PAUL BONGIORNO: Finance Minister Lindsay Tanner is a guest. And later, the first anniversary of Black Saturday, Victorian Premier John Brumby. But first what the nation's papers are reporting this Sunday, February 7. The ‘Sunday Age’ says, “Nation to pause and remember Black Saturday bushfires. The Prime Minister and Premier John Brumby are to attend a special memorial service in Melbourne. Kevin Rudd has declared today a national day of mourning with flags at half mast and a minute's silence at noon.” The ‘Sunday Telegraph’ leads with “Longer school hours for kids. The Federal government will pour $2 billion into extra teachers, literacy and numeracy coaches for disadvantaged schools identified by the My School website.” In breaking news, severe thunderstorms have hit northern New South Wales causing flash flooding and property damage. In Sydney, the Fire Brigade says it's had one of its busiest nights with wild weather, at one stage evacuating 11 people from a nursing home. The ‘Sun-Herald’ reports a defiant Malcolm Turnbull is ready to cross the floor over the emissions trading scheme. The former Opposition Leader will state his reasons for splitting with Tony Abbott in a much anticipated speech to parliament tomorrow. Welcome back to the program Lindsay Tanner. Good morning, Minister.
FINANCE MINISTER LINDSAY TANNER: Good morning, Paul.
PAUL BONGIORNO: One of the more spectacular things during the week was Barnaby Joyce's address to the National Press Club. That caused a fair bit of controversy. But it also led you to describe it as a political freak show. He was the bearded lady of politics, a goose. Was that a bit over the top?
LINDSAY TANNER: Paul, by appointing Barnaby Joyce as finance spokesman, Tony Abbott has shown that he would put the Australian economy at risk. Imagine if we were in the middle of the global financial crisis and Finance Minister Senator Joyce hops up and says the United States might default on its debts and we’re facing economic Armageddon. That would be on front pages all around the world and it’d be devastating for Australia. I don't think John Howard or Peter Costello would ever have appointed Barnaby Joyce as their finance minister. Tony Abbott’s playing Russian Roulette with the Australian economy. How many times do we want him to spin the chamber?
PAUL BONGIORNO: But aren’t you playing personal politics? I mean, the arguments you put forward, they’re quite reasonable – probably arguable - but at least you aren't playing the man.
LINDSAY TANNER: I don't believe I am playing the man. I’m pointing out that we’ve got someone totally unsuited to the position in one of the key economic portfolios. This is the weakest front bench economic team on either side of politics in modern Australian history. Tony Abbott has said he finds economics an absolutely bore. He’s not interested in it. Joe Hockey is a lightweight – he doesn’t do his homework - and Barnaby Joyce is simply off the planet on these issues. All of the major people on the other side of politics on the economy have departed. We’ve got John Howard, Peter Costello, Malcolm Turnbull all acknowledged as serious players.
PAUL BONGIORNO: That is your political point, but freak show? Bearded lady? Doesn't he deserve an apology – a personal apology?
LINDSAY TANNER: Of course not. There is a robust exchange in politics. Have a look at some of the things that he and others have said about our side. It’s the nature of the game that we try to make our points in a robust and colourful way.
PAUL BONGIORNO: The Opposition is hell-bent on equating your ETS with their GST. On Thursday, Tony Abbott borrowed from Labor's 1993 campaign by visiting the supermarket and claiming the ETS will push up the price of everything. His colleagues continued the tactic in Parliament.
EXCERPT - SHADOW MINISTER FOR CLIMATE ACTION GREG HUNT: (Thursday) How can the Prime Minister guarantee to a single pensioner living in Cooma, living in Jindabyne, living in Burnie, living in Davenport - that their electricity bill, if it is higher than the compensation they receive, will not make them worse off?
PAUL BONGIORNO: This is retail politics, cutting edge stuff. He brings the climate change debate right down to the household. A number of questions during the week – the cost of a loaf of bread in 2020, all these sorts of things - hasn't the Opposition finally hit on a tactic that’s got you on the back foot?
LINDSAY TANNER: We are happy to have the debate about the impact of our scheme, Paul, but I’ll tell you one thing. The big thing that is going to push up the price of food in the medium term is climate change. We have seen over the past few years the impact that extreme climatic conditions can have on the price of food and what is occurring is prolonged droughts, worse weather conditions and the projections from the CSIRO and other reputable scientists about what could happen to Australia's food bowl, the Murray-Darling basin, if we see unchecked climate change over the next couple of decades are very scary. And where that will end up - because we produce the vast bulk of our food in this country – is in higher prices.
PAUL BONGIORNO: But how can the ‘great big tax’, as Tony Abbott calls it, change any of that?
LINDSAY TANNER: The emissions trading scheme the Government’s put forward is part of global efforts to tackle climate change. And, yes, many people were disappointed with the outcome of the Copenhagen conference, but it did actually involve some very significant steps forward – there is more to go – but it did involve some very significant steps forward with the major countries agreeing on a longer term target and agreeing to measurable action including by developing nations. So action is starting to occur. It is crucial that Australia is part of that process. We are committed to doing that.
PAUL BONGIORNO: But even President Obama has had to shelve or put on hold his emissions trading scheme - his cap and trade policy. Doesn't it give a cue, if you like, to our government to follow suit?
LINDSAY TANNER: He hasn't put it on hold but he has done in effect what we are doing, and that is acknowledging that it’s difficult to get it through the Senate. They have a Senate just like ours. Our Senate is obstructing our efforts to tackle climate change. The Liberal Party is dominated by climate change sceptics and deniers. We had Tony Abbott meeting with this character Lord Monckton, who is a relic of the Thatcher administration in the UK who is whipping up conspiracy theories and saying that Copenhagen was about trying to create a one-world government run by communists. So we’ve got problems trying to get our position through the Senate and so is President Obama, but he’s sticking to his guns.
PAUL BONGIORNO: Well, President Obama has put it on hold, you’d have to say. He can't get it through his Senate, as you say. You can't get it through our Senate. What’s Plan B?
LINDSAY TANNER: We are continuing to press for our proposition. We’ve obviously got the matter in the parliament now. Malcolm Turnbull has indicated he will cross the floor. We had two Liberal senators vote for our proposals in the Senate when it was in early December. So we are going to continue to press the issue, Paul.
PAUL BONGIORNO: Time for a break. When we return with the panellists, spending and cutting at the same time - we ask the Finance Minister to ‘please explain’. And there was an outbreak of foot-and-mouth disease as the pollies returned to the national capital.
EXCERPT - NATIONALS MP DARREN CHESTER: (Tuesday) They are the greatest band wankered... (LAUGHS) Sorry, start that again. BANDWAGON jumpers in history of Australian politics.
EXCERPT - OPPOSITION LEADER TONY ABBOTT: (Tuesday) Mr Policy... Mr Speaker... (LAUGHS). First-time nerves, Mr Speaker.
PAUL BONGIORNO: You're on ‘Meet the Press’ with Finance Minister, Lindsay Tanner. And welcome to the panel, Michelle Grattan, the ‘Age’. Good morning, Michelle.
MICHELLE GRATTAN: Good morning, Paul.
PAUL BONGIORNO: And Marius Benson, ABC News Radio. Good morning, Marius.
MARIUS BENSON: Good morning, Paul.
PAUL BONGIORNO: At the National Press Club, Barnaby Joyce set the hares running by suggesting the public service could be trimmed and the $4 billion foreign aid budget would need a hair cut as well. Mounting debt, he claims, is leading Australia to ruin.
EXCERPT - SHADOW FINANCE MINISTER BARNABY JOYCE: (Wednesday) We've got to understand that it's not our money anymore. It's somebody else's money that we're sending over and if you want to keep borrowing money and sending it over, in the end you start to create problems for us all.
PAUL BONGIORNO: Michelle?
MICHELLE GRATTAN: Mr. Tanner, do you acknowledge that debt is a problem, even if it is not as much of a problem as Barnaby Joyce is claiming? And in terms of billions of dollars, how much will you be seeking in savings during this budget round?
LINDSAY TANNER: We haven't set a specific figure on the savings target but we’ve got a very big task in front of us. We had very large savings in the last two budgets but there has to be more work because the issue of long-term debt is a serious issue. We are committed to getting the budget back into surplus. We’re projecting that that will occur within about five years, and then to pay down that debt. That debt has occurred because of the global financial crisis knocking a huge hole in our revenues. We are presented with that problem. It has turned out to be not quite as big as we initially anticipated because Australia’s economy has performed better than was expected, but nonetheless we’ve got a really big task ahead of us. That’s why all the un-costed promises the opposition’s making, billions of dollars on climate change and the Murray-Darling and no savings.
MICHELLE GRATTAN: Isn't it odd that at this stage of the budget cycle you haven’t set a target, and if you haven’t, what areas do you think are most fertile to get cuts from?
LINDSAY TANNER: I have been now in this process a couple of times and the one thing I have learned is that things move around a lot and that artificial targets can sometimes be a distraction. I have a reasonably good idea of how far we need to go but we will keep modifying that as things move on.
MICHELLE GRATTAN: So what about areas? Is it across the board or is it specific areas you think?
LINDSAY TANNER: Obviously you cast a very wide perspective on these things, so you are looking for anything you can find, but clearly, there are lots of parts of the Federal Budget that are off-limits. We’re not about to cut the pension or cut benefits, for example.
MARIUS BENSON: Mr Tanner, can I ask you about one suggested area of economy which is – this is a story in the ‘Canberra Times’ - there are now 150 public servants working on the ETS. The ETS doesn't exist and may never occur. Is it fair and economic to have 150 people working on an as yet unrealised scheme?
LINDSAY TANNER: That story is referring to the Department of Climate Change and the people they’re talking about are, in a sense, the core of the staff of the Department of Climate Change. Even in the unlikely event that we cannot proceed as we currently are, the Government will not give up about climate change. We have a huge challenge in this country, as does the world. It is very complex, and one way or another, whatever the content of the approach is going to be, we will need serious and skilled people – people with expertise - to be working on Australia's response.
MARIUS BENSON: So you’ll keep them all working…?
LINDSAY TANNER: Regardless of the response, those people are necessary. They are very important to dealing with what is a huge economic challenge for Australia. Not just in 10 or 20 years' time, but now. I read an article a few days ago that over the past five years, methane emissions from the melting of permafrost in the Arctic have increased by a third. That’s just one small indication that this stuff’s happening now. We’re experiencing the early stages of it now. Australian jobs and our economy are at threat. We simply cannot afford not to respond.
PAUL BONGIORNO: Well, Minister, Tony Abbott seems to believe it's not too late to save some of the stimulus billions. Here's what he told parliament.
OPPOSITION LEADER TONY ABBOTT: (Wednesday) That is $20-odd billion or so that is yet to be spent, even though the crisis has passed and the recession has never happened. He is congratulating himself for avoiding something which he is still spending money to avoid. Something weird is happening inside his head.
MARIUS BENSON: Mr Tanner, does Tony Abbott have a point? You have killed the beast, the crisis is over, you’ve spent half of the $42 billion. What about not just motoring through the next $21 billion for the sake of it?
LINDSAY TANNER: The Australian economy is still very fragile and needs a significant ongoing stimulus, but less than what was the case last year.
MARIUS BENSON: Less than $21 billion more?
LINDSAY TANNER: That is exactly what is happening. The amount which has been actually spent is a little over half the total amount. But keep in mind that some of that remaining amount has already been committed. Some of it will be subject to contracts. Some of it will be milestone payments for projects that have already started but are yet to be completed. What Tony Abbott's gotta say is which projects would he cancel? Which schools would be told that even though the school down the road has got its $3 million a new facility, they are no longer going to get their facility? Which of those is Tony Abbott gonna cancel?
MICHELLE GRATTAN: Mr Tanner, could I switch topics for a moment and ask you about population? There is a mounting debate about population and immigration. Kevin Rudd said we're headed to 36 million people by 2050. Are you a big population man or do you think that this increasing population will put too much strain on resources and sustainability?
LINDSAY TANNER: The figure that you referred to is the projection in the latest intergenerational report for Australia's likely population level in 40 years' time. It is higher than the previous report projected. These are projections - they are not targets or promises by the Government. It is an estimate of where things are likely to head. And, yes, that does pose some challengers for Australia but the real issues, Michelle, are about how we manage ourselves. The reason we have urban congestion, the reason we have all kinds of problems in our cities, the reason we have big planning issues is because we have been very bad at planning and organising and investing in infrastructure in past decades. We are starting to change, the State governments are improving and we putting a lot of money into...
MICHELLE GRATTAN: So you’re in favour of aiming big?
LINDSAY TANNER: Nobody is aiming. In fact, it is very difficult to interfere with these things because it is difficult to change the fertility rate.
MICHELLE GRATTAN: You can change the migration rate.
LINDSAY TANNER: You can change the migration rate, but if you dramatically drop that, that will have a very severe negative impact on the economy. One of the things that immigration is crucial for is delivering skilled, trained people in areas of skill shortages. We are investing more so that we have fewer skills shortages into the future, but right here and now, we need the doctors, we need the nurses, we need the mining engineers, we need the IT specialists that are coming from overseas because we do not have enough of them in Australia and they’re crucial to our economy right now.
PAUL BONGIORNO: Thank you very much for being with us this morning, Lindsay Tanner.
LINDSAY TANNER: Thank you very much, Paul.
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