HUGH RIMINTON: Finance Minister Lindsay Tanner is a guest. And Graham Bradley later. We start with breaking news this morning with reports Indonesian authorities have shot and wounded two Afghan asylum seekers on a boat that was heading for Australia. The 61 people on that boat are now back in Indonesia. What the papers are reporting this Sunday: The 'Courier Mail' reports US President Barack Obama will attend a climate change breakfast hosted by Kevin Rudd. APEC leaders are set to back down on seeking a 50% cut in emissions by 2050. Welcome back to Lindsay Tanner. Good morning, Minister.
FINANCE MINISTER LINDSAY TANNER: Good morning, Hugh.
HUGH RIMINTON: We should go to the story emerging out of Indonesia - accounts of two asylum seekers being shot by Indonesian authorities on a boat as they were heading off to Australia. What can you tell us about that?
LINDSAY TANNER: I know very little about it. Just the basics you've outlined. Without detailed knowledge of the circumstances, it's impossible to express any view about what's occurred. All kinds of different things could have occurred and the Government will not be expressing a view until we have more knowledge of exactly what's happened.
HUGH RIMINTON: The Government has been for some weeks now pressuring Indonesia to try to do more to stop boats coming down towards Australia - presumably it didn't extend to shooting asylum seekers?
LINDSAY TANNER: Well, we don't know what's happened here, Hugh. We don't know what kind of circumstances have been involved. I have to be very careful in expressing views which may be way off when I don't know what the detailed situation is. It's regrettable if anybody has been injured in any kind of situation like this but we don't want to cast aspersions about anybody's involvement in these kind of situations without knowing what's happened.
HUGH RIMINTON: I presume there will be an almost immediate seeking of clarification with Indonesian authorities?
LINDSAY TANNER: Look, I can't comment on that. I suspect that because we are in contact with the Indonesians about a lot of issues, I'd expect this would be an ordinary matter we would be seeking information about. There's nothing unusual about that. Any incident of some significance of this kind, you'd expect that Australia would be wanting to find out about.
HUGH RIMINTON: The asylum seeker issue brought about an impassioned plea.
BATHURST STUDENT ELYSHA HICKEY: (Monday) Still a relatively popular prime minister, why don't you take the opportunity to completely change the discourse, the way that Australians think about asylum seekers and stop this round-in-circles business and just stop this fear-mongering?
HUGH RIMINTON: There seems to be progress with the 'Oceanic Viking' with at least some of those asylum seekers coming off that boat. Is this, do you think, winding up as an issue? Is it losing some of its sting now or is there still more to come?
LINDSAY TANNER: There's still a very difficult problem that has to be resolved here. All around the world the United Nations High Commission on Refugees handles literally millions of displaced persons and a number of key countries like Australia accept every year through the UNHCR process a significant number of refugees that have been processed and determined to be refugees. We're seeking to ensure the people on the 'Oceanic Viking' are handled properly through that process and inevitably some of them will be probably going to come to Australia because we do a significant proportion of the refugees that are processed by the UNHCR.
HUGH RIMINTON: This has been a public issue for the Government. There's been a lot of discussion about something much more private about how the Government operates. It's management style. Is the PM an ego-maniac?
LINDSAY TANNER: I don't think so, Hugh. You would be aware, having dealt with politicians over many years, most of us have healthy egos and would probably be in the upper levels of the community in that regard. That's just the nature of the game. You've got to have a strong and forceful personality to get to leadership positions in politics. These are terms people throw around as attacks on political leaders from time to time. I don't take any notice of that. We've all got strong egos but you want leaders with strong egos who will lead in a strong way. That came from a former Labor Party finance minister. He's from the Hawke era. He's no shrinking violet. I have a bit of regard for my predecessor but he's not backward in telling people what he thinks.
HUGH RIMINTON: It is interesting, because we heard from another former Labor minister discussing the Nelson's column version of Government under Kevin Rudd. A long pole with Kevin Rudd at the top of it and the rest of the country, including the Cabinet, down with the tourists and the pigeons. There's a lot of talk suggesting a certain brittleness about the way the Prime Minister does business. You sit right in there. What's your judgment?
LINDSAY TANNER: I don't think that's an accurate assessment. The argument about Nelson's column and the dominance of the leader is nothing unusual to this Government. It's been a phenomenon that's emerged in recent years in most democratic nations. I think you could have said the same about John Howard, for example. It's where Government is evolving. It's something I think is unavoidable. Whether you like it or not, it's the pattern that's been emerging and our Government is no different in that regard. From the point of view of the Australian community, the PM is the one that's responsible for the nation's problems and what we deal with. There's a team of people, ministers, members of parliament working with him, but the notion somehow this is unusual or different I think is completely wrong.
HUGH RIMINTON: One of the big issues is the ETS and negotiations are continuing. There's a report it's a done deal because agriculture will be removed from the scheme. Is agriculture out of the scheme? Does that make it a done deal?
LINDSAY TANNER: One of the key demands from the Opposition in the negotiations was that we would remove it indefinitely. But we have indicated publicly we're prepared to concede to that demand. The problem with agriculture is it's extremely difficult to measure emissions. It's very, very difficult to deal with that. So we proposed to postpone that decision for a period of five years. We've prepared to concede to the Coalition's request on this front. I wouldn't say that's a done deal now. It's a big issue for the Coalition, fair enough, but there's still a lot of negotiating to go and I don't assume there will be a concluded deal at the end of this. We've got a lot of wacky conspiracy theorists in the Coalition now, more or less taking over, people like Nick Minchin and so on.
HUGH RIMINTON: Welcome back. Welcome also to our panel now, Jennifer Hewett and Steve Lewis. Good morning to you both.
THE ‘AUSTRALIAN’S JENNIFER HEWETT: Morning.
NEWS LIMITED’S STEVE LEWIS: Morning.
HUGH RIMINTON: The jobless rate hit 5.8% in October with further evidence of a massive shift by Australians into part-time work.
LINDSAY TANNER: We have to remember that we do have 670,000 unemployed Australians looking for work. We've got to keep investing in our economy and supporting our economy, so that we can give those unemployed Australians hope of getting back into the labour market.
JENNIFER HEWETT: It's pretty clear now, isn't it, that unemployment is going to peak at a lot lower rate than we expected, and then when you put in the stimulus spending? Is that stimulus spending setting us up for more interest rate hikes?
LINDSAY TANNER: Certainly not, Jennifer. In fact, once we get in to the new year, what's going to happen is that the clawback of stimulus spending is going to start reducing the level of growth that otherwise would have been the case had it continued at the previous level. There's still a serious unemployment problem. Growth is still very, very modest. Yes, it's going to be in the positive. We expected it would be slightly negative this year but the more recent forecast says it will be just marginally positive. Still well below normal levels. It's very important we maintain the level of stimulus in the economy to ensure we can get through what's still a very, very bleak global position.
JENNIFER HEWETT: If we talk about what happens next year, given the changed economic outlook, is it going to be time for the Budget next year to be really tough?
LINDSAY TANNER: There's no question we have to be tough, not just next year but for a number of years. We've got a problem that has several facets. It's not just about the collapse of the mining boom and the change in our terms of trade. That's taken a big chunk out of our revenue but also the fact you have the ageing of the population starting to impact on the budget within the next 2-3 years. We have a number of challenges we've got to address and that means really tough decisions. We've already made serious tough decisions in this year's budget and we have more to come both next year and whoever is in Government in the ensuing years.
STEVE LEWIS: Are you putting your ministers on notice that next year's Budget will be a tough one, further savings taken and the means testing of the private health rebate, for instance?
LINDSAY TANNER: As you know, Steve, we've brought forward the savings consideration process for the forthcoming budget several months earlier than it would normally occur, precisely for the reason you identify, which means we have a tough task in front of us. The mining boom generates a lot of froth. It artificially pumped up tax receipts in a range of areas, and even though the recovery is now looking likely to emerge over the next couple of years, it's very unlikely we'll return to those heady days of 2005, 2006, 2007 when literally Australia was awash with money. There's going to have to be tough decisions and ministers are aware of that. We've already made significant tough decisions both this year and in the Budget.
HUGH RIMINTON: Moving back to the Emissions Trading Scheme, that will be absolutely crucial. Is the Government prepared to spend billions of dollars more compensating power generators in your home State of Victoria and other big polluters in order to strike a deal with the Coalition?
LINDSAY TANNER: It's obviously crucial that we get action on climate change. Australia is going to go to the Copenhagen conference in December, either as part of the solution or part of the problem. If we go with a clear position that's been endorsed by the Australian Parliament, we can be part of the solution. If we can't do that, we'll be part of the problem. We're committed to getting the ETS through the Parliament. The question of what that might involve in detail will be a matter for negotiation. We've indicated we want it to be Budget neutral and environmentally responsible.
STEVE LEWIS: If you accept in order to get a deal with the Coalition, you'll need to offer billions of dollars more than what’s currently on the table to the generators and other big polluting industries. Do you accept that?
LINDSAY TANNER: I don't. Our position is that the onus is on those who are proposing amendments who wish to spend more money in the way you are identifying, to identify alternative ways of financing that so we are broadly budget neutral. That's something we have to consider in negotiations - both the environmental impacts of any changes to the scheme and the Budget impact. The overriding consideration is Australians and people all around the world want action on climate change. Australians per head are amongst the world's highest polluters. So we've got responsibilities to go to the Copenhagen conference with a clear position, willing to play our part. That's why we're committed to getting this arrangement through the Senate.
JENNIFER HEWETT: You've talked about tough decisions. A former ACCC chairman Alan Fels basically said by sticking with the status quo for the books industry, you've proved you couldn't even take the easy reforms. Therefore, there wasn't much hope for you when it came to tough decisions. That's a fair criticism, isn't it?
LINDSAY TANNER: I don't think it is. There's a very complex issue here. I've read the Productivity Commission report. There's been a report from international economists writing about it. Prices move around from store to store, book to book, all the time. The key thing we had in mind is that we are in the early stages of being hit by huge technological change. Electronic books, a much larger proportion of the population using services like Amazon and the Book Depository. Those are the kind of things that will put downward pressure on prices. We therefore believe that ultimately it's too difficult to tell what the impacts would be and you're probably going to get a phenomenon similar to what happened with CDs and iPods happening to books.
JENNIFER HEWETT: One of your predecessors, we talked about Peter Walsh, was less than complimentary as well. And the PM was an economic illiterate, he said. Do you think the Government has been heavy on rhetoric of reform but light on substance?
LINDSAY TANNER: No, I don't think that's true, Jennifer. And there are lots of areas where we are undertaking serious reform. Many of them pretty unsexy. They'll never hit the headlines but they’re very important.
STEVE LEWIS: Why is it, for example, if you're a plumber, you've got to get a separate licence to work in NSW and in Victoria. Two different licences for which you both have to pay a fee. That's an absurdity.
LINDSAY TANNER: We're in the process of getting rid of that. There's dozens of things of that kind we're working on. And at a wider level, the reform of telecommunications through both the establishment of the national broadband network and the creation of a genuine level playing field competitive market are huge microeconomic reform initiatives. We're looking at lots of tough, challenging things.
HUGH RIMINTON: Thanks for being with us, Lindsay Tanner.
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