Andrew Leigh

I joined ABC Lateline host Emma Alberici and Liberal MP Josh Frydenberg for a wide ranging discussion on Liberal Party leadership tensions, the Budget deficit, Arthur Sinodinos, East Jerusalem and the approach of Clive Palmer and critical role of his Palmer United Party in the new Senate. Here's the full transcript:

ABC LATELINE  

FRIDAY, 6 JUNE 2014

EMMA ALBERICI: To discuss the week that began with tensions between the Prime Minister and his communications Minister and ended with debate over Israel.

I was joined a short time ago from Melbourne by Josh Frydenberg, Parliamentary Secretary to the Prime Minister and from Parliament House in Canberra, by Andrew Leigh, the Shadow Assistant Treasurer. Gentlemen, good evening.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good evening, Emma.

JOSH FRYDENBERG: Nice to be with you Emma.

ALBERICI: Now the events of the past week with Andrew Bolt and Alan Jones suggesting that Malcolm Turnbull is trying to destabilise Tony Abbott's leadership. Mr Turnbull himself said people might come to the conclusion that this was a coordinated campaign against them. What do you think, Josh Frydenberg, is behind these attacks on Mr Turnbull by the PM's good friends in the media?

FRYDENBERG: Look firstly, can I say about Malcolm Turnbull. He's extremely talented, he's extremely passionate and he's extremely experienced and we're very lucky to have Malcolm Turnbull in our team. His main job, his main focus is about fixing up Labor's mess that they left with the NBN.

ALBERICI: Can I steer you back to the question, sorry because as you both know, we run out of time pretty quickly on these forums. So let me steer you back. Malcolm Turnbull himself wouldn't discount the fact it could have been a coordinated campaign against him. What do you think?

FRYDENBERG: Of course not, there's no coordinated campaign and in fact there's no serious issue about the leadership here. And Malcolm I thought handled himself very well on the Alan Jones interview as well as on the 7:30 report.

ALBERICI: But what do you think is behind it?

FRYDENBERG: What do I think is behind it? I think people in the media particularly like to egg these things on. They really are a distraction just like Emma, the debates about winks, and dancing and cigars and attacks on family members. They are all distractions from the main game.

ALBERICI: Andrew Leigh what do you think?

LEIGH: Emma, I think there is a real battle going on for the soul of the Liberal Party at the moment. And that's between the two traditions which have animated the Liberal Party in the past - conservatism and small "L" liberalism. Tony Abbott has described himself in the past as the love child of John Howard and Bronwyn Bishop. And that statement reflects the fact that he sees himself firmly in the capital "C" conservative mould. So you've had the Liberal Party in recent years walk away from markets, moving away from the idea of using markets to tackle climate change, recently knocking back a foreign investment bid, increasingly becoming sceptical of markets in other areas. Malcolm Turnbull is the heir to that small "L" liberal tradition. Without him, then I think it rightfully falls to Labor to be the party not just of egalitarianism, but also of small "L" liberalism, so there is real policy substance to this tussle that's happening in the Liberal leadership.

ALBERICI: Josh Frydenberg, Malcolm Turnbull told the 7:30 program last night that in the right circumstances there might be an opportunity for him to be leader again. What might those circumstances be?

FRYDENBERG: Well there could the Billy Hughes of politics, Emma. He could stay there for 50 years and who knows what happens? But look, we've got a fantastic leader in Tony Abbott. Let's not forget when he came to power just last year, Labor got the lowest primary vote in 100 years and he saw off three prime ministers effectively. It was an incredible effort and now he is governing very strongly, and we are trying to fix up Labor's mess. Labor's $667 billion worth of debt. Their great debacles over things like the NBN, their carbon tax and their mining tax.

ALBERICI: You are moving away from my question again and I don't think I'm going to allow it in this forum. An Essential poll just today found 18 per cent prefer Tony Abbott, 33 per cent Malcolm Turnbull?

FRYDENBERG: Well I don't know who you are asking but if you go to the Liberal Party room, we're all firmly behind Tony Abbott, and he has taken some tough decisions Emma in this budget. He hasn't shirked those decisions he has taken the tough decisions now our job is to sell it and of course you're probably going to be a little bit unpopular when you are taking away a few entitlements to people.

ALBERICI: Okay the Prime Minister said this morning that having ambition is a prerequisite for entering the Parliament. Josh Frydenberg, you're considered a strong candidate for Arthur Sinodinos role as Assistant Treasurer. Is that a job you'd like?

FRYDENBERG: Look, I'm very happy doing what I'm doing and my real hope is that Arthur Sinodinos comes back to the ministry in his role as Assistant Treasurer. He's been a great friend and we worked together for John Howard. He brings immense experience to the role and I think you know, he's got a big future in Federal politics.

ALBERICI: Andrew Leigh, how much longer can the government function without an Assistant Treasurer. You're Labor's shadow assistant treasurer, is it a job that can do without a designated minister for what might turn out to be six months or more?

LEIGH: Emma, it is frankly, a little strange being a shadow without a body and I think the Government's loss of Arthur Sinodinos is showing. He has got some questions to answer, I think, through the ICAC process which is why he stood aside. But there's no denying that Arthur is an impressive mind. I've really enjoyed discussing ideas with him and that's reflected to me the sense that his depth of policy understanding would have been valuable in putting the Budget together. I think one of the reasons that this is the most unpopular Budget since polling began is because it doesn't reduce the deficit, the deficit is higher now than it was when the Government came to office, and it re-distributes resources so strongly from the least well-off to the most well-off. After a generation of rising inequality, Australia needs a budget like this like a hole in the head. This is a budget...

ALBERICI: Now, you've steered right away from my original question such that I've forgot what it was.

LEIGH: You asked me about the loss of Arthur Sinodinos and I believe that Arthur's values would have prevented some of the worst excesses of this Budget. The idea that it would be appropriate to take away the pension, to break the pledge on cutting the pension, to cut health and education and to leave the poorest single parents worse off to the tune of one dollar in ten. That's a massive hit to the most vulnerable. While at the same time the Government are putting in place $50,000 a parental leave scheme for the most affluent.

ALBERICI: Let me pick you up on that, Andrew Leigh, because welfare groups have in particular come out this week, with a stinging attack against the Budget, specifically the decision to deny people under 30, the dole for six months. But you are an economist. Surely being in a job or training are the best alternatives for the young person?

LEIGH: They absolutely are Emma, you're dead right on that and I think programs like Youth Connections can make a real difference. What's got less evidence backing it is a program like Work for the Dole. Shown by the only independent evaluation that's been done, commissioned by Tony Abbott to increase joblessness. I don't think there's any evidence that joblessness is a personal failing - if you believe that you think the Great Depression was a great sort of outpouring of lassitude. The reason that unemployment is twice the national average in say north-west Tasmania where I was recently, is because of structural differences in the economy, and so you don't want to punish 20-somethings who are finding it really tough to look for a job in Devonport by telling them that they have to sleep in a car or on the streets for six months before they can get access to unemployment benefits. We are a better country than that.

FRYDENBERG: Emma, can I just correct a couple of things which Andrew said there which are completely wrong? Today's Budget deficit is $49.9 billion. It actually falls to just $2.8 billion in 2017/2018.

If we are allowed to pass our Budget measures, we will reduce Labor's debt by $300 billion over the next 10 years, that's saving $16 billion a year in interest. So it's fine for Andrew Leigh to wax lyrical about the history of the Liberal Party but at least he should know the budget numbers a bit better than he's just indicated.

ALBERICI: Well Josh...

LEIGH: Emma the numbers that Josh has just given you there compare Joe 2013 with Joe 2014. They compare Treasurer Hockey's first budget update with his budget - that's not the fair comparison. As Scott Morrison made clear in Question Time this week, as Peter Costello made clear under the Charter of Budget honesty, the baseline when a government takes office is the pre-election economic and fiscal outlook. Compared to that the deficit is bigger, not smaller.

ALBERICI: Do you concede that, Josh Frydenberg?

FRYDENBERG: Absolutely not. I mean look Andrew Leigh...

ALBERICI: But under the Charter of Budget honesty, that's why we had the so-called PEFO document?

FRYDENBERG: And you know the PEFO document proved to be very wrong in a number of areas, for example...

ALBERICI: But the same people who produced the PEFO documents produced your Budget numbers?

FRYDENBERG: But we had to update those Budget numbers, but Emma the key point here is Labor said for example they only made...

ALBERICI: Sorry can I just take you back to that particular point. The same people did those two documents. When you say you had to update the numbers, of course that was to reflect your changes in policy?

FRYDENBERG: But also the fact that there has been, for example, a large number of public servants that Labor never accounted for to get... that they were going to get rid of. They were going to get rid of 1400 public servants and in their PEFO numbers they only accounted for 800. For example with Manus Island, they never accounted for the cost and the expenditure for Manus Island and Nauru beyond the year end of 2013. So the PEFO numbers in that respect were wrong. Look Andrew Leigh actually agrees with a number of measures in our budget, he agrees with Medicare co-payments...

ALBERICI: Before we get into too many different pieces of detail, let me ask Andrew Leigh to respond quickly before we move on.

LEIGH: We had no policy to get rid of public servants, Emma. The baseline is what was set down by the secretaries of treasury and finance and Peter Costello laid that out in his Charter of Budget honesty - it was a good thing to do, I'll give him credit for putting it in place. I just wish Joe Hockey would play by Peter Costello's rules.

ALBERICI: Okay, Josh Frydenberg, your Attorney-General George Brandis says it's time we stopped referring to East Jerusalem as "occupied". This is a significant shift in Australia's position on Israel. Do you support it?

FRYDENBERG: Look I absolutely support what George Brandis and Julie Bishop have said in this case because what we want is neutrality when it comes to the language that is between the Palestinians and the Israelis, because we believe as a government there needs to be a two-party and two-state solution, and it needs to be a negotiated solution, so we don't want to prejudge the outcomes, Emma, by saying if one side is occupying the other, that's effectively saying the other side has no legal claims and these are disputed claims. Look, Bob Carr re-wrote the rule book when it came to the Israel-Palestinian issue. He actually went away from decades of a bipartisan consensus, particularly Julia Gillard, Bob Hawke and their other predecessors, so I think what we have done here with the statement by George Brandis reflecting his discussions with Julie Bishop is to try to bring some neutrality to the language that we use.

ALBERICI: Andrew Leigh, the Attorney-General says it's not appropriate or helpful for the Australian Government to describe areas of negotiation in such judgmental language. What's your view?

LEIGH: Well Emma, East Jerusalem was occupied after the six-day war in 1967 and that prompted UN Security Council resolution 242 which recognised that East Jerusalem was occupied territory. That has been the language that Australian governments that successive governments have used since then and it reflects the fact that Australia can be a good friend to both the Palestinian people and to Israel if we work hard for a two-state solution.  I think back to the terrific Ben-Gurion warning where he said Israel can be Jewish, it can be democratic or it can cover all of the traditional lands of Israel, but it can't be all three. We need to encourage a two-state solution, and putting ourselves with just a couple of countries in the world isn't the way to do it. The position Bob Carr brought us to in Government was to abstain on a resolution giving Palestine non-state, observer-state status, and we did that - the vast bulk of the world's countries either voted yes or abstained on that resolution. There were only a handful that voted no.

ALBERICI: Finally and just briefly, let's talk about Clive Palmer. Putting aside his blunderingly offensive remarks about the PM's Chief of Staff this week, he has been able to cut through with voters. Could that be because Australians are sick of conventional politicians who are predictable and robotic, who never deviate from their talking points? Josh Frydenberg, I will start with you?

FRYDENBERG: Well there is no doubt you're right. Clive Palmer has hit a chord with some voters and no doubt there is a lot of cynicism out there with contemporary political discourse and particularly the activities of the both parties. But I think we would make a great mistake on our side of politics if we were to underestimate Clive Palmer. I think we need to sit down with him and discuss constructively the measures in this Budget, explain to him why they are in the long-term interests of the nation, while we can't keep on spending $180 million more a day than we take in tax, why one in five families or households are only net contributors to the tax system, the rest are actually getting more benefits than they are paying in tax - those systems are not sustainable and whether it is the Commission of Audit, or the Parliamentary Budget Office or the IMF, we are being told we need to take some difficult but necessary measures to bring the Budget back into surplus, to pay back some of that debt and to deal with the demographic challenge.

ALBERICI: Is it time you gave Clive Palmer the staff he says he needs to be able to properly scrutinise your bills?

FRYDENBERG: I believe he does have the staff already to properly scrutinise those bills...

ALBERICI: But the sticking point is here, he won't talk you to you unless you give him more staff. Why don't you just give him the staff he wants.

FRYDENBERG: Well, that's not a decision for me Emma.

ALBERICI: Well what do you think?

FRYDENBERG: Well, look I do think he's already got a lot of staff and the question is where do you go next? If he gets another five staff, does he ask for 10. What, does he want to bring in extra advisers on top of that? I mean who knows where he's going to end. He has his own personal wealth, I'm sure he could afford it.

ALBERICI: Shouldn't you at least or shouldn't your side at least be talking to him about that?

FRYDENBERG: I'm sure we are and you know... but the point is Clive Palmer has said he doesn't want to talk to us, so we would love to sit down and constructively discuss with Clive Palmer what's in the Budget.

ALBERICI:: Andrew Leigh, on the matter of Clive Palmer, why do you think he has resonated so well with the community?

LEIGH: Clive as a personality is really literally larger than life and he is juggling an awful lot. He is going to be responsible not just for the electors of Fairfax, but also for leading his party's negotiations with bills going through the Senate. We'll deal with him straight up, just like we will deal with the Australian people. We will make our arguments based on Labor values, talking about fairness and the importance in an Australia in which we've seen a big rise in inequality, to not be hurting those who are the most vulnerable in the community - pensioners, the unemployed. Young Australians who want the chance to go to university without the risk of being hit by a debt that is burgeoning out of control. So, we'll have all those conversations with Mr Palmer, as we will indeed with crossbench senators.

ALBERICI: We're out of time. There's always a lot more to talk about. That's for another day. Thank you both very much for coming in, Andrew Leigh, Josh Frydenberg.

LEIGH: Thanks, Emma. Thanks Josh.

FRYDENBERG: Thanks, Emma. Thanks Andrew.

ENDS