Transcript of
Senator Mitch Fifield
Shadow Parliamentary Secretary
for Disabilities, Carers and the Voluntary Sector
Sky News AM Agenda
Kieran Gilbert and Mark Arbib
4 May 2009
8:30am
EO & E
Subjects: budget, Defence whitepaper, Liberal renewal
KIERAN GILBERT:
Joining me this morning, our Monday morning panel. Liberal Parliamentary Secretary, the Shadow Parliamentary Secretary Mitch Fifield and in Sydney, Labor Parliamentary Secretary for Government Service Delivery Mark Arbib. Gentlemen, thanks for your time. Senator Arbib it looks like the tax cuts as promised, will be going ahead?
MARK ARBIB:
Well Kieran I’m not going to surprise you when I say I don’t know what is in the budget. This is a dance, this has been going on for a long time and I can’t speculate. I wish I could, I wish we could sit here and talk about it all morning but I don’t know and I really can’t put that out there. What I can say is and this is something you’ve heard often this is the toughest budget that any Treasurer has had to frame since the Great Depression. We have revenue going though the floor, they are talking about $50 billion, $60 billion, $70 billion worth of revenue that has just plummeted from the global recession and also from our trading partners having a down swing and the end of the mining boom. And that is going to put huge pressure on the government, huge pressure on the budget and there is no doubt there is going to be a temporary deficit, there is no doubt about it at all. And the Treasurer has said that. The real question here is that and this is the big debate that’s going now is what will Malcolm Turnbull do? Malcolm Turnbull has been saying that, attacking us on cash splashes, attacking us on debt and deficits. What will he do? Will he borrow? Because this is the big question. If we are losing $115 billion in revenue over four years, well that leaves the government in a terrible situation but it also means the opposition are going to have to make some tough choices themselves. Are they going to cut programs? Are they going to cut spending? Are they going to raise taxes? Or are they going to borrow? And he’s already been once, been stung on this once, on Meet the Press, where he didn’t deny that they would borrow $177 billion. So that’s a big, big question for Malcolm Turnbull and also Mitch Fifield.
GILBERT:
I know you are trying to put the blowtorch on the opposition, and obviously distract from the difficulties that the government is facing, but really, the blowtorch in the next week as you know is going to be well and truly on the Treasurer. And his challenge, you would concede, is a difficult one in terms of balancing the messages because he’s got this short term spending plan, but yet you still want to be true to the promise that the Prime Minister made in the advertising and the lead up to the last election and since that he is an economic conservative. So you are providing that road map back to surplus. So how important is getting that message out there, that balancing act between the spend, but then the longer term discipline?
ARBIB:
There is no doubt this is a very tough budget to frame, because on the one side, obviously we’ve got the revenue, $115 billion over four years, $50 or $60 billion this year in revenue loss though capital gains tax, company gains tax, at the same time as that, we must continue to stimulate the economy. This is a strategy that has been pursued by the government from day one. We acted early, we acted decisively, and we must continue it. And the Treasurer spoke yesterday about infrastructure being a major focus of the budget and a major focus of the stimulus package, and it is. 70% of the stimulus package is in infrastructure, nation building infrastructure, and that is where we are headed. So in terms of our spending priorities, I expect it will be to stimulate the economy but at the same time as that, we remain economic conservatives. We don’t like going into deficit, we don’t like having to borrow. So overtime we must get the budget back over the long term and the medium term back into surplus. And that it why it is a difficult balancing act for the Treasurer, difficult balancing act for the government. But Kieran I know you didn’t sort of take it across to Mitch, but it is an important question that the Liberal Party have to answer because they have been running scared on this one. Will they borrow, to make up for the short fall in revenue? Or will they cut services? It is an important question and it is about time Malcolm Turnbull came up with some answers.
GILBERT:
Well Senator Fifield, the Coalition, its in opposition of course, but the fact is if you were in government you’d still face the same revenue write downs, enormous revenue write downs, due to the recession, I think there is only a $20 or $30 billion difference between the two sides of what the debt would be. So there is a point there, isn’t there, banging on about debt, but really, the Coalition if it was in government would be in debt as well.
MITCH FIFIELD:
Well firstly can I say Kieran, despite Mark’s best efforts this budget isn’t about Malcolm Turnbull, or Mitch Fifield for that matter. But I’ll address your question. We would have had a very different starting point, we’ve got to be clear about that. And let’s remember, this government drove the budget into deficit. This government drove the budget into deficit on the basis of policy decisions alone. Go back to the budget updates last year and you will see that it was policy decisions by this government that took the budget into deficit in the first place. The reason I say that we would have had a different starting point is that this government spent the best part of 2008 talking the economy down. I’ve got no doubt, had we been in government in 2008, growth would have been stronger, and revenues would have been higher. So I won’t accept that our starting point would have been the same as Labor’s. But can I say, I am absolutely astounded that at the start of the program today that Mark couldn’t address the basic question of whether this government will honour its election commitment in relation to tax cuts. Mark couldn’t answer the question in relation to tax cuts which have been promised at the election, tax cuts which have been budgeted and tax cuts which have been legislated. This budget isn’t about the opposition. This budget isn’t about Malcolm Turnbull. This budget is about the government. This budget is about whether this government will honour some basic election commitments such as the tax cuts which have already been legislated, whether this government will honour its commitment to keep the private health insurance rebate intact, and whether this government has a plan for repaying its debt. And whether this government will ever deliver a surplus. Wayne Swan couldn’t answer that question yesterday…
GILBERT:
Senator Fifield…Senator Fifield in a very different economic environment you would expect though that there is going to have to be some spending changes, they are going to have to reign in some of the previous government’s provisions. That’s obvious, though, isn’t it? Given the enormous amount of revenue that has been wiped off the bottom line.
FIFIELD:
Well those are matters for this government to justify. It’s not for the opposition to defend the scenario that you are putting Kieran. They’re the government. This is their budget. They’ve been in office for almost 18 months. They talked the economy down in 2008. They’ve made billions and billions and billions of dollars of commitments. They have to make the books balance. It’s not our job to do that. It’s their job to do that. They’ve made election commitments. They’ve made some appalling decisions, such as the $42 billion stimulus package. It’s not for the opposition to account for this government and their spending and their debt, that’s something for Wayne Swan to do in the budget.
GILBERT:
But Senator Arbib, I want to ask you about the point that Mitch Fifield makes there in terms of the tax cuts, they were promised, they have been for some time. Why can’t you give a definitive commitment on that today? And secondly on the maternity leave scheme, is there some hope that there will be a move towards at least something which has been a cause that many in your party have been pushing for years if not decades will there be some move in that direction in this budget as well?
ARBIB:
Well Kieran I said this at the start, and Mitch sort of glossed over it, I don’t know what’s in the budget, I haven’t seen any of the detail, so it’s hard for me to answer on something that may or may not be there. The tax cuts are legislated, Mitch did make that point and I think the Treasurer did make that point yesterday as well. In terms of paid maternity again, who knows. This is something that most of us in the Labor Party if not all of us in the Labor Party are deeply committed to. And certainly there is a Productivity Commission report into it. It is something that we are very, very committed to. The question about the budget though and whether it is going to be in the budget is something that really, I couldn’t tell you but at the same time as that the Treasurer has said there has to be a re-prioritisation in some areas and it is going to be very difficult. The global recession has been like a wrecking ball into our government revenue and it is making it very difficult for everything we are doing in terms of the budget. I mean just listening to Mitch though, just to come back to him for a second on that, I think he spoke for about two minutes and didn’t mention the global recession once. If you listen to Mitch, all the economic problems that the world is having, that the country is facing at the moment is our fault, the government’s fault. I mean he also omits that he supported, he sat in Canberra in the same, next to where you are right now Kieran and he supported first stimulus package, he supported the cash payments to pensioners, he supported the cash payments to veterans, to families, he supported the first home buyers grant going up from $7,000 to $14 to $21,000 and this is something that, the duplicity of the Liberal Party on this where they talk about cash splashes but at the same time they supported it in the first place. And the stimulus package is delivering. You look at what Westfield, their March figures up 1.4%, where in the world is retail going up by 1.4%? There is no doubt that the stimulus package has had an effect in terms of the stimulus payments and it will have a big effect now that we move into the infrastructure phase.
GILBERT:
But you know that there are suggestions today in the Financial Review they’ve done some analysis on the Treasurer’s correspondence with his state colleagues last week and that is the deficit now could be up around $70 billion. Do you think that it is a realistic number? I know you’ve said to us that you can’t comment on whats in the budget or the numbers, you haven’t seen them, but I mean that is a, that’s quite a substantial deficit to be trying to claw back over the next few years.
ARBIB:
Well if the deficit is that big then the reason for that is, really, the loss of revenue from the global recession. We’ve seen the end of the mining boom. I mean we had 12 years of boom and mining lead the way, that is now over. You’ve seen, if you look at the price for coking-coal, the prices for commodities have halved in many cases and that has lead to a loss in mining royalties, that has lead to a loss in capital gains tax, a loss in company tax, and that has really been a wrecking ball through the governments budget. And again the Liberal Party, they aren’t in government you are right about that Kieran, but at the same time as that they are running a very, very duplicitous scare campaign on debt and deficit and they have to come clean, would they borrow to meet up for the revenue shortfall, caused by the global recession, would they cut services or would they raise taxes? That’s the question for the Liberal Party. We’ll be clear in the budget but they are going to have to answer it.
GILBERT:
I’ll put that to Mitch in a second but in terms of the messages that are coming from the government, undoubtedly going to be an issue the budget deals with as well, when on the one hand you are handing out money as you did early in the year and late last year with the cash handouts, and on the flipside you’re going to say people have got to reign in their spending and so on further down the track, to tighten their belts. It seems there is a lot of speculation about tightening middle class welfare, they are two very different messages that you are going to be sending out to people.
ARBIB:
Our messages on the budget are pretty clear. We need to continue to stimulate the economy, there is no a doubt about it. That is our economic strategy. We’ve had the stimulus payments, we’ve now moved into the infrastructure phase, 70% of the stimulus payments, package as I’ve said is on infrastructure and that is important. This is going to not just sustain jobs and employment in the short term, you know stimulate small business, what it is going to do is prepare the country for the long term. I mean Mitch says and you listen to Malcolm Turnbull and they say its not economic infrastructure, that is absolute rubbish, absolute rubbish, we are spending on roads, we are spending on ports, we are spending on rail. I mean in terms of rail funding, we are spending more on rail funding in 18 months than they spent in 12 years. At the same time though, and the point you make Kieran is right, the government must balance that off in the long term and the medium term in terms of surpluses and deficits. We are still economic conservatives, we support surplus budgets, but it would be irresponsible, absolutely irresponsible if we had not taken the spending stance we did in terms of the stimulus package. We would be forcing people out of work, businesses would be shutting down if we hadn’t have done what we have done. In the long term though there is a recognition that we must, must move back into surplus.
GILBERT:
Ok Senator Fifield isn’t it a fair point then that, and you’ve worked for the former Treasurer Mr Costello, you know how this stuff works, with the deficit, aren’t we just seeing the automatic stabilisers at play here? We’ve had this argument about the ‘d’ word, but aren’t you and the opposition leader continuing to try to demonise the idea of a deficit, when realty when you look across the OECD, across developed economies, advanced economies, wouldn’t we have one of the smallest deficits there is at the moment, isn’t this just an automatic stabiliser at play given the recession?
FIFIELD:
Well the reason Australia has relatively one of the smallest deficits is because we paid down all of Labor’s $96 billion debt. We handed Labor a $22 billion budget surplus. That is the reason why we are in a much better fiscal position than almost any other country in the world. It’s no thanks to Labor at all. That is the first point to bear in mind. The second is, of course, revenues are going to fall during an economic downturn. We accept that. We’ve never denied that. But what we don’t accept is that our starting point, at this budget, if we were the government, would have been the same as this government’s. Clearly, it wouldn’t have been because we would have managed the economy differently over the last 18 months, that would have had an impact on revenues, no doubt, and also, we wouldn’t have spent $42 billion with absolutely no economic benefit to show for it. So our starting point would have been different in terms of growth. Our starting point would have been different in terms of the revenue numbers. And our starting point would have been different in terms of the budget bottom line. So it is extremely unfair to say, in effect, if you were the Labor government, and if you’d been managing things this badly, would you handle the budget the same way that they are proposing? We are not the Labor Party, we would have handled the last 18 months differently and Australia would be in a much stronger budgetary position had we been in office and I think the economy would be growing a bit better…
GILBERT:
Ok gentlemen we are going to pause there, take a break, and after the break we are going to look at the reaction in China to the governments new Defence whitepaper.
BREAK
GILBERT:
Welcome back to AM Agenda and with me this morning the Labor Senator Mark Arbib and Liberal Senator Mitch Fifield. Senator Arbib I want to put to you a reaction to the government’s Defence whitepaper announced on Saturday. A Chinese military strategist in this mornings Sydney Morning Herald is quoted as saying “this is a stupid, crazy idea” from Australia “I am very concerned and worried about it” its not the best reaction, is it, to the governments military strategy out of Beijing?
ARBIB:
Well it is quite interesting, I read that article and you sort of take that from the top part of the article but when you read right down to the bottom and you actually get his last quote, he was not concerned about the scale or the size of the whitepapers build-up, the build-up in terms of the defence force, he is talking about some of the paragraphs in terms of China. Hopefully, hopefully, the Chinese Government are not seeing it that way because this whitepaper is not directed nor is it focused on one country or one threat. It talks about threats and challenges at multiple levels, not just now, not just in the short term but in the long term, because this is a, this is a document that right up to 2030 and as a country and as a government we have to be prepared for any contingency in terms of defence and in terms of national security, and that is the most important job that any one government can do. And the last whitepaper was ten years ago, a lot has changed in ten years, we have seen international terrorism, you’ve seen resource security, you’ve seen a proliferation of weapons of mass destruction, the nuclear threat. There is a lot going on and at the same time as that, you’ve seen a buildup and a modernisation of Defence forces in the Asia-Pacific region and Australia must be prepared for anything that could come our way in the future, not just with our allies, and when we make a lot of references to the United States, we’ve got to be self-reliant in terms of Defence and that is something that the government is definitely working to through the whitepaper.
GILBERT:
Well doesn’t this show then that the messages were a bit sloppy in the whitepaper if this is the reaction you’ve got from China, doesn’t it show that the messages within the whitepaper could have been a bit clearer if that is your aim?
ARBIB:
Well this is a comment in the Sydney Morning Herald you are referring to which was from one defence planner, one former admiral I think, it’s not from the Chinese government. And as I said, this is not a, this whitepaper is not focused on any one government at all, it talks about multiple threats across the whole region and obviously, I mean we have all seen, and the Prime Minister has talked about a modernisation, and an increase in the armaments in the Asia-Pacific region and you’d have to be blind Freddy not to have seen it. And it is something that we as a government we must be prepared for. There is no direct threat from China.
GILBERT:
Ok. I just, on one final issue, to Mitch Fifield, in the Australian newspaper Glenn Milne reports that business donors to the Liberal Party want a renewal of the Liberal Parliamentary team, they want out the likes of Kevin Andrews, Phillip Ruddock, Bronwyn Bishop, Bill Heffernan, and they want a renewal, according to these business donors quoted by the Australian newspaper. Is there room for renewal in the Liberal Party and does Malcolm Turnbull need to do it?
FIFIELD:
Kieran any individual, any supporter of a political party, be they in business or not, is entitled to their view about the relative merits of individual parliamentarians. We are fortunate in the Liberal Party that we are not subject to any sectional interests unlike the Labor Party where it is the unions who pick the candidates. In the Liberal Party it is our organisation who pick the candidates, not anyone external to the party organisation. But we have had significant renewal in the Liberal Party. We have had some great new talent come in at the last election, Scott Morrison, Scott Ryan, Simon Birmingham. These are talented young people who have got a great contribution to make. I think we’ve renewed and we will continue to renew.
GILBERT:
Should there be more though, should there be a cleaning of the slate from some of those Howard-era people?
FIFIELD:
Well renewal is an ongoing process and it happens election by election. It is the decision of the preselectors. They make the calls. And the Liberal Party won’t be subject to any outside influence on that subject, unlike the Labor Party.
GILBERT:
Ok, Senator Fifield, Senator Arbib, thank you very much as always this morning. We look forward to chatting to you on the eve of Wayne Swan’s second budget. It should be a fascinating week ahead.
ARBIB:
Thanks Kieran.
FIFIELD:
See you Kieran.
GILBERT:
That’s all for this edition of AM Agenda.
ENDS