Is 'fear' behind Labor's super-sized backdown?

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Today the Australian people have voted for Australian values.

Government is always formed in the sensible centre, but our Liberal Party reflects a range of views.

Politics is the brutal game of arithmetic, but no one's going to vote for you who don't stand for something.

We've always been about the planet, but we've got to make sure that people have their daily needs met.

People are starting to see that there is actually a different way of doing politics.

Welcome to the party room.

I'm Brett Worthington joining you from Ngunnawal Country here in Canberra and filling in for PK for one final time before she comes back from her leave.

And I'm Mel Clark also on Ngunnawal Country here in Canberra.

I'm still in the chair for Fran Kelly for a little bit longer.

I'm excited for PK's return, but Brett, I'm going to miss you on the podcast.

Hey, this has been a real treat to get to spend some time with you and here, Mel.

We are rearranging things.

We're getting it back the way PK likes it.

Her seat will be warm for her return, but very happy to see her back in the hot seat from Monday.

And look, hasn't she got plenty to sink her teeth into?

Because overshadowing this week or really dominating this week has been international events.

Obviously, the ceasefire that's now underway and sort of tenuously on hold

between Israel and Hamas has been one of the biggest moments in history in recent years.

And that is overlaying everything.

But back here in Australia, in the domestic political realm, we've actually had some really big news to deal with while this bigger international picture has been playing out.

So we've had a very big backdown from the Treasurer just a minor tweak.

Just a minor tweak.

A minor tweak or incredible capitulation, depending on how you want to characterise it.

So this is the big policy that they've been pushing for more than two years that they put to an election and got a big election victory for, but have now backed down on this idea of how they would go about reducing tax concessions on superannuation accounts over $3 million.

And we've still got more unfolding with the Liberal Party on their introspection.

I think we're getting a bit of a change in tenor in the debate that's going on, but certainly not a reduction in the volume of discussion that is going on.

I think that's fair to say, Brett.

Well, the Prime Minister might have been having a week off, but those back here certainly weren't.

Chief among them who's been keeping an eye on it is Phil Koori from the Australian Financial Review.

Phil, welcome back to the party.

Thanks for having us, Brett.

Mel.

Did you have a bit of a surprise on Monday morning when you walked into that press conference room and found out what the Treasurer was announcing?

I wasn't surprised at what he announced.

I was surprised it was they were doing it this quickly.

We knew they were going to be backing down on this.

We'd been writing it at our

Augusta journal for the last few months that the Prime Minister had stepped in and they were reconsidering it, but I was

caught out by the timing of it, yes.

We do need to point out the timing was Monday as the ceasefire was beginning.

It was also the first day of the Prime Minister's week of leave

and that was the day at which Jim Chalmers had to stand up and announce the change to the policy that he had been vociferous in advocating for quite some period of time.

There are six main changes to the proposal that we put forward a couple of years ago.

We have worked through the issues and we've found another way to deliver on the same objectives.

This means

ate the proverbial sandwich and I guess credit to him for standing there and taking the licks and rocking up the next day and taking them again.

But if we look into why this policy was reversed, driven over, backflip, torn up, whatever you want to call it, what was the underlying issue there, Phil?

Political fear,

one that was harboured by the Prime Minister.

I mean, the irony of what they did, just for the benefit of the listeners, is that, look, as early into their last term, they announced this plan to impose this extra earnings tax on high-value superannuation

accounts.

So the earnings on an account from the portion of an account over $3 million would have been taxed at an extra 15%.

And it was a big election promise breach when they did it because the Prime Minister had said we'd never touch super.

But it was more, the problem was they were going to tax both realised gains and unrealised gains.

Now, this thing just fested away for most of last term.

It had no love in the Senate, so they couldn't get it through.

The only party that was going to pass it was the Greens, but David Pocock and Jackie Lambie and everyone else didn't want a bar of it, A, because the taxing of unrealised gains and A, because the 3 million threshold wouldn't be indexed.

So it was sort of just left on the books as a zombie measure, as we call it.

Paradoxically, if you like, what happened, the election came and the Senate changed and suddenly all the government needed to pass anything was the Greens.

So this thing became,

changed from becoming a wish to a reality.

And it was only then the government realised...

be careful what you wish for.

Albanese didn't really want to do it because all these people were getting into his ear about the political dangers of taxing unrealised gains.

These are pay-per-profits, right?

And chief amongst them was Paul Keating.

He was really, really hot to trot and he worked over Albanese and Chalmers pretty hard.

Yeah, I don't pretend that Paul didn't have strong views and I, as someone who respects Paul Keating a great deal and speaks to him regularly,

I take his feedback and his views very seriously.

Of course I do, given his seminal role in compulsory superannuation.

And I've been speaking speaking to him for a really long time, not just about this, but a whole range of policy issues, including last week as I finalised this package to take to the Expenditure Review Committee.

I probably spoke to him half a dozen times in the second half of last week alone.

And Albanese came to the view that if they did do this, then there would be this scare campaign from the Liberals and others that

the next thing they'd be coming after would be like the family home and the pensions assets test, you know, and all another sort of unrealised games.

The farm tax becomes the house tax.

Yeah, and memories were still raw of the 2019 campaign and the franking credits thing became an attack on all retirees.

So he basically told Jim around June, as I understand, mate, you're going to have to rework the policy.

We're not doing unrealised gains, which obviously costs a lot in terms of the revenue they hope to raise from it.

And so

there was all form of disingenuous denial and claim from the government over the last few months as the policy still stands, we're not changing our policy, but we knew they were.

We receive briefings on policy all the time, as you expect the Prime Minister's office to do.

That's what we do.

There's nothing unusual about that.

That's what occurs right across the full sweep of policy issues.

Our policy is as it stands.

That's a classic of the genre, isn't it, Phil?

That the policy is not changing until the moment that it does.

Do you think there's a

way this could have been handled better by the federal government?

Yeah, they shouldn't have done it in the first place.

It was bad policy.

I mean, we hear hear this stuff, Mel, about, oh, this doesn't auger well for tax reform, you know, if they're going to sort of, you know, balk at something so small as this.

But the point is,

you know, I've been around a while.

I remember when they did the GST, that was tough.

But there was a strong argument for a GST.

And, you know, and Costello and Howard just sort of, you know,

stuck to their guns and it was tough and it was hard and they did it.

In this case, no one thought taxing unrealised gains was a good idea.

No one, including people on the Labor side and people who had no political acts to grind.

So whether it was Keating or Bill Keldy or Allegra Spender or former Reserve Bank Governor Philip Lowe or former Treasury Secretary Ken Henry, I mean, it was unanimous.

This is dumb policy.

It's bad policy.

And, you know, if Peter Costello would tell you, you know,

he's surprised Treasury even bowled it up in the first place.

He's got a fairly dim view of the quality of Treasury these days.

Well, this is a key question, I think, because, I I mean, the government is trying to justify it by saying, look, we've listened, we've taken on board feedback, we've responded, which they certainly have.

But they had already been through a policy formulation process, two years of not taking on board feedback and insisting it was fine.

So why did it take so long for the alarm bells to?

Because the reality of that they could actually pass it.

It was the changing of the Senate.

Suddenly, actually, we might have to do this now.

And then,

you know, people who were opposed to it got really opposed to it after the election because when it became,

a sure thing they could get it through, that's when Keating,

like Keating, for example, you know, really stepped it up after the election.

I mean,

his representations to Albanese.

And that's powerful within the Labour Party.

Yeah, listen to the guy.

I mean, he's the godfather of superannuation.

You know, he obviously wants to protect his legacy, and that's his policy.

It seems also that he has a greater respect for Jim Chalmers in the way in which he deals with you.

He and Chalmers are in regular contact.

Chalmers literally wrote his PhD on him, but it seems that when Paul Keating talks about Anthony Albanese, there's maybe a bit more sting in the tail.

I think a little bit.

I mean, I think he worked them both over, but he did what he had to do, because if you remember, Keating was quite vocal a couple of times on this, and then he went really quiet.

And he went really quiet because his belief was that if I go public, I'm going to...

Yeah, he said my mission here is to get this thing changed and that's not going to be helped by

going public.

So

he sort of worked this through.

I mean, Chalmers was given the responsibility for the redesign.

What is interesting to me, though, in talking about Keating is Hawke Keating, Howard Costello are now Albanese Chalmers.

We're kind of looking at these tensions that exist between a Prime Minister and Treasurer.

There is nothing new about that.

And in some ways, that competitive tension and edge can drive better outcomes for a government of the day.

But where do you assess the tension or the relationship between the current incumbents in both those offices with their predecessors?

It's a really good question.

If you go back to Howard and Costello, they were both pro-reform.

They were both economically literate.

Costello was a tax lawyer before he he came into parliament, Howard was a former treasurer under Fraser, and they were both gung-ho for reform.

So

if you look at

the tension between them was all about the leadership.

If you look at Hawke and Keating,

again, they were both sort of pro-reform, but Keating was, you know, Hawke was prepared to let Keating do what he needed to do.

So they were like-minded, but Hawke sort of sat back a bit and let Keating run policy.

But there was a leadership tension there.

With these two, Albanese and Chalmers, it's a little bit different again.

There's a frisson at best, I would say, when it comes to leadership.

But I think Jim certainly knows, you know, after that last election victory, he had to sort of put it in.

Do you think that does change it?

Because

before the election, there was a sense of Anthony Albanese might look to move on in a second term, but now with a whopping majority and there are very few signals coming from Anthony Albanese that he's going anywhere anytime soon, and that means aspirants will have to take note of him.

Are we overemphasising this latest policy issue, though, when you consider we have previously previously seen Jim Chalmers win the argument in cabinet on reforming stage three tax cuts which Albanese didn't want to do and Jim Chalmers won that internal debate so has something changed?

Yeah look I think compared to the other two relationships we're talking about these two get on better personally.

I think what people pointed out, I wrote a piece on this during the week, that neither of them are particularly economically savvy, right?

So Albanese doesn't pretend to be an economic genius and Chalmers doesn't have an economic pedigree of any sort.

He did an arts degree at university.

And so I think that's where their critics say neither of them are really, you know, so it's a bit of, they both sort of feel their way a bit and could be easily led by treasuries.

But you're right, Mel.

I mean, the big thing they did last term was to break that promise on stage three, but that turned out to be a masterstroke.

Not only because it, and that was Chalmers pushed for that,

because it tipped all this money down the chain to low and middle income earners.

And that was a real circuit breaker for them after the voice.

But yeah, we've seen it early in this term.

Like

they had that economic round table straight after the election and you could just tell the PM wasn't enthusiastic about it.

And when it got carried, remember the week before there was headlines about the GST and trusts and all that.

And Albo's going, hold on, hold on.

We didn't take any of this to the election.

And he really, and he had to go to the city of the city.

He did, very much.

And the agenda suddenly became everything and anything.

And Anthony Albanese was very quick to say, no, no, no, we're the cabinet, we make decisions.

So, you know,

to Brett's point, there's a competitive tension, and that's not a bad thing.

I think it was Chris Richardson who said to me, he said, if you don't have a treasurer pulling against your leader, you end up with Victoria.

So if we look at the politics of this, there was a bit of savvy salesmanship in this in that they get rid of the two heavily contentious, controversial bits of getting rid of the unrealised gains element and also then indexing it so that figure will increase over time.

But also then as a way to, you know, maybe win over the greens, say we're going to tax those with 10 million plus at a higher rate than originally thought and offer a bit to the low-income earners as well that I think over the course of a career would see about $15,000 extra in that person's retiring superannuation balance.

So the general sense you get today of it is if you had an amenable Greens previously, you're probably very much there with them in this case.

And Jim Chalmers made a point of calling Larissa Waters before he announced this.

True.

Again, the irony, Britt, is that the Greens wanted to pass the old one because they think this one's too weak.

Like Nick McKim, the Treasury spokesperson, came out on Monday and said this is a capitulation to the mega wealthy because they want to tax unrealised gains.

They want to go after people who put farms and businesses and

art collections and everything else in self-managed super funds.

They don't.

The point here being, the allegation is people are abusing concessional tax rates that are used and on offer for superannuation.

That means you are not making a contribution to the

coffers.

In some cases, yes, you know, people put vast property portfolios in their SMSFs, but there's not a lot of them.

It's commonly used for sort of generational transfer of assets like small businesses and farms.

I think it's worth just a little bit of time on Jim Chalmers pointing to what the objective is.

And he's trying to sell the reshaping of this policy.

You said, look, we're still trying to achieve our objective, which is an equity one, which is to make sure that people aren't using super as a tax avoidance scheme.

And the cap on 10 million in particular is designed to do that because it just financially doesn't make sense to have an asset, have assets worth more than 10 million now in your super because it'd be taxed at 40%.

You could get less tax on that if you had it in a standard trust fund or other investment investment vehicle.

So there is a line drawn in the sand there.

I found it very interesting hearing from the Nationals leader David Littleproud on this this week because he was in discussing this saying he has a problem with the fact that so many superannuation accounts still have 80% of their balance left in them when people die and that's a problem because super is meant to be about funding your retirement, it's not meant to be an investment vehicle.

And that's exactly the argument Labor is trying to make.

So I think there is a broader consensus in politics that super and investment are meant to be slightly different things, but getting agreement on how to do that isn't necessarily easy.

But that might be what brings the coalition on board now that unrealised gains

has been taken off the table.

Maybe you're right.

You're right about the 40% on earnings over 10 million effectively acts as a cap because

you'd be paying less taxes.

It doesn't make sense to have that.

Yeah, 10 million is plenty in your super.

But I struggle with this argument about somehow in retirement you've got to delineate between what what you can retire and on your investment as if you know some millennial accountant in a think tank tells you you can dictate everyone how much they need.

Again, if you go to Keating,

Keating designed this super scheme not as a pension scheme.

If you go back, the pension was there for people who couldn't afford to fund their own retirement.

And this super scheme is to get people off the pension.

And it's not meant to be like a pension type scheme.

It's meant to have a comfortable retirement.

So Paul says,

if you're retired and you and the missus want to go to London for the kids' wedding, you should be able to afford to do that.

Or you want to buy a brand new car before you die, you should be able to do that.

It shouldn't be about being poor and eating dog food.

Look, every four years governments want to meddle with your super, so I'm sure we'll be back here in four years' time.

Well, you get a sense that even if the coalition doesn't support this, given it will bring in money, it's not as much as the government might have previously said, when you've got a structural deficit that you're trying to work with, you imagine they might have a change of heart the other side of an election.

But I want to focus out on the other side.

They won't rescind it.

They won't vote for it, but they won't rescind it.

Exactly, exactly.

Let's focus in on the Liberal Party, and I think your turner phrase you used just then about a think think tank is the perfect segue there, Phil, because James Patterson reminding his colleagues this week, we are not a think tank, we are not an activist group, we are a political party designed to win government, and the apology tour is over.

The mass therapy, forget about it, come back to core business.

keep our fusion of a conservative and a moderate wing of the Liberal Party and from there build an attack on those that are currently sitting on the government benches.

What did you make of his intervention?

And I think I'm in the vast majority of you here.

It was an excellent speech.

It was an excellent political speech.

One of the easiest things to do in politics is to grizzle and gripe and identify the problem.

The most difficult thing is to identify a way through it.

And what Patterson managed to do...

And if you read the speech, it's compelling.

There's not a wasted line in it.

He identifies the dilemma and the problem of the Liberal Party.

He does it without blaming anyone,

either faction or any individual or

any former leader or current leader.

He says, this is just our lot.

But then he also charts a way out of it.

And yet, despite the economic and political success of Australian liberalism, there are some marginal voices arguing that the Liberal Party should split.

They argue that the differences between people who call themselves Conservatives and Liberals today are unbridgeable and we should go our separate ways.

Our task is to make sure those voices remain marginal.

And he does it in an intellectual way.

There's no polemic in there.

There's no spin.

There's no lies.

He's a very candid person, James Patterson.

People are really starting to notice him.

When he talks, he talks openly.

I'm glad you mentioned this because I think it's something we've actually observed in our office a little bit in that often when you're interviewing politicians and you just get hit with that wall of pre-prepared responses.

He actually genuinely engages with the question you ask.

Yes.

And he speaks honestly.

He's a real rising star around the place and both sides.

Everyone holds him in sort of fairly serious regard so it was a good speech I thought Brad it would you know it was about

trying to sort of tie everything together and then navigate a way through but it was also it comes after you know Susan Lee gave a very important speech last month to CEDA on economic principles about the Liberal Party's got to be getting back you know the country has to get back to living within its means you know we've got this post-pandemic mentality of you know everyone should get free stuff from the government regardless of your income

there was just then last week Paul Scar gave a very considered speech on immigration, again pushing back at the Andrew Hastie view of things.

And then Ted O'Brien, the shadow treasurer, did an op-ed earlier in the week or late last week about the Liberal Party has to get back to being the party of low taxes and lower deficits or smaller deficits.

So it's all this philosophical positioning that's going on, which is what you need to do, right, if you're going to rebuild.

It's not, I hear like radio presenters and

Sky After Dark people and other critics saying, where's your policy, where's your policy?

They can announce the biggest policy in the world now and it would be completely forgotten about by election time.

They're in such a bad state, the Liberal Party, they have to sort of rebuild around base principles.

And what Paterson did this week, I think, was a really big contributor to that, building on from these other speeches.

And that's where they need to be at this space.

Because

I've made the...

I've made the observation, as have many others, they're at an existential moment, the Liberal Party, and they've got to come back from that.

I I think the other thing that's been really notable with this speech is that there has been a lot of coalescing around its message.

And I think we've seen a lot of hatchwork messaging before now, but

this does seem to be now a nexus of Liberal MPs saying, all right,

we're ready to move to the next stage, which is stop the apology tour, which is, yes, we're committed to our fundamental principles of smaller government, market-driven outcomes.

Now we need to move on to the next stage.

I think there does still seem to be a willingness to give Susan Lee time for the processes she's set in force to play out, but there does seem to be a desire to move on to the next stage, whatever it is that that might look like.

But the question, but I do want to tease out a bit more, Phil, of James Patterson was sort of alluding to forces outside of the party that were advocating for a split.

Yeah, so let's talk about this.

There's a Sky After Dark.

There's also movements like Advance.

There's certainly plenty of chatter about, well, what about the role that Tony Abbott is a big figure in the party, though not the parliamentary party, what role is he playing in trying to encourage this along?

I'm keen to hear your thoughts on that, Phil.

Yeah, look,

it's not coming from just outside the party.

There are genuine discussions inside the party, too, about whether the policy differences between the left and right flanks are actually solvable, climate change being the main.

They still haven't had the sort of come to Jesus moment yet on net zero, which we know is going to be difficult.

And

when the Nationals split from the Liberals straight after the election for all of two days or whatever it was,

there were libs, and there's still libs today saying maybe they should have stayed apart a bit longer so each could find their own way again.

You go back to the 1970s when the Liberals in South Australia split, when the moderates split from the Conservatives under Steele Hall, and because they just couldn't reconcile on things, there was a civil war.

So it has happened before in the Liberal Party.

And

some people said maybe the moderate Liberals could side with the Teals and form a new progressive,

socially progressive, economically conservative movement.

It's all interesting, but I think what Patterson was saying is, no,

that's the road to nowhere.

There is a way through this.

And I think if you need only look to the reshuffle that was also announced under the cover of government doing a super backed out, under the cover of the hostage release, as you're saying, Mel, and a Prime Minister away, the challenge that currently sits before Susan Lee is she works out what her front bench is going to look like.

So, you've seen big departures because either by choice or by being forced out in Andrew Hasty and Senator Cinta Numpa Kimpa Price.

But on Tuesday, the shadow treasurer was telling RN Breakfast that they are spoiled for choice, that

everyone could have a portfolio.

I'm not sure if that's how the week has necessarily played out, Mel.

So, to run through it, we now have Jon O'Duniam, the Tasmanian MP, has been put into the Shadow Home Affairs role.

So that's a very senior role, very prominent role.

We've had Julian Lisa moved from the Attorney General portfolio.

Big eyebrow raising.

Yeah, this was really curious into education.

We've had Andrew Wallace come from the back benches straight in as Shadow Attorney General.

I think they're really curious moves.

I think John O'Duniam is someone who is a prominent Conservative and presumably Susan Lee needed to make sure the Conservatives still had

enough senior roles within the front bench to make sure that there wasn't further frustration.

He's someone who has shown he can mount arguments, perform well in public, and in media interviews.

That appointment makes sense.

And being described by some as Erika Betts in Prince Charming's clothing.

And so

there is a perception out there that Jonathan Dunaham would be a moderate because, based off what you see in terms of his physical appearance and the way in which he carries on, he is a member of the Conservative part of the Liberal Party.

He's a very Conservative Party.

And he will absolutely take up some of those battles that other Conservative leaders have taken in this portfolio.

The move to shift Julian Lisa out of the Shadow Attorney General portfolio is an unexpected one.

And to put Andrew Wallace in, who in his first interview with Radio National Breakfast this morning was, I think we can fairly describe it as a train wreck.

He came to talk about the media event that the opposition had created in Victoria, to talk about crime in Victoria, which is a very serious issue, which is one that should be an area where, state or federally, you should be able to land some blows on the Victorian Labor government because it is a serious issue of which they seem to be struggling to get under control.

Yet what we had from Andrew Wallace was no ability to talk about how a federal government may relevantly engage on a local crime basis when most of the laws are state-based.

So what's your policy?

What would you do?

Because these sound like state issues from what you're saying.

Well, it's very easy to say that, Sally, but where you have people who are victims of crime, and they are Australians, and where we see faults and flaws that are as significant as what we're seeing in Victoria, it's important that we call them out.

Go back to my question, apart from calling it out, what's your policy right now on youth crime in Victoria?

Well, Sally, we're not the government in Victoria.

The government didn't appear to have an understanding of

the Victorian system.

He talked a lot about wanting to focus on PCYCs, which aren't really...

It's a group that connects the police with young members of whoever they're much more popular, I think, in Queensland and New South Wales to an extent.

But as someone born and bred in Victoria, certainly not a Victorian thing.

And noticeably, no many federal or any federal Victorians at that presentation.

Well, that was the other curious thing when there are plenty of prominent Victorian frontbenchers for the opposition.

Obviously, we had James Patterson, who was in New South Wales, giving a speech, but there are other Victorian MPs who might have

taken part and might have been able to give a bit more local knowledge to say, why are you focusing on something that's a Queensland and New South Wales thing but isn't a Victorian thing?

And very much got caught up in this space of...

I think the federal government should be able to inject on local crime issues, but I can't explain how that is because we only have control over federal laws as federal MPs and really got himself a tied up, didn't he, Phil?

Yeah, look,

unnecessarily.

So Sally Sarah was just asking some pretty basic questions.

Law and order is a state issue.

Why are you there?

There's a simple answer for it.

As John Winston Howard used to say, people don't care who fixes the problem as long as it's fixed.

People are getting their cars nicked and their garage doors and their homes invaded

couldn't give a toss about the delineation of powers between the state and the Commonwealth.

They're just sick of it.

And if they feel the state isn't doing a good job and clearly they're not doing a good job down there, this has been been a problem in Victoria for a long, long time and is now really a big problem.

You know,

it's easy pickings for a federal party to go down there.

It should be, but it wasn't.

All he should have said is, look, you know, it's two minutes since the last election.

We will have a policy before the next election on this.

But, you know, going down and being seen to be listening is all an important part of that.

And, you know, that's what we did.

You know, no more than that.

Is this what happens when you put in someone who has no assistant ministerial experience, no junior portfolio experience straight into a big role like Shadow Attorney General.

So same Hume then, she's a very good job.

She's a woman and a woman.

She's not the Shadow Attorney General.

Senator Hume, it does sound like you're very across the crime issues in Victoria.

Would you have liked to have been sitting in the Shadow Attorney General portfolio?

That's a great question, Mel.

And a nice little wedge.

But no, I'm very happy being a conscientious and diligent senator for Victoria, making sure that I'm fighting for the issues that are important.

The curious question is, if you're not spoiled for choice, why then is Jane Hume still carrying the can of an election defeat, which was the worst in the party's history?

Well, I don't know.

Because she's still in the sin bin, Brad.

Exactly.

I think you can argue she's been sort of

fairly heavily punished disproportionately.

I mean, what were her two big sins, the work from home and the Chinese spies,

both of which sort of are pretty devastating.

And I mean, I'd get her back on.

She's articulate.

She's good.

It's not like they have this sort of poultice of talent to draw on.

But I just think, look, I don't don't know.

We were told when Susan Lee did the reshuffle that Julian Lisa wanted to move.

I don't know if that's true or not, but he's the most brilliant legal mind in this place,

by far.

And

constitutional law and so forth.

He's a very, very good family lawyer, Julian, in a political sense.

And he wouldn't have struggled with that question at all this morning.

So, you know, beat on the opposition leader to explain.

Now, before we let you go, Phil, what's going to happen next week?

Is it going to go well with the big meeting with Trump?

Oh, Christ.

I wonder if that's how easy he feels, too.

Well, first, it's got to happen, right?

So, when they're actually sitting in the Oval Office shaking hands, I'll believe it.

You just never know, do you?

There's a government shutdown that could well

threaten.

Well, Trump might have to vault off to Moscow in two minutes notice to end the war.

But let's assume it goes ahead.

I'm going to put my neck on the block here.

I think it will go well.

So, someone said to me, the whole aim is to get in and get out with your limbs intact.

We've got things to say on defence and critical minerals, so we've got things to tell Trump we're doing for him, things that we can use to make him feel like a winner and we can offer him something that's always important with him.

Your colleague, my former colleague Jacob Greber, wrote a very good piece, the ABC a few weeks ago actually about, you know,

Albanese and Trump do have a lot in common politically.

So you know, as sure as you can be sure, I think it'll be, I don't think it'll be a disaster.

No, and I would agree.

I think chances are this will go smoothly.

They will go with a limited agenda.

Focus on the positives.

The circumstances of the times have suited this delayed meeting.

I think what we're seeing between the US and China on critical minerals at the moment is sort of the perfect time to bowl up and say, well, we've been trying to work with you on these critical minerals for quite a while.

So here's the plan all laid out.

Have I got a deal for you?

Yeah, exactly.

Sign on the dotted line and tell the world that you've secured the answer to this problem with us.

It plays to what he wants, which is to be able to deliver a result, but it doesn't take away from being able to give him the impression that he can show he secured the victory.

It's a bit of a deft hand, I think, but it's certainly within the capacity of the Australian government to do that.

Yeah, and also to just, I assume the Prime Minister will be looking for, I mean, he's very confident the AUKUS thing is not going to be affected by this review, and he was saying that quite openly on that trip we just did to the US.

I've got no worries, I'm very confident.

So if he gets that first hand from Trump, he'll...

Look, look, get out of there in no worse shape than you win.

You take that as a victory, I think.

And on the podcast this weekend Insiders on Background David Spears is going to dig into this trip, a bit of a sense about what's happening with Credit Critical Minerals, but to get a sense of what could well be coming in the days to come.

Phil, thank you for spending time with us.

I hope I didn't babble too much.

That's what podcasting is all about.

It's a tree situation.

It's so much easier than writing, isn't it?

Don't tell people we don't want them to know.

Broadcast is great.

Pleasure guys, thanks for putting up with me.

Questions without notice, are there any questions?

Members on my route.

Prime Minister has the call.

Thanks very much Mr Speaker.

Well then I give the call to the Honourable, the Leader of the Opposition.

Thank you, Mr.

Speaker.

My question is to the Prime Minister.

The bells are ringing, and that means it's time for question time.

This week, we had a question from Mitchell.

Hi, team.

Mitchell from Melbourne.

My question is on the recent changes to the proposed increases in superannuation taxes announced by Jim Chalmers earlier this week.

There has been a lot of critical commentary on this change, with some even labelling it a humiliating backdown.

Could this instead be seen as a genuine effort to listen to feedback and find common ground?

Interested in your thoughts on whether we are too harsh on politicians when they admit mistakes or make concessions on their policy agendas.

Isn't compromise what voters want to see?

Thanks.

And we also had a really similar question to Mitchell's from Dan.

So clearly lots of people thinking about this bread of what is the role of the media here?

How do we look at backdowns in a political sense?

What are your first thoughts?

I think that both Mitchell Mitchell and Dan go to a point that is, you know, are we jumping down the throat of politicians if they are to make a change in response to there being criticism or something?

Is it, you know, are you then listening and responding?

And both two things can absolutely be true at the same time.

In that press conference, you had the treasurer insisting it's just a small change.

We've found a better path, so we're going to go in that direction.

Well, that's separate from what has actually been happening within the government.

As Phil was talking through us today, there were clear concerns from the Prime Minister that as a result of the feedback that they were getting, and they were driving this change as well.

It's not a small change.

There's a fundamental reworking of the policy, and it opens up the question about what work went into the policy development before this was announced.

But at the same time, politicians should be given the space to say, we did think this, but now we think this.

But that is for the politician to explain why that change was made.

It's our job to probe them with the questions, it's them to come up with the answers.

What did you think?

I think there is a real question about needing to give people the space to take information on board and realise that there might be a better solution or maybe there's a compromise that's the best way to go forward.

I think in this case and in many cases the problem is politicians themselves are very, very quick to dig their own trench and sit in it.

And the government has been very firm for two years in saying, no, there's no problem with this policy.

We've got the right policy outcome.

You're being obstructionist by not getting on board with our vision.

And a mandate from voters, because we've just been to a poll.

So I think there is a question of is there also a responsibility when announcing a policy is should you be more willing from the beginning to say this is what we want to do.

We're willing to take on board feedback.

The problem is politicians don't want to let other parties be seen to have a win.

So part of the reason they dig the trench so deep and say, oh no,

no discussions to be had here.

Our policy is the best one is they don't want to make concessions because they feel like that then gives another party grounds to go to the public and say, look, see, we made things better, you should vote for us next time.

So there's a lot of politicking rather than looking for the right policy outcome.

And I think sometimes you've got to call that out when it happens.

And it's not a partisan point to say that with this policy in particular and the indexing of these rates, there was always a bit of a wink, wink, nod, nod that could probably be changed with future, that maybe there'll be more laws passed closer to an election.

That's bad policy formation.

If you are conceding right before you pass laws that they're going to probably be changed and it would be closer to an election, whoever is in power, that approach is bad policy formation.

And I think we sort of got a hint of that from Jim Chalmers in his press conference when he was talking about the indexation issue.

So that's something they have conceded on.

It will now be indexed.

He made this reference to

that's something we thought we might change anyway.

So they sort of preemptively put in place a policy that was harder than they knew it would end up so that they strategically had ground to give if they needed to.

So it's kind of hard not to point out the politicking in it when there's so much that goes into it.

But I do think, Brett, it's worth also talking about focusing on what the overall objective of a policy is.

And I think Jim Chalmers is right to say they are this reformed policy does still move in the direction they were trying to move in, which is to make the system of tax concession slightly less generous for the wealthiest Australians.

And that was the objective with the original policy, and it's still the objective with the reformed policy.

And if that is what you are trying to do as a party, then they are still on a successful track.

And I think it's really easy to focus on the detail.

And sometimes it's worthwhile pulling out and say, well, does it still achieve that?

Yes, it does, less so.

But it does still achieve the broader objective.

It is still a move in the direction the government was aiming for.

And we should probably remember that too.

And I think for Mitchell and Dan, you know, Jim Chalmers received a bit of credit from people saying, Well, look, you came out and you took all the interviews and you answered all the questions.

So, certainly a bit of praise going the Treasurer's Way from some quarters.

And, of course, we've spent a lot of time today talking about the government's changes to its superannuation tax policy.

If you did miss the line and letter of those changes and just want to get your head around the policy a little bit more, I did have a chat with our friends at the ABC News Daily podcast, which is the full 101 on that.

So if you want a deep dive on tax policy, who doesn't,

you can check that out on the ABC Listen app as well.

If you too want to send a question in like Mitchell did and like Dan did, we love getting them, especially if they come via a voice note.

You can email them to thepartyroom at abc.net.au.

And remember to follow Politics Now on the ABC Listen app so that you never miss an episode.

Now, Mel, Politics Now and the Party Room wouldn't be possible if not for the incredible work of Lara Heaton and to Jess Lukenau.

They have been my guiding lights for these last five weeks while I've been filling in for PK.

She will be back on Monday.

The team will be there and making sure that this podcast will continue to be in your eardrums each day.

They really do help keep this show going, regardless of who is sitting behind the microphones, and we're very grateful for that.

All right, thanks very much, Brett.

See you, Mel.