SUBJECTS: Budget Reply, Resources Super Profits Tax, Work Choices, climate change.
RON WILSON:
Well what a week in politics. After losing ground in opinion polls, Prime Minister Rudd and his Treasurer Wayne Swan leapt over the parapet armed with a Budget that would return our economy to surplus three years earlier than previously predicted; and of course, last night Opposition Leader Tony Abbott hit back with his budget reply speech.
Now joining us in our regular Friday morning political debate today are Superannuation Minister, Chris Bowen, and Deputy Liberal Senate Leader, Senator George Brandis.
Gentlemen, thank you very much for coming in today, at very short notice, to talk to us; I know there's been a lot of difficulty with the airport, with the fog in Canberra this morning, so thanks for doing that.
First, Minister if I can go to you: Tony Abbott said last night that the election would be fought on this super tax on the mining industry. Has that got you worried?
CHRIS BOWEN:
No, we're prepared to fight the election on many issues including that, as well as health of course, and other issues; but Mr Abbott made it clear last night that he doesn't support that tax and he also doesn't support the things that tax funds, like our reduction in the corporate tax for small business and all businesses, a big boost in Australians' retirement incomes through the superannuation system, incentives for people to save through their bank or credit union accounts, and a simplification of the tax system so people don't need to fill-in tax returns so regularly.
So all the things that Mr Abbott stands against are the things that we stand for: they're all the things that the resource rent super profit tax would fund; and we're happy to have that argument in an election and right up to the election.
WILSON:
Well Senator, there is a difficulty, of course, fighting this particular tax, taking that out to the electorate: to be seen to be defending the profits of major international mining companies over so many other things you could be concentrating on.
GEORGE BRANDIS:
Well I think that looks at it quite wrongly, because the wealth in the mining sector – which is Australia's most productive sector – is wealth that is shared across the community through superannuation funds, through people's small shareholdings, the mums and dads investors who are. There are hundreds and thousands and indeed millions of Australians whose personal wealth is bound up with the prosperity of the mining industry; and the opposition sees it – and this is a point that Tony Abbott made in what I thought was a terrific speech last night – is, why on earth; what possessed a government to be so foolish as to cripple Australia's most productive industry by subjecting it to a tax regime which would be literally the highest in the world. If the government thinks that that's not going to deter investment - as Tom Albanese, the head of Rio said, only two days ago – they've got rocks in their head.
WILSON:
Now Senator, Julia Gillard immediately raised the spectre of a return of Work Choices; Tony Abbott has said absolutely not, but are we just talking semantics here? What will change in the workplaces?
BRANDIS:
We are not talking semantics here. Work Choices is dead. The 2005 legislation that was introduced by the Howard Government, we have freely acknowledged, was a mistake. We over-reached and we learnt our lesson from the 2007 election. So I can assure you, as Tony Abbott has assured you, as every Opposition frontbencher has assured you; there will be no return to Work Choices.
WILSON:
Minister Bowen, the big problem in the entire budget is that it seems to rely so heavily on that super profits tax, and also the ongoing boom in the mining industry. Supposing that doesn't happen, are we just back in a big hole again?
BOWEN:
No, not at all. We have delivered a budget which reduces the peak debt by half and pays off our debt three years ahead of schedule; pays it off; goes into surplus and pays the debt three years ahead of schedule. And the modelling and the forecasting done by the Treasury – the same people who did the modelling and forecasting for the previous government – is based on conservative estimates; and is broadly in line with much private sector forecasting.
You know an opposition's in trouble when they're reduced to attacking the modellers. When they're reduced to saying they don't believe the figures that means there's very little in the Budget that they can attack of credibility, on substance; and they're reduced to saying we think the modellers have got it wrong. That's the last resort of an opposition with no policies and no substantial criticism to make.
BRANDIS:
It's astonishing to listen to Chris Bowen patting the Government on the back for reducing peak debt sooner; the peak debt was created by his own government. When the Labor Party came in to office, two and half years ago, there was no debt; there was no debt and the budget was $20 billion in surplus. It's a bit like a robber breaking-in to your house and then expecting him to be congratulated when he returns some of the stolen goods.
BOWEN:
Well I think the Australian people would see through that argument. They know that in the midst of the global financial crisis, the worst recession in 75 years around the world, it would have been negligent not to stimulate the economy. You would have seen unemployment go up; many more Australians visiting Centrelink offices instead of going to work; and you would have seen a long and deep recession which would have wrecked government finances and left us in deficits for years.
The appropriate thing to do, the prudent thing to do, was to put money into the economy when the economy needed it. And we've seen as a result, the Australian economy being the best performing in the world.
The opposition, even last night, at last finally acknowledged that; that we got through the financial crisis better than anybody else. And the opposition says that has nothing to do with the government's actions; I think the Australian people will see through those pretty glib arguments.
BRANDIS:
You know, there's a reason Australia got through the worst global financial crisis since the Great Depression; and that is because we went in to the Global Financial Crisis in the best financial position of any government in the world: with no debt. There is no other economy in the world that could say that. Australia could say that because of the years of prudent economic management of the Liberal Party, in which we paid off the debt, put money in the bank; and in two and a half years the Labor Party has completely blown it. We now have more public debt in this country than at any time in peacetime in our history; and in the Budget that was delivered on Tuesday night, we had the second highest budget deficit since the Second World War.
WILSON:
But there, again, you've got unemployment figures out yesterday showing unemployment of 4.6 per cent. Surely the Government has to be congratulated for that?
BRANDIS:
Well, I don't think the Government has got to be congratulated on the strength of an economy that which has been buoyed – in particular – by a mining sector which it has proposing to wreck.
WILSON:
Well, I'll put this for either of you to answer: last night, the Government's immediately jumped on the budget reply speech, saying that it was a good story but it's very short on substance. Is that on purpose Senator; the fact that the smaller the target you put up there, the less likely you are to be shot down?
BRANDIS:
It's not a question of the smaller the target. What Tony Abbott did last night was to define the battlelines for the 2010 election, and most particularly, we will defend to the hilt, Australia's most productive sector; the source of the wealth of our country and the source of the wealth of all the superannuation superannuants and all the small households in Australia. The more particular details of spending cuts will be announced by Mr Hockey, when the Shadow Treasurer, when he addresses the National Press Club next Wednesday. Last night was a broad speech which set out the broad themes of the Coalition's approach to the 2010 election; and it did, by the way, contain a number of indications of major areas of savings, in particular a freeze on recruitment in the Commonwealth public service over the next 2 years which will save approximately $4 billion dollars.
BOWEN:
Let's be honest here: last night's speech was a complete failure. We had, last night, an opportunity for Tony Abbott to outline his alternative plans to bring us back in to surplus; he failed miserably. He didn't reveal how he's going to pay for all his un-costed, unfunded promises out there.
We got half an hour of one-liners, of glib sound bites, and no properly costed, funded savings plans; no plans for the future. All we heard about was Work Choices and some sound bites about sacking public servants. It was the last resort of an opposition without any credible policies.
WILSON:
We're just heading out of time; I just want to ask you one question Minister, if I may. I think the Prime Minister's appearance on the 7:30 Report earlier this week might have caught a lot of us by surprise. He was, well, bordering on a bit of a breakdown there – most of us thought. Is the pressure starting to get to him?
BOWEN:
I wouldn't accept that characterisation Ron, at all. I think the Prime Minister was just putting it very firmly that the Government believes in climate change and we've tried very hard – both domestically and internationally. We struck a deal with the opposition, which they reneged on: they changed leaders; George was on board for the deal, George believed in an ETS then they changed leaders and that deal failed. And we tried very hard internationally in Copenhagen to get an international consensus, and made some progress but not as much as we would have liked; and the Prime Minister was just putting that view.
He was putting it firmly, because he believes in it firmly. He believes in climate change, whereas Tony Abbott wanders around telling school kids that it was warmer in Jesus' time and climate change is nothing to worry about. Well we have a different view, and I think it's appropriate that the Prime Minister put that view.
WILSON:
Mind you, he said he gave up 3 sleepless nights to solve the biggest problem facing mankind at the moment. I don't think our hearts were necessarily bleeding for him at that stage.
BOWEN:
I don't think he would expect that. I think he would recognise that as part of his job; and it's a part of his job that he feels passionately about. It was just part of a vigorous conversation and I don't want to give another network a plug but Kerrie O'Brien likes vigorous conversations, as you know Ron, and that's just part of the political milieu.
WILSON:
Alright, we can live with that.
BRANDIS:
I can understand Ron, why Chris would want to try to paper this over; but I think anybody who saw the Prime Minister's interview two nights ago, frankly would've been quite alarmed; because it's the first time in my lifetime that I've seen an Australian Prime Minister almost hysterical. And the reality is that this Government is out of control: it's being led by a man who's cracking-up under pressure, who became quite hysterical when asked perfectly proper questions in an interview two days ago; and I think we are now heading for very dangerous territory.
WILSON:
Gentlemen, thank you very much for coming and having a chat with us this morning. Chris Bowen and George Brandis, you both came in on short notice because of those problems with the airport in Canberra; we thank you very much indeed.
BRANDIS:
Pleasure Ron.
BOWEN:
No problems, nice to talk to you.