SUBJECTS: Asylum seekers, global financial crisis, Government stimulus, IMF, interest rates, unemployment, Carbon Pollution Reduction Scheme (CPRS).
KIERAN GILBERT:
Joining me now to discuss these matters is our Thursday panel, Minister of Opposition Business Christopher Pyne and Financial Services Minister Chris Bowen.
Gentlemen, good morning to you both.
CHRIS BOWEN:
Good morning Kieran.
CHRISTOPHER PYNE:
Good morning Kieran.
GILBERT:
Chris Bowen, to you first. There's been no confirmation of any deal with Indonesia when it comes to paying for them to process asylum seekers or a bounty per vessel. What is happening there? Is that sort of thing going to happen?
BOWEN:
A couple of points there, Kieran. The Australian Government already makes payments through various international organisations to assist in the processing of refugees in Indonesia. That's been the case for a long time. We also have the Lombok Treaty which is a framework for dealing with security matters, including matters such as this, and that involves discussions on regional issues, which this very clearly is. The Lombok Treaty provides a framework for discussing such issues and that would include the issue of resources.
Now, I don't think you can characterise the payments that Australia already makes as some per diem payment and you couldn't characterise those discussions about resources as going down the road of per diem payment. But there will be, there have been discussions about how we can better assist in the regional issue and how we can work with the Indonesians to ensure a regional approach and that will include, inevitably, matters of resources.
GILBERT:
Should that not be part of it, Christopher Pyne? Greater support for a country like Indonesia which is obviously under a fair bit of stress when it comes to the number of potential asylum seekers?
PYNE:
Well Kieran, last night another boatload of asylum seekers was picked up off Ashmore Reef. I assume that they're being transferred to Christmas Island. It's the 42nd boatload in the last 12 months since the Government changed the border protection policies of the previous Government.
Chris Bowen is right about one thing: it's not unusual for there to be arrangements with Indonesia. Most of those were put in place by the previous Government. Last week though, Kevin Rudd said in a leak to The Australian newspaper for the weekend that there was going to be a whole new arrangement with Indonesia that would be groundbreaking, but we have heard very little about it since he got back from Indonesia. So my sense is that they've hit a snag in their negotiations with Indonesia. The ABC last night reported that the bounty per boat, per asylum seeker boat, was confirmed by the Government. This morning the Government's saying this is not the case. We've got Michael Danby saying that they should be allowed in; we have Amanda Rishworth being unable to say whether they're asylum seekers or illegal immigrants.
Unfortunately, the Government's strategy is in the shambles and of course that's exactly what the people smugglers know, they've known that since the policy was changed 12 months ago and they are taking advantage of that.
GILBERT:
You've referred to those reports about the per diem, the bounty or whatever it's described as, reports on the ABC, on The Australian and elsewhere, that the Government is planning that.
PYNE:
The West Australian newspaper have said the same thing.
GILBERT:
Chris Evans, the Immigration Minister was on the PM Agenda program yesterday and was asked specifically about this by David Spears. Let's see what he had to say.
[Excerpt] EVANS:
That's a news report that's not being substantiated by anybody. There's no consideration that I know of, of those things.
GILBERT:
Chris Evans playing down the reports, the Prime Minister was yesterday asked about this in Question Time. He had an opportunity to deny it but didn't.
BOWEN:
Well Kieran, I understand there's going to be a lot of speculation about this, a lot of interest in this from yourself and your colleagues – that's natural. There are discussions, there are regular discussions with Indonesia about regional security matters and the appropriate response. This is no different. The speculation isn't actually helpful and it will continue. That's your job. It's our job to get on with the business of dealing with Indonesia and our other neighbours on regional security issues. This is exactly what we're doing.
GILBERT:
Christopher Pyne, is that a fair assertion? That it is a national security, border protection thing?
PYNE:
I think what Chris Bowen is confirming is that their approach is shambolic. A week ago, Kevin Rudd, with great fanfare, leaked to The Weekend Australian that there was a whole new arrangement with Indonesia. It had been described by Paul Kelly as the 'Indonesian Solution', akin to the Pacific Solution.
Well, a week later, another boatload of asylum seekers arrived last night. We are no clearer about what that actually means in terms of what that means for our relationship with Indonesia.
GILBERT:
Stephen Smith says that the Howard Government worked out far too late that Australia has to work cooperatively with the region.
PYNE:
That's not true. The thing that worked in the previous government, that actually sent a strong message to people smugglers, was the Pacific Solution. The fact that people who arrive by boat as asylum seekers couldn't get the same kind of residency as people who came through orthodox means, and of course a real ramping up of our relationship with Indonesia when it came to these matters.
Between 2001-2008, the number of arrivals and the number of boats slowed to a trickle. Since that time, there's been a surge, an explosion at the same time that the push factors from overseas have lessened but the pull factors in Australia have obviously markedly increased and the people smugglers are marketing that.
BOWEN:
Chris, you just can't make things up in this debate. You can't say that the push factors around the world have decreased….
No, it hasn't Chris. Since 2006, there's been a 30 per cent increase in the number of refugees around the world…
You've just said it's all the pull factors, you've just said it worked under John Howard. You've just endorsed TPVs. You've just said that it's appropriate to leave people in limbo when they arrive. You've just endorsed all the Howard Government policies.
So what's the Liberal Party's approach on this? Put children back in detention? Reintroduce TPVs? Send them back to Nauru? What we have done is deal with this in a sensible and humane way. There are elements of the Howard Government policy which were unacceptable. We've also said we will have a touch approach on border protection.
We will deal with people on their merits and we will not have a system where people are put in detention. TPVs, which Chris Pyne of all people, who's meant to be a moderate in the Liberal Party, just endorsed and which the Liberal Party, in quite an outrageous campaign, is trying to say that pull factors have been the element here when we've had a 30 per cent increase in refugees around the world.
There are 250,000 Tamils in the north of Sri Lanka who are displaced. We've got members of the Tamil community arriving in Canada and Ukraine and the Liberal Party seems to say, well that's all because the Rudd Government has taken children out of detention and that's why people are arriving in the Ukraine and Canada.
I mean Chris, you of all people cannot make that case. You of all people…
PYNE:
Hang on, you can't just talk over people.
You can't just try and pretend that border protection is about women and children in detention. Now, I know you'd much rather try and send the message that it's about women and children in detention – it actually isn't. It's actually about protecting our borders and having a humane policy that doesn't encourage people to come here. There is nothing humane about a policy that encourages people to come here and that's what the Government has created. They have thrown up their hands in horror and said, a year ago they made these changes, how amazing it has been that there are 2,000 arrivals because of it, and they're now trying to pretend it's because of push factors when the number of people seeking asylum, according to the UNHCR has gone down.
BOWEN:
No, that's what happened when you were in office.
PYNE:
In fact, what's really happening here is that the Government is running scared from their failed policy. They're trying to pretend to be tough with respect to border protection but the public knows that they aren't. The want the rhetoric to say one thing but it doesn't match the reality. Another boat arrived last night, there will be others into the future unless the Government puts a suite of policies in place. In the Howard Government, we had a suite of policies. We didn't rely on one thing, we relied on many things and it worked and the public knows it.
GILBERT:
Okay I want to ask you, Chris Bowen, why does the Prime Minister continue, and indeed the rest of the Government, continue with that rhetoric that it's being tough on this issue when it has reined a few of the tougher elements in or softened policy. You say it's more humane, is it not incongruous with the argument that it's tougher as well?
BOWEN:
No it's not. What we've done is, we've taken an approach domestically which says it's unacceptable to move people to places like Nauru etcetera. It's unacceptable to have children in detention; it's unacceptable to have temporary protection visas which leave people in limbo. What is acceptable is to have very strong border protection. We've increased the number of patrols, we've sent the message that if you are not a legitimate asylum seeker, you'll be returned and we're working with our regional neighbours. It's very easy in politics and in Opposition, as Chris and his colleagues have done, to make cheap and tawdry political points.
PYNE:
What did you do when you were in Opposition?
BOWEN:
Well we certainly didn't demonise people. We certainly didn't make allegations about people being terrorists.
PYNE:
It's so easy, it's all easy but then you got into Government and found that being in Government is much harder than you expected, and you're struggling.
BOWEN:
Well Chris, you and your colleagues would be about the only people in this country who would have that analysis…
PYNE:
I don't think the people think you're doing very well with border protection to be honest. 2,000 people in one year, 42 boat arrivals, I'm not sure the public are popping the champagne corks over your success in this policy area.
GILBERT:
You are critical of the demonising of some elements of the political arena. You know Paul Howes from the union movement, Michael Danby, one of your fellow Labor MPs and Heather Ridout from the Australian Industry Group are expressing concern about the way this debate is unfolding, about the use of tough rhetoric from your Prime Minister.
BOWEN:
Well look I think the Prime Minister is a clear communicator. He sent the message around the world that Australia…
Well Chris, you can scoff all you like. The Prime Minister is a clear communicator. He's sent a clear message and of course, that is appropriate. It's also appropriate that we treat people with respect and that we deal with this issue in a measured manner. We send the message that we are not willing to accept people who do not have a legitimate claim and we send the message that we'll deal with people in accordance with international law and in accordance with the proper standards that should apply.
GILBERT:
The Uniting Church doesn't seem to agree. They've written to the PM ensuring that Australia leads on this issue. They're obviously not enjoying what they see from him.
BOWEN:
We'll be criticised from the left and we'll be criticised from the right. Chris criticises us from the right and says we're not tough enough. We'll get criticism from left to say we're too tough. We accept that. That's the price you play for having a balanced policy. That's the price you pay for having a sensible and humane policy. That's what happens in Government and it's fine.
GILBERT:
Malcolm Turnbull would be one of the more moderate MPs. He's known for that, for being a small 'l' liberal. Is this tough talk natural for him?
PYNE:
The point is that there's nothing humane about a policy that encourages people to risk their lives and the lives of Australian service people who are in the navy, customs etcetera. There's nothing humane about encouraging those people to come. So you can change the policies that make them want to get here. The pull factor is that if they can get to Australia, they will be able to, within about three months, have access to everything that every other Australian has because they're processed through Christmas Island, they can become permanent residents and that's why they want to get here…
But in the first place, you actually have to have strong policies which don't encourage them to come here.
Can I just say about the Reverend Tim Costello and the Uniting Church, they are simply responding to the rhetoric. But the rhetoric is meaningless, it's the whole thing about the Rudd Government, it's just about spin. The reality is the people smugglers know the truth, they know that when they go overseas, they can say to people, 'we'll get you to Australia, you'll be permanent residents within three months'. They're prepared to pay for that, that's what they're marketing overseas.
GILBERT:
Okay, Wilson Tuckey, he's known for his strident views to say the least. Let's hear a little of what he had to say on this issue this morning.
[Excerpt] WILSON TUCKEY:
Apparently when the Federal Police write a report, that infers there could be the occasional terrorist in a boatload of people that that's so unique that it needs to be classified.
GILBERT:
He's making the link between the potential terrorists being on the boats. I mean, is that the sort of thing that we need in this debate?
PYNE:
Well maybe that's a question you should put to Wilson Tuckey. I mean Wilson Tuckey is a jack-of-all-trades with all policy areas. He has a comment to say on every policy area but he's not the spokesman on immigration, he's not the leader of the Liberal Party. As a consequence, I think if you want to ask him about his personal views, you should ask him, not me.
GILBERT:
Stay with us after the break. We're going to look at the recent comments overnight by Treasury Secretary Ken Henry.
Welcome back to AM Agenda. With me, Chris Bowen and Christopher Pyne.
Gentleman, I want to now look at comments by the Treasury Secretary, Ken Henry, overnight. Chris Bowen, first to you. He's pointing to the strength of China and India in the face of this global financial crisis and the potential for the labour market to be bouncing back very quickly, indeed back to full employment within, what he says, not too many years. This is Ken Henry being very positive and it seems more positive than he has been in recent weeks.
BOWEN:
Well, the Treasury Secretary last night correctly was pointing to the resilience of the region in which we are, in Asia, and the resilience of China and India and its impact on Australia. We've said that consistently, that's true and very welcome but that doesn't take away from the immediate challenge and the Treasury Secretary was talking about the medium term. That doesn't take away from the immediate challenge which is still very evident.
We saw, John Lipsky, effectively the deputy head of the IMF, overnight express great caution about moves to withdraw the stimulus around the world and particularly in the Asian region which is what we've been saying.
So look, this is of course, a positive. The Treasury Secretary's views are in accordance with what we've been saying for some time that one of the things that we have going for us in Australia are our links to China and India and Asia generally. We've of course taken a hit in terms of trade, as some of our major trading partners have slowed. Some of them are still in very significant slowdowns. Singapore, for example, is still having an impact on our terms of trade and export performance. But the medium and long term indicators from Asia are very good and that's very positive.
GILBERT:
Christopher?
PYNE:
Well I think if we strip away the code language, the immediate challenge in inverted commas as Chris Bowen is talking about, is Labor's plan to win the next Federal election. They're going to keep their stimulus going, in spite of what Ken Henry said last night about an ongoing resources boom that will last decades, full employment in the relatively near future – a pretty rosy economic picture that he painted.
Labor is still talking about the old rhetoric because they know if they keep spending money it gives them the best chance of winning the next Federal election. That's in spite of the fact that it will force up interest rates, it will push up inflation, it will keep the dollar high which hurts a lot of our Australian businesses as a consequence and they will keep doing that because they want to throw money at the electorate to buy the next election. That's the real agenda here.
GILBERT:
Should we see in the mid-year economic forecast, out I think it's late next month, should we see a revised number from the Treasurer? That he is at least listening to other calls that you should rein in the spending faster?
BOWEN:
Look, the mid-year economic forecasts will have revised predictions for the economy, as it always does.
GILBERT:
Revised numbers on the spending?
BOWEN:
It will have revised parameters for budget outcomes as is always done but as we've made the point and as the Treasury Secretary has made the point, this fiscal stimulus strategy was designed to wind down and it is winding down…
It will wind down in accordance with the plan that we've laid out.
PYNE:
You're not going to change it at all?
BOWEN:
As I said, the IMF overnight warning caution. I know Chris is willing to raise the flag of victory, having been absent at the battle and say it's all over, the stimulus has worked when they said it wouldn't work, now they say it works…
PYNE:
The Howard Government was the artillery on the battlefield when it gave you no debt, no deficit…
BOWEN:
I didn't realise that the Howard Government had written the stimulus strategy…
PYNE:
You started with no debt, no deficit, I regard that as the artillery if you are fighting…
BOWEN:
That passed me by, I wasn't aware that John Howard…
When I was in the Expenditure Review committee and sitting at the table, I didn't realise that John Howard was in the room when we were dealing with this global financial crisis…
GILBERT:
You talk about this thing moderating, should it moderate quicker? There are many economists who are now saying that it should, given the sort of things we're hearing from Ken Henry and Glenn Stevens. On Melbourne Cup Day we're all going to have a punt and in the meantime, the interest rate is going to go up half a percent…
BOWEN:
There are many economists who say that the fiscal settings in Australia are absolutely spot-on right that the wind down in the stimulus is appropriate. In fact, the Governor of the Reserve Bank has said that as well.
PYNE:
What about Ross Garnaut?
BOWEN:
And Ross Garnaut said quite appropriately that you respond to changing circumstances…
No, don't misquote Ross Garnaut. Ross Garnaut said if the economic parameters change, then fiscal policy changes. Of course, the Treasurer has said we keep monitoring economic developments and respond accordingly.
GILBERT:
So does that mean you are willing – is that code for saying you are willing to rein it in?
BOWEN:
What the Treasury Secretary has said previously is if you adopt the Turnbull, Hockey and Pyne plan to withdraw stimulus immediately that will see 100,000 more Australians in the unemployment line. That might be acceptable to Chris, it's not acceptable to us. We think that keeping unemployment as low as possible is the key policy objective for this Government in the face of what still is the biggest economic crisis in 75 years.
GILBERT:
Okay I want to get Christopher's thoughts. The monetary policy is still on an expansionary setting. Even if rates, as tipped by some analysts, do rise by half a per cent on Melbourne Cup Day, so they're still very low comparatively. So the argument that they're not in sync with fiscal policy, is that diminished by that?
PYNE:
I think mums and dads, Australians who have mortgages, are going to find that conversation rather pointless when their interest rates are going up, when they're facing more pressure as a consequence of that and yet they can see the Government still pushing money out the door. You've got to understand there's another feature to this, something the Government hadn't planned for. Of course, because they pushed so much money out so quickly, pushed programs out so fast, it's behind schedule so a lot of the money that's going to be spent will be spent in the future when it doesn't need to be spent, when it's actually going to push up interest rates even faster. That again, because of the Building the Education Revolution failures, because Julia Gillard managed this so poorly, it's behind schedule. The money's going to be coming on stream at exactly the wrong time and as a consequence, it's going to have more pressure on interest rates.
BOWEN:
The fiscal stimulus has peaked. I mean, the fiscal stimulus was designed to peak at the time it was most necessary and that's exactly what's happened. Now for mums and dads paying mortgages, they would want to keep their job. They wouldn't want to be one of the 100,000 people that Chris Pyne, Malcolm Turnbull and Joe Hockey want to make unemployed by withdrawing the stimulus at the moment. The biggest thing you can do to keep people in their houses is to keep them in work. We believe that that is important, that that is the priority. Chris might believe it's fine to have unemployment, he might say we should be working harder to get to the eight and a half per cent that was predicted…
That's the implication of your ridiculous policy position.
GILBERT:
We've only got a minute to go, I just want to get a quick thought from both of you on the Emissions Trading Scheme. The bill is going back to Parliament today. It got off to a very positive start; the negotiations, mutual admiration almost.
PYNE:
Well I'm not going to give a running commentary on negotiations with the Government about the Emissions Trading Scheme. Ian MacFarlane is doing that and doing a fine job and I'm sure my friend and colleague from South Australia, Penny Wong is doing the same. I hope the negotiations are successful as we'd like to improve the Emissions Trading Scheme.
GILBERT:
Starting positive, what are the prospects for a happy ending to this story?
BOWEN:
Well I think it's in the national interest that we have an Emissions Trading Scheme. It's in the national interest that we have good and sensible negotiations and my understanding is that's what's happening and that's a good thing.
PYNE:
Good faith breaking out all around.
GILBERT:
Yes it's very unusual!
Chris Bowen and Christopher Pyne, appreciate your time. Thanks very much.
BOWEN:
My pleasure
PYNE:
My pleasure.