Sky News AM Agenda
Kieran Gilbert and the Hon Mark Butler MP
15 June 2009
8:45am
EO & E
Subjects: building industry watchdog, interest rates, ETS
KIERAN GILBERT:
Welcome back to AM Agenda. One Labor Senator has called on his Government not to treat building workers like organised criminals and terrorists. It comes ahead of an expected showdown in the caucus tomorrow on the building industry watchdog. Joining me to discuss this and the other matters around as we return for Parliament is the Labor Parliamentary Secretary Mark Butler and Liberal frontbencher Mitch Fifield. Good to see you both, thanks for coming in.
MITCH FIFIELD:
Good morning Keiran.
MARK BUTLER:
Thank you.
GILBERT:
Mark I want to ask you first of all. One of your colleagues in the Labor Party, in the caucus, Doug Cameron, says that the Government is treating building workers like criminals, organised criminals, and terrorists. Do you agree with him?
BUTLER:
Well there were two things we took to the election, two commitments. One was to abolish the ABCC in February 2010 and we’ll do that. And another was to keep what I think the Prime Minister referred to as a cop on the beat, and we’ll do that as well. The trick is going to be trying to bring some transparency and equity back to the construction industry, to treat workers who are law abiding citizens and are just trying to do a days work, properly, while also being able to deal with the bad apples that his honour Murray Wilcox identified in his recent report. So…
GILBERT:
But you’re from the left of the Labor Party and a union background, why should these workers be treated any differently to others?
BUTLER:
Well as a matter of principle we take the view that workers should be treated equally, that’s our starting point. But Murray Wilcox, his honour Murray Wilcox identified some ongoing concerns in the Victorian and Western Australian industries in particular and so Julia Gillard and others in the Government are having to work their way through to try and strike the balance between wanting to overturn the ABCC, which we think went way too far, but also recognising there needs to be some measures taken to keep some sense of order in the Victorian and West Australian industries in particular. And as you know Julia Gillard will be bringing some matters to the Parliament this week or at least the caucus tomorrow.
GILBERT:
Ok you’d welcome that, wouldn’t you, Mitch Fifield? Mark Butler and the government, the Prime Minister and the Deputy Prime Minister have been adamant they are going to honour that election commitment, which was to keep the ABCC until February and then have a watchdog beyond that.
FIFIELD:
I think we can put to one side this confected barney between the government and the unions, the sole purpose of which is so the editorial writers will write that Julia Gillard…
GILBERT:
It doesn’t look that confected…
FIFIELD:
No, no, no. It is so those writers will write that Julia Gillard is standing up to the trade union movement. But the reality is Julia Gillard will introduce this week legislation to abolish the Australian Building and Construction Commission. A body which we introduced in office which saw a dramatic reduction in industrial disputation on building sites, a dramatic reduction in thuggish behaviour on sites, a dramatic fall in the costs of building and construction and which also lead to a dramatic increase in productivity on building sites. Now Kevin Reynolds said before the last election that he’d be back. Now he and his friends will be back, they are on the way back, we know they are coming back because the ABCC currently is investigating 69 cases of alleged unlawful activity. Now that friskiness on the part of the unions is happening because they know the cop on the beat is going. The ABCC is going to be abolished. That is going to lead to higher construction costs.
GILBERT:
But Julia Gillard has said, Mitch Fifield, she has said that there will be, and the Prime Minister has maintained as well that there will be still that ability to have, to compel workers in the industry to give evidence under their new watchdog. So what’s the problem there?
FIFIELD:
Well look at the evidence on the ground today when we still have the ABCC in place. The unions are already acting up in anticipation that the new regime is going to be a lot softer, and that’s why we are seeing 69 cases of unlawful activity. We all know what the result is going to be. It’s going to be higher construction costs, more industrial disputation and jobs lost.
GILBERT:
Mark?
BUTLER:
Well we take the view that the ABCC was an overreaction and it was a sledgehammer to crack a nut. We’ve listened to Murray Wilcox’s report that says there’s ongoing concerns in Victoria and Western Australia and I think that Julia Gillard is going to bring forward a package that strikes a much better balance between recognising the building industry workers by and large are family people who are law-abiding citizens but also recognises that we still have some concerns particularly in Victoria and WA that need to be dealt with.
GILBERT:
Well Julia Gillard was on the Nine network yesterday, let’s recap a little bit of what she had to say on this front.
DEPUTY PRIME MINISTER JULIA GILLARD:
We gave a very clear commitment that we would abolish the Australian Building and Construction Commission and replace it on the first of February next year with a new tough cop on the beat in building and construction. We’ve had his honour Murray Wilcox give us a comprehensive report with safeguards for the controversial coercive powers that the current building industry watchdog has. Laurie it is my intention to bring to the Parliament this week legislation, from the Government’s point of view that debate has been had and is over. We gave the Australian people a promise and we’ll be honouring that promise.
GILBERT:
So Julia Gillard there talking to Laurie Oakes yesterday. Mark saying, articulating the message that you’ve been giving us this morning that the debate has been had. But a lot of people in your party don’t agree with that. Doug Cameron the only one at the moment speaking out about it, but the caucus tomorrow looks like it could be a fiery one. I suppose the fight with the unions is one thing but when you’ve got internal dissent within the party that’s not a good look, is it?
BUTLER:
Well in ways it is healthy. This is a very deeply felt issue within the Labor movement so a difficult balance to strike, but I think people have a hell of a lot of faith in Julia Gillard’s capacity to strike those sorts of balances. There’ll be a debate in the caucus tomorrow I expect but I’ve a lot of confidence that Julia’s package will be the right one and will be supported.
GILBERT:
Alright Mitch Fifield I want to ask you about the Commonwealth Bank’s move to increase its variable mortgage rate. There’s not much any government can do to stop it. The government was scathing about the CBA’s move to increase the rate, but what else can a government do?
FIFIELD:
I think Australians who have a mortgage with the Commonwealth Bank can thank Kevin Rudd and Wayne Swan for this rate rise. When you have a government that is on track to borrow $315 billion that’s the equivalent of $3 billion each and every week, that will inevitably place upward pressure on interest rates.
GILBERT:
How is it doing it already when it hasn’t been placed, the debt?
FIFIELD:
Well they are already borrowing money on the markets. Now, when you have government competing with banks for money, that inevitably leads to an increase in the cost of money, and that’s what we are seeing with the Commonwealth Bank. And that’s why we thought when we were in government that it was very important to pay down Labor’s $96 billion of debt because we knew that large, unsustainable government debt would put upward pressure on interest rates. And that’s why we enjoyed record low interest rates while we were in office. Because we took the tough decisions to pay down that debt. So what’s happening today is inevitable. It is a natural consequence of Labor racking up debt and continuing to do so.
GILBERT:
Mark?
BUTLER:
I mean this is from a guy whose former boss, Peter Costello, handed us one of the highest interest rate regimes in the developed world. One of the highest interest rate regimes in the developed world partly because he wasn’t able to come to grips with the current account deficit in spite of the best terms of trade in 40 or 50 years. Look, the Deputy Governor of the Reserve Bank has debunked this myth that there is a connection between what we are going to need to have to get us through this recession by way of government debt, and interest rates in the market. And I also just say to Mitch, what’s your debt figure, and what is the consequent reduction in interest rates going to be? And that’s the question they simply can’t answer. People are entitled to feel very angry about what the CBA has done though. We already know that out of the 4.25% reduction in the cash rate by the RBA, the majors clawed back maybe 40 or 50 basis points and people copped that because there were higher costs of borrowing in the international market, but people expect the majors, that make very significant profits to bear their share of the load to get us through a very difficult economic period.
GILBERT:
Is it because there is no competition now? Because competition has been diminished throughout this crisis?
BUTLER:
Well I think there is competition, and we’ve made it easier for people to switch from bank to bank with their mortgage and I think as you said at the outset, there is nothing we can do to force the CBA to have a particular interest rate, but Australians will start voting with their feet if they don’t think major banks are doing their bit to get us through this recession.
GILBERT:
Ok the other issue I want to touch on today is the emissions trading scheme and the vote due in the next few weeks. It seems the government is tying the compensation, business compensation, under the renewable energy targets to the broader emissions trading scheme. Are you just trying to put pressure on these guys? Is that the idea?
BUTLER:
The very clear message we got from industry in a very serious period of consultation was that they wanted one package of measures to deal with their exposure to trade, if they were emissions intensive, one package of measures flowing from the CPRS and the renewable energies scheme. So we’re doing this, we put it out in April, it’s not new. And really the question has to be, when is the Liberal Party going to stop talking people like Malcolm Turnbull and Greg Hunt and so on when are they going to stop talking about climate change and actually put their cards on the table and do something?
FIFIELD:
It’s all about politics for this government. Linking the two issues is about trying to wedge the Coalition.
GILBERT:
It’s not hard though, at the moment, is it?
FIFIELD:
It’s not about trying to get an outcome. The ETS has become an end in itself for this government. Surely the purpose of an ETS is to reduce emissions. This government hasn’t looked at alternatives to this design of an ETS. And that’s all we’re arguing. That the legislation should be referred to the Productivity Commission. That we should see what the impact on jobs will be. We should see what the impact will be on regional areas. We should see if there is a better way of reducing emissions at a lower cost to the economy and that’s why we think we should delay a vote until after Copenhagen, and after the US determines its position.
GILBERT:
The Minister is meeting with Steve Fielding today, he seems to be sceptical about the cause of man-made carbon emissions in causing carbon emissions, climate change. She’s meeting with Penny Sackett and Senator Fielding. Have you basically given up now any chance of getting this through the Senate, if you’ve got the only person you could swing is Steve Fielding? You just simply don’t have the numbers in the upper house.
BUTLER:
Look Penny Wong is still working very hard on the cross benches but ultimately this is a package that should have the support of the other major party. It is that significant a reform to the way our economy operates and our society operates that the pressure should not come off the Liberal Party as the alternative Government to put their cards on the table and vote for a scheme that has been the subject of probably the most significant consultation phase, certainly in my memory.
GILBERT:
Do you see any potential where the Liberals could vote for the scheme, the Nationals not? Would that, how damaging would that be if you split on that issue?
FIFIELD:
Well the National Party are a separate party, we work closely together in Coalition but…
GILBERT:
So it wouldn’t be devastating if you did?
FIFIELD:
Look the National Party have voted separately to us before and I’m sure they will again. So we will reach our position and we will argue and continue to argue that the right thing to do is to delay a vote on this legislation until after Copenhagen so that we are in possession of all the facts and we can make the right decision.
GILBERT:
Mitch Fifield and Mark Butler, thanks for your time today.
BUTLER:
Thank you Kieran.
FIFIELD:
Thanks Kieran.
ENDS