Sky News AM Agenda
Kieran Gilbert and Senator Mark Arbib
25 May 2009
8:45am
EO & E
Subjects: pension age, budget deficit, ETS
KIERAN GILBERT:
Welcome back to AM Agenda joining me here in Canberra is the Parliamentary Secretary for Government Service Delivery Mark Arbib and the Shadow Parliamentary Secretary for Disabilities Senator Mitch Fifield. Gentlemen, good to see you both.
MITCH FIFIELD:
Morning Kieran.
MARK ARBIB:
Good to be here.
GILBERT:
And we’ve got the unions today Mark, saying, writing to the Prime Minister complaining that the increase to the pension age to 67 is not on, particularly for people who work in areas of heavy labour. Do you understand their concerns?
ARBIB:
Definitely we understand their concerns, its an important issue. This has come out of the Harmer Review of the pensions, the budget lifted pension rates $32 a week, but at the same time as that it looked at the long term ramifications of the ageing of the population and this is something that, really, should have been dealt with earlier. It came, it was first raised in the inter-generational report in 2002, 2003 and the previous government did nothing about it. We’ve got an ageing population that is putting more and more pressure on the pension system. The pension, the retirement age was set 100 years ago, in 1909, a lot has changed since then. You look at life expectancy has gone up, more and more people are relying on the pension, and therefore we need to make it sustainable, and that’s what raising the age from 65 to 67 does.
GILBERT:
So the government won’t be budging on this, wont delay it or phase it in differently? This is locked in policy?
ARBIB:
Well we said going in to the budget that tough decisions had to be made and this is a tough decision, it is not going to be a popular decision and we know that. But it is necessary for the sustainability of the Budget, for the sustainability of the pension.
GILBERT:
Senator Fifield what are your thoughts on this, does the Coalition endorse the increase and do you understand where the unions are coming from on it?
FIFIELD:
We’ve made it clear that we are not going to seek to frustrate the passage of the budget, that we are not going to seek to deny assent to key elements of the budget. The clear exception, of course, being the private health insurance rebate which is bad policy and a clear breach of faith with the Australian people. But just back to the 67 age threshold for the pension, I think what this shows about this government is that they have great difficulty bringing the public along with them on particular issues. And that they have difficulty explaining to the public the rationale for the decisions that they take. They are a government which doesn’t consult as has been evidenced with the employee share ownership scheme where the government didn’t consult, where the government is all over the place, where the government has indicated that they are going back to the drawing board and are going to be putting out a discussion paper. It is a government that doesn’t consult, has difficulty carrying people with them and has difficulty getting their message out.
ARBIB:
Come on Mitch, you were in the Treasurer’s office, you were sitting there working as an adviser. The intergenerational report came, it raised this issue of the pension age, and Peter Costello, you, did nothing about it. You sat on it, you left it, it was all too hard. In this budget we said there was going to be tough decisions, we have to make the tough decisions and we’ve made it. And we’ve done exactly the same on means testing private health insurance rebate. It is a tough decision there is no doubt about it. But it is necessary for the long term sustainability and viability of the health system.
GILBERT:
What do you say to that?
FIFIELD:
We put intergenerational issues on the agenda in the first place. It was Peter Costello who delivered the first intergenerational report with the budget, who declared that there should be an intergenerational report every five years. We were the ones who put those issues on the agenda. We were the ones who took some tough decisions about the Pharmaceutical Benefits Scheme. So, you know, we did an awful lot in relation to those issues.
ARBIB:
You did a report and you didn’t act on it.
GILBERT:
Let’s talk about the broader economic debate. I want to ask you, Senator Arbib, about the Prime Minister and the Treasurer’s approach last week. They wouldn’t say billion dollars in debt, they wouldn’t articulate how much $300 billion in debt, you couldn’t drag it out of them. How silly did that look at the end of the week last week? Is it spin going too far?
ARBIB:
This is a beat up. This is an absolute beat up. I saw the interview, the Prime Minister said the figures alright, we know it is $58 billion, we know it, $58 billion deficit. We know there is the gross figure, the net figure. We know, this is an absolute beat up. For us, at the same time as that, we have been telling Australians that $210 billion has been lost because of the global recession and the end of the mining boom, that’s just a fact. Also we’ve been talking about the stimulus package. The opposition like to say this is a cash splash, it’s all just about handouts. Nothing could be further from the truth. They make up a small proportion. 70% of the stimulus package is actually in infrastructure. We talk about it today, there is a report, 35,000 projects across the country, infrastructure projects, schools fixing those, roads, rail. So we don’t have a problem…
GILBERT:
Why don’t the Prime Minister and the Treasurer say that from the outset, because they didn’t. They waffled around it and it was like pulling teeth, getting those words out of their mouth last week. You say it is a beat up but it wasn’t just one interview, it was a number of interviews.
ARBIB:
No I disagree. They were out there and they were open about it. And we…
FIFIELD:
It was excruciating to watch.
ARBIB:
In terms of debt, as we all know.
FIFIELD:
Excruciating.
ARBIB:
Australia is extremely well placed when you compare out debts to overseas. We’ve got something like the lowest debt ratios in the OECD and the economic world. It is extremely manageable. At the same time as that it is the responsible thing to do when you are in a global recession to stimulate the economy. Infrastructure, 70%, again, is on infrastructure. On top of that we are going to put forward a long term plan to actually get the budget back into surplus and that is why we are making those tough decisions, those tough decisions on pharmaceutical benefits…
FIFIELD:
That’s what we did.
ARBIB:
Sorry on private health insurance. Because we understand there is a need in the long term, the medium term to get back into surplus.
GILBERT:
Senator Fifield is it a fair retort there from the government, look at the global situation and revenues have been wiped out, they are taking a big spend on infrastructure. Should we be looking at that as the reality of the situation?
FIFIELD:
The reality of the situation, although you wouldn’t know it from listening to Wayne Swan or Kevin Rudd, is that we have a $58 billion deficit projected. That we have $188 billion of debt that we are looking in the face of. And that we are on track to have $300 billion of borrowing. They are the facts. You wouldn’t know it from listening to Kevin Rudd, he couldn’t bring himself to actually say the word billion after the word 300. That Lateline interview was one of the most excruciating things I’ve ever watched. It was one of the most disgraceful and outrageous performances by an Australian Prime Minister who would not present the Australian people with the basic facts of the Australian budget, it was just extraordinary. But Mark…
ARBIB:
Here comes the scare campaign.
FIFIELD:
No scare campaign here.
ARBIB:
Here comes the scare campaign.
FIFIELD:
Yes of course we acknowledge that revenues have taken a bit of a hit because of the global financial situation.
GILBERT:
A bit of a hit? It was enormous.
ARBIB:
$200 billion.
FIFIELD:
But if you listen to this government you would believe that the entire debt, that the entire deficit is as a result of revenue write-downs. Of the $188 billion debt which we are on track for, two thirds of that is as a direct result of spending decisions by this government. Not revenue write-downs, spending decisions. The story of this budget is not solely one of a difficult global financial situation. The other part of this budget, the rest of the story, is that this is a government which is reckless, just spending, which has no control on its expenditures and you won’t hear that from Wayne Swan, you won’t here that from Kevin Rudd, you’ll only hear that from Coalition MPs.
ARBIB:
Mitch is right, and I did say, we are spending, we are actively stimulating the economy. And what Mitch fails to say is that he sat in that chair and supported $11 billion of it when they supported the first stimulus back in October last year, you supported it.
FIFIELD:
We supported money for pensioners.
ARBIB:
Payments to pensioners, first home buyers grant…
FIFIELD:
That was our idea.
ARBIB:
$4.7 billion on infrastructure. They supported that, so let’s just get that straight. But this is Mitch, and the Liberal Party rolling out, yet again, the scare campaign on debt and deficits. It is a scare campaign.
FIFIELD:
They’re the facts. They are scary facts. But they are facts.
ARBIB:
The Leader of the Opposition Malcolm Turnbull has an opportunity two weeks ago when he stood up in the Parliament and delivered his address, to talk about what measures he would take, what measures the Coalition would take to actually reduce the deficit. What measures? We ask, put them on the table if you want to make savings, if you are going to increase taxes if you are going to cut programs, put them on the table.
FIFIELD:
It’s your deficit, it’s your deficit.
ARBIB:
He put forward no plans. So the truth is there is no difference.
FIFIELD:
You created it. What’s your plan?
ARBIB:
There is no difference between our financial position on deficits and their position on deficits.
FIFIELD:
Rubbish.
GILBERT:
Ok. The Emissions Trading Scheme, it’s the big legislation before the parliament over the next week. First to you, Mitch, the Coalition does seem like its, there are a few different views here. Malcolm Turnbull says there shouldn’t be any agreement before Copenhagen. Barnaby Joyce says no full stop. What can we expect, do you think, from the Coalition this week on this very important debate, this piece of legislation?
FIFIELD:
Well it was only on the last day that Parliament was sitting, barely ten days ago, that the government tabled the best part of 1300 pages of legislation and material. We need to examine that closely. The Australian public need the opportunity to look at that closely as well, should they choose. It is important to get this right. This is more wide ranging than the new tax system. It’s an incredible change to the Australian economy. The important thing is to get it right…
GILBERT:
Are you worried about being portrayed as climate sceptics again? It worked against you in ’07 in a big way.
FIFIELD:
That is not our concern. Our concern is to get this right. We agree with the government that it is important to reduce global emissions. If you want to reduce global emissions you want to do so in a way that has the least effect on the Australian economy. Now we don’t know if this ETS is the best model, if it is the best option, because the government has not modelled any alternatives. So what we want to do is we want to wait to see what happens in Copenhagen, we want to wait and see what the US does. Given this government has delayed the implementation of the ETS that gives us the time to make sure that we get this right. Now the government before was saying that famine, plague, pestilence and drought would befall Australia if the ETS wasn’t introduced by 2010. Clearly they now don’t think that is the case. So we have the time to get it right, and we should.
GILBERT:
Do you think that the Government has any chance of getting this through? It doesn’t look like it. The Greens are saying no, Barnaby Joyce says no, and the Liberals are saying lets wait till after Copenhagen.
ARBIB:
Well we don’t know, who knows what their position is and we are going to keep negotiating it right into the Senate. It is too important not to. Everyone needs certainty. Australians need certainty. Business needs certainty and that is what our scheme is about, it’s providing certainty…
GILBERT:
Would you fight an early election on it?
ARBIB:
Well let’s not even go down that path because we want to get this through the Senate. It’s too important, it is in the national interest to actually make these changes and also in terms of global leadership actually trying to get a global agreement, if Australia can do it now then that is going to add value to what the message we are sending overseas.
GILBERT:
But in this economic climate, facing a recession, is climate change still the political hot button issue that it was, could you win an early election on it?
ARBIB:
Climate change will always be, will always be a very, very big issue in the electorate and people are extremely concerned about it. And why wouldn’t they be? We’ve seen short term effects, we are hearing about the long term effects. We need to take action now, and that’s what the government is doing. Can I just say in terms of…
FIFIELD:
You’re not doing it, you’ve delayed the implementation.
ARBIB:
But as you said there has been a global recession so we have had to adjust the scheme.
FIFIELD:
So you recognise the scheme will cost jobs.
ARBIB:
At the same time as that, adjusting the scheme, we now have the Business Council of Australia supporting us, the AIG, the Industry Group, supporting it. But even like Bluescope Steel coming together on the business side supporting it. On the environmental side we’ve got the ACF, the WWF the Climate Institute. We now have a coalition of groups on both sides supporting it.
GILBERT:
But no one inside the parliament.
ARBIB:
Well that’s going to be in the end if Malcolm Turnbull decides to block the CPRS, well its going to be on his head and the Liberal Party’s head. They do not have a position on climate change, they do not believe in it. Talk to Barnaby Joyce, talk to some of their members, I mean one of their members Mr Jensen has moved a petition against global warming, that it’s not happening. This is the modern day Liberal Party, they don’t believe in climate change they are pretending because they want the electorate to think they do.
FIFIELD:
What Mark has conceded is that their ETS is going to cost jobs. He cited the global financial situation as the reason for delaying the implementation of the ETS. Now if the ETS wasn’t going to cost jobs then the government wouldn’t have delayed it.
ARBIB:
Look at the Climate Institute 26,000 jobs and NAB, $6 billion worth of investment a year out of a CPRS.
GILBERT:
Alright gentlemen, Mark Arbib and Mitch Fifield good to see you both, thanks for a feisty start to Monday, appreciate it.
ENDS