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Early Agenda -

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Sky News AM Agenda with Ashleigh Gillon

30 August 2011

Subjects: manufacturing, Abbott's statements, Craig Thomson

ASHLEIGH GILLON: First though, we're going to go to our panel of politicians. Joining me this
morning, the Trade Minister, Craig Emerson, and the Shadow Attorney-General, George Brandis. Good
morning to you both. Trade Minister ...

GEORGE BRANDIS: Good morning, Ashleigh.

GILLON: ... let's start with you. The unions want an inquiry into the future of the manufacturing
sector. Is that a reasonable, sensible idea?

CRAIG EMERSON: I think, on balance, it's probably better to proceed with a set of policies that
we've both announced, and that we're working on, for ensuring that we do everything to boost the
competitiveness of the Australian steel industry. That's what we're seeking to do. Through no fault
of the workers and the employers, who have striven hard to be efficient, they're now being burdened
with a very high exchange rate caused by the mining boom which, itself, is a vote of confidence in
Australia because money is coming into Australia, forcing the exchange rate up.

But that is a real burden to our steel industry and other manufacturing industries that export or
compete against imports.

GILLON: So, does that mean the Government's ruling out an inquiry into the sector?

EMERSON: Well, I think that the best way to proceed is to get on with it. An inquiry would take a
considerable period of time, so there's a range of policy ideas that have been put to the
Government, but they don't include, on the Government's account, restoring or jacking up tariffs.
We're very keen to support the competitiveness of the industry. We'll have a steel industry plan of
$300 million - $100 million of that will flow this year - but Mr Abbott, of course, has declared
that he's totally against that and will vote against it.

GILLON: I will get to what the Coalition's doing with Senator Brandis...


GILLON: ... in a minute. The unions are also calling for an audit to be done of contracts of the big
mining companies to see how much business they're basically giving to Australian manufacturers. Do
you have any idea, a rough estimate, of what percentage of that business is going to Australian

EMERSON: We don't have an across-the-board figure on this, but I think, again...

GILLON: So would an inquiry help figure that out?

EMERSON: But I think, again, I mean, you can get on with the policy, you see, and the policy here
is to provide the necessary information, so that Australian bidders can, you know, compete fairly
for these sorts of contracts.

Again, to the credit of Kim Carr, he's been working on this for some time, and that's the sort of
thing we can do. If there are information gaps or if there's, you know, tendering processes that
effectively lock out Australian tenderers through specifications, well, of course, that warrants
consideration. But that's very different from arguing that we should go back 30 years and increase
tariffs for the steel industry.

GILLON: So, you'd rule out forcing resources companies to use Australian steel. But what about this
industry proposal which will require an industry participation plan for all resources projects
worth more than $100 million. Does that idea have merit?

EMERSON: Well, let's have a look at that sort of thing. But again, we want to ensure that
Australian suppliers are able to compete on level terms. And I think that, by and large, the sorts
of proposals that the union movement and the industry are bringing forward are sensible proposals.

They aren't proposing to turn back the clock to 1980 or 1983. In fact, I was around advising the
Hawke Government in 1983, and the steel industry was literally on its knees. Using the old, sort
of, techniques, if you like, of just high tariffs, that didn't actually assist the steel industry
at all, and the Hawke Government had to intervene with a steel industry plan to save the industry.

But that's very different from increasing protection which, I know you'll say, 'I'll ask George
Brandis about this'. But this is what Mr Abbott is actually proposing.

GILLON: Well, let's get Senator Brandis's take on this. What other options do you think, Senator,
should the Government be considering to help the manufacturing sector?

BRANDIS: The best thing the Government could do for the manufacturing sector is to abandon the
carbon tax. But, of course, the Government is ideologically committed to this course now. Don't
worry that it promised the people it wouldn't introduce one.

And that is the primary reason why these thousands of jobs are being lost: because the people who
have to make long-term investment decisions in the steel industry and in other areas of Australian
manufacturing are now factoring in the fact that the cost of producing steel or other goods in
Australia, in the long run, will be much, much higher as a result of the carbon tax.

GILLON: Senator, BlueScope Steel,...

BRANDIS: And it's all very well...

GILLON: ... when it made its announcement last week, it said the carbon tax had nothing to do with
its decision to slash 1,000 jobs.

EMERSON: Exactly.

BRANDIS: It didn't quite say that. But I can understand why ...

GILLON: Well, it was pointedly asked. The CEO was asked, and he said the carbon tax didn't play
into that decision.

BRANDIS: Yeah, I can understand why he may have said that, but we know...

EMERSON: Well, maybe it's because it's the truth.

BRANDIS: ... and I think you ... I think ... well, we know... excuse me, Craig, please don't interrupt me.
We know, and I think the people who make decisions about long-term investment are well attuned to
what their long-term cost structure will be. Now, it's all very well for ... and that includes the
carbon tax.

Now, it's all very well for the Prime Minister to be crying crocodile tears over these job losses.
She is responsible for these job losses. This is a terrible time for Australian manufacturing.

You can't blame it all on the high dollar, though I acknowledge that that's a contributing factor.
You also have to have give regard to the fact that there is deep economic uncertainty and malaise
in this country at the moment. The Government has no idea where it's heading. And all it seems to
be interested in doing is increasing the costs of doing business, increasing the cost to
industries, and job-shedding is an inevitable result.

GILLON: Senator, as you know, the Minister sitting next to me here, Craig Emerson, has been very
critical of Tony Abbott's handling of the Coalition's policy on what the Coalition would do, saying
that your policy appears vague and murky.

Here are two comments Tony Abbott made during a speech in Melbourne yesterday. Have a listen.

[Excerpt from speech]

TONY ABBOTT: The Government should be investigating what can be done to ensure a genuinely level
playing field and a fair go for Australian companies. The Coalition is strongly opposed to industry
policy that props up over-manning or feather-bedding, or that does not count the cost of
intervening and honestly face up to it.

[End of excerpt]

GILLON: Senator Brandis, the analysis of The Australian newspaper this morning - I think we've got
the front page here to show you - is that Mr Abbott tripped up on this because, on the one hand, he
appears to be calling for a debate on steel industry protection, while on the other hand he's
appearing to say he believes in free markets. Which is it?

BRANDIS: Well, I don't think that those are inconsistent positions at all. What Mr Abbott is
saying, and what has been the Liberal Party and, indeed, the Coalition's position for decades now,
is a very strong commitment to free trade.

But that's not to say that we shouldn't have a national conversation about the future of
manufacturing. In fact, that is what Julia Gillard led the trade union leaders to - yesterday - to
believe that she was prepared to entertain. Although I note that's been now this morning ruled out
by her Industry Minister, Senator Carr.

So, please don't accuse the Coalition of inconsistency when you have the Prime Minister yesterday
telling the trade union leadership of the country that she was prepared to entertain an inquiry
into the manufacturing industry, and then it ... that very same course of action being ruled out by
her Industry Minister less than 24 hours later.

We're prepared to have a conversation about these things. It's not black and white. But we approach
that conversation with a very strong disposition towards free trade.

GILLON: Does conversation equal inquiry? Is the Coalition backing calls for an inquiry: the calls
from not only the unions, but industry leaders as well?

BRANDIS: Well, look, I'll leave that to Mr Abbott and the responsible Shadow Minister. But might I
point out that what Mr Abbott referred to yesterday in his CEDA speech was a forum. Now, whether
you call it a forum, or an inquiry or a conversation, I think that there is ... basically what the
union leadership of the country wants, and what at least one side of politics, mainly the
Coalition, is prepared to entertain is a national conversation about where manufacturing goes and
how jobs can be protected.

GILLON: Craig Emerson, the unions would be pleased to hear that the Coalition's open to this
conversation. Why isn't Labor willing to do the same thing?

EMERSON: We've been working on policies for some time and we're rolling those policies out. We're
happy to do that.

GILLON: But the unions say they don't go far enough. More needs to be done.

EMERSON: And I've already indicated on matters such as the specifications for tenders and so on, of
course we'll look at that. But Mr Abbott is a free-trading protectionist. He said yesterday that
he's in favour of free trade and protection. That's like saying 'well, there's two teams in the
footy match' - Mr Abbott, of course, will barrack for both teams. In a two-horse race, Mr Abbott
would take an each-way bet and say 'I won!' And what he's doing is basically...

BRANDIS: I don't think that's a fair characterisation.

EMERSON: ... I thought we were ruling out...

GILLON: Okay, let's let the Minister finish and we'll come back to you...

BRANDIS: You're just ... you're just characterising...

EMERSON: No, I'm not ...

GILLON: ... Mr Brandis, in one second.

EMERSON: ... I'm not. I'm not at all.

GILLON: Mr Emerson, please continue.

EMERSON: Yeah, what I'm saying is that what Mr Abbott seeks to do is be all things to all people.
He never makes a hard policy choice. He says 'well I'm for free trade; I'm for protection', because
he hopes that he will pick up enough people from one side of the argument by saying he's for
protection and enough people from the other side of the argument by saying he's for free trade -
because he won't do the hard policy work. He won't make the choices.

And here's a choice for Mr Abbott: the Government has announced a $300 million steel support plan
to help them make the transition to a lower-carbon future. Mr Abbott is on the record, absolutely
unambiguously saying he will vote against it.

GILLON: Senator Brandis?

BRANDIS: Yeah, well, look, that is part of the carbon tax debate. But let me...

EMERSON: It's a separate piece of legislation.

BRANDIS: ...and you know what our position in relat ... oh, it might be a separate piece of
legislation, when it's part of the package. Let me deal, though, with what I say is your
mischaracterisation of Tony Abbott's position. And let me put it clearly on the line here. The
Liberal Party, the Coalition, Tony Abbott himself, approached this debate with a very, very strong
disposition towards free trade.

But that's not to say that there might not be circumstances which admit qualification and
exception. Now, you accept that, Craig. All ... both sides of politics accept that. And to say that
we can have a discussion at the margins is merely to say we don't have an ideological or an
absolutist view of this position - of these suites of policies. But our very strong disposition is
towards free trade.

EMERSON: The only thing that Mr Abbott ...

GILLON: Look, I do need to move on ...

EMERSON: ... that said, yesterday...

GILLON: ... I think we've heard, Craig Emerson ...

EMERSON: ... that's credible, if I can just...

GILLON: ...your views on Mr Abbott's speech.

EMERSON: ... in 30 seconds...

GILLON: I do need to move on. We are going to cover off some other issues after the break,
including the Craig Thomson scandal and the handling of that by both of my guests on the panel
today. And also a report today that criticises the Government's carbon tax compensation package.

Do stay with us.

[Unrelated item - advertisement break]

[Cut to report on Prime Minister Julia Gillard's visit to Port Kembla steelworks]

GILLON: Let's go back to our panel now: the Liberal Senator George Brandis; the Trade Minister
Craig Emerson as well is with me today.

Of course, both of my guests today have really been leading the charge over the Craig Thomson
scandal. It is still creating headlines. The latest twist today is in the Daily Telegraph which
reports the Health Services Union, Craig Thomson's former union, paid 10s of thousands of dollars
to the Labor MP in the settlement last year, after Craig Thomson had sued the union for
deformation. That was in a settlement.

Senator Brandis, you've been leading the Coalition's attack on this. You wrote to the New South
Wales Police Commissioner last week outlining the case against him. Are you surprised that police
haven't announced a formal investigation yet, considering that the Health Services Union has also
referred the case to the police?

BRANDIS: No, not at all. What has happened is that I, as you say, wrote last Monday to Commissioner
Scipione and two days later the Health Services Union decided to make a formal complaint as the, as
it were, victim of this fraud, and agreed to cooperate with police and make available to them
documents which, I imagine, are well beyond the documents that I was able to put before the police.

As I said on ... at my press conference last Tuesday, I'm perfectly happy to abide by the processes
of the New South Wales Police and really the matter is now over to them and I'm perfectly happy to
await the outcome.

GILLON: George Brandis, as you no doubt will recall, Craig Emerson last week did slam you on your
handling of this case. Minister, you said that George Brandis is interfering in processes; he was
being grossly irresponsible by calling the New South Wales Police Minister, who then called the New
South Wales Police Commissioner to give a heads-up about George Brandis's letter. New South Wales
Police Commissioner, Andrew Scipione, though, wasn't offended at all. Here's what he had to say
last Friday.

ANDREW SCIPIONE: It's in no way compromised. I felt no pressure. There was no suggestion that I
would do anything or not do anything.

GILLON: Craig Emerson, do you owe George Brandis an apology?

EMERSON: Not at all. We said at the time, and I repeat, that we had the utmost confidence in Police
Commissioner Scipione. My concern was that Senator Brandis contacted the Police Minister before
lodging these documents. He then put out a statement confirming that he had, but what he hadn't
done is confess to the fact that he'd also contacted earlier the Attorney-General in New South

Now, ordinarily ...

GILLON: This is all before an investigation has even been looked into...

EMERSON: Before he lodged the documents.

GILLON: ... let alone launched.

EMERSON: Ordinarily, if you do what George is doing and says this is about legal process, it's not
about politics, you know, an average Australian wouldn't think to ring the New South Wales Police
Minister or the New South Wales Attorney-General saying that they're going to make a complaint to
the police.

And so I felt it was important that there be removed any suggestion of pressure on anyone.

Now, I haven't said that George Brandis has interfered in the investigative processes or the
assessment processes.

GILLON: That was certainly the suggestion.

EMERSON: That is an allegation I made against Mr Abbott; that is that he called for the Fair Work
Australia investigation into the Health Service Union to come to an end, seeking to put pressure on
the investigators. That's what I regard as interference. I did not make that allegation against
Senator Brandis; the allegation I made is that he's creating the impression, by ringing senior
counterparts in New South Wales, that is not a very good impression if you want a completely
impartial investigation that is seen by the public to be completely impartial.

GILLON: Well, as I said ...

BRANDIS: I think I'm entitled to a right of reply to that, Ashleigh. The fact is Craig is
embarrassed because ...

EMERSON: Not at all, George.

BRANDIS: ... I was accused of that, not by him but by the Prime Minister, last Thursday morning when
she got her facts wrong. She said 'Senator Brandis has done something wrong because he contacted
his political counterpart in New South Wales, the New South Wales Police Minister, when the police
had the matter in hand and were assessing his complaint'. That was factually wrong but, having made
that error, Craig was then trotted out, no doubt by the Prime Minister's media office ...

EMERSON: Yeah, George, just...

BRANDIS: ... to cover up for it. Now, the fact of the matter is that, as Mr Scipione has said, there
is no suggestion of any pressure having been applied to him whatsoever. The suggestion or the
innuendo that the Prime Minister put about that there was has been demonstrated to be factually
incorrect and, indeed, ignorant ...

EMERSON: Well, George...

BRANDIS: ... and that's...

GILLON: Craig Emerson...

EMERSON: ... did write to the Police Commissioner. Why did he not say ...

GILLON: Are you ...

EMERSON: Why did George not say in his statement ...

GILLON: I want to ask you about your handling of this, Craig Emerson.

EMERSON: ... that he'd also written to the police...

GILLON: Your critics have suggested...

EMERSON: ... rung the Attorney-General. Why did he not say that?

GILLON: We can't all talk over each other because no one can hear us. Craig Emerson ...

EMERSON: Why did he not say that?

GILLON: ...your critics have been saying that you've been distracted by this, you've been sent out as
the sort of chief government attack dog on this issue. You're the Trade Minister,...


GILLON: Acting Foreign Minister.


GILLON: When you were asked questions last week about the Government's handling of travel warnings
during the US cyclone Irene in the US, you couldn't answer. You said you didn't know what the
travel advice was.

EMERSON: Yes, and you know, I'm happy to respond to that.

GILLON: Are you being distracted by this affair?

EMERSON: I'm happy to respond to that. I was not asked a question about the cyclone. I was asked
about travel warnings in the context of a bombing of the UN building in Nigeria. And I was asked
was the government or DFAT considering changing any travel advice in relation to the US? We were
talking about the bombing of a UN building in Nigeria and I was concerned, having checked the
travel advisory in relation to the United States - which was unchanged at level two in terms of
terrorist activity - I was concerned to check that there was no ...

GILLON: So, you're not being distracted by this?

EMERSON: ... thinking ... that there was no change. I'm glad you gave me this opportunity because the
questioner did not mention the cyclone. We were talking about terrorism. I responded accurately in
relation to terrorism.

GILLON: Okay, there is more to come on this...

BRANDIS: Craig, I think we'd all be better off if you concentrated on doing your job and I'll
concentrate on doing my job as the Shadow Attorney.

GILLON: Okay, on that note we do need to go. We are out of time. Craig Emerson, George Brandis,
thank you for that. We do know the Liberal Senator Mary Jo Fisher will have her day in court over
charges of theft and assault on Thursday. So, we'll hear more about this later in the week.