SUBJECTS: High-level business delegation to China, Wright electorate, foreign investment, manufacturing, Greg Rudd, carbon price
An audio file of this interview is available on the ABC Radio Australia website.
STEVE AUSTIN:
Inside Canberra this morning with, first of all, one person who I have interviewed numerous times but think I've met face to face only once. Bernie Ripoll, the Federal Member for Oxley and Parliamentary Secretary to the Treasurer. Wonderful to meet you face to face in the studio, Bernie.
BERNIE RIPOLL:
Great to see you Steven.
STEVE AUSTIN:
And for the first time I think on ABC radio in Brisbane, Scott Buchholz, Federal Member for Wright. Is that right Scott?
SCOTT BUCHHOLZ:
Yes mate, my first time and if I could take this auspicious opportunity to do a shout out to my electorate.
(inaudible)
STEVE AUSTIN:
What do you think this is? Country radio?
SCOTT BUCHHOLZ:
Scenic Rim, Mount Tamborine, and in particular lord Julian
STEVE AUSTIN:
Julian of Boonah?
SCOTT BUCHHOLZ:
Yeah mate, quite a celebrity, everyone knows who Lord Julian is.
STEVE AUSTIN:
Well, welcome to the ABC studio Scott.
SCOTT BUCHHOLZ:
Yeah mate, compliments on your studio, they are beautiful.
STEVE AUSTIN:
Thank you very much. The staff can't believe our luck. It's the best thing that anyone at the ABC has ever had. Listen, I know Bernie Ripoll, you've just returned from a trip to China with the Treasurer. What did you come back with? Because we are sceptical about MPs in the break heading overseas on tax payer funded trips.
BERNIE RIPOLL:
Absolutely, and so you should be. Look, what I've come back with is a really great sense of how good the relationship is between Australia and China and how much more we can do and how important it is to our economy. We went over there to talk about the internationalisation of the Renminbi, which is their currency, and how we can do better trade in that currency, which is really important for our economy. But also we took across a high level delegation of business people and in the end...
STEVE AUSTIN:
Who did you take from Queensland.
BERNIE RIPOLL:
Good question, I should have prepared for that one. Look, there was a whole heap of people from across the banking sector, resources sector and business, and it's really about drumming up business, it's about how can we do more business. China is very important to Australia and vice versa.
STEVE AUSTIN:
Just explain, and listeners might not be aware, the Chinese are very, what's the word, focussed on connections; having the right people introduce them to business opportunities. And so they would expect a federal Australian Parliamentarian to go over and they would expect you to be there with a business person and to make friendships. So just explain the context of what the Chinese expect in that relationship.
BERNIE RIPOLL:
Sure, look, I think the first principle to understand is if you are going to do business with anyone, you need to turn up and you need to be able to discuss with them things face to face, you need to be able to exchange views. You need to have confidence that what we're doing and what they're doing actually has a match and, one thing that I came back with as well, which I think is really important, is the principle of patience and flexibility. If you are going to do business, you need to be patient and you need to be flexible.
STEVE AUSTIN:
So you took over miners and bankers?
BERNIE RIPOLL:
Miners, bankers, business people, resources sectors absolutely. It's really about trying, again, to grow the Australian economy and make sure we are in tune with what is happening. They are our most important trading partner.
STEVE AUSTIN:
Did you come back with any deals in the back pocket?
BERNIE RIPOLL:
There are people working on deals. I haven't done any deals myself, but there are people who have been there for a very long time and who continue their relationship, and it's beneficial and helpful for them if they have the treasurer there. We were doing a number of forums, we were doing some work government to government, but also to assist them in connecting them with other business people as well.
STEVE AUSTIN:
Bernie Ripoll is the Federal Member for Oxley and the Parliamentary Secretary to the Treasurer. Scott Buchholz is the Federal Member for Wright. First time in Federal Parliament I think Scott Buchholz?
SCOTT BUCHHOLZ:
Yeah, mate, yeah.
STEVE AUSTIN:
Look, I think I'm going to give you the opportunity to explain a little bit about yourself and the area you represent. Because it is your first time. This will be the only time you'll get it.
SCOTT BUCHHOLZ:
Thanks for the free hit, mate, but I was just saying to Bernie before we came in that ...
STEVE AUSTIN:
On microphone please, Scott.
SCOTT BUCHHOLZ:
The electorate that I represent it is one of the most picturesque places. I mean, I border up to the M1 and look after Mudgeeraba, bordering up to Robina, and I go right through to the top of the Toowoomba range and down to the NSW border.
STEVE AUSTIN:
That's a big electorate.
SCOTT BUCHHOLZ:
Yeah mate, I spend a lot of the time in the car and my people expect to see you as your local member. So as a result I start early in the morning, we finish fairly late. We had a bit of a tough time of it last year, over in the Lockyer valley with the floods, but that community is rebuilding beyond anyone's expectations. There is just an enormous sense of pride of what has been achieved over there in the rebuilding phase. Yes, there are some scars which will take, literally generations to heal, and we will work with those communities in every capacity to try and get them out the other side. From an agricultural and business perspective, my electorate is, we grow a heap of fruit and vegetables, predominately vegetables; your onions, carrots, broccoli, used to be beetroot. So if that blows your hair back, I'm extremely lucky.
STEVE AUSTIN:
And a fair bit of coal seam gas exploration. What's your take on the feeling of your electorate on coal seam gas exploration in those areas?
SCOTT BUCHHOLZ:
they are dark on it, there is no doubt that the scenic rim has got an extremely active group, actively working against the coal seam gas industry. We took a lot of comfort out of Campbell Newman's position in the last state election that there'd be no extraction permits offered to any of the mining companies down there. It's an education process with reference to the understand, mining companies, requirements under the current state legislation to continue exploratory activities so that they can keep their tenure. Obviously there may be some compensation around in the near future that these companies will want to take advantage of. If I'm elected to be the voice of the people, and the people say they don't want coal seam gas, well I'll be out the front there banging the drums.
STEVE AUSTIN:
Scott Buchholz is the Federal Member for Wright. My name is Steve Austin.
This is 612 ABC Brisbane and ABC digital. I want to ask the both of you about Australian manufacturing. Yesterday Ford announced 440 workers would go. They are only committed to Australia now until 2016. Inghams Chicken looks like they are going to seek out to a global equity firm or the Chinese. I wanted to know, just off the top of your heads, what's your feeling about manufacturing and its future in Australia which is a completely globalized economy now. It's seems like, for goodness knows how long, Australian industries are just getting knocked down like ten pins or bought out by international interests. How do you feel? Bernie I'll come to you first of all of this.
BERNIE RIPOLL:
Sure, thanks Steve. Look, the first thing is they are very different, Ford and Inghams.
STEVE AUSTIN:
Sure, but it's the wider picture of globalization. It's actually globalization that's doing this.
BERNIE RIPOLL:
Well globalization has been around for a thousand years. That's the reality and it'll be around for another thousand years to come. Bob Ingham has made a personal decision on his own company and it's not a bad thing. He's confident and happy about the decision he's made and my understanding of it is, it guarantees Ingham continues to operate, continues to create wealth in Australia and jobs in Australia. Sometimes ownership becomes too much of an issue. It doesn't really matter too much whether Jo X owns it or Jo B owns it. As long as we've got it here and we're doing something with it. We're always looking, and everyone's always looking for investment, including foreign investment, people are always banging on doors saying please bring your money, we'll take it. So it is distinctly different in that particular area. Now, Ford...
STEVE AUSTIN:
So you agree with Clive Palmer. That is Clive Palmer's argument, he thinks that we are racist towards the Chinese that we put things before the Foreign Investment Review Board and look at national interest reasons.
BERNIE RIPOLL:
Well, I don't know that I agree with Clive Palmer on anything in particular.
STEVE AUSTIN:
Well, he says China should be allowed to buy whatever they want.
BERNIE RIPOLL:
Well, I don't know about that either. No, let's not go too far here. I think there are foreign investment rules and we have got a Foreign Investment Review Board specifically to deal with our own national interest, as we should. We should protect our national interest. That should always be the number one thing that we do, but that shouldn't preclude or exclude foreigners or anyone else coming and making investments in Australia. It's a good thing for our economy. We grow on the back of trade and export, we also grow on the back of investment.
STEVE AUSTIN:
How much money did the Federal Government put into the automotive industry recently?
BERNIE RIPOLL:
Well $34 million if you are talking about Ford specifically and substantially more generally over a long period of time. A ten year outward looking plan. Because we want to keep manufacturing in Australia. Manufacturing actually has a future in Australia. We don't want to lose that base and…
STEVE AUSTIN:
Ford are only going to stay here, have only guaranteed to stay here until 2016.
BERNIE RIPOLL:
Ford are restructuring. Ford will be here for a very long time. Ford are going through what the rest of the world is going through. Manufacturing is going through, not just here in Australia but also in China. I'll give you one quick example, a factory in China, manufacturing factory that used to have 10000 workers, today only has a thousand. For the same reasons that we have structural changes in Australia. In Australia, we are going through change, as is continually happening. We are supporting manufacturing. Look, it's terrible for the guys that lose their jobs. You really feel for them because they are the ones who physically and personally feel that change. And that's why as a government we go out with very specific training and retraining packages to make sure that they have got other opportunities and Australia has got a great future in manufacturing, in particular markets, in niche markets. Ford, like any other company, has to look at what products people want to buy. And that's what they are doing right now, you can't just keep making the same old widget if no one is going to buy it off you. And Ford…
STEVE AUSTIN:
So why keep subsidising them? Giving them taxpayer money that's just money that seems to be burnt off.
BERNIE RIPOLL:
What we are doing is we are helping them to change. We're helping them to restructure so we can keep manufacturing in Australia. It's important that we maintain that base. Nobody wants to lose manufacturing out of Australia, least of all us. This Labor Government want to keep manufacturing. You can't lose that base. You have to work with people to save that base.
STEVE AUSTIN:
Scott Buchholz.
SCOTT BUCHHOLZ:
Yeah, I think as a nation it is appropriate that we do have the debate about whether or not we continue to invest billions of dollars into a manufacturing industry to try and keep it globally competitive. From a Queensland perspective, not one red cent of that subsidised money ends up coming to this state. It goes to Victoria, it goes to South Australia. From a state perspective, I don't see a lot of economic rationalism for Queensland supporting it other than the emotional debate of having a manufacturing sector. Your economic purists will carry the debate that if we are not good at making cars and take, for example, Ford, I think they're number eight. If you want to get emotional about it, start buying Fords. But reality is, one out of every eight cars sold on the road at the moment aren't built in Australia.
STEVE AUSTIN:
Does it matter if someone like the Chinese owned a company like Inghams? Inghams Chickens.
SCOTT BUCHHOLZ:
Mate, I have fundamental problems with that. I mean, I would desperately love to see Bobby Ingham sell to an Australian company, I really would. A third of the production of Inghams Chickens comes out of my electorate, from Wright, so I would desperately love to see the longevity of my boys looked after.
STEVE AUSTIN:
Are the egg farmers under threat, because they have certain contractual financial obligations to the parent company don't they?
SCOTT BUCHHOLZ:
I suspect whoever owns Ingham Chickens, it shouldn't make an enormous amount of difference to the value chain down the bottom. Normally when you see those larger takeovers you'd see a vertical integration of the management structure. At the end of the day I know…
STEVE AUSTIN:
Australian farms are being bought up by the Chinese, significant sized farms and more.
SCOTT BUCHHOLZ:
Are you talking about the poultry farms?
STEVE AUSTIN:
Not just in poultry, in a whole range of agricultural produce.
SCOTT BUCHHOLZ:
Absolutely, and that's one of the concerns we have as a government is not being able to accurately determine how much of the country is owned by other nations. I think the kick off figure is $254 million before it appears on a register. We should be smart enough as a nation to have each of the states talking to each other with a more accurate register where we can calculate sales over a million dollars.
STEVE AUSTIN:
How many egg farms are there in your electorate? Egg producers in your electorate?
SCOTT BUCHHOLZ:
Well, I spoke to a bloke last night and he gave me an indicative figure that a quarter of the Inghams production for the state of Queensland, come out of my electorate.
BERNIE RIPOLL:
Just a couple of sensible points, I think here, is its always easy to say it is someone else and lets not sell it to other interests. It's up to Bob Ingham to decide who he sells it to.
SCOTT BUCHHOLZ:
He's an iconic bloke.
BERNIE RIPOLL:
Absolutely. (inaudible). The flow on effect is people are always saying "we've got to stop farmers selling their farms to the Chinese or whoever". Just don't sell it to them. My simple solution is tell the farmer to sell it to someone else. Sell it to whoever he likes.
SCOTT BUCHHOLZ:
Don't get me wrong, I'm not going to tell bobby not to sell it to the top dollar. But from a Queensland perspective and from an ASIS perspective, I would dearly love to see that business held by an Australian. The fact that we can't compete at that level...
BERNIE RIPOLL:
So would I, so I'm just going to walk up to the farmer and say to him, look, Mr Farmer, don't sell your farm to anyone other than somebody we say is specifically in or out. I think he might tell us where to go. The reality is, there is a balance here, people have the right with their own property and that's why we have foreign investment rules, that why we have a Review Board, that's why as a national interest, and I appreciate you saying that about Queensland, and I'm a Queenslander too, but there's an overriding interest, it's called the national interest. Often we are called upon to do that, act in the national interest. Now whether the Ford plant is in Victoria or if it were in Queensland, it wouldn't really matter. Because in the national interest there is a higher calling and that is that that base supports other jobs, some of those jobs and many of them are actually in Queensland.
STEVE AUSTIN:
This is 612 ABC Brisbane and ABC digital, Bernie Ripoll Federal Member for Oxley. Scott Buchholz, Federal Member for Wright. News headlines in just a few moments. Scott, after the headlines I'm going to ask you about refrigerant gas, but before I do that, any advice for Greg Rudd, Kevin Rudd's brother. They have a bit of a touchy relationship at times. Turns out Greg wants to get into it politics like his brother and join the Senate. What advice would you give him? Just briefly before the news headlines.
SCOTT BUCHHOLZ:
I caught up with him, had dinner with Greg a couple of months ago in Canberra. I can assure you that Kevin and Greg don't share the same political ideologies.
STEVE AUSTIN:
So who did you have lunch with a little while ago?
SCOTT BUCHHOLZ:
Greg.
STEVE AUSTIN:
Did he tell you then that he was thinking of getting into politics?
SCOTT BUCHHOLZ:
No, not at all. What a great thing about the Australian democracy. If you want to stand up and have a crack. Go your hardest. Is he going to get across the line? Use political history as a tool and go back to the last time Queensland put up an independent Senator, I really think that this next election is going to come down to a fairly clear mandate as to whether you support carbon tax or you don't. It will be interesting to see which way Greg bounces on that one, as to where his support base is going to come from.
STEVE AUSTIN:
He usually picks the political winds reasonably well. He probably wouldn't be standing if he didn't think he had a shot. (inaudible) Bernie Ripoll, what about yourself?
BERNIE RIPOLL:
I like Greg Rudd, he's a good friend of mine. I've got a lot of time for him. He's a clever guy.
STEVE AUSTIN:
But? Here we go.
BERNIE RIPOLL:
No, in fact Steven, there is no but. I wish him well.
STEVE AUSTIN:
So your advice for him?
BERNIE RIPOLL:
Look, I don't have any specific advice. Work hard, because that's what it takes, hard work. And he's got a famous name, so he's in with an unusual opportunity. So, good luck to him.
STEVE AUSTIN:
Scott Buchholz, tell me what is happening with refrigeration gases. You've been taking a look at the carbon taxes' apparent impact on the price of refrigeration gas.
SCOTT BUCHHOLZ:
Yeah, we had breakfast yesterday in my office with a number of business people. The increase in the refrigeration gas sector as a result of the carbon tax is having an absolute impact on some of the business houses in my electorate. There was a bloke who's got a transport business and, in my electorate, building a cold room down in Sydney to handle the veggies that we spoke about earlier on. Forty by 14 foot, price before carbon tax, price after carbon tax, $41000 difference. That is predominately attributable to refrigeration gas. Now, I didn't know much about it before it was brought to my attention, but R4O4A is the gas that we use in refrigerants in Coles cold rooms, in Woolworths cold rooms to try and keep the fridges cold and it has gone from $92.88 a kilogram, that's the measurement of weight, through to $377.71, an increase of 406 per cent on one singular line item. You think how is that going to impact me as mum and dad punter. If you're buying stuff out of the refrigeration sector at IGA, or Coles, or Woolworths, or any of your local distribution, or if any of your, through the value chain, if any of your vegetables or fruit end up in the cold room through the process, these 400 per cent increases in operational costs as a line item are going to have an effect on your cost of living.
STEVE AUSTIN:
But that has already been calculated, hasn't it? Yes, it will be passed on to the consumer, but as the Prime Minister has already pointed out, the consumer is being compensated at our end for increases.
SCOTT BUCHHOLZ:
I would suggest that those compensation rates would be left drastically short of the real cost of compensation, the real cost impact will be on the community.
STEVE AUSTIN:
Ken Henry, the former head of treasury argued that we are probably being over compensated.
SCOTT BUCHHOLZ:
Well, I don't know how many times Ken has got it right either. He made something like 287 recommendations to the government with reference to the tax review and today I think 8 of them have been picked up and possibly 12 will be implemented. So I don't know how... (inaudible)
STEVE AUSTIN:
Bernie Ripoll, do you want to add some observation to this finally?
BERNIE RIPOLL:
Absolutely, if we are looking at Coles or Woolies or any of the big retailers. Let's look at two things, one is as a percentage of the overall cost of a Woolworth's operation, it's minuscule. On its own as a line item, yes, it is a big increase as a number, but what does it represent down the food chain and how many extra cents will it add to a kilo of beef, to your milk? Well, right now I see some very strong competition, that we are all seeing, which means there are some real competitive pricing going on, right across the board in terms of food. Cost of living is an issue and that is why we've said we are going to compensate people, and that's the first time really government has recognized, we do it in a range of different ways, through pensions and through welfare and generally the wage system. But when you look at these figures, you can pick any one figure out and I could go and pick up another figure which actually says something has actually decreased because of the way that the economy is changing. (inaudible)
STEVE AUSTIN:
So what has decreased because of the carbon tax Bernie?
BERNIE RIPOLL:
Well, good question in terms of...
SCOTT BUCHHOLZ:
Carbon outputs aren't going to increase, your own carbon modelling says (inaudible)
BERNIE RIPOLL:
Let me tell you what has decreased, what has decreased is the amount of pollution we are putting into the air. Now we have been talking about pollution, we have been talking about carbon emissions for 20 years...
SCOTT BUCHHOLZ:
Treasury modelling says carbon outputs are going to go up.
BERNIE RIPOLL:
Well no, overall as a number, and look this is where it gets a little bit too clever for people, and you can always play games with all of this sort of stuff. It's about rate of growth versus absolute numbers, so if you want to get into really technical stuff, ok, yes, the absolute number of emissions will continue into the future, of course it will because we are a growing society of ...
SCOTT BUCHHOLZ:
From 587 million tonnes to 612.
BERNIE RIPOLL:
That's fine, but the rate of growth is slowing. Where would we have been if we don't do this is double that number. What we are trying to have is a massive impact on reducing the growth and people do understand that. If we don't do something today, then we are all going to look back in 20 years time and say, who are those idiots who stood by and did nothing about one of the most significant problems we face.
SCOTT BUCHHOLZ:
is this really the right time to be doing it though Bernie?
BERNIE RIPOLL:
Scott, there is never a right time for anything, you can just sit on your hands for the rest of your life because everything is just too hard.
(inaudible)
SCOTT BUCHHOLZ:
Take it to an election.
SCOTT BUCHHOLZ:
(inaudible) we will in 12 months
STEVE AUSTIN:
If you can find something which has gone down because of the carbon tax, I'd be keen to hear from you. We'll leave it there gentlemen. Bernie Ripoll, Federal Member for Oxley and Parliamentary Secretary to the Treasurer. Thank you. And Scott Buchholz, Federal Member for Wright. Thank you
SCOTT BUCHHOLZ:
Thank you Steve, and thanks to Steve Ciobo for the opportunity to pop in.