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Labor's Lindsay Tanner and Liberal Greg Hunt -

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VIRGINIA TRIOLI: Well now to our Friday forum. And a tale of two tours - well, three really.

We've had the Prime Minister's international pilgrimage taking him around the world in 17 days. As
we know he's now in China, where he's been discussing Tibet, trade and climate change.

A little more understated has been Brendan Nelson's listening tour of Australia. Although, if the
latest Newspoll is any guide nobody's listening.

Then we've had the tortured tour of the Olympic flame, provoking protests and hand wringing from
the organisers of the Australian leg and more international attention on Tibet.

Well, to discuss all of that, the international financial crisis and more, we're joined tonight by
the Finance Minister, Lindsay Tanner, and the Shadow Environment Minister, Greg Hunt.

They're both in Melbourne. Gentlemen, welcome to you both.



VIRGINIA TRIOLI: Nice to have you both on board. Let's start with some issues arising out of Kevin
Rudd's tour of China.

Minister, serious doubts have been raised today by some security experts about China's claim to
have arrested people involved with a foiled bid to try and cause some sort of terrorism activity at
the China games. They're raising doubts about that. Does the Australian Government still believe
that that's a serious claim made by China?

LINDSAY TANNER: I don't think we would cast judgement on the specifics of the claim, Virginia.
Obviously, there's a wider security concern with respect to the Olympics. A concern that we faced
when the Olympics were in Australia. There's a whole range of different groups who conceivably
could pose some kind of threat to the safety of athletes and spectators and officials at the
Olympics and it's important that they are protected so we don't cause to pass judgement on specific
suggestions or claims from the Chinese, we just want to make sure, like all other countries, that
there is adequate security for our athletes, our officials and spectators and all others at the

VIRGINIA TRIOLI: But here's the thing: according to one mainland Chinese paper - an official paper
- you've got Al Qaeda, the east Turkistan Islamic Movement and the Tibetan Youth Congress
apparently all colluding, all coming together, to want to create some sort of event at the Beijing
Games. Terribly convenient, isn't it, that three groups most annoying the Chinese Government have
somehow been identified as a terrorist threat in this very tumultuous lead-up to the Games?

LINDSAY TANNER: Oh, look, it's conceivable that's accurate but I don't know. I'm not in a position
to judge and clearly the Chinese Government's not a democratic government. it's not subject to the
kind of open scrutiny that governments in nations like Australia are. So, who's to know how much
truth there is behind these statements? But we're not really in a position to judge.

The key thing from Australia's point of view is the question of security; is it adequate? Is it
appropriate? That's the issue that will concern us. And I don't believe we'll be in the business of
trying to second guess whether or not specific alleged threats are in fact real or not - that's the
Chinese's business. That's there problem to deal with. Our concern is to ensure that the security
protecting our athletes and officials and spectators is appropriate.

VIRGINIA TRIOLI: Greg Hunt, do you have concerns about these claims?

GREG HUNT: Well, firstly, in relation to the athletes and security: that's our number one concern
and we're in agreement across Government and Opposition on that. Secondly, with regards to the
claims by the Chinese Government, what we have to do is work towards a progressive opening of media
and press and internet in China. We can't make a judgement this evening. But what we can argue for
is the means for making a judgement.

VIRGINIA TRIOLI: Minister, Senator George Brandis has called on the Government not to send any
political representation to the Games. He's saying you can have a kind of political boycott and
still allow Australian athletes to compete. When the Tibetan movement seems to be gaining so much
strength now around the world, is this starting to look like a good idea?

LINDSAY TANNER: Well, I note that Senator Brandis' suggestion is in direct contradiction to the
statement of his leader, Mr Nelson - Dr Nelson - who said that Kevin Rudd should attend the Games.
I think Dr Nelson's right, I think Mr Rudd or representatives of the Australian Government,
depending on the Prime Minister's timetable, should attend the Games. I don't think there should be
any kind of boycott.

The Tibetan issue's a very serious one and the issues there, obviously, are getting a lot of
worldwide attention, but it's a long way from being the only issue of that kind in our region.
There are many groups of peoples in different countries in our region with similar concerns,
similar issues and we can't set ourselves up as the absolute arbiter of all these things. We have
to express our views. Kevin Rudd's done that very forcefully, very strongly. But the suggestion of
some kind of boycott by either athletes or politicians, I think, really, is not an appropriate way
for us to proceed.

We've got to have an appropriate way of dealing with these things. Kevin Rudd's had the guts to
stand up to China in China. To say what Australians think. To put those views forcefully. I think
that's the right thing to do. But I think we should participate in the Olympics and attend the

VIRGINIA TRIOLI: Greg Hunt, Lindsay Tanner's right, isn't he, because you actually do have a clear
division now in your party and Brendan Nelson's position is very different from Senator Brandis'
one? Has someone had a word to Senator Brandis yet?

GREG HUNT: Well, ah, let me deal firstly with the actual Games themselves. It's not a place to put
the athletes futures at risk. It's a once-in-a-lifetime opportunity for many of them. It shouldn't
be politicised in terms of their futures. Secondly, in relation to Tibet, real, deep, significant
human rights issues. Thirdly, how do politicians, parliamentarians, leaders of government deal with
that? You have to take it up directly with the Chinese.

You have to do what John Howard and others did and now, to be fair, Kevin Rudd has done. But, I
think you must make any judgement closer to the time, remembering always these are not China's
Games, they are the Olympic Games and the world Games. But any judgment like that you've got to
make closer to the time.

VIRGINIA TRIOLI: Lindsay Tanner, the arrival of the torch for the Australian leg of the torch relay
is now starting to look like quite a serious security issue, particularly through Canberra. And
we've been hearing discussion about that today and in the last couple of days. What's the
Government's concern about this right now? How are you going to manage that?

LINDSAY TANNER: Well, I understand there'll be a pretty strong police presence there to ensure that
the torch relay leg in Canberra is handled with security concerns in mind. We're obviously going to
ensure that there will be a proper police presence there.

But, it's important to emphasise that people do have a right to peaceful protest and make their
concerns known about the situation in Tibet. It's something that's been there for a long time,
something we all should be concerned about. So, we've got to strike a balance here to make sure
that the relay can proceed unimpeded but that ordinary Australians have got the opportunity to
express their view to the Chinese Government in that way - through peaceful protest.

VIRGINIA TRIOLI: Greg Hunt is the Opposition pleased with Kevin Rudd's performance so far on this
world tour and particularly in China?

GREG HUNT: Well, in China, I'd say a pass mark on human rights and a fail mark on climate change.
That's the most balanced assessment I can give. I say the fail on climate because the big
announcement when we looked at it carefully turned out to be a joint co-operation agreement which
we had already signed and put in place in January of 2007 and then, most significantly, a $20
million announcement which, when we looked at it, was precisely the funding that had been announced
at APEC last year for clean coal co-operation with China.

That's the great world task. He had a unique opportunity and with great respect, I don't think he
lived up to the promise of what is possibly the single biggest global climate change challenge and
simply reannounced money rather than did something real, constructive and profound.

VIRGINIA TRIOLI: You're talking about the three clean development projects that have been announced
coming out of China. Lindsay Tanner, would you like to respond to that? Is this simply an old
arrangement that Kevin Rudd has put his signature to?

LINDSAY TANNER: Um, no, that's not correct. It's actually adding detail to wide commitments that
have been previously made. It's all about relationship building.

VIRGINIA TRIOLI: So they are previous commitments?

GREG HUNT: The money was there.

LINDSAY TANNER: That's right, the money was there. But you've got to actually spend it on something
specific. You've actually got to put detail into the proposals and reach agreement and progress
those things and that's essentially what's occurred. But this is really about relationship
building. We've got a big task. It's really important, having signed Kyoto after the previous
Government for 11 years refused to do it, we are now in a position to display leadership. We're now
in a position, along with other major Western nations, to persuade countries like China, who
obviously have the risk of possibly increasing their emissions very rapidly and quite dramatically,
to modify how they're going about their economic development to try and ensure that we minimise the
global warming impact of that. So Australia's got a really important role to play...

VIRGINIA TRIOLI: But you haven't done that yet. I mean, that's not what's been achieved in China.
And you're quite right, unless radical cuts are achieved, everything else is just window dressing,
isn't it?

LINDSAY TANNER: Well, no, I don't agree with that. I think that it's a process of relationship
building and gradual amelioration. So, you can't just go and sit down at a table and get people to
sign up to sudden dramatic change. There is a confidence building that's required. Keep in mind
that the people that the Chinese are sitting down with until very recently, were refusing to sign
Kyoto and were effectively saying climate change isn't real. So, Australia, represented by the
former Howard Government, until a few months ago, was actually an international forum saying,
'we're not interested in climate change'. So, it's not surprising that the Chinese would be
reasonably cautious about dealing with Australia on these issues.

GREG HUNT: Can I say something, Virginia, here?

VIRGINIA TRIOLI: Greg Hunt, yes, of course, go ahead.

GREG HUNT: Look, very briefly: the world needed two great cornerstones to advance towards a global
agreement. One was the G8 between the US and Europe last year, the second was at APEC between the
US and China and that occurred on our watch, on our soil and that was a fundamental building block.

LINDSAY TANNER: Just a pity the rest of the world thinks Kyoto's the primary foundation stone, but
anyway, everyone's entitled to their view.

VIRGINIA TRIOLI: Well, look, let's move on to your own leader's listening tour, which is Brendan
Nelson's listening tour of Australia. How much of what Mr Nelson hears around Australia, if it
comes down to complaints about your party's platform or reasons why they didn't vote for you at the
last election, how much of those observations will be included in a rejigged Liberal Party

GREG HUNT: Well we have to take on board the fact that we did lose and we would be kidding
ourselves and be at odds with the Australian people if we didn't acknowledge that.

VIRGINIA TRIOLI: So this is a reprogramming tour then?

GREG HUNT: The tough task of this first phase - the tough task is to get out there and to talk with
people, to be honest and to get an absolutely clear sense of what it is that they want and expect
from us and politics is a dialogue, it runs in both directions, but what Brendan's doing is he's on
the streets, he's being real, he's doing all of the difficult things and it does take time. Most
importantly, he brings that back.

Now, we've made some changes and the Government has made some changes. In terms of us, we did sign
on to Kyoto, we have made changes in relation to WorkChoices, so those were big foundation stones.
Now, for - our task is to put the pressure on the Government in relation to silence about real
economic issues such as an $84 billion State debt blow out, so we're talking about these things.

VIRGINIA TRIOLI: Okay. Let's move on to the major topic internationally and of course in Australia,
about the global credit crunch and the financial disaster that it could wreak on us and virtually
everyone else. Lindsay Tanner, if Malcolm Turnbull was wrong, as you suggested today, and you don't
need to slash $5 billion in spending immediately in order to have some effect on inflation, how
much then do you need to cut and what are you saying is the outcome that you're trying to achieve
from the cuts?

LINDSAY TANNER: Well, Virginia, we've set a target a few months ago of 1.5 per cent of GDP surplus
which requires spending cuts of $3 to $4 billion. I didn't say Malcolm Turnbull was wrong because
of an implied suggestion we should cut by $5 billion. He's not saying that. He won't sign up to
anything. He won't actually specify what should be done. He thinks inflation's a fairytale. He
doesn't thinks there a problem.

We do have a serious inflation threat in the country. We've got a huge amount of money pouring in
as a courtesy of the mineral boom. We've got major capacity constraints due to a lack of attention
to these issues by the former Government and you can't turn around those skills problems and
infrastructure problems overnight. And government spending's been running at 4.5 per cent real
increase in the current financial year which is seriously putting pressure on inflation and
interest rates, so we do have to cut substantially, we've got to get Government spending under
control. That's what we're going to be doing in this budget in a few weeks time.

VIRGINIA TRIOLI: Yes, indeed. But, I mean, while these criticisms are maintained, it's because, I
guess, you're not quantifying, you're not putting a figure by how much you can actually have an
effect on inflation, what the cutback might be by your cuts in spending.

LINDSAY TANNER: Well, people will be able to see that and cast their own judgment on budget night
as to the figures for the forthcoming financial year. We've already announced a small package of
cuts in February of this year as a result of the mid-year process of appropriations which has to
occur. We will have substantial spending cuts, as we've committed to doing. They will involve some
pain, spread pretty widely across much of the community. That's part of getting the budget back
under control and responsible economic management. The previous government sprayed money around
like there was no tomorrow: billions spent on Government advertising and all kinds of things,
pork-barrelling, discretionary grants. $4.5 billion on grants in 2007 and $2.5 billion in 2006.

VIRGINIA TRIOLI: I think it's time to give Greg Hunt a bit of a right of reply on that, Greg Hunt.

GREG HUNT: All right. The first thing is that on the last three budgets, the final net position was
a surplus of 1.5 per cent or thereabouts. What we see is that they've made the grand commitment of
doing exactly what the previous three budgets have done. Secondly, they're on line without lifting
a finger for probably a $20 billion surplus because you do have precisely the minerals boom, a
tripling of coal prices, your likely to see an increase in iron ore prices of 60 to 70 per cent and
then thirdly, there is one area of Government expenditure in Australia which is absolutely out of

The states are, between them, running up a net debt of about $84 billion over a four year period,
as opposed to a net Commonwealth surplus of about $60 billion. So you have savings of $60 billion
and a debt of $84 billion and a total silence from a Federal Government because it doesn't suit its
political agenda and that is real irresponsibility.

VIRGINIA TRIOLI: Do you want to respond to that, Lindsay Tanner?

LINDSAY TANNER: This is just illiterate economic nonsense, Virginia. Complete illiterate nonsense.
The states are investing in infrastructure which the former Federal Government criticised them for
not doing enough of. They're investing in the infrastructure we desperately need to improve our
productivity and our overall productive capacity.

VIRGINIA TRIOLI: Gentlemen, next weekend Kevin Rudd holds his 2020 summit, discussing ideas for
Australia's future. And interestingly, all those who've been asked to take part have had to do some
homework. They've been asked two questions which they've got to answer: if you could do one thing
in your area, what would it be? What's the one thing that you think would make the most difference?

And the other question, intriguingly: think and write about one issue over which you've changed
your mind in the last 10 years. What is it and what changed your mind? Gentlemen, you can pick
either question but could you answer one, please? Lindsay Tanner.

LINDSAY TANNER: I haven't changed my mind on much in recent times, Virginia, but probably the one
thing I have become much stronger on is the importance of competition and the critical nature of
having open markets and I think probably the influence of Paul Keating and the former government
and understanding better the reasons why those changes were made and the positive impact they've
had on our economy in the long term have really made me understand just how important they are.

VIRGINIA TRIOLI: So, a bit of a competition convert?

LINDSAY TANNER: Yeah, like, I was probably had mixed views, you know, 10 or 12 years ago and I saw
some of the down sides, but I think I, like a lot of people, have realised that all of those tough
reforms in the 80s and early 90s have borne fruit in recent times and they've been of great benefit
to Australian working people generally.

VIRGINIA TRIOLI: Greg Hunt, which question would you like to answer?

GREG HUNT: Question number one, thank you (laughs).

LINDSAY TANNER: Press your buzzer, Greg.

GREG HUNT: Yes, yeah. A global agreement on preventing deforestation. About 20 per cent of the
world's emissions at present are coming from deforestation. It's the one thing we can do right now
to have a huge impact on CO2 emissions over the next five years.

VIRGINIA TRIOLI: Well let's see if those ideas get floated and discussed next weekend. Gentlemen,
thanks so much for being on the program.

LINDSAY TANNER: Thanks very much, Virginia.

GREG HUNT: Good evening.