8 August 2012

Interview with Steve Austin, Mornings with Steve Austin, 612 Brisbane ABC

SUBJECTS: Electricity prices, carbon price, Olympics, NBN, financial literacy, Gold Coast property prices

A podcast and mp3 download of this interview is available on the ABC website.

STEVE AUSTIN:

Well as you know we like to go inside Canberra and find out what's happening in the nation's capital and in the minds of those who we elect to make the big decisions for us. Let's this morning speak with Bernie Ripoll. Bernie is the Federal member for Oxley and Parliamentary Secretary to the Treasurer for the ALP. Bernie, thanks for coming in once again.

BERNIE RIPOLL:

Good day Steven and good day Steve.

AUSTIN:

Just get you to come a little bit closer to that microphone.

RIPOLL:

Right there.

AUSTIN:

Probably not tall enough.  Need to lift the bench up for you guys.

RIPOLL:

Thanks.

AUSTIN:

And Steve Ciobo. Steve Ciobo is the Federal LNP member for Moncrieff. Steve Ciobo, welcome back.  Thanks very much.

STEVE CIOBO:

Pleasure.

AUSTIN:

Bernie Ripoll, take us into Prime Minister Julia Gillard's thinking.  She gave a speech yesterday to the Energy Policy Institute of Australia. She observed that power bills have become the new petrol prices and she says what we could do, or what she's planning on doing came out, sort of, of the last COAG meeting when she met with all the state premiers and she basically said that if you guys don't fix this, I'm going to go you. What's her thinking on this?

RIPOLL:

Well, I think it's pretty straightforward. People are paying too much for electricity and I think the big factor is that the electricity market across the country over the last four years has been disproportionately increasing power prices for ordinary consumers and we've got to do something about it because it is a cost of living issue and it's a major cost of living issue.  So I think this is the right way to go and it is through COAG.  We ought to work with the states.

AUSTIN:

She didn't sound like if she was going to work with anyone, she basically made a threat. Well, she did threaten them.

RIPOLL:

Well, sometimes you've got to carry the stick and occasionally you got to use it.  We've got a big stick and we ought to say to the states look it's just not on any longer to charge the sort of prices that are going on in electricity and they're disproportionate. But also there is no harmony across the national energy market. It doesn't make sense and it's time we unified.  A bit of harmonisation and that, you know, nationally we took some control to make sure consumers get a better deal.

AUSTIN:

What's the stick? What can she do if state governments or state premiers don't do what she wants?

RIPOLL:

Well, there is a range of ways you can do it. But certainly through regulation and certainly through, you know, the preferred option is always cooperation but regulation if needed. I think if you look across the country and you have a look that over the last four years electricity prices have gone up by around fifty per cent and no one's been compensated for that and we would all agree that it's all just too much. It's unsustainable in the long-term. We need to do something about it. It's an important issue and just the fact too that it's not just for households, it's also businesses, small businesses in particular, which are paying too much.  And if you have a look at the way that state governments of all colours have been gouging consumers, we just can't let that keep going because it's unsustainable in the future. That's the biggest issue.

AUSTIN:

This is one of the very issues that got Campbell Newman elected, was his commitment to fix that and solve that. In fact, he's copping a flogging because he's setting up the ground work to do that. What has changed?

RIPOLL:

What's changed in terms of the Federal Government?

AUSTIN:

Yes.

RIPOLL:

Well, we want to do something about it as well. The reality is that we are talking to the states and we've got a process. It's called COAG and we have to come to an agreement at some point. The Prime Minister has set a timetable that by the end of the year. We can't keep going at the sort of increases that we've had in the past, particularly when you consider that about $11 billion worth of the cost of providing the infrastructure, not just producing power, energy, is actually just to meet peak demand for about four days per year. Now, why should the consumer or small business have to pay for that? We need to look much closer and work much closer with each of the states and territories to make sure we've got a better market, a national energy market. And particularly when you consider that more and more businesses and households want to co-generate. There's a whole range of options, whether it's solar, whether it's wind or whether it's companies that provide biogas solutions. We need to find a way to integrate them more into the energy market as well.

AUSTIN:

Steve Ciobo, any thoughts?

CIOBO:

Well certainly, Steve. You know, when I was a kid Steve, I was into magic. There is a bit of an interesting thing in magic that you learn as a young child which is always try to distract attention and the focus is don't look at the left hand, look at the right hand because you would be doing something with your left hand that you didn't want the audience to look at. The analogy applies directly here to Julia Gillard. Here we have the Federal Labor Government that's just implemented the world's biggest carbon tax that is doing more to drive up the cost of living than basically any government in this country's history and what do they do? They say don't look at the left hand, focus on the right hand. So we have the Prime Minister out there saying I'm so angry with these various state governments. Incidentally Bernie, where were you and the Prime Minister for the last five years? Where were you for the last twenty years when the Labor Party was in power in Queensland? I didn't hear much coming from them about electricity prices then. The reality is this is all because they know they have a very big problem. They introduced the world's biggest carbon tax, families are hurting, this government has failed abysmally.

AUSTIN:

They're not hurting as a result of the carbon tax yet though are they Steve Ciobo.

CIOBO:

Of course they are.

AUSTIN:

Steve Ciobo, the flow on has not been that great.

CIOBO:

There is a flow on in the economy.

AUSTIN:

The cost of other, the other costs has been the real effect of the carbon tax as I understand it.

CIOBO:

I respectfully disagree, Steve. I think that this will flow on across the economy. I mean electricity is basically an input into every aspect you can think of. You know and it is remarkable, I think, of the sheer audacity of the Prime Minister to say electricity prices are the new fuel prices. Well, you know what, this was a government that four or five years ago came to power promising Fuel Watch. You might recall that, Steve. That brilliant Fuel Watch scam that they pumped $50 million into and disappeared without a trace. I mean, you know, this is a government that is completely dependent upon political trickery and not upon dealing with the Australian people in a sincere and frank way and so I think that the Australian public will see straight through this for what it is which is nothing more than trying to get people to divert their attention elsewhere.

AUSTIN:

Bernie Ripoll, do you want to respond?

RIPOLL:

Oh.

AUSTIN:

Not particularly?

RIPOLL:

Love to. But I mean look I could spend all day just rebutting everything that Steven has said, but let's look at the reality of just a couple of things. One is fuel prices are no longer the single biggest cost, they still are a big cost but actually fuel prices have been coming down which is a good thing for all consumers across the country. Electricity prices have been going up. They've been going up particularly in the last four years by more than fifty per cent, regardless of the politics.

CIOBO:

So why have you said nothing before now, Bernie? Well if it's been going on for four years, why are you only talking now once you've introduced the carbon tax?

RIPOLL:

Steve, last week you made a big issue of saying ‘don't interrupt me'. I won't do the same thing. I won't do the same thing.

CIOBO:

My apologies. Sorry.

RIPOLL:

I won't do the same thing. But look the reality is that those price increases are unsustainable and there's a bigger issue here. We can always play the politics, and play the man rather than the ball, but I'm really interested in what we can do in our national energy market and the way we can reform the market and the way we can provide some sustainability to where we'll be in twenty years' time. The reality of electricity and power prices not just for consumers but for business, big and small and the way that it is currently run means that particularly for state governments. State governments have been gouging consumers at twice the rate that privately owned energy producers are doing. There's been a massive underinvestment.

AUSTIN:

How does that happen here in Queensland? Can you explain to me how does that gouging, how does someone, my listener, how do they feel the effects of that price gouging here in Queensland? Simply increase power costs?

RIPOLL:

Simply increase power costs.

AUSTIN:

So what are they doing? Is the state dipping their hands into sort of Stanwell or those big power companies and saying we will take a dividend?

RIPOLL:

They are just taking bigger and bigger dividends out of that particular market.

AUSTIN:

Ok.

RIPOLL:

That would be ok sort of if they were reinvesting, if the states were reinvesting that money into infrastructure. But the reality is that they are not. Where they are spending on infrastructure they're just charging the consumer. So there is a bigger order issue here and that's at some point regardless of whether it's a two card trick or the magic or whatever it might be, we still have to do it. That's the point. The point is at some point somebody has got to stand up and be counted and say well we're going to do something about this because it's a real issue. We can't sustain the same price rises and increases of the last four years for the next four, so we're going to do something about it.

CIOBO:

Good news Bernie, we are going to do something about it. We want to go to an election and we want the Australian people to have their judgment about the carbon tax because if we get to government the first thing we're going to do is to repeal the carbon tax which will have a material impact on reducing power prices.

AUSTIN:

I should probably mention and I'll try and give him a call but I, a number of times, spoke with Darryl Somerville who Julia Gillard mentioned in her speech yesterday and I spoke with him privately and publicly when he did his review of the energy infrastructure of Queensland a number of years ago. And he denied to me that state governments were using these power assets as cash cows.

CIOBO:

Because Steve, I mean, this is the problem you see because Bernie stands here and he says well this is just being milked as a cash cow. You know, we're not seeing the reinvestment in technology.

AUSTIN:

It may have changed since that time Steve Ciobo but back then, they weren't then.

CIOBO:

But see my point though is that this morning we had the Prime Minister talking about overinvestment in electricity infrastructure and how the states were, you know, effectively investing for gold-plated electricity networks I think were her exact words. And the point is this Steve, what the Prime Minister's actually saying is it's important that people understand where the Prime Minister is going with this line of thought. She's basically saying we don't need to have electricity networks and infrastructure at a level that provides for peak demand. And this notion of not providing for peak demand actually translates to saying when there is peak demand we'll probably get blackouts or brown outs as they're called, so they're actually saying let's build a network that can't accommodate the community's demand for electricity and we'll actually have blackouts during you know heat waves and things like that rather than actually saying that the real problem here has been this big illegitimate tax which the government has imposed.

AUSTIN:

This is 612. Bernie Ripoll, sorry.

RIPOLL:

I was just going to say. It's taken more than a hundred years to get a single rail gauge across Australia. It took a Labor Government to do it because we are committed to infrastructure. It's taken more than a hundred years to get to a position where for the first time talking about harmonising across energy markets across Australia and I don't see how anybody would argue against that regardless of anything else that's actually going on around us. This is about trying to deliver a better outcome. You can actually do it in cooperation with the states, not just the Labor states or Liberal states, but all the states. It'll be a better outcome for them and it's a better outcome for consumers.

AUSTIN:

This is 612 ABC Brisbane. My guests are Bernie Ripoll and Steve Ciobo. Bernie is the Labor MP for the seat of Oxley. Steve Ciobo is the Liberal, the Liberal member for the seat of Moncrieff. It's nineteen minutes past nine. Have you guys been watching the Olympics much?

CIOBO:

Absolutely.

AUSTIN:

Any thoughts on the funding arrangements for Olympian athletes? You guys, Parliament on behalf of the people of Australia, puts a lot of money, a lot of money into elite sport. We had the Crawford report a couple of years ago, 2009 and it said it's upside down, we should put it into a grassroots level. Got any thoughts?

RIPOLL:

We do put a lot of money in. There's no doubt about that. We've discussed (inaudible).

AUSTIN:

Multi millions.

RIPOLL:

Multi. Yeah, absolutely it's a lot of money. I think look from time to time those programs may change with whatever is the desire of the nation. Sport is pretty important to Australians and I think we do get a lot back out of it in terms of our national identity and how we feel about ourselves but also how our economy is travelling and I've just penned an article recently which hasn't been published yet but I'm still hoping, which just looks at, looks at this dichotomy between our confidence on the sporting field and how we treat those medals that we gain. If we boiled it down to a cost per capita, per head, looked at how much money we put in, you know, it's many tens of millions of dollars per medal as we all understand and know.

AUSTIN:

A lot of money.

RIPOLL:

A lot of money. I just wish we had the same confidence in our own economy because if we actually do the numbers and you stack them up side by side, let's put sporting performance up against economic performance, yes we're winning. I'm not kidding. (inaudible) Yes, I've done the numbers.

AUSTIN:

Can you give me any numbers now or do we have to wait until your article is published?

RIPOLL:

No, you'll have to wait until my article is published but there is one simple one that is on every single economic data, we're way ahead. So if we had the same sort of, let's say enthusiasm, about our economic credentials as we do about our sporting ones we'd be a much more confident nation and we should be because we're doing really well.

AUSTIN:

Steve Ciobo, on the Olympics and the way we fund it first of all. We put a lot of money into it. Any thoughts?

CIOBO:

Sure. Well, I've indicated previously in my view, Steve, I celebrate excellence. I think that, you know, someone like, I mean, I'll take a hometown girl from the Gold Coast, Sally Pearson's amazing win this morning. That in my view would do more to inspire young Aussie kids, would do more to inspire the community than probably you know $50 million on some kind of pamphlet or campaign or something like that.

AUSTIN:

The Crawford review actually found the opposite that when we fund the Olympics more people get involved in sports that aren't in the Olympics, not the ones that are. It's this weird paradox that came out of the Crawford review.

CIOBO:

Well, I mean I don't know the methodology behind that and what not and I can only resort to what I would refer to as common knowledge and experience, Steve, and in my perspective, you know.

AUSTIN:

Anecdote, I think it's normally called. Anecdotal evidence.

CIOBO:

Anecdotal evidence and any Aussie family that I know has sat around the TV and watched these things whether it's, you know, the Tri-Nations, the Olympics or whatever, maybe not the rugby so much but anyway. You know, we always celebrate outstanding success and I know, and I do think it's a really positive motivator and a great inspirator.

AUSTIN:

This is 612 ABC Brisbane. Twenty-two minutes past nine. The NBN. Why is it going to cost us more? I saw something saying that the cost of the NBN, the National  Broadband Network, are going up.

RIPOLL:

Well it's just not the case if I can just quickly deal with a couple of things.

AUSTIN:

Go for your life.

RIPOLL:

It actually is on target and we're actually..This afternoon, I wish I had it this morning, this afternoon we've got the NBN corporate plan being published so there will be a whole heap more information so that Steve Ciobo and others can pore over it and I'm sure they will and we'll talk about it next week. But the reality is that it's on track and on target. By the end of the year, we'll have 758,000 homes connected to the NBN. I can't wait to be one of them although it won't be this year. It'll return to the Australian consumer, in terms of an investment, around seven per cent. It's a good investment. It's good for the national economy and it'll deliver and drive jobs and industries that we haven't even thought of yet. It's a legacy program for the future. It's something that is really good for everybody.

CIOBO:

Steve, you know, this is a snake-all salesmanship to the greatest level that I have seen for a long, long time, this whole NBN thing. I mean this is costing taxpayers approximately $39 billion. Blowouts in the cost are to be expected because like any government project, I mean Bernie will stand here and say oh no, it's all on time, it's all on budget, it's all going great, you know. Let me ask the people, really how many government programs do you know where they invest and they come in on time and on budget? The reality is probably about one per cent.

AUSTIN:

Bernie, you've got one?

CIOBO:

The fact is that the NBN is a monumental and colossal waste of taxpayers' money. Now, I have no doubt that the community needs access to broadband. That's a positive thing. The point is though that there are much better ways to achieve it. And I'll give you one case in point, Steve. I've got a 4G modem that I plug into the USB port in my computer. Now that 4G modem available now, you can buy it off, you know, a telecommunications retailer, I plug that in, you go to speedtest.net. I can get up to 75 megabits per second off that 4G wireless modem right now. And here you've got the Government willing to spend $40 billion of taxpayers' money to roll down the streets and suburbs across the city, including for example again I'll use my own street where I've got access to the Foxtel cable network which is giving me about 40 megabits per second, the government's ripping all that out of the ground. They're saying you no longer can use that. They're saying to people that are marketing 4G network services, look that shouldn't be used because we're going to provide a monopoly, a legislated monopoly to this massive new government supplier of broadband communications, NBN Co. I mean, that just underscores the absolute waste of taxpayers' money behind this project and I've got bad news to Bernie, you're actually not on target. The reality is that there's something like only a couple of thousand of households that have been connected to the NBN. You're miles and miles and miles behind when it comes to the roll out.

AUSTIN:

Where is it connected in Queensland? Do either of you know?

RIPOLL:

Yeah, through the spine, through central Queensland there's work being done now. There's work being rolled out in Goodna, in my electorate and in other parts of the state. I've focussed particularly on my own area and people can't wait.

AUSTIN:

How many homes so far Bernie? Do you know?

RIPOLL:

No, look I don't have a figure. We've only just started with the interchange at Goodna so that's only just begun. But through central Queensland there's homes being connected up and the service is being provided there. The reality is though that by the end of the year 758,000 homes across the country, Tasmania's already being rolled out.

CIOBO:

You won't be close to it Bernie.

RIPOLL:

Seven per cent return in terms of an investment for the taxpayer and it's that big chunky, big chunky sort of infrastructure. Just two quick points. Let's not undersell technology. You can't run everything on a 4G dongle. There's a little bit more involved here. So, you know, let's not go down the dumbing down road.

CIOBO:

But hang on.

RIPOLL:

The other one in terms of (inaudible).

CIOBO:

Justify that. What are you talking about?

AUSTIN:

Let Bernie finish, Steve.

RIPOLL:

That's alright. Now look the other one in terms of you know when was the last time you heard of a government program being delivered on time and on budget, well there's heaps of them. I'll give you one really close by. The Ipswich Motorway, six months ahead of target.

AUSTIN:

So it was too, yes.

RIPOLL:

And under budget. That under budget, that saving went back to the taxpayer. It's a really good outcome, but what it delivers for the economy is far, far many times the multiple of what was spent. And no one will argue it now or in twenty years' time and neither will they on the NBN.

AUSTIN:

Steve Ciobo, final response.

CIOBO:

This is the same Ipswich Motorway that took about ten years to come to fruition. Is that the one you're talking about?

RIPOLL:

Closer to fifteen because you guys were in government.

(inaudible)

AUSTIN:

Point was well made, it was finished under budget and ahead of time.

RIPOLL:

And ahead of time.

CIOBO:

For the final iteration of the program, I mean, you know. This notion too that it's dumbing down so that you can get 75 megabits per second off a dongle. I mean the reality is that that is all that is necessary for the vast bulk, the vast, vast bulk of the community. I mean you could attach one of these things to a wifi modem in terms of your actual business premises or house and that would give you more than adequate capacity for what most people need. So the notion that in some way that's a dumbing down is absurd. I am willing very, and obviously on the public record Steve, to say they will not even be close to 745,000 homes.

RIPOLL:

58.

CIOBO:

By the end of the year. Not even close. So I'm you know, whatever the odds need to be, very happy to say you won't even come close.

AUSTIN:

This is 612 ABC Brisbane. Bernie Ripoll and Steve Ciobo are my guests. Final comments? Parting observations? End remarks? What's been happening in your world? I've dominated the questions this morning. Bernie Ripoll?

RIPOLL:

Financial literacy. I think it's one of the great hangovers from the global financial crisis is that at whatever level you are in the market, we're all in. It's a bit like what George Soros used to say when the music plays everyone has to dance. So whether you're a retiree, you've got a superannuation fund, whether you've got some money in equities or wherever it might be, financial literacy is a really important part because what we saw through the GFC were people making simple errors, or being given advice which they didn't understand and I think one of the strongest things you can do is to empower people to be financially literate. It starts with the consumer but it goes all the way up through to advisers and professionals and I've been working very hard with a whole range of people including the regulator ASIC, through their MoneySmart.gov.au website and just trying to help people, ordinary people just to have a better handle on it, make sure they don't get scammed like, youi know, the Nigerian scams that everyone knows but also just to make sure they understand when somebody says, you know, compound interest and you're going to get fifteen per cent year-on-year, that they actually know what that means or whether it's true or not.

AUSTIN:

Yes, that would be nice.

RIPOLL:

Absolutely.

AUSTIN:

Steve Ciobo, final remarks? What's been happening in your world?

CIOBO:

Well, in terms of my world, something that we've been focussing on on the Gold Coast which is being particularly adversely affected over the past five years, Steve. Obviously with property prices down significantly, we're starting now to finally see with the change of local government, with the change of state government in Queensland, a revival of sorts. We've seen, we hope, the bottoming out of property prices and what I've been focussed on and I think this is probably happening more broadly across the Australian community is the desire to actually improve, so that people are starting to see some stabilisation, starting to get some confidence back and starting to hopefully invest some of that capital and expand it. I think that they'll starting to respond really positively to what the Campbell Government is doing.

AUSTIN:

Thanks very much gentlemen, both for coming in.  Appreciate it.

RIPOLL:

Thank you.

CIOBO:

Thank you.

AUSTIN:

Steve Ciobo is the LNP member for Moncrieff on the Gold Coast. Bernie Ripoll is the Assistant Secretary to the Treasurer and Federal Labor member for Oxley.