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Early Agenda -

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AM Agenda

25 May 2009

KIERAN GILBERT: Welcome back to AM Agenda. Joining me here in Canberra is the Parliamentary
Secretary for Government Service Delivery Mark Arbib and the Shadow Parliamentary Secretary for
Disabilities Senator Mitch Fifield.

Gentlemen good to see you both.

MITCH FIFIELD: Morning Kieran.

MARK ARBIB: Good to be here.

KIERAN GILBERT: We've got the unions today, Mark, saying ... writing to the Prime Minister
complaining that, you know, the lifted increase of the pension to 67 is not on, particularly for
people who work areas of heavy labour. Do you understand their concerns?

MARK ARBIB: Oh definitely we understand their concerns. It's an important issue. This has come out
of the Harmer review into the pensions that the budget lifted pension rates $32 a week but at the
same time as that it looked at the long term ramifications of the aging of the population and this
is something that really should've been dealt with earlier. It came, it was first raised in the
Intergenerational Report in 2002/2003 and the previous government did nothing about it. We've got
an aging population that is putting more and more pressure on the pension system. The pension, the
retirement age was set a hundred years ago in 1909, a lot has changed since then. You look at life
expectancy gone up, more and more people are relying on the pension and therefore we need to make
it sustainable and that's what raising the age from 65 to 67 does.

KIERAN GILBERT: So the Government won't be budging, won't be budging on this, won't delay it or
phase it in differently. This is locked in policy?

MARK ARBIB: Well, we said going in to the budget that tough decisions had to be made and this is a
tough decision. It's not going to be a popular decision, we know that, but it is necessary for the
sustainability of the budget, for the sustainability of the pension.

KIERAN GILBERT: Senator Fifield, what are your thoughts on this? Does the Coalition endorse the
increase and do you understand where the unions are coming from on it?

MITCH FIFIELD: Look, we've made it clear that we're not going to seek to frustrate the passage of
the budget that we're not going to seek to deny assent to key elements of the budget. The clear
exception, of course, being private health insurance rebate which is a bad policy and a clear
breach of faith with the Australian people. But, just back to the 67 age threshold for the pension,
I think, what this shows about this Government is that they have great difficulty bringing the
public along with them on particular issues and that they have difficulty explaining to the public
the rationale for the decisions that they take. They're a government who don't consult, as has been
evidenced with the employee share ownership scheme where the Government didn't consult, where the
Government is all over the place, where the Government's indicated that they're going back to the
drawing board and going to be putting out a discussion paper. So, it's a government that doesn't
consult, has difficulty carrying people with them and has difficulty getting their message out.

MARK ARBIB: Come on, Mitch. You were in the Treasurer's Office, you were sitting there working as
an adviser. The Intergenerational Report came, it raised this issue of the pension age and Peter
Costello, you did nothing about it. You sat on it, left it, it was all too hard. In this budget we
said there was going to be tough decisions, we have to make ...

MITCH FIFIELD: We, we ...

MARK ARBIB: ... the tough decisions and we've made it ...

MITCH FIFIELD: We, we did.

MARK ARBIB: ... and we've done exactly the same, we've done exactly ...

MITCH FIFIELD: ... we did a lot ... we did a lot to address ...

MARK ARBIB: ... the same on means testing private health insurance rebate. It is a tough decision,
there is no doubt about it, but it is necessary for the long term sustainability and viability of
the health system.

KIERAN GILBERT: Mitch, what do you say to that?

MITCH FIFIELD: We put intergenerational issues on the agenda in the first place. It was Peter
Costello who delivered the first intergenerational report with the budget who declared that there
should be an intergenerational report every five years. We were the ones who put those issues on
the agenda. We were the ones who took some tough decisions about the Pharmaceutical Benefits
Scheme. So, you know, we did an awful lot in relation to those ...

KIERAN GILBERT: Okay, I want to ...

MARK ARBIB: So you did a report but you didn't act on it.

KIERAN GILBERT: Let's talk ...

MITCH FIFIELD: No, no ...

KIERAN GILBERT: Let's talk about the broader economic debate. I want to ask you Senator Arbib about
the Prime Minister and the Treasurer's approach last week. They wouldn't say 'billion dollars in
debt', they wouldn't articulate how much $300 billions in debt. You couldn't drag it out of them.
How silly did that look at the end of the week last week?

MARK ARBIB: This is ...

KIERAN GILBERT: Is the spin going too far?

MARK ARBIB: This is beat up. This is an absolute beat up. I saw the interview, the Prime Minister
said the figures, right.

MITCH FIFIELD: He didn't.

MARK ARBIB: ... we know it is $58 billion, we know it, $58 billion deficit. We know there's the gross
figure, the net figure. We know. This is an absolute beat up. For us, at the same time as that we
have been telling Australians that $210 billion has been lost because of the global recession and
the end of the mining boom. That's just a fact. Also, we've been talking about the stimulus
package. The Opposition like to say this is a cash splash it's all about just cash handouts.
Nothing could be further from the truth, they make up a small proportion. 70 per cent of the
stimulus package is actually in infrastructure. We talked about it today. There's a report, 35,000
projects across the country, infrastructure projects, schools, fixing those, roads, rail. So, we
don't have a problem, we don't ...

KIERAN GILBERT: Why didn't the Prime Minister and Treasurer say that from the outset because they
did ... they waffled around it and it was like pulling teeth getting those words out of their mouth
last week.

MARK ARBIB: Well I ...

KIERAN GILBERT: You say it's a beat up ...

MARK ARBIB: I disagree.

KIERAN GILBERT: ... There wasn't just one interview; it was a number of interviews.

MARK ARBIB: No, I disagree. They were out there and open about it ...

MITCH FIFIELD: It was excruciating to watch.

MARK ARBIB: In terms ... in terms of debt ...

MITCH FIFIELD: Excruciating.

MARK ARBIB: ... as we all know Australia is extremely well placed when you compare our debts to
overseas. We've got something like the lowest debt ratios in the OECD, in the economic world. It is
extremely manageable. At the same time as that, it is the responsible thing to do when you're in a
global recession to stimulate the economy. Infrastructure-70 per cent again is on infrastructure,
on top of that we are going ... we've put forward a long term plan to actually get the budget back
into surplus and that is why we're making those tough decisions, those tough decisions on
pharmaceuticals benefits, I'm sorry, on private health insurance because we ...

MITCH FIFIELD: That's what we did.

MARK ARBIB: ... because we understand there is a need in the long term ...

KIERAN GILBERT: Okay.

MARK ARBIB: ... the medium term to get back to surplus.

KIERAN GILBERT: Senator Fifield, is it a fair retort there from the Government that, you know, look
at the global situation and, you know, revenues have been wiped out, they are taking a big spend on
infrastructure. Should we be looking at that as the reality of the situation?

MITCH FIFIELD: Well, the reality of the situation, although you wouldn't know it from listening to
Wayne Swan or Kevin Rudd, is that we have a $58 billion deficit projected, that we have $188
billion debt that we're looking in the face of and that we're on track to have $300 billion of
borrowing. They're the facts, you wouldn't know it from listening to Kevin Rudd, he couldn't bring
himself to actually say the word billion after the word 300. That Lateline interview was one of the
most excruciating things I've ever watched, it was one of the most disgraceful and outrageous
performances by an Australian prime minister who would not present the Australian people with the
basic facts of the Australian budget. It was just extraordinary. But Mark, but Mark's here to ...

MARK ARBIB: Here comes the scare campaign.

MITCH FIFIELD: No, no, no scare campaign here.

MARK ARBIB: Here comes the scare campaign.

MITCH FIFIELD: No, no, no scare campaign here. Yes, of course we acknowledge that revenues have
taken a bit of a hit as result of the global financial situation. If you listen ...

KIERAN GILBERT: A bit of a hit, an enormous hit.

MITCH FIFIELD: No, no no ...

MARK ARBIB: (inaudible) $10 billion.

MITCH FIFIELD: ... if you listen to this government, you would believe that the entire debt that the
entire deficit is as a result of revenue write-down. Of the $188 billion debt-which we're on track
for- two thirds of that is a direct result of spending decisions by this government, not revenue
write-downs, spending decisions. The story the story of this budget is not solely one of a
difficult global financial situation. The other part of this budget, the rest of the story, is that
this is a government which is reckless, which is spending, which has no control on its expenditures
and you won't hear that from Wayne Swan, you won't hear that from Kevin Rudd, you'll only hear that
from Coalition MPs.

MARK ARBIB: Kieran, Mitch is right and I did say we are spending, we are actively stimulating the
economy and what Mitch fails to say is he sat in that chair and supported $11 billion when they
supported the first stimulus back in October last year, you supported it, payments to pensions ...

MITCH FIFIELD: We supported money for pensioners, we supported money for pensioners

MARK ARBIB: ... first home buyer's grant ...

MITCH FIFIELD: That was our idea.

MARK ARBIB: ... $4.7 billion on infrastructure, they supported that. So let's just get that straight.
But, this is Mitch and the Liberal Party rolling out, yet again, the scare campaign on the debt and
deficit ...

MITCH FIFIELD: It's not a scare campaign

MARK ARBIB: ... it is a scare campaign.

MITCH FIFIELD: They're the facts

MARK ARBIB: ... because you had an opportunity ...

MITCH FIFIELD: ... they're scary facts.

MARK ARBIB: ... the Leader of the Opposition Malcolm Turnbull had an opportunity two weeks ago when
he stood up in the Parliament and delivered his address to talk about what measures he would take,
what measures the Coalition would take to actually reduce the deficit. What measures? We ask, put
them on the table. If you want to make savings, if you're going to increase taxes, if you're going
to cut programs, put them on the table ...

MITCH FIFIELD: It's your deficit, it's your deficit.

MARK ARBIB: ... nothing. He puts forward no plan. So, the truth is there is no difference ...

MITCH FIFIELD: You created it, what's your plan?

MARK ARBIB: ... there is no difference in our position, our financial position on deficits and their
position on deficits.

KIERAN GILBERT: Okay, on the Emissions Trading Scheme, it's the big legislation before Parliament
over the next week. First to you, Mitch, the Coalition does seem like it's, you know, there are a
few different views here. Malcolm Turnbull says there shouldn't be any agreement before Copenhagen,
Burnaby Joyce says no full stop. What can we expect? Do you think from the Coalition this week on
this very important debate, this piece of legislation?

MITCH FIFIELD: Well, it was only on the last day that Parliament was sitting, barley 10 days ago,
that the Government tabled the best part of 1300 pages of legislation and material. We need to
examine that closely, the Australian public need the opportunity to look at that closely as well
should they choose. It's important to get this right. This is far, much more wider ranging than the
new tax system. It's an incredible change to the Australian economy. The important thing is to get
it right.

KIERAN GILBERT: Are you worried about it being portrayed as climate sceptics again because it
worked against you in '07 ...

MITCH FIFIELD: No, no.

KIERAN GILBERT: ... in a big way?

MITCH FIFIELD: Yeah, look, that's not our concern. Our concern is to get this right. We agree with
the Government that it's important to reduce global emissions. If you want to reduce global
emissions, you want to do so in a way that has the least effect on the Australian economy. Now, we
don't know if this ETS is the best model, if it's the best option because the Government hasn't
modelled any alternatives. So, what we want to do is we want to wait to see what happens in
Copenhagen, we want to wait and see what the U.S does given this Government has delayed the
implementation of the ETS, that gives us the time to make sure that we get this right. Now, the
Government before was saying that famine, plague, pestilence and drought would befall Australia if
the ETS wasn't introduced by 2010. Clearly, now they don't think that's the case. So, we have the
time to get it right and we should.

KIERAN GILBERT: Do you think that the Government has any chance of getting this through? It doesn't
look like it. The Greens are saying no, Barnaby Joyce says no and the Liberals are saying let's
wait till after Copenhagen.

MARK ARBIB: Well, we don't know who knows what their position is and we're going to keep
negotiating it right into the Senate. It's too important not to. Everyone needs certainty,
Australian's need certainty, business needs certainty and that's what our scheme is about, it's
about providing certainty. And it's balanced and responsible ...

KIERAN GILBERT: Would fight an early election on it?

MARK ARBIB: Well, it's not even go down that path because we want to get this though the Senate,
it's too important. It is in the national interest to actually make these changes and also it's in
terms of global leadership, actually trying to get a global agreement. If Australia can do it now
then that is going to add value to what we, what the message we're sending overseas.

KIERAN GILBERT: But, in this economic climate, you know, facing a recession, is climate change
still the political hot-button issue that it was. Could you win an early election on it?

MARK ARBIB: Climate change will always be will always be a very, very big issue in the electorate
and people are extremely concerned about it and why wouldn't they be? They've seen, we've seen
short term effects, we're hearing about the long term effects, we need to take action now and
that's what the Government is doing. Can I just say in terms of ...

MITCH FIFIELD: You're not doing it, you delayed the implementation.

MARK ARBIB: Well, this is ... but as you said ...

MITCH FIFIELD: ... you delayed the implementation.

MARK ARBIB: ... there has been a global recession so we have had to adjust the scheme ...

MITCH FIFIELD: So, you recognise that this scheme will cost jobs?

MARK ARBIB: ... and at the same time as that, as the same time as that, adjusting the scheme. We now
have the Business Council of Australia supporting us, the AIG the Industry Group supporting, got
even like Bluescope Steel coming together on the business side supporting it. On the environmental
side we've got the ACF, WWF, the Climate Institute. We now have a coalition of groups on both sides
supporting it

KIERAN GILBERT: But, no one inside, no on inside the Parliament?

MARK ARBIB: Well, that's going to be in the end of Malcolm Turnbull decides to block the CPRS, well
it's going to be on his head and the Liberal Party's head. They do not have a position on climate
change. They do not believe in it. Talk to Barnaby Joyce, talk to some of their members, I mean,
one of their members Mr Jensen has moved a petition against global warming that it's not happening.
This is the modern day Liberal Party; they don't believe in climate change, they're pretending
because they want the electorate to think that they do.

MITCH FIFIELD: What Mark has conceded is that they're ETS is going to cost jobs. He's cited the
global financial situation as the reason for delaying the implementation of the ETS. Now, if the
ETS wasn't going to cost jobs then the Government wouldn't have delayed it.

MARK ARBIB: Look at the Climate Institute ...

KIERAN GILBERT: Okay, alright ...

MARK ARBIB: ...26 000 jobs. NAB $6 billion worth of investment a year out of a CPRS.

KIERAN GILBERT: Alright, gentlemen, Mark Arbib ...

MITCH FIFIELD: (inaudible).

KIERAN GILBERT: Mitch Fifield good to see you,

MITCH FIFIELD: See you, mate.

MARK ARBIB: Thank you.

KIERAN GILBERT: ... for a feisty start to Monday, appreciate it.

MITCH FIFIELD: See you, Kieran.

KIERAN GILBERT: That's all for this edition of AM Agenda.

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