Sky AM Agenda

Subjects: HSU, Craig Thomson, Budget.

Transcript, E&OE

8 May 2012

KIERAN GILBERT: With me on the program this morning I've got the Trade Minister Craig Emerson and the Shadow Environment Minister Greg Hunt. Gentlemen, good to see you both.

CRAIG EMERSON: Good morning.

GILBERT: What about the Budget day? I can't remember a Budget when we've seen, Craig Emerson, the front page of The Financial Review, for example: 'Union Sleaze Threatens Labor'; the front page of The Australian: 'Escorts, Campaign Funds put on Thomson's card'. Such a damaging distraction, isn't it, when you've got a message that you think is a good message on a Budget surplus but just not getting it out there.

EMERSON: Well, it is a good message – and have a look at the papers tomorrow: I think they'll be full of the Budget. The Budget comes down tonight and didn't come down last night. And you'll see in that Budget a return to surplus, which is a sign of a strong economy. And that's an important buffer during this period of global uncertainty. We did go to deficit, that's right. We did say we'd protect jobs and we navigated Australia through the deepest global recession since the Great Depression.

GILBERT: It's got to be frustrating to have this rut on the eve of the Budget.

EMERSON: On this matter, this is a report that's actually four years in the making. It's finally come out; there's been a lot of frustration I think all round – all round – about how long this report has taken to come out. It now has. The various people involved, Craig Thomson and others, will now be subject to some sort of assessment, some sort of investigation. I do fundamentally believe that while the media and people in the community may reserve the right to make their judgements, it's not for me to be judge and jury on these matters.

GILBERT: What about the perception about the Government, though? Do you think that there will be increasing pressure on the Government not to accept Mr Thomson's vote?

EMERSON: There's no doubt that Mr Abbott will push this argument, but he didn't push it in respect of three MPs who were actually under police investigation. Nor did we, by the way Kieran, nor did we say that Andrew Laming, Ross Vasta and Gary Hardgrave should not vote in the House of Representatives. Nor did Mr Abbott, as Leader of the House, under the previous government. Nor did Mr Abbott, in respect of Mary Jo Fisher, who was in fact investigated and found guilty of a criminal offence. At no time did we say she shouldn't vote. Mr Abbott falsely claimed that she didn't vote in the Senate. She did, including against the Clean Energy Bill. So my point is: let's have one standard for all parliamentarians. Not one standard for the Coalition and another for the rest of Australia.

GILBERT: Does it risk the precedent if, for example, with Mr Thomson his vote isn't accepted and then any MP that's incumbent upon the Party … the relevant Party not to accept that MP's vote. He's not found guilty yet; it's a report by the industrial watchdog. It's not a court; it's not a police investigation.

GREG HUNT: There is a precedent for deep and profound allegations with a substantive base. Let's let the police make their own judgements, but at this moment we have 156 contraventions which have been alleged against Mr Thomson. We have police investigations in multiple jurisdictions on multiple fronts, and the precedent that counts is the way John Howard dealt with Mal Colston's vote in the Senate. He rejected the vote of Mal Colston. That was obviously a Member of the Labor Party that was willing to vote with the Liberal Party. The Prime Minister of the day to his own detriment rejected that …

GILBERT: But more recently, the precedent more recently is not to do that. And this is as Mr Emerson pointed out, relates to some of your colleagues who previously were under the scrutiny of police investigation.

HUNT: Let's understand there is a degree and a gravity to what's being alleged here, which is beyond anything in my knowledge of the Federal Parliament over the last three decades. I won't pretend to know the entire history of the Parliament in that respect, but there is a degree and a gravity far beyond anything we've seen previously. The only thing approaching the gravity – and even then it was of a far lower grade – was the allegations against Mal Colston. And we said 'we're not accepting your vote'. The Government, the Prime Minister should do the right thing: reject the vote of Craig Thomson.

EMERSON: Let me make a comment on that. The gravity in respect of the previous three MPs, plus Senator Fisher, the gravity of the allegation against them is that they stole from the Commonwealth. Stealing is an important, you know, is a grave allegation – with Mary Jo Fisher, stealing and assault. But with Mr Colston, a very inconvenient truth is that in fact the Howard Government accepted – accepted – the vote of Senator Colston while he was the subject of fraud charges. That is how the sale of Telstra went through the Senate. Now, Greg doesn't want your viewers to know that, but that is the fact. He was the subject of fraud charges.

HUNT: And we moved that …

EMERSON: After the sale of Telstra.

HUNT: … moved to ensure that his vote was no longer accepted, and that's what we did. Let me be absolutely clear…

GILBERT: This is a hung parliament, though, Craig Emerson.

EMERSON: Oh right, so we have two justice systems?

GILBERT: No, no, I'm not saying there's two justices. What I'm saying is the implications for your Government and the perception issue is different, isn't it? For a hung parliament held by the vote of this gentleman.

EMERSON: We can't have two justice systems. You say that the perception is different …

GILBERT: Yeah, I say the perception is different.

EMERSON: The perception of being charged with fraud is a very grave perception, and that's what Senator Colston was …

GILBERT: But your Government is resting on the vote of this …

EMERSON: I'm telling you that this … in respect of Craig Thomson, he has not been charged with anything. He has not been charged with anything. Mal Colston, who – Greg has just sought to conceal from the public – was actually charged with fraud and they accepted his vote. When they didn't need his vote any more they said 'well, we won't take your vote'. The sale of Telstra was made possible by this. In respect of the three Coalition MPs, when Tony Abbott was the Leader of the House and defended their right to participate in the Parliament and they were subject of police investigations – police investigations – for theft from the Commonwealth. At no time, at no time …

HUNT: Even now… you've had a good go… even now Craig Thomson…

EMERSON: … did we say that those three MPs should not vote.

GILBERT: Let's hear Greg's response.

HUNT: Even now, Craig Thomson's vote is propping up the Government.

EMERSON: And that's why you don't want him to vote.

HUNT: You have turned a blind eye to a stench – well, it's turned a blind eye to the evidence – it's turned away from the stench…

EMERSON: Completely false.

HUNT: And it has ignored for years and years the rot at the heart of its moral base. So what we see is a Prime Minister who miraculously crossed a line in the sand just over a week ago without being able to say what it was. And then in the days afterwards new investigations were launched against the Speaker; new allegations were made against Mr Thomson. There's a very interesting question here as to whether or not they had prior knowledge or whether it was just coincidence that the Prime Minister found the mysterious line in the sand.

GILBERT: Okay. We're standing by to take you live to Treasurer Wayne Swan. He's due here in about 10 minutes at Parliament House and we're going to take you live to his news conference when he arrives. For the moment, why don't we take a quick break and we'll be right back with Craig Emerson and Greg Hunt. Stay with us.

[commercial break]

GILBERT: This is AM Agenda. With me this morning, the Minister for Trade Craig Emerson and the Shadow Environment Minister Greg Hunt. Gentlemen, let's look at the Budget now if we can. I want to ask you Craig: there's been some speculation about whether or not the Government will deliver the 1 per cent reduction in the company tax rate. There's The Financial Review reporting that the one and a half billion dollar surplus is going to be delivered – like all the other papers – but also pointing out that there was some doubt in Mr Swan's language yesterday as to whether or not that 1 per cent company tax reduction will be followed through by the Government. Can you clear that up for us this morning?

EMERSON: I'd rather not. I'm not seeking to add to any speculation about this, but what I don't like to do is to pre-empt Wayne's speech. I don't think there's any cause for concern, but let's just let that develop.

HUNT: Well I can guarantee that what will be in the Budget is an increase in carbon tax and therefore electricity prices. I can guarantee that every company in Australia will be paying high electricity prices.

GILBERT: You've also guaranteed that you're not going to back a company tax reduction as well.

HUNT: Well we don't support the mining tax. This is a mining tax that the Government is bringing in. It's also bringing in a carbon tax. We saw only a few days ago that it's a carbon tax that's now going to hit milk companies, councils, universities – so that's what's coming in the Budget. We don't know about the company tax changes, whether they're about to be axed at the last minute. But we can guarantee that there's a mining tax and a carbon tax on milk that's coming.

EMERSON: Just let me explain to the viewers. Our proposal to cut the company tax is a stand-alone piece of legislation. We know that the Coalition is opposed to the mining tax, right? They voted against it. We got it through the Senate. This is a piece of legislation where we are inviting the Coalition to vote in favour of a reduction in the company tax rate. Now the reason that they won't is they actually want to increase the company tax rate to pay for their very expensive paid parental leave scheme; an increase of one and a half percentage points to pay for their paid parental leave scheme. What they're actually saying is that they're embarrassed about the idea of voting for a cut in the company tax rate, which we have asked them to do, because in truth they want to increase it.

GILBERT: It is a difficult argument to make, isn't it, because there was that levy, that levy that Mr Abbott has referred to with the paid parental leave scheme and the company tax rate. If the Government delivers it, or promises to, it's going to be the Coalition having to block it.

HUNT: Let's see whether they do or don't make the changes there. But I can guarantee that the carbon tax is the thing that everybody is looking at. The mining tax, as we saw yesterday, is beginning to have an impact.

EMERSON: It's passed.

HUNT: We know that the carbon tax legislation has been passed, even though there seems to be complete confusion. But what we want to see is a genuine surplus – not something which is cooking the books. We want to get rid of the carbon tax…

GILBERT: On that issue of cooking the books…

HUNT: … each day, every day, electricity prices are going to go up.

GILBERT: I'll ask you two things because I want to get your … give us some sense: will there be more compensation on the carbon tax firstly?

EMERSON: Well, what we'll do generally is increase the tax-free threshold from $6,000 to $18,200.

GILBERT: There are suggestions there will be even more, even more compensation tonight; one-off payments …

EMERSON: Again, I'm not going to sit here and pre-empt Wayne…

GILBERT: Come on, why not?

EMERSON: It is Sky and this is a great opportunity to do it. But I'm simply saying in respect of compensation for the carbon tax, trebling the tax-free threshold takes 800,000 people out of the tax system. They'd go back in under Mr Abbott because he would withdraw the carbon price.

GILBERT: This suggestion that the Government's going to …

EMERSON: Yeah, a great insult to Treasury.

GILBERT: but, bringing spending forward like the parenting payments and deferring acquisitions and so on beyond this year just to get across the line with a $1.5 billion surplus.

EMERSON: Well, if we were deferring stuff beyond this year then that means we're going to put it in the next year, when there'll be a surplus, and the next year when there'll be a surplus. What's the point of that? We're not …

GILBERT: Well, is it just fiddling with the numbers just to get across the line?

EMERSON: Why would you do it? I'm saying that we're returning to surplus and we'll keep the Budget in surplus. That's what I'm saying, so why would you defer things and put them in the next year when we'll have a surplus anyway? This is a return to surplus; it provides a buffer against global uncertainty and a return to surplus from a period that, yeah, we did go into deficit, that's true – to save jobs. We're one of the few advanced countries that didn't go into recession, and here we are again returning to surplus providing that buffer and the capacity for the Reserve Bank to further reduce interest rates. The Reserve Bank cash rate is three and three-quarter per cent now. It was six and three-quarter per cent when this Government was formed.

GILBERT: Let's just keep an eye on this because Treasurer Swan's walking to the media now. Greg, just quickly before the Treasurer starts: this is going to be the first advanced economy to move into surplus post-GFC.

HUNT: Well, if it were a real surplus it would be welcomed. But let me give you an example: a billion dollars is about to be given to the biggest brown coal power companies in the country before the 1st of July. We're also going to see massive off-budget borrowing. The purpose of a surplus is to stop the borrowing. The Government's going to keep borrowing.

GILBERT: Let's hear from Treasurer Swan now.

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