TRANSCRIPT
Of
SENATOR MITCH FIFIELD
Sky News AM Agenda
Kieran Gilbert & Senator Mark Arbib
24 November 2008
8:45am
E & OE
SUBJECTS: 1st Anniversary of Rudd Government, budget deficits, economy, Malcolm Turnbull
KIERAN GILBERT:
Welcome back to AM Agenda and our panel this morning, Labor Senator Mark Arbib and Liberal Senator Mitch Fifield. Gentlemen as always, great to see you.
SENATOR MITCH FIFIELD:
Good morning Kieran.
SENATOR MARK ARBIB:
Good to be here.
GILBERT:
Mark first to you, the first year polls look good. I mean it’s actually the best poll result for a government after 12 months. But there is that challenge of managing the economic expectation, people concerned about falling into a deficit. So first 12 months good, the next 12 months are looming as a bigger challenge.
ARBIB:
Well yeah the polls are positive, but at the same time really, polls are irrelevant at the moment. It’s very very early in the election cycle and on top of that, in the middle of a global economic crisis like this you don’t want to be looking at polls. What the Government is doing is showing leadership. You know, leadership in terms of the economic crisis, the $10.4 billion stimulus package, the bank guarantee, last week local government stimulus, $300 million to local government to actually get in there and get that infrastructure moving. So I mean this is the start. Obviously there’s a lot more work to do. We know that. And it’s going to be a tough year ahead. No one knows how bad the international financial crisis will be, there’s going to be some tough decisions, a very tough budget to make. So a long way to go.
GILBERT:
Ross Gittins in the Sydney Morning Herald today says that Wayne Swan’s inability to use the ‘d’ word deficit shows an inferiority complex. And yet a couple of weeks ago you said “deficits are the automatic stabilisers in any economy. If we’re facing a serious recession, well, I’d say go into deficit any day of the week to keep us out of a serious recession.” You said it, in that seat, a few weeks ago. Why don’t you get on to Wayne Swan and the Prime Minister and tell them to start planting the seed as well?
ARBIB:
Well I did say that, but I also went on to say that the Government is forecasting a surplus, a modest surplus. That’s what the MYEFO figures are saying, and that’s what Wayne Swan has made the point. And no one knows how serious the international financial crisis will get. Things are moving so quickly, it’s hard to tell. I mean who would’ve thought a month ago, two months ago, we’d be where we are now? So it’s very difficult to tell. We can only go from the figures that we’re seeing…
GILBERT:
Access Economics says that it’s going to go, the economy will be in deficit just from the current obligations.
ARBIB:
Well we can only go with the figures that we’ve got, and that’s the MYEFO figures, the mid-year figures and in terms of those we’re looking at a modest surplus.
GILBERT:
So you don’t think the Government, sorry Mitch I’ll come to you in one sec, but don’t you think that the Government needs to start planting the seed? Wasn’t that what you were doing? And I mean wasn’t that, isn’t the Government happy for Glenn Stevens and others to say prudent borrowing is acceptable? I mean surely a deficit is looking very very likely now?
ARBIB:
I was talking about economic principles. And at the same time I did talk about, and I did say it twice, go back to the MYEFO figures and have a look at that. We’re still projecting a surplus going forward. I mean we’ve taken some amazingly big big action in terms of stimulating the economy. As I said the $10.4 billion, the local government package, bringing forward infrastructure, and it’s exactly what they’re doing in the rest of the world. Barack Obama’s talking about a massive stimulus package for jobs. Gordon Brown is talking about announcing a stimulus package in the next couple of days. So this is, we have to get ahead of the curve, we use fiscal policy to actually start pumping the economy and hopefully it will work.
GILBERT:
Mitch shouldn’t the Coalition get ahead of the curve and admit that a deficit is going to probably be likely in the next 12 months or so?
FIFIELD:
Well it’s interesting Mark being a little more reticent now to praise the concept of a deficit. I think in economic policy the best predictor of future behaviour is past behaviour. You look at Labor’s track record, it took us the best part of 12 years to pay down Labor’s $96 billion debt. It took us the best part of 12 years to get the budget into a strong surplus which we passed across to this government. Yet in the space of barely 12 months this Government has the budget on the brink of deficit. There’s no excuse to go into deficit. The economy is growing. The economy is forecast to grow. If the budget goes into deficit in those circumstances it’s an indication that the Government is managing the budget very very badly.
GILBERT:
But isn’t it also an indication that things have changed dramatically and that there are other forces at play here? Of course, I mean the global financial crisis has affected commodity prices. The forward surpluses have been slashed by $40 billion. Can the Coalition get away with such a simplistic argument for much longer?
FIFIELD:
Well it’s not a simplistic argument.
GILBERT:
But you’re not taking into account the foreign forces at play here.
FIFIELD:
No we’re certainly taking those into account. We appreciate that it is a significantly different environment. But despite the hit that the economy will take, we’re still forecasting growth. The Treasury is still forecasting growth. And in that circumstance there’s absolutely no reason why the budget should go into deficit. It’s not a simplistic argument. It’s just a fact. There isn’t the need to go into deficit. This Government is seeking to use the global financial crisis as an excuse for everything. The global financial crisis…
ARBIB:
That’s not…that’s ridiculous.
FIFIELD:
The global financial crisis is a challenge. It is beyond any single government to solve it. But the decisions a government takes can make the situation better or worse. To date many of the decisions this government has taken have made the situation worse. Like the unlimited bank guarantee which has now been brought back to a million dollars, but we now have the four major banks saying that should be brought back further.
GILBERT:
Alright…
FIFIELD:
But you can make a situation worse by bad decisions.
ARBIB:
But it’s funny Mitch is saying this now because he sat in this same chair in October and actually supported the package 100%. And so did Malcolm Turnbull. They supported the bank guarantee. It’s there in black and white. It’s in print. They supported the stimulus package. They said they were going to be bi-partisan. And now we find two or three months after, now, you know, attacking us at every level.
FIFIELD:
Well, we took…
ARBIB:
They did support and now they’re attacking it, I mean this is the thing with the Liberal Party. Judge them on their actions not on their words.
FIFIELD:
We offered bi-partisanship. The Government told us to get nicked. We naturally assumed..
GILBERT:
But you also backed the plan didn’t you?
FIFIELD:
We backed it but…
ARBIB:
Yeah and you sat here Mitch and you backed it.
FIFIELD:
But we assumed that the Government would’ve taken advice from the relevant regulators. At no stage did the Prime Minister or the Treasurer talk directly to the Reserve Bank of Australia who were in the best position to know what the best policy response is…
ARBIB:
All the regulators were at one. All the regulators were at one on this Mitch. And you know that…
FIFIELD:
Well we’ve seen…
ARBIB:
…and you agreed with it then, you’ve changed your pitch now…
FIFIELD:
No no no…
ARBIB:
You’ve changed your pitch now in hindsight
FIFIELD:
We saw the Reserve Bank’s advice in The Australian newspaper which was ‘the lower the cap, the better.’ The Government didn’t talk to the Reserve Bank so they didn’t know what the Reserve Bank’s position was.
GILBERT:
But see, okay, alright…
FIFIELD:
We’re not going to give up the job of being a responsible opposition which is to make sure that the Government is introducing the best possible policy responses.
GILBERT:
Can I just say Mitch, in relation to the performance of the Government, you’ve been critical of the bank guarantee and so on but none of it is cutting through. I mean you look at the polls today and Rudd is soaring.
FIFIELD:
Sure, I mean Kevin Rudd spends a great deal of time working on his image and working on the media spin so I guess to some extent he’s been successful. But there’s a story behind the spin and that story is that Australia is less prosperous, that the economy is weakening…
ARBIB:
The whole world is less prosperous Mitch. There’s an international financial economic crisis.
FIFIELD:
That the outlook for business, the outlook for families is more uncertain. The simple fact is Australians are worse off today than they were 12 months ago.
GILBERT:
Okay, and that is a reality and regardless of the cause if you ask people that’s what their answer would be Mark. And I suppose the thing is for the next 12 months you’ve got a lot of big tests. You’ve got the ETS, the emissions trading scheme, the tax review, the defence white paper, the paid maternity leave. There’s a whole heap of expectations here. What goes? You can’t pay for everything.
ARBIB:
Well there is a lot of work to do. There’s no doubt about it. And I’ll come forward to that. But in terms of what the Government’s been doing, go back and look at the budget. Look at the actual package, the working families package, $55 billion. Tax cuts. Increasing the childcare rebate from 30% to 50%. The education rebate. Teenage dental plan. And now in terms of the stimulus package look at the money that’s going towards the pensioners, going towards families, $1,000. There is, the Government is doing everything possible it can to help families, to help pensioners, to help the disabled, to help people vulnerable in the community. So we are working hard at it. Going forward there is a lot of work to do, no doubt, as you said. Emissions trading scheme, we can’t take the foot off the pedal in terms of climate change. We can’t. It’s too important. I mean the effects of the global financial crisis will be around for years. But the effects of climate change are going to be around forever. So we have to take that sort of action. Education is another one where we’re not going to take the foot off the accelerator. The education revolution is really taking speed. We’ve had Julia Gillard out today…
FIFIELD:
The foot hasn’t touched the pedal yet in the education revolution.
ARBIB:
You’re seeing Julia Gillard out today talking about extra pay for teachers, disadvantaged schools. I mean this is the stuff that the Government’s about. Meeting the challenges of the future.
FIFIELD:
Well the things that Mark didn’t mention are, in relation to the education revolution, basically the only thing that’s happened are a few computers out there…
ARBIB:
A few computers?
FIFIELD:
…and some states are saying they don’t want to take part in that program.
ARBIB:
Funding for 116,000 computers, it’s not a few computers.
FIFIELD:
The Government said they were going to do something about health. What they’ve done is undermine private health insurance…
ARBIB:
1,000 nurse positions.
FIFIELD:
…and forcing people back on to the public health system to exacerbate those waiting lists. The Government said that they had a tax plan. Well so far all we’ve seen is $19 billion in new taxes. The Government said they were going to do something about cost of living pressures. Instead all we’ve had is the abandoned fuel watch scheme and the grocery watch scheme which is totally discredited. The Government promised that they would introduce a broadband network, that they would have the tenders let for that in the first six months of government. We’re a year into government and the tenders still haven’t been let.
GILBERT:
There’s a couple of fair points there. The fuel watch scheme was derided…
ARBIB:
They blocked it…but the Liberals blocked it.
GILBERT:
Yeah but you didn’t…
FIFIELD:
You only put it up the other week.
ARBIB:
But in WA the fuel watch scheme is…
FIFIELD:
You only just put the legislation up.
ARBIB:
In WA the fuel watch scheme is working extremely well.
GILBERT:
The broadband scheme then, let’s look at that. That’s six months late.
ARBIB:
The broadband scheme is underway. I mean tenders hopefully this week. I mean things are moving on that. And that is a massive, massive, massive commitment. And something you guys didn’t do…
FIFIELD:
Six months behind, six months behind schedule.
ARBIB:
Mitch you had 12 years to do something about it. You didn’t. We’re acting on it. You didn’t even dream of doing this sort of work.
GILBERT:
Let’s just go beyond the policy for a moment and look at the practise, the style within the PM’s office. Bruce Hawker this morning said ‘the PM’s office has been a little controlling, he could ease off that now.’ Do you agree with that?
ARBIB:
I haven’t actually seen it. What I’ve seen in terms of the PM’s office and all the offices and all the ministers is just a phenomenal work rate. I mean these are people that are working long long hours around the clock to actually get the job done because they know how big the challenges are ahead of us, so that’s what I’ve seen.
FIFIELD:
Very busy, but very little output.
ARBIB:
Well no Mitch, I think we’ve gone through some of the results…
FIFIELD:
They’ve been very very busy, but not producing much output at all.
ARBIB:
There’s been some great results. Go back to the budget in terms of health, you derided us on health, a thousand nursing places in universities. Right now. A thousand nursing places and $150 million to cut elective waiting lists.
GILBERT:
You’re a close confidant of the Prime Minister, what do you tell him…
ARBIB:
I don’t know about that
FIFIELD:
Oh, distancing himself from the Prime Minister!
ARBIB:
I think you’ve read too much into the newspapers Mitch.
FIFIELD:
After six months in the Senate, distancing himself from the Prime Minister
ARBIB:
No no, I would never do that mate. Don’t believe everything you read in the newspapers mate.
FIFIELD:
This is your happy birthday present Kevin.
GILBERT:
Well Malcolm Farr described you as the gatekeeper almost. You wouldn’t agree with that?
ARBIB:
I think Malcolm’s gone a little too far there.
GILBERT:
Okay, but what would your advice be to the PM over the next 12 months? What does the government need to do? What’s its priority? Obviously the financial crisis is going to dominate everything, but over the next 12 months what’s the key focus?
ARBIB:
The key priority is getting the budget and getting the economy through this tough period. There’s no doubt about it. That’s where we’re at. You can’t deliver in education, you can’t deliver in health, you can’t deliver in climate change unless you’ve got a strong economy and unless the economy is going forward. So that is the number one challenge. The emissions trading scheme, the CPRS, is going to be a huge huge challenge. The biggest reform this country has seen in the last 20 or 30 years.
GILBERT:
The Coalition has said you should delay it. Why not?
ARBIB:
Because we can’t afford to wait. I mean we’ve seen Garnaut’s report. It talks about the diabolical policy challenge, we have to move forward. The effects of climate change are going to be huge. In the environment…
GILBERT:
But politically, you can still argue that do you think?
ARBIB:
Of course, of course. We’ve got no choice. It has to be argued, hang on a sec, and in terms of climate change the effects on the economy are going to be massive. So you really need to make these decisions now. You can’t wait. And hopefully and what we’ll see, and you’ve seen Treasury modelling on it, and you’ve seen modelling by other organisations, it will lead to a boom in green jobs. You will see a new industry start emerging…
FIFIELD:
It’s important to get the ETS right.
ARBIB:
Of course it is.
FIFIELD:
Yeah.
ARBIB:
That’s what we’re doing…
FIFIELD:
You take the time to get it right.
ARBIB:
Of course we are, and that’s why the white paper, the green paper is, and Penny Wong is spending so much time to ensure we get it right.
GILBERT:
Okay Malcolm Turnbull, your Leader today at the National Press Club. What can we expect?
FIFIELD:
Well I think Malcolm will probably outline our main task for the next 12 months which is to hold the Government to account on economic policy. Given the global financial crisis is the issue the Government tells us that it is front and centre, more important than any other issue facing the nation, the most important thing we can do as an opposition is keep the Government to account on economic policy to make sure that they have the right policy responses. So far they haven’t. They’ve been very reluctant to take decisions but when they have taken a decision, such as with the global financial crisis, they’ve been rushed and bungled decisions and they’ve got them wrong. So we want to make sure we do what we can as a responsible opposition to see the Government take appropriate decisions to get things right.
ARBIB:
You know what would be nice from Malcolm Turnbull, just nice to see? Actually if he rolled out one policy. Just one policy. This is a guy who’s been wanting to be Prime Minister all his life…
FIFIELD:
We have.
ARBIB:
We don’t even know what he wants to do…
FIFIELD:
No.
ARBIB:
…on the fuel excise. Mitch if you speak to him today, one policy please.
FIFIELD:
Hey, he’s suggested plenty of them.
ARBIB:
And look, don’t copy them like Julie Bishop does from a New Zealander ten years ago.
FIFIELD:
He’s suggested plenty with the global financial crisis.
ARBIB:
Can he come up with his own policy? For God sake. Stop bagging the Government. Come up with something.
FIFIELD:
$100,000 bank guarantee.
ARBIB:
Policy. Education. Health.
FIFIELD:
Legislating the wholesale guarantee.
GILBERT:
We’ll see what Malcolm Turnbull’s got to say in a few hours from now. I won’t, we don’t have time to allow you to give your response right now but as always gentlemen it’s great to see you both. Thanks very much.
ARBIB:
Thanks Kieran.
FIFIELD:
Thanks Kieran.
ENDS