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Transcript of interview with David Lipsom: Sky News AM Agenda: 15 January 2013: Newspoll; budget surplus; BlueScope; trade with Japan; Laming's tweet on Logan youth; NSW water buybacks

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Trade Minister Craig Emerson

Sky News AM Agenda

Subjects: Newspoll, budget surplus, BlueScope, trade with Japan, Laming’s tweet on Logan youth, NSW water buybacks.

15 January 2013

DAVID LIPSON: With me now, the Trade Minister Craig Emerson. Thanks for your time this

morning, and Happy New Year.

CRAIG EMERSON: Yeah, you too David.

LIPSON: You must be pleased with this Newspoll this morning?

EMERSON: I don't try to follow the polls. You know, if it was a different number we'd

probably be having a different conversation — and this will occur, I think, every fortnight. That's Newspoll and there are other polls. But if I can take anything out of it, at the beginning

of the new year, that people do seem to accept that there is a contrast here between a Government that is taking the right decisions for Australia in the 21st Century, recognising the needs of the modern Australia and, perhaps, an alternative, which is looking back to

some sort of yesteryear.

We've got a plan for Australia built on the Asian Century White Paper — big policies coming, David, on the education reforms to make our young people ultra-competitive in the Asian

Century so they can have wonderful job opportunities.

LIPSON: But it hasn't come, largely, at the expense of the Coalition. It's mostly at the

expense of the Greens and the other parties.

EMERSON: And that's why I think you can over-analyse these things, and we'd be having a

different conversation in a fortnight as numbers move around. But the economy is proving to be resilient. Yes, there are real pressures on our manufacturing sector, and some parts of

Australia in this patchwork economy aren't doing as well as others. But, again, I think there's an appreciation that there's growth occurring; that interest rates have come right down, saving the average mortgage-holder $5,000 a year since the election of the Labor

Government. You've got relatively low unemployment, relatively low inflation, we're triple A-rated by all three ratings agencies — so the world is delivering a positive verdict as well.

LIPSON: Dumping the surplus commitment just before Christmas doesn't seem to have

damaged Labor one bit. But with the Prime Minister promising major commitments to

schools and disabilities, is the Government putting the election ahead of the nation's financial security?

EMERSON: Quite the opposite. We're putting the nation first, as we always have done.

We've made unpopular decisions in the past, in order to create room for our new reforms.

And they are reforms, and not just spending proposals. You know, you can make no greater investment than in the talents of our young people, and that's what we intend to do.

LIPSON: Why delay the surplus and send Australia further into debt, rather than delaying

some of these election sweeteners or, at least, policies that would be quite sweet for you at the election?

EMERSON: These are absolutely fundamental reforms. The National Disability Insurance

Scheme and the education reforms are vital to Australia's future. So, it's not as if they're just

a bit of wilful spending. These are the sorts of decisions that if not made, would be a matter of enormous regret for this nation.

So we will make them; we are making them. But in making the decisions, we're making room in the Budget, as we have done in the past. We will always do that. Again, the contrast: before the Coalition ever got a look at any new policies, they've got to find $70 billion to fill

that budget black hole that they've created.

LIPSON: Well the mining tax doesn't look like it'll be contributing much at all to the surplus,

or the hopes of a surplus, if there are any out there. Does it need tweaking? Does the mining

tax need tweaking?

EMERSON: No, I think what we've got is a tax that, as has always been the case, is

designed around the notion of when profits are high it gets a share for the community on top

of company tax, which also gets a share for the community. And when profits are lower, it doesn't. That's the nature of a profits-based tax.

Now, iron ore prices have increased very substantially in the last little while. We'll see what

that means for MRRT revenue. But it is always the case that if you have a profits-based tax, you have to accept the swings and roundabouts that are associated with, for example,

changes in iron ore prices, which have been really quite volatile.

LIPSON: Well, 170 BlueScope workers in Victoria have found out they'll be losing their jobs

by March. That's not related to the mining tax ...

EMERSON: No, it's not.

LIPSON: ... only to point that out. But, was the $100 million assistance package from the

Government worth it? Because the company says that that was just to offset the carbon tax, and hasn't saved these jobs.

EMERSON: Well, the company does support a total of $300 million for the Steel

Transformation Plan, and that is a fundamentally important investment in Australian

manufacturing. We're proud of that. Again, there are choices here: Tony Abbott, I remember, in the chamber, when this vote came up, the Speaker said: “I think the ayes have it”. Mr Abbott said “the no's have it”. In other words, Mr Abbott, the Leader of the Opposition, was

quite vehement in opposing the Steel Transformation Plan. He goes around with his hard hat on, saying he's the steel worker's friend — but he's not, because he voted against this funding.

Now, what we're doing is seeking to deal with the issue of a very high Australian dollar. And you see, David, when good news comes out of China — and we welcome good news from

China — what does that do to the Australian dollar? It goes up. That puts pressure on our

manufacturing sector. We understand that. And we're working with manufacturers, not only in steel, but right around Australia, to our very best to support manufacturing industry workers’ jobs.

LIPSON: Well you also met with Japan's new Foreign Minister at the weekend. There've

been rumblings that Japan may drop out of the Trans-Pacific Partnership, the trading bloc for the region. Were you given any assurance that Japan will stay in that grouping?

EMERSON: Well, they're not in it, and what happened is that the previous Government was

looking positively at that. The new Japanese Government is having a fresh look at it. They, in the election campaign, were less enamoured of the Trans-Pacific Partnership than the

Government beforehand. But they've told me that they'll have a proper review. In addition, they're in a ...

LIPSON: Doesn't sound positive though, does it, for them to be a part of it?

EMERSON: Well, I think in the actual election campaign, they weren't campaigning for the

Trans-Pacific Partnership. That's the truth of it. But, you know, we're engaged in negotiations bilaterally for a free trade agreement, and we'll continue to do that.

There is another grouping called the Regional Comprehensive Economic Partnership — they're in that, and they're keen on that. They're having a look at the Trans-Pacific Partnership, and they're great allies of ours in the World Trade Organization, the Japanese.

Every position that we adopt, we develop as far as we can with Japan. And we go into most of these negotiations side-by-side to get greater trade liberalisation.

LIPSON: Well also, much closer to home, we've seen — and much closer to your home —

violence has flared in your electorate. And it prompted a tweet from one of your opposite numbers, Andrew Laming, who said, quote, “Mobs tearing up Logan. Did any of them do a

day’s work today or was it business as usual, and welfare on tap?” What do you make of


EMERSON: Those are disgraceful and inflammatory comments from Tony Abbott’s

Parliamentary Secretary for Indigenous Health, no less. I mean these are tensions involving

Indigenous Australians and Pacific Islanders. No one likes to see it — we want the violence to end — but it doesn't help, and in fact it hinders, when a member of Mr Abbott's frontbench takes to Twitter last night, seeking, what, political gain out of this? Why would you seek

political gain out of what is a very tense situation? People of goodwill through Logan City are trying to calm the situation, and you have Mr Laming, a Parliamentary Secretary for Indigenous Health, seeking to inflame it. It is disgraceful.

LIPSON: Are you alleging there's a racial element to his tweet?

EMERSON: No, what I'm saying is that it is well-known that the tensions are between

Indigenous Australians and Pacific Islanders. And what Mr Laming is saying is, ‘oh they're all

on welfare; the welfare tap's just flowing’. Well, what are the policy implications flowing from that? What is Mr Laming, what is Mr Abbott, saying about, you know, income payments for people in Logan City? I don't know, and that's why I'm so bemused as to the motive behind

this comment.

What purpose could it serve, other than to inflame the situation and to put the Liberal National Party politically in the middle of what is a very difficult, tense situation that can only

inflame it?

LIPSON: Okay, well just finally and briefly: New South Wales has announced it will put a 3

per cent cap on water buybacks. Will that jeopardise the Murray-Darling plan at all?

EMERSON: We'll continue to work with the New South Wales Government. If they did all of

their infrastructure plans, which they said that they would do, then they would come in under that 3 per cent cap anyway. So if they back up their statements in terms of extra

infrastructure, water infrastructure investment, then this issue need not arise.

We will work constructively with all states on this. Hopefully, here's another issue that could

be above politics. The Murray-Darling Basin has needed fixing for, what, several decades.

We're absolutely determined to do that. We'll work cooperatively with the O'Farrell Government, but they need to work cooperatively with us, too.

LIPSON: Craig Emerson, thanks for your time.

EMERSON: Thanks David.