Sky News AM Agenda with Kieran Gilbert

Subjects: Health funding, Cabinet leaks, Opposition rifts, US budget, Asylum-seekers.

Transcript, E&OE

15 February 2011

KIERAN GILBERT: Joining me on the program to discuss this and the other matters of the day, from Sydney the Trade Minister, Craig Emerson, and from Brisbane the Shadow Attorney-General, Senator George Brandis. Gentlemen, good morning.

CRAIG EMERSON: Good morning.

GEORGE BRANDIS: Morning, Kieran.

GILBERT: Craig, first to you. The former Prime Minister there stating publicly his support. Given he invested so much time and energy into the previous plan, that would have been hard to do, wouldn't it?

EMERSON: I don't think so, as Julia indicated in announcing our plan, as she said, this has been built on the shoulders of Kevin Rudd's plan. That is true. The major variation is that there'll be a 50-50 partnership in the funding of growth and the original plan that Kevin put to the Premiers was 60-40.

Now the truth of the matter is that Premier Barnett did not want to and didn't agree to forgoing some GST revenue. There were two options: one, no health reform or, two, make the variation of a 50-50 partnership. That variation was made. Kevin's endorsed the plan, as he would — he's a member of Cabinet — and he is supportive of the plan, most of the essential features of which he developed, so it's no surprise.

GILBERT: But like his plan, Craig Emerson, this is not a done deal yet, is it? It hasn't… the final deal hasn't been signed and Barry O'Farrell — I spoke to him yesterday on this program — he's far from endorsing this and, indeed, has got a lot of doubts about the plan.

EMERSON: Well, he's the Opposition leader at this stage. There's an election, I think in late-March, and I think in those circumstances Mr O'Farrell's not really in a position to say he endorses every particular feature of it, including the detail which is still to be developed. This was the heads of agreement. There are some matters of detail to be determined but I thought in reading the papers today, Kieran, and watching the electronic media last night, that there's very strong support for this plan, including from the AMA, from the architects of Medicare.

And I note in passing that Peter Dutton has indicated this morning that he would pull Medicare apart. That puts him in the same category as John Howard, who once promised to do that and suffered the consequences. So I think Peter Dutton will follow the same path as Peter Shack. You might say 'Peter who?' Well, he was the health minister — shadow health minister — leading up to the 1990 election when he had to confess that they completely botched health policy. I reckon Peter Dutton will be going down that path too.

GILBERT: Senator Brandis, is there a risk here that through the comments of Mr Dutton and Tony Abbott, the leader, slamming this deal, if it is a national agreement, signed and delivered later in the year, doesn't … isn't this just another example of the Liberal leader being too negative, risking looking too negative on everything?

BRANDIS: It's not our job to endorse bad policy, it's our job to hold the Government to account.

Now, Kieran, the only way in which you could say that this plan is built on the shoulders of Kevin Rudd's health plan is that Julia Gillard decapitated Kevin Rudd's health plan. This is so much less than the Labor Party promised. It's their third go at this in three years but in each of their previous two iterations of their health plan, the core concept was what was called the dominant funding model, that the Commonwealth would be the dominant funder of hospital costs. And the Government, under pressure from some of the state premiers who weren't prepared to accept the GST clawback, has completely abandoned what Kevin Rudd, time and again, described as the central reform with which his health plan was identified.

Now, there are so many holes in this plan: there's nothing for mental health, there's nothing for aged care. Although it said that it's a 50-50 funding model, in fact, that's only partly true. It's a funding model whereby by 2017-18, so in two parliaments' time, the Commonwealth would assume responsibility for 50 per cent of extra hospital funding.

So this is in so many ways a woefully inadequate substitute for the heroic rhetoric of Kevin Rudd.

GILBERT: But, Senator Brandis, if all the Liberal states do sign up, don't you just look obstructionist and negative in those comments if the other Liberal leaders back it?

BRANDIS: Well, Kieran, as an Opposition we're certainly entitled to point out that this government has delivered so much less than Mr Rudd promised to deliver through the dominant funding model. That's the first point.

The second point is it's not a done deal yet, as you pointed out in your question to Craig. Mr O'Farrell, who almost everybody in the country expects will be the Premier of New South Wales by the end of next month, has reserved his position so we are , the Government, is yet to deliver on this outcome. But, you know, we can see it in the broad … we can see the skeleton agreement in the heads of agreement and the point we make is that this is far short of what Kevin Rudd promised would be his signature reform in health.

EMERSON: Now, Kieran…

GILBERT: Craig Emerson, Craig, I'll let you comment but I also want to talk to you about the nature of the debate out of Cabinet the last week. You know, there's got to be concerns among your colleagues whether or not Kevin Rudd had a hissy fit or he didn't; the fact that that interpretation out of the Cabinet room made its way into the papers, has got to be a worry for the Prime Minister, doesn't it?

EMERSON: And I'm happy to come to that but George Brandis, as the Deputy Leader in the Senate, has just described this health plan, which has been the subject of a signed heads of agreement for all states and territories, he described it, quote, 'as poor policy'. Now, I think the Australian people would like to know from the Deputy Leader of the Coalition in the Senate whether he will, and if his party room will support what he calls poor policy, whether they are going to actually seek to block this like they've sought to block everything else, like Tony Abbott, before he'd even seen it, said he opposed it. By the way, Tony Abbott's now saying, 'oh, Kevin Rudd's plan wasn't too bad'. He opposed that too!

Now, I think the Australian people, who are concerned much about the quality of the health care that they will get rather than whether it's 60-40 or 50-50 they should know whether the Coalition is going to block this or not and George Brandis just described it as poor policy.

GILBERT: What about — tell us about the problems, though, within your Cabinet. Because if it's leaking that's not a good sign for any Prime Minister, is it?

EMERSON: I'm happy to come to that now but I would like an answer from George. I think the Australian people expect an answer from George Brandis on that.

In relation to the matters that you've raised, obviously there was some disclosure about, or allegations or suggestions about, what Kevin Rudd did or didn't do towards the end of a Cabinet meeting. I was actually there. He didn't leave in a hissy fit. That is incorrect. But I accept your basic point, that there shouldn't be such disclosures out of Cabinet. There's some more media on it today. I think Julia Gillard's absolutely right. We should be concentrating on delivering better health care to the country. That's what we're doing through this policy. We'll continue to focus on good policy and, you know, we do want to actually deliver this health agreement.

GILBERT: Okay. Before I go to Senator Brandis to respond to your assertions, I want to ask you, have you got a sense of who might be behind the leaks?

EMERSON: [Laughs] Good try, Kieran. I mean, if I knew I'm not sure I'd tell you and I wouldn't know for sure anyway so, look, these things happen. We certainly…

GILBERT: Just try.

EMERSON: We just…

GILBERT: Just tell us who you think it might be.

EMERSON: I have no idea, but I can certainly confirm this because it was in the media all last week: and that is that the Shadow Cabinet has been leaking like a sieve, seeking to undermine Julie Bishop and so on and so on and on it goes.

GILBERT: Nice — nice diversion. Let's got to Senator Brandis. You heard what Craig Emerson had to say. Here's your opportunity to respond.

BRANDIS: Well, first of all, we don't have an agreement yet. We will — and we won't know whether there is an agreement until after the New South Wales election. I expect, and Mr O'Farrell, assuming that he would be the new premier of New South Wales and his new cabinet, will consider the matter. So let's not get ahead of ourselves, Craig, but it's not the Opposition's…

EMERSON: But are you going to pass 'poor policy'?

BRANDIS: It's not … it's not the Opposition's role to support poor policy, and we don't.

EMERSON: So, you've described it as 'poor policy' so you're saying you won't support it.

BRANDIS: And if I may — if I may be allowed…

EMERSON: You'll vote against it?

BRANDIS: If I may be allowed to finish, please, Craig, nor are we impressed with the fact that this seems to be a plan not for more doctors and nurses but a whole layer of new bureaucrats. That's the first point I want to make.

In relation to the leaks from the Cabinet, let me just say this. I know Craig pretty well. I think he's a pretty honest man. If Craig is telling the truth — which I think we may assume he is — that raises this question: which ministers, which cabinet ministers are putting it about that Kevin Rudd did stalk out — storm out — of the Cabinet room in a what was called a hissy fit, and if that's not true why do we have members, senior members of the Cabinet putting about mi… — untruths about what Mr Rudd did?

The fact is that this government is deeply divided. It's been deeply divided ever since the political assassination of Kevin Rudd by Julia Gillard on 23 June last year, and I don't think those problems are going to go away…

EMERSON: George, you…

BRANDIS: …because they're endemic.

EMERSON: George, you have a fascination with internal politics. That's fine but the Australian people want to know whether, as a result of this historic deal, they are going to get improved healthcare. And you've indicated two things…

BRANDIS: Well, ha…

EMERSON: …one, that this is 'poor policy'…

BRANDIS: [indistinct] …as if they are.

EMERSON: You've indicated that this is 'poor policy' and the Coalition will not vote for 'poor policy'. You have effectively indicated…

GILBERT: Well, let's…Craig, I think…

EMERSON: … the Coalition will block this as they, as they sought to block the last package.

BRANDIS: Craig, Craig, Craig. Craig, I'm sure I'm — Craig — I'm sure I'm old enough and ugly enough to express my own views in my own words, so please don't…

EMERSON: You're the Deputy Leader of the Opposition in the Senate.

BRANDIS: Please don't put — please — indeed. Please don't put words in my mouth. I think the Australian people — I think, I think the …

EMERSON: You said the Coalition will not support 'poor policy' and that this is 'poor policy'.

BRANDIS: Craig, just settle down, settle down.

EMERSON: I'm perfectly settled, George.

BRANDIS: The Opposition, I think, is entitled to draw attention to the fact that this government is split down the middle, with Cabinet Ministers leaking against the former Prime Minister in a way that I don't think we've seen in this country since the days of the Whitlam Government.

GILBERT: Okay. Senator Brandis, let me ask you, though, about the — just quickly, we've got to take a break in a moment — but the comments that Tony Abbott's made to a few of your colleagues, apparently saying 'you've got to pull your head' in as well. Not you specifically, but some of your Liberal Party and Coalition frontbenchers, that they also need to show a bit of discipline.

Would you be supportive of Mr Abbott in that pursuit? Do you have any idea of who might be causing some issues on your side?

EMERSON: Name them, George.

BRANDIS: Look, look, look, look, last week was untidy for the Opposition. I think that's freely conceded, although this is as nothing compared with a Cabinet that is split down the middle.

EMERSON: [Laughs]

BRANDIS: Having said that …

EMERSON: Righto, George, that's very persuasive.

BRANDIS: If I may finish. Having said that, as Christopher Pyne said on Sunday morning on one of the chat shows, there isn't a cigarette paper of difference between any of the senior leadership of the Coalition, not a bit of it. And Mr Robb …

EMERSON: Oh, come on George.

BRANDIS: And Mr Robb, I might say …

EMERSON: …wants Joe Hockey's job.

BRANDIS: …put out a statement on … Craig, would you please stop interrupting me? I didn't interrupt you! Please stop interrupting me.

EMERSON: Well, these are very long monologues.

BRANDIS: Mr Robb put out a statement on Sunday in which he drew attention to the fact that the press report that excited this last bit of media excitability was in fact of a story that was seven months old, a conversation that happened before the election. And in that statement …


BRANDIS: … Mr Robb affirmed his complete support for Mr Hockey.

EMERSON: So no undermining of Julie Bishop? There's undermining of the …


EMERSON: … Deputy Leader of the Opposition. It's rampant, and you know that.

BRANDIS: No, Craig, Craig, you're …

GILBERT: Gentlemen, let's take a break.

BRANDIS: … in Fantasyland.

GILBERT: Okay, Senator Brandis, thanks. Craig, pause for the moment, hold fire. We'll take a break, we'll be right back. Stay with us.

[Unrelated items — commercial break]

GILBERT: Welcome back to AM Agenda. Let's turn our attention now to Washington for a moment, where US President Obama has proposed a budget to slash that country's deficit $1.1 trillion over the next 10 years.

OBAMA: If we do this in part by eliminating waste and cutting whatever spending, we can do without. As I start, as a start, I've called for a freeze on annual domestic spending over the next five years. Even as we cut waste and inefficiency, this budget freeze will require some tough choices. It will mean cutting things that I care deeply about, for example, community action programs in low-income neighbourhoods and towns, and community development block rents that so many of our cities and states rely on.

But if we're going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary.

GILBERT: Sky News US reporter, David Lipson filed this report on the proposed budget a short time ago.

REPORTER: During his inauguration speech two years ago, the US President Barack Obama pledged to cut the US deficit in half by the end of his first term. Well, the budget that he has proposed, handed down, today does put his administration on track to achieve that by cutting the deficit to the tune of $1.1 trillion over the next 10 years.

To do that, he would increase taxes in areas like taxes for the rich, tax incentives and subsidies for oil and gas, and also increasing taxes for areas like financial institutions. On the other hand, he is also talking about cutting significant programs, 200 programs that traditionally are favoured by the Democrat side of politics here and also favoured by Barack Obama himself. Also, cutting significantly domestic spending in areas like defence and transportation.

But as he pulls one lever with one hand, he's pushing a lever with the other hand hoping to stimulate growth here in the US by investing, investing and spending in areas like education, innovation and also a national broadband plan, a wireless plan to increase high-speed internet for Americans, so some similarities, some echoes there with the policy of the Gillard Government itself.

Now, the biggest challenge that Barack Obama is facing, despite these significant cuts, is going to be getting this budget through the House. It's now of course controlled by his opponents in the Republican Party, and they say that these cuts simply don't go far enough, and point out that even with the $1.1 trillion reduction to the deficit, debt is continue — is going to continue to spiral and will actually accumulate by $7.2 trillion over the next decade. And those Republicans say that that's just not good enough. It'll be interesting to see what they actually do when this budget comes before them in the House on Capitol Hill.

In Washington DC, this is David Lipson for Sky News.

GILBERT: David Lipson there in Washington.

Trade Minister, Craig Emerson, as you've, you heard there, some tough decisions being made by President Obama, but the Republicans want him to go further.

EMERSON: Yes, they do. It's called de-leveraging, and this is happening amongst governments around the world, it's happening in the corporate sector, it's happening in the household sector, and that is that people are winding back on the debt that they've accumulated. And obviously the United States, through the global recession, has accumulated large debts and now they're going to have to deal with that by cutting expenditure and raising some taxes. As you say, the Republicans want them to go further.

But what I think this means for Australia is that there won't be rapid growth in the US economy; there'll be moderate growth at best. Fortunately, a lot of our growth prospects are related to our position and government decisions made here in our own region. So we're less directly linked to the US economy than we were before, but it does mean that global growth will not kick up, you know, to the sorts of levels we saw before the global recession.

I also note that George, who will be speaking next, said last week that the Coalition here in Australia would never have gone into deficit in the first place. He was joined by the health spokesman Peter Dutton in making that remark. This new position means that the Coalition, when confronted, if they were in government, with a $200 billion hit to revenue, would have cut government spending by $200 billion — exactly the prescription that caused the Great Depression!

GILBERT: Okay, we're talking about Obama, and Craig, you've managed to turn that back to a domestic …

EMERSON: It's all about economic policy, Kieran.

GILBERT: A domestic kick at Senator Brandis. So, Senator Brandis, your thoughts, first of all on President Obama. At least in the United States, it does look like things have turned around. Unemployment continues to fall, at least in recent months.

BRANDIS: Well, Kieran, without having studied the details of the US Budget, I think what we can say is that President Obama is doing what we in the Opposition have been saying for a long time now the Australian Government should be doing. That is, showing the character and the discipline to seriously tackle waste and government spending, so as to reduce debt. And it's something that the Gillard Government has singularly failed to do, even to the point of deciding to put on a new tax to fund flood reconstruction, rather than find the money out of fat in the budget.

Now, I think it's fair to say, if I may come to the point Craig made, that the public knows that Coalition governments always have a better record when it comes to managing public sector spending and keeping the country out of debt than Labor governments do.

And it always brings a smile to my face, I must say, Kieran, when I hear a Labor politician make a virtue of bringing the budget back into surplus.

The only reason the budget is in the worst position it's ever been in peace time is because of decisions …


BRANDIS: … wasteful decision made and billions of dollars wasted by this Labor Government.

GILBERT: We have had that — we've had that debate many times. I do want to ask Craig Emerson quickly about the costs on another front, the asylum-seeker cost.

Craig, we've only got about two minutes — a bit under two minutes left on the program. But apparently, two and a half million dollars a month paid to house about 500 asylum-seekers outside detention centres, and apparently $800,000 for one Darwin hotel over a fortnight last year.

These figures do seem quite large. What's your response to that?

EMERSON: Well, my response is that the Coalition Government itself housed asylum-seekers in motels, including in my own city of Brisbane. This is something that does happen from time to time. It's more likely to be used when there is a transition from detention, that is, where asylum-seekers are moving into the community because their asylum-seeker claims have been upheld.

I'm not saying that these are the circumstances here because I simply don't know. But it is something that has been done by the Coalition in the past and has been done by Labor now. And I will add one PS to the debate that we've just had. I'm glad George is endorsing the US position of getting the budget back into surplus. He failed to mention that the Australian Government will get the budget back into surplus way, way ahead of the US Government… .

GILBERT: Okay. Just quickly, Senator Brandis, we've only got about 30 seconds left, but quickly your thoughts on the asylum-seeker costs that we mentioned.

BRANDIS: Well, this is what happens when you lose control of the borders through weak policy. And you can't run and hide from the fact, Craig, that the Howard Government had this problem solved. We had boat arrivals down to an average of three a year. Last year, it was …

EMERSON: Well, why in 2007 — in 2007 they were in motels.

GEORGE BRANDIS: Please don't int … please stop interrupting, Craig. Please stop interrupting, Craig.

Last year in 2010, as a result of your Government's weak policies, the people smugglers got back into business and last year we had 145 boats arrive. So, go figure. That there's pressure on the system because you've given a green light to the people smugglers and they are coming in flotillas across the Timor Sea.

EMERSON: And if you licked the problem, why were they in motels?

GILBERT: Senator Brandis and Craig Emerson, gentlemen, thank you both very much for your time, a lively debate this morning.

EMERSON: Thanks a lot, Kieran.

GILBERT: That's all we've got time for on AM Agenda. I'm Kieran Gilbert, thanks for your company.

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