ABC RN Drive with Waleed Aly & Arthur Sinodinos - 5 Aug 2013

I spoke yesterday on ABC RN Drive with Waleed Aly & Arthur Sinodinos. Here's a podcast.





Transcript - ABC RN Drive with Waleed Aly & Arthur Sinodinos - 5 Aug 2013


Waleed Aly: Time to talk our political panel, two of our favourite politicians, Senator Arthur Sinodinos, Parliamentary Secretary to the Opposition Leader, previously chief of staff to Prime Minister John Howard. And Dr Andrew Leigh, member for Fraser, previously the parliamentary secretary to Julia Gillard when she was Prime Minister. Gentlemen, welcome back to the show.


I've got to say that I was very intrigued, that when you're not on our program, you guys are getting together, making all kinds of bets. This is scandalous behaviour. It's an interesting bet. You're looking at annualised real GDP growth which was 2.5 per cent, trend unemployment which was 5.7 per cent and average variable mortgage interest rates which were 6.2 per cent. And it seems to me that each of you is betting that if the other side get in, those indicators will get worse. Have I got that right Arthur?


Arthur Sinodinos: My recollection, my hazy recollection is that that is right. Not that I had drinks at the time. Yes, at the end of a convivial evening I thought it was not a bad bet. Andrew might remember better, he proposed the bet.


Andrew Leigh: That's right. The bet is settled based on December next year. My wager is if Labor is elected then those indicators will improve. If the Coalition is elected then a majority of those indicators will go backwards. Arthur's is the reverse.


Waleed Aly: A majority? Hang on. You're backing off already.... surely you mean all of them will go down?


Andrew Leigh: Oh well. I expect all of them to go down but the bet is a majority of the indicators, two out of three.


Arthur Sinodinos: Andrew was kind enough to agree it would be 12 months, December next year, rather than June next year.


Waleed Aly: But Arthur, you wouldn't have finished blaming the previous government for everything that's gone wrong by then, would you?


Arthur Sinodinos: We're expecting a surge of confidence when we come to office which will help unlock some of those high household savings and get business confidence up, and get people investing and get things cracking.


Waleed Aly: Yes, not doubt you are. Alright. Let's look at some specific policies. Two-hundred million dollars to save the car industry, Dr Andrew Leigh, that's come from your side of politics today. Why it is a good idea to be throwing more money at the car industry which has shown a history of taking our money and then leaving anyway?


Andrew Leigh: Well, we know that there are a lot of direct jobs in this sector Waleed, something like 50,000 direct jobs and then hundreds of thousands of jobs that depend on the car industry. And if you're thinking about industry assistance you really want to think about two things, the first being the spill-overs to other sectors and we know the car industry does a lot of research and development. So, you'd expect some spill-overs there. Also, the geographic concentration. Parts of Australia with a big car industry tend to be heavily reliant on that industry and so this is really important for people working in sectors, in the automotive sector,  just to have confidence that they will have opportunities in the future.


Waleed Aly: But we've given them money in the past and it hasn't saved their jobs.


Andrew Leigh: Well, it's certainly we've seen challenges for the manufacturing sector and that came particularly at a time when the Australian dollar was high. With the Australian dollar coming down, that' put the automative sector in a much more confident position. But also too, I think it's important that we have purchases of Australian cars by government. The Commonwealth is now purchasing the vast majority of its cars is Australian made cars. But you've got states and territories that are buying one in four Australian made cars. So that matters.


Waleed Aly: Arthur, what is exactly is the Opposition's policy on this. I know the Opposition has said it wants to wind back some of that additional funding but we don't yet have anything that approximates a figure, exactly how much the Opposition would be providing to the car industry, at least that I have been able to find.


Arthur Sinodinos: Let me go back a couple of steps. Some time back we'd indicated that a wind-back of 500 million which was not to take car subsidies back to where they were under the Howard Government, but approximately to that level because we thought the level of subsidies being provided at the time was sufficient and then, on top of that, there would be productivity commission review at some stage before there was any further assistance to industry to try and demonstrate some of the points that Andrew was talking about. What's happened since then is when Labor came in they had a series of programs that they ramped up, automotive subsidies. Some of those have since been cut back, and then more recently the fringe benefits tax changes had potentially quite a big impact on new car sales. We're talking around 1.8 billion, I think, being the cost of that measure. The government is now talking about an extra 200 million which is aimed principally at Holden but which really only, in a sense, is a very small off-set to this rather big change you've had recently because of FBT. It's actually quite a mess.


Waleed Aly: It sounds like you're playing off 1.8 billion against 200 million. But they are different things. The 1.8 billion is not money that is being taken away from the car industry and they are giving 200 million back. The 1.8 billion is income they will receive in tax by making sure the fringe benefits tax, as it is is applied more rigorously.


Arthur Sinodinos: But if you trace that income, it'll happen because they'll be less car sales, right.


Waleed Aly: No, that doesn't necessarily mean that at all.


Arthur Sinodinos: It's not a net... I'm trying to get away from this idea that this is somehow a net benefit to the car industry because it's not. You have see it in the context of this FBT decision recently. And to go back to your earlier point, which I think is the right point, what's happened over time is, even with the ramp up in subsidies, industry has been cutting back on employment. Even today, Kim Carr, the manufacturing minister still hasn't spelled out what the conditions are for the car industry to receive this 200 million and therefore what guarantees do you have that they'll be extra jobs or jobs maintained and we don't go down the route we've going down over the last couple of car assistance packages.


Waleed Aly: Can we go to the issue, what will happen in event of a hung parliament? Tony Abbott's been keen to talk about this. He was asked today what would happen in that. He said he'd stand aside and let Labor have the government benches basically.


Tony Abbott: The short answer is 'yes' because we want to deliver strong government. We want to deliver a decisive government that gets on with the job of building a better Australia. That's our business. Our business is a safe and secure Australia that builds on a strong and prosperous economy and we will not get that from a another hung parliament.


Waleed Aly: On the other side of it, Kevin Rudd was asked whether he would lead a minority government. his is what he said:


Kevin Rudd: If they're fair dinkum about this, that is we don't like Independents, we don't Greens, why do they preferencing them all over the country. They are doing this, I presume, in Dennison. We have double standards here. As for us, we're all about securing a majority government of the Australian Labor Party.


Waleed Aly: Andrew Leigh, that's a non-answer, I think you'd have to agree. What exactly will the Labor party do if there is a hung parliament?


Andrew Leigh: Well certainly if we look at the last few years, I think you can look at a minority parliament which has managed to get an awful lot done Waleed, whether that's putting a price on carbon pollution, creating disability care, better schools reforms, nearly 600 bills have passed through the House of Reps. I don't think anyone can look back at this minority parliament and say that it hasn't been a productive parliament. I think the point that Mr Rudd is making is simply if Mr Abbott believes that there shouldn't be Independents in the parliament, then it's odd to preference them on September 7, and refuse to deal with them on September 8.


Waleed Aly: He's not saying they shouldn't be there. He's just saying he won't do a deal in case of minority government circumstances. Am I to take from your answer that you will form a minority government if it comes to it?


Andrew Leigh: It would not be my decision alone, but my general view is that this minority parliament has been an effective one. Clearly governments would always prefer to govern in majority. If you look back over the last few years you see an Australia that is more prosperous, that has more jobs, that is a fairer nation than it was when this minority parliament began.


Waleed Aly: Arthur Sinodinos is it a good idea for Tony Abbott to opt out of the horse-trading that would go in in the event of a hung parliament given that that would encourage voters to go, well,  he has to win by a lot if he's going to be the prime minister and that's unlikely so I may as well vote for the other mob?


Arthur Sinodinos: Well I think it's in fact the reverse. He's trying to encourage people to vote for him on the basis that he won't have any truck with a minority government. He wants to be a majority government and I think he's making that pitch because frankly I think most Australians want a majority government of one complexion or the other. I don't think, as a country, we need to end up where we've ended up in the last three years. While I accept what Andrew is saying from his perspective from what he regards as the achievement of the parliament, I think if you go out there and ask the public what they want, they want more certainty, they want more predictability and that comes with having a majority government.


Waleed Aly: The other issue that was raised today was the carbon tax. Tony Abbott says his first order of business would be to get rid of the carbon tax. Gentlemen, is it really that important an election issue now that both sides of politics are now saying they are going to abolish the carbon tax? I'll start with you Andrew.


Andrew Leigh: Well certainly we've said we'll move to the floating period immediately and I think then we'll be in the same situation as 30 countries around the world using the most effective, the most efficient way of reducing carbon pollution which is simply to put a price on carbon pollution. That'll see, as we go to the floating price, we'll see the price come down from around $25 to around $6 a tonne. And, we’ll be linking in with the European emissions trading system which brings a sense of stability to it. This is just the textbook economic way of dealing with climate change, if you believe it's real as I do and I know Arthur does, then as John Howard said the most straight forward way of dealing with climate change is through an emissions trading scheme.


Waleed Aly: Arthur Sinodinos, do you think it's more efficient to deal with it by providing direct money from government to people who are going to do things that we think might reduce emissions?


Arthur Sinodinos: Very good point. The reason we've gone down this route is frankly we found there was resistance from the community to putting their hands in their pocket on this issue. If you go back and track peoples' willingness to pay and do something about climate change, you use the Lowy Institute poll as a measure all the way back to when the community reached a tipping point on climate change  in 2006-2007, it was clear that people were uneasy with the idea of putting their hands in their pocket.


Waleed Aly: Isn't that why you have leadership?


Arthur Sinodinos: Whether it's a carbon tax or whether it's in the form of a floating price, that's why we came up with direct action, because people were concerned about the cost of living and the government seems to be adding to the cost of living at a time when electricity demand was already being markedly effected by a ramp up in state investment plans which was raising electricity prices very significantly.


Waleed Aly: People are always going to be concerned by cost of living pressures, not least when politicians are constantly telling them they should be worried about cost of living pressures. Doesn't there come a point when you have to show leadership on this, look the electorate in the eye and tell them this is what has to happen? Like what the Coalition did with the GST?


Arthur Sinodinos: You have to take the community with you and sometimes you won't take them with you if you keep shouting at them to do something that they are unwilling to do. You've got to find a way around that. That's why Abbott came up with the formula he did and through direct action it keeps our options open. It gives up time to see how the world develops, what schemes occur overseas because, don't forget, this is one of the very few cases, if not the only case in the world, of economy-wide carbon tax or floating price, quite different to some of the schemes you'll find sprouting up in California, China, other places.


Waleed Aly: Just one final question to both of you. Asylum seeker policy was really everything in the lead up to this election campaign. Then today it hasn't been mentioned. Do you think we're done with that issue now as far as the public conversation goes and the election campaign is likely to go off onto different terrain. Let's start with you Arthur.


Arthur Sinodinos: I think the issue will continue to bubble away. The Coalition will continue to monitor what's happening with regard to PNG and Nauru. No doubt, we will talk about it further during the campaign. Yeh, it's been a major issue over a considerable time so I can't see that's it's going to fall off the radar completely. As Tony Abbott made clear in his pitch yesterday, he's going to be talking more about his plans for the future rather than just focussing on those particular issue which he has embraced (?)the last few years.


Waleed Aly: Final word to you Andrew.


Andrew Leigh: I agree with Arthur on this one. Asylum seekers are going to be an important debate for Australia but I hope that the debate that is going to be conducted over the coming weeks is a little more sober and bi-partisan than we've seen in the past. These are some of the world's most vulnerable people and I think we need to focus on compassion.


I think just one word of correction, a very rare mistake that Arthur made. Ours is not an economy-wide carbon price. It covers around 60% of emissions because it excludes agriculture and transport.


Arthur Sinodinos: I take your point on agriculture, that's right.


Waleed Aly: Yep. I think we can agree on that. The point about compassion is an interesting one. That seems the be the Greens' slogan.... We'll see how it unfold. Gentlemen, I look forward to speaking with you, hopefully in a week or so.... Thanks gentlemen.





Waleed Aly: Time to talk our political panel, two of our favourite politicians, Senator Arthur Sinodinos, Parliamentary Secretary to the Opposition Leader, previously chief of staff to Prime Minister John Howard. And Dr Andrew Leigh, member for Fraser, previously the parliamentary secretary to Julia Gillard when she was Prime Minister. Gentlemen, welcome back to the show.



I've got to say that I was very intrigued, that when you're not on our program, you guys are getting together, making all kinds of bets. This is scandalous behaviour. It's an interesting bet. You're looking at annualised real GDP growth which was 2.5 per cent, trend unemployment which was 5.7 per cent and average variable mortgage interest rates which were 6.2 per cent. And it seems to me that each of you is betting that if the other side get in, those indicators will get worse. Have I got that right Arthur?



Arthur Sinodinos: My recollection, my hazy recollection is that that is right. Not that I had drinks at the time. Yes, at the end of a convivial evening I thought it was not a bad bet. Andrew might remember better, he proposed the bet.



Andrew Leigh: That's right. The bet is settled based on December next year. My wager is if Labor is elected then those indicators will improve. If the Coalition is elected then a majority of those indicators will go backwards. Arthur's is the reverse.



Waleed Aly: A majority? Hang on. You're backing off already.... surely you mean all of them will go down?



Andrew Leigh: Oh well. I expect all of them to go down but the bet is a majority of the indicators, two out of three.



Arthur Sinodinos: Andrew was kind enough to agree it would be 12 months, December next year, rather than June next year.



Waleed Aly: But Arthur, you wouldn't have finished blaming the previous government for everything that's gone wrong by then, would you?



Arthur Sinodinos: We're expecting a surge of confidence when we come to office which will help unlock some of those high household savings and get business confidence up, and get people investing and get things cracking.



Waleed Aly: Yes, not doubt you are. Alright. Let's look at some specific policies. Two-hundred million dollars to save the car industry, Dr Andrew Leigh, that's come from your side of politics today. Why it is a good idea to be throwing more money at the car industry which has shown a history of taking our money and then leaving anyway?



Andrew Leigh: Well, we know that there are a lot of direct jobs in this sector Waleed, something like 50,000 direct jobs and then hundreds of thousands of jobs that depend on the car industry. And if you're thinking about industry assistance you really want to think about two things, the first being the spill-overs to other sectors and we know the car industry does a lot of research and development. So, you'd expect some spill-overs there. Also, the geographic concentration. Parts of Australia with a big car industry tend to be heavily reliant on that industry and so this is really important for people working in sectors, in the automotive sector,  just to have confidence that they will have opportunities in the future.



Waleed Aly: But we've given them money in the past and it hasn't saved their jobs.



Andrew Leigh: Well, it's certainly we've seen challenges for the manufacturing sector and that came particularly at a time when the Australian dollar was high. With the Australian dollar coming down, that' put the automative sector in a much more confident position. But also too, I think it's important that we have purchases of Australian cars by government. The Commonwealth is now purchasing the vast majority of its cars is Australian made cars. But you've got states and territories that are buying one in four Australian made cars. So that matters.



Waleed Aly: Arthur, what is exactly is the Opposition's policy on this. I know the Opposition has said it wants to wind back some of that additional funding but we don't yet have anything that approximates a figure, exactly how much the Opposition would be providing to the car industry, at least that I have been able to find.



Arthur Sinodinos: Let me go back a couple of steps. Some time back we'd indicated that a wind-back of 500 million which was not to take car subsidies back to where they were under the Howard Government, but approximately to that level because we thought the level of subsidies being provided at the time was sufficient and then, on top of that, there would be productivity commission review at some stage before there was any further assistance to industry to try and demonstrate some of the points that Andrew was talking about. What's happened since then is when Labor came in they had a series of programs that they ramped up, automotive subsidies. Some of those have since been cut back, and then more recently the fringe benefits tax changes had potentially quite a big impact on new car sales. We're talking around 1.8 billion, I think, being the cost of that measure. The government is now talking about an extra 200 million which is aimed principally at Holden but which really only, in a sense, is a very small off-set to this rather big change you've had recently because of FBT. It's actually quite a mess.



Waleed Aly: It sounds like you're playing off 1.8 billion against 200 million. But they are different things. The 1.8 billion is not money that is being taken away from the car industry and they are giving 200 million back. The 1.8 billion is income they will receive in tax by making sure the fringe benefits tax, as it is is applied more rigorously.



Arthur Sinodinos: But if you trace that income, it'll happen because they'll be less car sales, right.



Waleed Aly: No, that doesn't necessarily mean that at all.



Arthur Sinodinos: It's not a net... I'm trying to get away from this idea that this is somehow a net benefit to the car industry because it's not. You have see it in the context of this FBT decision recently. And to go back to your earlier point, which I think is the right point, what's happened over time is, even with the ramp up in subsidies, industry has been cutting back on employment. Even today, Kim Carr, the manufacturing minister still hasn't spelled out what the conditions are for the car industry to receive this 200 million and therefore what guarantees do you have that they'll be extra jobs or jobs maintained and we don't go down the route we've going down over the last couple of car assistance packages.



Waleed Aly: Can we go to the issue, what will happen in event of a hung parliament? Tony Abbott's been keen to talk about this. He was asked today what would happen in that. He said he'd stand aside and let Labor have the government benches basically.



Tony Abbott: The short answer is 'yes' because we want to deliver strong government. We want to deliver a decisive government that gets on with the job of building a better Australia. That's our business. Our business is a safe and secure Australia that builds on a strong and prosperous economy and we will not get that from a another hung parliament.



Waleed Aly: On the other side of it, Kevin Rudd was asked whether he would lead a minority government. his is what he said:



Kevin Rudd: If they're fair dinkum about this, that is we don't like Independents, we don't Greens, why do they preferencing them all over the country. They are doing this, I presume, in Dennison. We have double standards here. As for us, we're all about securing a majority government of the Australian Labor Party.



Waleed Aly: Andrew Leigh, that's a non-answer, I think you'd have to agree. What exactly will the Labor party do if there is a hung parliament?



Andrew Leigh: Well certainly if we look at the last few years, I think you can look at a minority parliament which has managed to get an awful lot done Waleed, whether that's putting a price on carbon pollution, creating disability care, better schools reforms, nearly 600 bills have passed through the House of Reps. I don't think anyone can look back at this minority parliament and say that it hasn't been a productive parliament. I think the point that Mr Rudd is making is simply if Mr Abbott believes that there shouldn't be Independents in the parliament, then it's odd to preference them on September 7, and refuse to deal with them on September 8.



Waleed Aly: He's not saying they shouldn't be there. He's just saying he won't do a deal in case of minority government circumstances. Am I to take from your answer that you will form a minority government if it comes to it?



Andrew Leigh: It would not be my decision alone, but my general view is that this minority parliament has been an effective one. Clearly governments would always prefer to govern in majority. If you look back over the last few years you see an Australia that is more prosperous, that has more jobs, that is a fairer nation than it was when this minority parliament began.



Waleed Aly: Arthur Sinodinos is it a good idea for Tony Abbott to opt out of the horse-trading that would go in in the event of a hung parliament given that that would encourage voters to go, well,  he has to win by a lot if he's going to be the prime minister and that's unlikely so I may as well vote for the other mob?



Arthur Sinodinos: Well I think it's in fact the reverse. He's trying to encourage people to vote for him on the basis that he won't have any truck with a minority government. He wants to be a majority government and I think he's making that pitch because frankly I think most Australians want a majority government of one complexion or the other. I don't think, as a country, we need to end up where we've ended up in the last three years. While I accept what Andrew is saying from his perspective from what he regards as the achievement of the parliament, I think if you go out there and ask the public what they want, they want more certainty, they want more predictability and that comes with having a majority government.



Waleed Aly: The other issue that was raised today was the carbon tax. Tony Abbott says his first order of business would be to get rid of the carbon tax. Gentlemen, is it really that important an election issue now that both sides of politics are now saying they are going to abolish the carbon tax? I'll start with you Andrew.



Andrew Leigh: Well certainly we've said we'll move to the floating period immediately and I think then we'll be in the same situation as 30 countries around the world using the most effective, the most efficient way of reducing carbon pollution which is simply to put a price on carbon pollution. That'll see, as we go to the floating price, we'll see the price come down from around $25 to around $6 a tonne. And, we’ll be linking in with the European emissions trading system which brings a sense of stability to it. This is just the textbook economic way of dealing with climate change, if you believe it's real as I do and I know Arthur does, then as John Howard said the most straight forward way of dealing with climate change is through an emissions trading scheme.



Waleed Aly: Arthur Sinodinos, do you think it's more efficient to deal with it by providing direct money from government to people who are going to do things that we think might reduce emissions?



Arthur Sinodinos: Very good point. The reason we've gone down this route is frankly we found there was resistance from the community to putting their hands in their pocket on this issue. If you go back and track peoples' willingness to pay and do something about climate change, you use the Lowy Institute poll as a measure all the way back to when the community reached a tipping point on climate change  in 2006-2007, it was clear that people were uneasy with the idea of putting their hands in their pocket.



Waleed Aly: Isn't that why you have leadership?



Arthur Sinodinos: Whether it's a carbon tax or whether it's in the form of a floating price, that's why we came up with direct action, because people were concerned about the cost of living and the government seems to be adding to the cost of living at a time when electricity demand was already being markedly effected by a ramp up in state investment plans which was raising electricity prices very significantly.



Waleed Aly: People are always going to be concerned by cost of living pressures, not least when politicians are constantly telling them they should be worried about cost of living pressures. Doesn't there come a point when you have to show leadership on this, look the electorate in the eye and tell them this is what has to happen? Like what the Coalition did with the GST?



Arthur Sinodinos: You have to take the community with you and sometimes you won't take them with you if you keep shouting at them to do something that they are unwilling to do. You've got to find a way around that. That's why Abbott came up with the formula he did and through direct action it keeps our options open. It gives up time to see how the world develops, what schemes occur overseas because, don't forget, this is one of the very few cases, if not the only case in the world, of economy-wide carbon tax or floating price, quite different to some of the schemes you'll find sprouting up in California, China, other places.



Waleed Aly: Just one final question to both of you. Asylum seeker policy was really everything in the lead up to this election campaign. Then today it hasn't been mentioned. Do you think we're done with that issue now as far as the public conversation goes and the election campaign is likely to go off onto different terrain. Let's start with you Arthur.



Arthur Sinodinos: I think the issue will continue to bubble away. The Coalition will continue to monitor what's happening with regard to PNG and Nauru. No doubt, we will talk about it further during the campaign. Yeh, it's been a major issue over a considerable time so I can't see that's it's going to fall off the radar completely. As Tony Abbott made clear in his pitch yesterday, he's going to be talking more about his plans for the future rather than just focussing on those particular issue which he has embraced (?)the last few years.



Waleed Aly: Final word to you Andrew.



Andrew Leigh: I agree with Arthur on this one. Asylum seekers are going to be an important debate for Australia but I hope that the debate that is going to be conducted over the coming weeks is a little more sober and bi-partisan than we've seen in the past. These are some of the world's most vulnerable people and I think we need to focus on compassion.



I think just one word of correction, a very rare mistake that Arthur made. Ours is not an economy-wide carbon price. It covers around 60% of emissions because it excludes agriculture and transport.



Arthur Sinodinos: I take your point on agriculture, that's right.



Waleed Aly: Yep. I think we can agree on that. The point about compassion is an interesting one. That seems the be the Greens' slogan.... We'll see how it unfold. Gentlemen, I look forward to speaking with you, hopefully in a week or so.... Thanks gentlemen.




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