Senator Scott Ryan debating Ed Husic MP on ABC News 24, 22 September 2010.
For the video, click here.
E & OE
CHRIS UHLMANN
Well Scott Ryan, to you first. On the cost of living issues, we’ve seen the Reserve Bank release its minutes. It looks likely now that we’ll see at least one interest rate rise before the end of the year. Cost of living pressures are going to be an enormously important thing for this next Parliament.
SCOTT RYAN
Chris, you’re right, and on top of the Reserve Bank minutes, we’ve had a former senior economist at the Reserve Bank come out in the last 24 hours and predict a 1.25% increase by the end of next year, which would be a truly extraordinary increase in interest rates, and for the average mortgage holder, would lead to around $300 a month extra just in interest payments on their mortgage.
CHRIS UHLMANN
And Ed, can you give us some sort of sense from your electorate, are cost of living pressures, interest rate rises, power price rises, are they the sorts of things that you’re hearing about a lot from your electorate?
ED HUSIC
Well cost of living increases are always something to keep a close eye on, but at the same time, too, there’s a lot of water to flow under many bridges before we get to the point that is being speculated upon right now about where interest rates might move. I note that, from the minutes that were released yesterday, it was couched in terms of they’re keeping an eye on it, and if certain things happen, then things will move. It’s a reflection, too, of a strong economy. The fact of the matter is this economy is set for further growth. It’s doing way better than many other economies, and we’re in a position where we’re talking about this, where in the States this week they’re talking about increases in the number of people living in poverty.
SCOTT RYAN
Well Ed, I take your point, but the challenge here is that you don’t have to read between the lines too much to know that interest rates are on the way up. If you’re saying the economy is so strong, why on Earth do we still have a $40 billion deficit? If the economy is so strong, this is the time to save – not to be borrowing $100 million a day and spending $100 million a week by the end of next year in interest payments.
ED HUSIC
Well Scott, your side was hammering on about tapering off the stimulus and the importance of support being provided to the economy to sustain jobs and to make sure that people could actually pay the bills as they were coming in, which is the subject that we’re currently discussing. If we were to follow the position that was advocated by members of your side, we’d be in a far worse position. The fact of the matter is, we’re set to go back into surplus and we’re making the necessary changes to the Budget and it’s all on the public record.
SCOTT RYAN
Ed, we’ve got a promise for a surplus in three years. Given the backtracking on election commitments the Prime Minister made only a few weeks ago on a carbon tax it isn’t worth the paper it’s written on. If the economy is so strong, then – like we did in the previous Coalition government – this is the time to save and build up surpluses for the rainy days. But at the same time as interest rates are going up, they are being driven up by the government borrowing record amounts and by the government continuing its deficit and spending binge. That always puts pressure on interest rates.
CHRIS UHLMANN
I guess the question is, for both of you and starting first with you, Scott Ryan, can governments really do anything much about cost of living pressures for people? Isn’t it something that’s promised and never delivered?
SCOTT RYAN
Well the government can make sure that further pressure isn’t put on the cost of living, Chris. When the Prime Minister promised no carbon tax only days before the election and last week, in the new paradigm – apparently the difference between the old paradigm and the new paradigm is that you don’t have to keep your promises – is now floating a carbon tax. That’s going to lead to electricity price increases of 20 – 40%. That’s the sort of thing that government can avoid doing in order to not put pressure up on interest rates. I take your point on government promising to do things it can’t. It was the Labor Government that promised to stop grocery prices and fuel prices with its failed GroceryWatch and FuelWatch websites. The Coalition hasn’t promised that.
ED HUSIC
I just don’t know if I can sit and be lectured by an Opposition that had an $11 billion hole in their costings leading into the election that we only found out after the election. They got a Liberal-friendly accounting firm to verify their costings and then are making all sorts of statements about whether or not certain policies can or cannot be costed in the way that they are. We’re going back into surplus. We’ve provided three tax cuts in the course of the last Parliament…
SCOTT RYAN
Tax cuts that were promised by the Coalition Government.
ED HUSIC
Those tax cuts were delivered and provided benefits in terms of people’s take home pay. On top of that, we didn’t have the rock of WorkChoices weighing down on people’s wages and working conditions.
CHRIS UHLMANN
The point that Scott makes is, though, that there was a promise about doing something about people’s cost of living at the election before last, in 2007, and there’s really not an enormous amount the government can do on some of those areas. So the government’s over promising and under delivering.
ED HUSIC
Look I don’t agree with that. Like I said, we provided tax cuts. We’ve also provided improvements in pensions – the biggest seen in decades, this week kicking in. This week additional increases in pensions as well. We have been doing things to make life easier for people. As well as that, for the people that are in work, not having to look over their shoulder wondering whether or not penalty rates, overtime, their working conditions, and take home pay cut further by the type of legislation promoted by the Liberal Party.
SCOTT RYAN
Ed, what are you going to say to those same pensioners when your carbon tax forces up the price of electricity by 20 to 40%? You’re looking at hundreds of dollars a year. The government can avoid putting pressure on the cost of living. It can keep inflation down. It can not put new taxes on the essentials of life – which is what Julia Gillard has reneged on her promise not to do from only a few weeks ago. It’s got to be a record to break a promise that significant inside a month!
ED HUSIC
Sorry Scott, which piece of legislation are you referring to that can allow you so convincingly to predict not only the shape of the things that you’re talking about but the impacts? That has not been discussed. We don’t have anything black and white on paper and it’s just another scare campaign by the Coalition.
SCOTT RYAN
The Coalition hasn’t opened the door to a carbon tax, Ed, the Prime Minister has.
CHRIS UHLMANN
I guess the question for you too, Scott Ryan, is that even without putting a price on carbon, what we’re seeing at the moment is a lot of uncertainty in business and that in itself will force up power prices, because people aren’t investing.
SCOTT RYAN
The only state that has got privatised electricity generation is my home state of Victoria, privatised by the previous Coalition government there. One of the main reasons power prices are being driven up around Australia – by 20% in New South Wales, I understand by nearly 40% in Western Australia – has been state governments, Labor Governments, stripping out hundreds of millions of dollars of dividends and preventing reinvestment in base load power and in network maintenance, and putting debt onto government power generation balance sheets to hide the true costs of the state budgets. That has been what is driving up power prices in most of these states and across Australia now.
ED HUSIC
That’s just not right. Power prices are reflective of a range of things, not just movements in CPI, but intentions by power companies to invest in their network to meet demand as it’s occurring on the ground. In terms of new estate areas in western Sydney where I come from, you do need to invest not only in new network, but you also have to make sure that old networks, networks that have been around for 40 years, can cater for increased usage of power by individual homes as they get air-conditioning, plasma TVs, and pool pumps in. All that is a lot more complex than is being suggested by Scott. On top of that, too, if people want reliable supply, the power utilities have to go through independent regulators to work out.
CHRIS UHLMANN
Scott, one last point on this.
SCOTT RYAN
I was just going to say, Ed, how many hundreds of millions of dollars has the New South Wales State Labor Government taken in dividends and special dividends from the power companies over the last decade? A lot of that money could have paid for this investment that you’re talking about.
ED HUSIC
Well all government businesses, at a federal and state level. This is a practice that has gone on under your former government, under our government, governments before. That’s the common practice. They provide a dividend whilst also providing a service that they are required to under the Act.
CHRIS UHLMANN
Alright, we’ll move on. Scott Ryan, looking at the last election, and it’s kind of a reverse polarity of the cities if you think about it. In Sydney it’s the Labor Party that’s got a problem and in Melbourne it seems to be that it’s the Liberal Party that’s got a problem. It used to be the jewel in the crown, Victoria, for the Liberal Party. What has gone so wrong for you there?
SCOTT RYAN
Chris, I think that’s been blown a bit out of proportion. Elections have always varied in their way across Australia. I remember in 1990, we had a fantastic result in Victoria and didn’t do so well elsewhere. Elections are very much about swings and roundabouts. We had a number of popular members retire. They’ve been replaced by some great new talent that will contribute for many years for the Liberal Party. I think this has been blown a bit out of proportion.
CHRIS UHLMANN
Ed Husic, things are very bad in the state of New South Wales for the Labor Party.
ED HUSIC
Well predictions of premature deaths I don’t think eventuated the way that people suggested. I think that both Scott and I are forming a unity ticket here…
CHRIS UHLMANNSo you predict a magnificent victory for the Labor Party at the next election.
ED HUSIC
No, no, no. There were no magnificent victories, but let me say, there were a lot of people that were predicting bad things to occur in New South Wales. You never like losing seats, bottom line, but we lost one seat obviously in New South Wales. My neighbours in Michelle Rowland in Greenway and David Bradbury in Lindsay pulled off fantastic victories against what was the conventional orthodoxy. The bottom line is, regardless of these types of discussions, ultimately we’re going to be judged on what we do on the ground in our electorates. That’s just going to be the hard work of local members who are putting in the hard yards themselves.
CHRIS UHLMANN
Alright, to Villawood Detention Centre, there are nine people on the roof there now replacing those that were protesting yesterday. This is an entirely new group. Scott Ryan, a diabolical problem, but really, would things be that much different if the Coalition was in power at the moment?
SCOTT RYAN
I think we can look to history here for an example. Things were different when the Coalition was in power. Since the end of 2001, when the Howard Government tightened up a number of our border security measures, less than 500 unlawful arrivals took place before the end of the Howard Government. We’re now looking at nearly 100 boats this year and well over 5000 people in detention. It’s not ‘would things be different?’ Things were different when the Coalition had its policies in place. When this government weakened Australia’s laws around visas, allowing people smugglers to effectively advertise and sell the prospect of permanent residency, the Labor Party was warned that this would have some consequences. We’ve seen that. We’ve gone from three boats a year to three boats a week.
ED HUSIC
The issues around the way that migration has peaked and subsided over the course of years and what that does in terms of our intake, that’s all well documented. The issue in terms of Villawood is complex and fluid. We’ve had a case where what had occurred in the previous 24 hours had been resolved last night at 7.30 and obviously we’ve got a fluid situation now. The key thing is, as has been stressed through the course of the day, that this will not make the processing of these applications any easier. They won’t speed them up. They will have to stay and get processed just like everyone else is getting dealt with right now.
CHRIS UHLMANN
It is a diabolical problem, though, isn’t it? This is something that could go on for years. Even with the people that we’ve got in the system now, it’s going to take years to process the people that are already there.
ED HUSIC
The problem is that we’ve got some people that are waiting for the outcome of their claims and the process of going through those claims as well is complex. If they get rejected, there are appeal processes as well as what Minister Bowen has indicated, as well, High Court cases that are being dealt with right now. That’s got to be something that’s taken into account as well.
SCOTT RYAN
The objective here, Ed, should be to stop as many people coming to Australia unlawfully as possible. You can jump on Google this afternoon and you can see the advertisements that are put around by people smugglers to some of the world’s most vulnerable people in some of the world’s trouble spots. Labor weakening Australia’s laws in this regard gave them a better product to sell. I don’t know the exact circumstances of these people who are currently involved in the situation in Villawood, but whether they were unlawful arrivals, people overstaying a visa or people seeking protection after arriving lawfully, the point is it’s taking a lot longer because we have so many more people in the system.
Things were different under the Coalition. Labor has changed the policy and we are seeing the consequences of it right now.
CHRIS UHLMANN
Gentlemen, we are going to have to leave the conversation there. I’m sure we could pick it up again in the future, but Scott Ryan in Melbourne, thank you very much and Ed Husic, thank you.