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Early Agenda -

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GILBERT: Good morning and welcome to AM Agenda. This morning, the Government's advertising
back-flip. It set the rules, then proceeded to exempt itself from those very guidelines. Coming up
on the program I'm going to be chatting about that and the broader mining tax debate with our
panel: the Parliamentary Secretary for Innovation and Industry Richard Marles and the Liberal MP
Jamie Briggs. First though on the program joining me is the Small Business Minister Craig Emerson.
Minister Emerson thanks very much for joining us.

EMERSON: My pleasure.

GILBERT: The Government set these rules, then proceeded to exempt itself from the rules. This is,
this is not a good look is it?

EMERSON: Well under the arrangements that were established there was capacity for an exemption in
particular circumstances which include extreme urgency or other compelling reasons. Senator Ludwig,
as I understand, granted the exemption on the basis of extreme urgency and part of that urgency was
the fact that there is now a very misleading scare campaign being orchestrated, amongst others, by
Tony Abbott, but also Clive Palmer who confirmed yesterday that's he's a major donor to the Liberal
and National Parties, and said yesterday that his objective is not to change the tax but to change
the Government of Australia.

GILBERT: But you set the rules, you set the rules, then you break the rules and the fact is you
campaigned so heavily on this issue at the last election. Kevin Rudd made such a big deal out of
reforming government advertising, he was going to cut it back, no political advertising and then
now $38 million before this thing is even legislated.

EMERSON: Well as I said in the rules that were established - and they were there for all to see -
there was a capacity for exemption under particular circumstances including ...

GILBERT: National emergency was one - extreme urgency ...

EMERSON: ... and other compelling reasons. Now extreme urgency ...

GILBERT: Like political disasters ...

EMERSON: Compelling reasons. It doesn't say that and that's not the argument. The argument is that
there is a misleading campaign being conducted right now which involves talking the economy down,
saying that everyone will lose as a result of this, that the Australian economy will be damaged as
a result of the Resource Super Profits Tax. And interestingly, if that were anywhere near a
balanced campaign, what's going on at the moment, they would at least say that the revenue from the
Resource Super Profits Tax is being dedicated to cuts in the company tax rate for every company in
Australia, mining and non-mining, small business tax breaks, expanding superannuation from 9% to
12% for every working Australian and investing in nation-building infrastructure.

GILBERT: But see, but that, but see that's what you're doing right now. On this form of media
you're doing it ...

EMERSON: Yes I am, yes.

GILBERT: ... you're advocating the case. Why doesn't the Government think it can sell its policies
well enough that you've got to resort to paying $38 million in advertising?

EMERSON: Well we believe that damage can be done and may well be done to the Australian economy
from a misleading scare campaign which says the introduction of a Resource Super Profits Tax will
damage everyone, will damage the Australian economy, will drive investment offshore. And as you may
recall Kieran, I've said before that these were the same arguments that were being mounted about
the Petroleum Resource Rent Tax and none of that happened.

GILBERT: But, but ...

EMERSON: None of that happened.

GILBERT: Okay. Well let's look at that. Did, did, how much did the Hawke Government spend in
advertising at that point? Or did it back itself to sell the tax changes?

EMERSON: Well it was a very long time ago and I frankly don't remember what arrangements were put
in place in terms of the promotion or the, you know, the explanation of those changes. But we're
now 25 years later and we're in a situation where there is an orchestrated scare campaign funded at
least in part by Clive Palmer whose stated objective is not to change the tax but to change the
Government of Australia.

GILBERT: Is this a concession that the Government can't sell its policies though?

EMERSON: No it's not. It's an indication that we believe the Australian public deserves to know
more about the Resource Super Profits Tax and the benefits that will flow from it, not just for
them personally but for the economy. And so you've got at present a campaign which says the
Resource Super Profits Tax will damage the economy, drive investment overseas and affect adversely
every Australian. Now, if that campaign were to make any pretence at balance whatsoever they would
have said 'but of course, on the other hand there are some benefits from the Resource Super Profits
Tax'. We don't believe it'll do any of these adverse things but we certainly know that the
Australian people deserve to understand that the Resource Super Profits Tax is being applied for a
particular reason, and that is to improve the competitiveness of all Australian companies.

GILBERT: Okay. The Government doesn't win any friends though, or any confidence when the way that
it was announced was Friday afternoon, it was at the end of the Senate Estimates. Joe Ludwig, the
Minister responsible, waits until after the Senate Estimates committee which he's before, wraps up
to announce it and so avoid scrutiny. It's not, it, it, certainly doesn't create a sense of
credibility.

EMERSON: Well the Senate itself is master of its own destiny, and I've read in the newspapers, as
you would've today, that the Senate, or at least several parties in the Senate, are looking to have
a look to examine this. Well it's not for me or anyone else to tell the Senate what to do, and if I
tried to they'd tell me to go and get lost so, I'm sure they can chart their own course.

GILBERT: But Joe Ludwig should have been a bit more upfront, he should have been a bit more upfront
and do it before he made the decision Monday. Announces it Friday after the Senate Committee
wrapped up. It, it, doesn't reflect well on the Government, that sort of behaviour.

EMERSON: Well as I said, there, there is provision for an exemption and an exemption in cases of
extreme urgency. We believe that it has now become extremely urgent for this information campaign
to be launched in order, amongst other things, to counteract a highly misleading campaign that is
being orchestrated by people like Tony Abbott and like Clive Palmer, two of the only people in
Australia who believe that the mining industry already pays more than its fair share of tax.

GILBERT: Rio Tinto, Rio Tinto believes that the Government is misleading and if you look at the
statement made by Joe Ludwig he says the changes affect the value of capital assets and impact on
financial markets. This is in direct contrast to what we've heard from the Prime Minister day in,
day out. He says that the markets have been all the Eurozone instability ...

EMERSON: Yeah and, and ...

GILBERT: ... nothing to do with the mining tax.

EMERSON: ... and let me explain that. The ...

GILBERT: Please do. Because it looks like they are in direct contradiction.

EMERSON: The campaign that is being waged - our concern - does and can affect the value of markets
because of assets. Why? Because the campaign is saying that every Australian will lose as a result
of the Resource Super Profits Tax, that the economy will be damaged. Now, that's not the Resource
Super Profits Tax, that is the campaign, the misleading campaign alleging that the world as we know
it will end, that the economy will be badly damaged. And therefore it is a misleading campaign.
We're not so ...

GILBERT: But Mr Rudd doesn't concede that.

EMERSON: No we, we ...

GILBERT: Kevin Rudd doesn't ...

EMERSON: Absolutely we do concede that this ...

GILBERT: Kevin Rudd has been saying the turbulence on the market's all the Euro zone.

EMERSON: We do concede that this is a misleading campaign, absolutely we concede that. Our point is
that the campaign itself is damaging the Australian economy, not the Resource Super Profits Tax.

GILBERT: But Kevin Rudd has not said that the campaign has been responsible for the turbulence on
the markets, what he has said in Parliament last week was that it was about the Eurozone
international instability ...

EMERSON: Yeah, no, no, no ...

GILBERT: He's said this day in, day out.

EMERSON: Here's the distinction. What we are saying is the Resource Super Profits Tax is not
responsible for the impact on Australian share prices, the value of the Australian dollar and so on
because that is overwhelmingly as a result of what's going on in Europe and also, by the way, a
tightening of monetary policy in China. And so what we're saying is that in terms of the

Resource Super Profits Tax, that is not damaging the Australian economy, but this misleading
campaign is damaging the Australian economy because it's not telling the truth about the Resource
Super Profits Tax, nor it is telling the truth and doesn't even deal with the benefits of the
revenue being generated from the Resource Super-Profits Tax in terms of ...

GILBERT: That, that, that makes sense but Kevin Rudd hasn't said that ...

EMERSON: ... cuts in the company tax rate.

GILBERT: Kevin Rudd hasn't conceded that.

EMERSON: No, what Kevin Rudd has said is that the campaign is misleading. I agree with Kevin Rudd,
it is misleading.

GILBERT: [inaudible] impacted the market.

EMERSON: Well what we're saying is that the, as Senator Ludwig said in his answer there in his
explanation, that this misleading campaign has all the capacity to damage the Australian economy
because it is false and misleading. It is, has the capacity to affect asset prices, not the
Resource Super Profits Tax itself but the misleading campaign.

GILBERT: Craig Emerson as always, appreciate your time.

EMERSON: Okay thanks Kieran.

KIERAN GILBERT: Welcome back to AM Agenda with me now Liberal MP Jamie Briggs and the Parliamentary
Secretary for Innovation and Industry, Richard Marles, gentlemen good morning.

RICHARD MARLES: Good morning, Kieran

JAMIE BRIGGS: Good morning, Kieran.

KIERAN GILBERT: Jamie, first to you, you heard what Craig Emerson had to say, compelling, there is
a compelling reason according to the government and that is missinformation from your side of
politics and the mining industry. Does the government have the right to clear all that up?

JAMIE BRIGGS: If it was such a national emergency why was it signed off on Monday and held back to
Friday? Is this was a national emergency they would've urgently moved a head last Monday. The
reason, of course, was that they didn't want to answer these questions in estimates last week so
the national emergency didn't apply until Friday. I mean, this is such a cynical decision by this
government, by Kevin Rudd. It actually makes, it confirms out there, unfortunately for all of us
that the worst fears of the Australian public have of politicians. The promises before the last
election could not have been any clearer. He sat there and, stood there and pointed at several
press gallery journalists before the last, three days before the last election and said you can all
hold me to account. Well, they need to hold him to account today, we will hold him to account
today. He said before the last election that why not have a system that three months prior to an
election have the Leader of the Opposition and the Prime Minister of the day, agree on what
government advertising programs can go ahead. I mean, this is such a farce. The problem with Kevin
Rudd is that it's not the non-core promises you should be worried about, it's the core promises.
This guy believes in nothing, he delivers nothing. This is a guy who said that he was an economic
conservative and has now spent us into the biggest debt in our history just about. This is a guy
who said that he faced the, climate change was the greatest moral challenge of our time and then
dropped that policy and this is a guy who said that government advertising was a cancer on our
democracy and it was a fundamental promise that he would do it.

KIERAN GILBERT: Yeah, he did describe it as a cancer on our democracy, Richard Marles? And then a
$40 million campaign, how do you, how do you respond to that?

RICHARD MARLES: Well, let's be clear in the lead up to the election what we had was a $121 million
campaign by the Howard government around WorkChoices. Now, we said, and Kevin Rudd said in the lead
up to the election ...

KIERAN GILBERT: That was legislation, this is not, this is not legislation.

JAMIE BRIGGS: It's not even a Bill, not even a Bill.

RICHARD MARLES: They were communicating a government program, $121 million, what Kevin Rudd said in
the lead up to the election was that we would tighten up the rules around government advertising
...

JAMIE BRIGGS: Na, na, na.

RICHARD MARLES: We've done that. No, that's what we said ...

JAMIE BRIGGS: No, he said he'd have the ...

RICHARD MARLES: Well ...

JAMIE BRIGGS: ... Auditor General vet the campaign ...

RICHARD MARLES: ...well and ...

JAMIE BRIGGS: ... and he's dumped that promise ...

RICHARD MARLES: ... okay and the Auditor General was part of the process and then on a bipartisan
basis, really, it was felt that there ought to be a different, a different independent monitor of
this ...

JAMIE BRIGGS: Come on, Richard.

RICHARD MARLES: ... which there now is ...

JAMIE BRIGGS: Come on.

RICHARD MARLES: So, it's not as though there isn't an independent monitor over this and that is a
process which has been put in place by Kevin Rudd but let's just look at the figures. In 2007 in
the last year of the Howard government $250 million was spent on government advertising, in the
first year of the Rudd government $87 million. So, you know, and what we're now talking about is
...

JAMIE BRIGGS: But it's not the first year that matters.

RICHARD MARLES: ... a $40 million or $38 million campaign over a two year period. So, really, to
compare the two ...

JAMIE BRIGGS: Oh, what a load of rubbish.

RICHARD MARLES: ... is to compare chalk and cheese. But we do need to bear in mind we face a
campaign of miss information by some of the largest mining companies in the world who are totally
partisan in this debate who are avowed donours to the conservative cause in this country who are
running a campaign of miss information, talking about shutting down mines in South Australia that
don't even exist, investing, you know, buying a million shares in companies which they say are in
trouble, Clive Palmer saying he's paying 70 per cent in tax, I mean, this is all patent rubbish and
that does have the capacity to hurt the Australian economy and so ...

KIERAN GILBERT: Well, why not ...

RICHARD MARLES: So, no ...

KIERAN GILBERT: ... why not do it ...

RICHARD MARLES: ... and so it is ...

KIERAN GILBERT: ... why not do it why you're, argue the case like you're doing this morning?

RICHARD MARLES: Well, in the face of ...

KIERAN GILBERT: And not pay, not pay millions of dollars?

RICHARD MARLES: Yes, but in the face of it, in the face of a paid campaign by some of the largest
mining companies in the world, the government absolutely has a right to communicate to the
Australian people what it's programs are,

KIERAN GILBERT: Okay, well let's just review it ...

JAMIE BRIGGS: Can I just deal with one of the fibs ...

KIERAN GILBERT: Sure, sure.

JAMIE BRIGGS: ... that Richard unfortunately has taken off the Wayne Swan talking points which is
that the Minerals Council or the mining industry is a big donor to the Liberal Party in Australia.
In the last financial year the Liberal Party received zero from the Minerals Council ...

RICHARD MARLES: What about Clive Palmer?

JAMIE BRIGGS: ... hang on, hang on, and the miners. The federal Liberal Party received zero. The
Labor Party received nearly a $100,000. So, let's just deal with who gets the money out the mining
industry.

RICHARD MARLES: (inaudible) to the conservative cause in this country.

JAMIE BRIGGS: Fib given to us about the mining industry paying for the Liberal Party's policy ...

RICHARD MARLES: What about Clive Palmer?

JAMIE BRIGGS: Well, if we want to talk about donations and misleading campaigns we'll talk about
the ACTU's campaign (inaudible).

KIERAN GILBERT: Let's just look, let's just look, we've discussed the merits of the advertising, I
want to look at the way the theatrics around it, Richard. Senator Ludwig waited till Friday to
announce this, drop the trash on a Friday afternoon. He made the decision on Monday and then the
government says this is all compelling and urgent, but the decision was made, a request was made by
the Treasurer before the budget, so this is weeks ago so where's the urgency if it was that urgent
do it then?

RICHARD MARLES: Well, the request was made back at the time of the budget, even where there is
seeking an exemption there is a process that has to be gone through. The request has to be made to
Senator Ludwig. At the time that the request was made we were already seeing a campaign of
misinformation being run by the mining companies in this country. I mean, they were out there ...

JAMIE BRIGGS: It's just not true.

RICHARD MARLES: ... well it is true, they ...

JAMIE BRIGGS: There wasn't anything in there ...

RICHARD MARLES: No, no, they ...

JAMIE BRIGGS: ... there was nothing in the market place.

RICHARD MARLES: ... no, no they're out there in terms of what they're saying, you know, claiming as
I said, there are mines that are going to be shut down which don't even exist. They're out there,
you know, saying there is a whole lot of share, or companies that are in trouble whilst their
busily by night investing in those shares. Now, all of that was happening at the time of the
budget, at the time that the initial request was made. We've worked through that process
expeditiously; we've got to a point on Friday where we're able to announce it.

KIERAN GILBERT: Okay, Jamie, the Coalition appears all holier than thou at the moment but the GST,
we'll go back to that, $120 million, that wasn't legislation, that was a hell of a lot of money
spent ...

JAMIE BRIGGS: Kevin Rudd ...

KIERAN GILBERT: ...unchain my heart.

JAMIE BRIGGS: Well, mate, Kevin Rudd promised before the last election that this would be new
politics that, you know, we would change the way that Australians looked at politicians and, you
know, he had to fix this cancer on the democracy. So, we can have all the historic comparisons in
the world but the problem here is that Kevin Rudd cannot be trusted to govern our country. He can't
be trusted to stick by his mates. Morris Iemma today says, you know, reveals that Kevin Rudd tells
him before the last election to stop Morris Iemma making a decision in the New South Wales what
Morris Iemma thought was New South Wales best interests but would've been against Kevin Rudd's
political interests, he tells him if you can help me, this is Kevin Rudd, I'll get you elected,
I'll get elected and you will, and you will prosper, work with me and when the time comes we can, a
word that Kevin Rudd often uses I'm told, the unions together ...

KIERAN GILBERT: Yeah.

JAMIE BRIGGS: ... now, you know, this guy cannot even be trusted by his own mates let alone the
Australian people.

KIERAN GILBERT: This is page two in the Telegraph today, the Daily Telegraph for those that haven't
caught up with the story. Morris Iemma suggesting and in a new book that Kevin Rudd had promised to
help him privatise the electricity sector if he held off till after the '07 election. I think we've
got a comment ...

JAMIE BRIGGS: There's more than that, do over the unions too.

KIERAN GILBERT: Let's, lets ...

JAMIE BRIGGS: ... it's not even just help him out, do over the unions...

KIERAN GILBERT: We've just got a comment of Morris Iemma on 2GB this morning confirming this story.

MORRIS IEMMA: You've put very simply the commitment that was made in my office that was never lived
up to and in spite of several attempts to ensure that it ...

ALAN JONES: But nor would he speak to you?

MORRIS IEMMA: ... well, for a ime there it was very difficult to get through to him ...

ALAN JONES: And when eventually you go through he said no it's a state matter?

MORRIS IEMMA: Did no longer want to establish a precedent notwithstanding a fact that it would
cause the national executive who's been there for, for a very long time to resolve internal
disputes.

KIERAN GILBERT: That was Morris Iemma there on 2GB this morning talking to Alan Jones. Richard,
this is a suggestion that the Prime Minister back flipped, gave a commitment and then retracted?

RICHARD MARLES: Oh, well look we've had one person's account of this, we obviously haven't heard
what the Prime Minister has to say on it. I'm not going to speculate on what's in the paper today.
I mean its part of the theatrics that's going on at the moment but i don't think we ought to be
paying too much attention to it than that.

KIERAN GILBERT: Okay, the Lowy Institute poll out today shows the government got six out of ten in
handling the global financial crisis. This is the governments strong suit and they only got six out
of 10, is this a worry?

RICHARD MARLES: Well, look we've, I've said consistently we don't govern on the basis of polls, we
governing in the national interest and polls are going to come and go but it depends on what
questions are being asked and the like. But I'll tell you one thing, if we're talking about foreign
policy the real risk to this country would be if Julie Bishop ever got her hands on the foreign
affairs portfolio, I mean here we have somebody who is an absolute risk to this country who can't,
who will speculate about the activities of national intelligence agencies, if you want to talk
about a risk to foreign policy that's where it's at. It's at the Opposition, it's with Julie
Bishop.

KIERAN GILBERT: The government still got a pass in terms of, six out of 10, you know, it's a decent
pass, probably a credit in university parlance, so people do generally vote with their hip pocket,
this is one of the key issues, so it still looks like it's solid for the government there?

JAMIE BRIGGS: Well, look I think it reflects the concern out there about the Julia Gillard memorial
halls and all the waste expenditure on that program where you're seeing massive waste and
expenditure, you're seeing a government who's just handed over a program to incompetent state
governments who cannot implement a program to save their own skin. And, I think that's a reaction
to those sorts of waste and, and the waste and mismanagement of this government. You've seen it
with the insulation program, you've seen it with green loans program, schools halls I've just
mentioned, you've got computers in schools I mean there's so much waste and mismanagement out
there. This government has wasted so much of the hard work done by the former government that it's
understandable that most people are concerned about that.

RICHARD MARLES: Well, I think that, let's bear in mind we faced the most difficult global economic
circumstances since the great depression. We've got through as one of the only, if not the only,
country in the OECD that didn't go into recession. A low unemployment rate, we've got the lowest
debt in the OECD, I mean you can talk about the school halls, I'll tell you what, in my electorate
not a single complaint about any of the BER projects, indeed quite the opposite, what you are
seeing is unambiguous joys. I'm sure Jamie knows in his electorate as well ...

JAMIE BRIGGS: No, I ...

RICHARD MARLES: ... from all those schools who are now getting new classrooms, new school halls, I
mean they are overjoyed with what we're doing.

KIERAN GILBERT: Okay, let's look ...

JAMIE BRIGGS: (inaudible) it's interesting that Richard says we got through the global recession
stronger than most countries. Of course there was one industry which largely was responsible for
that, and now you're going to try and kill that goose.

RICHARD MARLES: No, look, what we're seeing with, it's an important question, what we're seeing
with the resources tax is this: 10 years ago the price which we set as a country for the value of
something that we own, which is under the ground, has almost, has more than doubled in the last 10
years and yet we are still being paid the same price as if it was 10 years ago. All we're talking
about in the resources super tax, the resources super profits tax, is to have situation where
Australians get a fair value, where what we get moves with the increase in the value of the
resource?

KIERAN GILBERT: Ken Henry says, Ken Henry says that the mining industry didn't save the economy
from recession, that they actually had a big slump? But just quickly we're almost out of time.

JAMIE BRIGGS: Well, people are entitled to their view, Kieran, but clearly China and the growth of
China was one of the, and the stimulus package in China was one of the reasons Australia got
through that recession in such a strong position and that was driven largely by our resource
sector, the sector that the governments decided they're going to try and whack a great big new tax
on and, and kill off.

KIERAN GILBERT: The golden goose as I've heard

JAMIE BRIGGS: The goose which lays the golden egg.

RICHARD MARLES: But yeah, and trying to make sure that we get the fair value for the price of that
egg.

KIERAN GILBERT: Lovely analogy, Richard Marles ...

JAMIE BRIGGS: Smash the egg I might say to.

KIERAN GILBERT: ... and Jamie Briggs, as always great to see you both.