the sort of tax benefit in that space. And I
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think there are lots of, there are a little good economic reasons to do that in terms of being more
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fair across different asset classes, but it would also deal with some of these issues in terms of
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the incentives around, you know, a country which, you know, as a country, which is one of the
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biggest countries on earth, you know, we have, you know, per capita, we have some of the least
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dense population on earth. And, you know, Sydney is the second most unaffordable place in the world
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to buy a property like that just doesn't make any sense at all. And we've just, we have stopped
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up at lots of different levels. And the tax system is some of it. A lot of this is about supply. So
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I'm not pretending this isn't about supply, but tax does play into it, particularly into how do we
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lower taxes on younger working people? So they have a greater chance to actually build wealth
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themselves. Remind me to come back to the question of taxic assets differently from taxing wages,
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but just while we're on the question of the density of the population, I mean, one can say that we
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are one of the most sparsely populated countries in the world. I think we're the second most sparsely
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populated country after Mongolia or something. We're certainly the most sparsely populated rich country.
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Nonetheless, if you take an average Australian, the average population density of their
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neighborhood is reasonably dense. In fact, we're very cosmopolitan and urban in comparison to
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a country like the United States. We all live in basically five or six big cities. Have we
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stuffed that up by not having medium-sized cities? Like, could we do more to just encourage,
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we always talk about regional rule in Australia, but we have this cliche in our head that means we
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have to import a bunch of Afghan nurses to go and live in, you know, it's on a farm. But actually
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creating like vibrant, making Newcastle and Wongong and like Wagar, just more vibrant places to live.
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I think there's a huge opportunity there. So it's, I think, you know, you've got to get a bunch
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of things right. But I do think there's a big opportunity to do that. I think we're going to have
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to do lots of different things. Because, you know, if you look at supply of housing in Australia,
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we've got around 400 dwellings per 1,000 people. Countries like France have around 600.
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There, you know, you can buy a shadow in France. We've all seen that on Instagram. We have all
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seen that. But you can, and the OECD averages, you know, is, well, you know, significantly above us,
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Australia is one of the worst. So we actually haven't built enough houses and we need to build
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them in diverse places. And talking actually to some regional and rural MPs, I was talking to Helen
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Haines, who's a, who has one of those regional electorates. She was saying that, you know,
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she can't get housing built either in where she lives, which is a long way out of Melbourne.
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Because there's not the things like the border and the sewage and other things connected
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in her towns where they are looking for more people to be. So there's a bunch of stuff we haven't
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got right in terms of getting the zoning right, the infrastructure right, we just haven't had our
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eye on the ball, which is, you know, we need to build housing for the population. And that's,
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that's, you know, all those policy levers that play into this as well as tax.
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And what about infrastructure and transport? Are you a high-speed rail person or no?
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I'm, I'm, I am, in principle, I would love to see high-speed rail. I just think sometimes the
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business cases are completely crazy. So I do think, I mean, I, but the business case for the TGV
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would have been crazy or the Schimpansen would have been crazy. These are government subsidised
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operations for the public good in the same way that public transport is, is economically crazy.
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Uh, no, I mean, I think that, yeah. So I think the, I am on print, like on principle,
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but I also want to see the numbers because there are like suburban rail loop in Melbourne. If we go
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bit, I don't think the numbers are there for that at the moment. And I think that's where we're
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wasting a lot of money. Right. So I think how you do it's pretty important. And you've got to,
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you know, you can't build those things in it. Doesn't make any sense. I do look at the opera
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house often and go, I'm glad we were, yeah. Yeah, I'm glad we were silly. I'm glad we were silly.
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Yeah, yeah. Because a lot of money then should, yeah. I mean, there were so, there were just so
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many externalities on something like the positive externalities on something like that. You know,
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if you could, if you could live in Canberra and, and work in Sydney because there was a 50-minute
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train or will and go on a new castle or something like that. You can live in Canberra. It's a
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pretty great city. We could just, frankly, we should just be building a lot more houses in Canberra.
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Yeah. And it's, it doesn't need to be justified in the sense of, you know, you can get to Sydney
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quickly. So I've spoken like someone who was born and raised in Sydney. I say, I say that the
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great thing about Canberra is it's quite close to Sydney. No, I love Canberra as well. But, um,
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so then in terms of building, before we go back to tax, I had Peter Tula upon this show,
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who's an academic, who is banging on all the time about like tax is a distraction. Taxes
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are rounding error. You could get rid of negative gearing tomorrow. And yes, it would help at
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the margins, but there are loads of countries that don't have negative gearing and don't have
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our tax structure. And they also have a property burn. The problem is we import lots and lots
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and lots of people into the country and we don't build a lot of houses and we don't let people build
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houses. And it takes forever to get a development application through and we're extremely
23:06
nimbistic and jealous, jealousy guard, the look of our particular neighborhoods and so on.
23:12
What do you make of that? So I think, on principle, he's saying that the main game is supply and I
23:16
agree with him. So I think from a, from a housing affordability piece, the main game is supply.
23:21
The tax piece is for me is about actually lowering income taxes so that young people are the
23:27
rebalancing the incentives so that young people can actually get more of that supply rather than
23:31
people who already have wealth and sort of investment properties. So what I'm trying to do is make
23:36
it cheaper for young people to buy it and more expensive for investment properties to buy
23:40
effectively so that more of those people can buy it because they've got, you know, keeping more
23:44
of their own wages. That's the balance that I'm trying to strive. So yeah, so I think on principle,
23:49
we do need to build a bunch more supply. But E61, which is a great economics
23:55
consultancy, that's an Australian one, has, you know, is it started to say, you know,
24:01
tax might be playing more than people realize in this space, but I still think Peter Child is right.
24:06
State government's too leery of building. I think they have been. And I think, and I think that,
24:14
you know, I think, as John Howard said, you know, former Prime Minister many years ago, you know,
24:19
nobody complains when your house prices go up too much and the truth is people haven't.
24:24
But when we're in a world where, over the last 20 years, house prices have, I think, roughly
24:30
quadrupled and wages have basically doubled. Now people are complaining and now people worried,
24:36
not only, you know, for themselves, they're also worried about their kids and the grandchildren.
24:39
Yeah, I think about about bloody time, I would say, you know, the house prices has been,
24:43
it's all been very well. They've basically doubled every decade since World War II,
24:47
pretty reliably. And the people who've benefited from that, who are the sort of 50 plus cohort,
24:54
are now talking about how sad it is that their children can't afford to buy properties. But,
24:59
you know, like, I do, I just think there's a lot of BS in this. I mean, when I was on the ABC,
25:04
and I would hear from people talking about how terrible it is that young people can't get into
25:08
the property market, I would think in the back of my head and sometimes say, but like, you're
25:13
clearly an older Australian and you own your own home. So you do have a vested interest in the
25:19
status quo. Like you do like the fact that you're a millionaire through no doing of your own.
25:24
You bought a lottery ticket in 1970 and it paid off and now you're a millionaire.
25:27
I disagree. I think that people can go, you know, people can be say, look, I'm glad I've
25:32
owned my own home. But, you know, a lot of people say this to me, I wish, you know, I don't want to own,
25:37
you know, I bought this house a long time ago. I don't, I still want to live in the street that I
25:41
want to live in. Like, you know, I'm happy where I am, but I didn't need for it to be now worth
25:45
X million or whatever it dollars. I think you can be someone who has benefited to say, but the system
25:50
needs to change. And I think a lot of people are saying that to say, look, I may have benefited a
25:54
heaps of people say this to me. I might have benefited from this current system, but I recognize
25:59
this isn't sustainable. So, I mean, would you expect them to do like, you know, right to a check?
26:03
I mean, like, well, I expect them to support the proposals when they come along that would reduce the,
26:10
so what would actually, the main thing that would reduce the, you know, or that would make
26:13
housing more affordable as we've just acknowledged is more supply, which would mean that they're
26:18
pretty street full of tree-lined terrace houses might need some taller and more modern terraces
26:25
on it. And the moment the development application comes through, they're picking in the streets,
26:29
and they're lobbying how they don't want the heritage of their pretty neighbourhood to be
26:33
fundamental. I look at, you know, people, you know, people are allowed to say, well, this is why I
26:36
really like this neighbor. People are allowed to say, I want A and B, even if they are mutually
26:41
exclusive. I want low property. We would like to do it. So, you know, so I think, you know,
26:48
it's, you can say, I'd like to still live in a, you know, I like the humanity that I have currently,
26:54
but we need to build my houses. And I think, and so I think, I don't, I mean, I'm not in the business,
26:58
and I'm trying really hard at this, is that this isn't about trying to pit old and young,
27:02
even though I talk a lot about intergenerational. What I'm really trying to say is, I want young
27:06
people to have the same chance for prosperity that previous generations did. I think that is,
27:11
that's right from a fairness point of view, that is right from a social cohesion point of view,
27:14
that is, you know, it's right for our country. Now, that is going to mean some tricky trade-offs
27:18
because we haven't made a bunch of hard decisions over time. We're just going to have to keep on
27:21
Yeah, I mean, I wonder if we're sort of chasing a rainbow in thinking that housing needs to be
27:26
pivotal to that. Like, I understand that this generation is the first generation that is coming
27:31
to grips with the loss of the Australian and to some extent, American dream of homeownership,
27:37
the idea that if you were just a regular working person that someday you would have the white
27:43
picket fence is just not true anymore and probably and may never be true again. So, do we need to
27:49
find other ways of facilitating the flourishing of a younger generation without this fixation
27:54
on they have to buy the house? Yeah, I think you do. I mean, as I keep on coming back to tax,
27:59
that's why I do think you have to keep going. Okay, let's talk about taxes. No, no, no, no,
28:01
I think the reason why that's, again, I guess, probably why I talk about taxes because it's not just
28:06
about taxes, not primarily about housing, it's about how to help younger people. Yeah, and you can do
28:11
whatever you want with the money, you can buy an expensive house or yeah. Buy a house, you can buy
28:15
another thing. We are going to have to have people, people need to live somewhere and that's
28:19
got to be affordable and that means we're going to have to build stuff, whether they're buying it or
28:22
whether, you know, a big company who owns a lot of houses that they want to rent and, you know,
28:27
that's the choice they make instead. We still need to build the houses, depending on, you know,
28:31
it doesn't matter who's going to own them, we still actually just need to build houses.
28:34
I mean, yeah, when we say build houses, it sounds simple because you think, well, just
28:40
clear off a new empty bit of farmland and build lots of houses there, the problem is people
28:45
don't actually want to live an hour away from the city where they want, they want to keep living
28:50
in the places that are becoming that are increasingly expensive and the reason they're increasing
28:54
the expensive is because a lot of people want to live there. And so is there, we've sort of
29:00
gotten caught in this false binary in terms of development, I think, between do we turn our cities
29:05
into skyscraper cities with lots of cheaper apartments that we push up in places like mascot in
29:10
Sydney or Alexandria or wherever it might be, these inner ring suburbs which are previously
29:15
industrial throwing a lot of cheap skyscrapers and put people in there or do we contribute to urban
29:20
sprawl on the outskirts by with big double garage homes and sort of golf courses and, you know,
29:26
parks and things like that in an increasingly hot dry continent or is there a middle ground which
29:34
I rather like the idea of which is sort of medium density, you know, the way that most people in
29:39
Paris or London live or in the inner west of Sydney or something like that, like can you recreate
29:43
that in a way so that it's neither suburban sprawl nor high rise? I think you're going to
29:51
without pissing everybody off. Well, I think you're going to have to do all of it, right? Like if we
29:56
really want to be a place over time where housing becomes really affordable, I think that means,
30:02
you know, medium density in, do more medium density. I lived in London, I actually lived in
30:07
France and Paris as well, like me and, you know, I live part of my patch is Pots Point in Sydney which
30:14
is some of the most density populated part of the country and people who live there absolutely
30:19
love it. It works really, really well, right? So that's really beautiful medium density.
30:24
You are going to, you know, the bunch of people are very happy in, you know, high rises in
30:27
Zetland and those in mascot and places too. And then, as you said before, regional communities
30:34
also, you know, can do it. You've got to, I think you, people want to live differently. You've
30:38
got to, you have to have a, I think, a variety of, of housing, but it is, it's, it's everything.
30:42
It's not just urban sprawl. And I think traditionally in Australia, our answer has been,
30:47
just keep on pushing out. And I think the answer has to be much more mix and much more deliberate.
30:53
I mean, you would be shocked to know that we don't really have a sort of 10 year national infrastructure
30:59
plan where, you know, we go, oh, this is where the housing we think is going to be. And this is
31:03
where the transport, therefore, should be. And this is, you know, and that's the kind of thing
31:07
that going, it's, it's, it's, it's, it's not crazy. Just try and have a bit of a strategy around
31:11
this. I like to you say that I'm sure I would be shocked by this news. I am shockingly, I'm not
31:17
shocked that there is no plan. I mean, I'm shocked that there's no collaboration allegory between
31:24
the federal government's immigration policy and the state government's infrastructure policies.
31:28
Honestly, I mean, I don't understand why it isn't because talking about Trump and immigrant
31:33
sentiment and all this, it is obvious to me when you look at what's going on in the right in
31:38
the UK and the rise of the far right in Europe that you have to be extremely careful in this climate
31:43
about making sure that people can't blame migrants for failings of public transportation,
31:50
of hospital waiting lists of, you know, how long it takes to see a doctor of school overcrowding,
31:55
whatever, like you have to ensure that infrastructure can keep up with immigration. Otherwise,
32:00
the migrants are going to get blamed and you're going to get ugliness. So it just strikes me as
32:05
obvious that you should have the federal immigration minister and the state, like infrastructure
32:11
ministers sitting down together and going, okay, for every thousand new people who come into the
32:15
country, where are they going to go and what hospital beds, where are their hospital beds and
32:20
where are the new classrooms? Like, without that, you're just asking for
32:25
tribal. I mean, I mean, yeah, I think this is the sermon. This is a no. Well, look, this is
32:31
the great federation that we have. These are the challenges. And I think, you know, I'm the
32:35
child of a migrant, you know, Australia has is incredibly successful. Both as a migrant country,
32:42
but also because of its, I think migration, I think it's made us the country that we are. But
32:46
we've got to, you know, we do have to manage this in a way which doesn't try and pit different
32:50
people and parts of the country against it. Yeah. Yeah. I mean, I'm a child of migrants. I'm a
32:53
child of a refugee. And I certainly wouldn't want to see that, you know, what we're seeing overseas
32:57
happen here. I'm a big fan of high migration. But, yeah, make sure you're figuring out, yeah,
33:04
you're figuring out how you're doing it. So in terms of offering inducements for younger people
33:08
to be productive and to have to keep more of their money and distance incentives for wealthier
33:14
people to sit back and get rich off the profits of their, their assets, is there a standard way
33:20
of taxing assets revenue from assets at the moment in Australia and is it higher or lower than
33:24
if that income was coming from wages? So what it's, so what it is is, no, there isn't a standard way
33:31
of taxing assets at the moment. It depends on the type of asset and earning as I said, you know,
33:35
there's a, you know, if you save your money through your, you know, through interest, you know,
33:41
you keep your money in the bank and just have interest, your tax at your marginal rate,
33:45
which is, you know, can go up to 47%. If you are negatively gear your own, you know,
33:51
you can actually be reducing your tax by having this asset appreciating over time. And so it is
33:56
inconsistent. That's one of the, wait, I'm not supposed to, I don't quite understand the analogy
34:00
there. If I've got a thousand dollars in a bank account and that owns interest, then of course,
34:05
that interest is taxable. If I am negatively gearing an investment property, then that is a,
34:10
that is money that I'm putting into that investment property. Are you saying that the capital
34:14
growth of the, of the, if it goes up by a thousand, your capital growth will go up and then,
34:20
but I will pay tax on the capital growth when I eventually sell property. And you pay half the
34:23
rate that you will, because capital gains taxes are currently discounted at 50%. So you'll pay half the,
34:29
if you hold the asset, the more than a year, which most people do when it comes to property.
34:33
Yes, right. So that's some of the problem there. Okay. So get rid of the capital gains tax benefit.
34:38
Or reduce, I think, you know, the most argument, there's a reason you have a capital gains test
34:43
discount, but on, on things like those investments, but I think there's a strong argument for reducing
34:49
some of those capital gains tax discounts. And the reason for the discount is so that the tax is
34:54
higher on short term trades. Is that right? If you're flipping things in less than 12 months,
34:59
they want there to be some penalty for that. The idea, I mean, this is, we're being a big
35:02
technical, but the reason why you have, historically, have had a capital gains tax discount,
35:07
compared to your normal tax of income, is because if you hold an asset for say five years,
35:11
and it goes up from $100 to $200, some of the gain of that $100 is due to inflation. Because
35:17
let's say, you know, so you held this asset over five years. And so the idea of a capital gains tax
35:22
discount is to account for inflation. But if you hold an asset for one year and one day, you know,
35:29
the inflation is not 50%. Right. But that's, and so that's one of the challenges, that's one of the
35:34
reasons why we've had historically capital gains tax discount. But there've been different ways
35:38
to do it. And I think there's some of the problems of what we've got right now is because of this.
35:43
Okay. So if I, if I'm sitting on a balanced like superannuation portfolio, I'm a,
35:49
I'm a chubby fat pig at the trough. I'm a boomer. I'm a boomer. Who is just, these are my words,
35:57
not yours. Let me do it. I've got my eight properties. I've got my, I've got my few million
36:02
bucks worth of shares. And that revenue is, is coming in. I'm getting rental revenue,
36:08
we get rental income and I'm getting dividends from the shares and so on. Each one of those
36:13
components is likely being taxed at a different rate. And all of those rates are likely lower than if
36:19
I was working for that money. If you're, if you're getting capital gains tax discount, yep,
36:24
that would be. And, and I think, well, no, hang on, I'm not sure about capital gains tax. I'm
36:27
talking about dividends and rental income, right? So if you're discounting it against, you,
36:33
so the income won't necessarily, it depends if you're discounting it against your, your,
36:37
your interest income and your discounted against your wages. I think the point is, so we're probably
36:41
illustrator that the Australian system is very complicated. I think what's interesting actually,
36:46
some, there was some really interesting research for that. Basically, you said, you know, what you
36:49
want in a tax system is that people earning the same amount of money roughly pay about the same
36:54
amount of tax. Well, what happens now in Australia is actually that holds true for quite a long time
36:59
until you get to really the sort of top bands where there can be a 20 percentage point difference
37:06
on like is sort of from the 10th percent out to the 90th percent out on the amount of tax you pay.
37:11
So you and I are standing next to each other on the same income, you know, you're paying 20%
37:16
tax on your income. I'm playing 40% on my average income. And that is because of all these
37:20
complicated things in our tax system. And I think that's where it was saying, we've got to actually
37:25
try and harmonize this so that the incentives really are there for young people to invest in
37:30
themselves to work hard and do, you know, take the next job, do all those things that we as a
37:36
country have said over time, this is really good for our economy. And we don't have that now.
37:41
What we currently have is a system that says, hey, be a property developer or get into finance.
37:45
Because if you want to make big money, those are probably your best options.
37:48
I mean, taxes are also a way of discouraging behavior that you don't want to see more of, right?
37:53
We tax cigarettes and we tax alcohol for that reason, which makes it crazy that we tax,
37:58
for example, employment through payroll taxes. Would you get rid of payroll taxes?
38:04
It look, I'd love to get rid of payroll tax, not least because so payroll tax is a tax on
38:10
employment, which is varies across the country. It's complicated because different businesses
38:15
pay different rates and even the definition of employment is differs between states,
38:20
which is just a pain. But also because I think we are entering an age of AI,
38:25
where I think we shouldn't be taxing people more who employ people. I actually don't want to have
38:30
a greater tax burden on companies that are employing people as opposed to investing in capital.
38:37
Yeah, right. I think that'll be a bad idea. But to do all these things, you have to change,
38:42
that you need to actually really significant tax reform, which comes back to the start of this
38:45
conversation. This is why I'm trying to put tax reform on the agenda because we do have these
38:50
intersecting issues coming on right now. We have an ageing population. We have a young people
38:55
who are struggling to get ahead. We actually are not investing enough in our businesses
38:59
and our climate transition is going to cost us more than it should. All these things mean that we
39:03
actually need to try and get the tax system to work better. One of the things that enrages the
39:07
left is the way that big multinational corporations will be able to play jurisdictions off each other
39:12
in order to hide their profits and so on. You buy something from Apple and it just happens
39:16
to be processed through Ireland because I've got low-tech tax rates or whatever. There's this game
39:22
of whack-a-mole trying to locate where the money actually is. Let's suppose in an ideal world,
39:28
we get rid of payroll taxes. We get rid of the taxes that are discouraging the things that we
39:31
want, like employing people and young people's labor, for example. We increase taxes on things that
39:39
we don't really care about. Very wealthy people being able to keep lots of money from their assets.
39:46
I can say you're rolling your eyes, but my words, my words, my words, then we have a revenue gap
39:53
to fill, because we don't want to be. What about taxes on total revenue of multinational
40:01
or something like that? What about these ideas that get floated around so that they can't play
40:04
games with what their profits technically are? I think people hope that there's lots of money in
40:12
here. I think the truth is that the evidence suggests that there's not lots of money waiting out
40:16
there if we could just tax big tech better. I've genuinely lost a lot of money. Yeah, no,
40:22
they've got a lot of money. Just don't think their billions are out there that people are hoping
40:28
would fill all the gaps there. Why do you not think that? Because I think that's the people
40:35
the sort of economists that I was spoken to and the experts I was spoken to. I think there is some,
40:39
like to be honest, Australia is, and many of the OECD are part of work to try and overall fix
40:45
the world sort of tax systems, and it's more consistent. I think work has been done and a bunch of
40:50
loopholes are already closed. I just don't, while there are people doing this, it's not this kind of
40:55
big, you know, big golden pot of money that if you get it or understand that, but I always find
41:00
that I always hear people who say that and that that lands for me as sort of what about he kind of like
41:08
allowing the perfect to be the enemy of the good kind of thing of like they're like,
41:11
ah, these socialists just want to think that if we milk the rich,
41:14
then it's going to be raining money. No, but it might do something. I mean, it might help if like
41:19
Apple and Microsoft paid something. No, I think to be honest, this is where the government in
41:24
Australia has been trying to do over the last three years, like they've passed a bunch of sort of
41:28
multinational tax avoidance kind of bills exactly on this kind of piece. So I think you kind of
41:34
have to separate the different types of businesses, and this is where I do believe we should be
41:39
taxing what they call sort of like I believe we should be taxing our resources more,
41:43
particularly when prices are high. That is an example where I think it does make sense,
41:48
and because I think, you know, I think that's that's an area where I think we have great
41:52
opportunity than some of the other areas. And partly because I've just looked at the numbers,
41:56
and I think that's probably an area that we have great opportunity in this area. Yeah, right,
41:59
right. Yeah. How do you experience the politics of all this? Because when we talk about simplification
42:04
at the tax code, one of the things that we're implying is that there aren't lots of vested
42:09
interests in the complexity, right? Like every time you remove a piece of complexity,
42:13
someone goes, Hey, that was benefit. That was my complexity. All the other complexity is bad,
42:18
but this one is noble. How much confidence do you have that you can sell a grand bargain?
42:26
Look, I think it won't be easy. But I think it's, but I think it's about having the conversation
42:31
over time. I mean, I think genuinely, you know, you've got to take the conversation to people,
42:37
and you've got to make the argument. I went to actually an independence of retirement,
42:42
living a place really lovely place on the other day. And one of the opening gametes was from a
42:50
woman who said, Look, you know, I'm really worried about all this talk on intergenerational equity.
42:54
You know, I feel like that means you're coming for, you know, people are coming for my money,
42:58
and I look at my grandkids and others, and I just feel that they're not working hard enough. And,
43:02
you know, why should that? And I had 18% interest rates when I was a kid, a young person. And the truth
43:07
is that's, that's, that is what some people worried about. And, you know, this is about, for me,
43:12
this is about trying to not pitch generations against each other, or, you know, to say, you know,
43:18
to create a baddie that we can all go after. But it's just to say, Okay, what sort of country do we
43:23
want? Right? I want a country where young people can achieve the same outcomes. I think let's
43:28
look at the evidence. It's not happening. So now we have some choices. Now they're not easy choices.
43:33
Frankly, if we had made some of these choices 20 years ago, it would all be better off, but we haven't.
43:37
So now we've got to make those choices as a country now, which is, you know, some of which are not
43:43
going to benefit us individually or perfectly, but that's where we've got to go. And so I think you've
43:47
got to, you know, I don't think everyone is, you know, we've tried in the past to make it sure
43:52
everyone's a winner. No one can be worse off. It's impossible. There are people and companies and
43:57
others that will be worse off. And it's, I think, a matter of saying, Okay, try and have an evidence
44:02
base, back base conversation and listen to that, you know, listen to, listen and understand
44:08
and try and acknowledge them and then work out transitions because a lot of this, you know,
44:12
there are legitimate concerns. People have made choices over time, but we also, we cannot continue
44:18
on this trajectory. Something's got to change. And that's kind of how I approach it. Yeah, I think
44:22
the transition question is an interesting one. And we probably don't give enough attention to it,
44:26
because most of the naysayers of reform will say, but what about this example of this particular
44:31
person who, you know, has been working hard for the last 10 years, now you're going to pull the
44:35
rug out from under them and all of a sudden, everything's going to change. I mean, it strikes me
44:38
that the simplest way to sell something like an end to negative gearing would just be to say,
44:42
everyone's going to be grandfathered in. If you're negatively gearing a place, that's fine. Or
44:47
like, so let's say for 10 years, you've got another decade to make. If you're already negatively,
44:50
if you've already launched your tax returns and you were negatively gearing last year,
44:54
then you've got another 10 years to negatively gear, I think. Whatever, I think that transition,
44:59
whatever transition, whether it's yours or others, I think there is that question of transitions
45:03
is one. And you've got to be saying, where do we want to have the tax system in 10 years,
45:07
rather than necessarily, am I going to get there all in one hop in one year?
45:10
Yeah. And how much buy it? How can I maximize the amount of buy it?
45:14
Yeah, sure. And that's again, you know, I come back to again, where we started, which is to say,
45:18
that's why I think you have to be revenue neutral, because I think if you're saying, actually,
45:21
what we're going to do is increase taxes across the board, there's 50% of the country who already
45:25
says, government's not spending my money right. I don't want to give you any more of it.
45:29
So even if they, in principle, wouldn't be, you know, they don't mind you changing the mix,
45:33
but they do not want you to overall raise taxes. You know, the, you know, looking at politically,
45:38
how you can get it through, you know, the coalition has said, yeah, that'd be open to doing something
45:42
that was revenue neutral. So I think this is, you know, this is what I'm urging the government.
45:46
This is really how I'm framing it. It's like, do it so that the total tax take is not increasing,
45:52
but we're doing this in a way that's better for young people, better for productivity and investment,
45:57
and makes this climate transition cheaper. Is negative gearing expensive? How much does the
46:01
government spend on it, you know, roughly off the different models? So it's not, it's sort of not
46:06
as expensive as indexing the tax, the brackets, which is what I would really like to do,
46:11
in which a bunch of countries and just explain that. That's the idea that this is actually really
46:16
the heart of, I think, how do we be fairer to younger generations, which is currently, we've got
46:21
a tax system where the, you know, your, the brackets at which you pay different levels of tax,
46:29
so, you know, you pay, you know, certain amount of tax at 15%, 30, you know, certain amount of tax.
46:35
Yeah, you pay nothing up to so many thousands of dollars a year. Yeah, point of this is that
46:40
that doesn't change with inflation. And so what happens is that if you've got, so every year,
46:47
if you just basically, if you get a $5,000 increase in your pay, let's say you're on a hundred
46:51
grand, you get a $5,000 increase in your pay, and inflation at this time is 5%. You would think,
46:57
oh, yeah, I'm holding steady. Actually, you're not because you've actually increased your overall
47:02
average tax. Yeah, because of bracket creep as they call it. Because your average tax level is
47:06
higher. And one of the most shocking things is that in the recent, you know, last few years,
47:12
a really high inflation and also higher interest rates, the reserve bank of Australia has shown that
47:20
that bracket creep was more expensive, had a harder impact on people's household budgets,
47:25
than actually interest rate increases. So on average, because it's, you know, because bracket
47:30
creep affected, everyone, not everyone has those interest rate increases. But overall, it was a
47:34
really big cost. Now, but if you had a mortgage, probably not, but it depends on how big your
47:39
mortgage is and everything, it had a really big impact. And some countries, including the US,
47:43
though sometimes they suspend it, they index their tax brackets. So this doesn't happen.
47:47
Meaning that every year, they look at what the inflation was and the brackets go up
47:52
proportionally. Australian governments don't like to do that because if you have bracket creep,
47:56
then every five or 10 years, you get to give a tax cut and increase the, you go to go,
48:00
hey, look at us, we're going to increase the, yeah, come back into budget surplus over 10 years
48:04
and go, woohoo, that's because of good economic management. No, it's just because you're taxing
48:08
people more, but you're not actually telling them. Right. Okay. So peg the thresholds to inflation,
48:16
get rid of negative gearing somehow, use the difference in, use the saved money to cut taxes for
48:22
working people and maybe to get rid of payroll tax. All right. I'm on board. Where do I,
48:28
where do I sign? How are you still doing other numbers on it all? How much are political parties
48:35
to blame here? Because a lot of people in who I speak to in their 20s and 30s are disillusioned with
48:41
what they think of as a sort of a rigged two party system where big corporations pay lots of
48:45
money on lobbyists and fund political campaigns and everything's dirty. And it's very hard to,
48:50
you know, why isn't the government being more responsive on gas and climate and whatever
48:55
their issue is? And their diagnosis of the problem is that we should get rid of political parties
49:01
and everybody should be an independent as an independent. Do you concur? Or I think, I think that
49:09
on lots of things, political parties have, have lost touch with what people think and are worried
49:16
about and have not made some of the difficult and important long term decisions that they should
49:21
have over the last 20 years. And let's talk housing because frankly, this has been a slow motion
49:25
car crash for the last 20 years and no, and political parties of both persuasions haven't done anything
49:30
about it. And I think now some of that is definitely vested interests, some of that. And you know,
49:37
you can see that in something like gambling advertising where Australians are some of the biggest
49:41
loses per capita in gambling. And it is the sports organisations, it's the media organisations
49:48
that are like, no, no, no, no, no, no, you can't touch that. Don't touch our advertising.
49:52
While most Australians are like, oh, stop advertising all these gambling, all these gambling
49:56
advertising on sports because, you know, I just want to watch my sport. I don't want to be constantly
50:00
told I should gamble on my sport. So I think there's a bunch of areas where political parties
50:06
have let us down. I think on some of the difficult on these difficult issues. And I think that's
50:10
why you get independence. That's why I think you get minor parties. That's where people are,
50:14
it's saying, you know what, it's not it's not good enough. And how do you feel about the
50:19
the fate of liberalism at the moment as you see what's going on in the United States? Yeah.
50:26
You know, I would call myself a small liberal, like that's how I see the world. And you know,
50:30
I think I do worry. And I think this is where, you know, I think, you know, what do we do? How do we
50:38
how do we address, you know, what are the challenges? One, I think he's economic. And I do believe
50:43
that, you know, you need to have a growing and fair economy, which most people feel bored into
50:50
for to preserve liberalism. And you see that in, you see that in sort of tough economic times,
50:55
you always get the rise of the far right. You know, this is, it's what happens when people feel
51:00
like their future, their kids future, you know, they look ahead and they're not, don't feel,
51:04
you know, content and excited about it or they're worried about it. So I think there's a big part
51:08
which is just get good economic policy policy. That's good for business policy. That's good for,
51:12
you know, factually prosperity. And then the other side is, is more the kind of, you know,
51:19
community coherence, like working out, you know, what are we proud of in this country? And how do we
51:23
hold that together? And how do we disagree well? Which is one of the reasons why I like doing this,
51:28
you know, I'm proud of what you do. And I think, and I think we need to have difficult conversations,
51:33
but we need to do it in a respectful way and find ways to disagree well and also how to build
51:39
social capital and connection, you know, so that you can disagree on some things and still have
51:45
a relationship because we've got to do that more in a pluralist country like Australia.
51:50
Well, thanks for saying that. You mentioned climate change a couple of times. Is it at odds with
51:54
the idea of a vibrant and dynamic economy? I mean, I sometimes think that we dodged this question
51:58
by saying like, we can have our cake and eat it too. And like, there's loads of opportunities
52:02
in green jobs. But the reality is that we live in a country that is heavily reliant on mining and
52:06
makes a ton of money from coal. And is there a, like, how do you balance that conflict?
52:12
It's going to be hard. I think the truth is that again, I wish we'd started this
52:16
properly 20 years ago, but we didn't. So it is going to cost more and be more disruptive
52:21
this transition than it should have been. But, you know, so I don't, I don't think it's going to be
52:26
easy to do this, but I also think it's there are ways that we can do it better. And, you know,
52:32
I look at Princeton, rural and regional communities. Again, you know, one, again, another MPI
52:36
I was speaking to who said, you know, we've got all these massive wind projects right next to us
52:40
and actually in my electorate. And we have some of the most unreliable electricity in the country.
52:45
Like, you know, surely you can work out how to make sure that, you know, some of those communities
52:50
can share some of the benefits as well as do something which is a benefit to the whole country,
52:55
which is host significant renewable energy. So, you know, I don't think this, I think this transition
53:01
will be difficult, but I also think it is inevitable. And so we can't just hold on to
53:05
coal and gas. We actually need to, so where can we do, where is our economic future here? Now,
53:11
one area on sort of the climate side is definitely green. If we can get ourselves sorted and
53:17
organising that, that is an area where Australia has an opportunity for significant export earnings.
53:22
You know, other areas are in sort of in tech and innovation. And, you know, a lot of what goes
53:26
on around here, you know, for instance, AI data sensors in the area that Australia is really,
53:31
I think, a outstanding in or has a significant opportunity in Australian quantum computing.
53:36
We have more quantum computing experts here in Sydney than apparently any other city in the world.
53:42
It's hard to believe, but they're all here. So, you know, how do we build on some of those strengths
53:47
as well as saying, you know, it's going to be, it's going to be a hard transition, but we can't
53:50
just keep on putting it off. No, I mean, it seems like it seems like we're sort of grasping at
53:55
whatever shiny new climate object is in front of us, where the obvious solution which every
54:01
economist would tell you is just to put a price on carbon. I mean, should, because more than a decade
54:05
ago, Australia became the first country in the world to introduce a carbon tax and then that
54:09
government got voted out of power and it was reversed. Should that have just stayed? Should we just
54:12
have kept the carbon tax? Should we have a price on carbon now? Yes, we should. You know, I support,
54:16
oh, I think I have always had an extra part of price on carbon. And what we are in in sort of
54:20
economic terms, we're in second, third best world, where it is costing us more than we should.
54:25
And so, at the very least, you know, one thing I'm trying to work on is how do we actually get
54:30
more transparency around all the different implicit prices we have on carbon, so that we can
54:35
actually try and make sure that we prioritize the things that are cheapest to do rather than
54:38
the most expensive. Are you optimistic or pessimistic about the 21st century?
54:42
I'm in balance. I'm optimistic. I guess I'm an optimist by nature, but I also think it's up
54:52
to us. And again, taking very parochial kind of Australian first thing here. It's like, you know,
54:57
we are a country, we're a small country with enormous resources. We are one of the most diverse
55:02
countries on earth. 50% of the country was either born overseas or has a parent born overseas.
55:07
I think we have in this country the best chance out of any country in the world to show that it's
55:12
possible to be prosperous and diverse and to thrive in a clean energy kind of world.
55:17
And frankly, we've got so much going for us in this sort of clean energy world, so it's really
55:21
up to us to sort our stuff out. And that's, again, one of the reasons why I got to politics.
55:25
All right. Don't fuck it up Australia. That's the bumper sticker.
55:28
I like to spend it. Thank you. Thanks so much.