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ASHLEIGH GILLON: Good morning and welcome to AM Agenda I'm Ashleigh Gillon.

Well more than eight million Australians will be richer from this week as the government starts
delivering it's cash bonuses in a bid to stimulate the economy, but will people actually spend the
extra money or will they squirrel it away and how can we judge the success or otherwise of the

Joining me now from Melbourne is Liberal Senator Mitch Fifield good morning.

MITCH FIFIELD: Good morning Ashleigh how are you.

ASHLEIGH GILLON: Well, and also from Sydney the Labor Senator Mark Arbib good morning.

MARK ARBIB: Good morning Ashleigh.

ASHLEIGH GILLON: Mark Arbib let's start with you, in your new role as Parliamentary Secretary for
Government Service Delivery, no doubt you'll be paying very close attention to making sure that
these payments are rolled out as scheduled. I understand that most people will receive bonuses from
about Wednesday but there are a whole lot of us Australians who could miss out because they haven't
lodged a tax return yet?

MARK ARBIB: Well that is true, payments start rolling out from Wednesday and it's very important to
get this money into the community as quickly as we can. We face a very severe global recession we
know that and at the forefront of it, I mean the group that is feeling it most is obviously
business and we've got to get this money into the pockets of businesses so they can keep their
doors open, and if business keeps their doors open then that means people keep jobs and keep
employed. So it's extremely important that this money, through the stimulus payments, gets out the
door and it's something the government is focusing on, it's very, very important to our economy.

ASHLEIGH GILLON: Mitch Fifield how confident are you that people will actually spend this extra
cash and not just save it?

MITCH FIFIELD: Not confident at all I heard this morning on the radio a leading market economist
saying that he predicted that 80 per cent of this money would be saved only 20 per cent would be
spent. But this is spending that the nation can't afford and it's spending that's not going to
work. Kevin Rudd himself said that a recession is inevitable, now the whole point of the $42
billion spending spree was to avoid a recession, and the Prime Minister himself has said it's
inevitable that, that will happen. We also know on another count that this money won't work because
Wayne Swan has said that the government is going to revise up the forecast for unemployment above 7
per cent, so both the Prime Minister and the Treasurer can see that this package won't work and
once this money is spent, once this $42 billion package is gone there will not be a single new
bridge, a single new road, a single new power station, a single new dam to show for that spending.
This package will not add in any way to the productive capacity of the nation, its $42 billion for
next to no gain.

MARK ARBIB: That is just absolute ...sorry Ashleigh.

ASHLEIGH GILLON: But Senator Fifield does raise a very interesting point here Mark Arbib in terms
of how we actually judge this package. What benchmarks are there for success, do we look at the
retail sales figures over the next few months, if they don't go up does that show that this package
is failing? What benchmarks do you see that we should be judging this spending on?

MARK ARBIB: It's quite amazing that the Coalition continues to attack the stimulus package. I mean
they opposed it in the Parliament, opposed funding for education, opposed funding for roads,
opposed funding for housing, so here we go again it's just you know this is the way they operate,
no solutions to the global recession just come up with criticism. But in terms of this, let's look
at the results at the first round of stimulus's already had, let's look at the retail figures in
terms of retail. Retail spending in terms of December and January were well up, well up, we're
talking about 2 per cent and 3 per cent up on the past periods and that was relative I mean, that
was obviously due partially ...

MITCH FIFIELD: Unemployment's up too.

MARK ARBIB: ... to the stimulus package, we can also look ...

ASHLEIGH GILLON: In February though of course those retail sales figures we well down, they were
much worse than most analysts had expected down 2 per cent.

MARK ARBIB: Yep but that is true, but they were still 2 per cent up on where they were in November
which was before the stimulus package was in place. So over all I think that shows that there has
been a stimulatory effect in the retail sector. You've got to remember about retail in Australia,
it employs 1.5 million people, so it is hugely important that that sector has a stimulus and that
has flow-on effects right through to all the distributors, to the truck drivers who are delivering
the goods etc. That's not all the stimulus package is, it's not just the cash payments; two-thirds
of the stimulus package is in terms of infrastructure, at the moment we're rolling out the largest
school modernisation program the country has ever seen. We're talking about between 50 000 and 200
000 going to every school across the country building a new hall or Library or classroom, in every
Primary School. I mean this is just the start, Mitch says there's nothing productive going on, well
all this money going into education, that is hugely productive, what about roads, $500 million
going out into roads. I mean, it goes on and on and on the amount of money that is being spent on

MITCH FIFIELD: No new roads.

ASHLEIGH GILLON: Senator Fifield, just looking specifically at these cash payments, what would need
to be the results of these payments that would convince you that they have actually done their job,
done you know the aim of stimulating the economy in the short term?

MITCH FIFIELD: Well, the sole measure for this package is jobs, is the unemployment rate. If this
$42 billion package including those cash payments is deemed to be a success the only measure you
can use is employment. If this works the unemployment rate won't increase, yet we've heard Wayne
Swan say that they're predicating the next Budget on rising unemployment, that they are going
revise the forecast for unemployment up from 7 per cent. So on surely what is the only measure of
success this has failed.

ASHLEIGH GILLON: But Mitch Fifield in these global conditions that we have ...

ASHLEIGH GILLON: ...but looking at the global factors here, surely unemployment is going to rise
regardless of what sort of measures the government has in place, surely this can perhaps lesson the
impact or not but unemployment is going to rise.

MITCH FIFIELD: Well, that's the position the government want to be in, they want to be able to say
that when it comes to unemployment it's all the fault of the global financial crisis. When it comes
to a rising Budget deficit it's all the fault of the financial crisis, when it comes to government
debt it's all the fault of the global financial crisis, when it comes to slowing growth it's all
the fault of the global financial crisis. The government does have a responsibility here and what
they've done through their actions is to exacerbate the effects of the global challenge. You'll
recall in 2008 the government spent a lot of time talking the economy down, it's something that
Wayne Swan and Kevin Rudd can continue to do with their quite extreme language. It's in their
interests to say that this is all beyond our control, it's all due to global financial situations
but there are things the government can do to make the situation better, there are things the
government can do to make the situation worse, they're making the situation worse, this $42 billion
stimulus package isn't the answer it's not going to help improve the productive capacity of the
nation. This government isn't doing anything to assist small business, to retain staff and to
employ new staff. Malcolm Turnbull has announced a plan that would do just that, we're seeing a
government which is throwing money around so that they're seen to be doing something but they don't
actually have any practical concrete plans to assist small business to retain staff.

MARK ARBIB: Oh come off it Mitch, the stimulus package is aimed at actually putting money into the
economy, into the pockets of small business so they can keep their doors open.

ASHLEIGH GILLON: But Mark Arbib how much responsibility will the government take if unemployment
does rise beyond the 7 per cent that it's forecast for the middle of next year?

MARK ARBIB: Look, I think the Prime Minister has already said we take the responsibility for the
unemployment rate, but in the end there is only so much that any government can do in the face of
the global recession and I mean this thing is a global cyclone. What we have said from day one ...

MITCH FIFIELD: There you go again.

MARK ARBIB: ... is our effects?that's right because it is Mitch ...

MITCH FIFIELD: There you go again.

MARK ARBIB: There is only so much that any government can do ...

MITCH FIFIELD: We can't do anything.

MARK ARBIB: But what this is about is cushioning the country, cushioning the economy and cushioning
workers from the worst of the global recession. That is what we've said we are doing and Mitch I
mean let's go back to stimulus round one last November, I mean you sat next to me and you said we
support it, it will work. We support the stimulus package, we support the doubling and tripling of
the first home buyers grant, which is working we look at the first home buyers that are getting
into the market and it's been amazing I think it was $42 thousand first home buyers come back into
the market place. Great result, and that is working to stimulate the economy because when they do
that, that means builders keep their jobs, suppliers keep their jobs.

ASHLEIGH GILLON: Well there is speculation of course that there will be further stimulus measures
in the upcoming Budget. Mitch Fifield are you prepared to block parts of the Budget if you disagree
with some of those elements?

MITCH FIFIELD: Well, the first point is we can't block anything we don't have the numbers in the
Senate. The only way legislation can be defeated ...

ASHLEIGH GILLON: But the opposition can vote against these measures?

MITCH FIFIELD: Well, certainly, certainly. But we can't block anything, it's only if the
Independents or the Greens joins with us that legislation can be defeated, but certainly if we
think that there is bad policy, bad legislation. If we think the government is going to be wasting
money, if we think the government is going to be spending money for no good effect then of course
we'll oppose those sorts of measures. It's our job as an opposition to scrutinise all legislation
including Budget legislation and if we don't think it's in the national interest then of course we
would oppose it.

ASHLEIGH GILLON: Do you think it might be more helpful though if the opposition waits to see what's
actually in the Budget before making these threats about voting against it?

MITCH FIFIELD: Well, we're not making any threats and you know we certainly will wait to see what
is in the Budget before we declare our position on particular issues. We're just making a point of
principle which is we have a job as an opposition to scrutinise legislation and where there is bad
policy, where the government intends to waste money for no good effect then of course we will
oppose that legislation.

MARK ARBIB: But Joe Hockey went further than that yesterday, I mean he is already talking about
amazingly and I fell of my chair when I heard this he's already talking about blocking the Budget,
blocking stimulus ...

MITCH FIFIELD: Not at all Joe didn't say that.

MARK ARBIB: Well, Mitch I mean it was amazing yesterday.

ASHLEIGH GILLON: Well all Mr Hockey said yesterday, I've got the quote here Mark Arbib, Mr Hockey
said yesterday; if there is waste and mismanagement we will oppose it, which is exactly what
Senator Fifield just said then.


MARK ARBIB: But in terms of, let's have a look at what they've opposed already. I mean already they
have opposed the stimulus package, they've opposed the school modernisation package, they've
opposed money for roads, they've opposed money for houses, they've opposed money for rail upgrades.
I mean this is an opposition that is totally just playing political games, they're putting their
own self interest ahead of the national interest time and time again, just opposing anything in
Parliament they don't believe is as worthy as themselves, look at alco pops.

ASHLEIGH GILLON: Senator Fifield I'm really interested to find out what you think the government
needs to do in the Budget to save jobs, specifically what do you want the Budget to deliver?

MITCH FIFIELD: Sure, well I think the Budget should deliver the plan that Malcolm Turnbull has
outlined, a carry back of losses to assist small business who were doing it tough in this financial
year and the next financial year. That's something which would allow small business more money it
would allow them to keep on more staff also providing assistance to small business for the super
guarantee contributions, again, part of Malcolm Turnbull's plan. They're practical measures which
would put more money in the pockets of small businesses and put small business in a position where
they're much better able to keep on staff. That's where the focus should be, how to assist the
engine of the Australian economy, how to assist the engine room which employs more people than any
other sector and that's small business.

ASHLEIGH GILLON: Senator Arbib what's you take on some of those ideas Mitch Fifield laid out and do
you think that there needs to be more stimulus spending in this Budget?

MARK ARBIB: I am actually glad to see that Mitch and the Coalition are actually putting forward a
positive solution because it's been awhile and it would have been helpful that they actually, when
we put it in the Parliament legislation to help small business in terms of tax benefits for
investment, they actually had supported it but they opposed it, so which actually surprised me so
good on him for doing that. In terms of the next Budget obviously we have some tough, tough choices
to make, there is no doubt about it, we obviously need to keep stimulating the economy and that may
require further spending but I'm unaware I'm not in the Cabinet so I don't know that. But
certainly, obviously we've also got the infrastructure Australia announcements coming up over the
next couple of months and that will be some major spending in terms of infrastructure and that's
where we are going to see some of the big, big projects get the go ahead and get under way. At the
moment the nation building and jobs package is looking at mid level infrastructure, infrastructure
that can be started quickly as I said the school projects etc but then we are going to move soon
into the larger, larger projects, the major roads projects etc.

ASHLEIGH GILLON: Senator Fifield the Treasurer Wayne Swan said this morning that he thinks the
opposition would rather see the country fail than see the Rudd government succeed, how much
politics is it at play here?

MITCH FIFIELD: That's absolutely absurd you've only got to look at the Coalition's record, we took
difficult decisions in government in the national interest, we re-paid $96 billion of Labor debt,
we had to make significant savings which weren't always popular so it's absolutely absurd to say
that we wouldn't want to see the nation fail. The Coalition has a strong record of pursuing
Australia's national interest.

ASHLEIGH GILLON: Okay Senator Fifield, Senator Arbib stay with us we are going to go to a quick
break. Coming up next we'll look at the governments plan to help home owners try to pay back their
mortgages. Let's come back in a couple of minutes with that.


Welcome back to AM Agenda, going through the days political stories with me this morning is the
Labor Senator Mark Arbib and the Liberal Senator Mitch Fifield.

Yesterday we saw the Prime Minister announce a plan, a mortgage reprieve plan to help home buyers
try to perhaps delay their mortgage repayments if they do lose their jobs, here's the Shadow
Treasurer, Joe Hockey commenting on that plan yesterday.

JOE HOCKEY (archive tape): It was a commercial initiative announced originally by the Commonwealth
Bank, it's great that the other major banks are on board but, there are literally hundreds of
thousands of Australians that do not have mortgages with the major financial institutions and
therefore they may well not be covered, I hope they are, I hope it's been thought through by Kevin

ASHLEIGH GILLON: Mark Arbib it now seems clear that not everybody who loses their jobs will be able
to benefit from this sort of scheme it appears that customers of regional banks and smaller banks
won't be able to have access to this at all?

MARK ARBIB: Well we are working with those smaller organisations in the credit unions etceteras.
The Treasurer said today that they are going to continue discussions and hopefully we'll see some
progress at that level as well. Some of those smaller credit unions and building societies already
provide this sort of flexibility that the major banks have decided that they will provide to those
people who become unemployed. So, let's wait and see that might get fixed over the coming weeks.
But it was an important announcement yesterday from the Prime Minister and he was extremely
positive to see that there will be this new level of flexibility for people who lose their jobs,
borrowers who lose their jobs for no fault of their own and really that will remove some of the
stress that people have when they do lose their jobs because you can imagine the stress, you lose
your job, those bills keep coming in for repayments to your house and for your car so, if banks can
be flexible with that I think it's an outstanding outcome. I wish Joe Hockey could actually
positive for once, I mean watching him there again he only sees the negative side on it Joe, he
can't sort of say well congratulations that's a good result, he goes straight to the negative.

ASHLEIGH GILLON: Well Mark Arbib one of the negative concerns raised yesterday by the opposition is
that these options could end up seeing people end up with a greater debt and higher repayments at
the end of the day, is that a concern that you're worried about?

MARK ARBIB: I can tell you the concern we're worried about at the moment is that people lose their
jobs then lose their house, really and let's look at what effect that has on their life in terms of
being thrown out onto the streets and having to find accommodation. But also it leads to for sale,
for sale of those premises which can lead to a reduction of housing prices across the whole market
place, so it's important that we provide support and flexibility for people who have lost their
jobs to ensure that they stay in their own homes and I think if you go out and talk to the many
thousands of people who have lost their jobs they would saying this is a very, very good
announcement and they are very happy with it.

ASHLEIGH GILLON: Senator Fifield what's you take on this scheme, obviously not all of the banks are
on board but isn't it better to start helping some people instead of none at all?

MITCH FIFIELD: Look, it's certainly good news and anything that can help home owners with a
mortgage have lost their job to hold onto their homes, it's certainly a good thing. What causes me
concern though is, whenever you see a Prime Minister or government make an announcement on behalf
of commercial organisations in this case banks because it leads to a bit of confusion as to whether
this is a government scheme or whether this is a scheme that the banks themselves have come up
with, and it looks as though and I hope it is indeed the case that this is something that the banks
have come up with themselves for commercial reasons rather than something that the government has
intervened to seek to extract from the banks. One of the reasons why ...

ASHLEIGH GILLON: Mark Arbib can you shed any light on that question there? The banks idea or the
governments doesn't matter as long as we come up with the end outcome?

MARK ARBIB: Well, I think that is the key in the end we get the end outcome, I mean, Mitch couldn't
help himself he started off so well there saying it's good news and rather than just saying it's
good news and let's work together on it, had to move into the negative so Mitch that's just fact of
form. But can I just say overall Ashleigh, there has been consultation and negiations between
government and the private sector and in times like this where you do have a global recession, the
public sector and the private sector have got to pull together, there is no doubt about it so in
the end it's not who's taking credit for it or who's getting credit for it the truth is in the end
it's about that those people that lose their jobs, don't also lose their houses and don't also lose
their cars hopefully as well. That's what it's about ending that sort of stress, so let's just work
positively on it, look at the positive side, let's not worry about who's responsible for it.

ASHLEIGH GILLON: Senator Fifield we would let you continue, sorry to interupt you before.

MITCH FIFIELD: Thank you that's okay. Look, Ashleigh my concern is when you have government
announcing something on behalf of the private sector, you can get mixed messages you can have, you
know a misrepresentation of the situation and I think a lot of people would have in their minds as
a result of the Prime Ministers announcement that there is and as of right entitlement to this sort
of protection from the banks that its an automatic entitlement that mortgage holders have to be
able to not make their repayments to roll them over. And I think that's a concern if the public do
have that view because there is no automatic right to this particular entitlement it's something
which will be assessed on a case by case basis and I think it's very important for mortgage holders
to be aware of that.

MARK ARBIB: No and Mitch and that is, what Mitch is saying is exactly true this isn't a right this
is an agreement from the banks to work with their customers and provide flexiblity and as you said
the Commonwealth have already raised it and there are many building societies and other smaller
banks that actually do this now, but overall there will be a lot of people who'd benefit out of it
but in a real time of needs so it's a positive step in the right direction.

ASHLEIGH GILLON: Okay we are running out of time.

MITCH FIFIELD: I think it's always best, it's always best to let banks speak for themselves and
speak for their products and speak for their circumstances rather than for the government to do
them. If the banks do that then we avoid this sort of confusion.

ASHLEIGH GILLON: Okay one final issue to get to, over the weekend the newspapers were filled with
more details about Kevin Rudd's mid air melt down, where he reportedly made a female attendent cry
because he had some rude remarks to make when he wasn't delivered a special meal. Mark Arbib that
sort of behaviour has been described as bullying by the opposition. But also there were reports
this weekend that the Prime Minister's office lied about this story when asked to comment on it,
denied that it had ever happened, that's certainly not a good look for a government that promised
to bring openness and accountability to government?

MARK ARBIB: And we have, look at the FOI legislation that we're putting forward in terms of to
provide more transparency.

ASHLEIGH GILLON: But is that acceptable for people to lie about this kind of thing?

MITCH FIFIELD: Come off it Mark.

MARK ARBIB: Ashleigh I'm happy to answer that, if Mitch wants to get out of the way I'm happy to be
able to answer the question. In terms of the Prime Minister he is, he's human I mean he had a
moment and he has apologised to the actual woman involved and I think that was the right thing to
do, really all of us have a responsibility to act properly and if he didn't and then was wrong then
he has apologised and I think there are bigger issues at play at the moment that we should be
talking about. We've got a global recession, we've got people going out of work, really we're got
to focus, focus on that, this has been dealt with by the Prime Minister it's been dealt with
appropriately, let's move on.

ASHLEIGH GILLON: Well the opposition of course is claiming that we're now getting a real glimpse of
the real Kevin Rudd and that we're seeing a new dark side emerging, but Mitch Fifield is this as
Mark Arbib says Mr Rudd apologised for the matter is that now the end of it?

MITCH FIFIELD: Oh look, it was a pretty half hearted apology that the Prime Minister gave at the
G20 he said 'oh look you know if I happened to of offended anyone then I'm sorry', it was pretty
half hearted. Clearly the PM on this occasion was a bit of a pill, you know let's be honest he
certainly was ...

MARK ARBIB: A bit of a what? A what Mitch?

MITCH FIFIELD: ... But again a bit of a pill, its common Australian phrase.

MARK ARBIB: It's alright man I didn't even pick that up mate I didn't pick that up.

MITCH FIFIELD: No but the Prime Minister was a bit of a pill on this occasion, but we again see in
this episode this government's default, this Prime Ministers default. Whenever a difficult issue is
raised the first response from his office, the first response from him is to fib about it. The
Prime Minister's press secretary fibbed initially, he said no, no such event happened, we've seen
this sort of approach before you'll remember during the campaign or before the campaign the Prime
Minister was asked if he'd had dinner with Brian Burke, his initial response was no he hadn't. The
default of this government is to fib and you know, Mark can talk about FOI and improving openness
and transperance in government but it ultimately comes back to the culture. The ministers
themselves establish in this government and the trends set from the top by the Prime Minister is
that there's a culture of fibbing, there's a culture of secrecy and don't talk about FOI
legislation Mark the thing to do is for ministers themselves to practice what they preach, to be
open and don't lie to the Australian people and don't lie to the press gallery.

MARK ARBIB: Well, you can't say that about the Prime Minister, I mean the Prime Minister has been
honest with this from day one. He's dealt with it properly, he's apologised and then got up a pole
and aplogise to the nation, I mean how much further do you want him to go Mitch I think it's
getting to a ridiculous level.

ASHLEIGH GILLON: Mitch Fifield, Mark Arbib we have run out of time, this is one story that seems to
be just sticking around. Thank you for your time this morning and be sure to join David Speers this
afternoon at 4.15 Eastern time for PM Agenda I will be back tomorrow morning with AM Agenda until
then I'm Ashleigh Gillon thanks for your company.