26-April-2009
Portfolio Media Releases, Infrastructure, The Economy, Immigration and Multicultural Affairs, Emissions Trading Scheme
Topics discussed included government mishandling of the economy, infrastructure spending, the building up of unsustainable debt, asylum seekers and the ETS.
BARRIE CASSIDY, PRESENTER: Now to our studio guest Andrew Robb, who is the Shadow Minister for Infrastructure and the shadow minister assisting the leader on emissions trading. Andrew Robb, good morning, welcome.
ANDREW ROBB: Thanks very much.
BARRIE CASSIDY: And the Prime Minister says along the same lines that this is the toughest Budget in our lifetime to frame. Do you accept that that is the degree of difficulty ahead for the Government?
ANDREW ROBB: It's a very tough environment, but I'd just say to you Barrie that the recession that Wayne Swan was talking about will be much deeper and longer in Australia because of the unsustainable debt that they have already built in the last few months.
We are back, we are back in the Whitlam era and it took, you might remember, at least 25 years for governments to correct the mistakes and the debt and the, you know, the outrageous spending that went on in those Whitlam years. We're back to that sort of era.
BARRIE CASSIDY: But the IMF doesn't suggest that the recession in Australia is going to be disproportionate with the rest of the world.
ANDREW ROBB: Barrie, we've had the experience here ourselves. I'm just saying to you that because of unsustainable debt, we've already seen, we're already seeing a big threat to our AAA rating. We're seeing interest rates then will go up on the back of that. We've got a situation where private investment funds, billions of dollars of them are going into Government bonds to pay for the debt, to pay for the handouts when that money could be going into businesses and creating jobs and sustaining jobs.
And bear in mind that that debt already that's been built, the first $60 billion in the next three years of Government revenue will go to paying interest on the debt, the $200 billion to $300 billion of debt that this Government is racking up.
That's money that could be spent on all sorts of significant infrastructure projects and could sustain hospitals and education and pensions and all the rest. It will go on interest payments.
BARRIE CASSIDY: Well when you talk about infrastructure spending, how do you understand this third stimulus package that Kevin Rudd talks about? Do you think he has in mind more handouts or is that a reference to the infrastructure package that we already know about?
ANDREW ROBB: Well I see it's being announced today, an infrastructure package. I assume that that in many respects is the third stimulus package. In my view and our view, what has been announced today, which is money actually that the Howard Costello Government...
BARRIE CASSIDY: That's $26 billion, the states have now given the go ahead for, for road and rail essentially.
ANDREW ROBB: That's right. It's, that $26 billion is a lot less than it could have been if it was, if other, another $80 billion hadn't been spent since the last Budget.
But that stimulus package announced today, that infrastructure, that major infrastructure spending, that should have been the first stimulus package. That should have happened seven or eight months ago, like they did in China. They spent all their stimulus on major infrastructure projects.
That should have been the first stimulus package. And then I suspect there shouldn't have been another second and third. Certainly there should not have been billions, tens of billion dollars of handouts, $900.
People are out there totally bemused. Why are they getting $900 and we're facing one of the biggest economic crises in our history? People cannot understand...
BARRIE CASSIDY: Though Anthony Albanese argued this morning that for every dollar that they've spent on the cash splash they're spending $2 on infrastructure. Doesn't that suggest they have got their priorities right?
ANDREW ROBB: Barrie, they've spent tens of billions of dollars already on the cash splash, plus they've spent a lot of money already on minor infrastructure. You take, it's lovely to have another school hall. Who can say it's not a good thing? But it's how you pay for it and whether you can pay for it, whether you can afford it.
A school hall, $14 billion on school halls with a multiplier of 0.2 of one per cent, when if they'd spent the same money on ports and roads and rail and other major productivity projects, you get a multiplier of 1.5, 1.6. So when we come out the other end of this recession, whenever that might be, we get turbo charged. You know, we rebound quickly and strongly.
Whereas they're wasting the money. We're laden with debt. We've now got up to $300 billion of debt, massive interest payments, tens of billions of dollars a year coming at us, and this Government is putting a huge leg rope on this economy. The recession will be deeper and longer because of the misguided spending, spending, spending, borrowing, borrowing, borrowing of the Rudd Government.
BARRIE CASSIDY: At least though this $26 billion, you talk about the multiplier effect then you think this $26 billion is well targeted even if it's a little late?
ANDREW ROBB: This should have been the first thing they did. In fact it perhaps should have been the major focus of any government spending should have been on these major infrastructure projects, as long as they've been chosen properly. We're yet to see any transparency about how these things were chosen. But this is where the money should be spent.
BARRIE CASSIDY: Now talk this morning of an increase in the unemployment benefit in the Budget. Do you think that's warranted?
ANDREW ROBB: Well you know, we're in difficult times so again, if any money was to be spent it would be to help people who are affected directly by this circumstance.
The trouble is Barrie the options now are very constrained. The Government is, by its own admission, looking at $300 billion of debt. And you know, we have lived beyond our means as a country; most of the developed world has. And there has to be inevitably an adjustment. People understand that.
BARRIE CASSIDY: Yeah but nobody feels the effects of the global financial crisis more than the unemployed, so would you support the Government if they were to increase the unemployment benefit?
ANDREW ROBB: Well I don't know what they're going to do with it, how much they might anticipate, what else will be sacrificed as a result of it. Barrie you need to see these things in its totality.
All I'm saying is that the capacity for government to look after those people has been materially undermined by the cash splash, the money, the $900, the tens of billions of dollars that have been spent unwisely and the debt that's been built up that's now going to hang over our economy and our kids for generations.
BARRIE CASSIDY: And what about the deficit? What is a reasonable timeframe to work our way back into surplus? It's been suggested the Government might do something different this time around and go beyond four year projections. Now that implies, of course, that it will take many years to bring the budget back into the black.
ANDREW ROBB: Barrie, the Government's got no idea on it. This is, it's sort of puerile, the responses, you know. When we start to trend back up, there'll be more taxes come in and it'll pay it off.
I just say to you again, when you get to unsustainable levels of debt, just like in your own family situation, if you get unsustainable levels of debt, you know, it's very hard to get back on top of that.
This will, the Japanese did this in the 90s. They've still got 150 per cent of GDP as government debt. It is still hanging there like a hangman's noose over their economy. They can't get out from under.
This recession could go on for three or four or five years. Who knows? What have they done? They've fired all the ammunition in the first shot, built up huge debt. And I don't think they've got any idea of how we're going to get out of this thing and...
BARRIE CASSIDY: But a deficit is inevitable. Surely you accept that? There has to be some sort of deficit. What do you think is a reasonable timeframe to work back into a surplus?
ANDREW ROBB: Well again it's what measures you take. We've got to get back into surpluses as soon as we can. But if they continue to spend and rack up debt which is unsustainable then it constrains our capacity to get back into surplus.
We've got to be prudent. This is the thing, be measured and prudent. Who knows what's coming in the next two or three years? What if this does go on and get deeper and more difficult? If we get over 10 per cent unemployment, you know, what provisions have they made?
They've already committed us now to tens of billions of dollars of interest repayments before we even know what's happening next year or the year after.
BARRIE CASSIDY: Yeah but surely the fact they are talking about going beyond four year projections does give an indication that they are going to lay this out chapter and verse in the Budget. They will give some sort of a roadmap to demonstrate how they'll get back into surplus.
ANDREW ROBB: Well again, it's, they're very good on vision, hopeless on delivery. And the moment. They'll make projections about growth and taxation and all the rest over the next five, seven, eight years, who knows? Barrie, it's meaningless. What is important is what actions they take now as a Government to deal with the problems of the moment. Their instinct is to borrow and spend. It's a bad instinct. It's putting us into deep hock as a country and we're going to pay for this and our kids are going to pay for this. It'll be 20 years, 30 years to get ourselves back into some sort of financial order.
BARRIE CASSIDY: On climate change Penny Wong says if you block their emissions trading legislation you'll leave Australia exposed as the pariah nation at the Copenhagen summit.
ANDREW ROBB: Barrie this is just ludicrous. We will leave ourselves as a pariah nation if we introduce a scheme which is deeply flawed, which costs tens of thousands of jobs in the middle of the biggest economic meltdown in 80 years, and if it doesn't do anything about CO2 emissions.
And that is the problem with the scheme they've got on the table. It meets none of the objectives that they laid out. It doesn't sustain the strength of our economy, it costs jobs and it does nothing about CO2 emissions.
We'll show bad leadership if we bring in a flawed scheme which the rest of the world looks at and says this is not the way to go. And that's where we are at the moment. You've got even people like...
BARRIE CASSIDY: So when will you add something seriously to the debate and set your own targets?
ANDREW ROBB: Well we have already added some very serious elements. There was a speech Malcolm Turnbull gave in late January which talked about the enormous capacity to do some complementary measures, even before you get the scheme properly finalised.
BARRIE CASSIDY: He did talk about that, but he hasn't set targets and you had promised that targets would come after the Garnaut Review.
ANDREW ROBB: He did in that, he did in that speech identify 150-million tonnes a year that we can get with complementary measures in soil carbon and in better energy efficiency in the commercial building sector, a whole range of areas which are not in the Wong scheme, not in the Rudd scheme, right.
So we will, once we've seen the results of this Senate inquiry, we will lay out an alternative to what the Government's got on the table.
But they've got the onus on them. They've got the legislation on the table to address the very serious flaws that have been identified by all sides of the argument. I don't know anybody who supports this scheme other than Penny Wong and Kevin Rudd. Even many members of Caucus are desperately unhappy with the nature and the impact that this scheme will have.
BARRIE CASSIDY: And you talk about Malcolm Turnbull getting there by alternative measures. Could it be then that in the end when you do set a target, it could be higher than the Government's target?
ANDREW ROBB: It could be. I mean I think there are things we'll at least do as well as the Government, I can tell you that. On targets we can at least do as well as the Government without putting, you know, tens of thousands of jobs in jeopardy and making some progress and showing, giving some capacity for business to maintain their balance sheets so they can invest in new technology to lower CO2 emissions.
That's not going to happen with this flawed scheme that the Government's got on the table at the moment.
BARRIE CASSIDY: Is the Opposition close to announcing a return to temporary protection visas?
ANDREW ROBB: Barrie there's an interesting debate on this issue. In my view the onus should be wholly and solely on Kevin Rudd as to what he will do now to correct the fact that he has gone soft on people smugglers. That's not me saying that. That's the Indonesian ambassador; that's the Australian Federal Police; it's the head of the Office of International Migration. It's even the illegal migrants saying this Government has gone soft on people smuggling.
BARRIE CASSIDY: Yes but there's an onus on the Opposition as well. You can't simply criticise without putting up an alternative. So the question is, temporary protection visas, do you need to go back to them?
ANDREW ROBB: Barrie I have not heard one journalist ask Kevin Rudd what is he going to do. The fact of the matter is...
BARRIE CASSIDY: Well that implies though he's comfortable with his policy.
ANDREW ROBB: No but, hang, hang on, hang on. Look, well, he, what - people are dying. You look at the boat this morning in the paper of the latest arrivals last night. That's a death trap. It was filled to the gunnels with people. It was just a disgrace.
Now those boats are coming now. I understand there's dozens of them in prospect.
The fact of the matter is Barrie, we went to the last election with a policy that worked and it didn't put lives at risk...
BARRIE CASSIDY: So say now then that you would return to that policy.
ANDREW ROBB: No I didn't say that...
BARRIE CASSIDY: No but I'm inviting you to say that.
ANDREW ROBB: No I'm saying it was a policy that worked and it also had the support of our full party room.
BARRIE CASSIDY: Well then why wouldn't you return to it in government?
ANDREW ROBB: Well because the Government has made a whole host of changes, not just temporary visas. It's the Pacific solution, they've reduced funding by $50-million to surveillance and they made changes to the rights of people coming here. Now they made changes on a whole host of fronts.
His job now is to tell us, tell the community what he will do to remove the fact that he has gone soft on people smugglers and now we have the whole industry up there, all this people smuggling industry which has been re-engaged and is now looking to send many people into great peril on their way to Australia.
BARRIE CASSIDY: But if you reintroduce temporary protection visas that would split your party down the middle, wouldn't it?
ANDREW ROBB: Barrie, I'm not going to, it's not our issue. People are dying and people are dying now. We won't be in government for at least 15 months. The issue must be dealt with right now and Kevin Rudd must get on with and address this issue. He is putting the lives of these illegal migrants in great jeopardy. Already, people have died.
We had a policy that worked. The onus is on him to get back to something that will also work.
BARRIE CASSIDY: Okay just finally, another book on the Howard years coming out this week and another Peter Costello appearance. He'll be launching the book. You could do without that?
ANDREW ROBB: It's the pain of Opposition I'm afraid Barrie.
BARRIE CASSIDY: What, Peter Costello appearances?
ANDREW ROBB: (Laughs) No, no, the endless speculation about our circumstance. Look, you know, we've got a situation where we're 18 months into Opposition. We've got work to do. We've got the Government splashing money around. We've got a global crisis on our hands. So the people naturally gravitate around the government of the day. We've got to work through all those issues. But I'm very confident we will be very competitive at the next election.
BARRIE CASSIDY: Thanks for your time this morning.
ANDREW ROBB: Thanks Barrie.
The interview can be viewed in full at http://www.abc.net.au.insiders.