Aug 14, 2011

Transcript of Interview on Sky’s Australian Agenda

Subjects: Global economic conditions; Federal Budget; Jobs; Attracting greater private investment in public infrastructure; Road user charges; Abbott’s duplicity over coal seam gas; National Transport Reforms; Gay marriage

PETER VAN ONSELEN: We’re joined now, as I mentioned at the top of the program by the Leader of the House and Infrastructure Minister, Anthony Albanese. Thanks for your company.


PETER VAN ONSELEN: Can I start by asking you, parliament’s coming back next week. No doubt debate about the economy, as it often is, will be right there in the cut and thrust of it. There’s been a reluctance in – by the government to acknowledge directly whether you can or can’t achieve this surplus target. Now I spoke yesterday to Matt Thistlewaite, your senate colleague for the Labor Party, and he got the closest that anyone has in the Labor Party so far to acknowledging that the international economic climate being what it is may be something that jeopardises the surplus.

Let’s just take a look at what he had to say.

[Start pre-recorded segment]

MATT THISTLEWAITE: Government revenues took a big hit from perhaps a massive downturn in the Chinese economy, issues such as that. Maybe another double dip recession in terms of the global economy would warrant a look at the issue.

[End pre-recorded segment]

PETER VAN ONSELEN: I don’t think that there’s anything big in that. I think that’s the – stating the obvious but do you agree with that? Are you willing to say that?

ANTHONY ALBANESE: Well look there’s not much point speculating on hypotheticals. What we have to deal with is what’s in front of us, and what’s in front of us is a very clear objective and we have a plan to get there; a plan to get to surplus. And I think our record in terms of going through a Federal campaign where we didn’t put one extra dollar onto the bottom line by having offsets, has shown that we are prepared to take those tough decisions.

PETER VAN ONSELEN: But you must just be rolling your eyes at the reality of what could happen here, which is that a downturn in the global economy means that you don’t get to the surplus before the next election, and you’re just thinking this is going to be political pain all over.

ANTHONY ALBANESE: It certainly is the case that after we were elected in 2007, we’ve been rocked by the Global Financial Crisis and international occurrences of course have an impact here in Australia. But what we’re determined to do is to work towards meeting that objective and we expect to be able to do so.

And I think the last campaign was of course none closer since the Second World War, perhaps 1961, but we went through it with discipline. We’ve shown that discipline, we’re continuing to show it, we showed it during the recent budget and we have a plan to get us to surplus. We expect to be there.

MICHAEL STUTCHBURY: Minister, you’ve got – this week we had news that unemployment rising above five per cent. With the stock market volatility, no doubt the economy is slowing. That means to reach your surplus target most likely you’re going to have to cut government spending in order to reach it in a time when the economy is slowing. Do you – would you be prepared to put up, would the government be prepared to put up with unemployment rising, if not a lot, above five per cent and be cutting government spending in order to get to the promised finan – budget surplus?

ANTHONY ALBANESE: We think of course that jobs are critical, and we have an outstanding record of creating jobs in the economy. We think the fundamentals of the Australian economy are very strong. We’re located in the right part of the world at the right time. So we’ve got our settings in place. There was a small increase in unemployment this week, up to 5.1. We want to see employment maintained at a strong growth trend and we believe it will continue to do so.

We’ve got plans in places to bring additional people into the workforce. We think spreading the opportunity created by the second mining boom is important. So we think the fundamentals are strong and we want to talk our economy up because we think it’s worthy of it.

JENNIFER HEWITT: Minister, in terms of your own portfolio obviously one of the biggest issues facing Australia is the need for more investment in infrastructure. We have heard for several years now about the desire for superannuation funds to invest more in greenfields projects in infrastructure and yet it never seems to happen. I mean is that just unrealistic. Will it ever happen?

ANTHONY ALBANESE: I certainly would like to see it happen. We know that up until now super funds have shown a greater propensity to invest in brownfield sites.

We put a number of new incentives into the Budget. The infrastructure investment incentive means that losses can be carried over. It also means that the losses and tax benefits flow with the project, regardless of ownership. What that means is that there’s an incentive there for super funds to come in and invest in brownfield infrastructure.

We’ve also established through Infrastructure Australia a private sector organisation looking at encouraging investment from the private sector into infrastructure. That’s chaired by Jim Murphy from Treasury. There are senior people from the private sector on it and we want to work through with them ways in which to encourage that investment into the productive side of the economy.

JENNIFER HEWITT: But why is it taking so long? I mean we all know that this is a good idea but you know do you need to do something a bit more dramatic? What you did in the Budget would help brownfield sites for example; it’s not actually encourage money into new projects. Where are we going to go on that? What about the idea of much more tax breaks as the industry seems to want?

ANTHONY ALBANESE: We have said that there’ll be incentives for projects which meet the Infrastructure Australia guidelines and get themselves on the priority list. What that means is that we’ll be encouraging investment, not just into any infrastructure but into those projects which will most benefit the Australian economy. We had that measure in the Budget.

We want to work with Jim Murphy’s group and Sir Rod Eddington and the Infrastructure Australia Council to get further recommendations because we recognise that public investment alone won’t meet what is our considerable infrastructure deficit.

MICHAEL STUTCHBURY: Are we really as a nation serious about all this or are we kidding ourselves? You mentioned Sir Rod Eddington and Infrastructure Australia, but last month they came down with the annual report and Sir Rod Eddington pointed out that there – what he called – was a profound disconnect in the Australian community over the amount of infrastructure that we really need to keep the economy going without things clogging up, without our ports clogging up, without our roads clogging up. But he said this is just not happening at a government level.

Do you share Eddington’s concern that there is a profound disconnect over infrastructure in Australia?

ANTHONY ALBANESE: Certainly. What the disconnect is I think is between the political cycle, which is three years, and the infrastructure investment cycle, which is much longer. So historically governments have focused on things that can provide an immediate benefit. It is frustrating, I must say as the Infrastructure Minister, when you make an announcement about a project it’s sort of: ‘right when will it open’. Very often the Infrastructure or Transport Minister that announces the project very rarely gets to cut the ribbon at its opening.

So we do need to make sure that we change the paradigm of debate so that it’s longer term rather than short term. That’s one of the challenges. That’s one of the reasons why we established Infrastructure Australia; that’s one of the reasons why we beefed up its funding in the Budget.

I think this is a challenge for all governments. It’s one I believe our Government has met by doubling the roads budget, increasing the rail budget by more than 10 times. And in terms of urban public transport, we’ve committed more money since 2007 than all previous governments since Federation combined.

MICHAEL STUTCHBURY: But Rod Eddington was saying for example that unless governments either go much more into debt and borrow a lot more, they embrace much more fully user pays, congestion charging or they get state governments in particular get much more into privatisation that we just won’t overcome this profound disconnect. Now do you agree with him on that, on congestion charging, privatisation for example?

ANTHONY ALBANESE: It has to be dealt with on a case by case basis I think. In terms of congestion charging we’ve ruled that out.

MICHAEL STUTCHBURY: Why would you rule that out?

ANTHONY ALBANESE: Because we have a different dynamic here in Australia compared with say London where congestion charging operates.

MICHAEL STUTCHBURY: So you’re at odds with Infrastructure Australia over infrastructure charge – projects?

ANTHONY ALBANESE: No, it’s not a matter of being at odds and that’s part of what we need to get around. We need to be able to have a sophisticated mature debate without generating the sort of headlines that we saw in the Daily Telegraph when the tax paper was released.

MICHAEL STUTCHBURY: You’ve got to wear that. Doesn’t – a sophisticated mature debate doesn’t just rule something out because it’s politically difficult. Isn’t that his point?

ANTHONY ALBANESE: No, because when you look at congestion charging the Government believes it would have very little impact given the dynamic that we have, given the sparseness of our population. The issue of pricing mechanisms certainly needs to be looked at. But by and large that’s done by state governments. So we need to work our way through those issues with state governments.

PETER VAN ONSELEN: Minister, I want to get your reaction to something that happened with Tony Abbott over the weekend. The Australian newspaper splashed on its front page with this idea of there being a bit of a conflict for him between coal seam gas and farmers. He’s taken the side of farmers. He was in Western Australia during the week, and we had a sort of slightly bizarre situation in a media conference. Let’s just take a look.

REPORTER: Why won’t you say it again today? Are you backing away from it?

TONY ABBOTT: No, no. I had a speech to make today and I’ve said my few words today and I want the speech to speak for itself.

REPORTER: Don’t the Australian people deserve to know what the view of the alternative Prime Minister is? [inaudible] this is quite embarrassing.

TONY ABBOTT: Well, you might be embarrassed, mate. But as I said, I’ve given a speech and that’s the way it is, okay?

REPORTER: I’m concerned why you’re so worried about repeating your comments. Did you go too far yesterday, do you think?

REPORTER: Are you backing away from it though?

PETER VAN ONSELEN: He obviously didn’t want to reiterate what he’d said in the speech. The speech is online in fairness. But what’s your view on the issue? Do you think that Tony Abbott has managed to wedge himself here between the interests of miners and the interests of farmers?

ANTHONY ALBANESE: Tony Abbott has one message for farmers on the east coast and an opposite message for miners on the west coast. This is a pattern of behaviour from Tony Abbott.

He put Peter Reith into the field as National President of the Liberal Party and then voted for Alan Stockdale. He has one message on climate change when he wants to say that he cares about it, and then you’ll recall going to a speech in Melbourne and saying it was crap. He has different messages for different audiences. He is an opportunist when it comes down to it, and when held to account, such as he was there at that press conference in the west, he tries to run away.

PETER VAN ONSELEN: Tough state to be in, I suppose, to back farmers over miners, to do it and then end up in Western Australia!

ANTHONY ALBANESE: Well he volunteered the previous comments – that’s the point. He says what he thinks people want to hear rather than what he believes.

JENNIFER HEWITT: Minister, if you talk about getting on with the states and beginning to cooperate with the states, obviously infrastructure is a very big part of that. You seem to be stalling on the idea of reducing the number of the very many regulators that you’ve got in this area. What’s happened? Is that the states’ fault? Or is that your inability to convince them to cooperate?

ANTHONY ALBANESE: We had all the states sign off on national transport regulators at the Australian Transport Council meeting in May. That followed the COAG meeting where they all signed off at the end of last year. This is a vital productivity reform. This is about taking the 23 transport regulators that exist nationally, bringing it down to three, with benefit for the Australian economy of $30 billion over 20 years.

JENNIFER HEWITT: So why are the states not cooperating?

ANTHONY ALBANESE: Because you have entrenched bureaucracies defending their interest. We have some objection at the moment from Victoria about maritime regulation. It is absurd that if you have a commercial vessel in Victoria you can’t simply operate it in another state, South Australia, New South Wales or Queensland. In terms of the skills, the people who work on the vessel aren’t transferable from state to state; they require recertification and then recertification again when it comes back to Victoria.

These are really commonsense reforms, and across this sector we have different weights allowed.

JENNIFER HEWITT: Sure, so that’s the problem. But are you saying that we’re actually now going to get around it? Or are you actually getting up?

ANTHONY ALBANESE: I’m very hopeful that the states will see commonsense and will not walk away from what is a vital productivity reform. Businesses are demanding this reform. We’ve worked through all the details. We know that there’s massive benefit, and the states, certainly if there any difficulties they can be ironed out in terms of dotting the i’s and crossing the t’s.

What we shouldn’t allow is for people to essentially want to do things because that’s the way they’ve always been done for the previous 100 years.

JENNIFER HEWITT: Do you think we should have a more carrot and stick approach?

ANTHONY ALBANESE: Certainly we have an incentive there for them to sign up. We have an incentive in terms of the managed motorways program which is using smart infrastructure to get, again, more productivity out of our investment.

Jennifer Hewett: Then do you need more stick if they’re not doing it?

ANTHONY ALBANESE: They will not be eligible for that funding unless they sign up to the national transport regulators at COAG.

MICHAEL STUTCHBURY: Minister, can I just ask you maybe a final question about infrastructure and the economy, if the economy slows. When the global financial crisis hit, one of the big issues was that we didn’t have any shovel-ready infrastructure projects and the government then got into things such as the home insulation scheme and building the education revolution. If things did turn very pear shaped, China slowed down dramatically and so forth and the government decided there did need to be a budget stimulus, do you have ready right now a list of shovel-ready infrastructure projects that you can crank up for a budget stimulus?

ANTHONY ALBANESE: Certainly I think the states are getting much better at learning some of the lessons in terms of getting better planning mechanisms in place, and there are projects in which planning is much more advanced as a result of the investment and commitments that we’ve made.

MICHAEL STUTCHBURY: Like today, what would be the projects you’d press the button on?

ANTHONY ALBANESE: I don’t want to make that announcement on the program here, because I’ll have various state premiers on the phone by 10 o’clock! But it is the case that states had failed to get those projects shovel-ready, which is why we had 17 and 14 respectively rail and road projects, they were all ready to go.

MICHAEL STUTCHBURY: But do you have a list of things ready to go?

ANTHONY ALBANESE: Well Infrastructure Australia certainly has prepared-

MICHAEL STUTCHBURY: But one that’s ready to go?

ANTHONY ALBANESE: No, in terms of the projects that have already been committed as well, a number of them are ready to go. It’s a matter of the timeline of when they’re being rolled out.

PETER VAN ONSELEN: Minister, one final question – change of pace. Penny Wong announced during the week that her and her partner are having a baby through IVF, her partner that is. This ignited a bit of a debate about gay rights and the spectre of gay marriage, which is a debate that National Conference for Labor will be having later in the year. I wonder, is this going to be a divisive debate in your view for the Labor Party?

ANTHONY ALBANESE: I’m very hopeful that these issues will be sorted out. There are strong views on both sides. It seems to me though that these things are often the issues in which you expect a big clash, they fizzle, and the big clashes come from areas which there’s no build-up to.

So we need to have a debate at the National Conference. I’ve made my position clear – I think we can work through these issues in a commonsense way. Of course there is going to be a focus on what happens in the parliament as well as what happens in the party, and in terms of the debates over whether they’re conscience votes or not, we’ll work those issues through over coming months.

PETER VAN ONSELEN: Minister, we appreciate you joining us on Australian Agenda. Thanks for your company.