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Early Agenda -

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KIERAN GILBERT: Good morning and welcome to AM Agenda. This week some crucial economic data with
the national accounts out this Wednesday expected to confirm what most economists have been saying
for months that Australia is in recession. The Liberals and their leader Malcolm Turnbull have
launched a pre-emptive strike with a television advertisement which aired for the first time last
night.

MALCOLM TURNBULL (from advertisement): Kevin Rudd and Wayne Swan have lost control of our economy.
18 months ago we had no debt and cash at the bank. Now, they are plunging us into over $300 billion
of debt. They want us to believe that they can repay twice as much debt in about half the time that
the Coalition did when were in government. It just doesn't add up. We must get Labor's debt under
control.

KIERAN GILBERT: Good morning and welcome to our Monday panel, Labor Parliamentary Secretary for
Government Service Delivery Mark Arbib and Liberal Shadow Parliamentary Secretary for Disabilities
Mitch Fifield, good to see you both.

MITCH FIFIELD: Good morning.

MARK ARBIB: Good morning.

KIERAN GILBERT: Senator Arbib it looks like the Liberals have certainly identified your weak point,
that being debt and the ability to repay it?

MARK ARBIB: Well, I don't think that ad is a surprise. It's the scare campaign we've been talking
about, rolled out now on to TV. So, we can expect to see a lot of it over the coming months. But,
again it just shows how out of touch Malcolm Turnbull is. He does a 30 second ad on the economy and
doesn't mention the global recession once, did not mention the global recession and this is the way
the Liberal Party are acting at the moment. For them the global recession isn't happening. Let's
not put things in context, let's not talk about comparisons overseas, let's just talk about debts
and deficits. The reason we've got a debt, the reason we've got a deficit is the global recession.
The end of the mining boom, $210 billion dollars wiped ...

KIERAN GILBERT: Are you concerned though?

MARK ARBIB: ... of our revenues.

KIERAN GILBERT: ... as, I mean, you've been a political strategist for many years. Are you concerned
that these ads will resonate, that the debt will scare people?

MARK ARBIB: Well, I have to say, I'm not concerned about those ads because again there is no
balance in those ads. I mean, he doesn't even mention the global recession. You know, there was an
election in Queensland where Lawrence Springborg wouldn't admit that there was a global recession.
I think Malcolm Turnbull's out-done him with that. I mean, until the Coalition can actually come to
the table and honestly reflect and talk about the global recession and the effect it's having on
our revenue stream, the effect it's having on unemployment, the effect it's having on small
business then really they are just completely out of touch and out of the debate.

KIERAN GILBERT: Mitch Fifield, what do you make of those comments?

MITCH FIFIELD: Oh, well, I think they're absurd. The reason why we've got this TV ad is because you
won't get the truth from the government. The Prime Minister, the Treasurer couldn't bring
themselves to utter the figure of Commonwealth debt. The Treasurer neglected to mention in the
budget speech that the deficit was $58 billion, so I think it's important that we've got someone
out there who's actually giving the facts. And that's all Malcolm was doing, was giving the facts
that we're on track for a $188 billion of debt by 2012-13, two thirds of which is as a result of
spending decision, not the revenue write-downs which Mark is so fond of talking about but two
thirds of which is a result of spending decisions by this government and that we're heading towards
government borrowings of $315 billion. Now, the government don't like talking about those facts,
they're ugly facts. Mark talks of a scare campaign. It's not a scare campaign, these are real
numbers, they're real facts and those facts are scary and it's important.

KIERAN GILBERT: There no mystery to the timing of it with the national accounts out Wednesday as we
mentioned, expected to show Australia is now, to confirm that we are officially in a recession?

MITCH FIFIELD: Well, I don't think you should look at it in terms of coincidence or not. We're just
in the business of putting the facts out there. Now, we will see the national accounts if we are
technically at recession, but the reality is the economy has slowed, the stimulus package, the $42
billion stimulus package hasn't worked. We were told that that would keep us from recession; we
were told that that would create 90,000 jobs, that clearly hasn't happened. The stimulus package
has failed.

KIERAN GILBERT: Well, obviously ...

MARK ARBIB: Can I ...

KIERAN GILBERT: ... the government and Mark you can elaborate on this, but I've no doubt the
government will be using Parliament this week to again argue where the stimulus has worked and can
we expect the use of more those props? I mean, it did seem to get absurd last week the way the
Prime Minister every day would hold up a photograph, it was like a slide show.

MARK ARBIB: Well, we had to, we had to break through last week in terms of this. The Coalition has
been running a ...

MITCH FIFIELD: You break through okay.

MARK ARBIB: ...their scare campaign. They've been saying there is no infrastructure. I mean that is,
Malcolm Turnbull has been running around saying there's no infrastructure been built, so I think
the Prime Minister was right to show the photos of the infrastructure and ...

KIERAN GILBERT: Can we expect more photos today?

MARK ARBIB: Well, I have no idea ...

MITCH FIFIELD: Please, please no.

MARK ARBIB: ...But, can I say it is important that people realise that and Mitch talks about facts,
here are the facts Mitch, I want you to understand the facts. 70 per cent of the infrastructure, 70
percent of the stimulus package is in infrastructure. That is fixing our roads, fixing our rail
lines, fixing our schools, 70 per cent ...

MITCH FIFIELD: You're counting bike paths and pink bats.

MARK ARBIB: ... no, no, no. Makes up ... your talking about the community infrastructure which is the
local councils, makes up a very small component and pink bats, let me tell you, pink bats. I went
down to Dandenong factory, Fletcher's Factory, they've just invested $9 million in plant and
machinery. $9 million this is in terms of rolling out the stimulus package an extra 55 jobs, this
is investment in the Australian economy. Jobs! We are ...

MITCH FIFELD: It doesn't add to the long term productive capacity of the nation.

MARK ARBIB: We are, look, how can you say that? It will, in terms of climate change, fighting
climate change carbon and the Coalition is so out of touch on this. Look at the, it's going to save
the average family $200 a year but that is only a small part of it, that is only a small part of it
...

MITCH FIFIELD: You could've got better bang for you buck for less money.

MARK ARBIB: ... we are spending; we are spending more money on rail in five years than you spent in
12 years.

MITCH FIFIELD: That's simply not true.

MARK ARBIB: We are spending on roads. Bring forward doubling of the road budget ...

KIERAN GILBERT: Why do you need to, just getting back quickly to the strategy last week, do we
really have to, I mean, do the Australian people really need photographs to and these props to tell
them what's happening? Isn't it sort of assuming, you know, that they're not ...

MARK ARBIB: Well, the Liberals ...

KIERAN GILBERT: ... able to take the message ...

MARK ARBIB: ... the Liberals have been playing a bit of a game. What they do is they come to Canberra
and they say, 'oh the stimulus package is terrible. Really, this just cash splashes, it's a
shocker'. Then they get to their local electorates and they just thumbs-up great infrastructure
we're really happy with the packages. So, the Prime Minister called them on their strategy ...

MITCH FIFIELD: Two. Two separate issues.

MARK ARBIB: He's shined a light on their strategy in the Parliament and I think that was the right
thing to do.

MITCH FIFIELD: Is it disingenuous for Liberals to be bagging it and to block it and then to show up
with a thumbs up at the opening of these local infrastructure projects?

MITCH FIFIELD: Our issue with the $42 billion package was the quantum and the quality of the spend.
We didn't think that there was enough money on serious economic infrastructure, infrastructure
which would add to the long term productive capacity of the nation. We thought that you could've
had a smaller spend but for a better result. Now, in voting against that package and voting against
the quantum, that's not to say that individual local members have issues or against particular
local projects, they're two separate things and I think to run them together is unfair ...

KIERAN GILBERT: Alright.

MITCH FIFELD: ... but, but, but, no no ...

MARK ARBIB: That's just total hypocrisy.

MITCH FIFIELD: ... but I do have to say, I think, Mark and you can do better than this. Your
explanation on Lateline on Friday night that the Opposition forced the government to take those
photographs into the Parliament to prove that these projects were happening, I mean, that's an
interesting explanation, Mark, for the appalling ...

MARK ARBIB: Well, you are. You are running ...

MITCH FIFIELD: ... the appalling behaviour of the Prime Minister ...

MARK ARBIB: ... you are out there, you are out there. You talk about facts and you are out there, you
are out there ...

MITCH FIFIELD: ...for the appalling behaviour of the Prime Minister in Question Time. He promised
that he would be better, that he would set higher standards. He's taken standards low.

MARK ARBIB: Well, Mitch, if you guy's, if you told the truth, stopped being dishonest about the
infrastructure and actually admitted we are in the construction phase 35,000 projects, small to
medium. This is, this is the second part of the stimulus ...

KIERAN GILBERT: But doesn't the Prime Minister ...

MARK ARBIB: ...then we're going in for big infrastructure.

KIERAN GILBERT: ...Mitch has got a point though. Doesn't the Prime Minister set the tone in many
respects ...

MITCH FIFIELD: Absolutely.

KIERAN GILBERT: John Howard never used props; the Prime Minister's using props like a slide show
every day. Doesn't that set the tone for the broader Question Time?

MARK ARBIB: But these are, these are photos ...

MITCH FIFIELD: No, no.

MARK ARBIB: ... of live sites, photos of construction sites ...

MITCH FIFIELD: But, Kevin Rudd was forced to do it. He was forced to do it by the Opposition.

MARK ARBIB: ... actually underway now. Photos of workers underway now, photos of the schools that
Malcolm Turnbull goes into Parliament opposes, then goes out there and tries to take the credit for
it.

KIERAN GILBERT: Okay, let's ...

MARK ARBIB: ... I mean this is just.

KIERAN GILBERT: ... let's move on

MITCH FIFIELD: We forced you to do it.

KIERAN GILBERT: Let's move on ...

MITCH FIFIELD: ... and it's our fault.

KIERAN GILBERT: Let's move on. I want to look at the ...

MITCH FIFIELD: (inaudible)

MARK ARBIB: Scare campaign.

KIERAN GILBERT: ... Galaxy poll out today which shows Labor still in front. Some positive news for
Kevin Rudd as a strong leader, he seems a stronger leader by 55 per cent of people, 51 percent
think he's the better person in the economic climate. So, that's the good news. The bad news is 36
per cent think he's okay but there are some things they're not sure about. That's 36 per cent,
that's quite a number, Mark Arbib. It seems a lot of people still have doubts about the PM. Is he
still a work in progress in people's minds?

MARK ARBIB: Well, it's not going to surprise you Kieran, but I'm not going to analyse the polls
especially during a global recession. I think the worse thing, and I've said this before so this is
not a new thing for me every time I'm here. The worse thing you can do during a recession, during a
crisis that we've got globally is to be interpreting polls. What I will say though ...

MITCH FIFIELD: (inaudible)

MARK ARBIB: I think voters ...

MITCH FIFIELD: (inaudible)

MARK ARBIB: No, no, no. I'm sure you'll ...

MITCH FIFIELD: (inaudible)

MARK ARBIB: And I'm sure you'll be talking about them because you always do, but ...

MITCH FIFIELD: But how can you say you can't talk about the polls why the economy's doing it tough?

MARK ARBIB: But at the same time as that ...

MITCH FIFIELD: That's madness.

MARK ARBIB: ... the same time as that, I think Australians understand that we are doing and Kevin
Rudd is doing what's in the national interest. There is no doubt about it. We are doing everything
possible to support and protect jobs and small business during the global recession. That's what
the stimulus package is about. We are concerned about the national interest. Malcolm Turnbull and
the Liberal's, they're only concerned about their own interests.

KIERAN GILBERT: There seems to be another number here that I want to get your thoughts on. Someone,
this is perception that Kevin Rudd is more likely to be someone who can turn nasty if he doesn't
get his own way, 43 per cent of people think that the PM has got that nasty streak. Is this off the
back of those reports that he blew up at an air hostess and, you know, has a temper?

MARK ARBIB: Kevin Rudd has admitted he's not perfect and no one is. I mean, we look at our
politicians and we try to think they're perfect, but we're all just people, we make mistakes he
said that. He's not Mother Theresa, there's no doubt about that. But at the same time, I mean, this
is a guy that is working, you know, 24/7 in the national interest. And we're not just working on
the global recession, trying to fend off the global recession; we have a huge agenda coming out of
the last election. Climate change, look what we're doing in terms of an emissions trading scheme,
we are driving that hard, the education revolution, computers in schools, look what we're doing on
broadband. We've got a lot on the table and that means it's a lot of hard work.

KIERAN GILBERT: For Malcolm Turnbull, we saw the last week he got a little bit tetchy when his
rating in the BRW Rich List was released and now in this Galaxy poll, we'll turn to his numbers, 47
per cent says he's more arrogant than Kevin Rudd and out of touch 48 per cent, nearly one in two
voters for both of those. You can see why Malcolm Turnbull's a bit annoyed at being painted as the
silver spoon, if they're the numbers that he's seeing in terms of polling.

MITCH FIFIELD: Oh, look, to know Malcolm is to love him and I'm sure the more Australian's get to
know Malcolm the more they'll like what they see. He's a person of great character, person of great
intellect; he'd make a fantastic prime minister. He's never presented himself as Mother Theresa and
that's ...

KIERAN GILBERT: He's not out of touch?

MITCH FIFIELD: No, not at all. And that's the difference with Kevin Rudd. Kevin Rudd was presented
by the Australian Labor Party to the Australian people before the last election as Mother Theresa.
Kevin could do no wrong ...

MARK ARBIB: To (inaudible)

MITCH FIFIELD: No, he was.

MARK ARBIB: (inaudible) okay, I don't remember that one Mitch? That's a new one for me.

MITCH FIFIELD: ... I remember, I remember the ads, you know, but anyway, I think the mask is starting
to fall; the Australian people are starting to see the real Kevin Rudd. I think 10 per cent of
people in that Galaxy survey said that they're getting a little bit tired of Kevin Rudd, I know how
they feel. Two thirds said that he hadn't lived up to expectations so there are some worrying
trends in those numbers for Kevin Rudd.

KIERAN GILBERT: Okay, thanks we'll pause there for the moment.

BREAK FOR INTERVIEW WITH SENATOR BARNABY JOYCE

KIERAN GILBERT: And it's welcome back to our panel, Labor Senator Mark Arbib and Liberal Senator
Mitch Fifield.

Mitch, it sounds like Malcolm Turnbull's got a very, very difficult almost an impossible ask to on
the one hand back a form of ETS when you hear Barnaby Joyce speaking about it. He's not going to
back anything.

MITCH FIFIELD: Well, you know, Barnaby made the point that the emissions trading scheme as it's
currently designed, in his words, is an employment termination scheme and I think there's a lot of
truth to that. The current ETS would destroy jobs that's ...

KIERAN GILBERT: Except he doesn't use the caveat as it's currently designed, he says full stop.

MITCH FIFIELD: We know the current ETS will destroy jobs that's why the government has delayed its
introduction. Now, Barnaby Joyce does have a bit of a different take, readily conceded that but the
National Party is a separate political party. We work together in Coalition. They bring a range of
views to the table and we discuss that.

KIERAN GILBERT: You have the split on this, you happy to vote. Do you think you've watched politics
for many years, do you think if you split that would be disastrous leading into an election.

MITCH FIFIELD: Look, I don't know what position the National Party, what position Barnaby will
ultimately take. It remains to be seen what the government does in response to our proposal to the
ETS.

KIERAN GILBERT: Well, they're trying to wedge you, aren't they?

MITCH FIFIELD: Of course they are, of course they are.

KIERAN GILBERT: ... that's exactly what you're trying to do is wedge them and spook them on this.

MITCH FIFIELD: But, it remains to be seen if the government will take up our very sensible proposal
that the ETS legislation be referred to the Productivity Commission so we can get a handle on what
the impact would be on jobs in the regions and, you know, I remain optimistic that the government
might reconsider and actually delay a vote on the ETS ...

KIERAN GILBERT: Glass half full Mitch?

MITCH FIFIELD: Well, you know, you've got to think positively, I mean ...

MARK ARBIB: He used to attack ...

NO AUDIO

MITCH FIFIELD: ... emissions trading schemes so we think the government should delay, that they
should wait until after Copenhagen, until after its clear what the U.S will do.

KIERAN GILBERT: So, but, Mark Arbib what are your thoughts on what Mitch has had to say. But also,
I mean, it does seem quite clear that your trying to milk it for all it's worth in terms of
splitting them on this?

MARK ARBIB: We're trying to get an emissions trading scheme up in the Senate, that's what we're
trying to do. I don't think it's any surprise what Barnaby Joyce has said. He came out five minutes
after Malcolm Turnbull made his announcement and pretty much sunk torpedo straight into Malcolm
Turnbull's boat on this one. They're just trying to delay. They know that their Caucus, Liberal
Party MPs, Nationals MPs, they don't support ...

MITCH FIFIELD: You've already delayed it yourself ...

MARK ARBIB: ... they don't support ...

MITCH FIFIELD: You've already delayed the introduction yourself.

MARK ARBIB: ... taking action. They don't support taking action on climate change. We know that for a
fact. This is a political fix, it's a con job on the Australian public because if you left it to
Malcolm Turnbull there would never be, never be an emissions trading scheme. And this goes back to
who he is as person. I mean, in government ...

MITCH FIFIELD: It was Howard government policy Mark.

MARK ARBIB: Exactly, exactly. And he was the Environment Minister who was out there championing
emissions trading schemes saying ...

MITCH FIFIELD: So why do you think we're against an emissions trading scheme?

MARK ARBIB: ... saying it was 100 per cent necessary ...

MITCH FIFIELD: It's been our policy for ...

MARK ARBIB: Mitch, if you let me ...

MITCH FIFIELD: for along time.

MARK ARBIB: ... finish, I'll tell you why. This is ...

MITCH FIFIELD: Thank you for that.

MARK ARBIB: ... what he was saying when he was in government, now in Opposition he knows you can't
hold together his Caucus. I mean, there is no doubt, I have no doubt that Senator Corey Bernardi
from the Liberal Party, he will never vote for an emissions trading scheme. Dennis Jensen from WA,
Liberal Party MP he's out running petitions against global warming. He will never vote for an
emissions trading scheme. So, Turnbull he's smart politician on this one, just pushing it out,
pushing it out and even if there is a decision at Copenhagen and even if the United States makes a
call he will have another excuse ...

MITCH FIFIELD: No.

KIERAN GILBERT: So, are you happy to then, do you think you'd be happy to go to an election, say
that the other mob are split and call one by the end of the year/early next year.

MARK ARBIB: We do not want an election. What we want is ...

KIERAN GILBERT: You're heading towards one. Are you going to have a double dissolution? You say you
want to pass it, Penny Wong said it yesterday we're determined to pass it. The only way you're
going to pass it, in the words of Kim Beazley the former Labor leader is to have a double
dissolution.

MARK ARBIB: Well, what Penny Wong said yesterday was we'll negotiate with every body in the Senate
and that means negotiating with the Greens and negotiating with the cross benches. This is a ...

MITCH FIFIELD: Greg Combet said they were economic lunatics a couple of weeks back.

MARK ARBIB: ... this is an opportunity here. We've got on one side business the AIG The Australian
Industry Group, the BCA, we've got Blue Scope Steel supporting what we're doing. On the other hand
we have environmental groups WWF, ACF supporting us. This is a once in a lifetime opportunity to do
the right thing ...

KIERAN GILBERT: But they don't get a vote in the Senate.

MARK ARBIB: That's true, Kieran but at the same time as that we've found a balance, we've got both
business and ...

MITCH FIFIELD: Well, you haven't and I ...

MARK ARBIB: ... we've got the green groups supporting us and this is a chance ...

MITCH FIFIELD: Don't verbal business Mark.

MARK ARBIB: ... this is a chance to actually to take the action on climate change that's needed. The
real pressure now comes back on the Liberal Party and Malcolm Turnbull. He says he's for an
emissions trading scheme. Well if he is let's see, put the money on the table and start
negotiating.

MITCH FIFIELD: Now, Mark's verballing industry. Heather Ridout at the weekend said that it's
important to get the balance right between providing certainty for business and certain death for
business. She's very concerned ...

MARK ARBIB: True but they support the package.

MITCH FIFIELD: ... very concerned that the government doesn't have the balance right. The government
argues that passing the legislation will give certainty to ...