Chris Bowen joins Insiders

BARRIE CASSIDY, PRESENTER: Chris Bowen, good morning, welcome.

CHRIS BOWEN, SHADOW TREASURER: Good morning, Barrie, good to be with you.

CASSIDY: This week's parliamentary inquiry as we just saw placed a spotlight on the banks' failings, it was all laid bare. But in the end, it didn't take a Royal Commission to do it.

BOWEN: What we saw Barrie was a hearing which was long on apologies and short on solutions. For the bank chief executives, it appears that sorry is the easiest word to say, but for Malcolm Turnbull, Royal Commission are the hardest words to say. We know that we need an eminent retired judge or an eminent Australian with the assistance of a Special Council assisting the Royal Commission, with all the powers of a Royal Commission to get to the heart of matters, of culture, of remuneration, of the financial services sector, not just the big four banks, but the financial services sector more broadly to ensure that we've got a financial services sector working for the best interests of Australians. This was a stunt and a distraction by Malcolm Turnbull to avoid a Royal Commission. It's the latest in a long line of stunts and distractions by Malcolm Turnbull for somebody who just appears to be singly incapable of recognising that it's time for a proper examination of the conduct of Australia's banking financial services industry.

CASSIDY: Bill Shorten has written to all cross benchers in both chambers telling them that Labor is more determined than ever to get a Royal Commission over the line. He's requested a meeting with them but what can they do?

BOWEN: It's true that a royal commission can only be called by the executive. But of course we'll continue to use, as we have done, all the avenues of both houses of Parliament to put our case. Independents and crossbenchers by and large agree with us on that case, because the case is a strong one and we'll continue to talk to them about what can be done.

CASSIDY: Is there anything inside you that says the politics behind this, that the politics in play and it's a step too far, it ignores the facts the banks play a very important part in Australia's economy?

BOWEN: No I don't think so. It wasn't a decision taken lightly. It's not a decision we took quickly. It's not a decision we rushed to It was a decision taken over a long period of time when the evidence mounted. Now, take for example, the latest proposal for a banking tribunal. Now, this is just the latest diversion. Malcolm Turnbull should be honest with people and say, one there's already a banking and financial services ombudsman. What would this achieve that that doesn't? It would provide an adversarial arrangement and the banks would have very substantial resources for their legal teams, for his banking tribunal, and the victims of banking misspractice would almost by definition have no resources. This is not the answer. A royal commission would be able to, in a thorough, mature and sensible way examine all the problems and instances which have got us this far, and what are sensible ways forward.

CASSIDY: But you do a lot of work trying to build bridges with the business community. What if some of them see this and they say this is indicative of Labor, you're prepared to play hard ball for political advantage?

BOWEN: Yes I do engage with the business community as part of my Shadow Treasurer of course, but the Labor Party has a job to do to ensure that the Australian corporate environment works in the best interests of all, and a royal commission is a very sensible way of achieving that, of what working through the issues, of having an examination as royal commissions have done in the past, examinations of what are complex and detailed matters and making good structural recommendations for a financial services sector which is strong, profitable, but not based on a poor practice, a poor culture of exploitation of vulnerable Australians.

CASSIDY: With parliament resuming a few issues there but the backpackers tax, are you now comfortable with the rate that they have levied ?

BOWEN: This has been a shemozzle for beginning to end. The Liberal Party is meant to understand business and the National Party is meant to understand regional Australia and they have completely buggered this from the beginning. What I'll be recommending to shadow cabinet and caucus, is that we take our time for proper parliamentary processes to allow consultation. It's clear the Government has done no consultation on the passenger movement charge. We should allow people to have their say. They have got this wrong from the beginning now they expects us to accept that they have got it right now 18 months later. The Government might want this passed this week, but they have taken 18 months to get to this point, so we'll take our time to make sure our response is based on good policy, proper consultation and there should be a process through the Parliament to allow it to occur.

CASSIDY: So again you are letting them squirm a bit rather than come to a decision on your own part. Pretty much the tactic you're taking with the plebiscite.

BOWEN: What we are doing is going through the proper processes. There are a lot of people affected by the backpacker tax and a lot of people in tourism affected by the passenger movement charge. We want to hear from them we want to make sure that the Government which has got this so wrong at every turn, from Joe Hockey to Scott Morrison, right through on this particular matter has got it right this time before we lend our support. We are leaving open our options here for a sensible outcome based on good policy. But you have got two big and important sectors agriculture and tourism very affected by these changes. They should have the chance to go through the normal parliamentary committee process and for us to examine the case on this particular matter.

CASSIDY: This week though, will you take a position one way or another against a plebiscite, for or against a plebiscite ?

BOWEN: This will be discussed by our Caucus on Tuesday. I imagine Bill Shorten will make a recommendation to the Caucus. We have been listening we have been going through it, the reason, there is no secret that we are deeply concerned. The reasons are multiple. Whether it's the cost, which is a concern whether it's the impact on the wellbeing of young Australians in particular, who are same-sex attracted. Whether it is the diversion from what we should be doing, through a referendum recognising our indigenous Australians in the constitution something only a referendum could achieve. There are many reasons why we should be concerned about this. Now Bill has taken the approach that we should take a measured and considered approach to this through consultations with affected people he has met with members with of the gay and lesbian community. He's met with members of the clergy with Archbishop Fisher for example to hear the various arguments. He'll then make a recommendation to the caucus, we'll have a debate and a discussion. It's a big decision and it's right that of we've taken our time to do so.
CASSIDY: Ford has built its last car in Australia. Your colleague Kim Carr said that it's a social and economic catastrophe. You on the other hand in a recent speech warned the country against a return to protectionism. How do those two positions square up? 
BOWEN: Entirely because I've made two speeches. The case for openness and the case for the middle class in which I made the point that we need to ensure an open economy and open borders, that immigration and trade are good for our nation, but that very importantly, fairness cannot be lost and people on middle incomes are feeling squeezed. We've had wages growth at record lows, we've got manufacturing under real pressure and we need to ensure that trickle down economics is rejected and the case for the middle class is really the case for inclusive growth, ensuring that all benefit from the growth, in the regions, in the suburbs, in manufacturing, in tourism and agriculture, not just the big cities. This is the point I'm making. The case for openness cannot be won by spin and by tactics. It must be won by ensuring we've got an economy that is working for all. If you look at people in South Australia, in central Queensland and Tasmania, they have sent clear messages the economy is not working for them and that we need to insure we've got approaches to economic growth which mean that every Australian can contribute, including those working in manufacturing, and every Australian can benefit. Not having it focused on sectors which can be successful, while other section have failed.
CASSIDY: But then, if you're saying we should resist a return to protectionism, that implies you would not have thrown any more money at Ford. 
BOWEN: What it implies Barry and what it says explicitly is I believe in the power of markets but I believe in the power of intervention by governments to ensure that the middle class is growing and strong. That we have proper inclusive growth right across the board. What we had, a situation where Joe Hockey goaded the car manufacturers to leave. Actually stood up in the Parliament and said these guys should leave Australia's shores. The car industry is subsidised in every nation in the world. There's not a nation in the world where the car industry doesn't receive some sort of government support. We can have a legitimate debate about what that support should be and how it should look like. But we had a Government driven by prejudice and ideology which did not want a car industry in Australia.

CASSIDY: You talk about the middle class and you have argued that the middle classes should be driving economic growth, but where in your policies do you allow for that to happen? You're talking about wages and salary earners. Do you need, to bring this about, you need to deliver more spending power to wage and salary earners but where's the policy that supports that?

BOWEN: Well I made the point in the case for the middle class speech Barrie that a lot of the argument goes to redistribution of government policies, but a lot of that should be occurring at the workplace as well. We should be having a proper robust discussion about the status of the median wage in Australia. It's been falling as a percentage of median earnings, made the case strongly that it's middle income earners who would lose out most if penalty rates were abolished with no compensation. These are the debate that we need to have, people lecture hard working people on Saturdays and Sundays, they should be giving up wages and salaries. That's a blow to their spending power, as well as being fundamentally unfair. As I made the point in my speech my Dad was a shift worker. He worked weekends and nights and Christmas Day, he worked very hard but I look at people doing that today, why should they receive less compensation than he did for his hard work? He was a member of the hard working group of the Australian middle class, he benefited from that economic growth at the time but we've got a group in Australia that no longer want that to be the case. Partly it's about government and budget policies and redistribution, it's also partly about ensuring fairness at the workplace as well.

CASSIDY: Doesn't it have to go further than just raising the minimum rage and retaining penalty rates? You have to put real income in the hands of the middle classes. Without tax cuts or an increase in salaries, wage growth has stalled. Nobody is proposing that, nobody is proposing to boost wages and nobody is proposing to give them real income tax cuts.

BOWEN: Barrie, what you need to do is take a holistic approach to the whole issue. Of course. Whether it's supporting the minimum wage and penalty rates, whether it is saying for example that cuts to family tax benefit below $80,000 aren't justified which is the Government's position that they do want to cut those. We say they are not justified. We've supported tax cuts at between $80,000 and $87,000 they are people in that target range. It's about the entire policy settings. Now in these two speeches, and I'll be making more speeches along this theme, these two speeches have laid out, early in the term, the big picture approach that we'll take to economic policy making, which is: supporting openness, supporting freer trade where possible, supporting the benefits of migration for Australia, and ensuring that people in the political class don't lecture hard working Australians about the need for them to tighten their belts and to do more, without taking a strong view towards ensuring that economic growth is inclusive, geographically across our country to sectors that have been struggling and doing it tough. This is debate we need to win. I mean the simplistic approaches that we see from people around the world, and some people in the Australian political debate, that all we need to do is put or more borders, put up more barriers and everything will be OK back to the old days, will not cut the mustard. But at the same token people are hurting, people are doing it tough. Wages growth at record lows, industry is under real pressure and we just simply can't ignore that. The Liberal approach does, the Liberal approach ignores that and just says we want to keep going the way we have been. I'm making the point that we need to ensure that the economic growth is inclusive for all, as well as ensuring that the openness continues. This is in keeping with the Labor approach of the '80s and '90s, opening out the economy ensuring that we are competitive but also investing in things like the social wage, in Medicare, in the aged pension in those days, ensuring that the growth benefited all.

CASSIDY: Alright we are out of time but thanks for your time.

BOWEN: Thanks Barrie.