TRANSCRIPT
Of
SENATOR MITCH FIFIELD
Sky News AM Agenda
Ashleigh Gillon & Senator Mark Arbib
17 November 2008
8:30am
E & OE
SUBJECTS: G20 meeting, budget deficits, John Howard, polls
ASHLEIGH GILLON:
Joining me now from Sydney is the Labor Senator Mark Arbib and from Melbourne the Liberal Senator Mitch Fifield. Thank you both for your time. Senator Arbib firstly to you, at the conclusion of the G20 meeting we seem to get all these big, vague, motherhood type statements. What do you see though as the key outcome?
SENATOR MARK ARBIB:
I think the G20 has been very very good for the process and the way forward. Main reason is it has given a strategy to stimulate economies worldwide using fiscal policy which is something that Labor and Kevin Rudd has done early in the piece. Now other governments have made agreements to do that. Secondly you talk about trade and not pulling down the shutters. Governments are learning the lessons from the past and certainly that the great mistakes that were made during the Great Depression where countries moved back into protectionism. Well we’ve got agreement here that trade liberalisation will continue and we’ll also look at the next round of further trade liberalisation which I think is a great thing. And importantly there’s also a roadmap forward for regulation in terms of executive salaries and also transparency in terms of marketplaces. And the G20 will meet again in April where that will be looked at. And last, just the G20 itself, I mean it is a great forum to actually take on these issues and show world leadership and also coordinated measures. And it means you’ve got at the table for the first time countries like China, Brazil, India, the real emerging economies. So I think that’s a great thing. And for Australia it means we have a seat at the table and that’s something Kevin Rudd had been lobbying for for a long time.
GILLON:
Senator Fifield do you think it was too ambitious to expect anything more than a roadmap as Mark Arbib puts it or these non-binding goals to come out of this meeting?
SENATOR MITCH FIFIELD:
Well you have to have realistic expectations about what can be achieved in these forums. The G20 I think was the appropriate forum for these discussions. The G20 was established in the wake of the Asian financial crisis and it was established at the urging of nations such as Australia who wanted to get together the twenty economies of systemic importance to the global economy. So it’s important to keep in mind some of the history. But I agree with Mark, I think it’s a good outcome. The renewed focus on transparency in financial markets. Also that we are looking at having better regulation and a new council of regulators for transnational scenarios. But I think that the great thing from this forum is that there was a renewed commitment to free trade and to free markets and also a warning about protectionism. And I think that warning about protectionism is something that this government should keep in mind as it’s considering putting $6 billion towards the car industry. While I think it was a useful forum, I think Kevin Rudd has got some work to do when he gets back to Australia to fix some problems which are not the making of the global financial crisis but are of his making. The frozen assets in mortgage and other investment funds. He’s got to address that, still hasn’t done that. And also the important issue of how secure are the guarantees for wholesale funding for banks? We still don’t have a clear line from the Government as to whether they’re going to legislate that. So Kevin Rudd has got to come back to Australia and fix up some problems of his making.
GILLON:
Okay well before Mr Rudd left Washington he met with the Fed Reserve Chairman, Ben Bernanke. He also met with the Chinese President. Here’s Mr Rudd speaking after that meeting.
KEVIN RUDD
We discussed also how we could adopt a fresh approach to speeding up the conclusion of the Australia/China Free Trade Agreement. Both in order to accommodate the important investment links between our two countries and of course the trade in goods and services.
GILLON:
Senator Arbib you touched on the importance of free trade earlier. Do you think this crisis is the sort of thing that’s needed to get a breakthrough on these sorts of free trade agreements and in particular progressing the Doha round?
ARBIB:
Well that was something I saw the Trade Minister talking about this morning in the newspapers, that this might provide the stimulus for the next round of Doha and I think that’s very positive. I mean, we’ve just got to remember during the Great Depression they pulled down the shutters and went to a round of protectionism and that was the worst thing that could happen. So we need to ensure that countries maintain free trade. And just going back to something Mitch said in terms of the car industry, well I mean Mitch you forgot to actually mention that we’re actually going to reduce tariffs from 10% back down to 5% which was a recommendation of the Bracks Report…
FIFIELD:
I’m with you on that part of it Mark.
ARBIB:
Good to see we’re together on one thing. So, yes trade is extremely important and that’s something that came out of the G20 and something that all countries need to work towards.
GILLON:
Do you think that this free trade focus was something that the world leaders were particularly hopeful that Barack Obama pays attention to? Of course during his campaign the President-elect spoke a lot about ‘fair trade not free trade’ and there are fears that he may bring in some more protectionist policies. What’s your take on that Senator Fifield?
FIFIELD:
Well I think the G20 meeting sends the incoming President a clear message and also sends the US Congress a clear message that the leaders of the nations that represent 90% of the world’s GDP think that one of the best ways to lead to prosperity, to lead to higher living standards, to lead to greater global stability is to have freer markets and that means lowering the trade barriers. So I think there’s an important message there for the incoming government.
ARBIB:
I mean the worst thing they could do in the United States right now is to actually increase trade barriers. The situation over there is so dire when you look at the job queues and the declining growth, if they were to pull down the shutters on trade that would be just catastrophic.
GILLON:
Well here at home the Finance Minister, Lindsay Tanner, made it very clear that the Government is willing and able to spend a lot more if that’s what it takes. Here he is on the ABC yesterday.
LINDSAY TANNER:
Clearly we are in a completely extraordinary situation here. We are in circumstances that nobody could really have predicted and we have to leave all options open. We have to be prepared to move if and when required…Clearly one of the options we’ve got is to spend some of the remaining surplus for additional stimulatory activity.
GILLON:
Mark Arbib do you think it’s inevitable that we will see another sort of stimulus package announced by the middle of next year?
ARBIB:
I don’t think it’s inevitable. I think it’s going to depend, as the Acting Treasurer said, on the economic circumstances. And it’s just so hard to tell where this is going. I mean every day you hear more bad news coming out of Europe and the United States. Germany is now in recession. British Telecom just sacked 10,000 workers. It’s just moving so fast, the global financial crisis, it is very very difficult to know where you’re gonna be, not just in six months, but in one month’s time. So it’s just too hard to tell. But the Government has acted decisively. They’ve been ahead of the curve in terms of the bank guarantee, in terms of the stimulus package, in terms of moving forward infrastructure. So we’ve been doing the right things. And what the Acting Treasurer and also the Prime Minister have said is, if the circumstances warrant it we’ll spend more.
GILLON:
Senator Fifield the Opposition has warned against going into deficit which of course could happen if there are more stimulus packages to come. Do you think though that this could be the time that we need to do that, to go into deficit?
FIFIELD:
Well I’ve got to say, I don’t. And I’m not sure why the Government is even contemplating deficits at a time that the economy is growing. When you have a growing economy there’s no excuse to go into deficit. What this Government says and what we said when we were in office is that you should aim to be in balance on average over the course of the economic cycle. Now what that statement means is that if an economy goes into recession, if you have negative growth, then you contemplate going into deficit. But the economy is forecast to be growing. So there is absolutely no excuse to go into deficit in that particular scenario. I don’t know why the Government is continually talking about deficit. Actually, I do know why the Government is talking about deficit, it’s because they’re softening up the media, softening up the public to go into deficit. And I think there’s a very good chance that this Government is going to take us there while the economy is still growing. Now that is something for which there is no excuse.
ARBIB:
That’s just not true. That’s not true Mitch.
GILLON:
Well Senator Arbib last week on this program you said that there’s nothing wrong with going into deficit, but you seem to be one of the few people in the Party actually willing to use that ‘d’ word. Do you think the Prime Minister agrees with you? We don’t really know on this whether or not deficits are okay according to Mr Rudd.
ARBIB:
Well last week we were talking about economic theory. What I also said at the time Ashleigh was that the Government MYEFO figures are pretty clear for next year, for this year in terms of a modest surplus. So I mean that is where we’re headed and that’s a good thing. In terms of spending, well we’ve said that if the economic circumstances continue to deteriorate, well we’ll need to spend more. There’s no doubt about it.
FIFIELD:
But Ashleigh a point here that I think is important to make is that this Government is acting as though our economy is in the same situation as the United States and the same situation as the United Kingdom. This Government inherited a strong and growing economy. This Government inherited a budget in balance. This Government inherited a government sector with no debt. If you listen to Mr Rudd and to Mr Swan and Mr Tanner you could be forgiven for thinking that our economic circumstance was the same as the U.K. and the U.S. It’s not. It’s very different. We’re in quite a strong position and there’s no reason to automatically assume that we will go into recession and therefore there’s no automatic reason that we should be going into deficit.
ARBIB:
No and no one is saying that. No one is saying that. What we’ve said is, we’ve talked about and we’ve been honest with the Australian voters. We’ve talked about the great international challenges. You’ve only got to look over our shores and you can see what’s happening overseas. At the same time as that we’ve talked about the resilience of the Australian economy. We do have great regulation. We do have the banks with positive balance sheets. I mean that is important…
FIFIELD:
I like the way you’re talking Mark. I wish I’d heard more of this from your senior colleagues.
ARBIB:
But Mitch, you’re not listening Mitch because they have been talking about it and they’ve been saying it every day…
FIFIELD:
Not too much.
ARBIB:
They have been talking about that and also they do acknowledge that we’ve still got, the figures going forward are still for moderate growth and still for a moderate surplus. So I think that’s a good thing.
FIFIELD:
I think they should take a lead from you Mark and talk like that a little bit more.
GILLON:
Okay we do have to move on. We’ve only got a certain amount of time and there’s a lot to get through. Of course the other really interesting part about the G20 meeting this weekend for political observers was watching the dynamics between Mr Rudd and Mr Bush after that leaked phone call we’ve heard so much about in Parliament last week. It wa widely reported that Mr Rudd got the cold shoulder from the US President. He of course is usually pretty jovial but it looked a bit icy on this occasion. This is something that the Finance Minister, Lindsay Tanner, rubbished yesterday. Let’s have a listen.
TANNER:
Really this is a bit of nonsense frankly. We’ve got a situation where this issue is resolved. It’s over. The fact that, you know, Silvio Berlusconi got a pat on the back and Kevin Rudd didn’t, I think frankly if we get to that stage where that’s serious commentary it’s ridiculous.
GILLON:
Senator Fifield is this now a situation of ‘case closed’ like the Prime Minister says? I guess the Opposition won’t be letting up on its attack on this one any time soon?
FIFIELD:
It’s not a closed case by any means because the Prime Minister still hasn’t answered the fundmental questions in this issue. That reception that he received from President Bush, it wasn’t just cool. That was a positively Arctic response. It was quite extraordinary. This won’t be a closed case for a long long time because foreign leaders will remember this episode. When our Prime Minister goes to the G20 he would’ve received an Office of National Assessments brief on each of the leaders there which would’ve spoken about their character and issues to watch out for. And you can bet your bottom dollar that every one of those heads of government that were at the G20 would’ve had a brief from their intelligence organisation which would’ve said to them ‘if you’re having a one-on-one meeting with Kevin Rudd, be careful because this guy has a track record of not keeping confidences.’
ARBIB:
That is ridiculous Mitch. That is absolutely ridiculous.
FIFIELD:
Well Mark…
GILLON:
Senator Arbib you must admit, we’re just looking at the pictures there now and it does look like the greeting Mr Bush gave Mr Rudd was a little bit icier, a bit more uncomfortable than some of the other world leaders.
ARBIB:
Well I can’t see that vision at the moment but I also remember seeing today there was a second photo pool and they looked pretty friendly to me. I think what’s important here is that the Australian Government, Kevin Rudd has said this matter is closed. The American Ambassador has said the matter is closed. We’ve now had the G20 and it wasn’t raised so surely it’s closed. But the Opposition continue to hammer away at it for whatever reason, I don’t know. I think there’s more important issues that we could be debating and should be debating. But yesterday this issue reached a new low when the Shadow Treasurer, Julie Bishop, refused to repudiate Howard’s comments, the former Prime Minister’s comments, in terms of Barack Obama and Al’Qaeda. And I think at the moment we really have to take a cold shower on these issues because the Australian-American alliance is too important to play these games with. And what I’d be saying…
FIFIELD:
You should tell that to your Prime Minister.
ARBIB:
Mitch, what I’d be saying to the Liberal Party here is, especially after Julie Bishop’s comments yesterday, now is the time to move on. Let’s not threaten the relationship any further. Let’s move on and get on with the job of actually meeting the global financial crisis rather than the pettiness and the stupid games that are being played over the G20 phone call.
FIFIELD:
Well I think the pettiness was the Prime Minister trying to big note himself in the press and trying to make the US President look like a fool. I think that was the pettiness.
ARBIB:
That’s not true.
GILLON:
Okay senators we do need to go to a very quick break but we’ll have a look at those comments by the Deputy Liberal Leader when we come back.
Break
Welcome back to AM Agenda. I’m joined by the Labor Senator Mark Arbib and the Liberal Senator Mitch Fifield. We’ve been talking about how our leaders may or may not have offended the American leaders over in the States. Of course we remember that there was the leaked phone call conversation between Mr Rudd and Mr Bush and now also some ramifications from a comment the former Prime Minister, John Howard, made last year. Mr Howard insinuated that a win for Barack Obama would be a win for terrorists. It seemed bizarre at the time. Now that Barack Obama is President-elect it seems even worse. But yesterday the Deputy Liberal Leader, Julie Bishop, wouldn’t dream of criticising her former boss. Let’s have a look.
JULIE BISHOP:
Well it is a comment I think was unfortunate in the circumstances. Barack Obama was not the Democrat nominee at the time, he was a candidate, and it was in the context of comments…
LAURIE OAKES:
Do you repudiate what the former Prime Minister said?
BISHOP:
Well that’s not for me to do.
OAKES:
Why? You’re the Deputy Leader now.
BISHOP:
That was in another Government, we are now in Opposition. John Howard was Prime Minister at the time. He made the comment in context
OAKES:
Come on, it was either a sensible comment or it was really stupid. Which is it?
BISHOP:
Well I would not have made the comment…
GILLON:
Senator Fifield, why can’t anyone in the Liberal Party say Mr Howard got it wrong on this occasion?
FIFIELD:
Well I think Julie Bishop did. She said that it was unfortunate and that she wouldn’t have said that herself. But let’s get this in perspective. John Howard lost government, he lost his seat, he’s not in Parliament and he was three leaders back. So I don’t think what John Howard had to say a year or two back has particular relevance to the situation today. What we’re talking about today is the incumbent Australian Prime Minister who tried to big note himself in the papers, tried to show that he knew more than the President of the United States and who won’t come clean over whether there was a breach of security from the cabinet note taker or whether he himself was just simply big noting. I think most of us know what the scenario actually was, but I think that’s a far more relevant and contemporary issue, what the Prime Minister of today said, rather than someone who was Liberal leader three leaders back.
ARBIB:
It’s pretty clear that for the Liberal Party it’s okay to attack Democratic candidates and Democratic Presidents but it’s okay to raise any partisanship in terms of any Republicans. I just think this is a ridiculous debate and what we need to do now is move forward. Yesterday’s comments by Julie Bishop were really regrettable and I think Mitch for you to back her in on that is just crazy. What we need to do is draw a line in the sand…
FIFIELD:
I think you’re verballing Julie here. Julie said that she thought that the comments were unfortunate and were unwise. We’ve yet to have any figure on the Labor side say that they think that Prime Minister Rudd was unfortunate or unwise in the way that he conducted himself in relation to his phone call with the US President.
ARBIB:
Well Mitch for the sake of the Alliance we should move forward.
GILLON:
Okay well speaking of the former Prime Minister, John Howard, The Howard Years goes to air tonight. In it Mr Howard reveals that Peter Costello could have had the top job if details of that secret leadership deal weren’t made public a couple of years ago. Let’s have a look at this quick grab from that ABC program.
JOHN HOWARD:
What a departure at that time would’ve looked like was that I was being pushed out because of some allegedly broken deal. Well there was no way I was going to tolerate that.
GILLON:
Senator Fifield what’s your reaction to that? Do you think it said something about Mr Howard’s stubbornness more than anything?
FIFIELD:
Look I don’t think John Howard was ever going anywhere. I don’t think he had any intention to leave the office of Prime Minister. Pretty much everyone on our side of politics…
ARBIB:
So you’re saying he was lying Mitch.
FIFIELD:
Pretty much everyone on our side of politics recognises that it would’ve been better to have an orderly transition, for the government to have an opportunity to renew itself. That didn’t happen. It’s important I think, however, that we do have programs like the one the ABC has prepared so we can learn what we did right and also so that we can learn the mistakes of the past and make sure that we don’t repeat them in the future.
ARBIB:
I mean I just find that unbelievable Ashleigh. He’s just accused the former Prime Minister of being untruthful here. He’s just put on the record, the Prime Minister, that he would’ve gone if it weren’t for that article and Mitch is questioning it. Despite that, what I really hope the former Prime Minister answers tonight is a few things. Why during an economic boom, a boom that we haven’t seen since the 1960s, did education spending go backwards, second lowest in the OECD. Health spending dropped by 5%. Infrastructure spending dropped and why did he bring in WorkChoices? These are the things I’m hoping we see tonight and get some answers on because we really do need answers.
FIFIELD:
There was a booming economy, no net government debt, a budget surplus, $96 billion of Labor debt paid down, the lowest unemployment almost since records started to be kept by the ABS…
ARBIB:
Highest inflation, 10 interest rate rises, and what did you do with the money in the end? You weren’t spending on infrastructure, you weren’t spending on education, you weren’t spending on health, I mean you neglected these areas…
FIFIELD:
We were spending on all those things Mark.
ARBIB:
Your legacy will be remembered.
GILLON:
Okay well that is of course all in the past. Just very quickly, finally, I just want to get your reaction to the two polls out today showing again that voters are overwhelmingly approving the way the Government is handling the economic crisis. Mitch Fifield, the Government must be doing something right. Kevin Rudd’s popularity is again at an all time high.
FIFIELD:
Well you’ve got to recognise that we lost office just a year ago after eleven and a half years. I think it would be pretty amazing if we found ourselves ahead in the polls after only twelve months in that sort of situation. But look, we’re working to a medium term plan, we’re gearing up for the next election, we’re not working month by month. We’re preparing our policies, we’re holding the Government to account, we’re working to a three year plan and that’s what we’re going to stick to.
GILLON:
Mark Arbib, final word, we do need to go.
ARBIB:
Just on polls, look I think polls at the moment are unhelpful. When you’re facing a crisis like we’re facing internationally I think the last thing you want to be doing is talking about or pontificating on polls. What Australians want now is leadership and that’s what Kevin Rudd is providing. Leadership.
GILLON:
Okay Senators Mark Arbib and Mitch Fifield, thank you both for joining us again. We’ll see you both next Monday.
ENDS