SUBJECTS: Prime Minister Julia Gillard, Government stimulus package, Building the Education Revolution, Resource Super Profits Tax, Election
LEON DELANEY:
Federal Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen. Good morning.
CHRIS BOWEN:
Good morning, Leon.
DELANEY:
How are you today?
BOWEN:
I"m doing fine. How are you doing?
DELANEY:
Not too bad. Tony Abbott says, "Different salesman, same product". Surely that's more or less accurate, isn't it?
BOWEN:
Well, when you have a new Prime Minister, you have a new focus, a fresh approach, and every Prime Minister puts her own stamp on the Government, as Julia Gillard is doing and will do. That's why governments are named after the Prime Minister: the Howard Government, the Rudd Government, the Gillard Government. Prime Ministers do change focus and provide new leadership. So I think Tony Abbott's, you know, pretty desperately trying to spin that one, but we will have a fresh approach.
DELANEY:
So does that mean there will be significant changes to policy or approaches to policy?
BOWEN:
Well, I think, Leon, it's fair to say that this Government's been a good one. You would expect me to say that, but that's my view. I think the Australian people give us a tick for our economic management, particularly through the global financial crisis. We did what we had to do to see Australia through and Australia avoided a recession, unlike most other countries.
I think also people are saying, "Having done that, we want you to focus on basic issues, services for working families, cost of living, the economic fundamentals," and I think the Government's taken a decision that the best way of giving that focus is a fresh start with a new Prime Minister and that's what she'll do.
DELANEY:
You're claiming credit for successfully guiding Australia through the global financial crisis, but it was a flawed success, wasn't it, a flawed triumph? Because it was precisely those economic stimulus measures which also ended so often in controversy, with the cash bonuses being famously sent to dead people or people living overseas; the school building program being subject to cost overruns and exorbitant pricing; the home insulation program ending not only in controversy but also tragedy. All of these processes were flawed and that has been the source of much of the criticism of the Government, hasn't it?
BOWEN:
Look, I think the first point, Leon, is that the economic stimulus was successful in doing what it was meant to do, which is getting Australia through the recession internationally and avoiding a recession here in Australia. The cash payments: overwhelmingly successful. We needed to give people a boost to their income immediately – it's something quite innovative; other countries didn't do it – because we didn't want to wait around for years before we could get the money out the door. We needed to get the money spent quickly. In the vast majority of cases, that worked. Even in relation to, as you put it, dead people, well, the money went to the estates and the recipients, so it still got spent in Australia by people who were beneficiaries of wills.
In relation to the school program, Leon, again, frankly I disagree. An overwhelming success. I could take you through a tour of schools in my electorate, for example, show you for the first time disadvantaged schools getting science labs and language laboratories, and yes, new school halls, but new libraries and new classrooms that the teachers are so excited about.
DELANEY:
And $600,000 canteens smaller than a one-car garage.
BOWEN:
Well, but Leon, you've got 24,000 –
DELANEY:
$800, 000 glorified pergolas called "covered outdoor learning areas".
BOWEN:
24,000 projects, Leon, across the country.
DELANEY:
$800,000 toilet blocks with two toilets.
BOWEN:
If you'll let me just finish the sentence, 24,000 projects across the country and how many have been complained about? About 150. 150 out of 24,000. Now, even if you assume that each one of those 150 complaints are valid – I'm not sure they are, but let's just say for the sake of the argument that every one of those complaints are valid and that there's been problems with value for money in those projects – 150 out of 24,000 is a pretty good strike rate.
DELANEY:
Even today there's a report in New South Wales in relation to the building the education revolution program with further concerns about the quality of the work. There's a problem now with a significant number of defects being found in the work that's been done, despite the high prices paid.
BOWEN:
Well, I haven't seen that exact report, but we do have a very vigorous process in place. This is the most audited Government program in Australian history, Leon.
DELANEY:
Was it a mistake to trust the states to administer it?
BOWEN:
Well, again, as I say, 24,000 projects, almost all of them delivered without incident. And as I say, I could take you through the schools, Leon, talk to the principals, talk to the teachers and they'd show you the technology that's going into these classrooms for the first time; the specifically designed, fit-for-purpose classrooms, in many cases replacing classrooms 60, 70 years old with the best practice, comfortable teaching and learning environment. So this has been an outstanding success, Leon. You and I are going to disagree. If you say –
DELANEY:
Well, the whole point –
BOWEN:
[inaudible] we're going to disagree.
DELANEY:
But the point here is that the public, like me, have been left with the impression that a huge amount of money has been wasted without enough significant benefit, lasting benefit to show for the expenditure. Now, right or wrong, that's the impression an awful lot of people have been left with and surely that's been one of the reasons the Government has suffered such a lot of damage in the polls.
BOWEN:
Leon, I mean, if you're putting to me that we haven't communicated our success and our achievements well enough, well okay. I'll cop that. Is that a reason for a Government to be turfed out, because they haven't necessarily talked enough about what they've done and communicated that well enough? No, it's not. You turf a Government out when they haven't done a good job. You don't turf a Government out because, you know, some people might say we haven't communicated that well enough. It's our job to communicate that. If you say we haven't communicated that, okay. I'll cop that on the chin.
But the bottom line is we've been a good, solid Government making good achievements. We have a new Prime Minister to give a new focus on those very basic services: the cost of living and the things that you and your listeners are concerned about.
DELANEY:
The straw that appeared to break the camel's back was the deadlock over the Resource Super Profits Tax and of course that's really been a very big issue. It perhaps caught the Government a little by surprise in the reluctance by the public to accept it as a good idea. Was that the straw that broke the camel's back?
BOWEN:
Well, look, there's a range of issues, as you point to. The Resource Super Profits Tax is controversial. We always knew it would be. We're committed to it. We want the Australian people getting a fair share of the minerals under the ground; they're not at the moment. And sure, some people in the mining industry are going to criticise us for that. We don't make an apology for saying that the Australian people deserve a fair share of the wealth of the minerals under the ground.
Having said that, we're more than happy, we have been and will continue to sit down with the mining industry and talk those through and again, fresh approach, a fresh set of eyes, a new Prime Minister will give us a fresh chance to sort this out with the mining industry.
DELANEY:
Is there a scenario where the introduction of a Resource Super Profits Tax is actually good for the mining industry?
BOWEN:
Well, look, there's a lot of research around suggesting that it is because of royalties. They're a very inefficient tax. They just don't work in terms of encouraging mining investment. Royalties are, in many cases –
DELANEY:
Well, they seem to have worked well enough in the past because, you know, mining's such a big and successful sector, isn't it?
BOWEN:
They're a disincentive, Leon, and the mining industry would be the first to say it. When you look at the mining industry's submission into the Henry Tax Review, they say, "Royalties are terrible. We want a profits based tax because royalties are a disincentive to investment, particularly in the bad times."
I mean, this has been a very good time for the mining industry because of the China boom and frankly, the level of demand from China has meant that the royalties haven't really mattered. But you've got to have a tax system which works for the down times as well as the booms, and royalties are very much a discouragement to investment when things are a bit more marginal, when there's not that level of demand there.
DELANEY:
Replacing one tax with another great big new tax isn't necessarily an improvement, though, is it?
BOWEN:
Well, it can be when you've got royalties which are so inefficient. Royalties are basically, Leon, the most inefficient taxes we have in the country. They're just a very old fashioned way of doing things. They've been around since, you know, the turn of the century and they really aren't suitable for a modern, efficient mining sector, and they're not suitable if you want an equitable return to the Australian people, a fair return, a fair go for the Australian people for their resources under the ground. The resources belong to all of us.
DELANEY:
Are you looking forward to an October election?
BOWEN:
Well, Leon, the election will be in the next few months. I'm not going to put a month on it because that is a matter and a decision for the Prime Minister to discuss with the Governor-General under our system, and she'll call the election when she sees it appropriate and it's a matter for her.
DELANEY:
Thanks very much for your time today.
BOWEN:
Nice to talk to you, Leon.