Aug 31, 2008

Transcript of Interview with Laurie Oakes on Channel 9’s Sunday Morning News

Transcript of Interview with Laurie Oakes on Channel 9’s Sunday Morning News

The Hon Anthony Albanese MP

Member for Grayndler

Minister for Infrastructure, Transport,

Regional Development and Local Government

Leader of the House

Subjects: Wizard Home Loans; Infrastructure policy; Budget; Senate; Electricity privatisation; Qantas

Sunday, 31 August 2008

LAURIE OAKES: Minister, welcome to the program.


LAURIE OAKES: The headlines today, front page headlines. Home loan rate cut. The Government will be pretty pleased by that I guess.

ANTHONY ALBANESE: Well we are. That is one of the reasons why the Treasurer has been placing pressure on the banks. We want to ensure that maximum pressure is put on the banks to follow the Reserve Bank in any interest rate decrease. But Wizard have gone one better and good luck to them.

LAURIE OAKES: Well, they’ve stolen a march on the Reserve Bank. Are you pretty confident that there will be an interest rate cut when the Board meets on Tuesday?

ANTHONY ALBANESE: I wouldn’t want to pre-empt that. That’s a decision for the Reserve Bank. But certainly we know that there has been substantial pressure placed on families paying mortgages and there has been a slowing of the economy.

LAURIE OAKES: Well do you have any doubt at all that the banks will pass on any rate cut, any cut in official rates by the Reserve Bank, even if it’s say 50 bases points?

ANTHONY ALBANESE: Well a number of the majors have already indicated that they would follow any Reserve Bank decision. The fact that Wizard have been smart in their marketing and have got out in advance of the major banks sends a real signal to the marketplace. And one of the measures that the Government’s also put in place, of course, is making it easier for people to transfer their loans so that when you have this market leadership, as shown by Wizard today, there’s more pressure than there would be otherwise on other lenders to follow.

LAURIE OAKES: Well let’s talk about infrastructure which is possibly your most important responsibility. Do we need to spend $400 billion plus on infrastructure in the next decade?

ANTHONY ALBANESE: That is what has been indicated. We know that for a long time we’ve had a major infrastructure deficit and that the Reserve Bank warned on 20 occasions that was leading to capacity constraints in the economy, leading to upward pressure on inflation and interest rates. And that’s right across the board. It’s our roads, rail, water, energy, all of these areas and that’s before you get to more modern areas such as communications.

LAURIE OAKES: Well the Government has set up a new multi-billion dollar Building Australia Fund. I gather you want members of the public and the business community to give you ideas on how to spend it?

ANTHONY ALBANESE: Yes, we do Laurie. Today, myself and Sir Rod Eddington, the chair of Infrastructure Australia, will be announcing that we want community input, not into the local roads and local things that need fixing, as important as they may be, but what community members and the private sector think are the nation building projects that will be required over coming years. This comes from a decision of Infrastructure Australia Board which met on Friday afternoon. Submissions will close on 15 October.

After all, when we talk about infrastructure, we’re talking about areas that have an immediate impact on people’s lives. Often, we only notice it when it doesn’t work, when you can’t get the train, or urban congestion is occurring, or we have water restrictions. So we want the community to have input, because this effects people’s everyday lives.

LAURIE OAKES: Are you concerned though, that once you open this sort of thing up to public suggestions, some of the ideas you get are, you know, might be a bit wacky?

ANTHONY ALBANESE: Well in these processes you get a variety of quality of input. But that’s not a reason to not engage with the community. We want this to be something that characterises the Rudd Government, that engagement with the community, not a situation whereby you have a government elected and then says “see you in three years time”. And that’s why this is an important part of the process.

LAURIE OAKES: The chair of the Infrastructure Australia Advisory Body is Sir Rod Eddington. He’s going to put out a discussion paper tomorrow. What’s the purpose of that?

ANTHONY ALBANESE: Well the discussion paper will look at what are the areas where investment is required, to try to give people an indication of the direction that Infrastructure Australia’s looking at up to this point. We know that in a couple of areas in particular, in terms of our export potential, we know that we have clogging of our ports. We had a road and rail system, AusLink, where previously the Commonwealth gave funds until it got to the outskirts of cities, but then the congestion occurred getting from the outskirts to the ports. We want to turn that around.

We know that urban congestion, if left unaddressed, will cost some $20 billion by the year 2020. That’s a good example of why this is not just an economic issue, but a social issue because many working parents are spending more time commuting to and from work in their cars, than they are at home with their kids. That’s why this requires coordinated action from the National Government, from state governments and from the private sector.

LAURIE OAKES: You’ve been claiming that the Opposition’s decision to block a few budget measures in the Senate, threatens spending on infrastructure. How do you work that out?

ANTHONY ALBANESE: Well because in the budget, we did two fundamental things. One is we produced a $22 billion surplus. But it’s a surplus with a purpose. A purpose in the short-term of placing downward pressure on inflation and interest rates. But in the long-term, putting some $41 billion aside for long-term spending on infrastructure. Eleven billion dollars into education, $10 billion into health and $20 billion into the Building Australia Fund.

Now you can only put funds from a surplus, into these long-term infrastructure funds if that surplus remains intact. And the irresponsible position of the Opposition in blocking more than $6 billion in Budget measures will take money from those funds and will mean that that money is not available for long-term infrastructure spending.

LAURIE OAKES: But hang on, that $6.1 billion over four years, that’s one and a half billion a year. It’s really a drop in the bucket isn’t it? That’s not going to effect your infrastructure program?

ANTHONY ALBANESE: No it’s not, because this is just one indication. And there are more measures before the senate at the moment. Just last week we saw the Opposition block $51 million which was from the previous government’s policy on gaining some revenue back from pharmaceutical companies for assessments of whether they would go on the PBS. Now this was the Howard Government’s policy. They budgeted for it in their election budget statements and yet they blocked it in the Senate.

It would appear that we have an Opposition that’s determined to wreck the budget. And determined to be irresponsible.

LAURIE OAKES: Minister, the budget allocated an initial $20 billion to this Building Australia Fund. Are you saying if the Opposition blocks budget measures, that amount will have to be reduced?

ANTHONY ALBANESE: Well the money has to come from somewhere.

LAURIE OAKES: So is that a yes?

ANTHONY ALBANESE: Yes. We put aside money from the surplus, for this financial year and the coming financial year and indicated that it was appropriate to put that into this long-term spending. Because what we want to do is break the nexus that’s been there in the past. One of the reasons why there’s an infrastructure deficit is that the pressure has been on previous governments to choose between immediate spending, one off payments, and long-term infrastructure investment to the benefit of the nation. Governments in the past have chosen the former. They haven’t put the spending aside for the long-term. And that is why we did it in the Rudd Government’s first budget, and that’s why the Opposition’s actions are so irresponsible.

LAURIE OAKES: Well while we’re talking infrastructure, do you believe that electricity supplies in New South Wales are under threat, or any less certain, as a result of the abandonment of the State Government’s proposal to privatise the generation capacity?

ANTHONY ALBANESE: Well the Iemma Government’s come up with a plan B that it would appear will be supported because it won’t be subject to Parliamentary scrutiny.

LAURIE OAKES: That doesn’t increase your generation power though does it?

ANTHONY ALBANESE: No, it doesn’t. But potentially, as part of the plan, they’re talking about setting aside and selling off land that would be made available for new generation. So the Iemma Government is doing what it can under the circumstances to move forward the debate.

LAURIE OAKES: Were you surprised that the Opposition Leader Barry O’Farrell decided to oppose the privatisation of Electricity New South Wales, or did you think he might throw Morris Iemma a lifeline?

ANTHONY ALBANESE: Privatisation, of course, has always been a difficult issue for the Labor Party, and whatever the views for or against, they were views held out of conviction. I, myself, think that once you have a national electricity market the debate moved on and it wasn’t as important as it was in the past. But nonetheless, those views were held out of conviction.

When you look at the Liberal Party and Barry O’Farrell, this was pure political opportunism and recklessness. And there is no justification for his position given that the conditions that he placed on his support of this legislation had been met. And it’s a bit similar to the way the Federal Opposition is reacting to Budget measures. It’s just oppose for opposition’s sake, and it’s reckless in its nature.

LAURIE OAKES: Well you’re often described as a left wing power broker in the New South Wales Labor Party. How much of a mess has this left Labor in in New South Wales? And I note particularly that the Treasurer of Michael Costa is talking of quitting and he faces a possible no confidence motion in caucus. You wouldn’t shed any tears if he went would you?

ANTHONY ALBANESE: No individual is bigger than the great Party to which I belong to. But it’s important, I think, that the Party does unite now. They have the opportunity to do that and I want to see the Parliamentary Party, as well as the organisational wing of the Party, unite in a constructive fashion, to move away from any recriminations that have occurred and to get on with the business of governing in the interests of the people of New South Wales.

LAURIE OAKES: Minister, how alarmed were you by Friday’s report from the Australian Transport Safety Bureau on that oxygen tank explosion that blew a big hole in a Qantas jet last month?

ANTHONY ALBANESE: Safety is the number one priority of any Transport Minister and it’s certainly my number one priority. These are issues of concern. One of the things that must not be forgotten though about this, is the extraordinary response from the Qantas pilot and crew – that was world’s best practice, under difficult circumstances. According to the Transport Safety Bureau, what was a one off occurrence that they responded in such a…

LAURIE OAKES: But you, you say one off, but the investigators could not find out what caused the oxygen tank to explode, that means it could happen again doesn’t it?

ANTHONY ALBANESE: Well, yes. And we need to put in place any measures from the report and recommendations that the ATSB make, will be implemented in full by the Government.

LAURIE OAKES: Minister, we thank you.

ANTHONY ALBANESE: Good to talk to you.