Topics: Budget fairness, renewable energy and returning jihadists
E&OE…
Chris Hammer
We’re joined in the studio by Michelle Rowland, Labor member for Greenway in Sydney’s west and Senator Scott Ryan, Victorian Senator for the Liberal Party. Senator Ryan to you first; there’s something like a hole between $25 billion, $40 billion in the Budget. The Budget’s target of returning to balance in four years, that’s pretty much out the window isn’t it?
Scott Ryan
Well let’s put this in in context. We inherited an unsustainable Budget situation, with debt continuing to grow at a rate that was going to place an incredible burden on future Australians. We brought down our Budget in May and the Senate is now only in its second sitting week after the Budget. We’ve got a sitting fortnight to come in July, and as the Prime Minister and Treasurer made clear, we intend to sit down and negotiate with crossbenchers and negotiate the Budget measures that were announced through, because they are important to get the Budget back into balance. Our debt trajectory under Labor’s plans is utterly unsustainable.
Hammer
But with something like 60% of Australian people thinking the Budget is unfair, what incentive is there for a crossbench senator to support the Budget?
Ryan
Well, we’re making appeals to the national interest. We’re making an appeal to the sense that all politicians, the Labor Party used to have as well, that there is a national interest in not placing an unsustainable debt burden on future Australians. Now this is only an issue, firstly because of the mess Labor left us in, and secondly because they are refusing to clean up that mess. And most ironically of all, we’re trying to legislate for $5 billion of Labor’s Budget savings that they announced in the Budget last year, and Labor is voting against their own measures.
Hammer
Michelle Rowland, isn’t Labor in danger of overkill here? Opposing measures, as Scott Ryan has said, that you supported before the election. Aren’t you doing exactly what you accused Tony Abbott of doing, and that’s being oppositionist for opposition’s sake?
Michelle Rowland
I think the first thing to not, Chris, is that Labor made it very clear when this Budget was brought down some six weeks ago, that we would examine it for fairness, we would prioritise areas and we would also seek to cooperate in other areas. And I think that the announcement Bill Shorten made yesterday, about those aspects of the Budget we would support, point to a very well thought out and a methodical, and with a great focus on fairness I might add also, seeking to what is in the national interest; and we believe that primarily this is about fairness. And last night there were measures Labor put forward, sensible amendments….
Hammer
Why not support, say, the reintroduction of indexation on fuel tax? An indexation measure that was originally implemented by Labor in government.
Rowland
Well certainly, look it was actually taken away under the Howard Government. We didn’t go to the election saying we were going to bring it back, and by the way, neither did Tony Abbott. So I think that’s one of the test for Budget measures, is not only its fairness – that’s a great part of it – but also what was promised before elections. We want to this Government to account for its promises. But if I can just finish, last night we proposed some, and were prepared to support, some very sensible, we thought, savings. And it’s very important to recognise that we supported sensible savings that we thought were also fair. Things like lowering the time at which students can go overseas and still receive payments, taking into account untaxed superannuation benefits for qualification for the Commonwealth Health Care Card. But there are some aspects we won’t support; we won’t support the introduction of a GP co-payment, we won’t support certain cuts to family tax benefits. So I think you need to bear in mind that Labor has examined this; it is not a blanket area of opposition. It’s very well thought out and we have assessed these things on factors like fairness and promises made before the election.
Hammer
Well Scott Ryan, do you accept that? That Labor’s going through this policy or by policy, or do you see it more as a blanket political strategy?
Ryan
Well I’m not going to be told that Labor’s trying to keep people to their word about what we promised before the election. We promised to get rid of the carbon tax, that’s over $500 for every household. That means a lot more for lower income earners by the way who spend a higher proportion of their income on electricity and gas. Labor’s stopping us doing that, and under Labor’s plans those taxes continue to increase. So Labor is supporting tax increases, we’re trying to get rid of them.
Hammer
That’s not so financially responsible though; to cut the income from the carbon tax but keep the compensation. That puts a hole in the Budget by itself, doesn’t it?
Ryan
Well we costed that plan and we showed how we were going to pay for that before the election. We were very clear about that. That’s a promise that we have made for years, and it’s a promise that Labor is stopping us; Labor is stopping us from delivering on that commitment to the people. Frankly they lie about saying they will terminate the carbon tax, but vote against it every time it comes before parliament.
Hammer
Ok, now you’ve mentioned carbon; the Renewable Energy Target. There’s new research out showing that keeping the Renewable Energy Target would lead to falls in electricity prices. So why not keep it?
Ryan
Well I understand, I’ve seen some of the newspaper commentary on preliminary research that I understand was commissioned by the review. That’s why we have a review. We’ve got a review to look at the impact of the renewable Energy Target, to look at the impact of the changing profile of demand for electricity. What was originally set at a 20% target now looks like being much more closely aligned to a 30% target and this review is looking at what are the cost impacts of that target. How does it work? Now there is competing research, there is other research that says that the Renewable Energy Target drives up prices, and there’s a lot of that research. I note that the research that was reported in today’s paper says the opposite. But it does pose the question that if it does drive down prices; one has to ask why it needs a compulsory subsidy taken from the bill of every electricity user?
Hammer
So the assumption has been that the Government will get rid of the Renewable Energy Target; are you saying that if the review actually shows that it’s a positive thing, that then it will be kept?
Ryan
Well I’m saying that the Government has said we’ll have a review and we’ve gone into the review with an open mind, because the target that was originally set by Labor – 20% – looks like being much higher than that – near 30% – and there’s a great deal of anecdotal and research evidence that explains there is a serious cost burden on electricity users and particularly energy-intensive employers. In my home state of Victoria that has a high base of manufacturing; I hear of a lot of concerns, and I heard of some earlier this week about the cost of the renewable energy target on their electricity bills. Now we should understand what those cost impacts are and then we can make a decision.
Hammer
Ok, Michelle Rowland, do you believe that the Government does have an open mind then on the Renewable Energy Target?
Rowland
Its strange though, Chris, because for some time we’ve had some Government members coming out, and I think even the Prime Minster alluding to it, saying almost without question that the RET drives up prices. This ACIL study that’s come out, I mean it’s a reputable firm, clearly shows that while there are some price increases in the first years, there are notable reductions in electricity prices from then on. So it does beg the question; if we support evidence-based policy making in Australia, surely this demonstrates that renewable energy actually results in, in the long term, in lower prices for consumers? I believe when we talk about network industries, when we talk about essential services such as this, we should be basing this on solid evidence and we should be basing it on the long term interests of end users.
Hammer
Ok, now there’s another report in the paper today, Scott Ryan to you, that the Government’s review of workplace relations has been put on hold. That the Government’s not going to launch it because it’s a politically difficult area for the Government going back to the Workchoices in the Howard Government, that essentially you don’t want to be fighting it on two fronts here; you want to focus on the Budget. Are those reports accurate?
Ryan
I don’t think so. We made a commitment before the election to have a Productivity Commission review. That’s a commitment we stand by. We will undertake that this term, and as we’ve said, we’ll look at the findings of that review before we take on any commitment onto policy to the people at the next election.
Hammer
Michelle Rowland, is it a good time to have such a review from Labor’s point of view given that it would be a pretty brave government to be implementing dramatic workplace changes at the moment?
Rowland
Well that’s a matter for the Government to decide when it wants to conduct this as part of its business of being in government. But I’ll point out a couple of things, firstly that I note that the terms of reference that have been proposed include matters such as employment, the impact of the Fair Work Act on unemployment. Well I can tell you now that I don’t need a commission to tell me about unemployment and the measures we need to make young people more employable, and you know unfortunately coming from an area of western Sydney that has some very high levels of youth unemployment in some parts, measures that went to the employability of young people, many of those measures that have been scrapped in this Budget, are going to have a long-term impact on the employability of young people. I mean things like productivity that are going to be examined as well, we already know that every study will show you that the best way to drive productivity in an economy is by investing in ICT and again, in this Budget, so much money cut from innovation and those very things that would have driven this productivity. I don’t need and enquiry to tell me about some of those parts, but that’s a matter for the Government to bring forward and we are very prepared to have the debate about it whenever they bring it on.
Hammer
Scott Ryan, how do you think the economy as a whole is travelling, quite separate from the Budget? Because there have been some indications that, it’s a bit hard to imaging, business confidence up but consumer confidence seems to have taken a hit from the Budget?
Ryan
Well the experience I had, especially in my previous portfolio of small business, over the previous three years was that small business took a massive confidence hit from the unpredictability of the previous Labor-Greens Government, from broken promises like the carbon tax, and that takes some time to work through.
Hammer
We’re really in an area of unpredictability now, aren’t we?
Ryan
Well we’re not being unpredictable, we’re trying to deliver on the commitments we took to the people; particularly around the reduction of those imposts on business like the carbon tax, and Labor is stopping us from doing that. So the economy, as the Treasurer made clear, Labor spent years re-regulating the economy, tying it down, dramatically increasing public spending, dramatically increasing deficits, and that’s a very different economy we’ve inherited from the one John Howard and Peter Costello inherited. We had our differences with Paul Keating over Budget deficits and some of the issues like Working Nation, but we always gave credit to the Hawke and Keating Governments for deregulating the economy, for undertaking the start of microeconomic reform. The previous Labor Government went backwards; it took us back beyond the Hawke-Keating agenda. We’ve got a harder handicap to start with.
Hammer
Michelle Rowland?
Rowland
Well, when I go around my electorate and speak to small businesses, they’re not jumping up for joy because they think red tape’s being removed. They’re not jumping for joy because they think all of a sudden, nine months into this Government’s term, suddenly their businesses will be improved or consumer confidence has increased. So I think when you talk about the local level of the economy, there really are some areas where there are flat around western Sydney. People are still very concerned, and look families are concerned because on average some of these families will be $6,000 a year worse-off if these Budget measures go through. So when I speak to parents, who are looking long term and considering taking their children out of private school and making some very difficult choices there. This is a time of high unpredictability and I think that that is being reflected in consumer confidence and business confidence being quite low at the moment.
Hammer
Ok, a final issue. Tony Abbott was reported as telling the Coalition party Room yesterday that the party that has stopped the boats will stop the jihadists. This is a reference to the estimated 150 Australians fighting in Iraq and Syria with ISIL. But Scott Ryan, it’s not actually possible to stop most of those people coming back to Australia is it? If they’re only citizens of Australia?
Ryan
Well what the Prime Minister has made clear publicly is that we will use all the tools at our disposal to prevent people bringing, effectively a jihadist terror approach, back to our country. Some of those people who are dual citizens, we have different options in that case to those who might solely be Australian citizens. But we also have domestic laws we could use to ensure that people promoting violence, and people promoting terror and jihad, can’t do that in Australia. It of course illegal to go and fight in a foreign war, and the Prime Minister has also made clear that if we need new resources we will actually seek to get those. But the key point is that our priority is the maintenance of the safety and security of the Australian community, and that is first and foremost what will drive every action we take in this regard.
Hammer
Michelle Rowland, you’re Shadow Minister for Citizenship, surely this is an issue where you want bipartisanship with the Government?
Rowland
Well it has to be. This is about the national interest, this is about national security. Ill point out that as Brett Walker, the independent security legislation monitor – the independent monitor of coercive powers, pointed out; these coercive laws, these counter-terrorism laws are not a passing fad. They’re here to stay. They’re here to stay for every country unfortunately, including Australia. And we do need to in some cases strengthen those laws, like Brett Walker pointed out, he’s very much alive to this unfortunate issue of these travelling jihadists that go around and seek to fight in foreign wars, unfortunately some of whom are Australians. And we need to make sure that Australia has every power possible for that and it also needs very effective independent oversight. Not only to safeguard citizens’ interests, but also to make sure those laws operate as effectively as possible, and protect Australians as effectively as they can. This is why it is exactly the wrong time to be looking at scrapping this independent roll and saying that it is somehow a form of red tape, which is what this Government has done by introducing a bill to repeal it.
Ryan
Michelle, you’ve moved away from you first statement which was you wanted bipartisanship in this. If that was the case, Labor shouldn’t have stripped hundreds of millions of dollars from customs and border security like you did when you were in office, which we’ve had to put back in place.
Rowland
Look, don’t start with me on what you’ve done and what you’re seeking to do with these counter-terrorism laws. These counter-terrorism laws need to be as effective as possible…
Ryan
And the resources they use to enforce them which you stripped out.
Rowland
This is exactly the wrong time to be looking at disbanding this very important piece of independent oversight. Counter-terrorism laws and here to stay and we need the most effective mechanisms in place to make them work properly.
Ryan
And we need the agencies with the resources to enforce them, and we’ve had to put those resources back in. we’ve had to put resources back in that you took out of customs.
Hammer
I think we should maybe leave this for another day; we can have a whole debate on this issue because it sounds like there are some differences there to explore. Michelle Rowland, Senator Scott Ryan, thanks for your time today.
(Ends)