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Transcript of doorstop interview: Canberra: 8 November 2008: Labor's economic mismanagement; Paul Keating; fuel excise; pensions; international financial crisis; Afghanistan; ABC Learning; G20 meeting.



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LEADER OF THE OPPOSITION THE HON. MALCOLM TURNBULL MP FEDERAL MEMBER FOR WENTWORTH

8 November 2008

TRANSCRIPT OF THE HON. MALCOLM TURNBULL MP DOORSTOP INTERVIEW, CANBERRA

Subjects: Labor’s economic mismanagement; Paul Keating; fuel excise; pensions; international financial crisis; Afghanistan; ABC Learning; G20 meeting.

E&OE…………………………………………………………………………………...

MALCOLM TURNBULL:

We’ve seen today in the press the consequences of years of Labor mismanagement, economic mismanagement in New South Wales. Now Mr Rudd was put in his place as leader of the Labor Party with the support of the New South Wales Labor machine, the same team that have delivered such appalling leadership, such shocking economic mismanagement to New South Wales.

It’s absolutely vital that Mr Rudd stops managing Australia’s economy with the same Labor spin strategy. He has got to develop an economic strategy, not just a political one. Managing the economy with political strategy in mind only has been demonstrated to produce some very significant errors already in Mr Rudd’s Government. And we can see the full force of that political style in New South Wales. We have to be very aware and very concerned that Mr Rudd doesn’t do to Australia what Labor has done to New South Wales.

QUESTION:

So Paul Keating had a bit of a go at you yesterday, what do you think [inaudible]

MALCOLM TURNBULL:

Paul Keating was on fire last night. It was...at one point he told the room, largely full of businessmen and women, that if it wasn’t for him they’d all be selling pencils in Martin Place. So it was a very colourful performance buy him and I think everyone was entertained.

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QUESTION:

On economic management do you still believe it would be economically responsible to cut fuel excise by five cents a litre.

MALCOLM TURNBULL:

Well it is an issue that we have to review in terms of our priorities, in terms of budgetary priorities. Now that commitment was made and I am very reluctant to abandon it, very reluctant. But there are priorities in government and there are priorities for oppositions that seek to be in government. And there are certainly budgetary priorities of a very high order, we’ve talked today about families, I’ve talked on other occasions about pensions. So we’ve got to weigh up all of those priorities and then make the right judgements. And that just as the Government is going to have to reorder its priorities no doubt we will too.

QUESTION:

So you may scrap it?

MALCOLM TURNBULL:

If in fact, if we cannot afford to meet the extremely important priorities of delivering a better deal for pensioners, looking after families and other key priorities, if we can’t do that and at the same time reduce fuel excise by five cents then obviously those more important priorities will take their place instead.

QUESTION:

Do those priorities mean pensioners?

MALCOLM TURNBULL:

Well pensions are clearly a key priority. I mean we’re pleased the Government is making this one off payment but long term pension reform is a very vital priority. Now there’s a review going on, we look forward to that and we’ll be formulating our response when we see what the review produces.

QUESTION:

Mr Turnbull you spoke inside of the global financial crisis and returning to say, living within your means, is that something that Australians need to start thinking about and it’s perhaps greed that created this [inaudible]

MALCOLM TURNBULL:

Well look I think there’s no question that around the world there has been something of a debt binge. I think we all recognise that and that’s been seen much less so in Australia than in other countries. Now I think most Australian families now are looking carefully at their obligations and ensuring that they don’t take on obligations

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they can’t meet and where they afford to perhaps reducing their indebtedness and so forth. That is common sense.

The sub-prime crisis was very much a United States phenomenon. Don’t forget that thanks to the good financial regulation put in place during the Coalition’s time in government we have in our mortgage market less than one per cent of mortgages that are sub-prime. In the US it’s 15 per cent. And in 2006 40 per cent of all of the mortgage loans made were sub-prime. So you know that system got quite out of control, that lending got out of control. But it gets back to that fundamental problem of imprudence, lending money to people who can’t afford to repay it and of course people taking on obligations they can’t meet other than through a housing bubble continuing to grow.

QUESTION:

Was Kevin Rudd right to tell Barack Obama that it’s too early to commit more troops to Afghanistan? That our numbers are [inaudible]

MALCOLM TURNBULL:

Well I’ll wait and see what the US administration, the new US administration seeks from Australia. Mr Rudd has got a habit of giving accounts of his conversations with leading American politicians, I don’t think he…well we all know he hasn’t advanced Australia’s standing by doing so. Let’s see what the Americans seek from us, if they do in fact seek additional commitment from us and then we can form a view on it in the context of both the military and other political context, economic contexts of the time.

QUESTION:

On ABC Learning Centres there were reports that [inaudible]

MALCOLM TURNBULL:

Well ABC Learning has been a matter of concern for some time. The Government have said for some time they have had a contingency plan, it looks like this contingency plan, this support, was put together very much at the last minute. So I’m a little sceptical as to how much of a plan they really had.

But the reality is that we need child care in Australia, it is better delivered by a mixture of community not for profits, by governments, particularly local governments, and of course by the private sector. So there has been…we’ve got an issue with ABC Learning, you’ve got to remember that the problems of ABC Learning are essentially a problem of too much debt. It gets back to the point I made earlier at the top level of the company.

So the core business of delivering child care services for Australians is…it’s vital. And the Government has to make sure that those services are available. Now how they do that again, we’d be happy to discuss that with them. Mr Swan says we’re irrelevant so presumably he’s not interested in our views, but if he is we’d be very

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happy to sit down and talk to the Government as to how that problem can be dealt with.

QUESTION:

Just on ABC Learning and on the level of principle, how much longer should taxpayers expect that they will have to step in and bail out companies that have made bad business decisions? I mean is that appropriate on the level of principle?

MALCOLM TURNBULL:

Well look, the reality is an unprofitable business cannot be sustained indefinitely. So there is clearly a concern about the level of and the tenure…the extent of government support. But there are a very large number of families and children that are dependent on this company for child care services and there has to be a degree of continuity. But again, and I say this to you as someone who has been involved in business for along time, I have been involved in situations with companies that have got into serious financial difficulties like ABC Learning, and the resolution of these problems is often very complex and there will have to be a very careful analysis centre by centre. And really I think the object of the $22 million is to give the receivers and indeed the continuing management of the company the breathing space to be able to sort out their affairs. But there won’t be one silver bullet.

QUESTION:

Jobs figures released in the US overnight show a massive rise in unemployment, a big rise. How concerning is that for us here in Australia especially in the light of some of the protectionist rhetoric that Barack Obama used during the campaign?

MALCOLM TURNBULL:

Well look the jobless figures in the US are of concern, there’s no question about that. And it underpins why, or underlines why it’s important for Australia’s government, Australia’s Prime Minister in particular to speak about our economy accurately and confidently. We are looking at an economy that will be slower this year and next year, that’s what the numbers say. But it will still remain, according to the forecasts, in positive territory. Now that’s a lot better than many other developed countries.

Mr Rudd should focus on the facts, he should focus on confidence and saying things like ‘next year is going to be ugly’ simply provides a bit of rhetoric, which he obviously thinks is colourful or likely to get a headline, but undermines confidence and of course doesn’t provide any useful information because no one really knows what it means other than it sounds bad.

QUESTION:

What’s your response to the $3,000 new homeowners’ grant in New South Wales?

MALCOLM TURNBULL:

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Well we’ll have a look at that. I think the housing sector has been getting a lot of support lately, obviously principally from the federal Government. The manner in which that support is delivered is something people have different views on but we’ll have a close look at that and we’ll speak particularly with our shadow housing minister Scott Morrison who is here today. You might be able to take that up with him.

QUESTION:

On the G20 with Wayne Swan in Brazil and ahead of Washington’s G20, are you happy with the Government’s calls which they say they will make relating to reform of the financial markets and regulatory systems?

MALCOLM TURNBULL:

Well you know there are a lot of proposals for reform floating around. You know I was reading this morning about what the European Union have decided to take to the G20. I think that Australia should play a constructive and positive role. Mr Rudd will…Australia has a voice, it should exercise a responsible voice. Mr Rudd will have a bit of explaining to do not just because of his extraordinary indiscretions, I think there will be a lot of other heads of governments that will be pretty careful what they say to him for fear that they too read about what they have said in a newspaper.

And also of course Mr Rudd will have the challenging experience of having to explain why he entered into an unlimited bank deposit guarantee which has had so many adverse impacts. I am not aware of any other developed country whose response to the global financial crisis actually made the situations worse. Now that is Mr Rudd’s unique distinction so he’ll be able to explain why he did that and he’ll be able to explain the impact on the finance companies that now are not able to provide the same level of support to the motor industry that’s causing knock on effects there. He’ll be able to explain how his policies resulted in hundreds of thousands of Australians having their savings frozen in funds that were not the beneficiaries of the unlimited guarantee.

So I think there will be a lot to learn from Mr Rudd but - he won’t like it but the truth is there will probably be more to learn from his mistakes than from his advice.

Thanks very much.

[ends]