Subjects: Griffith by-election, car industry, unemployment, National Heavy Vehicle regulator, industrial relations, Paul Howes, Hawke-Keating era, Infrastructure Australia, Qantas, second Sydney Airport, infrastructure policy, Royal Commission, Labor reform.
PETER VAN ONSELEN: Welcome back. You’re watching Australian Agenda where we are joined now by former Deputy Prime Minister, Anthony Albanese. Welcome to the program.
ANTHONY ALBANESE: Good to be here.
PETER VAN ONSELEN: I don’t mean to insinuate that you are out of politics because you’re not. Which leads me to my first question, I guess. This time last week we were talking about the Griffith by-election and Labor had retained the seat, just. That said, the most interesting take out of the night for me was when I was watching the reaction as the new member, Terri Butler, was thanking the various people for their support and there was a cheer for Bill Shorten. There was a louder cheer for Kevin Rudd, and then there was a far, far louder cheer when she also chose to thank you. That goes to the party membership I guess and the support you had in the leadership showdown.
ANTHONY ALBANESE: Well, Terri Butler too is someone that I’ve known for a long time. I thought that she was a great candidate and she’ll be a great local member. I was actually up there launching – I launched her pre-selection campaign last year and –
PETER VAN ONSELEN: But Bill Shorten was up there a lot as well.
ANTHONY ALBANESE: – campaigning with her.
PETER VAN ONSELEN: I mean the crowd reaction, you can’t have not noticed?
ANTHONY ALBANESE: I think on that night what I noticed is that everyone got a cheer and it was a very good outcome for the Labor Party.
PAUL KELLY: If we just shift to the debate of the week, the big debates on the car industry. As far as Labor is concerned, does it recognise that this $30 billion subsidy equivalent given to the industries from governments since 1997 essentially has been an unsuccessful policy?
ANTHONY ALBANESE: Well, what we recognise is that we have a government that promised to create one million jobs over five years and what we’ve seen is 63,000 job losses in just five months.
What I found extraordinary wasn’t that there was a debate about industry assistance, you expect that.
What I found extraordinary was that Holden were almost goaded into leaving Australia both by Joe Hockey on the floor of the Parliament and by Warren Truss in his extraordinary letter to Holden.
PAUL KELLY: But Holden said the business model didn’t work any more. Isn’t that correct?
ANTHONY ALBANESE: Well, they said different things at different times. Given they are leaving you’d expect them to be justifying their corporate decision.
But what I know is that the impact of that has led, of course, into the job losses that will occur at Toyota.
It’s not just about the direct jobs; it’s also about the component sector.
So we’re talking about tens of thousands of jobs.
Now, I don’t argue certainly that industry won’t restructure, and of course we are living in a globalised economy.
But it is a matter of looking at a case by case basis. It is a matter of government working with industry and unions.
PETER VAN ONSELEN: But what’s the bottom line here though, Mr Albanese? I mean would the car industry, in your opinion, have been saved if Labor had won office? Because the letters from the bosses of the car industry, the two that have left, suggests otherwise, but some MPs suggest it would still be open. What’s the reality?
ANTHONY ALBANESE: Well, what you can say is that the on the record correspondence as well as the private briefings that I had, for example, as Transport Minister with executives in Holden and Toyota, would suggest that they weren’t planning to leave at the time that we were in government last year.
PETER VAN ONSELEN: So they are gilding the lilly now when they, in a sense, suggest otherwise?
ANTHONY ALBANESE: Well, I’m not casting aspersions on them. I’m saying that you expect companies to put out an argument for the time. Given they’ve made the decision that they’re leaving, it’s not surprising that they’re putting out an argument for that.
ADAM CREIGHTON: Is that rather absurd to blame the current government for the present rise in unemployment, given most economists would say that the employment rate is the slowest of all the indicators to catch up with present settings and so the changes that the previous government made in 2009/2010 they are finally bearing fruit in the labour market?
You know, For instance, we saw the unemployment rate fall to 4% in early 2008, the lowest it’s been for a long time and that was, some would say, largely because of the dreaded Work Choices. And then of course there were subsequent changes made, the Fair Work Act, and now we’re now seeing the consequences of that.
ANTHONY ALBANESE: Look, what we’ve seen is that employment growth and economic growth have been most successful in my view when you have a cooperative relationship. I noticed the discussion that took place before about the Hawke and Keating eras. They were successful, you did have reform. I’m a supporter of microeconomic reform.
Just this week National Heavy Vehicle regulator came into being, something that’s been covered by The Australian, not many other places. Thirty billion dollars of benefit to the national economy over 20 years – negotiated out through industry, through the state governments making sure that we reduce that regulation and get that productivity benefits.
So I’m a supporter of change, but you need change to be negotiated through in a cooperative manner. That’s a lesson of the Hawke- Keating era – microeconomic reform, productive benefits done in partnership with the unions and with industry.
PAUL KELLY: Well, let’s take that up. I mean Toyota has been very critical of the workplace relations system in public. They were negotiating to change their enterprise agreement before the final decision.
Does Labor recognise that there is a problem of sorts with the IR system that needs to be addressed?
ANTHONY ALBANESE: Well, Labor certainly recognises that we need a cooperative IR system.
And when it comes to the automotive sector, we’ve had circumstances whereby unions have agreed on a whole range of measures at each of the manufacturers over a period of time, including, effectively, wage freezes, something that hasn’t applied in my business, politicians, or your business in terms of the media.
So unions have shown a preparedness to support jobs and to be cooperative.
PAUL KELLY: But they were resisting this in the case of Toyota. I mean this became a real issue. Toyota wanted to vary its enterprise agreement in order to improve conditions and the unions resisted that. So what’s the judgment do you make of union behaviour in that case?
ANTHONY ALBANESE: Well, those negotiations were continuing to take place. What I know is that in terms of the automotive sector I think the unions had shown a preparedness (to co-operate) and a number of very specific examples, including a wage freeze agreed to by the unions, and that is a pretty extraordinary circumstance, and that had been agreed to in a number of cases.
PAUL KELLY: Well, can I just come back to the core question. The impression one’s got from Labor leader Bill Shorten this week is this is all the problem of the Abbott Government.
There’s no need to review again or take a fresh look at the IR system. Is that Labor’s position?
ANTHONY ALBANESE: Well, what Bill Shorten’s done is hold the government to account.
PAUL KELLY: I know.
ANTHONY ALBANESE: And that is the job of an opposition particularly in this stage in the cycle.
PAUL KELLY: But in policy terms?
ANTHONY ALBANESE: Well, in policy terms Paul, what we have is there is a mob who are there now who were in opposition just a little while ago who said that they wouldn’t tinker one jot with the IR system. That was the platform in which –
PAUL KELLY: Sure.
ANTHONY ALBANESE: Every time: “Dead, cremated, buried’’. All the slogans came out.
PETER VAN ONSELEN: But in fairness they said that they weren’t going to bring back Work Choices. But they did take a policy to the last election which incorporated quite a bit of change to the Fair Work Act, just not legislative change.
ANTHONY ALBANESE: Well, they wanted to make sure that industrial relations was not an issue.
PETER VAN ONSELEN: Sure.
ANTHONY ALBANESE: They wanted to make sure after the disaster that was Work Choices that they argued the case that there wouldn’t be significant change in the system.
Now the Fair Work Act was passed through the Parliament.
It has, within it, a lot of flexibility in terms of a preparedness, a framework for negotiation and, indeed, if you look at the decisions of the Fair Work Commission, a range of the decisions I don’t think can be said to have been pro-union.
They have been, I think, fair and balanced in the outcomes.
PAUL KELLY: Well, what about Paul Howes? I mean he’s basically belled the cat here. He’s basically said: “We’ve got big problems with the IR system.” He’s right, isn’t he?
ANTHONY ALBANESE: Well, what Paul Howes has spoken about very specifically is some sectors that in some areas of the economy we’ve had some significant wage increases due to the old demand and supply operating.
PAUL KELLY: But we’ve just lost the car industry. We’ve just lost the car industry. Surely we’ve got to go back to the drawing board?
ANTHONY ALBANESE: Paul Howes has certainly not said, certainly not said – and I’m a friend of Paul Howes – and he has certainly not said: “We’ve lost the car industry because of actions of the trade union movement.”
PAUL KELLY: No, no, that’s not the issue. That’s not the issue.
ANTHONY ALBANESE: Well, that was the suggestion, Paul. And, with respect, he has certainly not said that.
PAUL KELLY: But of course. But I mean the question is though, given that Toyota was very concerned about the IR system, whether we need to review the IR system?
ANTHONY ALBANESE: Well, I support a fair and balanced IR system. That’s what I support.
ADAM CREIGHTON: Just on the IR system just more generally. Is it still reasonable that the union movement has such a privileged position in the industrial relations framework given that the share of the workforce that it actually represents has fall from about 40% to 13%?
ANTHONY ALBANESE: Well, if you look at the way the system works then you don’t get represented by trade unions in the Fair Work Commission in terms of a dispute unless you are a member of the union, unless you make that decision.
In terms of automotive sector, of course, it’s a highly unionised workforce and that’s not surprising given the nature of the work.
What’s happened, of course, is that Australia is an economy in transition; the big growth has been in the services sector.
The services sector tends not to bring 400 people together on the floor of an institution. The big growth has been in individual companies, self-employed people, the growth in terms of the way that services are delivered through contract.
It means that it’s not surprising that the unionised workforce fall.
PETER VAN ONSELEN: In light of all of that, do you think that modern Labor is living up to the legacy of the Hawke-Keating era?
ANTHONY ALBANESE: Look, I think certainly. I’m a great fan of the era. I believe that modern Labor has to constantly reform and has to constantly put forward both in terms of internally but also externally.
PETER VAN ONSELEN: It’s doing it internally, but is it doing enough externally? That’s really where I’m getting at here; about this idea of where Labor is going in relation to where it was taken by the Hawke-Keating period.
ANTHONY ALBANESE: Well Peter, I do recall as someone who’s just a little bit older than you – but maybe Paul can back me up here – that at the time of the Hawke- Keating loss in ’96, at this stage in ’96 you didn’t have the same conservative commentators like Peter Reith saying and Co saying: “Oh, the golden era, the Hawke-Keating government.”
They were saying it was terrible. They were saying there was no reform. And that’s what we’re getting now.
Have a look at the reforms that we did in government. I used that example. I also use the example of the creation of Infrastructure Australia on my watch which, at the moment, the current government is trying to undermine its independence.
You’ve had not just me saying that but Infrastructure Australia itself, through its coordinator Michael Deegan, and importantly institutions like the Business Council of Australia, the Urban Development Institute, all saying this legislation is flawed.
It’s about bringing back pork-barrelling rather than proper cost-benefit analysis to projects. Very important analysis being undertaken and the government found wanting, wanting to go back to the old National Party system of just funding roads on the basis of political decision-making.
ADAM CREIGHTON: Many of the reforms under the Hawke-Keating government involved the government doing less rather than more. I’m just wondering what the previous Labor government – the Rudd-Gillard government – did that entailed government doing less rather than more.
ANTHONY ALBANESE: Well, I just gave you one example of national transport regulators. That replaced eight separate institutions, laws with one for maritime –
ADAM CREIGHTON: That’s just a centralisation, isn’t it? That’s not freedom.
ANTHONY ALBANESE: Not at all. Not at all. Indeed the heavy vehicle regulator is based in Brisbane. The rail regulator is based in Adelaide. The maritime regulator, somewhat perhaps ironically, is based in Canberra.
But in terms of the system, it certainly isn’t about centralisation. It’s about uniformity.
Because with a single national economy – more and more we need to break down these structures. Infrastructure Australia was about that as well. We had measures such as uniform public private partnership guidelines. We had consistency in …
ADAM CREIGHTON: It just sounds like regulation though, in fairness. This is just all regulation.
ANTHONY ALBANESE: No, no. It’s about removing regulation. If you’re a company and you wanted to start up in Australia in infrastructure, when I became the minister and you wanted to operate in Queensland, you had to get a whole series of approvals.
Then if you wanted to do a project in Sydney, you had to go through it all again.
We’ve gotten rid of all that. That’s about getting rid of regulation and getting rid of red tape with the benefit of $30 billion to the economy over 20 years.
PAUL KELLY: I wonder if we can go to Qantas. Given that Labor opposes amendments to the Qantas Sale Act. What does Labor think is the best way of helping Qantas at the moment and, in particular, in general terms, what’s your response to the idea of some form of debt guarantee?
ANTHONY ALBANESE: Well, we of course aren’t the government so we await the government’s decision before we comment on it.
What we have said though is that we will be constructive. We have said that there are particular circumstances in terms of what Qantas finds itself in.
That means that there is, in my view, a case for some form of government support.
That’s not government paying cash to Qantas. No-one’s suggesting that at all. But some …
ADAM CREIGHTON: Are you talking about a debt guarantee, that sort of thing?
ANTHONY ALBANESE: Well, that’s one of the options that’s on table, that a debt guarantee would be there, but that Qantas would pay for that as well, a market-based rate to the government. So it wouldn’t cost the taxpayer anything.
PETER VAN ONSELEN: Unless Qantas collapses.
ANTHONY ALBANESE: But it would be – well the question is, and, this is where it comes from: Would a government sit on its hands when Qantas – if Qantas collapsed?
My argument is that that would lead to pretty soon, whoever was in office, an intervention.
PETER VAN ONSELEN: But surely the best way to avoid Qantas collapsing is to remove the foreign ownership restrictions? But if you are not going to do that and if Labor’s going to oppose that, then the debt guarantee becomes the only option, and without the removal of the foreign ownership restrictions the potential for Qantas collapsing remains. Where it probably goes away …
ANTHONY ALBANESE: Well, the whole reason why you don’t want it to collapse is that you have a view, as I do, that a national airline is important.
It’s something that goes to national security interests, goes to the interests of the nation. It’s something beyond any other business.
PETER VAN ONSELEN: But it has to be Australian-owned?
ANTHONY ALBANESE: Well, that’s right. In terms of if you’re going to have a company that will act in the national interests they, by definition, have to be a part of the nation.
Qantas are an iconic brand for Australia, they’re an important company, and would a government sit back and allow it to collapse? I think not, whoever was in office.
PAUL KELLY: I think the answer’s “No”. The government’s indicated clearly that it intends to act and support Qantas in some way or another.
ANTHONY ALBANESE: And they should get on with it, Paul.
PAUL KELLY: You’d like to see a decision when?
ANTHONY ALBANESE: Last year.
PAUL KELLY: Last year?
ANTHONY ALBANESE: When this issue was raised.This is a problem with the government, they had a plan to get into government but they don’t have a plan to govern.
These circumstances have been exactly the same since the downgrade first happened which was in, from memory, October maybe November.
So this has been around for some months.
The government is prevaricating on this issue. There is no reason why if it’s going to make a decision it should stall making that decision. It should do it.
PETER VAN ONSELEN: All right, hold that thought, we are going to take a break. When we come back there’s a lot more to discuss both in Anthony Albanese’s portfolio area but also broadly after the first sitting week for 2014.
Back in a moment.
PETER VAN ONSELEN: We were talking about Qantas before the break. Is Labor going to give us a firm position as an alternative to what the government comes up with? I know you want to wait until they make their full announcement but will we have and alternative government – an alternative policy on this?
ANTHONY ALBANESE: We’ve indicated pretty clearly one; that we’re opposed to removing the majority Australian ownership of Qantas.
Secondly we’ve indicated pretty clearly that we don’t believe that the government would just sit idly by and watch Qantas disappear and there’s a whole range of reasons for that that are technical as well as political.
PETER VAN ONSELEN: Is it right that you’re not for moving though, not for turning on the Qantas Sale act changes to allow foreign ownership?
ANTHONY ALBANESE: Sure. That is 51 per cent and there’s a range of reasons. Airlines are able to travel between nations because of agreements between governments through air services agreements. That’s why Singapore can’t fly through Australia to the United States for example. The sort of idea that it just sort of doesn’t matter if you have an Australian-based airline or not is pretty naive.
PAUL KELLY: How does Qantas turn a profit? We got a structure here in terms of the international aviation industry and the domestic aviation industry which is pretty difficult for Qantas. So it’s one thing to talk about a debt guarantee. How does it turn a profit?
ANTHONY ALBANESE: The fact is Paul that they have turned a profit consistently.
At the moment, of course, the high Australian dollar, like a range of companies, affects Qantas. It particularly affects Qantas because the punter in Marrickville can decide to have a holiday in Bali or the US for that matter in Hawaii.
Look at the figures in Hawaii because of the US dollar and what’s occurred, rather than Cairns. So it has a particular impact on the tourism sector and as shadow tourism minister I’m very conscious of that.
The fact is though over period of time Qantas has been a very successful company.
It’s one of the most successful Australian brands that there is.
When people see the red kangaroo on the back of a plane that’s an ad for Australia, not just an ad for Qantas which is why there is that national interest question.
I have no doubt that Qantas will continue to be successful into the future.
Have a look at their cash reserves. They are substantial. There are certainly more cash reserves than there are in terms of their cap-ex at the moment.
So they are an extremely successful company. I’m convinced that they can continue to be in the future. But if the government needs to take a small action, they should.
ADAM CREIGHTON: Isn’t this Australian ownership thing a mirage really because as it stands, less than five percent of the stock is actually owned by individual Australians. The vast majority of Qantas is owned by the investment funds who really couldn’t care less about Australia’s so-called national interest and so I don’t see how it’s any different if the investment funds are foreign investment funds based in San Francisco or if they’re based in Melbourne. I mean at the end of the day these are largely pension funds and they’re just trying to get the highest return for their members. They don’t care about the national interest. And even if there was a war – you know World War III or something, you know the Australian Government could always seize the planes …
ANTHONY ALBANESE: That’s a very radical suggestion from an Australian journalist.
ADAM CREIGHTON: It is radical. But this idea that somehow the shares need to be owned by people who are ultimately based in Australia …
ANTHONY ALBANESE: It’s not just the shares Adam. Have a look at the Act.
The Act says a majority of its activity has to be Australian-based. Its board has to be based here …
ADAM CREIGHTON: But the CEO is Irish. Surely that contradicts the spirit of the ….
ANTHONY ALBANESE: The CEO is not Irish, The CEO lives in Sydney. Let’s get real here. Because he has an accent? He’s not the only Australian that has an accent.
He is an Australian and he’s loyal to this country. So in terms of the company and its actions I know as transport minister when there were issues in Thailand when we needed to get people out of Bangkok, when we needed to get people out of the Middle East, Qantas – a phone call away to help.
I must say also that John Borghetti (CEO, Virgin Australia) – always happy as well to do whatever he could as well to assist.
That’s an important thing. It’s not just a matter of creating an airline. If there was a war as you put it we have a great history – Qantas has a history as an Australian brand.
Australians want it to remain in Australian hands and they are right.
PAUL KELLY: If we could just switch to the airport, if we could just switch to Badgerys Creek, is the Labor Party prepared to support a decision by the Abbott Government to go ahead with a second Sydney Airport at Badgerys Creek.
ANTHONY ALBANESE: We‘re absolutely prepared to support a go-ahead for a second airport. Indeed, we’ve said that the second airport should be built second airport sooner rather than later.
You need bipartisanship. I was very heartened by John Robertson’s comments yesterday. You need bipartisanship for this to occur. I did what I could as transport minister to consult with the Opposition over these issues.
Because it, by definition, goes for more than one term, if you just play politics with it then it won’t happen. And because four out of every ten flights go through Sydney this is an issue of national productivity.
The failure to have increased capacity in Sydney will be a handbrake on growth and national productivity and that is why we need to act in the national interest – not just the government but the Opposition as well.
PAUL KELLY: There are divisions in the Labor party about Badgerys Creek. How severe are those divisions?
ANTHONY ALBANESE: We’ll there’s not a consensus position in either political party. This will require leadership on behalf of the government and the Opposition.
PAUL KELLY: But you’re committed to Badgerys Creek?
ANTHONY ALBANESE: No, I didn’t say that.
PAUL KELLY: I know you didn’t. That’s why I’m asking.
ANTHIONY ALBANESE: I didn’t say that. It’s up to the government to make a decision based upon the advice that they receive.
PETER VAN ONSELEN: It sounds like Labor wants to have its cake and eat it too. You want to say you are for a second airport but then when they pick Badgerys Creek, you want to run a marginal seat campaign around it.
ANTHONY ALBANESE: Well that’s not right at all. I’ll be playing a constructive role very clearly. I commissioned studies that clearly indicated that the only two sites that were available were Badgerys Creek and Wilton.
The second part of that study hasn’t been received by me. It’s been received by the government. So I haven’t received it.
But I will be constructive and I’ve made very clear – and I made it clear when I was the minister – that I thought construction should commence in this term – in this term – and that is what I support the government doing and you won’t see from me politics being played on this issue because it is a national economic interest issue.
ADAM CREIGHTON: I don’t understand why there’s this piece of conventional wisdom that a second airport in Sydney will be an unpopular thing even in the seats where it would be based because I mean surely it’s going to create many, many jobs and so forth. I think even polling shows it’s popular. And yet, there’s that fact and on both sides of politics there’s a huge reluctance to actually put it there. Can you explain why that is the case?
ANTHONY ALBANESE: I think you are right. Saying no to a second airport, like Barry O’Farrell is doing, is saying not to jobs, no to growth and no to Sydney’s position as a global city into the future.
People get that and what occurred was that the former Labor Government selected the site, it was supported by Western Sydney councils, there was a great campaign in favour of it to accelerate it.
The Howard Government came to office. For all of the rhetoric about their actions, they ripped $1 billion that had been allocated to Badgerys Creek in their first budget in 1997 and it never recovered.
After that you had politics being played with it because of the Lindsay by-election effectively.
It is difficult when it comes to infrastructure. It’s one of those issues that is about the long term. Because it goes beyond the political cycle, the infrastructure investment cycle can be prey to politics.
We need to move beyond that. I think the general public certainly understand the need for that project.
With regard to the Moorebank Intermodal, at Moorebank, that was opposed by the Coalition in the lead-up to the election in 2010. Now there’s consensus for it. Why? Because it will create thousands of jobs in south-west Sydney.
PETER VAN ONSELEN: All right we’ve only got about five minutes left on the program. We have to talk about the Royal Commission into trade unions. It’s been announced, the terms of reference are clear, so is the royal commissioner. Why is Labor opposing this as opposed to just saying let the sun shine in and then by all means attack some of the politicization of it by the government but have and support the idea of the Royal Commission just to clear the air.