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Early Agenda -

View in ParlView

JOURNALIST: Penny Wong thanks for your time.

WONG: Good to be here.

JOURNALIST: You called on Malcolm Turnbull to bring his Senators into line on the Water Bill. He's
done that hasn't he?

WONG: We are very pleased with the indication from the Opposition last night that they will be
supporting the Bill - that they won't be insisting on their amendments. So we are very pleased with
that change of heart and this Bill, of course, is key to the future of the Murray-Darling Basin.
This is the first time in our nation's history that we will be able to manage this Basin as a
whole-of-Basin, reflecting the fact that rivers run across borders.

JOURNALIST: The Opposition has attached a declaration to the Bill calling on the Government to stop
the Victorian Government's North-South pipeline. Do you have any intention of doing that? Or will
you ignore that attachment?

WONG: We made clear when the amendment was moved on that - our view on that amendment. We believe
it's inappropriate; we make the point that the Liberals in Victoria are going to use the water from
the pipeline. But most importantly what we said is this: this is a Bill which delivers the means to
secure the future of the Murray-Darling Basin, and it is critical that the Bill was passed and we
are very pleased that the Opposition has backed down on its amendment.

JOURNALIST: On this attachment, is there any legal requirement on you to act?

WONG: This is the amendment you move when you want to support the Bill but simply make a point on
the way through and that's what the Opposition is doing. As I said, we welcome their support for
the Bill - we welcome the fact that they have backed down on the amendments they previously moved.
Because after all, this is legislation that is all about the future of the Murray-Darling.

JOURNALIST: So you just ignore the attachment - it's irrelevant. The bottom line is the Bill has

WONG: We have made our position clear. We are grateful for the support of the Senate on the Bill
and - as I said in the Senate last night after the Opposition made their views public - we welcomed
it. We also recognise that there remains a lot to do in the Murray-Darling, but there is a package
of reforms, the Bill is central to that. But we will also continue to purchase water, to invest in
infrastructure so we can return water to the very dry river system.

JOURNALIST: I want to look at the Lower Lakes in South Australia - the South Australian
Government's idea or plan of flooding the lakes with sea water. The Federal Government is going to
give a ruling on that - a decision as to what vetting will be necessary. What sort of vetting is
possible? You either do it or you don't.

WONG: Well as I understand it, the South Australian Government has applied under Federal
legislation for approval, under the Environment Protection and Biodiversity Conservation Act. Peter
Garrett is in charge of that Act and he is in charge of determining the approval or non-approval of
that application and any conditions associated with it. But just in terms of the Lower Lakes, what
was clear when we met as Ministers recently, as the Ministerial Council for the Murray-Darling, is
that we are really facing enormous and historic challenges in the Murray-Darling. There are
pressures all over the system and unfortunately the Lower Lakes and Coorong is one of those. The
key priority for the South Australian Government and for all governments must be to ensure that the
Lower Lakes are not acidified - that they don't turn acid as a result of having so little water in
them. So that is the first priority.

JOURNALIST: Is there any hope at all, in your mind, that the Lower Lakes remains a fresh water

WONG: We will keep working as a Government to ensure we return water to the river but the reality
is we are up against it in the Murray-Darling. We are at historic lows - we have been for a long
time. And unfortunately the situation in the Lower Lakes reflects climate change, the current
drought as well as a history of over-allocation.

JOURNALIST: Your critics say that now is not the time to be diverting water away from the
Murray-Darling to Victoria and to Melbourne for example, when you could be having that fresh water
going down to the Lower Lakes.

WONG: Well some of these critics are the same people in the Coalition who are also critical of the
Government purchasing water. And the purchasing of water, buying of water is precisely so we can
put more water back into the river and deal with the legacy that this Government inherited and that
the communities are struggling with, which is a river system which is very dry.

JOURNALIST: On to the emissions trading scheme. Your White Paper is due on December 15. The Prime
Minister yesterday urged backbenchers to hold their nerve. Do you understand why the likes of
Jennie George and others - her electorate where Blue Scope Steel have a big presence - and why they
have got these concerns?

WONG: The issue is that the backbench is discussing are the issues that the Government has to
balance. We are very conscious as a Government of the balance that we have to strike; we have to
strike the balance between the importance of today's jobs and tomorrow's jobs. We have to strike
the balance between the different views across the community but we also have to do this
economically responsibly. But we also know that we have to act on climate change and the reason we
have to act on climate change is clear: the costs of failing to act are going to be far greater
than the cost of responsible action now.

JOURNALIST: Are you seeing the result of more efficient or I suppose the industry stepping up their
lobbying in the lead-up to you finalising your White Paper?

WONG: Well Kieran, this is a whole of economy reform, it's a large reform. It's not surprising that
different sections of the community and industry are very clearly putting their views to
Government. We anticipated this. We understand that this is part of the process of this type of
reform. But we are very clear about what we believe and that is: this is the right thing to do for
Australia - for Australia's economy now and into the future.

JOURNALIST: You say that it's the concerns expressed by the backbench, of course that is true. But
it's also concerns being expressed by numerous fellow Cabinet Ministers so we hear, that a number
of them have been arguing for the target to be lower. Now that argument is obviously still ongoing.
How hard is it to bring the Cabinet with you?

WONG: Look, as I've said, we are as a Government seeking to strike the right balance. And we will
continue to work with the different sectors of the community - different sectors of industry.
They've put their views to us and we are taking a very measured and responsible approach to
tackling this problem. But again I say this: we know that tackling this problem - climate change -
is something Australia needs to tackle. We've just been talking about the Murray-Darling Basin.
What we know there is we're seeing climate change already in action. So we understand already as
Australians the cost of failing to act. What we have to do now is to strike the right balance - to
put in place a system which enables us to act responsibly to respond to climate change, to reduce
our emissions so that we can be part of all the nations of the world tackling this very significant

JOURNALIST: Has it been a willing debate in Cabinet on this...

WONG: Kieran, it wouldn't surprise you to know I'm not going to discuss Cabinet conversations with

JOURNALIST: You're off to Poland next week. You said you'd have an interim target to take with you
- you don't. Are you waiting to see what Obama is going to do?

WONG: As I've said when I announced the date of the White Paper and also when I gave a Ministerial
Statement in the Senate this week about the announcement: it became clear to us in the course of
consultations that there was strong merit in announcing the decisions on the design of the CPRS -
the Carbon Pollution Reduction Scheme - at the same time as the targets. So that's why we've taken
the decision to announce both of those...

JOURNALIST: So it's got nothing to do with Obama and what the new American administration might or
might not commit to?

WONG: Well for us we believed that business did want the certainty - that certainly was the
feedback to us. Business needed the certainty of having both the targets and the design decisions
on the table at the same time and that's what we'll be providing. Can I say this on Obama: this
really demonstrates that the world is moving and we welcome President-elect Obama's commitment both
to an emissions trading scheme - a cap-and-trade system such as the Carbon Pollution Reduction
Scheme - as well as targets to reduce emissions. This is very important leadership from the
President-elect. And let's understand why we need to - we all need to address emissions - why we
need to have a Carbon Pollution Reduction Scheme. It is about reducing Australia's contribution to
climate change at the lowest cost to the economy.

JOURNALIST: The Prime Minister often refers to Australia as a middle power but your abilities to
lead in many ways in Poland is restricted now and diminished by the fact that you don't have a
target for 2020. How can you tell others to come to the table if you're not doing it yourself?

WONG: We should remember where this conference in Poland comes in terms of the international
negotiations. In Bali, as you know, where nations agreed to the Bali Roadmap and Australia was
integrally involved in the drafting of that and the agreement to that. That set out a range of
issues that Governments, that nations [inaudible] to negotiate on leading up to the conference in
Copenhagen. So Poznan in Poland is the midway point in that process. This is not the time that
nations are going to be asked to bring binding commitments to the table and we will participate as
we have to date constructively in Poland and we will continue to participate constructively next

JOURNALIST: Minister Penny Wong, thanks for you time.

WONG: Good to speak with you.


AM Agenda

3 December 2008

KIERAN GILBERT: Welcome back to AM Agenda, good morning to our panel-Liberal frontbencher Scott
Morrison and Labor MP Jason Clare-gentlemen, great to see you both.

SCOTT MORRISON: Good morning.

JASON CLARE: Good to see you Kieran.

KIERAN GILBERT: Finally some good news Scott. Yesterday with the-quite a substantial rate cut the
good burgers of Cook will be very happy about that-your electorate.

SCOTT MORRISON: Well I think everyone who has a mortgage will be happy about that.

JASON CLARE: Absolutely.

SCOTT MORRISON: If you're a Westpac mortgage holder though-or you're an ANZ mortgage holder-you'll
be disappointed though that you had up to 20 per cent of that rate cut not passed through.

And the Coalition has been consistent all year on this. Rate cuts must be passed through in full.
And I think the government have had mixed messages from maximum possible pass throughs-what ever
that means-to Lindsay Tanner yesterday also putting qualifications. And the Treasurer had two
positions in two days on this, this week. So the government's got to be clear about what they
expect from the bank. I mean tax payers are underwriting guarantees.

KIERAN GILBERT: Well Lindsay Tanner was sitting where you guys are yesterday morning.



KIERAN GILBERT: And he was qualified. He didn't say there should be a full pass through. Can you
understand why Westpac goes back and, you know ANZ and they think, oh well maybe we can get away
with less?

JASON CLARE: Well, when you see the Commonwealth Bank pass the whole lot on, when you see NAB pass
the whole lot on.

SCOTT MORRISON: As they should.

JASON CLARE: There's no excuse for the rest. It shows that conditions are normalising. And if you
read the Reserve Bank report yesterday it shows that the financial system is starting to improve.
The splits are reducing by about 50 per cent and that makes it possible for the banks to pass the
whole lot through.

So my message is: pass it on as soon as you can. Follow the lead of the Commonwealth Bank, follow
the lead of the NAB and pass it all on. Because if they do what it means is that four successive
rate cuts in a row mean that if you've got a mortgage of $300 000 it's an extra 600 bucks in your
pocket-in your wallet-or potentially being spent in the economy, stimulating the economy and
protecting jobs.

KIERAN GILBERT: And what's the mood like-and I want to get the sense from both of you, your both in
Sydney of course, Scott your electorate is in the Sutherland shire of Sydney, you're in Blaxland ...


KIERAN GILBERT: ... which is around Bankstown-a working class area. What's the mood in those
particular seats, first of all Jason?

JASON CLARE: Yeah well in my patch-the mortgage stress capital of Australia-we've had three homes a
day getting repossessed for the last two years. Things are starting to improve actually.

I rang the Bankstown sheriff's office yesterday to ask them: what's the impact of interest rate
cuts, all of these cuts over the last few months? And they said that repossessions have dropped in
the last two months by about 30 to 40 per cent. So it's encouraging news, gone from highs of 60
people losing their homes a month in August/September down to around about 31 and 37 in October and

So still too early to tell, but certainly when you've got an extra 600 bucks in your pocket rather
than giving it to the bank it makes it possible to keep your head above water, pay the mortgage
back, pay the arrears back, or potentially use that money to pay for other things like petrol and
food and a holiday.

KIERAN GILBERT: I suppose the challenge now is when-if, spending and growth does slow is keeping
people in their jobs ...

JASON CLARE: That's the top priority.

KIERAN GILBERT: ... for them to keep the house and the roof above their head.

JASON CLARE: And look what's happening in America. People are losing their homes and they're losing
their jobs. Officially in recession as of yesterday and other figures yesterday said that America
1.2 million jobs in the last 12 months.

That's a horror story and that's why the priority of the Rudd Government is to keep the economy
growing and to protect jobs.

KIERAN GILBERT: Scott, what's the mood like in your area? Are people worried? I mean you see-we've
seen the news every day-the fall out of this financial crisis. Are your constituents, are they
expressing concern; are they worried?

SCOTT MORRISON: Well I think everyone who has a mortgage and everyone who has commitments and
everybody who has investments-you know, if you've got retirement investments and they're frozen up
in, you know mortgage funds and these sorts of things and they way the financial crisis has been
handled and what not. Everyone has their set of issues, whether you're a mortgage holder or a
self-funded retiree or wherever you happen to be.

The key point I picked up from what Jason said though was this issue of unemployment. That's the
biggest challenge facing the housing sector. It's the biggest challenge facing those who have
mortgages. You've got to keep your job to keep your home.

And yesterday we suggested that the government take out of that $8 billion they put aside for
residential mortgage backed securities-they take 500 million of that, that is already out there,
and put that into shared equity mortgages.

Because shared equity mortgages are a really good opportunity if you do get into mortgage stress.
You can reconsolidate your mortgage and you can go in a situation where you can have the bank take
effectively a portion of equity in your property. And that way you can reduce your payments.

And we need some more options for people to stay in their homes. And shared equity's a very good
opportunity for doing that and by investing in that sector-we've invested in RNBSs. Now these
shared equity funds did not get the advantage of that investment and they're facing the same
capital drought as other sectors. So it's a good suggestion. I hope the government takes it up and
there's an opportunity to help people stay in their homes. Because with joblessness rising in the
current situation-and it's going to get worse, as the government has forecast-that's the pressure.

KIERAN GILBERT: It seems to make sense, to give the government and those with mortgages more
options. Jason, we had the good news yesterday-today the less than good news with, I suppose, the
growth figures out expecting to show the September quarter there-the economy just crept along.

JASON CLARE: Yeah, well. Things are pretty grim around the world and we can expect that everything
that's happening around the world-21 of the 30 OECD countries going into recession is going to have
an impact here in Australia. It's going to dampen demand which is why the Reserve Bank cut interest
rates yesterday, which is why they've cut interest rates for the last four months. It's to inject a
stimulus into the economy, put more money into the economy to protect jobs.

I think I read in the paper today that what the RBA did yesterday is, in effect, an extra $10
billion into the economy. Next week you're going to see the federal government inject another $10
billion into the economy.

That's money for pensioners, money for young families, money for first home buyers. But it also
means money for small business it ends up being money for construction companies. It's all about
getting money into the economy-swirling around the economy-and keeping people in their jobs.

SCOTT MORRISON: Well the Coalition supported those packages and this is why, with the economy
forecast to grow-the growth figures will show growth today-why the government has an obsession with
talking about deficits.

Now, I mean a deficit while you're in a growing economy is not ... shouldn't be the first club out of
your bag. And the concern the Coalition has is it seems to be option number one. And we have these
big stimulus packages coming through next week. We have had a further rate cut. And as Julie Bishop
has been arguing, I think incredibly well ...

JASON CLARE: Is anyone listening to her?

SCOTT MORRISON: She's been making the case, very strongly ...

JASON CLARE: Is anyone listening to Julie anymore?

SCOTT MORRISON: Well maybe the government ...

JASON CLARE: She doesn't even get a question in Question Time.

SCOTT MORRISON: Well maybe the government should listen to her. Because what she's saying is that
you should wait to see the impact of your packages.

JASON CLARE: Well we hope that she asks us a question.

SCOTT MORRISON: You should wait to see the impact of your packages and the Reserve Bank cuts and
then make decisions about what happens next-but this obsession with deficits.

The Canadian finance minister last week told his parliament that they can keep Canada in surplus
and they're looking at growth of 0.6 of a per cent. Now if the Canadian Prime Minister and the
Canadian finance minister can do that, then maybe it's the Canadians that the Prime Minister should
be listening to rather than the Germans and the French and the Italians who are all obsessed with
deficits and it seems that's where he is getting his economic advice from.

JASON CLARE: Scott, if you want to go down that road then why is the Chinese government, which is
growing at eight per cent, going through a fiscal deficit at the moment? Why did Peter Costello
have a deficit in 2001-02 when the economy was growing then?

SCOTT MORRISON: We want to talk about how many surpluses the Coalition had? I'm happy to have that
debate, happy to have the surplus debate about the Howard-Costello government.

JASON CLARE: The key point is this. That Malcolm Turnbull says it's all about jobs, jobs, jobs.
Well what's your priority? It's about injecting money into the economy to protect jobs.

SCOTT MORRISON: Well it's not the going into deficit as option number one.

JASON CLARE: And no one says it is. The Prime Minister said we expect a modest surplus. But here's
the question for you: If the economy worsens, if things get worse around the world and another
stimulus package is needed to inject money into the economy, to protect the people that you and I
represent are you prepared ...

SCOTT MORRISON: Name me one economist who is forecasting us to go out of growth. There is not one
economist out there who is saying we are going to go out of growth.

JASON CLARE: Name me one economist who disagrees with the government.

SCOTT MORRISON: We are in growth.

JASON CLARE: Name me one economist thinks that we're doing the wrong thing.


SCOTT MORRISON: They're talking about the hypothetical scenario, we're talking about the real
scenario which is the economy will be in growth.

KIERAN GILBERT: Okay-next topic. School funding-let's move on. I don't think we're going to resolve
it this morning ...

JASON CLARE: Maybe not

KIERAN GILBERT: ... over breakfast. The school funding, the national school curriculum is being
linked to $28 billion of school funding over the next four years. Scott, the Labor Party campaigned
on this. They said: we want a national curriculum. What's with the holding up in the Senate?


KIERAN GILBERT: They did campaign on it; they've got a mandate for it.

SCOTT MORRISON: Not to tie funding. Not to tie funding to a curriculum that parents and teachers
haven't even seen.

KIERAN GILBERT: But you supported the curriculum as well-the national curriculum. You support the

SCOTT MORRISON: But the tying this issue ... tying this issue to funding is the issue. And now what
Julia Gillard has to decide today, is she going to go with form and put her ego over this
issue-over funding for schools. She has this opportunity to let this Bill be passed, for the
funding to flow and she can deal with the curriculum as a separate matter.

But no, she wants to tie the issue-two together. And my colleague Stuart Robert said this morning,
think ... you know; we would like our kids to be able to read The Little Red Tractor, not being
forced to read the little red book. And that's what this is about. This is exactly what this is
about. This is forcing a curriculum agenda, tying it to funding and mandating it. Now we can split

KIERAN GILBERT: But well ... Why don't you give them the detail Jason?

JASON CLARE: This is about ...

KIERAN GILBERT: Why didn't the minister come up or get this organised beforehand, before the bill?

SCOTT MORRISON: It's in a little red folder.

JASON CLARE: Well it's all about treating every school the same. You know a national curriculum ...

KIERAN GILBERT: But they would like to have the detail before they commit to it.

SCOTT MORRISON: They'd like to have the money.

JASON CLARE: But these schools are going to be part of formulating the national curriculum-public
schools, private schools-all working together to put this together.

SCOTT MORRISON: So why tie it to funding?

JASON CLARE: This has been talked about forever. This is a government that is finally going to do
it. I thought the Opposition supported a national curriculum.

SCOTT MORRISON: Why tie it to funding? You can pass this Bill ...

JASON CLARE: Well look, the legislation was knocked back in the Senate.

SCOTT MORRISON: ... it will go through the Senate. Funding will go through the Senate. The curriculum
has been excised; you can deal with that separately. But no private schools are going to be held to
ransom for Julia Gillard's ego, because she won't want to back down at the last week of parliament.

JASON CLARE: Well I think the Liberal Party's holding them to ransom.


JASON CLARE: $28 billion in a piece of legislation that's been sent back to the House. It'll go
back to the Senate tonight, if you want those independent schools ...

SCOTT MORRISON: So Julia Gillard is going to send this back without amendment? She's going to
reject those amendments and deny the funding?

JASON CLARE: The Bill is ... We're going to accept the amendments of Senator Xenophon, they're smart
and they're appropriate amendments. We'll take those on board. We'll send it back to the Senate ...

SCOTT MORRISON: But you're going to force the little red book clause. You're going to force it.

KIERAN GILBERT: But then it's brinkmanship ...

JASON CLARE: Suddenly the national curriculum has become the communist manifesto.

KIERAN GILBERT: ... because you guys will then be blocking it. If you don't vote for it the
non-government schools in your electorate aren't going to get this money.

JASON CLARE: Exactly right.

SCOTT MORRISON: Well the government has a decision to make right now. Do they want funding or do
they want to force their agenda and does Julia Gillard not want to back down simply for the sake of

Because this is an issue the government has. This government never likes to admit it when they get
it wrong. They never will back down. They will never admit when they've perhaps gone the wrong way.
And as a result she's going to play politics with this funding to force her curriculum agenda.

JASON CLARE: It's the Liberal Party that are going to have to make a decision.

SCOTT MORRISON: They're going to force ...

JASON CLARE: They can explain to their schools why they don't have their money next year if they
don't support the legislation. It's as simple as that.

SCOTT MORRISON: They want to bully the Senate and they want to bully the House. It's classic

KIERAN GILBERT: It's, it's ...

SCOTT MORRISON: I know it works in union meetings but it's not going to work in this parliament.

KIERAN GILBERT: Nick Xenophon, I think he nailed it when he said it's brinkmanship or
blinkmanship-waiting to see who blinks first. But it's a lot of money at stake.

JASON CLARE: $28 billion. You can explain to your schools why they don't get the money if you don't
support it in the Senate tonight.

KIERAN GILBERT: Okay, Gentlemen.

SCOTT MORRISON: You'll be voting against it today, from what you just told me. You'll be voting
against those changes.

JASON CLARE: I'll be sending the Bill back to the Senate.

KIERAN GILBERT: We're out of time. Good to see you both. That's all for this edition of the
program. I'm Kieran, thanks for your company