Topics: QANTAS, health and education spending and Craig Thompson
E&OE…
David Lipson
G’day and welcome to the program, I’m David Lipson sitting in for Kieran Gilbert. The Qantas job announcement to be made on Thursday is now expected to be even worse than reported just last week. News Corp Australia papers are reporting that the number is closer to 5,000 with a large number of them to go by the end of next month. The company won’t confirm that speculation but in a statement out today says that “we have said that we will be making some tough decisions in order to achieve $2 billion in cost savings over the next three years, which is a consequence of an unprecedented set of market conditions now facing Qantas.” The statement goes on to say “we’ve also said that we must take steps to reduce our costs regardless of whether the Federal Government acts on the uneven playing field in the Australian aviation market.” Well the finance minister Mathias Cormann says the government is yet to make a decision on any assistance to Qantas
(Clip: Mathias Cormann)
Lipson
Joining me on the program here in the Canberra studio is the Shadow Parliamentary Secretary for Foreign Affairs, Matt Thistlethwaite and the Parliamentary Secretary for Education, Senator Scott Ryan. Thank you for your time. First to you Senator, Labor’s not allowing any changes to foreign investment rules, so does that mean a debt guarantee is the best way to help Qantas?
Scott Ryan
One of the things the Government’s trying to do to help Qantas right now is to help it save $106 million by getting rid of the carbon tax. That’s the cost of the carbon tax to Qantas, $106 million. That’s a substantial part of the savings that Qantas have said they’re trying to announce.
Lipson
They’re seeking $2 billion in savings over three years.
Ryan
That’s over three years, and as I understand it that $106 million is an annual carbon tax bill for Qantas. Firstly let me say, for the workers of Qantas this is always a very difficult time for any person to live through, and their family, when the threat of job security over their head and the Government stands with them in that and that’s why we’re trying to directly help Qantas by taking $106 million of costs out of their business immediately. Matt here, and his colleagues, won’t let us do that.
Lipson
What about the prospect though, of a debt guarantee, as I asked earlier.
Ryan
Our position is that Qantas does need to stand on a level playing field and it should have the same sort of laws and regulations that hinder and assist it’s operations as do other Australian airlines, like Virgin and like Rex. But as Senator Cormann just outlined, decisions about any applications will be a matter for the Cabinet to make in due course.
Lipson
Two major ratings agencies have Qantas as ‘junk status’ so I suppose the point I’m trying to get to, a lot of speculation the government is considering a debt guarantee, but is allowing the company to borrow more money on the taxpayer at a time when it’s considered junk a good idea?
Ryan
The way I understand it, has been written up in the press, a debt guarantee that would work wouldn’t necessarily entail a liability for the taxpayer. It’s a facility that may be accessed, it’s a facility that would cost Qantas if they used it. But that’s one of the reasons we actually want to help Qantas’s cost base, by taking the $106 million carbon tax bill out of their accounts, but also the Qantas Sale Act that limits the level of ownership of airlines and foreigners in Qantas does make it harder for them to raise capital, it actually is a direct impact upon that bond rating that you mentioned.
Lipson
That’s true, both of those things are making life more difficult for Qantas, the Carbon Tax and the Qantas Sale Act. Why is Labor opposing them?
Matt Thistlethwaite
Well firstly David, the reports are very concerning in the newspapers today, it is speculation at this point so we need to caution taking it as fact but I’ve got a lot of Qantas employees in my electorate who are worried and deeply concerned. In respect to the Qantas Sale Act, Labor is opposed to changing those provisions and that’s for good reason. We think Qantas should remain our nation’s carrier. Those Qantas employees that I speak to in my electorate are very proud of the fact that they work for our national airline. They’re proud of Qantas’s safety record, they want it to be maintained in Australian hands. The other point to make is that the Qantas Sale Act allows foreign investors to invest up to a level of 49%, the current level of foreign investment in Qantas is 38%. So there’s 11% of additional take-up from foreign investors that could be taken up.
Lipson
What about the Carbon Tax?
Thistlethwaite
We just don’t accept that, we just don’t accept that.
Lipson
What don’t you accept? It’s an additional cost to Qantas.
Thistlethwaite
Qantas haven’t said that the Carbon Tax is the reason why they’re going through these difficulties.
Lipson
Sure, but they don’t need to say it though, to know that it is making life more difficult.
Thistlethwaite
No, well, you have to accept what the Qantas board has said about the difficulties that they have. The other deeply concerning aspect of the story in the papers today is the implication that this Government is holding out on doing anything for Qantas, until Qantas show evidence of taking on their employees. They’re seeking to drive down wages and conditions and take on the unions. If that is the case, that is deeply concerning and very worrying for a government to be forcing such a position on a national carrier and something that’s really concerning for employees in my electorate.
Lipson
Ok, the other thing that’s been foreshadowed in the papers today, but in particular because of a speech the Prime Minister made last night, is cuts to health and education in the May Budget. Let’s just hear what Tony Abbott said last night, first of all.
(Clip: Tony Abbott)
Lipson
Scott Ryan, Tony Abbott clearly said there that he will maintain his election commitments when it comes to spending on health and education. Does that mean that any cuts that may come in the May Budget will be pushed back beyond the next election so he can have a mandate?
Ryan
I just want to pick up on what you said in the introduction there David. The Prime Minister said he will keep all our promises; he’s made that crystal clear. What he talked about in that speech last night was about reducing the rate of growth in the future in order to keep these services sustainable. So let’s put this in context, education and health spending have grown by 6% a year in real terms over a decade. Health spending has doubled effectively over a little more than a decade. The best way to sustain education spending, health spending and other important social services is to make them sustainable in the long term and all the Prime Minister said was we need to look at reducing the rate of growth, as in the rate at which they increase, not cuts.
Lipson
But the population is increasing, so I know he’s talking about the rate of growth, not growth on its own, but surely that would indicate that things in terms of healthcare, education, will be tighter into the future.
Ryan
Well I don’t think that anyone that works in that area will say it’s not tight. It should always be tight when you’re looking at spending of scarce public resources. You’re always going to have more opportunities to spend money than you will have resources to dedicate. That’s why we’ve always had waiting lists under Medicare, we’ve had them since the day Medicare was introduced. So reducing the rate of growth of spending is actually what a friend of Medicare would do. It’s about ensuring that you don’t have a financial d-day in a decade’s time given the situation that Labor left with unsustainable rates of increase where the Federal Budget was a $100 billion a year bigger than when the Labor Party came to office and it wasn’t funded by taxes, it was funded by borrowing.
Lipson
Matt Thistlethwaite, we have to rein in costs for health and education because we don’t want to end up like the United States, for example, where they don’t have a sustainable health system, education system.
Thistlethwaite
Well Labor in government took a number of measures to make our fiscal position much more sustainable, but the difference between a Liberal Government and a Labor Government is a Liberal Government will attack those who are on low to middle incomes, the most vulnerable in our society. So now we’ve got Tony Abbott going back on his commitments not to cut health, education and pensions. Who knows what they’ve got planned for pensioners, that speculation is out that that there could be possible cuts to the pension, they’re looking at a Medicare co-payment and they’ve completely undermined the former Government’s Gonski reforms, that’s the issue here. They’ve gone back on their commitment to the Australian public.
Lipson
But if you take that to an election that’s not going back on a commitment is it?
Thistlethwaite
Well I hope he does take things like that to the election because the Australian people do deserve a say in very important public policy areas such as health and education. But Labor in government made a number of decisions to make the budget more sustainable and they included making those earning big profits on their superannuation, more than $150,000 a year on their superannuation, pay more tax. It included some of the corporate profit shifting measures that Labor tried to put in place when we were in government. They were opposed by the Liberal-Coalition, they were opposed by Tony Abbott when he was in government and now they’re coming back to the Australian public and saying “oh the Budget’s got out of control, we need to make it more sustainable.” Well why did they oppose those measures when Labor was in government and we were putting those in place? But measures that were insuring that our economy continued to grow, that we created jobs, that we weren’t putting that impost on low to middle income families.
Ryan
I’ve got to correct what Matt said. A lie repeated often does not become a truth. Under no forward estimate was there a budget surplus forecast under the Labor Party when they left office, none. Every time they tried to raise revenue they spent double what they raised so the deficit and spending continued to increase. They accumulated record levels of debt, the third fast run-up of debt in the western world. So Labor’s record on this, despite all they words they say, can be measured by the numbers. There was no budget surplus on the horizon within a decade under Labor, that’s why changes need to be made, but it’s also why the Prime Minister said we will keep to the commitments we made, and he restated this last night, before the election we will maintain spending on health and education.
Lipson
Ok, we’ve got to take a quick break here on AM Agenda, we will be back with more right after this.
(Video: Newspoll CEO, Martin O’Shannessy)
Lipson
Matt Thistlethwaite and Scott Ryan are still here with me in the Canberra studio. Matt Thistlethwaite, after the last four years of woeful polls for Labor, that must have made more easy breakfast reading for you this morning.
Thistlethwaite
Look David, it’s early days yet, we’ve still got a long way to go to the next election but it is reflecting some of the sentiment that I’m feeling in my community. I spent the last two weeks standing out front of school gates in my community talking to parents about issues that are important to them and two characteristics came through. First, they don’t like Tony Abbott, particularly young mothers, it was striking their hatred of him, really, in some of the things that he’s done. But also deeply concerned about the Government’s commitments before the election, not to cut health, education and pensions and going back on that. So I was talking about the Schoolkids Bonus to parents and many of them are signing petitions to keep the Schoolkids Bonus, they’re also deeply worried about the Medicare co-payment and how that’s going to affect their families so I think some of that’s being reflected in these poll results.
Lipson
Scott Ryan is this all part of the Government’s plan? Take the pain early and turn things around before the next election?
Ryan
There goes Matt again trying to repeat a lie so often that he tries to make it a truth. We took the promise to remove the Schoolkids Bonus for reasons of budget sustainability and responsibility. We took that to the election, that’s one of our promises Labor’s not letting us fulfil. Now we didn’t talk about, and I didn’t talk about, polls before the last election and we’re not going to do so now. The Government’s focused on actually delivering its promises. As the Prime Minister said last night, we’re going to keep our promises on health and education spending, despite Matt asserting the opposite. The problem we’ve got is that Labor is doing everything it can to stop the Coalition fulfilling its promises, whether that is reintroducing Temporary Protection Visas to maintain our border security policies, or even ending the Schoolkids Bonus, but particularly abolishing the Carbon Tax. Labor’s stopping us from keeping our promises.
Lipson
But does it reflect that the Government has to, and is, making difficult decisions?
Ryan
They’ll jump around. What we’ve committed to doing is we took a plan to the election, we are going to deliver on that plan over this coming three years, despite Labor’s obstructionism, and in three years’ time, or two and half years’ time now, the people get to choose whether to reemploy us.
Lipson
Ok well, the Parliament is being urged by the Government to make somewhat of an historic apology to the union members who were defamed under parliamentary privilege by Craig Thompson in that infamous speech he gave defending himself, which has now shown to be false through the courts. The Government is urging the Opposition to support this apology motion and this morning the Manager of Opposition Business, Tony Burke, confirmed they would.
(Clip: Tony Burke)
Lipson
Matt Thistlethwaite, Tony Burke there saying that this is just a political ploy, or political games, but why not apologise? It was a pretty grievous thing for Craig Thompson to do and also to preserve the sanctity of the Parliament into the future.
Thistlethwaite
We’ll support the apology motion in the Parliament but more importantly I think that Craig Thompson should apologise to the members of the HSU. The bloke that lives next door to me in Matraville, he’s a hard working member of the HSU, he works at the local hospital, he was thinking about quitting the union when all of these allegations came up but he stuck by the union. Now there’s someone that I think Craig Thompson owes an apology to and he should apologise, not only to the union members, but also to the officials who he sought to damage in those allegations.
Lipson
So why didn’t Labor get on the front foot then, and suggest this?
Thistlethwaite
Well because there wasn’t a conviction, there wasn’t a determination of the court…
Lipson
There is now, it was up to the government to do it.
Thistlethwaite
… well no, Labor’s supporting it and we’ve said, you know, that he should apologise and that we’re supporting the apology in the Parliament.
Lipson
Scott Ryan, this has never been done before as I understand it, this sort of apology. Is this really the worst example that Parliament has ever seen of abusing parliamentary privilege.
Ryan
It is, I remember there was a Member of Parliament that defamed a particularly prominent individual in the public service, but that was about twenty five or thirty years ago. This is the most extreme example of parliamentary privilege being abused that most people can recall. Matt here likes to talk about Craig Thompson as if he’s someone else, I think Matt you were Secretary of the New South Wales ALP when he was a candidate, if not when he was endorsed as the Labor flag bearer in the seat of Dobell. Labor ran a protection racket for years on Craig Thompson, they used their numbers on Parliamentary Committees to prevent the release of information into the public domain. They constantly protected him and the Leader of the Opposition said he believed him…
Lipson
But he wasn’t convicted at that point, as Matt pointed out.
Ryan
But the point is Labor obstructed public consideration and investigation. They used their numbers on Senate Committees and Joint Committees to prevent the release of information so that the public couldn’t find out because they needed his vote to keep them in government. So quite frankly, while I’m glad they’re supporting the motion and I take the announcement by Tony Burke and by Matt next to me today, I think it’s too little, too late given the racket they ran.
Lipson
Just a quick response in twenty seconds, if you could.
Thistlethwaite
Well everyone’s innocent until proven guilty under our legal system and Labor was respecting that. Now that he’s been convicted he should apologise.
Lipson
Matt Thistlethwaite and Scott Ryan, thanks very much for that today.
(Ends)