SENATOR MITCH FIFIELD
Leigh Sales & Senator Mark Arbib
13 February 2009
E & OE
SUBJECTS: STIMULUS PACKAGE, ECONOMY, INDEPENDENT SENATORS, BUSHFIRES
LEIGH SALES, PRESENTER: The horrific Victorian bushfires inspired a rare sense of unity in Canberra earlier this week. Political differences were set aside as our parliamentarians attempted to articulate the shock and sorrow of the nation. But with the Government’s economic stimulus package heading for a tight vote, that agreement couldn’t last. As we’ve just heard, today the package was passed on its second attempt when Senator Nick Xenophon changed his crucial vote.
To discuss the week’s events, I’m joined tonight by Liberal Senator Mitch Fifield – he’s in our Canberra studio. And with me in Sydney Labor Senator Mark Arbib. Gentlemen, thanks for being with us.
MARK ARBIB, LABOR, NSW: Great to be here.
MITCH FIFIELD, LIBERAL, VICTORIA: Good evening, Leigh.
LEIGH SALES: Mitch Fifield, the Coalition warned that the national economy would be imperilled if Kevin Rudd’s economic stimulus package was adopted. I’m sure it can’t have escaped your notice that it’s now passed the Parliament on Friday 13.
MITCH FIFIELD: Ominous indeed, Leigh. We’ve said from the outset that we’re against the $42 billion package for the simple reason that we don’t think it will achieve the Government’s stated objectives of stimulating the economy and supporting jobs. We think that the package in size is incredibly irresponsible. The components of the package leave lot to be desired. The most charitable thing you could say about them is that it’s a poor quality spend, but probably more accurate would be that a lot of the spending is junk spending. And, you know, taxpayers have got to ask themselves: what do they get for $42 billion?
LEIGH SALES: Mark Arbib?
MARK ARBIB: It just shows how far out of touch the Liberal Party are, saying that this stimulus package won’t work. I mean, across the globe, governments everywhere are putting in place stimulus packages to fight the global recession, which is becoming more serious day by day. This package, $42 billion, is investing in infrastructure, investing in jobs, fixing our schools, fixing our houses, fixing our roads and ensuring that our businesses have the stimulus they need to keep operating. And that means tradesmen, tradeswomen will be at work day after day after day finishing their jobs. It’s a positive.
MITCH FIFIELD: Leigh, I’ve got to say, though: $42 billion will be spent, and once that’s gone, Australians will not have a single new road, a single new port, a single new school, a single new hospital or a single new railway line to show for that money. None of that money is going towards serious infrastructure – infrastructure which goes towards the long-term productive capacity of the nation.
LEIGH SALES: Mark Arbib, what’s your response to that?
MARK ARBIB: Well, again, it just shows how out of touch the Liberal Party’s become. I mean, this infrastructure is needed by communities. Go out and talk to the P. and C.’s; go and talk to community groups about the effect that these school buildings will have, about the road projects.
LEIGH SALES: He’s making the point, though, that there’s not going to be enough new infrastructure.
MARK ARBIB: Well these are new buildings. I mean, these are new homes. And the thing about it is: I mean, sitting through the senate inquiry into this, listening to the Treasury officials, the infrastructure spend needs to be quick. I mean, we’re talking about an urgent need to stimulate the economy. That’s why the infrastructure must be at a level that it can be done in a hurry. I mean, we can’t be putting forward infrastructure projects that are going to take five, 10 years to complete. They’ve got to be completed quickly. And that’s why the projects that have been identified are projects that can be completed quickly, get those workers working and get the money into the economy where it’s needed.
LEIGH SALES: OK. Senator Arbib, we’ve seen that despite the first stimulus package late last year, business and consumer confidence still remains pretty flat. What happens if you fired off this massive fiscal shot and nothing changes? What’s the Plan B?
MARK ARBIB: OK, well, let’s go back to the first stimulus package, as you raised. The first stimulus package has shown a dramatic increase in terms of activity in the marketplace. Look at retail: month of November and month of December, big increases in retail. In fact, as Westfield put forward, I think Frank Lowy came out, Australia in December was the only country where they had an increase in retail across the globe.
LEIGH SALES: OK.
MARK ARBIB: And looking at that, that would’ve been – a lot of that would’ve come from the stimulus package. Housing’s the same.
LEIGH SALES: Fair enough. What I’m asking is if you inject all this money into the economy and nothing much changes or it’s a little blip and then it goes away, what’s your Plan B option, given how much you’ve put into this stimulus package now?
MARK ARBIB: Sure. OK, this is only one part of the strategy, the stimulus package. And there’s no silver bullets because there is a global recession on. There is not one thing that any one government can do to solve it. Global coordination’s what’s necessary. And of course the Prime Minister will attend the G20 soon. Because you need a global solution to this. But already, we’ve had the first stimulus package, we’ve had the car plan, we’ve had the local government infrastructure.
There are some big infrastructure projects that are coming down the line from Infrastructure Australia in the future. And in terms of this package, it’s $42 billion representing two per cent of GDP. It’s a big hit, there is no doubt about it. But these times require decisive action and the IMF support it. And listening to the IMF chief economist, he says if in doubt on a stimulus economy – on a stimulus package, spend more, don’t spend less.
LEIGH SALES: Senator Fifield, can I ask you: the Coalition decided to oppose this package in defiance of the IMF, as Senator Arbib points out, against the advice of business groups, of welfare groups, of the Treasury. Isn’t it a lucky break for you that Senator Nick Xenophon has allowed the package to go through because now the risk is all on the Government’s side and the Opposition can keep attacking?
MITCH FIFIELD: I don’t think it’s a lucky break at all. We opposed this legislation because we thought that it was bad policy, that it wasn’t going to create the jobs which Mark Arbib was talking about. The first stimulus package of $10 billion, which was meant to create 75,000 jobs, what have we seen? The January unemployment figures showed an increase in unemployment in Australia. So, clearly that first package of $10 billion didn’t work.
We can have no confidence in this package of $42 billion and in fact Treasury, at our hearings, couldn’t give any undertaking that that 90,000 figure – 90,000 jobs – would actually come to pass. And in fact, they lacked so much confidence that they’ve changed their language. Whereas in the first package, they said that 75,000 jobs would be created, in this second package, they say that 90,000 jobs would be supported. Now, we don’t know what the word supported means, but it’s clear that Treasury themselves don’t have confidence that this package will create jobs. So, no, I’m not pleased that this legislation has gone through because I think you can spend $42 billion or even $15 to $20 billion for much better effect, for much better fiscal stimulus and for much better support for jobs.
LEIGH SALES: Alright, Senator, you say that you’re not happy it’s gone through. If Australia does have a comparatively soft landing, if this stimulus package does create jobs and boost confidence, wouldn’t it be fair and decent for the Coalition to say, “Great, we’re happy to be proved wrong because it means everything’s worked out for the best for Australians”?
MITCH FIFIELD: Well, if we have a soft landing, it won’t be because of this fiscal stimulus package.
LEIGH SALES: But isn’t that just such a typical answer from the Opposition? Nothing will be good enough.
MITCH FIFIELD: No, not at all, not at all. You’ve got to be realistic about the effect that a fiscal stimulus package can have. Fiscal stimulus can make a difference at the margins. It’s not the magic bullet which the Government’s presenting as. It has only a very limited effect and if we are indeed, and I hope we’re not, going into a deep recession or depression, this package won’t stop that from happening. And if we are to have a soft landing, it’s not going to be because of this package, it’s going to be because of the fundamentals of the Australian economy …
MARK ARBIB: But it will protect jobs.
MITCH FIFIELD: … something which this Government spent the best part of 2008 talking about. This Government killed consumer confidence. This Government killed business confidence.
LEIGH SALES: Senator Fifield, Let’s let Mark Arbib come in there. What would you like to say in response?
MARK ARBIB: I mean, this is just – I think you raised it earlier: this is just a total political play by the Coalition. I mean, they are just playing politics to the 10th degree. And the people whose at stake here – I mean, these are small businesses that could go under, these are jobs that could go under and they’re playing politics with it.
The reason Malcolm Turnbull is doing this is so that in 12 months time when unemployment goes up because we know – I mean, the Treasury say unemployment’s going to go up, the IMF say unemployment’s going to go up. It will go up; there’s no doubt about it. In 12 months time, Malcolm Turnbull wants to come out and say, “I told you so. I told you so.” That is what the Liberal Party policy is here, is about playing politics.
LEIGH SALES: Speaking of playing politics, what about Kevin Rudd this week linking the fires in Victoria – the stimulus package into a speech about the fires on Victoria. If that’s not playing politics, what is?
MARK ARBIB: Well, Kevin Rudd has said there’s already unlimited funding for the Victorian Government in terms of reconstruction. It’s uncapped. So, I mean, our position on that is clear. But the Coalition’s position on the stimulus is totally political. It’s about setting them up for a future attack on the Government in terms of unemployment. There is no doubt about it. They were wishing and hoping that this package would go through and that they could vote against it. And they got their wish and they’re just playing political games, there is no doubt about it.
LEIGH SALES: Mitch Fifield, the Newspoll that was out this week showed that the Coalition is no longer considered a better economic manager than Labor. Doesn’t that poll show that with your opposition to this economic stimulus package, that in the eyes of the Australian people, you’ve squandered the most valuable political advantage you had?
MITCH FIFIELD: I think it reflects that we took a tough decision. The much easier decision for us, the more popular decision, would have been to let the Government’s legislation go through unopposed. That would have been the easy thing, that would have been the populist thing. But we want to do what’s right by the Australian people and what’s right by the Australian economy. And we know that this package isn’t right. If anyone is pursuing a populist path, if anyone is pursuing political motivation, it’s the Government.
This $42 billion package is not informed by economic considerations, it’s informed purely by political considerations. And that’s why it was clear when we had our senate hearings that this was the package which the Government gave to Treasury to model. It wasn’t the package which Treasury themselves put forward. Because Treasury would have come forward with a package which had a much greater focus on increasing the productive capacity of the nation.
They would have suggested serious infrastructure projects. They wouldn’t have suggested Bradford batts, bike paths – which I concede is the Greens’ great addition to this program. They wouldn’t have suggested boom barriers. They would have looked at serious infrastructure and they also would have looked at some serious money in Australians’ pockets in the way of a bring forward of tax cuts. Once this $42 billion is gone, there’s going to be no extra dollars week in, week out in the pockets of Australians because it’s just a one-off sugar hit, and there’s no serious infrastructure projects.
MARK ARBIB: I think we must have been sitting in different senate hearings, Mitch, because the Treasury supported this package. They provided the advice that we needed to act urgently and we provided the package to act urgently and decisively.
MITCH FIFIELD: What else was Ken Henry going to say? He would have been sacked.
MARK ARBIB: Well, Mitch, just straight there, you’ve said something which is misleading because Ken Henry said he’s supporting the package. This is about getting infrastructure in quickly. That’s why we’re supporting the schools, that’s why we’re supporting housing, …
MITCH FIFIELD: It’s his duty as a senior public servant to support the Government’s program. That’s his job.
MARK ARBIB: … that’s why we’re supporting roads. And I can’t believe that you would come here tonight and say that that sort of infrastructure is not serious. I beg to differ.
MITCH FIFIELD: I don’t think Bradford batts and bike paths is serious economic infrastructure. Call me crazy, but I don’t think it is.
MARK ARBIB: And I expect many of the Australians out there … Mitch, go out and talk to Victorians, go out and talk to your own electors because they think it’s serious.
LEIGH SALES: Alright. We’ve seen this week with the way this vote’s unfolded, the tremendous power that minor parties and Independents are wielding in the Senate. Senator Fifield, is it in the national interest to the have likes of Nick Xenophon and Steve Fielding holding so much influence, disproportionate perhaps to their mandate?
MITCH FIFIELD: Well, it depends how they use it. I’m much more comfortable having Nick Xenophon and Steve Fielding having the balance of power than I would be having the Australian Greens holding the balance. And I’ve got to say, I was pretty disturbed today when Penny Wong said in the Senate that the Greens were now a party of economic responsibility. I hope that’s something Penny Wong keeps repeating from now until the election. But we do have a situation in the Senate …
MARK ARBIB: No, she just said they were more responsible than you, Mitch. More responsible than the Liberal Party. I think she’s right.
MITCH FIFIELD: We’re basically seeing the emergence of a bit of a Green-Labor Coalition in the Senate where Labor and the Greens will reach their deal together and then look to get the extra one or two votes that they need. And I think that’s very concerning when Labor start with the Greens rather than with a responsible Opposition.
LEIGH SALES: Alright. Speaking of green issues: Mark Arbib, the Government’s asked a lower house committee to investigate whether a emissions trading scheme is the best option for Australia is. Is this the first step in Labor backing away from it? Well why have an inquiry?
MARK ARBIB: No, not at. I mean, we are, we are 100 per cent committed to the emissions trading scheme. 100 per cent committed.
LEIGH SALES: Well why have an inquiry about whether it’s the best option?
MARK ARBIB: There’s an inquiry currently going on in the Senate. This a concurrent inquiry going on in the House of Representatives. I mean, I don’t think there’s anything wrong with that. This is a huge, huge reform. This is one of the biggest economic reforms this country will ever undertake. We’ve got to get it right. We’ve only got one chance to get it right. So I don’t think there’s any problem with the House of Representatives also having a look at it.
LEIGH SALES: One of the things that businesses said …
MITCH FIFIELD: It’s very suspicious.
LEIGH SALES: … is that they need certainty around this issue; they just need to know what the Government’s doing and when they’re going to be doing it. Isn’t the Government putting this into an inquiry enough to just create uncertainty in itself?
MARK ARBIB: No, but there is already an inquiry underway in the House of Representatives that’s been called by the Coalition and the cross-benchers. That’s underway. So, there is going to be an inquiry. At the same time, the Government has decided to run a concurrent inquiry in the House of Representatives. But in terms of certainty, there is certainty with us. There will be an emissions trading scheme, as put forward already in the white paper.
LEIGH SALES: Hence my question why we need a second inquiry.
MARK ARBIB: Well, because there’s – at the margins, I mean, this is a detailed policy that needs to be looked at.
MITCH FIFIELD: This is very suspicious, Leigh.
MARK ARBIB: A detailed policy that needs to be looked at. But let’s just bring in the Liberal Party here. With us, you get an emissions trading scheme; with them, well, it’s a lot more fuzzy. The climate sceptics – and Mitch is a proud climate sceptic and, good to have you here, Mitch – really, are winning the battle within Malcolm Turnbull’s caucus. And Malcolm Turnbull is all over the place on climate change at the moment. He’s come up with a Clayton’s policy in terms of fighting global warming which will have no effect. If he’s fair dinkum about fighting climate change, if the Coalition are fair dinkum, well they’ve got to support an emissions trading scheme.
LEIGH SALES: Senator Fifield.
MITCH FIFIELD: Yeah, Leigh, this is very, very interesting, the development of the house economics committee inquiry, on two counts. The first is: look at the reference. The reference says, “Look at the choice of an ETS as the central policy response to carbon emissions.” So, the Government has given a reference that questions the ETS as the central policy response. So, that’s very curious in itself.
The second interesting point is the reporting date for this inquiry – it’s in the latter half of 2009. Now, let’s remember this government has a commitment to introduce an ETS in 2010. Now, 2009 is well underway. If this government is wanting to introduce an ETS in 2010, they’re going to have to introduce their legislation pretty soon.
So, this inquiry will actually report after the Government needs to have passed its legislation. So, this inquiry I think is telling us something: that this government is looking for an excuse to push out the timeframe for the introduction of the ETS, and I think they’ll use this inquiry as that excuse, saying, “We’ve got to wait until this inquiry completes its work.”
LEIGH SALES: Alright. Senator Fifield, let me ask you: a lot was made this week of the response to the bushfire disaster in Victoria with members of Parliament being able to put aside politics. We’re constantly being told that this global financial crisis is a national emergency, yet we’ve not sign there of politics being put aside. Why does it take a national tragedy for Australians to get responsible and co-operative political leadership?
MITCH FIFIELD: Well, I think the Victorian bushfires really put into perspective what a real crisis is, that the language of crisis, the language of drama is bandied around lot in politics and has been over the past year. But I think, you know, we’re seeing a real crisis, a real tragedy with the bushfires. And like Mark and all my colleagues, I think we’ve been pretty distracted and pre-occupied this week with what’s been happening in Victoria and particularly as a Victorian Senator, it’s been hard to concentrate.
LEIGH SALES: We have been told that the economic situation is a crisis, is a national emergency. Are you saying, Senator Fifield, that it’s not?
MITCH FIFIELD: Well, I’m saying there are crises and there are crises, there are emergencies and there are emergencies. What is happening in Victoria – that’s a crisis, that’s an emergency. What’s happening with the Australian economy is a challenge, and it’s a challenge which has been made even more difficult by the way that this Government has handled itself in its first year in government. They inherited a terrific economy, no budget debt, no net debt in Australia and a strong and booming economy with good consumer and business confidence but this Government proceeded to trash talk the economy for the best part of a year.
LEIGH SALES: Alright, Senator Arbib …
MITCH FIFIELD: So, we would’ve been in a better position had that not happened.
LEIGH SALES: Sorry, we’ll go to Senator Arbib. Can I ask: obviously the events of the past few days in the Parliament would lead Australians to believe that, well, no, we can’t get co-operative political leadership on an issue as big as the global financial crisis.
MARK ARBIB: Well, look, in terms of the fires, it was – I mean, for anyone in the Parliament, for all Australians, it was just horrific. And for the first three days of Parliament, I mean, no-one – anyone you looked at, anyone you spoke to, they were just in shock. But the Parliament does have a job to do and we’ve got – we do have a crisis, unlike the Liberal Party, we believe what is happening overseas, a global recession is a crisis, because it is going to affect the day to day lives of working families. People are going to lose their jobs, people are going to lose their businesses. It’s a crisis.
LEIGH SALES: So in that case, why can’t we see more co-operative, mature, political response to it?
MARK ARBIB: Well, we should be. And, I mean, from our side, we are trying to put forward a package that will help Australians, help the unemployed, help businesses. On the Liberal Party’s side, they’re playing politics. They played politics with the first stimulus package. Malcolm Turnbull, day one, came out and said, “I want to be bipartisan.” Then he spent the rest – the next three months attacking the package. We’d love them to work with us on this. We would love it. It would be a great sign from the Liberal Party that they’re actually committed to the same things that we are. But I don’t think that’s going to happen.
LEIGH SALES: Alright.
MITCH FIFIELD: Give us more than 48 hours notice before you want legislation passed. I mean …
MARK ARBIB: Well, it is urgent. It is urgent.
LEIGH SALES: Gentlemen, gentlemen, gentlemen, gentlemen, we are out of time. Thank you very much for coming in Senator Arbib and Senator Fifield. Thanks very much.
MARK ARBIB: Sorry.
LEIGH SALES: That’s alright.
MITCH FIFIELD: Thanks, Leigh.
MARK ARBIB: Thank you.