SUBJECTS: Unemployment, Nation Building and Jobs Plan, Emissions Trading Scheme, WorkChoices, Liberal Party leadership, fiction
LEIGH SALES, PRESENTER:
This week it was all about jobs, jobs, jobs. As the Government tried to negotiate its Fair Work bill through the Senate, the unemployment rate jumped higher and faster than expected. And though the Coalition agreed on a new slogan for the global economic crisis, the 'Rudd Recession', its positions on both industrial relations and the emissions trading scheme were unclear and muddied further by a very familiar spectre - one P. Costello.
To discuss the week in politics, I'm joined in Sydney by the Assistant Treasurer Chris Bowen and from Melbourne by shadow Environment Minister Greg Hunt. Welcome to both of you.
CHRIS BOWEN, ASSISTANT TREASURER:
Good evening, Leigh.
GREG HUNT, SHADOW ENVIRONMENT MINISTER:
Good evening.
LEIGH SALES:
Chris Bowen, it seems inevitable that the Treasury's going to have to revise the unemployment figure upwards in the Federal Budget from the current seven per cent. Should Australians brace themselves for a higher number?
CHRIS BOWEN:
Well, we'll be putting out our predictions on Budget night, the Treasury forecasts on Budget night, as is usually the case. We've said all along that all the risk is on the downside, that the world economy is getting worse. I think Access Economics said this week it's gone from rotten to diabolical, and that's probably pretty accurate. So, the risk is on the downside, but we'll putting out the revised forecasts, as is normally the case on Budget night.
LEIGH SALES:
Greg Hunt, what's your response to that? Do you think we're going to be seeing the unemployment number get higher?
GREG HUNT:
Well, these are very difficult times and what we would like to see is Chris Bowen and the Government release the unemployment modelling from the emissions trading scheme and from their workplace relations changes. There are real risks to employment from each of those changes, and I would ask Chris tonight to please guarantee that they will release the modelling of the unemployment effects of those pieces of legislation.
LEIGH SALES:
Chris Bowen, will you do that?
CHRIS BOWEN:
Well, I'm surprised that Greg of all people would suggest that there's a choice between the environment and jobs. There's a false dichotomy that the Liberal Party's trying to paint. We can make our contribution to climate change abatement and we can have employment growth. They're no - that's not a choice. The CSIRO predicted, said that if you have deep emissions cuts, you could create up to 340,000 jobs in low-polluting industries. So it's not a choice between helping the environment and creating jobs - you can do both. And also, the Liberal Party's running a scare campaign on industrial relations. I mean, the Australian people voted against WorkChoices. And one of the things that we found during the campaign was people saying, 'Well, look, it might be OK in the good times not to have our employment protected, not to have unfair protection, but what about when the economy turns bad? That's when we really need the protection.' Well the economy has turned bad, and the Australian people would expect us to deliver on our commitment, and we will.
LEIGH SALES:
If the economy's turned bad, why is now the time to start an emissions trading scheme?
CHRIS BOWEN:
Well, I agree it would've been better if we'd done it back in 2003 when Peter Costello made the submission to Cabinet that we should do so. Everybody agrees on that. But as I say, it's not a false dichotomy between jobs and the environment. You can do both. The Treasury modelling showed that if you are an early actor, if you don't wait and see, as the Liberal Party would have us do, but you get out and you get in front of the game and introduce emissions trading, then the costs would be less and Australia can actually get in front of the game. I mean, we had President Obama ..
GREG HUNT:
Leigh?
CHRIS BOWEN:
... during the week saying that we need and America needs an emissions trading scheme. The world is moving, and if Australia sits on the sidelines, we'll be left behind and then our costs of adjustment will be much greater.
LEIGH SALES:
Greg Hunt.
GREG HUNT:
Let me take of these propositions head on. A bad emissions trading scheme will destroy jobs. Let me give you an example. Sun Metals in Queensland: 450 direct and indirect jobs. They have said that under Chris Bowen's, under the Treasurer's, under Senator Wong's, under Kevin Rudd's emissions trading scheme, they will probably move straight to China. Those jobs will go from Townsville, not because of the global economic climate, but because of a bad scheme, badly implemented, in a bad way, which will send up global emissions by sending Australian jobs to a higher emissions environment. The same goes for Visy. Visy is not a soft company. Visy is a great Australian company. And they have said they will take two paper recycling plants, 160 jobs, also to China or elsewhere in Asia if the emissions trading scheme in this form, without a level playing field, to protect Australian jobs, occurs. And what will happen is that you take Australian waste paper all the way to China, you process it in China under a higher emissions regime, you import it back and you pay, not only in terms of jobs, global emissions, but instead of being a producer, we become an importer. It is the definition of an economically disastrous approach. Now I believe passionately in real action on climate change through green carbons for improving what we can do with our soils, our farms, creating Australian jobs. But at this point in time, their model, without a level playing field, is like driving without a seatbelt.
LEIGH SALES:
Greg Hunt, at the time of the Howard Government's election in 1996, Australia's unemployment rate was 8.4 per cent. We're now at 5.2 per cent, so in comparatively good shape. Our unemployment rate is also significantly lower than other nations; the US is at 8.1, averaging across Europe it's at 8.2 per cent. That would show that the Rudd Government's managing things quite well so far, wouldn't it?
GREG HUNT:
What it shows is that the Rudd Government inherited the Rolls Royce economy of the world. It did go from the mid-eight per cents down to 3.9 per cent. Now what we've seen is not a comparatively good outcome; 80,000 jobs in two months, 54,000 full-time jobs last month, 10,000 jobs a week, 10,000 lives and families since Christmas. That is a disasterous outcome with a terrible human outcome. And what I say very clearly is this Government is making it worse by reverting to old Labor of debt, strikes and above all else, high unemployment. It can be better, it's being made worse and it's old Labor up to the business of maxing out the national credit card, importing a global debt crisis and helping to create a potential Australian debt crisis.
LEIGH SALES:
Chris Bowen, picking up on Greg Hunt's points there: he didn't use the words 'Rudd Recession', but that's the line that the Coalition is now using. Is it inevitable that even though many of the factors are outside the Government's control, that at some point the Government will wear this recession, the blame for it?
CHRIS BOWEN:
Well, Greg engaged in the normal Liberal Party sophistry on the economy. I mean, we are seeing the most synchronised downturn around the world and that is having an impact on Australia and Australians understand the causes of that. They also understand what we've done. I mean, we've acted, with two stimulus packages, the Reserve Bank has acted. And as a result, we're seeing retail trade figures - retail sales figures are being much more robust in Australia than they are around the world, and that flows through to employment. Yes, we've had a bad unemployment figure. We knew that that was coming. We've been saying for some time that that had been coming. And we have said for some time that unemployment is gonna rise more. But what we're also seeing is the Australian economy standing up better than most around the world, and that is partly due to the early decisive action that we've taken. I mean the Liberal Party's position on climate change and the economy are the same: 'Let's sit back, wait and see what the rest of the world does. Let's sit back and do nothing.' I mean, we don't think that that's sustainable. As a result, we're seeing some better figures in Australia than you're seeing from other countries around the world, and I think the Australian people understand that.
LEIGH SALES:
Greg Hunt, the polls do show that the Australian people don't believe at this point that the Rudd Government is to blame for the downturn. Are you simply hoping that some of your mud will stick?
GREG HUNT:
No. What we've seen is a Government which has not yet had to make a single hard decision. To spend $42 billion in giveaways, to run up $200 billion of debt - those are the easiest things in the world to do. And of course people will appreciate it at some stage. But for every $900, there's $9,500 of debt which has to be paid back by our kids and by our grandkids. And this debt crisis, this debt millstone, this debt disaster which they're imposing on the next generation, will not be a good legacy for Australia.
LEIGH SALES:
Well the cheques only went out this week. Isn't it a bit soon to be writing the whole thing off as a disaster?
GREG HUNT:
Well, ABN Amro put it very succinctly. They said of all of the different stimulus packages in the world, this was the least effective. It had a multiplier rate, which means the amount that goes through of about 0.3. The US is looking basically at one for one. What we could have done is much more effective things. Let me give you an example. In my own portfolio, there's $5.8 billion of money for water infrastructure on farm. Save water, help production. It's infrastructure which, if it had been released, could have gone straight to local jobs in communities, whether it's Deniliquin, whether it's Moree, whether it's Mudgee, contractors, suppliers, post hole diggers. And this was money which the previous government budgeted. It's not money which had to be borrowed, and it's money which has been sat upon so real jobs which could have been created with a huge environmental and economic multiplier effect had been left wanting, whereas they've been borrowing to give money away. It's not a popular decision that we've taken, but it is a long-term decision.
LEIGH SALES:
Let's - let's let Chris Bowen respond to that.
CHRIS BOWEN:
Well, look, the Liberal Party's position when it comes down to it is that we should wait and see. That's what Julie Bishop said, Joe Hockey said it in as many words, that we've done too much too early.
GREG HUNT:
Why are you waiting on water infrastructure?
CHRIS BOWEN:
The Liberal Party's position is that we've done too much too early. Now, the opposite is the case. And as for our stimulus package, there's plenty of evidence that our stimulus package is well-targeted.
GREG HUNT:
The worst in the world.
CHRIS BOWEN:
It's temporary, targeted and effective. Compare it to the United States stimulus package: we have 53 cents in the dollar being spent early in 2009 compared to, on some estimates, between 12 and 20 cents in the United States. So it's very targeted. We have the combination, not only of the payments to families and others, but also the investment in the future. For every dollar spent on a payment, a direct payout, there's $2 of investment for the future - infrastructure and schools, which, you know, the Liberal Party says is 'ridiculous'. We don't feel that's the case. We think our package is well-targeted and there are plenty of expert commentators who agree with us and violently disagree with Greg and his colleagues.
LEIGH SALES:
Now you used the word 'well-targeted' there - words 'well-targeted' there three times. How well-targeted are they when we've seen this week them going to dead people, we've seen them going to people who are no longer living in Australia? How well-targeted is that?
CHRIS BOWEN:
Well, you know, the Liberal Party would apparently ...
GREG HUNT:
There's barely a person in the developed world who didn't get it.
LEIGH SALES:
Greg Hunt, that question wasn't towards you, I might add. Chris Bowen.
CHRIS BOWEN:
Settle down, Greg. Settle down. The Liberal Party would apparently rip up our social security agreements, which indicate that when there's a payment to pensioners in Australia, it goes to our pensioners overseas. Of course it does. With the payments to taxpayers, if a taxpayer paid tax in Australia and subsequently moved overseas, of course there'll be some of that. A very, very small amount, a very, very small proportion of the total. A very small proportion of the total. When you're looking at really big figures - I mean, I think if this is the best the Liberal Party can come up, you're gonna have to do a bit better than that.
LEIGH SALES:
Alright. We've got a few other issues that I want to try to whip through quickly, one of them being the Government's industrial relations legislation. The sticking point is the number of workers that a small business has to employ before it's subject to the unfair dismissal provisions. The Coalition wants the figure set at 25, Labor wants it at 20. Chris Bowen - 20 - at 15, sorry.
CHRIS BOWEN:
15.
LEIGH SALES:
Chris Bowen, wouldn't 20 be a good compromise?
CHRIS BOWEN:
Oh, well, look, the Liberal Party has plenty of positions on this as well. But, look ...
LEIGH SALES:
But why can't you compromise at 20?
CHRIS BOWEN:
Well, the key point about unfair dismissals is this: the Liberal Party would have us believe that we are going back to the old days of three strikes and complex negotiations for small business to go through, and nothing could be further from the case. With a small business, we have effectively a 12-month probation period, so a small business can make that decision. They have 12 months to work out whether an employee is good or bad. And then, after that, a simple process, which ensures fairness but doesn't load small business with the burden of paperwork and turning up to, you know, complex and difficult hearings, etc. So, we have struck. We've worked very closely with small business groups and they've welcomed our package. Now we went to the election with a policy of 15. We were clear a mandate exists for 15. Now obviously, Julia Gillard is talking to the cross-benchers and making sure that we can maximise support for our package. But we went to the election with a policy of 15, and that's what we'll be arguing vigorously for.
LEIGH SALES:
Greg Hunt, Chris Bowen raises that point of the mandate. Malcolm Turnbull has said in the past that he concedes WorkChoices is dead, that the Coalition heard the voice of the people at the last election. Given that, doesn't that mean you should accept Chris Bowen's point that the Government has a mandate for their reforms?
GREG HUNT:
Well the Government has taken what they said at the election and gone dramatically further. There is quite a radical agenda as part of it. So what we see is union right of entry, union right to inspect people's private personal records. We see an attack on what could be a small business, whether it's a hospitality office - well, whether it's a cafe, whether it's a sandwich bar, whether it's a laundrette. You might have a situation where you have a small number of employees, but it's spread across a few days. That will suddenly be counted as 15 employees. It may only be three or four or five full-time employees. Under this system, the smallest milk bar, if it has part-time workers, risks being put under a very onerous system.
The second thing is in terms of compromise. Michael Keenan, our spokesperson, has written to Julia Gillard. He rang Julia Gillard's office. He's spoken, he's offered to meet, he's offered to sit down and he has been summarily dismissed. So the door is open to talk. I'm not going to get into individual negotiations, but the principle is: we stand ready to sit and to talk and to discuss. But we do not expect that will be taken up by the Government. The last thing is they could do Australia a great service and that is to release the modelling which until now has been quite secret as to what the jobs effect will be of their work.
LEIGH SALES:
Okay. We've made that point. We've made that point, so let not go over it again. I'd like to talk briefly about Peter Costello. Greg Hunt, when Brendan Nelson's leadership was being undermined by speculation about Malcolm Turnbull's ambitions, Dr Nelson called a spill to bring it to a head. Should Malcolm Turnbull do the same with Peter Costello?
GREG HUNT:
Malcolm is the leader. He's going to stick right through. He's a strong leader. And what is impressive is that he understands the waves of history, he identified the need not to slow down the economy at the start of the year.
LEIGH SALES:
Well I'm not asking about that. I'm asking about ...
GREG HUNT:
He's a strong leader, he'll do the right thing. And the only challenge that I hear around Canberra at the moment is - I like Chris, I know Chris and I see that with the Treasurer overseas, he's eyeing off Wayne Swan's job.
CHRIS BOWEN:
Oh, settle down, Greg. Good try.
LEIGH SALES:
Nice attempt to change the subject there, Greg Hunt. Well how is this issue going to be resolved? Are you quite happy to be seeing your message being undermined by all of the distractions surrounding Peter Costello's ambitions?
GREG HUNT:
Let me speak up on Peter's behalf as well. You have a guy who was Treasurer of Australia. The Labor Party will criticise him if he's silent and the Labor Party will criticise him if he speaks up. His voice is a powerful voice. What he said yesterday was something very simple. He said every dollar which is being paid out is borrowed. Every dollar which is being given now will have to be paid back. It's a loan shark that's out there because they give you $900, but it's $9,500 on the national credit card bill. And if Peter Costello is giving messages like that, I am very happy because he is a strong, powerful advocate with a real history of economic success.
LEIGH SALES:
Chris Bowen, is the Labor Party war-gaming the return of Peter Costello to the Liberal leadership?
CHRIS BOWEN:
No, but can I say this? I almost feel sorry for the Liberal Party. I mean, Peter Costello is arrogantly using it as his plaything. He is indulging in an arrogant exercise. And at the end of the day, it's a matter for the Liberal Party what they do about it. But just as an observer of politics and a participant, it is the most self-indulgent exercise I've seen in a long time. And, really, he should decide what he wants to do: is he gonna run or not run? But we're focused on the problems facing the nation, the economic crisis, et cetera. We're not war-gaming any particular Liberal leadership result. But it is quite bemusing to watch.
GREG HUNT:
So you're not briefing against the Treasurer?
LEIGH SALES:
You better answer that on the record.
CHRIS BOWEN:
Certainly not. Of course not, and Greg's being very mischievous as he knows.
GREG HUNT:
A categorical denial, I know.
CHRIS BOWEN:
There's plenty of problems in the Liberal Party. The Labor Party's very cohesive.
GREG HUNT:
Young Cassius has a lean and hungry look.
LEIGH SALES:
Chris Bowen, you wrote an article this week extolling the virtues of fiction reading for politicians and indeed for all of us. What's your favourite novel?
CHRIS BOWEN:
Two equally favourite novels, Leigh: the 'The Grapes of Wrath' and 'To Kill a Mockingbird'.
LEIGH SALES:
Greg, what about you?
GREG HUNT:
T.E. Lawrence, 'The Seven Pillars of Wisdom'.
LEIGH SALES:
Now how come nobody in these forums ever says something like 'The Da Vinci Code'?
CHRIS BOWEN:
Well, I'm sure 'The Da Vinci Code's a fine novel, and any novel that people are reading should be encouraged.
GREG HUNT:
I'm capable of reading across the full spectrum of high and low, but that one stayed with me.
LEIGH SALES:
Alright, Greg Hunt and Chris Bowen, thanks very much.
CHRIS BOWEN:
Great pleasure, Leigh.
GREG HUNT:
It's a pleasure.