Malcolm Turnbull has said he does not expect the Liberals to field a candidate in the Batman byelection, a move that would help the Greens take the seat and increase pressure on Bill Shorten.

With parliament set to return on Monday, Turnbull gave a wide-ranging interview to the ABC’s Insiders program in which he held out hopes for wage growth in 2018 and defended Liberal MP Jason Falinski after Labor obtained legal advice claiming he has dual Polish citizenship.

Turnbull also said that the sale of confidential documents in a second-hand filing cabinet was a “shocking failure” that should cost those responsible their jobs.

The Batman byelection, triggered by Labor MP David Feeney’s resignation over dual citizenship, will be a test for Shorten, who hopes that the Australian Council of Trade Unions president, Ged Kearney, can win the seat despite a rising Greens vote.

On Sunday Turnbull said he did not “expect we will be running a candidate in the Batman byelection” but it was up to the Victorian division of the Liberal party to decide.

Turnbull did not deny the move was designed to help the Greens defeat Labor and noted it was a political decision based on “priorities and limited resources”.

The prime minister accused Shorten of “moving further and further to the left ... [throwing] workers, jobs and traditional Labor supporters under the bus in his desperation to hang on to inner-city seats here in Melbourne”.

Shorten led the “most leftwing, anti-business, anti-jobs Labor party ... we’ve seen in generations”, he said.

With Labor using stagnating wages as a central prong of its attack on the Coalition, Turnbull defended the governments $65bn company tax cut plan by saying “of course” it would lead to higher wages.

“Because if you get more economic growth, you get competition for labour,” he said. “The laws of supply and demand have not been suspended.”

Turnbull pointed to 403,000 jobs created in the last year as evidence that stronger growth led to lower unemployment and said Labor leaders including Paul Keating, Bob Hawke and Neville Wran had accepted this led to wage rises. He said it was an “economic reality” that Shorten sought to deny.

He said the impact on wages would be “over the next year and following”.

Turnbull said that Shorten was not just opposing big business tax cuts but planned to reverse the government’s tax cuts for companies earning less than $50m a year.

Turnbull reiterated that personal income tax cuts were the government’s “next priority” after budget repair.

He noted the Coalition had raised the second-highest income tax threshold to $87,000 from $80,000 but brushed off Labor’s contention that – combined with the Medicare levy surcharge – ordinary workers were paying $6 a week more in tax.

Turnbull refused to concede the figure and said the levy was to pay for the National Disability Insurance Scheme, which he said Labor had left unfunded.

Turnbull struggled to explain why the Coalition had claimed Labor’s negative gearing policy would be a “sledgehammer” to the economy after Treasury advice revealed it estimated the impact on prices would be “relatively modest”.

“The impact of that change would have taken a very large percentage out of the housing market and it would have had a very big negative impact,” he said.

Turnbull said that changes to loan rules had seen loans to first-home buyers rise to a five-year high.

Turnbull said Labor’s legal advice that Jason Falinski may be a Polish citizen was “based on facts that are wrong” and cited Falinski’s legal advice that contradicted it.

Immigration consultant Jolanta Wolski told Labor that records at the office of citizenship in Warsaw showed Falinski’s father migrated from Poland using a Polish passport, while legal advice from a Krakow-based firm said this should be conclusive proof of citizenship.

Falinski said the fact Labor was pushing two lines of advice as conclusive legal evidence showed they were “clutching at straws”.



In a sign that political jostling over the section 44 constitutional crisis – which has already triggered nine resignations by federal parliamentarians – will continue in 2018, Turnbull said that Susan Lamb had admitted she was still a dual British citizen and questioned why she had not resigned like Feeney.

Lamb contends she took all steps reasonable required to renounce British citizenship, a defence legal experts have questioned.

Asked about the breach of confidential files, dubbed “the Cabinet Files”, which the prime minister’s department has admitted it lost, Turnbull said it was a “disgraceful, almost unbelievable act of negligence”.

He said the idea public servants entrusted with confidential documents would lock them in a safe, lock it, lose the keys and then sell it without checking “beggars belief”.

“The [Australian federal police] are doing a rigorous investigation ... and we want to see those responsible for this negligence identified and dealt with appropriately.”

Turnbull also paid tribute to the Fairfax Media journalist Michael Gordon, who died on Saturday aged 62. He said Gordon was “one of the great gentlemen of the world of journalism – gentle, wise, always calm ... a great writer and mentor”.

“It’s a tragedy and our hearts go out to Robyn and his family,” he said. “He will be so sorely missed by us all.”