STEVE PRICE: Federal Parliament is, as you know, on a break until Budget week. Our political panel are on the move this morning. The Finance Minister, Lindsay Tanner, is, I think, in Melbourne. He's sitting in very kindly for Tanya Plibersek. Morning to you, Minister.
LINDSAY TANNER: Morning Steve.
STEVE PRICE: And we have on the line, also in Melbourne, I think, he's on his way down to Tasmania, the Opposition spokesman for families, Tony Abbott. Morning to you, Tony. Morning to you, Tony.
TONY ABBOTT: Yes mate, I'm here. Are you there?
STEVE PRICE: Certainly here. We've got you loud and clear.
TONY ABBOTT: Good.
STEVE PRICE: Lindsay Tanner, are we in a recession?
LINDSAY TANNER: I'm not going to call that as yet, Steve, until we've actually got data that shows that. But, clearly, the OECD report from last night suggests we're going to have further negative growth during the course of this year. It shows the world going backwards over the course of 2009 by 2.7 per cent and developed nations by 4.3 per cent. So no matter what the Australian Government does, the pressure of that on our economy can't be completely resisted. So, it's pretty inevitable we're going to have further negative growth. But at what that point formally becomes a recession, if it does, we'll make that call when - if and when it arrives.
STEVE PRICE: Is it helpful, or unhelpful, then you have the Reserve Bank Deputy Governor, Rick Battellino, saying that, look, Australia was going through a very substantial decline, and my impression is that most households and businesses feel that this downturn is severe enough that they think it's a recession. Does that help you as a politician?
LINDSAY TANNER: Oh look, I don't think it makes much difference, Steve. The Reserve Bank leaders make speeches from time to time, and they're very important because the Reserve Bank, of course, has detailed access to data and information, and they are at arm's length from government. So their assessments are actually pretty important for the public debate. So I wouldn't criticise the Reserve Bank for making those observations. It's up to them to call it how they see it.
STEVE PRICE: Tony Abbott, is the Reserve Bank telling it like it is?
TONY ABBOTT: Oh, I have no reason to doubt what they're saying. The point I'd make though, Steve, is that you're listening to Lindsay, it's as if the Government is in the grip of giant forces beyond it's control, and that there's nothing that the Government can do except ride this thing out as best it can. Unfortunately, we've got policies that the Government's put in place which are going to make a bad situation worse, and one of the issues that I've been talking about a lot over the last few days is the Job Network, which is the Government-funded network of organisations designed to help people get employment. And thanks to bad decisions by this government, the Job Network is on the verge of an absolute disaster, and we're probably going to have at least a thousand people sacked from the Job Network [indistinct]…
STEVE PRICE: [Interrupts] I saw your criticisms of that. What is your main complaint about the change?
TONY ABBOTT: Well, there are three problems with the change. First of all, they've put the whole of the Job Network business out to tender. That was a big mistake. It's bound to lead to disruption. Second, they have prepared a tender that was based on boom times when, plainly, we're now in bust times. And third, and this is very important, Steve, they haven't taken past good performance into account in awarding these tenders, and there are lots and lots of very, very good Job Network members that aren't going to get any business, and up to 40 per cent of Job Network sites are likely to close in the next few months, which is a real disaster for the 600,000 people currently unemployed, let alone for the extra hundreds of thousands that will come onto the unemployment list soon.
STEVE PRICE: Lindsay Tanner, you're aware, obviously, that jobs is your main priority. Is the Job Network change, does it need to be rearranged or fiddled with, given the changed economic climate?
LINDSAY TANNER: We've already made some changes, including getting easier access to the Job Network as a result of that changing climate, so I don't accept that criticism from Tony. And the claim that somehow we should not proceed to the tender is just extraordinary, because this is an ordinary, regular process that occurred under the Howard Government where, from time to time, these services are put out to tender, and that's important to keep these services accountable. A lot of taxpayers' money's involved. It's important to make sure you've got competition. And I'm not quite sure what Tony's suggesting, but if we want to maximise the value for money, we want to maximise the quality of services delivered to people who are looking for work, then we've got to ensure that from time to time people have to bid for the right to use this taxpayers' money to deliver those services. So I don't agree at all that we should back away from that. The implication is, they just have the right to the money for life.
STEVE PRICE: Well, before I go back to Tony, Lindsay, one of the criticisms we do have of this network from time to time, or the Job Network, is the definitions of what is a long term unemployed person and how you don't really get any assistance until you're classified as that because the placement agencies earn more out of placing a long term unemployed person in a job. Is that something that's going to be changed?
LINDSAY TANNER: Look, we have made some changes on that front to try and ensure that the system is more nuanced to actually reflect genuine advantages and disadvantages, because the whole point is to try and target the assistance on the people who most need it, and this is a very tricky thing to do, Steve. So I don't think the previous government got it right, but I certainly wouldn't claim that we'll get it perfect either, because every individual is unique, everybody's circumstances are different. So it's really just about targeting the rules so that you don't spend lots of money helping people who are going to get jobs anyway, and neglect those who really need the help. It's a very tricky thing to do. I'd argue that the changes we're making do actually focus the intensive assistance where it's needed. But you'll never be able to get it perfect because of the fact that everybody that's walking through the door is not the same…
STEVE PRICE: Yeah.
LINDSAY TANNER: … as the person who came through before them.
STEVE PRICE: Tony, are you saying, again, that you shouldn't do anything?
TONY ABBOTT: No, I'm not saying that, Steve. And one of the problems with the new Job Network tender is that the issue you just raised of people not getting assistance until they're quite well into unemployment is actually going to be made worse under the new tender, not better.
STEVE PRICE: How?
TONY ABBOTT: Because they are focusing - because this was designed to suit a boom, not a bust, basically, all the money is going into very disadvantaged job seekers, not the sort of people who are going to be made redundant and laid off in the next few months. But the basic point I'd make, Steve, is that, sure, by all means re-tender some of the work from time to time, but don't re-tender all of the work, because what's going to happen as a result of the mistake that the Government's made is that a very large percentage - it's said up to 40 per cent of existing Job Network sites are going to close down, and that means that the 600,000 job seekers are basically not going to know where to go, they're not going to have anyone who has job security himself to help them, or they're going to have people who are very inexperienced and just starting up in this business to help them.
STEVE PRICE: Okay, I might have a longer look at that, I think that's important. Lindsay Tanner, The Telegraph in Sydney this morning - I'm not sure if the Herald Sun in Melbourne's reporting this - is suggesting the Government will take a knife to the Medicare Safety Net, making it more expensive to have a baby and to go through IVF. We're told that's necessary because of the financial crisis. Is that going to happen?
LINDSAY TANNER: Oh, look, I can't speculate on what may or may not be dealt with in the Budget, Steve. We've got a lot of tough choices facing us, because we're very focused on ensuring that once the worst of this slowdown is over and normal growth is resumed, that we get the Budget back into surplus as quickly as possible. And although there's a lot spending occurring at the moment, it temporary spending; it's not locked in forever, it's only over a couple of years. So, it's very important that we ensure that the Budget is in good shape so that when the recovery comes along that we're able to get back into surplus. That means tough choices. I'm not going to speculate on what those tough choices might involve. We'll - people will just have to wait til budget night.
STEVE PRICE: Tony Abbott, were you Health Minister when that - those changes came in? And do you - what do you make of this suggestion there will be cuts?
TONY ABBOTT: Well, Labor swore on a stack of Bibles before the election that they were not going to change the Medicare Safety Net, and - just like they swore on a stack of Bibles that they were not going to change the private health insurance arrangements, and they weren't going to change the Baby Bonus…
STEVE PRICE: Well, on the Safety Net, we haven't established they will change it. But if they do, that's a broken promise, is it?
TONY ABBOTT: Absolute. Absolute, clear broken promise; caught red-handed breaking a promise. But look, they've broken a lot promises…
STEVE PRICE: But is it a necessary financial broken promise?
TONY ABBOTT: Well, if they hadn't blown $42 billion, mostly on very, very low-value projects, they wouldn't be in the fiscal mess that they're in. And I think if they weren't wasting money on school halls and pink batts - pink batts should be done by private householders and school halls should be done by state governments - if they weren't wasting money in these sorts of areas, they wouldn't need to be ripping off decent people by eroding the universality of the Medicare Safety Net.
STEVE PRICE: We're talking to Tony Abbott and…
LINDSAY TANNER: Tony…
STEVE PRICE: … sorry, go ahead, Lindsay.
LINDSAY TANNER: Sorry, Steve. No, Tony's - and the Liberal Party are one out on this issue. The OECD, the world group of developed nations, has put out a report last night which has got very gloomy predictions about the world economy but does say that Australia's stimulus package is pretty much world class, and that spending is far more effective than tax cuts - which is what the Liberal Party are advocating. So, the OECD, most major economist, most major commentators, the business community, support the Government's approach. And why Tony thinks by insulating our nation's houses and building better facilities in primary schools and secondary schools a waste of money is frankly beyond me. I think it's important we leave a legacy for the future and we improve our nation's productivity for the future, and that's what those things will do.
TONY ABBOTT: Hey, hey, Lindsay, you've now referring to those wicked neo-liberals and all those other horrible people that Kevin Rudd, your boss, thinks are responsible for the terrible, terrible problems.
LINDSAY TANNER: I don't recall the OECD…
TONY ABBOTT: I mean, you've got Kevin Rudd - you've got Kevin Rudd sermonising from St Paul's in Mel… in London against these people; and now you're trying to cite them as some kind of arbiters of economic commonsense. I mean, what gives here?
LINDSAY TANNER: I don't recall Kevin mentioning the OECD in his essay, Tony. And clearly we…
TONY ABBOTT: They're the evil neo-liberals that have been running the world for the last 30 years.
LINDSAY TANNER: [Laughs] I don't think they are, actually.
STEVE PRICE: [Laughs]
LINDSAY TANNER: I think we're talking mostly about your political allies and the OECD are pretty politically neutral.
TONY ABBOTT: Yes, the Hawke Government to the Keating Government…
STEVE PRICE: Lindsay w… sorry, Tony. Lindsay, while I've got you there, Simon Crean in China I think overnight has said the Opposition's being xenophobic about China. Are they?
LINDSAY TANNER: Look, I think there's been some very unfortunate commentary from Malcolm Turnbull, from Peter Costello, from one or two others that are trying to score cheap points and really stoke antagonism and fear of China; suggestions that Kevin Rudd and the Government just do whatever China tells them. There's all these little implications and innuendo that I think is clearly designed to - to touch those nerves that are still latent in the Australian community. The truth is that China looms very large in Australia's future whether we like it or not. It's a major exporter of capital; we're a bit importer of capital, we need investment. They're a big and growing customer of our mineral exports. So they loom very large as a partner for Australia's economy into the future, just as other countries like Japan and the United States have and will continue to do so. So, this commentary I think is pretty nasty, it's completely uncalled for; they should deal with the issues on their merits, and fair enough, disagree with the Government, but not imply these kind of things.
STEVE PRICE: Well, do you regret using that term, yellow peril?
LINDSAY TANNER: No, of course not, because I think that's essentially what they're doing.
STEVE PRICE: Malcolm Turnbull tried to turn that back on you, saying you shouldn't use terms like that.
LINDSAY TANNER: Well, I - Malcolm Turnbull's entitled to say what he likes, Steve, but I'm just basically belling the cat here and saying, this is what these characters are on about. Peter Costello wrote an article in The Age a couple of months ago about decisions on the - facing the Government about Rio and Chinalco and various other things, and there was a nasty little bit of innuendo in there that was all about, you know, Kevin Rudd speaks Mandarin, he really - he's there to represent the Chinese, isn't he? You know. And it was pretty low-rent stuff, and I'd like think that we could conduct political debate on a slightly higher level where we just argue about the merits of these things and not try and tickle people's fears.
STEVE PRICE: Tony Abbott, shouldn't we be very careful in our dealings with China, given the size of them as a trading partner and the jobs that are reliant upon our trade with China?
TONY ABBOTT: Look, I certainly think that we should make the most of the economic relationship with China, but I think we've also got to be very much aware of our own national interests, and we've also got to be very conscious of the fact that in the end China isn't doing us any favours; they're trying to do favours for themselves. And we've got to be just as tough minded and as hard-headed. Look…
STEVE PRICE: So, would you disagree with the investment that's now been allowed in Fortescue Metals by China?
TONY ABBOTT: Look, I'm not full bottle on all that stuff. I mean, I haven't had the benefit of the Foreign Investment Review Board's consideration of the matter, so…
STEVE PRICE: Well, it's a $1.2 billion share in Fortescue, so I guess if the Chinalco deal's no good, isn't the Fortescue deal no good either?
TONY ABBOTT: Well, the Chinalco deal I think is quite different, because the Chinalco deal involves the Chinese getting majority control of some particular and rather important assets. So, I think that raises quite different issues from the Fortescue deal. But just to get back to the - to this nasty smear that Lindsay is peddling, that somehow we are anti-Chinese, I mean, really and truly, Kevin Rudd himself was frequently described by his former frontbench colleagues in Opposition as the Manchurian Candidate. This was the nickname that other Labor frontbenchers had for Kevin Rudd when he was the Shadow Minister for Foreign Affairs. So, I think they're quite capable of playing the 'yellow peril' card themselves…
STEVE PRICE: It's all very dangerous territory this, isn't it, Lindsay?
LINDSAY TANNER: Gee, that's the first time I've heard anybody suggest that Labor frontbenchers have ever referred to the Prime Minister as the Manchurian Candidate and if they did, something that passed me by. I didn't hear it. Look, yeah, that is - this is punchy stuff. And to Tony's credit, he's just made reference to a couple of the issues on their merits. And he said we've got to be tough with out dealings with China. Fair enough. So, you know, the point I'm making is that's how the Opposition should deal with it. It shouldn't be making these insinuations that somehow Kevin Rudd, or the Government, are deliberately favouring China or making decisions that are in China's interest and against Australia's interest, because there is no evidence to support that. And in my view these innuendos are being spread deliberately to connect with what is inevitable latent sentiment in this community. It goes back a long way of, you know, fear of China as, you know, the famous 'yellow peril' is the term the shorthand term for it. So, that's what I'm pointing to and I make no apologies for that. It's a serious question.
STEVE PRICE: Okay. Lindsay, thank you very much for your time today. And I appreciate that you're on the move. I very much appreciate you joining us. Thanks a lot.
LINDSAY TANNER: Thank you very much.
STEVE PRICE: Lindsay Tanner, the Finance Minister. Tony Abbott, I know you're on a - got to jump on a plane. Thank you for being with us as well.
TONY ABBOTT: I'm always happy to keep talking, I've got to say, Steve. And I think it was just a bit disappointing to hear Lindsay, as it were, accusing the Australian people of latent racism. I just don't think that's true of us and I don't like to hear it said by government ministers.
STEVE PRICE: All right, Tony. Thanks for your time.
TONY ABBOTT: Thanks so much.
STEVE PRICE: Tony Abbott there, the Shadow spokesman for Families.
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