LEIGH SALES, PRESENTER: It could be a rogue result or it could be the turning point for Kevin Rudd's prime ministership.
Either way, this morning's Newspoll in The Australian newspaper had all the political heads talking.
For his take on the day's political events, I spoke a short time ago to the Finance Minister, Lindsay Tanner.
Lindsay Tanner, thank you for coming in tonight.
LINDSAY TANNER, FINANCE MINISTER: Good evening, Leigh.
LEIGH SALES: What do you blame for this very bad Newspoll result for the Rudd Government?
LINDSAY TANNER: I always urge caution in looking at individual polls 'cause they do tend to move up and down a bit for reasons that nobody quite understands.
But we've obviously had a difficult couple of weeks with some challenging announcements and some issues to deal with that I suppose has been reflected in this poll, but it's really ultimately the bigger issues that we've gotta focus on in getting the budget out and ensuring that we're dealing with all the issues that flow from the major tax changes we've just announced and I'm confident we'll be judged according to both our record and what we're proposing to do for Australia's future when it comes to the election.
So, everybody takes some notice of opinion polls, but a single bad poll is not something that's gonna divert us from our wider agenda.
LEIGH SALES: In article for The Australian last December you wrote that, "I think there is a central theme around which modern Labor can build its program. This theme can be expressed in a single word: trust."
Hasn't Labor greatly eroded the public's trust in it with its mismanagement of the insulation program and its shelving of ETS?
LINDSAY TANNER: Look, things like the insulation program obviously do have an impact for the Government's standing. We accept that. We accept that there have been problems and that we'll be held to account for that.
But I think you need to be a bit careful about drawing the analogy with that article there because I wasn't talking about trusting politicians; I was talking about wider trust in society generally. Our whole society is built on trust. I give my money, my savings to financial institutions run by people I've never met who in turn invest it by lending the money to people I've also never ever met and in some cases to people who are not even Australians.
They earn a return, they pass back some of that return to me and so forth. Now, a society needs that kind of trust underpinning its operations in order to function in the modern world, in order for people to be able to prosper. And so, that point was really about the entire society, not just politicians winning votes.
LEIGH SALES: But members of society also have to have trust in governments to deliver what they promise and to administer programs properly, and can't these poll numbers be summed up by saying that for whatever reason Australian voters are shaky in their trust of the Rudd Government?
LINDSAY TANNER: Oh, no, look, I don't think so. I think to begin with, all governments make mistakes, have difficulties and all governments upset people because they have to make decisions where it doesn't matter which way they jump, they're going to upset somebody.
So that I think you're applying a rather strange kind of frame to look at these things through. Inevitably, most people don't absolutely trust governments full stop. That's just the nature of the beast.
But they do actually trust governments broadly to try and do the right thing in the nation's interests and I would argue that broadly people would accept that governments of either persuasion in Australia's longer term history have generally been trying to do the right thing in Australia's national interest as they see it.
It's just that, inevitably, that's always gonna be a matter of great debate and different people will think that what I'm trying to do in Australia's national interest is wrong or motivated by the wrong analysis or the wrong reasons. So these things are always gonna be contestable, so I don't think that we face a crisis of trust in our society more broadly.
I think we've got a challenge to strengthen the trust that was very much shaken by things like the Global Financial Crisis.
LEIGH SALES: But wasn't it shaken by things like the Rudd Government's decision to shelve the ETS after Kevin Rudd called it the great moral challenge?
LINDSAY TANNER: No, look, again, I don't agree with the assessment you're making here, Leigh. We'll pay a political price for our decision-making on big, complicated issues like climate change, whichever path we head down.
There's a variety of different views in the community; some very strongly held views, and inevitably we can't satisfy all of them and inevitably trying to chart a course for the future of the country that's in the national interest is going to lead to unhappiness in many quarters and that's what's happening.
We are responding to realities, to events that we don't control. We're responding to substantial changes in the global climate on these issues and we are responding to the fact that we have been unable to get our carbon pollution reduction scheme through the Senate.
Yes, we're facing criticism from people like the Greens. Well they were the people who killed it in the Senate. They are the people who stopped our emissions trading scheme from being adopted by the Australian Senate because we had two votes from the Liberal Party, two people who crossed the floor to vote with the Government to put our climate change action plan into place and the Greens voted against it.
So, yes, we're gonna face some attacks, some criticism, but we're responding to wider changes in the circumstances.
LEIGH SALES: As I said before, Kevin Rudd said that climate change was the great moral challenge. Wayne Swan described Sunday's tax announcement as the greatest reform in living memory. Does this government have a problem with hyperbole?
LINDSAY TANNER: No, I don't believe so. We all of course use some pretty strong language and some strong adjectives in politics, whether it's describing the merits of what we're doing or it's describing the disadvantages of what our opponents are suggesting.
That's just the nature of the game. I don't think there's an issue there. People are always gonna use fairly powerful language to try and get a message across and to try and underline how important things are.
And the truth is that there is a big issue underneath the changes in the tax regime that we've put forward, and that is how to share Australia's natural resources wealth in an equitable and efficient way so that we can underpin the economic growth and the longer term prosperity for Australia right across the board in the fairest possible way.
So these aren't big issues and it's always gonna be a matter of opinion as to whether this one's bigger than that one, but I don't think it's really the key question here.
LEIGH SALES: On this question though of hyperbole, if I can return to that: do you really not think that it's an issue when Kevin Rudd says climate change is the great moral issue of our time and then shelves his policy for dealing with it?
LINDSAY TANNER: Well, look, again, no, I don't, because I don't think the character of the issue has changed. The circumstances ...
LEIGH SALES: But you don't think that raises questions in the public's mind that, "Hang on, he said this was such a big deal, he was elected basically promising to do something about it and now that's changed?"
You don't think that's a big issue in the electorate's mind?
LINDSAY TANNER: Well, Leigh, first, nobody at any stage other than some wackier people within the Greens territory has ever pretended that Australia is the world here. We have always acknowledged that we are a relatively small part of the total picture in the world, but we've got a responsibility to take action, particularly because we're relatively high emitters.
I don't think anything has changed with the significance of the issue, it's just the wider circumstances globally and politically in the Australian Parliament that very much shape how the Australian Government goes about tackling it.
Those are the things that have changed. And it would be foolish for the Australian Government to pretend that they haven't changed. We have to deal with those things.
Now, what we've done is to defer for a couple of years our response. We haven't backed away from our commitment to our proposition.
What we've done is said, "OK, the Kyoto period ends at the end of 2012. That's when some kind of new global arrangement needs to come into effect. We will defer putting in place our proposal until after that time."
Why people are presenting this as some giant backflip is beyond me. Yes, it's a change, but we remain committed to the core of the proposition.
LEIGH SALES: Well, let me help perhaps explain that. In an interview with me on this program in September last year you said that the Government's ETS was built on the assumption first that there may not be other countries taking action, but also it expands to take into account the possibility that we will have global action, so it is designed to cope with both scenarios.
So you've said yourself that the ETS was not conditional on international agreement.
LINDSAY TANNER: It wasn't, but it was very much being put forward in a global climate that was heading down that path and where it was important for Australia not only to be part of the momentum, but also to kick it alone.
When the reverse is happening, which is essentially what's occurred since the Copenhagen conference, the clearly you've got different circumstances.
So, our commitment to in a sense getting a bit ahead of the game was always premised on an assessment that that's where the world was heading and that it would be both an appropriate and a worthy thing for Australia to do to push that momentum along a bit and that's what we were seeking to.
Those circumstances have now changed, so we no longer have that imperative to deal with. We still remain committed to introducing the scheme, but circumstances mean that we have to defer that for a couple of years and allow, basically, a bit of clarity to emerge in the international picture so that people have got a sense of exactly where things are heading.
LEIGH SALES: On what matter of principle would the Prime Minister be prepared to hang his political fortunes? What does the Rudd Government consider to be absolutely non-negotiable?
LINDSAY TANNER: Well, look, that's not a question I can answer, Leigh because that's essentially a personal question. I can give you a few personal answers from my own point of view about these things, but obviously each individual politician or even individuals active in politics have got different bottom lines, so, I can't answer that on behalf of the Prime Minister.
LEIGH SALES: But you're a senior member of the Rudd Government, though; I mean, what is the Rudd Government's big picture vision?
LINDSAY TANNER: Well, the Rudd Government's big picture vision is straightforward and that is long-term sustainable growth for Australia. That's why we want to make sure that we get a price on carbon and that we reduce our carbon emissions so our economic growth will be sustainable in the long term and we tackle climate change.
That's why we are changing our tax system to ensure that we've got a fairer underpinning to our economic development and that we don't end up with a two-speed economy. That's why we are investing massively in the development of skills and infrastructure to sustain the long-term growth and productivity in the Australian economy. So if you want my definition of what the core objective of our government is, it's that simple phrase: long term sustainable growth.
LEIGH SALES: Tony Abbott was caught on tape today saying that if Kevin Rudd is re-elected, he'll remain leader for three months, maybe six months tops. What do you give it?
LINDSAY TANNER: This is for Tony Abbott's leadership, I'd say if he's talking about Kevin Rudd, he's indulging in a bit of projection here. If Tony Abbott isn't successful in the election, he'll struggle to remain leader more than a week after the election result, I would have thought. But that's ultimately a matter for the Liberal Party. I'm not quite sure what the point of his comment is though.
LEIGH SALES: How would you describe the Labor Caucus' attitude towards Kevin Rudd as leader?
LINDSAY TANNER: Strong support and I don't think there is any question about that for the future. Kevin Rudd's obviously been the key to Labor winning office, he's been the key to the Government governing successfully through the incredible challenges of the Global Financial Crisis and he'll remain at the helm through obviously the forthcoming election.
I'm very convinced that we will win that election, although anything is possible in any election contest and he will continue to be Prime Minister. If you want my assessment, that's where things'll head, but of course nothing in politics is certain. Any election can always be won or lost, no matter how good any government thinks it may be.
LEIGH SALES: If we can turn to the Henry tax review and in particular the resources rent tax: we've already had a resources company in WA cancelling a multimillion dollar project because of the uncertainty surrounding the Government's new tax. What are you going to do to ensure that this isn't the first of many of these type of cases?
LINDSAY TANNER: Well first thing is, Leigh, that I would always caution against companies that make announcements blaming particular things, often things that third parties do like governments as a reason why they've made announcements of that kind, because sometimes it isn't actually true.
Sometimes there's a convenient excuse there that covers other things. Now, in the case you're citing, I don't know whether that's true or not. But, whatever the issue, whenever companies, or indeed sometimes unions, blame governments for things, I'd always urge caution because usually that's a pretty useful excuse. It may or may not be true.
LEIGH SALES: What about the broader is of uncertainty though?
LINDSAY TANNER: There are very important positives for the mining industry in the package we put forward. And they are, first, that the regime governing the tax treatment of expenditure on exploration for mineral resources has been significantly improved.
It's been something the mining sector has been going on about for years. We have put in place a rebate for exploration expenses that will really put a lot of incentives into the tax treatment of exploration that will transform the structure that faces companies making these choices.
So that's a very important thing. Second, the structure of the resource rent tax or the super-profits tax that we're putting in place in effect provides an underpinning for losses as well as a tax on super-profits.
There's also an underpinning for losses and thirdly there is a big fund, billions of dollars over several years that is for infrastructure in resource-dominated states. So the bulk of this money is gonna go for infrastructure that is designed to relieve pressures, particularly on the mining sector in states like WA and Queensland.
LEIGH SALES: The takings from this revenue will be used to boost super savings, build infrastructure and lower corporate taxes. Why aren't you using it to pay down debt?
LINDSAY TANNER: Well the key thing here, Leigh, is that we've got a budget strategy in place that's gonna do that in any event. And the purpose of this package is wealth creation.
The purpose of the whole package is not additional spending, it's not electoral giveaways, it is plain and simple wealth creation and the vast bulk of the package, the vast bulk of the fiscal benefit we get from the super-profits tax is going straight back into reduced taxes for business generally, whether it's a cutting company tax, an accelerated cutting company tax for small business, a substantial increase in the amount of money that small businesses can write off immediately for capital expenditure and of course a further boost to our superannuation system.
All of these things are about wealth creation for Australia's future. We remain committed to getting the budget back into surplus as quick as possible. We remain committed to paying down that debt.
These things will happen and Australia's finances, as the Reserve Bank governor said only very recently, are in terrific shape. That was his words. And compared with the rest of the developed world our public sector balance sheet, our Federal Government balance sheet is in very, very good shape.
Forget about the rhetoric and the nonsense you get from Tony Abbott and Joe Hockey. They're just giant bags of wind. They have got no serious policies, they have got no savings, they have got no plan for the future of our budget or indeed the future of the economy.
Our budget is gonna get back into surplus soon and the debt is gonna be paid down in an orderly way, and we are investing in the future of Australia's prosperity by cutting business taxes - the sort of thing the Liberal Party say they're on about, but never do.
LEIGH SALES: Lindsay Tanner, thank you very much for your time tonight.
LINDSAY TANNER: Thank you very much, Leigh.
-ends-
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