21-April-2011
Portfolio Media Releases
STEVE CANNANE, PRESENTER:
The Treasurer appears to be softening up voters for a tough budget, saying revenues will be down due to natural disasters and the benefits of the mining boom not flowing through to the rest of the economy. For the Opposition's response, I spoke to acting shadow treasurer Andrew Robb a short time ago.
Andrew Robb, welcome to Lateline.
ANDREW ROBB, ACTING SHADOW TREASURER:
My pleasure. Thanks, Steve.
STEVE CANNANE:
The Treasurer says tax revenue will be down at least by $4.5 billion this year and that natural disasters have had a real impact on the budget bottom line. What's your response to that?
ANDREW ROBB:
I felt it was almost embarrassing today. We just saw another litany of excuses, new excuses, today. Not only were the floods the major reason, and Japan, but in an extraordinary way, he rolled out the mining boom as a reason for revenues being down. This is a Treasurer who, in a sense, is blessed with the best terms of trade in 140 years, and yet still can't deliver a surplus and is looking again at excuses for not being able to balance the books.
STEVE CANNANE:
On the issue of the mining boom, he says this time it is different, this time round. He says that there's a higher dollar and that's squeezing companies and that's affecting company tax. He says there's different issues with the property market, the share market, that's affecting capital gains. Economists have backed that today. You don't agree with that?
ANDREW ROBB:
No - well, all of these factors have an impact on revenues. I don't disagree with that. But some of those are problems of their own making. Like the mining boom has pushed up the Australian dollar, along with what's happening in the US. It's a relative business. But the Government has been in the market for $100 million a day borrowings, is still there for another 12 months, has been for 12 months. They're every day there competing for Australian dollars with small business and other businesses. As a consequence, they've put pressure themselves on interest rates, and that has made some contribution to the exchange rate. So, most of these issues he talked about today, if the Government had lived within its means, he'd be balancing his books today. But they have wasted money like no government ever has before.
STEVE CANNANE:
So you're arguing that the Government's fiscally reckless, but why does the Coalition continue to block measures that would help bring the budget back to surplus quicker - things like the private health insurance rebate that would bring in $2.1 billion over four years?
ANDREW ROBB:
Well, the private health sector - I mean, it's now doing 56 per cent of all operations. It's a fundamental complement to our public health sector. Private health insurance is something the Government wants to get rid of, ultimately. That's their real agenda. This is an anti- ...
STEVE CANNANE:
But aren't they just trying to means test it?
ANDREW ROBB:
No, it's an anti-productivity measure. We want as many Australians as possible to take responsibility for their health costs and their health expenses, and by means testing it, you are discouraging Australians from doing that and the fact of the matter is that most of the things we have blocked are things that, you know, should not be stopped by the Government. We need to stop the measures they're taking. Yet at the same time they have - they have wasted tens of billions of dollars on the Building the Education Revolution, on the pink batts, on a lot of the green programs, on endless programs. And if they hadn't have wasted all that money, if they hadn't have spent the amount of stimulus money, wrote out cheques when they weren't needed, if they hadn't done all that, they would actually now be close to surplus.
STEVE CANNANE:
Well Labor also wants to scrap the chronic disease dental plan, which would save $3.1 billion over four years, but the Coalition opposes that cut. Are you trying to have it both ways here?
ANDREW ROBB:
No, no - no, we're not. We're saying that this government has borrowed and borrowed and borrowed and spent and spent and spent. We're not talking about a million here and a million there. We're talking about tens of billions of dollars. And if they had lived within their means, like millions of Australian households are forced to do, then none of these problems they would confront, and they would be making the most of the mining boom. There's not one dollar of the mining boom that's been used to pay off the debt. We've still got $100 billion debt, $6 billion interest repayments each year, that's six new international level hospitals each year. And it's only because they have wantonly wasted money hand over fist.
STEVE CANNANE:
Penny Wong put out some figures over the weekend where she said if the Coalition was in government you'd be delivering a deficit every year of the forward estimates. And she says not only have you blocked more than $5 billion worth of saving in the Senate, but also you've voted against $8 billion of savings in the Parliament that have already gone through.
ANDREW ROBB:
If we'd been in the Government, we wouldn't have spent $85 billion in stimulus money.
STEVE CANNANE:
How much would you have spent in stimulus money?
ANDREW ROBB:
Well we sought to block a large part of it. The first $10 billion - first $10 billion, we supported. It was important for confidence. By the time they even passed the second tranche of stimulus money, Australia was coming out of it because of the monetary policy had worked and the floating exchange rate had worked, had done its job. And yet they came in and they've spent it in a most irresponsible fashion. We would never have got anywhere near the debt they've got, we would never have built the deficits they have. So for Penny Wong to suggest, you know, that we wouldn't be in surplus for many years, it's just nonsense. It's absolute nonsense. And she knows it. They are out of their depth.
Wayne Swan today was an embarrassing performance. This man, in my view, is not up to the job. I've now been to 42 boardrooms since I've had my responsibility some 10 months ago. Most of them have never seen him, never, and he's the Treasurer of the country. And those that have said to me that this fellow is out of his depth, that he's a wholly-owned subsidiary of Treasury, he does not understand the problems of business and you're seeing it every day with the way in which they are misspending taxpayers' dollars and the way in which they're borrowing and taxing.
STEVE CANNANE:
Okay. I want to move on to the carbon tax, and you've said that carbon tax will lead to hundreds of thousands of job losses. What's your evidence of that?
ANDREW ROBB:
Well, last time, when we had the Emissions Trading Scheme, Access Economics did a major regional study. They identified 126,000 jobs that would be lost in regional areas alone, and bear in mind this tax will affect ...
STEVE CANNANE:
But that study was done before the negotiations were done with the Coalition to bring in more compensation, weren't they?
ANDREW ROBB:
It was done, but there was still massive compensation. We don't know what the compensation will be. And even if it's ...
STEVE CANNANE:
But isn't it out of date if it was done before the negotiations for compensation?
ANDREW ROBB:
Yeah, but the compensation didn't make that much difference. I mean, ...
STEVE CANNANE:
And it's 126,000 jobs projected over 12 years, wasn't it?
ANDREW ROBB:
Yeah, but it's tens of thousands of jobs.
STEVE CANNANE:
So that's about $10,000 - sorry, 10,000 jobs a year over 12 years projected into the future out of 1.5 million jobs growth?
ANDREW ROBB:
That was in regional areas alone, right? Bear in mind that this tax will impact on hundreds of thousands of manufacturing companies, mid-tier manufacturing companies, who at the moment are either competing against imported products or are trying to export. Now, if all of those - some of those have electricity bills $20,000, $30,000 a year. If you materially add to the cost of their electricity and their water and so many other areas of their business, they're not competitive, right? So, we are talking about hundreds of thousands of jobs across the economy, and yet Julia Gillard and Wayne Swan ...
STEVE CANNANE:
In one year, two years?
ANDREW ROBB:
Well, over a period of time, but they're still real jobs and they're still real businesses. And they're talking about new jobs. We've seen in Spain and we've seen in Germany and we've seen in Portugal that they have now done comprehensive studies about the money they have spent in green areas and for every job that's created in a green job, they have lost two or three jobs in traditional areas. So, this is misleading the public writ large, and it will take many years, many years for these so-called "green jobs" to materialise, and all the while, the things we do best as a country, resources and energy - we're built on an effective and very successful resources and energy sector. The things that we do best, we're going to tax the hell out of and get rid of and see lots of those industries disappear.
STEVE CANNANE:
Wayne Swan today said that there is hysterical scare-mongering coming from vested interests who don't really care about the long term. What do you say to that?
ANDREW ROBB:
I just say he's absolutely wrong. This man unfortunately does have no sense of business. There is a view in the Labor Party and in other areas of Canberra that anyone who's making a quid, anyone who's in business, are ripping off the system. It's sort of an ingrained attitude of mine that I have witnessed over a long period of time. This is the attitude they are bringing to the table, that if anyone says, "You're doing our business a damage, you are making it more difficult in a highly competitive world market. We're going it alone with this tax, none of our competitors are, and for you - and for us to say that's going to hurt us, that, you know, we're misleading, we're looking to line our own pockets, all the rest of it," this is a fundamental misunderstanding. It is the reason we are in such a mess. Labor does not know - understand how to manage money. And that is - they're bringing that same attitude to bear when they run this carbon - this carbon tax was a political decision; it was not an economic or environmental decision.
STEVE CANNANE:
Last week you attended the Menzies Research Centre for their productivity roundtable. What do you think needs to be done to increase Australia's productivity?
ANDREW ROBB:
Well, we need very clearly to introduce a lot more flexibility into the system. We need to encourage innovation. We need so much more autonomy, for instance, for universities. And a lot of those activities which are now drowning in reporting requirements and regulations, even down to childcare centres and aged care homes - all of these areas of the economy, they all make up, you know, the profitability and the economic strength of an economy. We're seeing across the board this choking effect of mountains of reporting requirements. And, really since ...
STEVE CANNANE:
If I can pick up one theme that came up at that conference, and that's former Leighton's boss Wal King, he gave a speech and he said, "Under the Fair Work Act unions have the legal backing to insert clauses into enterprise agreements that place restrictions on the use of contract labour," and he's worried that's going to lead to a wage blowout in the construction and mining industries. Do you agree with him?
ANDREW ROBB:
Well, if that does in fact occur - I mean, these are the things that Julia Gillard and Wayne Swan and others said would not occur under the Fair Work Act. Now they made this Fair Work Act. They made a whole lot of commitments about flexibility in the workplace, about the opportunities for businesses to run their own concerns without the interference of unions.
STEVE CANNANE:
So if Wal King's saying that, is it time to dismantle the Fair Work Act for the sake of Australia's productivity?
ANDREW ROBB:
No, no; he said the way in which it's heading, there will be this major constraint on those in the construction industry, which will in turn add enormous costs to the construction business.
STEVE CANNANE:
And he said that and lots of other people said to you that they had criticisms of the Fair Work Act. So, are you going to dismantle it?
ANDREW ROBB:
Well, what we've said very clearly is if we're in government, we would have not have made any changes for the term, but we would spend the three years looking at how it's working. Is the Fair Work Act working the way in which they said it would? Now, we're not in government, so we can't make any changes in any event, but we are certainly spending the three years - these sorts of warnings are starting to increase in many areas of the economy. We're listening to this.
STEVE CANNANE:
But what if it's in the national interest to act earlier than that three years?
ANDREW ROBB:
Well we - it's not in our capability. We're not the Government. We weren't elected. So, we will - and we've said very clearly in all of those areas, if there are serious areas of concern about the way in which the Fair Work Act is now starting to seriously compromise the profitability of businesses and jobs, then we will act and we'll take that to the people at the election. They'll know upfront what it is we would seek to change within the Fair Work Act.
STEVE CANNANE:
Just finally, Barnaby Joyce this week flagged running against Tony Windsor. What did you make of that?
ANDREW ROBB:
Oh, well, I think - I've got an enormous amount of time for Barnaby, to be honest. I do think he would in any Lower House seat make an enormous contribution, and I think in that seat in particular he, having come from that area, I think he would far more closely represent the interests of that electorate than the current incumbent.
STEVE CANNANE:
What if he wins, takes over the National Party leadership and wants his old Finance portfolio back?
ANDREW ROBB:
All of this - if he takes over the leadership, he's entitled to whatever he wants. But all of these things are hypothetical. I mean, Warren Truss I know is firmly ensconced. I see them working together. Barnaby's got enormous respect for Warren. I think Barnaby is just looking to make the best use of his skills. This would be a sensible move and it will be another further advantage to the Coalition if Barnaby gets in and wins that seat.
STEVE CANNANE:
Andrew Robb, thanks very much for coming in to Lateline tonight.
ANDREW ROBB:
My pleasure.