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ABC News Breakfast -

View in ParlView

Subjects: Broadband; importance of economic stimulus; Parramatta-Epping Rail Link; federal election
campaign; Commonwealth Bank; consumer credit reforms.

VIRGINIA TRIOLI: Chris Bowen is the Minister for Financial Services and Superannuation, and he
joins us now in the studio. Chris Bowen, good morning. Thanks for joining us.

CHRIS BOWEN: Morning, Virginia. Morning, Michael.

TRIOLI: Now, could Julia Gillard, do you think, tell us exactly just how many megabits per second
your broadband scheme would be delivering to customers?

BOWEN: Well, I think Julia Gillard could have certainly explained the benefits of our scheme for
Australia and could do so -

TRIOLI: It wasn't a benefits question. It wasn't benefits.

BOWEN: And could do so in great detail. And I think she could explain, for example, that our scheme
would deliver 100 megabits per second to 93 per cent of the Australian population, as opposed to
Tony Abbott's plan where he or nobody else can tell us what proportion of the population will get
that sort of speed and they can only guarantee 12 megabits per second.

So I think yesterday Tony Abbott showed not just a lack of understanding of his own policy, but a
lack of judgement about the importance of things like broadband and information communications
technology to the economy, and I thought that was the essential point out of last night's
performance.

Nobody expects the leader to be across every minute detail of every policy. That would be a
ridiculous requirement to have. But when your party has made a major announcement on that day and
you can't explain it, I think that goes to the core of Tony Abbott's ability to be Prime Minister
of Australia.

ROWLAND: The other point of difference Tony Abbott was trying to get across was the Government's
plan is going to cost taxpayers billions more dollars than the one the Coalition's putting up.

BOWEN: Well, his plan is the equivalent of building the Sydney Harbour Bridge with two lanes. A
number of your emails made similar points, which I thought were very well made. This is an
important piece of economic infrastructure. It's important for our productivity. It's important for
educational outcomes, particularly in rural and remote areas which have been left out, certainly
underdone, by the Coalition's plan.

Now, this was the 19th plan of the Liberal Party. They had 18 plans in Government: none of them
worked. Why should we expect this one to be any different? Yes, it does require an investment from
Government. It's an investment which will pay off for many, many years to come.

TRIOLI: Now, Australian National Audit Office figures that have been released, or analysis has been
released, show that Treasury stimulus growth estimates were exaggerated and they were exaggerated
after lower than expected spending as well. Have you been fudging or exaggerating the figures?

BOWEN: No, and I don't accept that analysis, Virginia. I think what we see here...

TRIOLI: The Audit Office is wrong, is it?

BOWEN: Well, no, what you're seeing is interpretation of a report which was released some time ago,
as I understand it, as I read the Financial Review today, and a particular interpretation being put
on that and that's fine. And clearly, some people criticise us for spending the money too quickly.
We needed to spend the money quickly to stimulate the economy. We saw the Nobel laureate in
economics, Joseph Stiglitz, just a couple of weeks ago pointing out that our stimulus package was
particularly well designed in that regard compared to others around the world.

That's why we saw controversial and difficult decisions made, like making payments direct to
Australian families, investing in infrastructure and schools, largely because that sort of smaller
scale infrastructure could be done more quickly. Now, that rolled out and it rolled out quickly,
and you're seeing projects being completed across the country, and now the stimulus is being
withdrawn because we designed it in that way.

ROWLAND: I suppose the point is are you claiming credit too early? Did you claim credit in the
09-10 financial year for stimulus spending that may not have been spent when you were saying this?

BOWEN: I don't think anybody could argue that the money wasn't spent quickly. It was spent on a
range of projects: on schools, on direct payments to families, across the board, a number of
payments made, the upfront capital deductions for business, the First Home Owners Boost, all of
which stimulated the economy very quickly at that very point it was needed.

Now, around the world you look at other stimulus programs; they weren't calibrated in that way.
They took a lot longer to roll out and as a result they're still adding to economic growth as we
speak around the world, whereas ours has started to contract because we designed it that way.

TRIOLI: Now, the rail proposal that's going to be announced today by the Prime Minister, which has
been a long promised, a repeatedly promised rail plan that hasn't been delivered on, is it
dependent on there being a Labor Government at state level in New South Wales?

BOWEN: No, and this is an important commitment for western Sydney and certainly an important part
of our economic plan because it's important for federal governments to get involved, particularly
in public transport, in big cities. And as you say, this has been a project talked about and yes,
promised before. But -

TRIOLI: [inaudible] there's some scepticism because of that.

BOWEN: But these sorts of projects, Virginia, require federal investment. They're very expensive.
This is an investment of well over $2 billion and states do have trouble trying to find that amount
of money for what is a very important but very expensive urban infrastructure.

Now, this will open up that high technology growth area around Macquarie University for students
and workers from the west. It will free up the main western line from the west end of the city so
that we can have better services along the existing main western line because it'll provide an
alternative route. So this has real social and economic benefits for the people of the west.

ROWLAND: Can you understand voters' cynicism, though, that you're only announcing this big new
promise during an election campaign when a number of western Sydney Labor seats are in serious
threat?

BOWEN: Well, I think people expect when we're seeking a mandate for another term that we outline
our plans. That's the way things work.

ROWLAND: Why not do it six months ago?

BOWEN: Well, because these projects take a long time to work up. We've got to make sure that we
have all the necessary checks and balances in place and yes, we are seeking a mandate from the
people not only of western Sydney but Australia for our plans for the next term of government. Now,
this will be a very important project for western Sydney. As a western Sydney boy myself, I'm very
excited about this project. It will make a big difference.

TRIOLI: In what timeframe will it be delivered?

BOWEN: Well, we expect work may be able to start in 2011. The federal funding will roll out and as
I understand it will be complete by 2017. But there'll be more details put out on that.

TRIOLI: So 2017 is the completion date? So you'll have actually gone through another election well
before it?

BOWEN: I think people expect and understand that a big project like this doesn't get built
overnight. But the benefit of this project is because - as you say, Virginia - it's been talked
about for a long time. A lot of the planning work, the property acquisition, the detailed design
has already occurred. So we are able to hit the ground a little earlier than you might be for some
other sort of big rail projects.

TRIOLI: So as Michael mentioned, you could have actually hit the ground earlier about six months
ago then?

BOWEN: Well,,,

TRIOLI: Given you've conceded there's so much groundwork done already.

BOWEN: This is a project which is going to take a long time to build. Six months, you know,
frankly, when you're talking about a seven, eight year project, is neither here nor there.

TRIOLI: No, we're just trying to get to the heart of what creates cynicism about election promises,
that you only make these promises when seats are in danger.

BOWEN: Well, look, no, I don't accept that, and we've said all along that we have the view that a
Federal Government needs to be involved in urban infrastructure and urban public transport in
particular.

And that's one of our key criticisms of the former Government. They thought Federal Government
involvement in infrastructure finished at the borders of capital cities. Now, if you care about
productivity, you care about how cities work, you care about how people move around cities, then
it's not only appropriate, it's vital that the Federal Government be involved in these sorts of
projects.

ROWLAND: Do you sense renewed momentum in Labor's campaign and can that be derailed by the latest
Newspoll figures that show you are still in very serious trouble in the key states of New South
Wales and Queensland?

BOWEN: Well, you know, I think lots of polls show this election being very tight and I agree with
that. Certainly, the Prime Minister's campaigning very strongly. She's campaigning strongly on
policy and substance, and certainly I think that there is a heightened degree of community concern
about Tony Abbott's lack of economic judgement, his lack of credibility on key issues and his
readiness to be Prime Minister of Australia. And there's certainly a long way to go in this race,
but certainly that's a growing concern.

TRIOLI: So you're feeling a little more confident?

BOWEN: Look, this is an election which is going to go down to the wire, Virginia. We may well have
a long night on election night.

TRIOLI: I know that, but I'm actually, I'm just trying to get you to talk just a little more
frankly just about whether there's been - because some commentators have picked this up - in the
last 48 hours just a slight shift, a slight change in the breeze.

BOWEN: I'm always frank with you, Virginia, and I'm frank with you when I say that this election
will go down to the wire. It will be very, very close and anybody who calls it this far out is not
fair dinkum because I think it will be very tight. We are, if anything, I think, still the
underdogs.

ROWLAND: I'll just get you to put your Financial Services Minister cap on briefly. The Commonwealth
Bank is expected to announce an annual profit in the $6 billion vicinity very shortly. How does
that sit with you when so many other parts of the community are suffering?

BOWEN: Well, look, I think we need, obviously, to be responsible about this. We want a strong and
robust financial sector, of course we do. That was one of the key elements of us getting through
the global financial crisis and that was important. It was important in terms of good management of
financial institutions. It was also important in terms of regulation.

We also need to ensure that that profit is made fairly and that people aren't ripped off along the
way. We need to do that in financial services. We've outlined a range of measures on exit fees, for
example, unfair contracts and there's other consumer protections - the national credit regime which
we've brought in place - to provide those extra protections, and of course there's always more to
do. So I think this is a matter of balance. Yes, we want good, strong, profitable banks, but we
also want those basic and strong consumer protections in place, and that's what we've been doing.

TRIOLI: Chris Bowen, good to talk to you. Thank you.

BOWEN: And you, Virginia.