Sky News AM Agenda

Subjects: PM at G20, Budget surplus, Melinda Taylor, Fairfax.

Transcript, E&OE

19 June 2012

ASHLEIGH GILLON: Let's move on to our panel of politicians now: and joining me today, the Trade Minister Craig Emerson, who's also the Acting Foreign Minister with Bob Carr out of the country, and also the Shadow Environment Minister Greg Hunt. Hello to both of you.

GREG HUNT: Good morning.

GILLON: Let's start off on some of this criticism we've seen from European leaders about the sort of lecturing they're getting from people like our Prime Minister Julia Gillard in Mexico. Tony Abbott, the Opposition Leader, had something to say about this as well a little earlier today. He delivered a speech at a breakfast meeting here in Canberra. Just have a listen to some of this:

TONY ABBOTT [CLIP]: A government that has delivered the four biggest deficits in Australian history hardly has the credentials to lecture the G20. And a Prime Minister would be better advised to actually deliver a surplus as opposed merely to forecast one before she starts giving lectures to other countries on economic and fiscal rectitude.

GILLON: We will get into the surplus deficit debate in a minute, but firstly on what Julia Gillard is doing in Mexico. Craig Emerson, do you think that's what it was: lecturing these European leaders? She was saying yesterday they should be following Australia's lead. But, of course, these Europeans don't have the luxury of a resources boom like we do.

CRAIG EMERSON: Australia's an economic success story. It is built on more than 20 years of reform, most of that implemented by the previous Hawke and Keating Governments. But we've embarked on a reform program as well. The period of the 2000s, around 2005, is described by Professor Ross Garnaut as "a great complacency", where the ball was dropped on reform. But, more recently, we're in a situation where it's true that we have some government debt: less than one-tenth of that of the major advanced countries. We stayed out of recession; Europe certainly didn't – 800,000 jobs created here while 11 million jobs were lost in Europe and North America. So, I think it's fair to say that Australia has some capacity to provide some advice on these matters.

GILLON: Do you think we do have bragging rights here, Greg Hunt? We do hear from people like the Treasurer and the Prime Minister that whenever they go to these sorts of meetings they keep getting asked 'how are you doing it in Australia?'.

HUNT: Well, we went into the GFC two laps ahead of the field and we came out barely a few hundred metres in front. What you see is that the world has been pretty underwhelmed by the Prime Minister's performance at the G20. It's about judgement; it's about how you deal with other countries and whether or not you …

EMERSON: You've been talking to world leaders?

HUNT: … try to swan into an event like this, try to lecture everybody. And the response has been, not surprising, of 'well that's strange. Aren't you the person who delivered Budget deficits of $27 billion, $54 billion, $47 billion, $43 billion?'. As Tony Abbott said this morning, the four biggest Budget deficits in Australian history, and a perfect set of nine out of nine deficits for the last nine Labor Budgets.

GILLON: Craig Emerson, Tony Abbott did go through the Budget this morning. He's accusing you again of cooking the books. We've heard that from Tony Abbott before, but he's gone through and figured out that, well, he believes, you're hiding a Budget deficit of about $12.5 billion.

EMERSON: [Laughs] Yeah, I saw that.

GILLON: He's saying that you brought forward things like the first Schoolkids Bonus payment. You've brought forward some local government financial assistance. Also talking about the NBN Co, which of course I know you don't count in those Budget forecasts when you put them together. Is your proposed surplus safe?

EMERSON: Of course. And the very idea that Treasury and the Finance Department would engage in a conspiracy to 'cook the books,' to use Tony Abbott's phraseology, is a deep insult. And what it does reflect is the deep distrust of the Coalition of the financial advisers to the Government who give fearless and frank advice. They don't cook the books. But instead of relying on Treasury and Finance, the Coalition has indicated that they won't be doing that, like they didn't at the last election. They got an accounting firm that got done for misconduct by the professional association. And I saw Tony Abbott saying 'look at us; aren't we terrific – we came up with $50 billion worth of savings before the last election.' That includes, and this is quite astonishing, that includes not spending the revenue from the mining tax on the various things that the Government had pledged to spend it on, but keeping the revenue. Now how can you abolish …

HUNT: That's false.

EMERSON: It's here. It's right here.

HUNT: That is absolutely false.

EMERSON: It is absolutely right here. Programs linked to RSPT. There's the set of them. Almost $10 billion worth of them, and they keep the revenue. Now how can you abolish the tax and keep the revenue? There it is in black and white. It's your document.

GILLON: Greg Hunt, is your….

HUNT: For a Foreign Minister, Acting Foreign Minister…

EMERSON: No you don't. You can't run away from this…

HUNT: … to come on TV and say something that is demonstrably false …

EMERSON: It is absolutely here.

GILLON: We can understand either of you at the moment, so let's move on.

EMERSON: Absolutely, it's here.

GILLON: Craig Emerson, you've said your piece here. Let's hear from Greg Hunt. You can defend that. Is this the pot calling the kettle black from Tony Abbott this morning when we know that there is a lot of doubt over the Coalition's own plans for spending?

HUNT: Well, no, there's no doubt. Let me be absolutely clear. We are the party that in government delivered 10 out of 12 surpluses. They are the party that in government has delivered nine out of nine, on either side of the Coalition government, perfect major deficits. So that's the reality of economic performance. Now going forwards, we will be making significant savings. Let me look at my own portfolio.

EMERSON: Answer the $50 billion.

HUNT: Let me look at my own portfolio. There's $10 billion in the Clean Energy Finance Corporation. There's four and a half billion dollars to come in terms of the issue of the payments to brown coal companies and generators which this Government's giving. At the moment, and this is the point that Tony was making, three and a half billion dollars is being rushed out the door, including this week and last week $250 million to what they call the worst polluters in Australia: Loy Yang Power Station, Hazelwood Power Station and Yallourn Power Station. So, as we speak each of those companies is getting, roughly, $250 million in cash, to be out the door just before the 30th of June.

GILLON: But Greg Hunt, from what I can tell, going through what Tony Abbott said today, the majority of the extra dollars Tony Abbott is talking about in terms of swapping from surplus to a deficit is actually to do with the NBN Co. The Government doesn't …

EMERSON: Not on the Budget bottom line.

GILLON: It says that this is an off-Budget item. Why should it be treated any differently, considering it is part of the debt …

EMERSON: Same with the Clean Energy Finance Corporation. By the way, in answering that question …

GILLON: We will come back to you Craig Emerson …

EMERSON: Same with the Clean Energy Finance Corporation. Same thing.

HUNT: Well what this is about is the Government dressing up as capital investment money which is going out the door which is clearly going to make a loss. There's no credible economic or business analyst in Australia who believes that this NBN is a viable proposition. And what they're doing is they are throwing money out the door. The rest of the country's going to have to pay for it. And the whole point of it surplus – and I think the Government forgets this – is to stop the borrowing. But the borrowing is going up, because they've shifted the borrowing off-balance. So, in other words, the purpose of a surplus is to stop the borrowing – but they are continuing to borrow by putting that borrowing off-balance. And that's why even the economic purpose of this sort of mythical surplus is defeated by their own actions.

GILLON: Can you guarantee, Craig Emerson, that those programs that Greg Hunt has been talking about will be something that brings back returns for the Government?

EMERSON: Of course they will bring back returns. But the National Broadband Network, which should be supported by all Australians – is opposed by the Coalition – is a great productivity-raising investment in our future, and is not in the Budget, as you've just pointed out.

HUNT: That's the problem.

EMERSON: Greg calls it a problem. They are the accounting procedures. And this is the problem: you go nowhere near Finance; nowhere near Treasury; you said you'd get all these savings to the Budget bottom line from the NBN and from the Clean Energy Finance Corporation, where neither of them contributes to the Budget bottom line. You guys don't know what you're talking about. And that's why you get these complete stuff-ups where you have the Coalition, where you have the Coalition saying that they've got $50 billion worth of savings …

HUNT: Well actually, the Clean Energy Finance Corporation has write-offs of $2bn over the Budget forward estimates …

EMERSON: … can I now finish that… includes $9 billion that is from the savings, and no revenue losses from abolishing tax. This is so fundamental, it is embarrassing. But in the response to it, all they say is 'it is false.' It's not false. It's true. And they have had two years to deal with this problem and never have.

GILLON: Look, let's just leave these accounting issues aside …

EMERSON: It's not accounting; it's about the Budget bottom line. It's about the Budget bottom line.

GILLON: Craig Emerson, the point Tony Abbott was making today, even when you leave…

EMERSON: And what's this 'off-balance' stuff, anyway?

GILLON: Even when you leave those accounting practices aside to do with the NBN and the Clean Energy Finance body, we do see that we have seen some grants brought forward, some spending brought forward, over the tune of $1.5 billion. Does that mean that your surplus is at threat? That's the basis of the complaints Tony Abbott has made today.

EMERSON: The Budget sets out a surplus, not only for 2012-13, but right through the forward estimates. The Budget figures are prepared by the departments of Treasury and Finance. We don't have the luxury of the Coalition going to a retired Mosman bookkeeper and saying 'look, add these figures up for us and we'll present them as ridgey didge.'

GILLON: When will you receive your figures, Greg Hunt?

EMERSON: And who'll audit them?

HUNT: Well according to this Government, there's still another Budget to go. So we'll frame our final figures in light of the final Budget, which I think is the only possible thing you can do. But let me give you an example in my own portfolio. The Energy Security Fund: a billion dollars is going out the door now. Suddenly, next year, it's a million dollars and then every year afterwards, a billion dollars, a billion dollars, a billion dollars. That's an example of the cooking the books. That's not about Treasury doing the wrong thing. These are decisions of Government, of the Treasurer, of the Finance Minister, of the Prime Minister. The Department has to work with a dodgy government. Not the other way around.

GILLON: Okay. I think you've both made your points on this one. We've had enough on that.

EMERSON: Remember the $70 billion black hole?

GILLON: I really need to move on. We need to get to a break. We've got plenty more to talk about. Both of you stay with us.

EMERSON: Remember the $70 billion black hole?

GILLON: After the break I promise you our politicians will be far better behaved. I'll have a talking to them in the break. Do stay with us. We'll be back with more after this.

[ad break]

GILLON: Welcome back. The Australian lawyer Melinda Taylor is still being detained in Libya. She has been now for nearly two weeks. At the moment the Foreign Minister Bob Carr has been in the region. He was on the ground in Libya for about six hours yesterday meeting with the country's Prime Minister. He emerged from those talks saying that he is now feeling a bit more optimistic about this case. This is some of what Mr Carr had to say on Sky News earlier.

BOB CARR [CLIP]: Look, I'm hopefully that a release can be secured here. I think they've just about wrapped up their investigation. I think the Libyans see an advantage in releasing the four detainees from the International Criminal Court. I've urged the International Criminal Court to give the Libyans a form of words that gives them some comfort, because I think the Court might have been a bit more thoughtful about the procedures and protocols that set up before it sent Melinda Taylor and her three colleagues into a difficult situation. And I think they might be able to expedite the process of release of the detainees by saying the right things in the right tone.

GILLON: Greg Hunt and Craig Emerson are still with me. Craig Emerson, I mentioned at the start of the show you are the Acting Foreign Minister while Mr Carr is overseas. What's the sense you get of how close we actually are to Melinda Taylor walking free?

EMERSON: I think the elements are coming together following Bob's visit to Libya and his discussions with the Prime Minister. At the centre of this seems to be a breakdown, or inadequate consultation, on the protocols that would be followed by the International Criminal Court. If those had been put in place, and it's great to be wise with hindsight, then perhaps this misunderstanding wouldn't have occurred. And so what Bob is saying is that if the ICC can effectively express some sort of form of regret or apology, that, together with a couple of other elements, might bring the right result.

GILLON: Sure. Hindsight is nice, but, Greg Hunt, do you think the International Criminal Court has a bit to answer for here, sending in people like Melinda Taylor without following those protocols.

HUNT: Sure. I want to be cautious here. I don't want to add to any difficulties. My position, and our position, is this: we do hope that Melinda Taylor can be released. She's obviously a very committed, very professional lawyer doing a difficult job for a critical body in the International Criminal Court. We would wish the Foreign Minister success. I hope that he is acting on the advice of the Department, and we presume that in good faith. My only point is having had responsibility for Australian consular matters, less is more in terms of public statements. So we would just gently caution the Government …

GILLON: Do you think Bob Carr's done too much media on this?

HUNT: … just gently caution the Government to keep it low-key. And we really wish them all success and we hope that Melinda Taylor can be released as soon as possible.

GILLON: Look, on Fairfax, I'm keen for both of your thoughts. Gina Rinehart obviously has increased her stake in the company. Do you have any problem with that, Craig Emerson? She's looking to have three seats on the board. Are you worried about the impact that will have on the papers …

EMERSON: While ever Ms Rinehart operates within the law, and I'm sure she will, she's entitled to do that. Fairfax has a proud record, and indeed a charter of independence. We would, I think all Australians, hope and expect that that independence was maintained with Ms Rinehart's desire to put, I think, three members on the board. But that's something that would need to be sorted out by Fairfax and Ms Rinehart. But I'm sure she's complying with the law and so she's free to do as she wishes. But independence is important.

GILLON: What do you make of the changes we saw announced late yesterday, and what it means for the future of journalism in this country?

HUNT: Sure. The first thing is of course that there are 1,900 job losses. So these could be printers or journalists; they could be line editors, all sorts of people from right across the spectrum. And so many of them have families and children to take care of – so that's the first concern. The second thing is that this is a difficult time for many different sectors of the economy …

EMERSON: Here we go.

HUNT: Whether it's the manufacturing sector; whether it's other sectors. So you have structural changes in media. Obviously we think that it's a terrible time to be adding additional costs, whether it's in terms of the actual printed paper, whether it's the printing processes, whether from 2014 it's the distribution process through a carbon tax. But it's this idea of right now you've got sectors that are under pressure and adding more costs is probably not the right thing to be doing.

GILLON: I'm going to let both of you carry on that conversation in the corridor because we are out of time. We need to go to the next news bulletin.

EMERSON: This is absurd to blame the carbon tax. It is absurd. George Brandis did it. You just did it now. Outrageous. Outrageous.

GILLON: Craig Emerson, Greg Hunt. Thank you for your time on AM Agenda. We do appreciate it, and we'll be back with more news after this break.

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