SUBJECTS: Political party factions, Reserve Bank decision
STEVE AUSTIN:
My guests for Inside Canberra this morning are Bernie Ripoll. Bernie is the Federal Labor Member for Oxley. Bernie, welcome back.
BERNIE RIPOLL:
G'day Steve. How are you?
AUSTIN:
And replacing Steve Ciobo this morning is a man who's done it in the past. Scott Buchholz the Federal LNP member for Wright. Are you LNP or Liberal Scott? What are you?
SCOTT BUCHHOLZ:
Mate, I am a bit of a hybrid. I come up through the National Party ranks here in Queensland. But the seat of Wright was a designated Liberal Party seat so I proudly sit in the Liberal Party room in Canberra.
AUSTIN:
Well, it's lovely to see you.
BUCHHOLZ:
Thanks mate.
AUSTIN:
Thanks for coming in. First of all, let me ask you Bernie. We've heard one of the respected Senators of the Labor Party, and I have just gone blank, what's his name?
RIPOLL:
John Faulkner.
AUSTIN:
Senator John Faulkner. So respected and I couldn't remember his name. Basically stated very bluntly to the party last night, 'get rid of these factions'. Queenslanders had a long problem with this. We had the Shepherdson Inquiry here that looked at that when Peter Beattie was Premier. Now John Faulkner is saying the same thing for the ALP nationally. What's your feeling about his comments over night?
RIPOLL:
Sure, well we certainly don't have those problems that you referred to in terms of some time ago. There can always be reform. I like reform because I think it's a really positive way forward and every year you should reform something. Every year you should move forward. There should always be something good happening, something new updating. Senator Faulkner has had a view on a range of things internally in the party for a long time and I respect him greatly for that and I think we can improve. Look, whether we have factions or not have factions doesn't concern me as much.
AUSTIN:
But you do have factions. Very strong factions.
RIPOLL:
Well, we do and so does the Liberal Party and so does the National Party. In fact so does most school yards.
AUSTIN:
My question was what do you think.
RIPOLL:
You've got factions here in the ABC Steve. You've got factions here. We need to get rid of factions at the ABC.
AUSTIN:
That's far too hard. But what do you think personally Bernie of Senator Faulkner's comments.
RIPOLL:
Look, I think that factions are playing less and less of a roll. That's the reality to start with. I am in a group called a faction.
AUSTIN:
Which one?
RIPOLL:
It's called the Right, Centre Right. AWU Group, whatever you want to call it. Labor Forum in Queensland.
AUSTIN:
The forces of darkness.
RIPOLL:
The forces of great light. Look, we've got a whole bunch of different names. Basically it's a group of people who think alike on a range of issues and you find that friends get together and you discuss things over a cup of coffee and you find you share similar views and you work towards those views. There's always good and there's always some bad with that system. When those systems become in themselves the dominant factor that's the problem and I think we ought to reform that. But in terms of orderly conduct in terms of, a bit like the Parliament really we've got three factions there. There's the Government faction, there's the Opposition faction which is split into two – Liberal and National Party – and Scott could probably give you the (inaudible).
AUSTIN:
I'll come to you in just a moment. Let me ask you a couple more questions. So, what faction is John Faulkner in?
RIPOLL:
He's in the left.
AUSTIN:
Ok, so you are very lukewarm on his comments about getting rid of factions in the Labor Party.
RIPOLL:
No, no I am not lukewarm on it. I just think it's… Look, it's admirable and fine let's go down that path. I am just not sure how you would activate that. You know how you would say to somebody you're not allowed to talk to this other person because as soon as you talk to someone else you've created a faction. If you and me get together and have a cup of coffee once a week, we've just formed a faction. That's the problem.
AUSTIN:
Only if I agree all the time with you, or agree to achieve mutual outcomes.
RIPOLL:
Well, you may not always agree, but you might decide that we can work together for the greater good, you know, together we've got a stronger voice. This is not unusual, this is not new. I do agree with Senator Faulkner though. You do have to reform when groups of people get out of control and I am not saying they are. But when they do, when they have too much influence I think that's bad but I think what we have seen in recent years particularly in the Labor Party, particularly since coming to Government is that we've been able to push that very much to one side and there's less and less influenced and you see often so-called factional leaders not get their way and I think that's a really positive thing.
AUSTIN:
The factional leaders are usually union leaders as well, aren't they?
RIPOLL:
Not always. Sometimes they are, yes. Yes, but not always. Sometimes they come from different bases.
AUSTIN:
They are exerting a lot of pressure on your party at the moment, aren't they? The union leaders?
RIPOLL:
Well, if they are, I am not feeling it. I think we are making some really good decisions and often you find we get criticised every single day on a whole range of stuff we are doing. So if that were the case you'd be able to say, well they want this and they get that. The reality is somewhat different.
AUSTIN:
Alright. Scott Buchholz, does the Liberal Party have factions?
BUCHHOLZ:
Mate, I am sure they do. If they do, I don't belong to any one of them.
AUSTIN:
The LNP, sorry. The Liberal National Party.
BUCHHOLZ:
Mate, there's a Coalition so you've got the old National and the Liberal Party. But I mean with reference to, and for the small amount of time I've been there, I've noticed that there are greater differences in the political ideology between say the left and the right of the Liberal Party than what there are between the National Party and the Liberal Party.
AUSTIN:
Just do me a favour Scott. Just pull the microphone a little bit closer to yourself. Just grab the base. Thank you very much.
BUCHHOLZ:
No worries. Yeah, so I don't belong to a faction. I get into the party room. I have my piece and if I'm unable to convince the party room of a direction that I'd like to take… If we can't get it past the party room then it's going to be a very difficult for me to get it past the Australian public.
AUSTIN:
It's usually described as the wet's and the dry's in the Liberal Party. The demarcation line being people who are sort of economical liberal, free market and more. Whereas you'd come from the other side, wouldn't you? You'd be more concerned about two totally open markets. You're the old sort of National Party. You used to be call Rural Socialism or Agrarian Socialism in Queensland.
BUCHHOLZ:
Yeah, Agrarian Socialists, yeah. I don't know where I'd fit actually because I sit on the Joint Standing Economics Committee. So with that Committee we have oversight of the Reserve Bank and Monetary Policy. Economics is one of my strengths. Before I had my transport business I spent some time in the banking sector specialising in agri-finance. I'm a student of market forces but I just happened to have been brought up in a regional and rural town in Queensland.
AUSTIN:
Are you a wet or a dry Scott?
BUCHHOLZ:
Well I don't know what they are mate. I really don't know. I mean nobody comes and speaks to me about it.
RIPOLL:
Mate is that sweat on your forehead? You are looking a bit wet there.
BUCHHOLZ:
Honestly. I don't get into conversations with anyone about factions or wet and dry. Maybe I'm just not attractive enough for someone to have in their factions mate.
AUSTIN:
Occasionally I know that sort of the conservative side of politics used to often envy the organisational abilities of the factions in the Labor Party. Because of your groupings were so clearly defined on the left, but often in the conservative side of politics they were a little bit jealous of that because it meant you had to work a lot harder to get sort of outcomes or policy discussions going. Is that right?
BUCHHOLZ:
Mate, I don't know. I really don't know. When we have open and frank dialogue in the party room and sometimes, and we all tear fur off each other. One of the bad things about the party room and suppose it's from both sides of the Parliament is, I get a bit disappointed as the amount of leaks that come out of there and I think that's a great place to have open and frank debate and whether or not what side of the debate you come up on, it helps school you for when you get back to your electorate as to what the whole macro discussion's about. But with reference to Faulkner's comments, I don't think they're new comments – definitely not on the Australian landscape. I think after every election we normally have a review or something. Whether or not it's the Liberal Party or the Labor Party that are going to have reviews or dialogue, he's not breaking new ground there. I think there's been recommendations in the past that those factions or power groups be reviewed.
AUSTIN:
Alright, well you are on the Economics Committee, Bernie is the Parliamentary Secretary to the Federal Treasurer. As you know, the Reserve Bank dropped interest rates. The first bank to follow suit was actually the Bank of Queensland.
BUCHHOLZ:
Good on them.
AUSTIN:
The first of the big four did it today – the NAB. Bernie Ripoll, this is not a vote of confidence in the Australian economy, this is a very worrying move to get interest rates that low. That says the Reserve Bank is really troubled about what's coming next year and they are trying to tickle things along.
RIPOLL:
Well, I agree with you that they are low and I agree with you that it is good for consumers and it's a great Christmas present for families because what it means now for the average family that's got a $300,000 mortgage it means a saving of about $5,000 a year. So if you talk about the cost of living, well, there's a big one. Five grand a year. That's how much you're saving now to when we came into Government. The issue of is it low, how low is it? I mean 3 per cent is certainly good, but it's still an interest rate. If you go to the United States it's zero, if you go to Japan it's zero, if you go you know to Europe it's zero. We've got interest rates which mean if you are actually saving, you get a return, if you are after a Government bond you're getting a return. We've got an economy like the rest of the world. The whole world is going through some really tough times. We've got a resilient economy, we got an economy and frankly just Australian people and workers who are prepared to do the heavy lifting. What this is, is just an indication that we need to from time to time speed things up a little bit, tweak things up. It's a small decrease, it's 25 basis points. I think it's healthy, I think it's good and for every mortgage holder out there, you know the message from them to their banks would be hurry up move it along and I am not sure, look there's two banks who have already said that they would follow suit and lower rates and I think there's one doing it on the 21st of December. I think it might have been NAB.
BUCHHOLZ:
ANZ normally leave it towards the end of the month.
AUSTIN:
NAB announced it this morning.
RIPOLL:
Yeah. Which is interesting, because if you follow the Mayan calendar that's the end of the world on the 21st. So maybe they are hedging their bet. Maybe they are hedging.
AUSTIN:
Scott Buchholz, 3 per cent it's almost hitting the panic button for the Reserve Bank.
BUCHHOLZ:
You know, as long as I can remember politicians wear low interest rates as a badge of honour. You are dead right. We're lucky we have an independent Reserve Bank who are able to be at arms length from fiscal policy, being able to…
AUSTIN:
Something that Paul Keating brought about I think from memory, wasn't it?
BUCHHOLZ:
Yeah, it was a good setting keeping that independence. You know, the retail sector out there, there are really sectors of our market out there which are doing it extremely tough.
AUSTIN:
This doesn't really help people in retail. It helps mortgage holders. It doesn't really do anything for retailers.
BUCHHOLZ:
No, it doesn't, that's the falsity. And you know how many mortgage holders there are out there? In the market we've got a third of the people, a third of householders own their own home, a third are renters and a third have got mortgages. So, it's not an enormous demographic. I think when you go back the other way and do the other settings of people who have money invested in the market we focus as politicians in on the interest rate and what it means for that last third but by crickey, those self-retired retirees that have already been touched up by their superannuation in the markets their quivering.
AUSTIN:
What do the self-funded retirees do Scott Buchholz? And you are not in the Government I know. I'll come to Bernie and ask him the same question in a moment. But what do they do? Their deeming rate hasn't been adjusted for them. What do they do?
BUCHHOLZ:
Mate, I don't know. What I did is, I pulled out of the market and dropped it all into cash.
AUSTIN:
You weren't alone I hear.
BUCHHOLZ:
No, you just chase the best deal you can get with the lowest amount of risk. You need to be risk averse and in trying to maximise the capital return on your investment stay close to your financial advisor. I think the day's gone by where an advisor could sign you up and set you into some type of fiscal program and leave you there for 12 months and come back and have another look at you is gone. You need to be reviewing your accounts on a monthly basis because the economy is such a global place now with reference with flow of funds.
AUSTIN:
Bernie, what do self-funded retirees do?
RIPOLL:
Well, first can I just say. I agree with Scott. I actually think he's made some really good points. That's the reality. People are making decisions. If there's one good thing, I always look to what's good that comes out of anything that happens, is that people are more interactive with their superannuation, they're participating more. One of the things we used to complain about is people didn't worry about their superannuation until they got to about 55 years of age or 50 and then started sort of thinking about it. Now people are thinking about it, I'd dare to say even at the age of 40 but I would encourage people to think about it when you're 25. Start thinking about where you're going to put your money, how are you going to save? There aren't a lot of options, if you actually look at the options in front of you. Cash, yes. You're not going to get a great return on cash but at least it's safe. There's bonds, if you can access those through some mechanism or there's the market.
AUSTIN:
Would the Federal Government consider adjusting the deeming rate to help those self-funded retirees?
RIPOLL:
We look at deeming rates all the time and right now I don't know that anyone would want to adjust it down. I think they'd prefer to keep them where they are because normally if rates come down deeming rates you might find might go the other way or come down. So, look I don't know where we are at on that at the moment but certainly it's reviewed from time to time.
AUSTIN:
When is the next review, do you know?
RIPOLL:
No, I don't.
AUSTIN:
Ok. Your electorate Oxley is largely the mortgage belt. Springfield, Springfield Lakes. What are your electors saying to you about how they're feeling at the moment in terms of financial squeeze?
RIPOLL:
Cost of living I think is on everyone's lips. There is no question about that. Exactly what that translates into is something else. I mean electricity prices is one we've talked about every week and I think justifiably people are looking at their bills and they've seen in the last few years, certainly pre carbon pricing coming in, their bills going up enormously and they're going 'why is this the case?'. When the carbon pricing system came I think that shone the light on this and people really looked at it - it's much more than 10 per cent previous to that. So I think there's a lot of work being done and I'm really happy at the moment that we've put so much of a spot light on energy prices and that the Prime Minister and the States, I've got to say, are actually starting to do something about it. They're all looking at it together and they're saying we may not all agree but at least lets go down this path of saying we want to start saving people money.
BUCHHOLZ:
Love to talk about energy.
AUSTIN:
I have to give you the chance to make farewell observations, parting shots or final comments. Scott Buchholz as you leave, what's happening in your world?
BUCHHOLZ:
Mate, as Bernie was saying earlier on, with reference to cost of living pressures out there coming into Christmas, retail sector doing it tough, I think it's fair to try and take our mind back to that 2006/2008 period here at a State level when previous Labor State administrations went through and cleaned out about $1.7 billion out of the infrastructure funds of both Ergon and Energex over that period of time. That was money that they had put aside for future infrastructure requirements. They were diligent in storing their capital reserves. Those funds were taken away from them and as a result now the punters will pay for that catch up infrastructure funds that needs to be invested in the State.
AUSTIN:
Scott Buchholz is the Federal Liberal Member for Wright. Bernie Ripoll, parting observations as Labor Member for Oxley.
RIPOLL:
I think where Australia's future absolutely lies is in a way where we have been in the past. Australia has always been a country reliant on foreign capital to build our markets and innovation. I think the future for us is innovation. I'm looking at a whole range of projects and I know Greg Combet has been looking at this issue specifically. But if we are going to create jobs in the future, if we are going to have that resilient economy, how do you drive it? You know, the how? How do you actually build that? Well, it's got to be through innovation. We're great thinkers and inventors in Australia, we're not terribly good at innovating and commercialising. I think that's the future. Whether it's in energy markets, whether it's in new food and agricultural markets or even manufacturing. I think that's where Labor will be focussing much of its energy next year.
AUSTIN:
Thanks for coming in gentlemen. Appreciate it.
BUCHHOLZ:
I won't get the opportunity to see you probably between now and Christmas. Merry Christmas to you and your listeners and all the staff who make me feel very welcome here and thanks the Steve Ciobo for the opportunity to fill in when he's not available.
AUSTIN:
Our pleasure Scott. Thank you very much and Bernie Ripoll, Federal Labor Member for Oxley. We'll be back next week finally.