A (2:49)

And had you, just to give us some context, had you any idea that Bannon was in touch with Clive Palmer or that Ste. If Bannon was at all interested in the 2019 election campaign, which you were.

B (3:00)

Contesting, came right out of the blue. Yeah, I had no idea that our reform agenda had resonated to Bannon.

A (3:10)

It was really extraordinary. Palmer, initially, we should say, came out and said that he'd never spoken to Bannon. So, you know, he had no idea where this had come from and it must be untrue. And then we had Palmer come out a day later and say, oh, actually I do recall that there was a phone call from Steve Bannon, which I got at 3am it was short, and he just basically congratulated me on what a wonderful campaign I was running. And then we hung up. What did you make of that? Clarify.

B (3:38)

Just a footnote, like, you know, Clive would know where every dollar he spends is and he would certainly remember everyone who's ever insulted him. But he was very emphatic. He sent out his media minder to say it was BS and it was not true. That was the Monday or Tuesday position. But within 24 hours, Palmer has miraculously remembered a phone conversation. So, like on the Tuesday, 0, never happened. Nada, nothing to see here. And then by the next day he says, oh, that's right, I did get a call. What I would say to you and to anyone listening is, if you got a 3am phone call from Steve Bannon, would you forget that? Cause apparently poor old Clive forgot it. So that's why I'm really not sure. And there's more questions here than answers that I can see.

A (4:27)

Maybe it just sort of melded into his dreamscape. You know, when things happen to you and you're not sure if they're a dream or if they were real. But I mean, I guess Clive Palmer really contradicted himself, as you say, within the course of 24 hours. And one version was the truth and one version wasn't. Or maybe neither versions were the exact truth. We don't know.

B (4:47)

He did also say in the interview that, no, it wasn't Steve Bannon, but he had a lot to do with Matthias Korman. And Matthias Corman, nicknamed the Muscle from Brussels, came in from Brussels, where he's helping look after the oecd. Or maybe he's in Paris and he said, Palmer's not right. So there's. There's a lot of shaky memory here.

C (5:06)

Well, Palmer's first statement from the media minder, given to the news, given to our newspaper, just omitted the call. I didn't deny that there was any contact. I think it was just along the lines of this is made up, nothing to see here. And then Palmer, when he's speaking at length, perhaps explained what was meant by.

B (5:25)

Necessarily Palmer's first comment was there was no direct communication.

C (5:29)

Was it that direct? The first comment?

B (5:31)

That's what my recollection was.

A (5:32)

His wording was quite careful. He said he'd never spoken to him, I think, and I remember contrast. But that doesn't mean that they haven't communicated with each other.

B (5:39)

Yeah, that's right.

C (5:40)

What do you think the. If there was a more substantial link, let's say that there is more to this than Clive Palmer's letting on the broader context of the communication with Epstein and Bannon. And for listeners, knowledge. Steve Bannon is someone who spends a lot of time in Europe drumming up fundraising and interest in right wing populist movements across Eastern Europe. He's been linked with reform in the UK and he's boasting to Epstein about how he's creating these online communities across the world to kind of create political tension in democracies, to give fuel to right wing populist movements. Was that your sense of looking back, if there was a link between the Palmer campaign and Bannon, was your sense at the time that there was interference, that there were outside forces at play, or is that fanciful?

B (6:29)

I don't want to. I'm very conscious that, you know, the nation's moved on and by 2022, you know, Morrison had run out of any so called miracles. And so that's happened. So I'm not towy about that. At the time, you know, we were advancing a pretty solid tax reform agenda, amongst other things, and a climate agenda. I was aware that there was vested interests who were deeply unhappy, but there were things probably we could have done differently in our campaign. So I don't put it all at Palmer's campaign, but in the last couple of weeks just dumping tens of millions of dollars in advertising. It was a bigger spend than Woolworths and Coles, you know, so it's got to have an impact on perhaps less engaged voters. But the broader picture is I was aware during the campaign that, for instance on some of the anti abortion stuff that there were algorithms pumping out interest in complete misinformation which said that Iron labor was supporting third trimester abortions, which wasn't our policy. But I remember seeing some of those ads pop up and we, you know, I think there were algorithms and I think the alt right were much better organised in the digital world than Labor. I think we were probably naive about the digital campaign and that sub current of sort of right wing populist misinformation.

A (7:54)

Right, so you're talking about sort of bots that will pick up someone's interest via the algorithm on their use of social media and basically spew content at them, which is misinformation or disinformation based on what they think their interests are and thereby sort of skew their vote.

C (8:08)

Yep.

A (8:08)

Yeah.

C (8:09)

And there was the death tax subterranean campaign.

B (8:12)

Yeah. I mean, Palmer's, that China was going to build a secret air base in Australia. Like, you know, that Idea disappeared about 6:01pm on the Saturday night when the polls closed.

A (8:26)

Yeah. And it was also a lot of, as you say, it was a real ad hominem attack on you. I mean, it was really, really personalised attack which you don't often see in sort of mainstream advertising so much. I mean, if, as you say, it was, you know, a few elections ago now, the Australian public made its decision, even the Labor Party review said that it was probably a pivotal factor or it was a factor in the election loss. But it wasn't the only factor. So putting those things to one side, what can we learn from this rather disturbing sort of revelation that this foreign person who, let's face it, he's not what you would call a good faith actor, and he's certainly not an Australian.

B (9:06)

I mean, he's not an Australian citizen and he's boasting about influencing Australian election results. I think the first point I'd make, and it's a broader point than just the 2019 election, but 2019, I think is some proof of it, is that Australians have essentially had a holiday from history, really since the Cold War, and we've tended to believe that our distance, the Pacific, the Indian Ocean, that somehow what goes on in America or happens in other places can't happen here. That is wrong. I know in the last term the government, which I was a member of, did propose electoral forms to stop that American style big billionaires just buying outcomes, you know, under the guise of freedom of speech. I mean, when it's $83 million, no one else, who else can compete with that?

A (9:54)

Yeah.

B (9:55)

To find out that they were working hand in glove with, well, the political parties.

C (9:57)

Can the political parties can compete with 83 million.

B (10:00)

Pardon?

C (10:00)

The major parties can compete with the 83 million.

B (10:03)

No. Well, that's right when you added their 83 on top of the liberal spin for Morrison. I suppose, you know, I've got a sense of humour about it all now. I must have really upset some people to spend that much money to want to stop us. But you know, the truth eventually comes out in these things. But the bigger point is that we're not immune to what happens in America. We think it doesn't happen here, it does.

A (10:26)

Well, what kinds of things are you talking about? You're talking about the take for instance.

B (10:29)

Policy, like the big tech bros. You know, the fact is that the Esafety Commission has been so personally attacked by Elon Musk related interests, you look at the way that big tech companies really don't see themselves as bound by sovereign laws. That's business, they would say. But it's still undermining our system. You have a look at some of the Americans coming out to visit Peter Dutton's campaign, which was just a matter of record. So I think that when we talk about elections, whilst we've got some safeguards in place, I do think that we need to be a lot better at funding our efforts to tackle misinformation and disinformation through the Internet.

C (11:11)

I think it's just worth noting on the Epstein files, just given the level of secrecy and intrigue around the whole story. It's easy to quickly believe the conspiratorial element to what we learn about or what we've seen in some of these texts. It could be the case that Bannon had very limited contact with Palmer, wanted to boost his influence to Epstein and claim that he was having this role in intriguing election results and that there's not much in this. I mean, he does have a very regular podcast. Steve Bannon, he's not shy in coming forwards about his role in populist movements in Europe. He does now have the ability to refute Palmer's claim and say, I actually had a significant role in that election and he hasn't done that yet. So this could be nothing or it could be something.

A (11:54)

I don't think it's nothing. I mean, why would Epstein have rigged this obscure thing to write to Epstein, who presumably doesn't know a lot about Clive Palmer?

C (12:04)

Because there was a list of the facts.

B (12:06)

We do know Palmer spent $83 million, much of it in the last two weeks. That had an impact. There's no doubt that Palmer and the Liberals were talking a lot there's no doubt now that Palmer and Bannon had at least one conversation, which Palmer has now recollected. And there's no doubt that Bannon boasted to Epstein. We don't know if Bannon was just being a sort of foghorn Leghorn conservative, taking credit for everything from Kazakhstan to, you know, the polling boobs in Western Sydney, but they are facts. And so let's reduce it to what I think is the factual issue. Bannon says to Epstein, I'm the man I help with these ads. Palmer says, no, I and Matthias are the men he didn't help. I don't know. But it does highlight our vulnerability to big money and, you know, vested interests overseas.

C (13:00)

Yeah, totally. I mean, the texts were sent days after the result where there was this incredible upset win. A left wing Australian leader has been beaten by a Conservative with the help of this really interesting kind of subterranean online campaign. So Bannon might be just trying to shoehorn himself into something.

B (13:16)

At times, Leghorn is a legitimate explanation, but I'd like to hear what Bannon has to say because he's been caught out as just an empty vessel, being a blowhard, boasting to mates on emails or. That's close.

C (13:28)

Oh, there's more to it. We need to hear from Bannon.

A (13:30)

It's extraordinary. The whole story is extraordinary, but I don't. I think we've always got to remember that there are.

B (13:35)

There's victims in all these shock systems.

A (13:38)

Young women and girls who were the victims at the heart of this. And there have been no consequences for any of the alleged perpetrators.

B (13:46)

It's a shocking. I mean, the election is of interest to us, but the reason why it's a story is because of Epstein's gross and grotesque and illegal behaviour.

A (13:56)

Yeah, yeah. Which apparently has been completely sort of normalised amongst the powerful men among who he moves. Now, I just want to get back to Australian politics because. And back to the 2019 election where you advanced a very, what should we say, audacious, brave economic agenda and tax reform agenda, which was obviously roundly rejected by voters.

B (14:18)

Well, actually, 48 and a half to 51 and a half.

A (14:22)

OK, alright. No, that's good.

B (14:24)

It's good to roundly reject is what Dutton got.

A (14:29)

You just couldn't resist that, could you? But I'm glad you corrected me on the facts. It wasn't roundly rejected, but it was rejected by voters. And now we have reports and rumblings that Jim Chalmers, in the lead up to the May budget, might be looking at one of those reforms again, which of course, is the capital gains tax discount. Basically, you get a 50% discount on any capital gains tax due if you've held an asset for more than 12 months and you're an Australian citizen. So it's a very, very broad exemption or discount to the tax. So you couldn't get it up in 2019. If Jim Chalmers instituted it or tried to get it through in this year's budget, do you think it would get up this time? Have things changed?

B (15:07)

Well, what my policy was based on, I don't know what Jim and Alba will do in the budget, but what my policy was based on was this assumption that in Australia, income is taxed too heavily. A property is taxed too lightly. We've got a situation where a plumber or a teacher or a nurse or a journalist or anyone you know, you pay the increasing marginal rates of tax, which can go up to 45 cents if you earn over 200k. But you could buy a building for 5 million, it is worth 10 million when you sell it and you only pay tax, you'll only pay 25% tax on the profit, essentially. So you can make 5 million and only pay 25% tax. But you could be a nurse working night shift in charge of a ward, you could be an air traffic controller, you're at the top marginal rate, you're paying 45 cents on far smaller incomes. So we have a system in Australia where it favors the acquisition of property and punishes just working hard, which is what 13.5 billion people do. They go to work every day. So that's the underpinning assumption that property shouldn't be taxed so preferentially and income is taxed too heavily. Now, how Jim and Anthony and the rest of them cut the pie, I don't know, but it's a fair argument to make. And I think that, you know, of course, you know, the universe doesn't grant reruns, but I might have thought occasionally how I'd re pitch the 2019 policy. And beyond the assumption to 13 and a half million income earners, you have to pay your 10% GST. You've got to pay your marginal rate of tax. If you're a student, you've got to pay your hecs. You know, really the dice is stacked against younger generations and people who just have an income to rely on, not as not revenue from property.

A (17:00)

So do you, I mean, just going back to the question, do you think then that it's sort of the circumstances have changed and I'm talking particularly about that issue of intergenerational equity and the feeling that a lot of people have that their children are not going to have the same benefits and the same playing field that they had basically when they were coming up. And the big, big problem of the housing crisis or the housing affordability crisis. Do you think in the current sort of circumstances it'll be easier to sell?

B (17:27)

I think so, yes. I mean, it depends what the policy is. It depends how good the sales job is. I get all of that. But like the demographics have changed in the electorate. By the time we get to the next election it'll be in the best part of nine years, since 2019. That's millions of new voters on the rolls, millions of new voters on the roll. Many of them are young who don't have that property. There's some sort of natural attrition. So I think the demographics have changed. But even more than the demographics, the reality is that maybe we needed to recalibrate our negative gearing policy and so everyone could have a property they could negatively gear. But how is it fair that a young couple maybe holding down two jobs, competing to buy a house with someone who's. This is their fifth investment property and they're getting a taxpayer subsidy. So it's a bit like in a height competition, the investor gets a stool to stand on, which is called taxpayer subsidy, which lets them compete against poor old, you know, Tim and Fiona are out in the outer burbs who are holding down two jobs and just want to get their first house.

A (18:30)

Yeah, it's certainly some of those things, it would seem to me, would be more easily argued in the current situation. Paul, I want to ask you, what do you think? I mean, if Jim Chalmers was to come up with some sort of tweak, particularly to the CGT discount, would the Liberals slash nationals? And who knows whether they'll be together or apart by then? Would they actually be able to mount an effective argument against it?

C (18:55)

Well, this came up in the early part of the Dutton opposition. There was a group of backbenchers led by Keith Wallahan who lost his seat in the eastern suburbs of Melbourne. The seat of Menzies used to be a very safe Liberal seat. And this group of younger Liberal backbenchers were keen for the Liberal Party to break from their tradition on protecting the property own class and to do a kind of radical policy push that would align the Liberal Party with the group of Australians who want to break into the housing market. And Dutton became aware of this push and him and his people, including Michael Sukar, who was the Housing spokesperson at the time who's part of an older generation of Liberal Conservatives, said, guys, we're not going anywhere near this. We're in opposition. We're not going to take risk on our policy set and we're not going near property tax breaks. So the Liberal Party, I imagine, because it's in the weak position that it's in, will take a reflexive opposition to any change to the property tax settings and they'll see this as a new policy debate that will, you know, allow the Liberal Party to cleave back to its natural home protecting the asset class. And it would be a big economic fight for Susan Lee to take on. Probably short sighted because they do actually need to talk to those voters. But I think it is short sighted.

B (20:08)

Because the greatest predictor of what is a Liberal voter now is if you were born before 1965, if you're Anglo, Australian, like that's an okay cohort. And lots of my, I know lots of people in that cohort, but that's not enough.

A (20:23)

All my best friends are in that cohort.

B (20:24)

Yeah, but it's not enough people to win an election.

A (20:28)

No. And it's certainly not enough people to kind of form a broad coalition in the small C sense of like, you know, there are many, many cohorts within Australia that we will fight for.

C (20:38)

Bill, your mentor, one of your mentors, Bill Kelty, has said since 2019 that one of the key lessons was if you do tweak the tax breaks, it makes sense to offset what you're effectively taking from the community with income tax cuts. And that's a kind of grand bargain you can do.

B (20:55)

If you're going to go down the path of tackling property tax reform, property capital taxes, you should hand back that in income tax cuts. Otherwise it just looks like a money grab.

C (21:08)

And they could do that by expanding the small tax cut. They.

B (21:13)

But just if I had my time again in 2019, one thing I would do other than watch Clive Palmer carefully is any of the money we were taking out of reforming capital gains discount reforming some of the other taxes is handed back in income tax cuts. But anyway, that's advice from the lofty heights of academia. My former colleagues no doubt will have, you know, they'll take their own catches.

C (21:38)

Well, how do you think that the PM would be thinking about this change politically? I mean, he's totally ascendant Liberal Party just blowing itself up. But he did have a difficult summer and it proved that he can get into a poor polling situation more quickly than he would have realised. Perhaps after that big win. How do you think he'd be calculating the risk of going down this path?

B (22:00)

I don't know if they're considering it.

C (22:01)

You know, I know that they are, so I'll take it.

B (22:04)

Ok. Ok. Well, you'd be looking at all the pros and cons. You'd be weighing up the national interest, you'd be weighing up the impact on productivity. You'd be weighing up what makes a fairer system for people to work harder. I mean, that would be the test. You'd apply what incentive in anything you do, and it's got to be part of a big strategy is productivity. How do you reward people for working harder in Australia? See, buying more houses isn't working harder. That's just using money to make more money. That's legitimate. What you want to do is tell your nurses on the night shift, tell your team leaders, you know, in businesses, your foreman supervisors at warehouses, tell your tradies, you work harder, you're going to keep more of what you earn.

A (22:49)

It seems to me they're going to have to have some sort of budget trimming sort of policies as well because otherwise they won't be able to pay for it.

B (22:55)

Well, the big issue is. The big issue is inflation.

A (22:57)

So they're going to have. That's right. So they're going to have to cut as well. But that's maybe a discussion for another podcast. Do you think in terms of the ructions within the Liberal National Non coalition at this moment of recording, do you think that we're looking at a historic rearrangement of, you know, the right wing of Australian politics? Can the Liberals fight their way out of this? I just want to go to you both really quickly on that.

C (23:21)

Well, in terms of if they do split in a long term sense, you know, there are people in the Liberal Party worried about a 1950s labor style moment where the centre right fractures for a longer period of time and that entrenches labor dominance? I suspect that. I suspect the coalition will not be apart for that long. I don't think it will be patched up this week. I mean, the absurdity of the back and forth between Susan Lee and David Littleproud is slightly nauseating and the squabbling over process and party procedure is really difficult to follow. But there's a personality dispute at the heart of it between the two leaders. They don't get along and they both box themselves in and would struggle to reconcile because that will diminish their authority. So won't be. They won't get back together in the next few weeks, I don't think, but I suspect they'll patch it up before the next election. But if it is a longer term split bill and given what one nation's doing at the moment, how do you see the Centre riot faring for the next period?

B (24:15)

Well, the right of Australian politics have split in the past. Menzies only founded the Liberal party just over 80 years ago. It's Don Chipp and some of the Liberals split in the 70s. Political parties do split, that's the first thing. So it's not unknown. The second thing is underestimate Pauline Hanson and Barnaby Joyce at your peril.

A (24:36)

Ok.

B (24:37)

They are saying things which a lot of people just agree with, like, like it or not, that's just what it is. And they have a sense also that these two are not going to change their convictions to suit a particular issue. So, you know, I talk to old members of my union who I used to organise in the bush. They've always voted labor, but they're thinking about other things. You know, whether or not that's wise, that's up to them.

A (25:02)

So what do they say is the appeal of one nation, if they're interested in one nation?

B (25:05)

Oh, I think they just think that Hanson calls us as it is. Now. The thing is, saying everything that you think in your head aloud isn't necessarily what people do. And there's a good reason why we don't, because you don't think about it. But without getting into who's right, who's wrong, she has some appeal. So I think the coalition need to be careful of that. You know, I'm not going to predict the demise of the Liberal Party or the National Party, but I would say this is a serious issue. This is, it's, you know, if it goes one way, it's a sort of like extinct planet extinction level event for the coalition. So they need, they're going to need to get their act together quickly, I would have thought. But the real challenge, I think for labor is that with the coalition being, you know, at sixes and sevens, we've got to be careful that a good government needs a strong opposition. And one of the anxieties I feel for some of my colleagues is that what if the Liberal vote falls, that they no longer come second in some of our safer seats and there's a sort of militia of third parties come together. So, you know, I think it's what Australians want is stability and focus on cost of living. Coalition disunity may be good for some memes and there were some pretty good one liners in Parliament. But when you've got cost of living interest rates, I think a strong opposition is necessary for a strong government.

A (26:23)

Yeah, that's a very good point. And it's interesting to note as well that there are perhaps hidden dangers for labor at a time when they really seem like they're sort of untouchable. And Albanese seems like the luckiest man in Parliament. Guys, that's been so fascinating. Bill, we love having you on. We hope you'll come on again soon. And thanks a lot, Paul. And we'll talk to you soon. Soon, Bill.

B (26:43)

See you guys sooner and out. Bye.

A (26:49)

You can read all of our political news on our websites, theage.com au or smh.com au Today's episode was produced by Chee Wong with help from Debbie Harrington. Our executive producer is Tammy Mills. And our podcasts are overseen by Lisa Muxworthy and Tom McKendrick. Before you go, please follow Inside Politics and leave a review for us on Apple or Spotify. Hello, I'm Jacqueline Maley. Thank you for listening.