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Meet The Press -

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MEET THE PRESS

INTERVIEWS WITH SHADOW HEALTH MINISTER JOE HOCKEY AND CFMEU NATIONAL SECRETARY JOHN SUTTON.

7th September 2008

DISCUSSIONS ABOUT MEDICARE, INTEREST RATES, WA ELECTION, BY-ELECTIONS, FUTURE OF COAL INDUSTRY,
GARNAUT FINDINGS.

MEET THE PRESS PRESENTER PAUL BONGIORNO: Good morning and welcome to Meet the Press. The end of
Labor dominance across the nation - but some hard lessons for the Federal Coalition. That's after a
week of, slowing growth, falling interest rates and a shrinking budget surplus.

SENATOR: There being 33 ayes, 34 no the matter's been resolved in the negative.

PAUL BONGIORNO: The Senate begins hacking into the Rudd Government's revenue measures and one of
its tax cuts, the planned raising of the threshold for the Medicare surcharge levy.

PM KEVIN RUDD (Wednesday): And I would suggest to those opposite that they do the right thing in
the Senate and stand up for working families instead of providing an average slug of $1,200, which
hits their family budget.

SHADOW HEALTH MINISTER JOE HOCKEY (Wednesday): Will the Treasurer confirm half a million adults
will leave private health insurance as a result of the Government's proposed changes to the
Medicare levy surcharge? Will the Treasurer also confirm that there is no compensation to the
States in the Budget for the massive additional pressure this will place on the public health
system?

PAUL BONGIORNO: Shadow Minister for Health and manager of Opposition business, Joe Hockey is a
guest. And later, one of Australia's biggest unions replies to Ross Garnaut's proposals to cut
greenhouse gasses. But first - what the nation's press is reporting this Sunday September 7. In
Perth the 'Sunday Times' has "Labor backlash." Libs poised but no majority. A 6% swing against the
Carpenter government has the Liberal's Colin Barnett the likely next premier.

WA OPPOSITION LEADER COLIN BARNETT (last night): The voters of WA have clearly expressed their
viewpoint tonight - today. They have rejected the Labor Government.

WA PREMIER ALAN CARPENTER (Last night): It has not the sort of night or the sort of day that we had
hoped.

PAUL BONGIORNO: In Adelaide the 'Sunday Mail' has "Libs claim close Mayo victory." Despite an 11%
swing against the party, Jamie Briggs holds the seat against a strong Greens challenge.

LIBERAL CANDIDATE JAMIE BRIGGS: So it was always going to be a difficult battle for us and we had a
good result.

PAUL BONGIORNO: In Sydney the 'Sunday Telegraph' reports "Nationals lose Lyne." Independent Rob
Oakeshot blitzed the the former National Party-held seat winning a massive 74% of the two party
preferred vote. To help us read the tea leaves this morning, from what one paper describes as
by-election bloodshed, and to talk about the battle over the Budget, is senior Liberal and manager
of Opposition Business, Joe Hockey. Welcome back to the program, Mr Hockey.

JOE HOCKEY: Great to be here, and happy Father's Day, Bonge.

PAUL BONGIORNO: I should say same to you!

JOE HOCKEY: Good. I couldn't think of a better way to spend Father's Day!

PAUL BONGIORNO: Well, that's good. How confident are you that, ah, Labor rule has ended in the
west?

JOE HOCKEY: Well, you'd have to be reasonably confident. Certainly there was a massive swing
against the Government over there. It says a lot about the fact that Australians are increasingly
disgruntled with Labor in government, that there has been a massive swing in the Northern
Territory, followed by a massive swing in Western Australia. And there is compelling evidence that,
whether it be a Coalition of the Libs and Nats and independents, whatever comes out of it, Western
Australians wanted to get rid of their government yesterday, and they should get rid of their
government today and tomorrow.

PAUL BONGIORNO: Seems it's not a good time for an incumbent government.

JOE HOCKEY: Well, that's because the economy has deteriorated over the last 6 months - 6-12 months.
And what you've seen is that people are worse off since the election of Kevin Rudd. And
Australians, whether the commentariat agree with it or not - Australians are saying that it was a
lot better under the previous federal government than it is under the current federal government.

PAUL BONGIORNO: That's a very good political line to run, but international and economic conditions
were a lot better at the time of the Howard-Costello government, weren't they?

JOE HOCKEY: That's true, but we also were openly stating - and the record is clear - we were
warning Australians that were dark clouds on the horizon. We knew they were coming. We knew that
international credit markets were deteriorating rapidly. Liquidity was going out of those credit
markets. It was going to have an impact on Australia. Kevin Rudd was offering a message that things
would just go on, there'd be no risk in a change of government. Well, the first two months of the
Rudd Government were focused on trashing the Howard government legacy, and it came back to bite
them.

PAUL BONGIORNO: Two lessons, it seems to me, that we can definitely take out of the West Australian
result is that vote don't like opportunistic early elections, and if you get your leader right, you
a long way from winning an election.

JOE HOCKEY: I think it's pretty clear if Kevin Rudd was toying with the idea of the double
dissolution that went out the door last night. Secondly, I think people want to see a government
that delivers action, not words. We've got lot words from the current Federal Government, but not a
lot of action.

PAUL BONGIORNO: What about the leader? There's no doubt that Colin Barnett brought the Liberals to
government, it looks like, whereas Mr Buswell was taking them out the back door.

JOE HOCKEY: Well, I think the Liberal Party had a lot of brand challenges in Western Australia over
the last 6-12 months. Having said that, at the last Federal election, we got a swing to us in
Western Australia, picked up a number of sheets. So the bottom line is - if you are seen to be a
competent and united opposition, in this environment, you can win government. There is nothing that
cannot be achieved.

PAUL BONGIORNO: Isn't there a lesson in Mayo, where there was an 11% swing against the Liberals? If
you're right and the gloss is beginning to go off the Rudd Government, it doesn't seem to be coming
onto the Liberals.

JOE HOCKEY: I don't think that's right. That contradicts what happened in Western Australia, in the
Northern Territory.

PAUL BONGIORNO: That's a federal by-election.

JOE HOCKEY: In Gippsland, where the Labor Party did have the courage to run, there was a 9% swing
against the Labor Party. And the interesting thing is the Labor Party wouldn't have run if they
didn't think they could win. The Labor Party deputy run in Mayo or Lyne because they didn't think
they could win. What we saw in Mayo overnight was the impact of having eight candidates preference
against the Libs - you even had had Greens giving preferences to One Nation ahead of the Liberal
Party. So there was never going to be a chance that we were going to maintain our margin - Mayo was
a very good result with a very good candidate.

PAUL BONGIORNO: At the end of the weekend, the Federal Coalition has gone backwards - it's lost a
seat.

JOE HOCKEY: Well, because of Lyne. I don't think anyone would suggest that that was an anti-Liberal
swing in Lyne. Rob Oakeshott is a formidable political practitioner, and he had an enormous
majority in the State seat. He's switched to Federal. It's no surprise to anyone that an
independent has won Lyne.

PAUL BONGIORNO: On Tuesday, your colleague Christopher Pyne seemed to have given up on Peter
Costello answering the leadership call.

SHADOW JUSTICE MINISTER CHRISTOPHER PYNE (Tuesday): I think that it's high time that the Liberal
Party stopped wondering about whether there might be other leadership aspirants in the hills around
the camp, and simply support the commander of our forces, which is Brendan Nelson, and hankering
after anyone else is unhelpful.

PAUL BONGIORNO: Well, Mr Hockey, are you waiting for Peter Costello to ride down from the hills?

JOE HOCKEY: No, I'm waiting for everyone to stop criticising our current leader and get won the job
of being a formidable alternative government. Look - when Brendan Nelson became the leader of the
Liberal Party, there were an enormous number of commentators that were extremely disappointed that
their preferred candidate didn't get up or that they were surprised that someone should come
through the ranks. Brendan Nelson has jumped every hurdle put before him. He is, I believe to be, a
very, very decent man who's doing a very good job.

PAUL BONGIORNO: Like Troy Buswell, if you believe the opinion polls, he's fallen in every hurdle.

JOE HOCKEY: You know, Boz, if you're suggesting that Brendan Nelson and Troy Buswell are similar
characters, I think that's very wrong. I think - you know, they are very different characters.

PAUL BONGIORNO: Only in terms of their performance.

JOE HOCKEY: Brendan Nelson - we were written off before the Gippsland by-election. We won the
Gippsland by-election. We were written off at various points. As I've said before, diamonds are
forged under pressure. And anyone who leads the Liberal Party at a Federal level, after having been
in government for 11.5 years, is going to have enormous pressure applied to them. Brendan Nelson is
standing up to it, and I admire him immensely for it. I think people will be surprised at how well
Brendan Nelson continues to do.

PAUL BONGIORNO: Who we return with the panel - we ask, is the debate over dental schemes full of
cavities? And the red face of the week goes to Queensland Liberal Senator Sue Boyce, who had to
give the Senate a please-explain after missing a crucial vote.

SENATOR SUE BOYCE (Wednesday): Mr President, I'm sincerely sorry to the Senate for the
inconvenience that I've caused by missing that division. I have in other circumstances joked that I
have a Pavlovian response to the division bells.

PAUL BONGIORNO: You're on Meet the Press with Shadow Health Minister Joe Hockey. Welcome to our
panel, Jennifer Hewett from 'The Australian'.

JENNIFER HEWETT, THE 'AUSTRALIAN': Good morning.

PAUL BONGIORNO: And News Limited's Steve Lewis. Good morning, Steve.

STEVE LEWIS, NEWS LIMITED: Good morning, Paul.

PAUL BONGIORNO: The debate over lifting the threshold to the Medicare surcharge has received most
of the attention. But in the past sit fortnight, the Opposition and Family First also blocked a
cost-recovery measure that required the giant pharmaceutical companies to pay to have their drugs
evaluated before they are put on the Pharmaceutical Benefits Scheme.

HEALTH MINISTER NICOLA ROXON (August 28): This is a policy that the Liberal Government was so fond
of, it banked the savings in 2000 and 2008, and never introduced any legislation into the
Parliament. Now what do we find? We introduce the legislation into the Parliament, and you've voted
against it.

JENNIFER HEWETT: Well, Mr Hockey, how can you justify that? Surely the pharmaceutical companies can
afford it better than the Australian taxpayer?

JOE HOCKEY: Well, there's two points here, Jennifer. Firstly, we announced it in a budget, but we
never implemented it because, in its implementation, it was bad policy. Therefore we never
proceeded with it. And in fact, the Labor Party in Opposition opposed it as well. So the initiative
never went ahead. Now, they've come in, they're trying to find money everywhere - they introduce
what is an old proposal, claiming that it's good policy. It's not good policy.

JENNIFER HEWETT: Why?

JOE HOCKEY: It was bad policy because it basically meant that pharmaceutical companies with drugs
that were needed by a small group of people would not bother lodging applications if it was going
to cost them $300,000-$400,000. It just wasn't worth bringing into the Australian market
pharmaceuticals for a small number of people. The biggest losers out of that were aged Australians.
That's why we never proceeded with it.

JENNIFER HEWETT: Mr Hockey, if we look at another policy - you have obviously blocked quite a few
measures because the Government doesn't have a mandate for them. Yet their dental policy - they had
a clear mandate to introduce that at the last election. Are you now saying that you reserve the
right to block anything you don't like?

JOE HOCKEY: Well, we reserve a right to block bad policy. Whether they have a mandate or not, we
will block bad policy. If you're talking about mandates, the Labor Party never respected our
mandate - for example, in 1998, when we went to an election promising to introduce a new tax
system. They never respected our mandate on Telstra and the privatisation of Telstra. To have the
Labor Party lecture us about mandates is something pretty rich, I must say.

STEVE LEWIS: But Mr Hockey...

JOE HOCKEY: In this case, this is bad policy. Because their replacement of Medicare dental means
that people will not get emergency dental treatment when they really need it.

STEVE LEWIS: But isn't the risk for the Coalition, Mr Hockey, that in blocking all of these Senate
measures, that would put a $5 billion-$6 billion hole in the Budget, that you were going to
undermine your economic credibility, you're going to be seen as budget wreckers?

JOE HOCKEY: Well, let me tell you about it. Let's get into this. The Labor Party try and portray us
as budget wreckers. I want to be very fair dinkum about this - there is no economic upside in
increasing taxes. This is what the Labor Party wants to do. It wants to increase taxes on household
goods, which in itself is inflationary. I mean, they said the number-one agenda items for the
Government...

STEVE LEWIS: A surcharge is hardly a tax increase. It's going to give people some tax relief.

JOE HOCKEY: You know what the impact is? Unequivocally...

STEVE LEWIS: You can't have it both ways.

JOE HOCKEY: Well, you can. If they deliver the Medicare surcharge changes, there is no argument
from anyone against the proposition that private-health insurance premiums for 10.7 million
Australians will rise probably about 12% - well above inflation. So whilst they think, on the one
hand, it's great policy to change the Medicare levy surcharge, the impact on people who can least
afford it - particularly pensioners, self-funded retirees - is that they're going to pay massive
increases in private health insurance.

STEVE LEWIS: Can we just get this straight? Given your position as manager of Opposition business,
you're saying you reserve the right to block any measure this Government brings forward, whether it
has a budgetary impact or not - you reserve the right to block any measure.

JOE HOCKEY: Absolutely. If it's bad policy.

STEVE LEWIS: Do you have a longer list we don't know about?

JOE HOCKEY: The Government doesn't have that many policies. If they roll out their policies and
they say "These are our initiatives," absolutely, we reserve the right to stand up against bad
policy.

PAUL BONGIORNO: The Shadow Treasurer laid down some ground rules back in May that he may now
regret.

SHADOW TREASURER MALCOLM TURNBULL (May 21): From Budget night on, Wayne Swan owns every
interest-rate rise.

JENNIFER HEWETT: What does that mean that he owns every interest rate cut as well?

JOE HOCKEY: When Malcolm Turnbull made those comments, the Government had framed the budget as a
war against inflation. The RBA has stepped away from inflation being its number-one challenge and
said the slowing down of the Australian economy is the number one challenge. There is no argument
date the RBA has moved its focus from inflation, which Malcolm Turnbull was talking about, to the
slowing down of the Australian economy. And the last interest rate cut was brought about not
because the Government did anything about inflation - in fact, inflation is rising to 5% - and now
the RBA is dropping interest rates.

JENNIFER HEWETT: So the RBA should be keeping interest rates high?

JOE HOCKEY: No - the RBA should be focused on what it's doing, which is trying to stimulate the
Australian economy now that we are going into a downward trend. During the last election, the RBA
increased interest rates when inflation was 3.2%. And they said inflation was a challenge.
Inflation is heading to 5% and the RBA is desperately dropping rates. And why? Because the
Australian economy has been hit with a sledge-hammer - in part, that is a responsibility of the
Rudd Government because they came in and they started talking up inflation as the number-one
concern.

PAUL BONGIORNO: We all know that the Australian economy had to be slowed down.

JOE HOCKEY: Well, I don't believe that. I don't believe that at all. Why did the Australian economy
have to be slowed down? I mean, because anyone who could see what was happening overseas was
saying, "There is this tsunami coming towards Australia."

STEVE LEWIS: You're saying Glenn Stevens got it badly wrong.

JOE HOCKEY: I think the RBA, with the benefit of hindsight, may not have increased interest rates
at such a time as the world's credit markets were in free fall. And I think they underestimated the
impact on the Australian economy of the impact of the credit crisis overseas.

STEVE LEWIS: Mr Hockey, turning to the broader political issue and looking at the results overnight
- in Western Australia, the Nationals ran very hard on an independent tag. You're a supporter of
the Federal merger of the Liberal and National parties. Do you think that is something that should
still be supported? Is there a move behind the scenes to bring that to the fore now that these
by-elections are out of the way?

JOE HOCKEY: Steve, I'm a person that believes in principles. So if I said it yesterday, I agree
with it today, unless there's something that's changed dramatically. And there's nothing that has
changed dramatically, other than the fact that the Nationals had a good result. But let me be very
clear about it - the support for the Nationals in Western Australia was a vote against Labor. Even
if the Nationals claim to have run as an independent alternative to the Liberal Party, the bottom
line is it was an anti-Labor Government vote in Western Australia, and I think there is significant
pressure on the Nationals in Western Australia to form a partnership with the Liberals.

PAUL BONGIORNO: Thank you very much for being with us today, Joe Hockey. After the break - CFMEU
National Secretary John Sutton and the Garnaut proposals to cut greenhouse gases. On Tuesday, the
Treasurer had a big win when the banks followed the Reserve's interest rate cut. Brett Lethbridge
on the 'Courier-Mail's website remains sceptical.

WAYNE SWAN CHARACTER: I'm very pleased to take all the credit for the Reserve Bank cutting interest
rates today. Finally - the relief has come that working families have been waiting desperately for.
And I can't emphasise the importance of all banks immediately passing on this cut. In fact, let me
demonstrate - this represents the banks, and this represents the power of the Labor Government. And
this is what will happen if the banks do not comply.

(HITS PIGGY BANK INEFFECTIVELY)

PAUL BONGIORNO: You're on Meet the Press. On Friday, the Government's chief climate-change advisor
delivered his supplementary draft report on an emissions trading scheme. Professor Ross Garnaut is
proposing the Federal Government put a $20 price tag on carbon permits in 2010 - and increase that
by 4% each year, taking the price to around $35 a ton by 2020.

CLIMATE CHANGE ADVISOR PROFESSOR ROSS GARNAUT (Friday): A $20 price would add about 5 cents a litre
to petrol. It could be an increase of 40% in electricity prices.

PAUL BONGIORNO: So what could that mean for all of us, especially coalminers? And welcome to the a
program, National Secretary of the CFMEU, John Sutton. Good morning, Mr Sutton.

CFMEU NATIONAL SECRETARY JOHN SUTTON: Thanks, Paul.

PAUL BONGIORNO: Well, if electricity prices go up 40% and we're still depending on coal-fired power
stations, that could mean - what, job losses for your members?

JOHN SUTTON: Not necessarily. Garnaut has talked about the emissions trading scheme that needs to
come in, and the whole idea of industry polluters buying these permits is to generate funds, which
can then be used for a range of beneficial purposes such as assisting those in the community that
would be hit by the inevitable increases in electricity charges and other costs.

PAUL BONGIORNO: I suppose what we're looking at down the track, however, is really moving away from
coal as an energy source.

JOHN SUTTON: Well, not necessarily. Obviously Australia's energy is heavily reliant on coal at this
time, and coal - we're obviously rich in that resource, and we're very good at it and we're major
exporters. So I don't think we can be talking about any hasty retreat from coal for a whole range
of reasons. The emphasis that our union has been placing on this is investing now - we want people
to get cracking, particularly the big corporations to get cracking - on investing in what some
people call clean coal - or carbon capture and storage is the more technical expression - and we
really can't waste any time. We have to get cracking and make that technology work.

STEVE LEWIS: Mr Sutton, if we could just go to this issue - unlike, say, Paul Howes from the
Australian Workers Union, you seem sanguine about the impact on an emissions trade scheme on your
members. You don't think there will be any detrimental effect?

JOHN SUTTON: We could take an attitude - particularly a union like ours where we represent coal
miners and other heavy industry workers - that it's all too hard and we could brush it all aside or
be sceptics about the whole thing - we've chosen not to do that. We're active players in the
debate. We know we have to be on the front foot. I think the Rudd Government knows it has to be on
the front foot. And we have to work with what we've got and so we're quite positive that, provided
all shoulders go to the wheel, and that particularly means some of the big corporations here, we
have to work our way forward. We have to deploy the appropriate technologies. And we can turn this
into a positive.

STEVE LEWIS: So you're talking about concessions, or beneficial concessions, for workers and what
are have you. I think the Rudd Government has said that most of the money will go to low-income
workers and pensioners. Are you saying that people who are at the front line of these changes
should somehow get compensation from the revenue raised through auctioning these permits?

JOHN SUTTON: No, I'm not saying that. I think the Rudd Government - and Garnaut has talked about
50% of the funds raised defraying costs in the community for the low-income people - pensioners and
the like - but a significant chunk of that resources goes towards new technologies. And that's the
real issue here. If we can't start to invest heavily and rapidly deploy new technologies, we will
have a problem.

STEVE LEWIS: If we're talking about solar and wind and all these other renewable energies that have
been talked about, that's surely going to be at the expense of workers in forestry and mining and
those sorts of areas.

JOHN SUTTON: Not necessarily. When I say new technologies, I mean carbon-captured storage.

STEVE LEWIS: That's years away, isn't it?

JOHN SUTTON: Not necessarily. Demonstration plants are starting up now. And we've got to pour the
resources in and make that a winner.

JENNIFER HEWETT: It seems that you're therefore accusing people like Paul Howes and many of the big
businesses of fear-mongering.

JOHN SUTTON: Not at all. Not at all. There's a lot of voices in this debate, and Ross Garnaut has
been battered from all sides, I notice, at the moment. But look - everyone's got a right to have
say in this debate, and I don't criticise those others that are having their say in the debate. But
we've got a right to have a say, and we think this is a critical issue for our nation. It's
critical for our industries and the members of our union. And we have to take a positive frame of
mind about this, and get cracking and start to deploy the kind of ideas that Garnaut is talking
about.

JENNIFER HEWETT: So even if they move away from a lot of coal production and using coal for energy,
you don't think there's any danger of the risk of losses of thousands of jobs in the industry?

JOHN SUTTON: A - it's not inevitable that we will move away from coal production, provided we can
find a way of capturing carbon and sequestering it. But of course there will be other technologies
deployed along the way, and our members - we cover workers who work in energy - our members have
got every reason to have a bright future across a range of different energy sources.

PAUL BONGIORNO: Just briefly - what do you think of Garnaut's slow start-up?

JOHN SUTTON: Well, Garnaut is trying to balance a whole variety of very difficult factors here. We
think he's making a pretty good fist of it. I know he's been criticised from all sides, so that's a
good measure in itself. He's heavily dependent - his stuff is heavily dependent on the
international environment. And that is correct too.

PAUL BONGIORNO: Thank you very much for being with us today John Sutton, and thanks to our panel,
Jennifer Hewett and Steve Lewis. Until next week, goodbye.