Topics: state government job cuts, mining tax, supertrawler, asylum seekers, Tony Abbott, Kevin Rudd, foreign investment
David Speers: Welcome to the program. Cutting budgets is never easy, whether you’re in business or politics. This week we saw Campbell Newman in Queensland and Barry O’Farrell in NSW take the knife to the public service. Now the thousands of public servants who are out of a job, or soon will be, as a result of these cuts are certainly feeling the impact of this the hardest. But there is no doubt collateral damage will and is also being felt by the Coalition in Canberra. These state government cuts have allowed Labor federally to warn of what might happen should Tony Abbott win the keys to The Lodge.
Joining us this week to look at this and other issues, Ged Kearney, the president of the ACTU, Peter Lewis is from Essential Media Communications, Matt Hingerty, the chief executive of Barton Deakin and Senator Scott Ryan, Liberal frontbencher. Welcome to you all.
I want to start with Queensland in particular where the deepest cuts have been. Ged Kearney, 14,000 public service jobs are to go. We know the union movement is deeply unhappy about this, but do you accept there have to be some efforts made to get the budget back into the black?
Ged Kearney: I think it is a sad indictment of our times that the first thing people do if they have to trim budgets, as you saw, is they cut jobs, sack people. It is actually, in our mind, bad for the economy if you reduce people’s incomes, if they can’t pay their mortgages, if they can no longer consume things from small business with some disposable income.
Speers: Sure but you can’t just let the public service grow and grow and grow, there can be a point at which it is too fat.
Kearney: You can look at other things surely. Even in private business we are seeing people, the first thing they do is they’re sacking people or cutting jobs. I was at a forum today talking about improving productivity, we had an economist from the RBA saying in times like this, in lean times, in hard times, it should be the mother-of-all-invention times. It should be about sitting down and working out how you can do things smarter. How you can keep people in jobs, not how you sack them.
Speers: But we’re in growth federally and certainly in Queensland as well. Are you saying there is never a case to cut someone’s job?
Kearney: I’m not saying that at all. But I’m saying if you cut public sector jobs to the extent that we’re seeing, it has to have a detrimental effect on the economy. Not only that, it will have a bad effect on society. You look at what they’re cutting, cutting breast cancer screening clinics, for example. I mean ultimately down the track, you’re going to see a rise in the incidences of breast cancer, you’re going to see a rise in people in people needing healthcare. You cut mental health services, you will see a rise in the incidences of people with mental health, eventually that will become an economic burden on the state. Eventually productivity will fall even further, to me it doesn’t make economic sense.
Speers: Scott Ryan what is this doing to the Liberal brand? The fact that we are seeing these cuts not just in Queensland but in NSW, and today Isobel Redmond, the Liberal leader in South Australia suggested there should be up to 20,000 job cuts in that state.
Senator Scott Ryan: It is not causing any issue at all. What it is highlighting is the mess that these governments have been left to clean up. Now half of a state government budget, roughly, is spent on wages in the public sector. If you’ve been left, like Campbell Newman, with $65 billion in debt, debt that didn’t exist when Peter Beattie first won office, debt that didn’t exist when Queensland was the strongest state in the nation financially, you have to balance the budget. In the end, if you don’t balance the budget, all those problems that you outlined Ged, all those cuts, all those services, will get worse in the future. I lived through this in Victoria, when the D-Day of financial Armageddon was put off when Joan Kirner was in office and it made the adjustment that much more difficult for people my age when we left school. Balancing the budget is actually what Liberals do. It doesn’t surprise me that the Labor Party is upset by it, because they never do it.
Speers: Peter Lewis, is that a fair point?
Peter Lewis: One of the more effective lines this week has been Treasurer Wayne Swan saying, ‘that’s what Liberals do’ around both what’s going on both in NSW and Queensland. I think one of the things we’re seeing is the charade around the pre-election promises – ‘you’ve got nothing to fear here. We’re going to be just like the other guys, except a little bit more economically responsible’. Then all of a sudden you see tens of thousands of jobs being cut, normally under the guise of a review that comes in after an election. We’ve been polling the state governments over the past couple of weeks and got the results back this week. There hasn’t been a huge drop-off in the primary votes for the NSW and Queensland governments, but what we’re picking up is, is the state heading in the right direction? It is about 30 per cent saying yes in both states. You’ve got this sense that we’re in a new marriage, but it ain’t working. There is a danger for Scott’s team in Canberra, that the same charade they’re going to play in Canberra – ‘you’ve got nothing to fear here, trust us, we’re not like the other guys’ – it just doesn’t wash because you see what Liberals do when they get into power. Scott’s saying Liberals balance the books. That’s just the frame they’re using, the other frame of this is they’re cutting services. You look around at the moment and people say, ‘we need government support and government services more than ever in a whole range of new areas’.
Speers: Matt, what do you think this does? Particularly when it comes to this trust issue about what was said before an election and then deep cuts after an election?
Matt Hingerty: I don’t accept that analysis of what was said before the election was right. That’s what Liberals do. We are elected, and have been historically over 20 years, elected into government to fix a mess. The interesting thing about the NSW and Queensland election is that we were elected in record numbers. In the past it has been, ‘we’ll just give you enough of a margin to last a term or two and then you’ll be out again because of the pain we’ll feel’. They’ve said, this time around, ‘we’re going to give you a big margin; we want you to do the job properly’.
Speers: So you think voters expected this? This is why they’ve put them in?
Hingerty: The individuals who have lost their jobs obviously not. But overall, the electorate expected us to do a job. We promised to be tough.
Lewis: Blind Freddy knew you were going to win Queensland and NSW, but both leaders were saying ‘we would not do this sort of thing’. O’Farrell was saying, ‘you’ve got nothing to fear’, Newman was saying ‘you’ve got nothing to fear’. It was only after they won their election that their true colours came out. At least Joe Hockey is saying, ‘I’m going to cut $70 billion out of the public sector’ so now we can have a debate about what that means for the public sector. That’s honest, I’ll give you that.
Kearney: The backlash in Queensland, you have to admit, is much broader than the public service. They have come out in their droves recently at a rally to say they are unhappy with the direction the Newman Government is taking. This is really widespread discontent with the government though.
Speers: The other parallel is, particularly in Queensland, the Newman Government had an audit done by Peter Costello. Now Scott Ryan, Tony Abbott has promised an audit of the books should you win the next election. What’s the purpose of that, is that to mask some pretty deep cuts?
Senator Ryan: Not at all. We are going to make it clear, and Peter just mentioned we’ve already made a commitment about the federal public service.
Speers: Just remind us what that is?
Senator Ryan: That’s 12,000 public servants, members of the APS, to be shrunk through natural attrition, not through redundancies, to take it back to exactly the size it was at the end of the Howard government when Labor came to office because it has grown slightly more than that. The federal budget is slightly more transparent than a lot of the state budgets. We do get updates, but what we’ve found under Labor is that every update leads to a bigger deficit and debt being higher, but there are updates out there. The Commission of Audit is merely a responsible measure to find out where is the Commonwealth situated financially. There is a discussion here as if the budget deficit doesn’t matter, it does. Every dollar borrowed now, is a dollar that a future taxpayer has to pay back, plus interest.
Lewis: But the argument about never running a deficit is contested and it is contested by economists who are far more credentialed than us.
Senator Ryan: But Labor is out there bragging about economic growth, yet we are still running huge deficits. Last year it was $44 billion and we haven’t got the final outcome yet, while the Government is crowing about the size of economic growth. It doesn’t mesh here.
Kearney: The argument about the deficit it really makes me cranky because we know it is a very small deficit by world standards. In personal terms it is as small as a personal car loan, it can be met and it was necessary. It kept Australia afloat through the Global Financial Crisis, it kept hundreds of thousands of people in jobs. The point that the Liberal federal government (sic) has is they can put numbers to how many job cuts. He can say 12,000, although I think Joe Hockey might have said, ‘at least’, but the fact is that people won’t believe it now given their experience with what has been promised by Liberal premiers in states.
Lewis: The other issue that is coming out of NSW this week, is what we’re seeing with the education cuts, which I think is $1.7 billion, was announced in the budget sometime ago. Everyone sees the headline figures and thinks this is good economic management, it is only when you actually say which bits you are going to cut out of the education sector that you really create public engagement. I think the other challenge for you guys, Scott, is not just to give us a big number but to actually say how that is going to affect different level of service delivery.
Senator Ryan: Government’s hard. We’ve always accepted that, and Ged, we had the second fastest run-up of debt in the OECD during the GFC – from a very low base to now somewhere where it is actually costing the Government $8 billion a year. Think of what that $8 billion a year could be spent on in terms of services, it could cover an NDIS. But no, we’re paying it on interest bills each and every year and we’re probably going to hit the $250 billion debt ceiling this year.
Speers: I want to turn to another element of that Queensland budget and that was another increase in the Queensland mining royalties. They’re going up some 2.5 per cent to raise $1.6 billion. Matt, do you think now is the time to be hitting the coal miners in Queensland? When commodity prices are falling, we’re seeing projects shelved, jobs lost, is now the time to hit them with this?
Hingerty: I would suspect the mining companies would complain at any time the royalties were increased or the taxes were raised. But it surely must be in their best interests to operate in a sovereign state that has a strong economy, that is not losing its AAA credit rating, that’s not plunging in those sorts of measures and they have to do their bit. We’ve got a $10 billion deficit in Queensland; it is in a parlous state. It probably would be better if these things weren’t employed, but you know, desperate times, desperate measures.
Speers: Again, it gets back to the timing of this. This is a tough time for coal miners, they can go elsewhere and they are shelving some projects in Queensland because of the commodity price fall, the high dollar, high labour input costs. Jac Nasser, the chairman of BHP Billiton, who’s normally fairly cautious about his comments on things like the carbon tax, has said this state royalty increase is unbelievable.
Hingerty: But again, they would say that wouldn’t they at this particular time. Queensland has great reserves of coal, this is a cyclical issue, the state needs the royalties to get itself out of a desperate situation. I think saner heads will prevail, people will calm down and we will get through this issue.
Kearney: It is interesting that argument wasn’t put up by the Liberal governments around the country with regards to the Mining Resource Rent Tax. There was huge opposition and I think, in fact, Newman has joined the legal proceedings against the tax, has he not?
Speers: He is contributing to it, yes.
Lewis: The reality is that it is funny money too. Because it is just going to turn into an arm wrestle with the feds and the states.
Senator Ryan: It is right of Campbell Newman to challenge the mining tax. It is his responsibility to raise royalties. He doesn’t do a deal in secret with just three big miners – where a lot of the other miners still don’t know their liability – which is the case with the Mining Resource Rent Tax. More importantly to people not in Queensland, every dollar the Queensland Government collects through royalties gets redistributed around Australia through the GST pool. The Victorian Government is going to have more money for teachers and nurses and policemen, because Queensland has put up their royalties.
Speers: Hang on, you’re saying …
Senator Ryan: It gets redistributed through the fiscal equalisation process to the other states after a three year period.
Speers: That royalty money is for Queensland’s …
Senator Ryan: And it is taken into account when the GST grants are made by the Commonwealth Grants Commission. What the mining tax was about, was about taking money off the state government and letting Canberra control it. What this does …
Lewis: That’s a very technical argument.
Senator Ryan: No, it is a very important argument because it means there is more money for teachers, more money nurses, more money for policemen.
Lewis: That’s the same argument as the mining tax.
Senator Ryan: No it’s not because the Commonwealth doesn’t pay for nurses, teachers and policemen.
Speers: No but it pays for the infrastructure and for lowering the company tax rate.
Senator Ryan: Ged before was talking about services and this is a very important point.
Speers: Let me ask you this. The federal mining tax, which I assume you are still opposed to, that isn’t affecting a lot of these coal miners in Queensland, is it?
Senator Ryan: The thing is, they don’t know. No one knows because they still can’t determine their liability. The deal was made in secret.
Speers: You’ve got to be making a profit, right?
Senator Ryan: You’ve got to be making a profit, it is a resource rent tax.
Speers: The state royalty though …
Senator Ryan: … is based on the price of the coal.
Speers: So it doesn’t matter whether you are making a profit or not.
Senator Ryan: No, but it does go up. The Queensland royalties increase with the price of coal.
Speers: So this argument that it is all right for the miners, they will be refunded from Canberra anyway, may not necessarily be so if they’re not paying the federal mining tax because they won’t be making a profit? It is the miners who will be out of pocket.
Senator Ryan: Well the Government is still saying it is going to collect $13 billion a year off the mining tax.
Speers: That’s got to be looking pretty shaky, that forecast on the federal mining tax revenue?
Lewis: Who knows what’s going to happen next year. I think the tragedy is that there wasn’t a stronger tax locked in on the first instance, but that’s history now.
Speers: Is it still a bit of a mess Ged, do you think, the federal mining tax?
Kearney: To be perfectly honest, I don’t fully understand it, but I think it is an important thing. My understanding, what I do understand about the Mining Resource Rent Tax, was that it was to be used for infrastructure. If we don’t have that money we are going to miss out on some very major infrastructure projects that Queensland would have benefitted from. To say we can sacrifice those because we are going to be pushing money all around the table is a great shame.
Speers: But this argument that the state mining royalties pay for services as well, I mean health and education, it cuts both ways.
Hingerty: Complaining about a reduction of services in Queensland.
Kearney: I just think it is very two-faced to support this tax and not that tax. To me that is just having your cake and eating it too. It is disingenuous.
Senator Ryan: The Commonwealth Government is spending $100 billion a year more than when John Howard left office. A $100 billion a year. Surely, if infrastructure is so important, part of that $100 billion could have been directed that way. But no, there is a grab here for cash, for something that the states have always collected, which has always funded those very services you’ve just been talking about.
Speers: We’re going to move on. I just want to ask you Ged Kearney, clearly we are seeing a slowdown in the mining industry and that is going to affect federal government revenues, a whole bunch of other things are also going to affect federal government revenues, things they’ve committed to – dental schemes, the NDIS, the Gonski reforms – the crunch is going to come. How worried are you, because I know this week we’ve been focussed on the states making big cuts, how worried are you about the big cuts that must be coming from the Federal Government as well?
Kearney: Well we haven’t seen any evidence that they will have to make cuts. At the moment, they have said they are going to honour these things and we just have to wait and see if they do honour these things.
Speers: The surplus, which they remain committed to, what’s your message to the Federal Government on sticking to that surplus commitment?
Kearney: Our position has always been that the surplus should be reviewed, that surplus target should be reviewed if indeed they are having difficulty meeting it. We don’t think that jobs should be sacrificed for a surplus. We have a very low level of debt, very low level. It is being serviced. We are the envy of the world really, when it comes to our economic situation. They could push that surplus target out if they have to and that’s always been our position.
Lewis: I’ve got to say, we consistently poll that question, whether you had a choice of a surplus in 2013 or to defer it, most people say, if you say to protect jobs and invest in infrastructure, it is not something that people want to die in a ditch for, but it is a great talking point for the other side of politics.
Speers: You guys won’t let them off the hook if they miss that surplus.
Senator Ryan: Nor should we. When you are running budget deficits of this scale you are just pushing off tax increases. It is actually unfair to people who are going to be paying those in the future to live the high life now.
Speers: We’re going to move on, take a quick break and then look at boats of different kinds, a supertrawler and then asylum seekers. Stay with us.
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Speers: We’re joined this week by Ged Kearney, the president of the ACTU, Peter Lewis is from Essential Media Communications, Matt Hingerty, from Barton Deakin and Senator Scott Ryan, a Liberal frontbencher. I want to move to the supertrawler. The legislation, finally, late this afternoon or early this evening passed through the lower house. This gives the Government power to ban the boat and any future fishing vessels that it is similarly concerned about. The Opposition voted against it, but enough on the crossbench were with the Government – Rob Oakeshott, Andrew Wilkie and Adam Bandt in particular. Scott Ryan do you want to see this supertrawler fishing in Australian waters or not?
Senator Ryan: I don’t have the scientific qualifications to make that assessment. What is striking about this is that this is the sort of boat that Tony Burke, as Fisheries Minister, invited to Australia. His strategy paper he released specifically talked about these sorts of boats. The science said it was ok. As recently as a week ago, the science was still ok. And then, after a Twitter campaign by GetUp! they’ve tried to ram this legislation through the Parliament to give the minister quite extraordinary power to say no to anyone he or she wishes for the period, from what I understand today, of 12 months.
Speers: So what you’re saying is you’re not sure whether or not it should be allowed?
Senator Ryan: The advice from AFMA, the advice from the authority and the advice that came out of this Government, the words of the minister himself were that this was entirely reasonable. So the problem we’ve got here is a sovereign risk one.
Speers: But the Minister today said he’s got new legal advice that the authority, AFMA, had not been correctly implementing some aspects of the Fisheries Act.
Senator Ryan: So he has got new legal advice, he hasn’t got new scientific advice, and for weeks, for years, this boat has been going through a scientific assessment process. The real risk here is that everyone in a resource-based industry should be worried that when we have a GetUp! Twitter campaign, we will end up getting government-by-Twitter. A cabinet decision doesn’t matter, we’ll get a unilateral backdown by a Government.
Speers: Peter it does look like that. This boat had been coming, everyone knew it was coming and then after a GetUp! campaign at the last minute, the eleventh hour, the Government finds grounds to ban it.
Lewis: I love GetUp! I don’t know if I’d give them that much of the power. The background of this is that Labor has been taking a lot of hits for a number of years now on marine protection zones. That has really been this fight between environmentalists and commercial fishers about where you can fish around. There’s been the commercial fishers and bringing the recreational fishers on board to say ‘you can’t fish either’. I think the problem for Labor was this big trawler was actually confusing everyone about where they stood on this broader issue where they were taking hits. This is clearly a political fix with a bit of a legal and scientific figleaf, but it’s probably one that is worth fighting. For me it is refreshing to see a bit of a focus on our fish stocks because it is not the most sexy issue around, but it is one that is actually really important.
Speers: As well as saving the dolphins and seals and sea lions that are caught up in the by-catch.
Lewis: Going back to polling, it is really interesting, the Marine Protection Zones are probably one of the more important measure that the Labor Government has undertaken.
Speers: Ged Kearney do you agree this is a political fix with a figleaf of science thrown in?
Kearney: I’m a bit like Scott, I don’t really know that much about it, but it seems just eminently sensible to me that if there is any doubt at all about the science, let’s delay it for a while and get it right, I don’t think there is any problem with that.
Speers: There is now, there wasn’t earlier. The authority was pretty clear cut in the advice that it had and on this being no different, one big boat, to three small boats. Matt, what do you think?
Hingerty: It is a smart political move. I was politicised in the 1980s around the environment movement and it was easy to mobilise the green vote back then. You just had to point to a forest that needed to be saved, or a river that needed to be undammed, but then it became a bit more complicated. We talked about science, we talked about the greenhouse effect, global warming, and it all became a bit too complicated to mobilise the green vote. Then over the horizon sails this factory ship, it dealt with fish, so there’s no human beings involved.
Lewis: It’s not like a big mining truck, we like big mining trucks, but big fishing boats …
Hingerty: It was a smart political move to mobilise some of the green vote, perhaps get some of the core green vote back from the Greens to the Labor Party. But it is at the stake of our international credibility. I’ve read countless articles in magazines like The Economist, where our fishery management is lauded, globally. It is lauded because it is done on a scientific basis and with this quick political fix.
Speers: I saw Greg Hunt, the Shadow Minister, in his statement tonight saying under the powers that are now going to be given to the ministers, once the Senate no doubt passes this as well, that every recreational fisher could still be in danger and every recreational fisher could be banned. Is that over-egging it a bit?
Senator Ryan: Well you don’t want to give this huge, enormous power as a political fix at the last minute and to U-turn on everything they’d said for months and years, including on the work they’d done on this very boat to get it out to Australia. They’ve given the Minister, in this draft legislation that went through the House, enormous personal power.
Speers: But do you really think it is going to be used to ban a recreational fishing boat?
Senator Ryan: Well who would have thought a week ago, given what Tony Burke had said, given he’d invited this boat out here, that they’d reverse on this?
Lewis: But going after recreational fishers is madness. One of the problems with the Marine Protection Zone at the moment is, my understanding is you have to go out 100km before you can stop fishing as a recreational fisher. That’s still becoming an attack on recreational fishers.
Senator Ryan: Peter I wouldn’t use the test of political madness to decide what this Government is going to do. They did say there wouldn’t be a carbon tax and then they did it.
Speers: All right, let’s look at boats of a different kind. The asylum seeker vessels have been coming in an almighty rush this week. We’ve had another one that we’ve heard about tonight, 151 people on board, takes to 17 the number of boats in just two weeks. Now more than 5000 since the start of July. Already since August 13, when the Government announced the reopening of Nauru and Manus Island well over 2000 have come. Already the full capacity on Nauru and Manus Island when they are fully operational will only be 2100. There is problem Peter, isn’t there, that the more that come and are at risk of being sent to these places, it dilutes the deterrent, doesn’t it? If your chances of being sent become lower and lower?
Lewis: It’s still an unresolved problem. I think the problem the Government’s got is they tried to match the Coalition on toughness because that is the accepted wisdom, that’s how you neutralise the issue, but the problem is bigger than a slogan and it is bigger than a quick fix. The key issue is how do you deal with the relationship with Indonesia in a way that you can actually manage this geopolitical issue? It doesn’t play well politically either to do that.
Speers: Looking at what they have done, Ged Kearney, do you think it is going to work?
Kearney: I think the great pity about this whole debate is we’ve kind of lost the whole human rights argument around it. They are human beings, they’re not doing anything illegal by seeking asylum in this country, and we’ve kind of managed to completely depersonalise it and that’s always been the ACTU’s concern. We should see this as a human rights, social justice issue and worry about those individuals and look after them, worry about their health and their needs.
Speers: You don’t think that’s happening?
Kearney: We know what happens to people when they were held for a long time in places like Nauru and Manus Island. It was very, very detrimental to their health and their well-being.
Speers: This time around they could be there for years under this no-advantage principle.
Kearney: That’s right and I think Peter’s right that there is a big political problem. It is a regional issue that will only be worked out with regional agreement with all of the island states, with all the countries, the large countries and the small countries in the region. We’ve got to get to and start doing that.
Speers: Based on the numbers that we have seen in the last few weeks rushing to get here, Senator, do you fear this isn’t going to work?
Senator Ryan: I hoped, we all hoped, that the boats would stop because of the risk of people drowning. We’ve had 700 we know of sce the policy was changed. I fear it won’t, and I’ve said so before, because it wasn’t easy to solve when John Howard was Prime Minister and Philip Ruddock was minister. We’ve always said it took a suite of policies. It was temporary protection visas, offshore processing and turning back the boats where safe to do. Now, we were told in Parliament time after time – I saw it on TV – that there was no such thing as pull factors. Now the Government admits it, but they are not going back to what we know worked. And that’s what we know stopped people getting on boats.
Speers: So if you think the answer is those extra two steps, temporary protection visas and turning back boats …
Senator Ryan: … where it is safe to do so. Yes.
Speers: And you think that will actually stop?
Senator Ryan: Well it didn’t stop immediately under the Howard Government, but it did stop. There were a handful of people in detention when John Howard left office in 2007. A handful. The boats had slowed to a trickle. This is now a very serious problem. And to personalise it Ged, I met a young man from Africa the other day. Now he hadn’t seen his parents in 10 years and he spent eight years on the run and in camps in Africa. Every time we actually facilitate or don’t otherwise discourage people from jumping on boats, that is someone else that is missing an opportunity that Australia can give them.
Speers: If this is the problem that you inherit in government, should the Coalition win the next election, and none of that works, would you never consider Malaysia?
Senator Ryan: We have said, and I am personally strongly opposed to Malaysia. We can’t guarantee the protection of people the way we could with offshore processing in Australia. We can’t guarantee that their various rights are protected, we can’t guarantee access to services that you mentioned earlier Ged.
Speers: But you would turn back boats to Indonesia and also send asylum seekers back to Sri Lanka?
Senator Ryan: Where it is safe to do so.
Lewis: It is a very qualified position you guys have on turning back the boats.
Senator Ryan: It is not qualified at all. It has always been like that.
Lewis: There is only a sliver between your position and Labor’s in terms of the full debate and you guys are just looking for an excuse to have a debate.
Senator Ryan: No, temporary protection visas were one of the major reasons why people used to attack John Howard and Philip Ruddock and the vilification of Philip Ruddock for introducing those policies was extraordinary. Temporary protection visas were a critical element of it. And Labor, due to either hubris or stubbornness, simply will not countenance their reintroduction.
Speers: Matt, what do you think of this?
Hingerty: This is a great tragedy isn’t it? For four years we’ve lost the opportunity to take the regime that we had in place under the Howard Government to keep working through it, to keep humanising it, to improve it, to improve the services, to work with our foreign friends, our foreign partners through diplomacy, to make them explain it. It could have been a great system. And now we’re back to square one or square point five.
Lewis: You’re actually at the point now where the major parties are not that much different despite what Scott is saying. The other question that keeps coming in my head is, why is this the number one issue that we talk about? We know in the public’s mind it is not top-tier issue, but it is a proxy debate for a whole lot of other things that the politicians don’t want to talk about, which is like the size of our population, people coming over our border.
Senator Ryan: Peter, actually consider, it is a pretty basic role of government to control an immigration program. And it is a pretty important role of government to have a strong humanitarian program. Both sides record on that Australia has been strong. So don’t try and assume there is another motive to this. This is an important issue precisely because of its simplicity.
Speers: There is also, let’s not forget, the reality of how many people have died at sea trying to get here.
Lewis: That has been a game changer no doubt.
Speers: Are you willing to acknowledge Labor was wrong to dismantle the Howard Government’s Pacific Solution?
Lewis: I’m not here to talk on behalf of Labor.
Speers: What do you say? What do you think?
Lewis: My view is that the path Chris Bowen tried to go down to create a system that was consistent with international obligations was an honourable cause. It is a tragedy that he could not pull that one off for a variety of reasons that had to do with the numbers in the House. My question still remains, why is this such a massive issue when there are so many bigger issues at play? I just know that one side of politics tries to inflate the issue and the other one is just trying to manage it and that’s because there are votes in it.
Speers: Ged, you’d clearly prefer to stick to onshore processing?
Kearney: We would. There is also the whole other issue of the Howells Report, which never really got the light of day. It showed many, many more tens of thousands of people enter this country illegally on aeroplanes and through all sorts of other means. It is by comparison a trickle the people that come by boat and yet that is the one that is inflated and that is one that is all we hear about. Notwithstanding the tragedy of people who die at sea, I agree, there needs to be a solution to that. But we can’t forget they are human beings, they are desperate human beings, and they are seeking help.
Speers: Matt, it is quite possible that none of this is going to work now. The sheer number of people coming to Australia aren’t going to be deterred by being sent to Nauru, Manus Island, aren’t going to be deterred by temporary protection visas.
Hingerty: As I said earlier, we’ve lost four years of working to break up what is basically a market, a business, for the people smugglers. It is going to difficult. It is difficult now, for the current government, and it will be difficult for the future Abbott government as well. But I go back to what Scott was saying, the voiceless people in this debate are the thousands of people in camps throughout greater Asia, who are not really getting a voice or a look-in in this debate. They are the people I feel sorry for.
Speers: We’re going to take another break. A couple of other issues to look at, Tony Abbott’s past has been under some investigation, his student days and what he did or didn’t do, and Kevin Rudd re-emerging. Stay with us.
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Welcome back, we’re joined this week by Ged Kearney, the president of the ACTU, Peter Lewis is from Essential Media Communications, Matt Hingerty, the chief executive Barton Deakin and Liberal Senator Scott Ryan. I want to turn to Tony Abbott’s past. The Quarterly Essay written by David Marr has raised some issues about Tony Abbott’s student days at Sydney University and the claim made by a former rival in student politics, Barbara Ramjan, that when she beat Tony Abbott in a student council election, he, according to Barbara Ramjan, punched the wall on either side of her head. Now initially said he had no recollection of this, then he said that he definitely didn’t do it. Labor has ramped up pressure on Tony Abbott today, in particular, drawing parallels to the questions we had a month ago about Julia Gillard’s past at Slater & Gordon, saying if it is fair enough for the PM to have to explain herself, why shouldn’t Tony Abbott. Ged Kearney, do you agree with this? He said he didn’t do it, what more does he need to answer?
Kearney: Well I think he does have something to answer, clearly by his own standards. Whatever happens in your past is important in your political life. In my opinion, clearly he does have something to answer.
Speers: But he says he didn’t do it.
Kearney: He says he didn’t do it, there are several others now that said he did. There must be something to answer, you can’t just come out and say several people are liars.
Speers: There is this issue, Scott Ryan, that he initially said he had no recollection and then he said he definitely didn’t do it. If you definitely didn’t do something like that you’d remember it wouldn’t you?
Senator Ryan: It is hard to prove a negative. He has been clear, he can’t be clearer than say it didn’t happen. You’ve got one person saying something here, one person Ged, and Tony’s been in public life really prominently for 20 years. He has been a very prominent figure in public debate.
Speers: There has now been another Sydney barrister, who today, in The Sydney Morning Herald, said that while he didn’t witness it, Barbara Ramjan did come to him immediately afterwards.
Senator Ryan: So he didn’t witness it. Tony’s denied it, you’ve know got a person thinking they didn’t see it but they think it happened. Tony’s denied it, that is the explanation. I don’t buy this. If there was any truth to this whatsoever it would have come out years ago, it would have come out in the sledging of Tony that Labor’s undertaken for more than a decade.
Speers: That’s a fair point Peter, he has been around in public life for a long time.
Lewis: You know the personal attacks are what everyone hates about politics but it is also what draws everyone into the bigger stories about our leaders. It works when it fits in with preconceptions about people’s character.
Speers: That’s what this is, a hook to get into Tony Abbott’s character and attitudes to women?
Lewis: I’m a graduate of Sydney Uni politics and nothing would surprise me when it comes to what happened under Wentworth building, but the debate that people want to have is this guy, if you believe the polls, is going to be leading the country in 12 months. For a lot of people they’re still having a look at him and who is he and what’s he going to want to do. It’s not like John Howard, who was around for 12 years, you know, there will be a legitimate debate around the character of the future prime minister. Again, we hate it, but we get drawn to it.
Speers: If anything it does allow Labor to spend a few days to talk about Tony Abbott not being nice to women. In a political sense, is that damaging?
Hingerty: We should just stop this now. You’re right. This is what turns the public off politics. It is dredged up from ancient history. I’m sure there are plenty of Labor MPs walking around Parliament fearful that there is going to be a tit-for-tat. Most of them were involved in student politics.
Lewis: They’re all out of student politics.
Hingerty: They were there years ago, in Young Labor or the union movement, all equally robust. Where does this end? It is mutually assured destruction. There are much more important issues for the public.
Lewis: We’ve got to the point where both leaders are so deeply unpopular that the attraction on both sides is to actually make the other side more unpopular. I actually get the sense that if Labor is to get back, the way to gain traction is to go the Libs on what the state governments are doing. Go the brand, rather than the man.
Speers: Is politics becoming more personally negative in Australia?
Lewis: The last three years has been unprecedentedly negative.
Senator Ryan: In Victoria, NSW and Queensland, the Labor Party undertook personal sledging campaigns on the Liberal opposition leaders that we haven’t seen before. They attacked Ted Baillieu and his family for two elections in a row.
Lewis: The attack now is Ted breaking a promise that he’s been captured on video. I’m agreeing with you.
Senator Ryan: It blew up in Labor’s face. This is the just the latest Labor sledge.
Kearney: It is both sides though, isn’t it? It goes both ways. Abbott spent all that time on Julia Gillard.
Senator Ryan: Those allegations came from the Labor Party.
Kearney: We need to get out of all that, the issues, the important issues need to be dealt with.
Speers: Another issue, another leadership issue, we saw Kevin Rudd on the 7.30 Report, he has been Tweeting a lot, doing various things lately. Anything wrong with that? He is actually saying the right things, he is on message.
Lewis: After the last leadership challenge what he needed to do was pull right back for a whole range of reasons and he’s done it. Now he is being recognised as an effective backbencher who is pretty good at his job. I think you would have to be a conspiracy theorist to say there is much more going on, particularly at a time where Labor is tightening in the polls to the point where they are probably one tightening away from being competitive.
Speers: The thing is, whenever Kevin Rudd does something or opens his mouth, it is seen through this leadership prism. People say, ‘well look the Newspoll’s in the field so he must be deliberately trying to damage Gillard by doing this’. Ged, what do you think? He is a former PM, we shouldn’t have former PM’s silenced, they should be able to speak.
Kearney: He is a good campaigner and an active member for his electorate and he is voicing concerns about his electorate and what Campbell Newman is doing in Queensland. That is a perfectly legitimate thing to do as far as I’m concerned. I guess the sooner he starts to do that, the sooner that prism will break down.
Speers: Plenty on your side, Scott Ryan, think there is more to it than that, what do you reckon?
Senator Ryan: It is not just plenty on our side, you speak to people on the other side of the aisle. You don’t have to walk through too many corridors in Canberra to find a member of the parliamentary Labor Party telling you they want Kevin Rudd back. I think it is a bit mischievous to say ‘Kevin is just innocently being a backbencher’. I don’t think Kevin, since the day he came into Parliament, ever wanted to be a backbencher.
Lewis: But he has either got to take the vow of silence, or walk.
Speers: That’s right, what does he do?
Lewis: I guess there is no roadmap of former prime ministers sitting in the Parliament.
Senator Ryan: Billy McMahon did it for a long time, he did it for a decade.
Speers: But particularly one who has tried to have a crack to get back into the job.
Senator Ryan: Labor MPs are the ones who talk this up. Labor MPs are the ones who talk around. It is not like people are trying to draw things out here that aren’t being spoken about around Canberra.
Speers: It was your Deputy Leader Julie Bishop who said in your party room this week that it is all going to come to a head in the next two weeks, that was her prediction.
Lewis: That’s the problem, every time you predict it, and at one time they got it wrong so much last time, you keep predicting and sooner or later you get it right.
Speers: Let’s move on to a more substantive issue, foreign investment. Everyone happy in the Coalition on this issue and particularly the sale of Cubbie Station to a Chinese-led consortium?
Senator Ryan: We’ve got a policy on it which is to support foreign investment when it is in the national interest. We don’t have a particular policy on Cubbie Station per se, we support the process that leads to foreign investment. We had some criticisms, which we discussed in the Senate earlier in the week, which was, this was released late on a Friday night, there has been very little transparency and we’ve talked about adding to that. We support foreign investment, it has built Australia 100 year ago in the pastoral industry …
Speers: But it has taken a few bumps to get a clear policy position. Matt, what do you think? Particularly the concerns from the Nationals, we did see, expressed before this week. Has that damaged the Coalition at all?
Hingerty: No I don’t think so. We’ve been through this before. I remember – I’ve been heavily involved in the tourism industry – in the 1980s we had all these concerns raised about Japanese investment in resort development in Queensland. The Japanese did invest, they’ve gone, they’ve left behind fantastic infrastructure. You look at a hotel like the Shangri-La in Syndey that used to be the ANA, one of the great hotels in Australia. Support an industry that has 5-6 million international visitors come here a year, it generates $30 billion for our economy. It is about effectively deploying foreign resources to get the most out of those resources for our country. I think the Coalition will get over it.
Speers: What is the union view on foreign investment?
Kearney: I think the critical issue for us is that any foreign investment doesn’t undermine our sovereign right. That Australian rule, Australian law is respected by the companies that come and invest here. We’ve got a very interesting situation here now where that is under threat with trade negotiations, free trade agreements. We’ve got the situation where Philip Morris, for example, is suing the Government for plain packaging cigarettes under a free-trade agreement, what they call an ISDS clause, which allows corporations to do that. Our concern about foreign investment is that it is subject to our sovereign rule and our sovereign right, it doesn’t undermine local jobs and local bargaining and there is due process around that.
Speers: Is there any example where foreign investment has damaged our sovereign rule?
Kearney: That ISDS where we have investor-state dispute settlement clauses.
Speers: That’s a free trade agreement though, I’m talking about foreign investment in Australian property or business.
Kearney: But that’s exactly what that is. If you’re a foreign investor and you set up a company in Australia and something happens that you can show is detrimental to your corporation you can sue the government, even though a law the government made was actually in the best interests of the subjects of this country.
Speers: So you do have concerns then that because of those agreements, foreign investment is perhaps going too far?
Kearney: Well luckily, the Howard Government and the current government have resisted having those clauses in agreements. I think since the late 1990s. Philip Morris is suing us under an old agreement. They actually moved an office to Hong Kong because we had a free-trade agreement in Hong Kong that was struck in 1993 that had one of these clauses in it. They are really clutching at straws to get that.
Senator Ryan: Those clauses are partly important too. Australian companies have used those too when they are in dispute with foreign governments that might pass a law that appropriates property, particularly with our resource-based industries, which are quite global with Rio and BHP. Those clauses have a role as well, they are not always all bad.
Kearney: Well our experience is that they pretty much do cause a lot of problems for governments that want to make rules in the public interest, but may impact on a corporation. Those cases are increasing Scott, there are more and more cases happening around the world.
Senator Ryan: Something governments deserve to face them.
Kearney: If you’re a business and you’re investing in a company you should take all risks into account.
Speers: Getting back to foreign investment in farmland, one Nationals MP said to me this issue is white hot in the bush, a bigger issue than even the carbon tax, believe it or not. Peter do you agree with that?
Lewis: The thing about economic populism is that it is popular. There is a big gap between the elite opinion and the public opinion. When we were asking about foreign investment it was interesting, Japanese buying golf courses isn’t the concern, it is Chinese, Asian, governments buying in at the moment. That was the response we got when we polled different type of foreign investment.
Speers: So specific to countries?
Lewis: Yes. And particularly the notion of state-owned enterprises buying in as well. What I take from that is that there is a bit of a responsibility on all decision makers to actually explain the benefits better.
Speers: Are you able to tell from the polling, is that a greater concern in regional areas than city areas?
Lewis: I’ve just got the general national figures, but it is white hot all over the place. There is a suspicion there that may or may not be conducive to the national interest.
Speers: Do you think that’s why Labor is being fairly careful on this as well? We didn’t see Wayne Swan standing up in Parliament talking a lot about Cubbie Station this week, exploiting the differences on the other side.
Senator Ryan: He dropped it at 5pm on a Friday night.
Lewis: You know, Barnaby Joyce is more in touch with the average Australian on economics than any other politician and that is a challenge for all politicians if you don’t agree with Barnaby Joyce’s economics.
Kearney: Do you think it is interesting though Peter, that people don’t have the same level of concern about, for example, 85 per cent of profits from mining go offshore. Mining is owned by foreign investors.
Lewis: The mining industry there is still a degree, there is a double-take. People say ‘thank God the mining industry is investing because that is basically the only economy we’ve got’, and then there is a growing awareness that other parts of the economy are suffering because of the strength, because of the Australian dollar. Our economy is a really complex beast and we spend too much time talking about what Tony or Julia did and not enough time trying to bring it to life the way Keating used to bring it to life.
Senator Ryan: Well Peter makes a fair point here. Howard and Costello did this. John Howard and Peter Costello always gave credit to the Hawke Government for being able to do this, to explain the benefits of economic reform. I think quite frankly that has broken down under this Government. I don’t think anyone would say Wayne Swan has the ability to explain economic reform in the same way Peter Costello or Paul Keating did. If that’s what you’re hearing Peter, I think it reflects a breakdown in the leadership role of government explaining to people ‘sometimes these are difficult choices, but they do make us better off in the long run’.
Lewis: Everyone is offering no pain anymore, no pain reform.
Speers: Particularly to look at this concern that is coming through on state-owned enterprise, we are talking here about China. Matt, you’re a supporter of foreign investment, but is there a difference when there is a Chinese state-owned company?
Hingerty: Perhaps there is. I was just reflecting, listening to these guys, that very recently we had the story of the sort-of, almost merger of Emirates and Qantas and that barely went by without a mention. I think the combination of Chinese investment into farmland is at the pointy end of this debate.
Lewis: It is energy as well, you know into power stations, because the NSW power grid is going to be up for sale in a couple of years.
Hingerty: But it is how you ask the question though. Would you prefer to have a job from a farm or from a mine which the Chinese have invested or not have a job at all?
Lewis: I will put that in next week’s questions.
Speers: Peter Costello who I interviewed during the week also made the point where are you going to draw the line with this stuff? General Motors and Ford, for all intents and purposes, are owned by the US Government through their bail-out funds.
Senator Ryan: Look, this has been a sensitive issue. I do remember the 1980s particularly well. That’s why Queensland has a land register, which is something that could actually add to transparency. Peter mentioned power. In Victoria, the Labor Party in 1995 and 1996 ran a campaign, it was a famous ad – I’m not sure if Julia Gillard was John Brumby’s chief of staff – but it was an American buying up all the Victorian power stations. No one in Victoria is worried by that because they’ve seen what happened and they are now owned by companies and funds from all around the world. So our job as politicians is to explain it. I think there is a particular burden on government to do that because that’s what government does, it implements policy.
Speers: But are you worried about foreign government owned companies investing in Australia or not?
Senator Ryan: I think we just need to know when they are, in my view.
Speers: Is it in our interest to have foreign government-owned companies controlling Australian businesses?
Senator Ryan: It depends, that’s why we have a Foreign Investment Review Board, which makes these decisions on a case-by-case basis. You talked about this as complex Peter. Let’s not say there is a simple black or white answer. We believe in process.
Lewis: Should it be a higher test though?
Senator Ryan: I think it needs to be a second test as well as a first test. We do need to look at it twice and look at it in more detail when we have foreign governments, as opposed to foreign companies. We’ve always had a very open approach to foreign companies and multinationals and that’s served this country very well. This is a new trend of sovereign wealth funds and I just think we need to allow Foreign Investment Review Board process to continue to do its job.
Speers: Well it is a sensitive issue and a difficult issue as well. We will have to wrap it up now.