02 September 2015

SUBJECT/S: Canning by-election; China-Australia Free Trade Agreement; Tony Abbotts Royal Commission; Bank Deposit Levy.
KIERAN GILBERT: Good morning and welcome to the program. Our top story this morning senior Abbott Government Ministers telling Sky News theyve been surprised at the lack of resources Labor is throwing at trying to win the upcoming Canning by-election. My understanding is that the Foreign Minister yesterday briefed Cabinet on the campaign telling her colleagues Labor is not pouring the resources the Liberals had expected in the ALP trying to win the seat. Another Minister said Labor was, quote, nowhere to be seen on the ground in terms of advertising and other campaign material in Canning. It is understood Julie Bishop told Cabinet Labor appears to be holding fire and strategically targeting a new WA seat that will come in to effect at the next general election. Thats when a new redistribution will see the seat of Canning split and a new electorate called Burt created whose demographics should favour the ALP. Another Cabinet Minister told Sky News that Labor appears to be, quote, running dead in Canning because they believe a bad result for the Liberals would see the Prime Minister rolled and Labor does not want that to happen. With me this morning to discuss this and other stories of the day, Parliamentary Secretary to the Shadow Treasurer Ed Husic and Assistant Treasurer Josh Frydenberg, gentlemen good morning to you.
GILBERT:Josh Frydenberg, it seems that the effort to secure and hold on to Canning might be a bit easier than previously thought because Labor is not putting as much money in to it that the Government had anticipated.
FRYDENBERG: Absolutely not. Make no mistake Kieran, the Labor Party wants to win this seat of Canning. They will throw everything possibly they can at this by-election and as you know governments tend to have significant swings against them in by-elections. We are seeing the Prime Minister today joined by the Finance Minister to support Andrew Hastie, our fantastic candidate in Canning. We know its going to be tough but we know with a SAS captain as our candidate with the great work that Don Randall, the late Don Randall, did in that seat winning five elections for Canning, we can win this seat but its going be tough and make no mistake, Labor will try very hard to win it.
GILBERT: Okay, what do you make then of the suggestion that your senior colleague, the Foreign Minister, briefed Cabinet yesterday which Ive had confirmed to me in saying that the Labor Party is not pouring the amount of resources that the Government had expected them to in trying to win the seat?
FRYDENBERG: Well, I wasnt at that discussion so I dont know what was said. But I am sure that the Labor Party wants to win this by-election, absolutely, and our job is to make sure that they dont and thats why the Prime Minister is out there campaigning today with our fantastic candidate.
GILBERT: Ed Husic, your reaction to this story and I guess the other elements of the story that I reported this morning that Julie Bishop mentioned that Labor strategically is looking at the longer term, or the general election that is, when theres a redistribution that opens up a new seat called Burt which includes Labor areas of the current seat of Canning?
HUSIC: Well, the Coalition cant even get their lines right. I mean theyre claiming on the one hand that were not putting resources in and now were hearing from Josh that we are putting resources in and were all expected to take serious note of noted Labor observer, Julie Bishop, as to what were doing in the seat of Canning and thats supposed to be the legitimate grounds for this story. I mean its just ridiculous. The best test, Im going to give you one thing, the best test of how serious were taking it is how many times has Bill Shorten been in Canning compared to Tony Abbott? Tony Abbotts finally turning up today, weve been out there talking about the things that are important to Canning voters most notably the fact that in WA, when you look at the jobless rate, its higher than the national rate. Jobless as a result of the downturn in mining up 30,000 in the last three years. A really serious issue and weve been focussed on that. Tony Abbott has been in hiding and Julie Bishop reckons she can make some sort of observations about Labor Party strategy. Give me a break.
GILBERT: Well, it sounds like theyre a bit more confident than they otherwise would have been, that they dont believe the amount of resources are being poured in to it commensurate with a party that really wants to win the seat from the Government. You reject that out of hand?
HUSIC: Yeah, sure, whatever Julie Bishop says about our motives, approach or being able to make an assessment: I totally believe. It really doesnt stand the believable test, Kieran so lets just look at the issues on the ground as they are, compare Bill Shortens commitment in the way weve been involved in that campaign, the commitments that weve made in terms of local infrastructure for example the types of things people want to see improvements on, building on the work that Don Randall has done in that area. We have been very focussed on this and were not going to get side-tracked by some sort of, you know, apparent observation by Julie Bishop.
GILBERT: Josh Frydenberg, your thoughts on that, your reaction?
FRYDENBERG: Well, Im not going to speculate any more on speculation. I mean, thats effectively what were doing here Kieran. Id much rather want to talk about Australias economic future, which will help the people of Canning if we sign this free trade agreement with China and were able to get it through the Parliament because today, the big revelation is that two Labor Premiers in Daniel Andrews in Victoria and Jay Wetherill in South Australia and a Labor leader in NSW, Opposition Leader, have actually expressed their support for the Coalitions free trade agreement with China. Now, the only Labor Leader against this deal is Bill Shorten.
GILBERT: Josh Ill let you elaborate on that but I do want to say to you that on this issue, this is something else Ive picked up from the Government. That at the senior ranks this is something that is resonating in Canning. There are ten thousand fly-in fly-out workers in Canning, a seat of just over a hundred thousand. Ten thousand Im told by senior members of the Government are fly-in fly-out workers in that seat. So obviously the China FTA is a big issue there heading in to this by-election and as you rightly point out, Josh Frydenberg, Daniel Andrews is now very much in support of it.
FRYDENBERG: Yeah, but what also affects the people in Canning is the resources sector. Thats why youve got fly-in fly-out workers and what is going to happen with this free trade agreement is that the tariffs on Australian resource exports to China will fall. So this will actually create tens of thousands of new jobs including in the agriculture sector, including in the services sector which, you know, is all relevant to Canning. So if you want to actually talk about what Bill Shorten should be focussing on, its getting behind an agreement that is in Australias long term interest and not just running the unions scare campaign.
GILBERT: Ed Husic, Ill read to you what Daniel Andrews said yesterday. He says that his Government supports the free trade agreement, he says that the China FTA is good news for Victorian jobs. He was unequivocal yesterday in the Parliament, the Victorian Premier. Jay Wetherill also supporting the China FTA. Labor cannot credibly oppose this can it?
HUSIC: Were in favour of good trade agreements. Weve got a track record ourselves of supporting them and we believe that freeing up trade is a good thing for economies, for growth, for jobs. But you cannot dispute, and anyone who has spent time in their communities as I have in mine, having done a number of mobile offices across my area recently and Ive had people come up to me worried about jobs, worried about losing jobs and having them replaced by overseas labour. Ive had that expressed to me by people in my area and those concerns youve picked up in terms of Canning. The labour market testing provisions that are clearly absent there is no firm protection there, this is reliant on policy within the FTA this needs to be addressed. We think it can be addressed, it should be addressed and people that are concerned about their jobs want it to be addressed. They want to be certain that their jobs will not be forsaken as a result of a trade deal that has been sought to be ratified by an Abbot Government thats got more of a mind to a headline than to the job waiting line.
GILBERT: Josh Frydenberg, I want to put to you something an argument thats been made by the former Trade Minister Craig Emerson and get your reaction to it. He says, this morning, that labour market testing is not required under the FTA, that its basically left to the Australian Government of the day at their discretion. He saysthe solution to this is a general piece of legislation making it mandatory, it doesnt require a renegotiation of the deal. So why not just introduce that, have some certainty here and some guarantee that labour market testing is mandatory under the FTA?
FRYDENBERG: Well, were very satisfied about these labour market testing provisions which are in the FTA with the power of the Immigration Department to give the green or the red light to particular workers who come to work on particular projects and it has to be pointed out that the number of people who came in to Australia on 457s was higher under the Labor Party than it is under the Coalition thats a key fact. Now the only Labor Leader who is against this free trade agreement is Bill Shorten. All his State colleagues and former Prime Minister, so called mentor to Bill Shorten, Bob Hawke has come out strongly in favour of it because they understand that as an economy of 23 million people, we need to link ourselves into a much bigger economy, a dynamic of 1.2 billion people
GILBERT: Yeah, obviously, but why not provide the added certainty? Specifically on that issue a blanket bit of legislation, provide the certainty, move on in terms of the market testing for workers
FRYDENBERG: Because this deal is done. Craig Emerson, Julia Gillard and Kevin Rudd tried for years to get a dealwith China but they couldnt clinch it. Nor with Korea, dare I say it, nor with Japan. Weve done all three. Now this deal is done and weve heard in recent days that China will walk away from this agreement if we seek to try to renegotiate it. Now we dont believe we need to renegotiate it, we believe theres going to be tens of thousands of new jobs that will flow and its just common sense Kieran that your children and your grandchildren want to have the job opportunities that will flow from an economy of 1.2 billion people. Its just common sense. So lets just get on with it.
GILBERT: Yep, okay. And Ed Husic I guess it is common sense as well to, you know, suggest that a Government of the day is hardly not going to require labour market testing before allowing foreign workers in I mean what Government in its right mind would allow that to happen, so isnt the Governments position defensible here and that the deal is done so get on with it?
HUSIC: The Abbot Government is more interested in a headline about a trade agreement than protecting Australian jobs bottom line. The way that it stands at the moment is that labour market testing will be at the whim of policy, which can be changed at a moments notice. They are not interested in providing the legislation and the assurance to the Australian public and to people that are concerned about their jobs that their jobs will be protected and that they will not be used, you know, at a moments notice that they will not be made redundant for the sake of a major project in the way in which this trade agreement allows for jobs to occur and so
GILBERT: But theres no way youre going to block that, surely theres no way that Labor will block the FTA or try to repeal it?
HUSIC:Well were saying to the Abbott Government provide the assurance. At a time where jobless numbers are higher now than they have been in twenty years, higher now than what it was under the GFC because of what the Abbott Governments doing, it should be working harder to protect jobs not seeing them off for the sake of a headline.
GILBERT: A quick break
GILBERT:Back in just a moment with Ed Husic Josh Frydenberg, Josh you can continue after the break. Quick break back in just a moment.
FRYDENBERG: Thanks Kieran.
GILBERT: This is AM Agenda, with me this morning Ed Husic and Josh Frydenberg. Josh Frydenberg, apologies I interrupted you to go to the break, your thoughts?
FRYDENBERG: Look, I was just going to say were seeing a theme running through Bill Shortens conduct here, most recently in relation to this China Australia Free Trade Agreement where hes not acting in the interests of all Australians
HUSIC: [laughing]
FRYDENBERG:Hes acting in the interests of the union movement
HUSIC: [laughing]
FRYDENBERG: Because just last week we saw in the Parliament the Labor Party blocked the reinstatement of the Australian Building and Construction Commission which was a cop on the beat on our building sites producing a $6 billion a year productivity dividend and weve also seen Bill Shorten try to shield the unions from proper scrutiny at the Royal Commission with their partisan attacks on Dyson Heydon
HUSIC: No, No.
FRYDENBERG: So theres actually a theme whether its the China Australia Free Trade Agreement, whether its the ABCC, whether its the Royal Commission where the Labor Party is actually doing the bidding of the unions who only represent thirteen per cent of the Australian private sector workforce.
GILBERT: Theres a risk here
HUSIC: Okay, that was worth waiting through the break for
GILBERT: Isnt there Ed Husic if Labor goes too far in
HUSIC: But come on.
GILBERT: Well no, but theres a serious point here in terms of the Royal Commission that youve made your point about Dyson Heydon, the guy is a long serving High Court judge, people can make up their judgements as to the claims of apprehended bias themselves but in terms of some of the serious outcomes here Labor has really got to be credible about the outcome, surely, otherwise youll be seen to be simply being a human shield to the thugs and others that are accused here of wrongdoing in the Commission.
HUSIC: Let me just first say that what Josh was making reflections on Josh being part of a Government, led by noted nation builder Tony Abbott. I mean, Tony Abbott exists as a leader of a political party, not as a leader of a nation. He will always put his partys interests first, he will not put the nations interest first and he will always pick a blue. Thats the evidence. He will always pick a fight, and so were seeing this on some other things well no doubt talk about this morning. Im not having Josh say, having himas a Minister of the Abbott Government, tell us about political fights, political blues, when you see what Tony Abbott does. In terms of your point Kieran, in relation to the Royal Commission, weve said zero tolerance. If theres bad behaviour by employers or unions, deal with it. Give the resources to the police, give the resources to the proper regulators handle it that way instead of setting up an expensive political exercise in a Royal Commission. Another example of a political fight that Tony Abbott has wanted to start.
GILBERT: Lets look at the lack of consistency in the Government narrative and message as well, particularly on the economic front Josh Frydenberg. The Treasurer just a few weeks ago, according to Phil Cooreys analysis today in his reportingin the Financial Review, just a few weeks ago was saying to Labor okay, can we get your bipartisan support for a restricted bank deposit tax that just hits the big four banks but wont hit the minor players? So just a few weeks ago he was looking at coming up with a deal, now hes saying that Labors got to come out and oppose this tax on deposits. Whats going on?
FRYDENBERG: Okay well lets start here from the beginning that in August 2013, two days before the election was called, Chris Bowen announced a bank deposit tax. Now this was designed to meet the Governments commitments and its obligations to guarantee deposits up to $250,000. We said at the time that we would consult widely and that we would establish a financial system inquiry led by David Murray. Joe Hockey, right through that process, said that he would consult widely before making any final decision. Now, David Murrays inquiry found that we didnt need to have this bank deposit tax because the banks have actually built up their capital reserves as a result of what the Australian Prudential Regulatory Authority has been asking them to do
GILBERT: So why only a few weeks ago was he still pursuing it? Why only a few weeks ago was he still pursuing it, now its the worst thing that Labor couldve come up with?
FRYDENBERG: He was pursuing his consultations and then he made a recommendation to Cabinet that we dont proceed with it going forward. Now, the question is will the Labor Party who came up with this bank deposit tax, which will be passed on to consumers which groups like the National Seniors have come out strongly against as well as the regional banks, will the Labor Party continue to book the revenue from this bank deposit tax going in to the next election we wont.
GILBERT: Okay is it really necessary, given the Murray findings that Josh Frydenberg referred to Ed Husic, is it now redundant given the outcome of that particular review?
HUSIC: Can I just clarify a few facts to complement the nice story that were getting out of the Coalition Government on this issue? The first thing is that the Council of Financial Regulators, headed by Reserve Bank Governor Glenn Stevens, recommended this. Joe Hockey criticised and complained about this and then took it to the election as policy. He then, as youve pointed out and in a variety of other instances, backed in this proposal and now has been rolled in his own cabinet, as a result has had to basically turn his back on everything that he has said until this point about the need for this type of measure. And I come back to the point I said earlier if its a choice between policy and the nation and politics, Tony Abbott and his Government will always pick politics because now youre hearing, through the Coalition Government today, that this is being set up as yet another political fight.
And we certainly will have an opportunity in a few weeks time I sit on the House of Representatives Economics Committee and on 18 September the RBA Governor and Chair of Financial Regulators will be appearing before us and were going to hear his views in relation to this decision by the Government not to proceed with something that regulators believe is an important measure.
GILBERT: Alright. Josh, your reaction to that? Because obviously Ed Husic is, through that Committee, very much across the view of the regulators. Your take on that? Youre willing to go against their recommendations?
FRYDENBERG: Well, Joe Hockey has consulted widely and theres going to be a clear choice at the next election you can have a bank tax under the Labor Party or you can have no bank tax
HUSIC: There you go, politics
FRYDENBERG: Under the Coalition thats it
HUSIC: There you go
FRYDENBERG: Thats it, thats it. And we have not only met our commitments on the carbon tax and the mining tax
HUSIC: [laughing]
FRYDENBERG: But weve also reduced small business tax, taxes for lowest in half a century. Thats going to be our record going in to the next election.
HUSIC: Thats it Kieran, its all about politics. Its all about scoring the points. Its all about, you know, dusting off the carbon tax campaign and now applying it on the bank levy. This is all its about. Its not about policy, its about politics.
FRYDENBERG: Well, can I say to you David Murray who is an expert
GILBERT: Gentlemen, just quickly, sorry Josh were out of time just quickly, very quickly.
FRYDENBERG: Has made a recommendation for it not to go through.
GILBERT: Alright, Josh Frydenberg, Ed Husic. Gents thank you both, have a good day. A quick break on AM Agenda, well be back in just a moment stay with us.