Topics: Wayne Swan’s attack on miners, green groups campaign against coal, Paid Parental Leave, Gonski review, ADFA Skype inquiry, Jeff Lawrence.
DAVID SPEERS:
<introduction and welcome>
I want to start with Wayne Swan’s attack on the mining magnates, in particular Clive Palmer, Gina Rhinehart, Twiggy Forrest. He accused them of poisoning our economic and political debate, being anti-democratic, pursuing their own vested interests ahead of the national interests, he didn’t quite liken them to Kevin Rudd, but he came close. Peter Garrett do you agree with his assessment of what these people are doing to our country?
PETER GARRETT: Look yes, I think the Treasurer was making an absolutely valid point David. The truth is we saw an absolutely unprecedented level of engagement by these particular individuals in the minerals resource rent tax debate. We saw Ms Rhinehart, for example, campaign vigorously against the Government in Perth and that footage was widely distributed around Australia. It is absolutely appropriate for the Treasurer to make an observation about the way in which people conduct themselves, particularly people who occupy this extremely powerful position.
SPEERS: What’s wrong with Gina Rhinehart going to a rally, standing on the back of a flat-bed truck? Peter Garrett, you’ve done one or two of those, I remember a famous concert in New York. Protest is surely not something you would argue against?
GARRETT: I would have had no exception if someone would have said to me ‘this is what I think about what you’re doing’. That’s the point about this isn’t it? Are we really expecting that whether we agree or disagree with what Wayne Swan is saying, I happen to agree, that he shouldn’t say it or have the opportunity to say it? Of course he should. And there is another issue at heart here. The Government’s underlying reason for wanting to make sure that the super profits of miners are accessible for us to use to improve superannuation prospects, for us to invest in infrastructure and the like, that is an important public policy debate.
SPEERS: Tim Wilson?
TIM WILSON: Well I actually think it was an embarrassing essay at the end of the day and I am really disappointed to hear Peter back it up. If you actually look at the conduct of mining companies, it is clear that the mining companies that led the biggest tax against the Government, are the same people that then went and had closed-door meetings with the Government to negotiate the final mining tax.
SPEERS: It wasn’t Gina Rhinehart, Clive Palmer and …
WILSON: It wasn’t Gina Rhinehart and all those people, but if you want to know what the biggest threat to a fair-go in this country is, and the biggest threat to democracy in this country is, it is when big government gets together with big business and hashes out private deals that suits your political interests and their economic interests. It was a disgrace, it should never have happened …
SPEERS: Government shouldn’t sit down with business?
WILSON: Not in that way, not behind closed-doors to deliver an outcome that serves those groups’ interests at the expense of every other Australian.
SPEERS: Ged Kearney?
GED KEARNEY: That’s not really what Wayne Swan is about. Wayne Swan is talking about democracy and I really think it is a good conversation, the fact that we are sitting around talking about it, if nothing else we have started an important conversation. When you have one or two people of enormous resources, their own resources that they can spend on their own vested interests, it does put out of balance the basic tenets of democracy because you have the larger per cent of people – who he calls the 99 per cent to use the occupy vernacular – who don’t have those resources, who don’t have that ability to just put out their interests or arguments. That’s where it gets out of balance.
WILSON: The reason these messages resonate with people is because they agree with people. Just being able to afford to put advertisements on television doesn’t necessarily win your case.
KEARNEY: Oh come on.
WILSON: The reason why in WA and Queensland – particularly in Queensland where Labor was vulnerable and they had a big jump in their impact on their judgement call and what they finally did over the mining tax – was because we have a federation. Those resources belong to those states and those people know that when Canberra comes along and takes that money, it doesn’t get distributed in a way that they’re happy with.
SPEERS: Getting back to the issue about abusing democracy or not, where do you draw the line? You’re saying these people have resources that ordinary folk don’t, that’s true, but where do you draw the line in saying this person’s too rich, they shouldn’t be allowed to run ads on newspaper, TV adds, make a campaign contribution? The unions do too, you’ve got money and resources and you ran a very effective campaign against Workchoices.
KEARNEY: We did, but I think the difference between unions and any other member organisation is just that, they are membership organisation. We have two million people who we speak on behalf of, who without the union movement would not have a voice and that is a fact. Other membership organisations are the same. And what unions argue for very much are for public benefit, they are for broad things that benefit a large amount of people, public health, public education.
SPEERS: But Twiggy Forrest would say he is arguing for jobs … Let’s bring in Scott Ryan.
SENATOR SCOTT RYAN: I can’t believe Ged said that with a straight face. The unions spent $30 million in one election cycle, you didn’t consult with all your members before spending that money. Andrew Forrest and the other miners, they are speaking on behalf of thousands of shareholders – every Australian with a superannuation account was going to be hit by that RSPT. They are speaking on behalf of tens of thousands of workers in the mines and the supporting industries, in the shops in the towns where those people live. They are just as much speaking on thousands of people as you are.
KEARNEY: No one’s arguing against innovation, no one’s arguing against investment, of course that’s important, but …
RYAN: You’re saying that you argue on behalf of public interest but somehow Andrew Forrest doesn’t. Well Andrew Forrest has built a company up from very little and has employed tens of thousands of people and made tens of thousands of people better off through their superannuation accounts. You can’t simply say, ‘oh we speak on behalf of the public interest because we happen to agree with the Labor Party’. What Wayne Swan did, just like he did to Kevin Rudd a while ago, was show a thuggish behaviour to attacking personally people he disagrees with.
GARRETT: This is ridiculous, this is a ridiculous discussion. Look, if these big-time mining billionaires can’t take a little bit of public discussion, such as the Treasurer offered, then I am extremely surprised. Now I know Mr Forrest, he is a robust individual, who is more than capable of standing his own ground. But the key issue here, is whether or not the argument about the profits that mining companies can and will make, ought to be redistributed in a different way than we’ve had before.
SPEERS: That’s a legitimate argument, but the Treasurer and Deputy Prime Minsiter’s point is about the way they are arguing this, that it is somehow poisoning our democratic process, that’s the point that he has made.
GARRETT: I think the key thing here is this. If people mount an argument on public policy grounds specifically, then you have a legitimate argument about it. When you have people mount an argument on public policy grounds plus political plus loaded grounds as we’ve seen, and we’ve seen plenty of examples of it including in the commentary that was made by these executives in the past, then you open up a question of the way in which this debate has emerged in the country. I think the Treasurer is absolutely entitled to stand up and say something about it.
SPEERS: We also saw this week, revelations that Greenpeace is running a campaign to stop coal projects going ahead by tying it up in the courts. Do you similarly condemn that as being an obstruction to our democratic processes?
GARRETT: Well, it is the same point. I support the right of any organisation to engage in civil disobedience if they don’t harm others. If they break the law then they should bear the consequences of the breaking of that law, that’s as it should be and that’s what actually constitutes democracy. It is ridiculous for us to say that we shouldn’t have an organisation, whether it is an animal liberation organisation or a trade union or whether it is someone who wants to see their profits entirely contained to themselves and no tax paid, to express their view.
RYAN: No one is actually arguing that. This was actually a public policy argument about whether a tax that is not in place anywhere else in the world, with no consultation as we’ve heard from the Labor Government, which Colin Barnett didn’t know about, which the companies didn’t know about, which was a profound change in both our federal-state relations, which was going to strip a lot of money from all the states and drastically de-value the Australian mining industry.
GARRETT: Scott, I’ve got to say to you, having watched this and listened to this closely, it is absolutely untenable to put a view that this was not subject to discussion. We had a Treasury paper that specifically looked at a super-profits tax for the minerals resources industry. This was the subject of considerable discussion.
SPEERS: Just to be clear on that, it was released on the day the actual mining tax was announced. The Treasurer walked out with the then-prime minister Kevin Rudd and said ‘here’s what the Henry recommendations are and here’s what we’re going to do’.
GARRETT: Yeah, but it is just not an argument to say that this hadn’t been under consideration, of course it had.
RYAN: This was radically different to anything that had ever been discussed.
KEARNEY: But this is missing the point, I don’t think there is an economist in the land that would disagree that this is a tax that is necessary and would redistribute wealth fairly from mines and minerals. It is very strongly supported right across the board and there is inequality growing in this company, this country. As a proportion of national income, wages are at their lowest since the 1960s, there is growing inequality in this country that needs to be addressed.
RYAN: I remember Bob Hawke and Paul Keating arguing to push up the profit-share because they wanted to increase investment in Australia’s capital stock and in fact, that is one of the reasons the capital share is increasing, because we are seeing unprecedented investment in resources. The numbers we are getting into our resources industry are good for Australia, that is why the share is dropping.
SPEERS: Good for some. It is also pushing up the dollar and we are seeing that hurting manufacturing. The Government at least has this plan to tackle some of those pressures. What is the Coalition going to do about the imbalance this mining boom is going to create?
RYAN: Firstly, you don’t improve a two-speed economy by slowing down the fastest horse in the race. That is at the core of the Government’s problems with this plan. Australia has got a unique opportunity now, in agriculture and resources, to feed the growing middle-class of Asia’s demands for economic wealth and increased food security. So what we have said is, you don’t need a mining tax to slow down, or to use your words Peter, redistribute the wealth. What we need is an environment that allows that to prosper. We need less government debt because that will reduce the pressure on the dollar. When the Government’s borrowing 80 per cent of its large deficits from overseas, that forces up the value of the dollar.
SPEERS: That all sounds good, but what does that mean?
RYAN: What that means is first and foremost it means bringing the budget back into balance, keeping it in balance and paying back debt.
SPEERS: That will somehow help manufacturing?
RYAN: That will instantly take pressure off the dollar. There is no silver bullet to fixing economic adjustment, Joe Hockey outlined this in his speech yesterday. But what government can do is get out of the way of making things worst. Government borrowing is making things worse, it is keeping the dollar high and keeping interest rates high – two things that are hurting Australia’s manufacturing industry.
GARRETT: It is interesting to hear the mantra, but it is at odds with the economic conditions that we face and the economic reality that Australia is a well-buttressed nation in terms of the strength of our economy. Our interest rates are relatively low, our unemployment, despite the recent figures we have seen, is in a healthy state, and I think it defies belief for a frontbencher of the Liberal Party that governments shouldn’t look at the once-in-a-lifetime profits that are going to be secured by these mining companies and consider ways in which the national interest can be advanced through an appropriate tax. That’s what this discussion is all about.
WILSON: No one is actually arguing fundamentally against a resource rent tax, it is how it was designed in the first place and how it is being implemented. That is actually the issue at hand.
GARRETT: But you just argued against it.
WILSON: The problem was the Government didn’t design it the way where it would actually achieve a national objective, as well as recognising the structure of our federalism, which is how it should operate.
SPEERS: What do you think of the one now, which has gone through the House, will go through the Senate in the next few months presumably, not the original mining tax, which wasn’t properly negotiated clearly. What do you think about this one?
WILSON: Well, it is extremely complex and I am not in the best position to comment on how it will operate, but I think we do think we need to have one that promotes investment, at the same time as providing a dividend of resources from their extraction that recognises the context of our federation. This is one of the biggest issues I have with this, not the nature or operate, but that money goes to Canberra. That is not a good outcome, that is a massive reworking of our Constitution, which should be respected and does need to be dealt with.
GARRETT: Can I just jump in there and say something very quickly. At different times in Australia’s political history, different states have prospered and they have supported the whole, that is what made the Commonwealth of Australia, the powerful, strong nation that it is today. While I understand that we have a different view of Tim on my left, the fact of the matter is that the national government has a responsibility to ensure that the national interest is considered when we make these decisions.
RYAN: The royalties collected by Western Australia, Queensland and NSW, they go into the pool that is then redistributed to all the states in three years. That is exactly what Colin Barnett is complaining about at the moment, with his state’s share of GST receipts dropping to near 50 per cent. So all the mining royalties that WA and Queensland collect, in three years time, they end up in the budgets of Victoria, NSW, South Australia and Tasmania and they pay for teachers, cops and nurses. You are not talking about the money not being collected, you’re talking about Canberra having control of that money. I actually like that money being collected by the states because it does flow all around Australia through fiscal equalisation.
WILSON: There is another point though, and this is getting back to Scott’s earlier point, which is that you shouldn’t slow down the productive part of the economy. What we need to find is provide avenues to boost those sectors of the economy as well and that is where governemtn and government regulation does matter. Removing things like the carbon tax …
SPEERS: We might get on to that … Is there a special argument, if we are talking about resources in the ground that belong to all Australians, to future generations, is it different to say the banking sector, or some other sector?
WILSON: Those resources belong to the state.
SPEERS: Is there an argument here that there should be a better distribution of those resources, whether they belong to the state or the commonwealth?
WILSON: There is already a redistribution of those profits through company profits tax, through other tax …
KEARNEY: Fiscal redistribution is not working. We have seen by the economic figures that there are two states booming in this country, and other states where jobs are shedding, the states are not doing so well, unemployment is rising, the fiscal redistribution you talk about as a panacea is not working.
RYAN: No I’m not talking about a fiscal redistribution. The economy is always going to vary between different parts of the country. In the 1990s, Victoria’s economy got hit very hard while other parts of the economy were doing very well. The important point here is the money is being collected and it does go to all the state capitals and it helps increase every state budget, which I thought you would have liked because it is the sort of thing that helps address the issues you are seeing in Victoria with the nurses dispute.
SPEERS: We will move on from the mining tax, after the break we will look at whether the Government can and should be getting the budget back into surplus and would the Coalition do any better. Stay with us.
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SPEERS: <re-introduces guests> The Government, once again this week, despite some weaker economic news, pledged to get the budget back into surplus next financial year. Wayne Swan acknowledged it is becoming more difficult and there will probably need to be another round of spending cuts to do it. The Opposition also promising to deliver a bigger and better surplus, as well as some of the promises it has made like a more generous paid parental leave scheme. Ged Kearney, what do you think about this mad rush to get back into surplus?
KEARNEY: Well the ACTU has said all along while we recognise the fiscal responsibility of a Government and they target they set themselves, we are concerned about a race to a surplus, we are concerned it will be at the expense of public services, of jobs, of severe budget cuts that actually affect those things that are important to us like health delivery and education.
SPEERS: Wayne Swan did signal that there might have to be more spending cuts in the budget.
KEARNEY: That’s right. We have to keep in mind that the surplus we have in Australia is tiny, absolutely tiny by international standard
SPEERS: The deficit?
KEARNEY: The deficit, sorry. The deficit we have is very, very small by international standards and it is actually something we can manage as a country.
SPEERS: I know you will have a different view of that, but Tim Wilson, what do you think of getting back into surplus, is it really that important?
WILSON: It is actually extremely important and drawing a comparison between other countries and saying they are completely bankrupt and need massive bailouts and we don’t need one so therefore it is ok is rather silly reasoning in my view.
SPEERS: But is there a point at which it becomes detrimental to the economy to force back into surplus?
WILSON: No, I don’t think that is the case at all. If we look around the world, countries don’t get themselves into really difficult financial situations because they go a little bit into surplus and ignore the fact it keeps growing every year. We are assuming that we can pay of all this debt within a 10 year time frame, we’re assuming nice economic conditions and that other things won’t come along and hit on top of that as well. But what I am really concerned about with the surplus, and I really do hope Wayne Swan achieves it and I would congratulate him, but it has to be an honest surplus and reports that he has previously considered raiding the Future Fund, as an example of getting cash into the budget and enabling it to get into surplus, worries me greatly. Can you confirm he won’t be doing that Peter?
GARRETT: Well he is answering the questions Tim. You were talking about some reports or something, what I can say is that the Treasurer has made it very clear that the Government will return the budget to surplus. And do you know what? We do that on the back of really strong economic performance in Australia that is unparalleled anywhere in the developed world. Let’s just sit back for a second and recognise our economic fundamentals are strong. Yes, we have some significant challenges, and that is understood, but if you look at the economic fundamentals, they are strong. We managed the Global Financial Crisis, the Treasurer has made the commitment we will go to surplus and we will achieve it
SPEERS: But we do have a deficit forecast for this year of $37 billion and a lot of money of spending was pulled forward into this year so we could still get back into surplus next year. It is a fair point, is there going to be more accounting chicanery to protect that surplus?
GARRETT: The Treasurer is going to bring down the budget and that is a matter which he is on the record as saying he will deliver. I’m not going to start this argument.
SPEERS: Are you worried that things like the $5 billion that David Gonski reckons you need to improve the school system – and we’ll talk about that shortly and the National Disability Insurance Scheme money that is going to be needed – all of this gets pushed out a bit further, gets harder to do when you are so determined to come into surplus.
GARRETT: Look I think the fact is that for any government there will always be demands on teh budget, of course there will. But I’m in agreement with my friend on my left here …
WILSON: Will you please stop saying that?
GARRETT: I’m destroying your reputation here on national television. If you’re serious about establishing the right economic foundations for the country to grow in the future, you have to maintain fiscal responsibility, that’s what it is called.
SPEERS: Even if it means delaying education reform?
GARRETT: And that’s not delaying the reform, but getting the reform right and committing yourself to the budget surplus we have. Here’s the key to this: we’ve said we will commit ourselves to the surplus. The Opposition with Tony Abbott in magic pudding economic land, they’ve got $70 billion in their black hole, a paid-parental leave scheme that they can’t afford and half the party doesn’t like.
SPEERS: Joe Hockey says it is not $70 billion, but clearly there is a lot of money that needs to be found. Can you really afford to stay with the paid parental scheme, the more general scheme that is going to cost $3 billion?
RYAN: The paid parental leave scheme is fully funded, that is not an issue.
SPEERS: Through a higher levy.
RYAN: Due to a levy on the largest companies in Australia because we believe this is a national priority. Do you know what? We’ve had temporary levies before and we’ve got rid of them, in fact we had a superannuation surcharge, which was introduced under the Howard Government and then we got of it over Labor objections. So we’ve got form on both balancing the budget.
SPEERS: But you’ve also got form in railing against levies like the flood levy. Won’t this levy hit companies like Coles and Woolies and mean higher prices at the supermarket.
RYAN: What this levy is going to do is address what we think is a serious national priority and having a fair dinkum paid parental leave that gives women and families real choice
SPEERS: Sure, I get that, but the question is, isn’t it going to affect companies like Coles and Woolies?
RYAN: It is going to affect the largest companies in Australia and not necessarily hit prices at the supermarket because the price someone charges is the price someone will bear.
SPEERS: So they will have to absorb it? Shareholders?
RYAN: We think those companies can afford to make this contribution.
GARRETT: We are in a bizarre fantasy land here. We’ve got the Opposition who likes to attack the Government on the grounds of economic credibility basically saying they want to replace an existing paid parental leave scheme that we’ve introduced that is fully funded and today Jenny Macklin had a press release out that said 150,000 families that are taking advantage of it. With a paid parental leave scheme, which is actually a tax on companies, and provides the benefit to those who really don’t need it.
SPEERS: I noticed you’ve been a bit silent on the paid parental leave scheme.
WILSON: With Peter on my right here I agree with exactly what he said. There is an enormous amount of hypocrisy because it is exactly the same argument: companies can afford that, but they can also afford a whole raft of other taxes the Government has.
RYAN: You talk about economic credibility. Wayne Swan brought down a budget that said there was going to be a $26 billion deficit, six months later, oops, it is $37 billion. I mean let’s talk about serious economic credibility, which is actually about looking at runs on the scoreboard. The Coalition has delivered surplus budgets. You’ve had record revenue, you brag about how good the economy is and how unemployment is, yet you still cannot get us anywhere near a budget surplus. We’ll see at the end of next year, when the final budget outcome comes out.
KEARNEY: Can we go back to paid maternity leave because you talk about hypocrisy, Scott uses the royal we support it, when we know half the party doesn’t support it.
RYAN: That’s not true.
KEARNEY: When we know Tony Abbott himself is on the record as saying over his dead body will a paid parental leave scheme be introduced but he has suddenly changed.
RYAN: So you are now criticised someone who has said “I now change my mind”.
KEARNEY: He has employers out there who hate it, who don’t want to do it. And we know, if there comes a time when you are ever in a position to implement it, that pressure will be brought to bear on you by your interest holders, it won’t happen.
SPEERS: The point Tony Abbott makes is that when it comes to annual leave, sick leave, you get replacement salary. Why shouldn’t you get that for having a baby?
KEARNEY: I’m not saying you shouldn’t, but it is talking about affordability and you actually bring up a very good point about sick leave and annual leave another thing we don’t like, that I don’t like about Tony Abbott’s scheme, is he wants to take it out of the workplace system, he wants to not make it a workplace right, which it should be a workplace right, and put it in the welfare system. Now it should stay legislated as a workplace right where the Labor Party has put it.
RYAN: That’s the exact opposite of what Tony Abbott said, which is it isn’t a welfare entitlement, it is a workplace right. What you’re talking about is that we’re going to take the burden of the paperwork off a couple of million small businesses in Australia because the Labor Party’s minimum wage for 18 weeks with no superannuation paid parental leave scheme forces every small business to do the paperwork for no good reason when everyone, and I’m a new father, spends a lot of time at Centreline anyway and it would make a lot more sense to get the Family Assistance Centre to manage it.
GARRETT: I think the fact here is that people are voting with their feet on this one and they’ll vote with their feet when they consider this is a Rolls Royce scheme that Mr Abbott has proposed. It was a thought bubble he had and now he has to defend it and so do his frontbenchers. The fact is we have a paid parental leave scheme, a responsible one, in place. The one that Mr Abbott proposes is expensive, it also imposes extra cost on business, the very things that they criticise the Labor Party for. It is not well thought out and mate, if it comes to a contest between Joe Hockey’s credibility as an economic spokesperson and Wayne Swan’s, I’ll back Swanny any day.
RYAN: There is one thing we can agree on including when we compare his runs on the board.
SPEERS: That scheme is still cheaper than the $5 billion education reform that David Gonski has recommended to the Government. Are you going to be able to find anywhere near this sort of money to be able to deliver – and I know it is not all commonwealth money that he is talking about –you are going stump up a fair bit of cash.
GARRETT: Well David, the figure David Gonski put in his report was an estimate, it was based on figures he had in front of him and you’re right, it would apply to commonwealth and state governments. What we’ve said is let’s do the work. Let’s sit down and do the hard and necessary work of looking at what an education model that provides effective funding to students in all schools – government and non-government – will look like. We will then come to the question of money and that will be a matter I will have to consider and I’m not ducking the question.
SPEERS: Some of the concerns that have been raised about his recommendations, and I know you’ve been holding forums about teachers and parents about this already, the concern they would be some kind of means testing families who send kids to independent schools.
GARRETT: There are two things that the Opposition has said about this, which are absolutely wrong, even Mr Gonski has gone onto the record to say ‘look I’m not quite sure why they’re saying this’. One is, that there is a hit list. There isn’t. There is no hit list in that report, there is no suggestion of a hit list. We’ve said no school will lose a single dollar per student – that’s an absolute commitment. And there is no means testing in the report either. There is no means testing mentioned in the report, the report doesn’t talk about means testing in anyway.
SPEERS: It does talk about finding a better of trying to determine the wealth of a school community.
GARRETT: Yeah but David let’s be clear on it. The Gonski Report identifies the current SES system that determines the wealth of the school community and then determines the money the school would receive.
SPEERS: Then it wants to discover a new way of measuring that wealth.
GARRETT: Hang on, sorry, that was the Howard Government model and it says that is the model we’ve got now and that is the model we should use before we move to a more refined and better model. It has got nothing to do with means testing. It is absolute hypocrisy on the part of Mr Abbott and Mr Pyne to get up and scare the living daylights out of punters by saying there are hit lists when there are none and there is mean testing where there are none.
SPEERS: So you will rule out any kind of means test of families who sent their kids to independent schools?
GARRETT: Absolutely. It is not under contemplation in Gonski and it is not something the Government would contemplate. The question of fees and fee-setting is a matter for the schools themselves and school choice is a matter for the parents themselves.
SPEERS: So what are you guys so worried about?
RYAN: Peter can guarantee that a lot of parents go to bed easy tonight if he says the current indexation regime and funding formula will mean that no school will lose a dollar in real terms going forward, including the indexation under the formula that has been in place.
GARRETT: Look I’m very happy to make clear what we’ve already said and that is this: there will be indexation, and we’ve made a commitment to that, and no school will lose a single dollar.
RYAN: In real terms?
GARRETT: Hang on, we’ve made a commitment to that. And that any proposed models of funding will deliver the most effective resources it can to educate our students. Now it is really interesting in this debate, everybody – Independent Schools Association, the parents organisations, the principals organisations, the academic community – all of them say we need to get on and do this job now. It is not about having some marginal argument about private versus public, means test or otherwise, it is about working through what an effective education model would be for the country and that’s what we want to do.
RYAN: Do you guarantee the current indexation regime in real terms, that is what I want to know. In real terms, will any school lose a dollar. That’s what the Coalition has been asking and I noted that you carefully have not said that.
GARRETT: Well I am making the point to you in this way. We’ve commissioned the first independent review of funding that we’ve seen for nearly 40 years. They have provided the Government with a set of recommendations, we think there is a lot in those recommendations and we intend to do that. As we do that, bearing in mind that their finding is that the current funding system is illogical, not transparent and not effective – in other words we are not seeing the educational performance we need for our kids. No school will lose a single dollar …
RYAN: In real terms?
GARRETT: … And there will be indexation.
SPEERS: Just to check what the Coalition’s position is on this, are you saying you would stick with the current formula and no school would lose a dollar in real terms?
RYAN: At the moment we have committed to indexation using the current formula, that is, no school will lose a dollar in real terms. That’s why we’re asking Peter Garrett the question.
SPEERS: The point that, not just the Gonski Review, but the international tables show is that Australia is slipping back in terms of our international rankings on literacy, numeracy and those sort of measures. Surely something has to change.
RYAN: Agree. If you look at the countries that are doing better than us, a lot of them spend a lot less on education. Money is not the pre-determining outcome of what we get as educational results. My mum has been a teacher for 37 years. We had an obsession in the 90s at the state level, with shrinking classes, particularly for junior primary school classes. That hasn’t worked. Money is not the determining factor in how well our kids do.
GARRETT: I’m not arguing that it is.
SPEERS: Let’s get some other thoughts on this. Tim Wilson, what do you think about the education reforms that have been put forward and the need for reforms, do you see a case?
WILSON: Absolutely there is a case for reform. I just think this is a lost opportunity. I am a big fan of a proper means-tested voucher system that enables parents to have choice of where they send their children and drives competition into the school system. My partner’s a school teacher and we need to drive up standards and competition is a very key component of how you actually achieve that as part of a changing cultural system in schools.
SPEERS: Ged Kearney?
KEARNEY: Well look I am no real expert on the funding system or indexation, but what I know, as an outsider looking in, is that this report and the way forward has been endorsed by all the major education bodies, including the independent schools, public school associations, the unions, all the unions involved. So to me it seems like everyone is on board and this is a very sensible way to go and I will take that on face value.
SPEERS: What’s wrong with a voucher system?
GARRETT: Well look, I think there are a lot of reasons why you wouldn’t want to go to a voucher system. We’ve got a good education system in that it is a system that is divided between the government schools, which are run by the states, and non-government schools, which are run by systems. Mr Gonski recommendation made plain that he and his panel believes that we should continue to fund according to systems. In principle I think that is absolutely right. There is one aspect of the voucher that does exist in the report and that is around the portability of the disability loading. Gonski recommended essentially that there would be a schooling resource standard – and that is a figure identified by effective schools doing their job well – and then you look at the things holding kids back, whether it is disability or English language, and you add loadings to that schooling resource standard. Now there is a question over whether that disability loading would be a portable one, that is one that we will work through, but generally speaking, no, I think it is up to the state to provide the educational entitlement to all Australian students and if parents want to choose to send their kids to an independent school, a non-government school, then they can.
WILSON: Using vouchers doesn’t actually inhibit the state providing that safety net and appropriate level of funding for the public to make sure there is a good standard of education, it means you can means test people out of the system so the rich pay for their education and the state doesn’t have to do it. In the same way we should look at changes in the space of health care, it is actually about enabling people to get a higher level of choice in the system by making sure we drive up standards. I agree with you that there should be portability on disability funding to make sure there is an equaliser for people in that unfortunate situation, but why can’t it then apply to others? Where vouchers have been used around the world, they have been an incredibly effective measure to drive up standards and improve outcomes.
GARRETT: Look I’m not sure that’s the case David. We’ve just had a Finnish expert basically come and tell us why the Finnish education system delivers extremely well for its students. It is not a vouchers system and it works very well, somewhat similar to the Australian system.
RYAN: Three years ago, Joel Klein was out here telling us how to run an education system too. The point you make around disability funding I think is a very important point. We actually had that policy at the last election and I know that there is actually an inequity in the way a student with a learning disability or a physical disability is treated between the independent and the government sector. They are not provided with the same degree of support publically through the independent and Catholic sectors and that’s something we’ve committed to
SPEERS: <Throws to ad break>
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SPEERS: <re-introduces guests> This week we also saw the inquiries, and there were many of them, into the ADFA sex Skype affair made public – well not all of them made public – but in particular, the one that looked at the actual issue itself and the role of the defence force academy Bruce Kafer. The key findings were released and they found no error of judgement on his part. That’s exactly what the minister Stephen Smith accused him of, saying the error of judgement was insensitive and/or completely stupid to allow the disciplinary hearing to go ahead of this young female cadet on a separate matter when she had just been the alleged victim of this Skype incident. Ged Kearney, what do you think about the culture in defence, that we’ve seen discussed a lot this week, and particular about this case and the way it was handled?
KEARNEY: I think the very sad thing in all of this is that when we’re focussing on whether or not there should be an apology we have totally missed the point of the whole episode and that is, a young woman was harassed, humiliated, vilified and this is appearing to be, in a report that hasn’t been released yet, this appears to be the culture of the ADF. What we should be talking about here and what should be the height of discussion now is, what are we going to do about that? How are we going to change the culture? Is that something that we accept? I’m not hearing that debate and that’s a great shame.
SPEERS: Defence has signed off on the back of this on a “pathway to change” document that acknowledges there are problems with the culture and lays out plans for tackling it. Do you believe that we will see a change?
KEARNEY: I hope we will see a change. I think it is going to be difficult really given how entrenched it seems to be. There seems to be nearly a thousand cases or something are going to be talked about in that report so it is going to take a long time to turn it around, it is going to take a lot of leadership, particularly from the ADF, and I hope we start seeing signs that that’s the case.
SPEERS: Nonetheless, it is important for the Defence Minister to have a solid working relationship with the defence force obviously. This inquiry report found no error of judgement on the part of Commodore Kafer, yet Stephen Smith is standing by this very view and not apologising at all. Tim Wilson, what do you think, are there grounds for an apology from the minister?
WILSON: It would seem so. I come from a pretty traditional background, if you do something wrong, if you get something wrong, you apologise, someone accepts your apology and you move on from it. If, as you correctly point out, you actually want to try and change the culture, the person who is supposed to be at the head of that, shared with other senior personnel, isn’t able to actually have constructive engagement and working relationship, it will fundamentally undermine that. I don’t know why Stephen Smith doesn’t do it, get it out of the way and move on.
SPEERS: There was grey in the inquiry findings that it wasn’t reasonable to put this girl before a disciplinary hearing, but that it also would have been reasonable not to put her before a disciplinary hearing.
WILSON: I don’t think it is disputed that he also over-stepped the mark with his commentary, that it was ill-judged and ill-timed to the extent to which he did it. As I said before, he should just apologise so we can all move on and focus on this because it is really an issue with some parts of the defence force culture. It is not everywhere, there are always pockets within any organisation, and particularly one that has such a big, institutionalised culture at the ADF and that’s why, you’re absolutely right, we need to drive change, and he has to be part of that process.
KEARNEY: Why do we focus though on this, why can’t we move on? OK Stephen Smith said he is not going to apologise, Stephen Smith has said he is not going to apologise, the man has been reinstated in his job, let’s move on and start focussing on the next stage. Why are we focussing on this?
WILSON: For precisely the reasons I have just outlined. You can’t actually have a minister in charge of an area, who has a very difficult working relationship with the people he needs to try and drive that culture when there is a lack of trust and a lack of moral understanding.
RYAN: We know now why Stephen Smith wanted another job, he didn’t want to have to drop this. He dropped the report yesterday, on the same day as the National Accounts were coming out.
SPEERS: I just want to say, I don’t they hid this report.
RYAN: We had a minister that went out and said some pretty hardline things, pre-judged the actions of a senior officer and we have just had a report come down that exonerated his actions. Quite frankly there is a lesson here where politicians shouldn’t try and dominate the media cycle at the expense of reputations of others.
GARRETT: Just to be clear. Stephen Smith has done more, in his time as Defence Minister, to address the issues of the culture of the ADF and the way and which they treat women than any other defence minister, that’s the first thing. The second thing is his comments that he made were entirely appropriate and I believe that an accurate reading of the report in time will show that.
SPEERS: Maybe if it was made public we could do that.
GARRETT: It is true that the report didn’t find a legal reason not to reinstate the commander and so it is appropriate that he should be reinstated. But Stephen Smith has been representing that particular view that he took and the reasons why all day. He didn’t drop it out on the same day as the National Accounts to hide it, that is ridiculous and he will maintain a productive and constructive relationship with the defence force leaders as they are obliged to do and will do as well.
SPEERS: You say he has a good working relationship with the Chief of the Defence and vice-chief, but surely the head of our Defence Force Academy, which is training our defence leaders of the future, is a pretty important post. He is not willing to express confidence in him, clearly still believes that he did something stupid.
GARRETT: Well, I think Ged was onto something here when she said, ‘just think about what happened in the first instance’. I don’t think anyone sitting around this table would in any way say ‘well hang on a minute, what’s gone on here?’. He was perfectly in his rights as minister to express the view he expressed at the time and after all, he commissioned all of these inquiries.
SPEERS: Shouldn’t the Minister wait for all those inquiries he has commissioned before expressing a view – he of all people?
GARRETT: Any minister or opposition spokesperson is entitled to put views at different points of the political debate about matters over which they have responsibility for.
SPEERS: But getting back to the issue that is at stake here. An 18-year-old female cadet is filmed having sex with a male counterpart, it is beamed into a nearby room where other cadets are watching it. She is then called before a disciplinary hearing over a separate matter. Are you comfortable with that?
RYAN: Look, I’m not going to judge. I’m not going to do what Stephen Smith did and judge the actions of a commandant at ADFA without knowing all the facts. We may see the whole report in time, I know the Government has said it will not release it and there are obvious reasons we shouldn’t do that now with potential legal action. The point here is that the Minister jumped to conclusions. We saw in Dennis Shanahan’s piece today an analysis of the timing of that press conference, which was due to internal shenanigans in the Labor Party because Kevin Rudd was holding one at the same time. I think he should simply do what Tim suggested: say sorry and move on. Here we have a senior officer who the report has effectively exonerated by saying there was error of judgement, there was no reason to remove him, yet he was attacked pretty viciously in public by a political leader.
KEARNEY: And what about the young lady? If you had a daughter, how would you feel?
RYAN: I am not dismissing that.
KEARNEY: We’ve lost that, don’t you think this has all been lost. That is the tragedy. That there is a young lady – maybe many young ladies – who are feeling very hurt, very injured by this and all they’re seeing is a debate about whether a man, who was ultimately their boss and had responsibility for their safety in their workplace, is demanding an apology. It seems everything has been forgotten for those women.
RYAN: No I don’t think that.
GARRETT: You can call out, ‘what about process?’ The fact is, there has been a process that has been followed. I think that when people get a chance to reflect on events in the last couple of days, they will see that the Defence Minister has acted entirely appropriately. I have absolutely no doubt about that whatsoever. The fact that you won’t answer the question Scott, about what you would have said in those circumstances is indicative of that.
RYAN: What I’m saying Peter, is I won’t jump to a conclusion and attack someone personally.
GARRETT: The fact is, he expressed a view as he absolutely entitled to as minister, he stands by that view, but he recognises there is a process underway. It was instituted, it reached its findings and now it has reached its conclusion.
SPEERS: We’ve only got a few minutes left but I do want to touch on the ACTU changes. Jeff Lawrence, the secretary, announced he would be stepping down this week. Dave Oliver, the secretary of the AMWU, looks set to take over. What has gone on there? There have been suggestions that Jeff Lawrence was pushed, that union leaders weren’t happy with his lack of profile and ability to sell the message. Is any of that true?
KEARNEY: Well Jeff made it absolutely clear when he announced that he wasn’t going to run at congress that he has been thinking about this for a long time, that he has discussed it with many of his colleagues and that it crystallised over the weekend that he thought the best thing for himself and for the movement was for him not to run at congress in May. That’s how it is. Jeff has made a valuable contribution to the trade union movement, he has been there for 35 years. As he says, he turned 60 and he wasn’t prepared to commit to a full three-year term, so he has decided that all of those things put together that he won’t run.
SPEERS: He made an interesting comment that in some ways it is more difficult for the union movement when Labor is in government. Do you agree with that?
KEARNEY: From my perspective I have always said that as president, the labour movement or the union movement should have its own agenda and should drive that agenda regardless of who is in government. I think that is certainly something we should do in the union movement.
SPEERS: But is it harder for you to be heard and seen and pick a fight that is going to rally people to union membership when Labor is in government
KEARNEY: I don’t think the union movement has ever been afraid of picking a fight with whoever is in government, that’s for sure. As Jeff said, there might be some difficulties when Labor is in government because you really have to pick the things you want to pursue. From my perspective as the president, I have always said the union movement has its own agenda and we will pursue it rigorously regardless of who is in government.
SPEERS: What can be done, regardless of who is leader, about the decline in union membership? It has been going on for a long time, decades, but it is now under 20 per cent nationally. What can you do about that?
KEARNEY: We are actually campaigning very, very heavily. There are lots of reasons why union membership has fallen and I actually think the next statistics will show that we have grown again. We had 10 years of a Howard government, who demonised unions, who made it very difficult, through workplace individual contracts, for people to be part of a union, we have seen joining a union see people losing shifts or demonised at work, there are a lot of reasons why trade union membership has fallen.
RYAN: Most of the fall happened under Hawke and Keating.
KEARNEY: We are actually campaigning around that. We are addressing that and we are as a union movement more unified than ever. That is one of the legacies of Jeff Lawrence that he has really unified the union movement.
SPEERS: Tim Wilson, what do you put this down to, the decline in union membership?
WILSON: It is quite simple really, more people are operating as independent contractors, they are operating in their own environments, people are setting up small business, it is an entirely desirable situation. I think a decline for the unions care about work is an entirely good thing because the point of the union is to represent people who can’t represent themselves. If people think they can represent themselves that is an entirely good thing.
KEARNEY: Can I just say though, the union movement still has two million members. There is not another organisation in the country that can boast two million members. It is still very viable, it is still very strong, it still had an incredible impact on the 2007 election as we know, it is still a vital, viable organisation that looks after the interests of two million, and vicariously 10 million, workers in this country.
SPEERS: And what about its relationship with the Labor Party. The issue of unions affiliating with the ALP, a couple of the unions that have defied the trend of falling membership actually aren’t affiliated with the ALP – the Nurses Federation and the Australian Education Union – is there something in that? Being a bit more independent might be more attractive?
KEARNEY: It amazes me that this question is always asked because the Labor Party grew out of the union movements. It was started by unions to represent the interests of working people at a political level, so unions have always been affiliated with the party. Always. That is the history of it and I don’t see why people see that as an anomaly or something strange. That to me is a very strange question. The fact that some unions affiliate and others don’t, it is a very democratic organisation the unions, it is a matter for the members to decide and that is usually what happens.
SPEERS: What does Labor get out of union affiliation?
GARRETT: I think you get a strong sense of the issues that are important to unions. Ged is absolutely right, that is part of a tradition of Labor that is still very much alive. One thing I would say is that, we are at an interesting phase in our history generally with community – whether it is union membership, whether it is volunteer groups, whether it is professional associations – where the demands that people have in their lives mean they have less time to put into these sorts of things. I know, I see it as a local member and I’m sure local members on both sides of politics see it. Like any organisation that seeks to represent the interests of its members you’ve got to be active and effective to do that, and provide them with the opportunities for that membership to operate in a meaningful way. I think we can get too caught up in this idea that everything is losing currency simply because you might have membership changes over time. It doesn’t necessarily change the way people think about it, it might just mean they haven’t had the time or space in their lives to devote to being there at that particular time at that particular place.
SPEERS: <wrap up and thanks>