Fri, 16th May 2008

Nelson interview with Alan Jones (Radio 2GB, Sydney)

The Hon Dr Brendan Nelson MP
Leader of the Opposition

E&OE

JONES:

Brendan Nelson, good morning.

DR NELSON:

Good morning Alan.

JONES:

Just firstly about delivery, what was going on?

DR NELSON:

Well look you have a 30 minute reply to the Budget, Alan, and I spent quite a bit of time writing the speech, but once you’ve written it obviously you should be able to essentially deliver it without referring too heavily on notes. But it is a valid point with the Prime Minister. I’ve noticed that Mr Rudd – even when he’s attacking me by the way – can’t seem to do it unless he’s actually reading it and it’s also become clear over the last couple of days that neither he nor Mr Swan are actually across the detail of their own Budget even though they’ve spent months putting it together.

JONES:

You said that you’ll use your Senate majority, which only lasts until July 1, to reverse the Government’s alco-pop excise hike, saying that the $3 billion tax grab will make binge drinking worse.

DR NELSON:

Well Alan look the key issues in terms of the Budget are can Australians be more confident about keeping their house, putting groceries in the trolley, putting petrol in the car and basically being able to feed, clothe and house the kids. Now one of the things that Mr Rudd did not tell us he would do before the Budget is slug a $3 billion tax on people who drink ready-to-drinks. Now these are basically bourbon and cokes, like your Bundy and coke and so on. They’re about 80 per cent of the market and what really makes me angry, Alan, is that when this was announced through a Sunday paper we were told that this was to deal with binge drinking by young people. And I, like most Australians, said well if that’s the problem and this is going to address it in principle we’ll support it but I want to see the evidence.

Now Alan we’ve seen the evidence and the evidence is that binge drinking by young people, women in particular in this age group, has actually declined according to all of the studies that have been done since 2001 and in fact the Government’s own Budget papers, Alan, with the $3 billion being raised over the next five years actually demonstrates the Government is budgeting for a compounding 10 per cent a year increase in consumption.

So in other words this is an exercise in deception. It’s nothing other than taking money out of the pockets of everyday Australians. By the way, my electorate is on the upper north shore of Sydney. They don’t sell a heck of a lot of these sort of products in my electorate. The people that are buying these, Alan, are just everyday, hard working people, decent people, usually family people. The kind of people listening to your programme.

JONES:

But surely if you’re going to increase the tax on these things, these RTDs, you’ll only force kids to buy their own spirits, mix them themselves, and you’ll finish up with perhaps a more lethal alcoholic cocktail?

DR NELSON:

Well Alan, you’re absolutely right. I’m a doctor. I’ve spent a lot of my life working with people who’ve suffered alcohol abuse. I’m also a parent. So I want to make it absolutely clear that I will support anything that I believe is going to help deal with the scourge of the consequences of alcohol abuse.

If you increase the price of one alcohol product – and Mr Rudd’s proposing a 70 per cent increase in the excise in this – then what you do Alan is a lot of people will continue to buy it. That’s the first thing, and the Government’s own Budget papers demonstrate that. In fact the demand will, consumption will increase. But at the same time those who don’t will go and buy something cheaper. So they’ll find some other form of alcohol to purchase. So the kids will chip in and buy a bottle of vodka. There’ll be no measured dose of alcohol in that. Or they’ll go onto wine-based products. Or some kids, Alan, will actually find or will start to look at the cost of ecstasy tablets or other things.

So our concern, in fact my very strong criticism of this, is firstly like a lot of things Mr Rudd has given us a deception. He has presented this as something that it is not. It is simply a tax grab. The second thing is that it’s not part of a comprehensive strategy which involves education, policing, parenting, alcohol treatment – all of the things that are necessary with an integrated approach, part of which could be pricing, and that’s why I will convene a national forum of my own and bring people together who’ve really got some expertise in this field.

JONES:

I was surprised last night that you didn’t grab Appendix F of Budget Paper 2 though and wave it around because there you have a big heading, a block heading, ‘major savings in the 2008-2009 Budget’. Why should a crude oil excise, or increased taxes on beverages, or increases in the luxury car tax, or increases in the passenger movement charge, or a heavy vehicle road user charge, or ripping a special dividend out of Australia Post, or a visa application charge, why should they be savings? They are taxes. I mean shouldn’t you have made more of the fact that this is very heavily a taxation measure rather than a savings measure?

DR NELSON:

Well you’re right. I mean the way the Budget papers are put together they put it up as savings but you’re absolutely right Alan.

We have got over $19 billion of increased taxes over the next five years from Mr Rudd. I don’t recall Mr Rudd prior to the election telling us at any stage that his plan was to increase taxes.

We had all of this business over the last few months in response to the inflationary challenges which emerged late last year – we had Mr Swan saying he was going to heavily cut into spending. What they’ve done Alan is that they have cut spending by $15 billion and then increased spending by $30 billion, and then put $19 billion of extra taxes on Australians to cover it.

And then, further to that, we now find that we’re going to have about $40 billion put into funds, part of which will be used to prop up failing state Labor governments with quite vague conditions under which it’s going to be allocated to spend both the capital and the interest.

JONES:

But surely the ultimate hoax of all here – and I’ve been alluding to this – was that we had a very heavy media saturation prior to this Budget. The Government building itself up as a Government that will take tough fiscal decisions. Dire warnings by the Prime Minister about the need for belts to be tightened. Putting such a Budget together was hard work, but this is how it will have to be if we’re going to be responsible. Agony to come and the result at the end of the day was a pretty puny affair, as you say, which most probably will do nothing to help the Reserve Bank lower interest rates.

DR NELSON:

Well you’re absolutely right. In fact those tax increases which you listed are in the main inflationary themselves. In fact we estimate that up to 0.4 per cent of the CPI will be increased as a result of the tax increases. The other thing about the Budget is it’s confusing. There’s a whole hotch potch of different measures – bits cut off here, bits cut off there. You’ve got different thresholds in deciding who’s rich or not.

And one of the things we as Liberals are very concerned about is this idea that you reach a ceiling in Australian society. They’re suggesting that if two people are working, they’ve got $150,000 in income, that in some way...

JONES:

Because Mr Rudd did say that would be $250,000.

They had said before the election it would be $250,000. To be fair they did say they most probably would means test some of that stuff. But why… What are we saying to the Australian people when you means test the baby bonus, you means test the family tax benefit B, which is for mothers who stay at home, but when there’s a childcare rebate that’s not means tested. You’re not means testing the mechanisms for women who go to work. Are the women who stay at home second class citizens?

DR NELSON:

Well that seems to be the clear message, Alan, and as a matter of policy we don’t support means tests on these things. We’re not going to block those measures, but nonetheless we don’t support them. We believe that the family tax benefit B was to recognise mothers who stay at home to raise children, and the means test is actually on the mother’s income but not in the income of her husband. Now what Mr Rudd’s saying – and you’re absolutely right – he’s saying that if you’re working and you’re earning $300,000 a year, you’ll get the childcare rebate and that’s not means tested. But if on the other hand you’re staying at home to look after your children then there’s a means test going to be applied.

JONES:

Yeah. The other thing is that he was asked, I saw Wayne Swan was asked why pensioners didn’t get more than they should have got and he said ‘oh well there’s going to be a comprehensive review’. And the Treasurer then said he would have liked to have done more for disabilities but they’re going to have a current review of federal and state programmes. Have we reached this thing where we’re process driven – a public service government where everything is up to review. There are committees, there are commissions. It’s very difficult to get decisions. Meanwhile people are hanging out there in the electorate and doing it tough.

DR NELSON:

Well you’re absolutely right. We’ve got more than 100 reviews, committees, summits, all sorts of things that are being looked at at the moment, without any real decisions being made. And again, one of the things that concerned us about the Budget – that there was nothing really there for pensioners, retirees, seniors generally.

JONES:

But shouldn’t you have done more for those people when you were in government. I mean you said last night that the entry levels for example for teacher training are appallingly low. Can’t Julia Gillard say well hang on if they’re low, you were the Minister for Education only a couple of years ago. It’s because of the fact that you blokes did nothing?

DR NELSON:

Well in fact we undertook major reforms of higher education, Alan. We put an $11 billion additional package into universities and one of the things that particularly I focused on when Education Minister was national standards in Australian schools. Focusing on plain language school reports, for example. Getting information to parents about how schools perform.

JONES:

But if your teachers are not adequately qualified and there are low entry requirements for teacher training it’s obvious that not enough has been done about that and you’ve just vacated the field?

DR NELSON:

Well in fact, all I can say to you Alan and to your listeners, again, is last night what I’ve said is that our policy will be that as a condition of a university receiving funding there will be a minimum tertiary entrance rank to get into university to study education. The science faculties must develop or accredit the mathematics and science related subjects that are in a teacher education degree. And further to that that every person who is studying to be a teacher will be taught in all of the basic fields, particularly English, history, mathematics and sciences. They will be tested. Some people will say…

JONES:

But why not waive the HECS fee entirely for the best academically qualified to become teachers, and say we’ll give you incentives, there’ll be no HECS. You become a teacher with good economic qualifications, no HECS?

DR NELSON:

Well in fact what we did Alan was we actually kept HECS at a lower level for teachers and nurses and to basically make it more attractive financially for people to look at going into teaching, and it really has had no effect. HECS itself, as you know, you pay back once you’ve graduated from university. It comes out of your pay. It’s an interest free loan which is not paid back until you are working and if you are working. And I think the key thing in terms of teaching is to make sure that we have higher standards of entry, higher standards of training during the course. That we have higher pay for teachers which is based on their performance. And we’ve got to have classroom teachers that are in our universities training the next round of teachers.

JONES:

Can I just come to, ‘cause we’re short of time here, the gravest emission in my opinion of the previous government and that is the failure to strengthen the Trade Practices Act – the perception of the Government, as with this Government, is hand in glove with big business. I mean the Woolworths, the Coles, the Westpac issues prevail because the Trade Practices Act is too weak. It allows these sorts of mergers, it allow geographic price discrimination, it allows predatory price and so Woolworths and Coles are charging more for petrol and more for groceries. When as a new leader are you going to say this is what we will do about the Trade Practices Act – you only have to go the Canadian model; the legislation is there – and say, no longer will we allow this kind predatory behaviour where big business swallows up small business and the consumer is the loser?

DR NELSON:

Well I agree with you Alan. We’re actually looking at that very closely at the moment. We’re only a few months into this and we’re in the process of examining all of those powers in relation to the Trade Practices Act. I ask myself whether we’re going to be a better country if even more power goes into the hands of both Woolworths and Coles. I think it’s very important that we continue to have small community-based businesses and more competition in the community. If I could just say one other thing, Alan, going back to childcare and means testing, it’s the childcare benefit of course that is means tested, the childcare rebate isn’t.

JONES:

Just a quick one, and we’ve only got seconds in it. Can we see from you people the social conscience that ought to be there in government, which wasn’t in the previous government in relation to carers – there’s $2.6 million of them – I mean they’re on about $230 bucks a week for God sake, saving the tax payer $31 billion. Don’t we need a superannuation scheme for carers, don’t we need to double the carers allowance?

DR NELSON:

Well Alan these carers are the window into our humanity. These are the real saints of Australian society. They wouldn’t be getting that lump sum payment this year had we not hammered Mr Rudd mercilessly, and he led them to believe that that cash payment, that lump sum payment would be available over the next four years. It isn’t.

In terms of policy and the superannuation and other things for carers, Alan, I’ve started with a blank page. I announced some policies last night. There’s a lot more to come and I assure you I’ve been on a listening tour and I have heard.

This is about groceries, it’s about keeping your home, petrol in your car, supporting those people in society like carers and pensioners and seniors, and it’s about making sure that we are not just solid, sound economic mangers, but we’re men and women committed to building a better society which means that all of those issues which you focus on; you talked about mental health earlier. I for example think that one of the things we need is specialised psychiatric hospitals in Australia and we also need to move increasingly to more residential care and facilities with people with mental illness. And remember a few weeks ago Mr Rudd announced $100 million for people with disabilities in residential care, and yet it barely scratches 10 per cent of the demand that’s out in the community. We’ve got a long way to go.

JONES:

Since that is the longest sentence ever in history we’ll just continue on here because I’ll just say to my listeners, we were going to go to the news but I’ll just stay with the Opposition Leader Brendan Nelson. I mean basically my concern about carers is that we’ve got 170,000 of these under 18. We’ve got too many of workforce age. Tax cuts have been nothing to them, superannuation means nothing for them. They can’t have a job. Now shouldn’t we be saying to them, we don’t expect you to be mendicant or beggars. We’re going to have to do something that provides you with a certain dignity in life that currently isn’t available to them and that costs money?

DR NELSON:

You’re absolutely right. What we did in government over the last six budgets…sorry over the last eight budgets we delivered tax cuts to Australians. We believe in lower taxes, Labor in higher taxes.

JONES:

But if you’re a carer you haven’t got a job.

DR NELSON:

What we did with carers of course we gave them those additional cash payments, Alan. Now in the process of reviewing all of our policies, you’re right, carers too often feel that they are treated like welfare recipients instead of men and women who are caring for someone whom they love in the process of building real fabric to society and saving the tax payer an enormous amount of money.

One of the things that we are focussed on at the moment is looking at all of these policies and what can and must be done for carers, people with disabilities and particularly seniors in Australia. So Alan I just want you to know, as far as I am concerned, you must get the economic fundamentals right. If you don’t do that you can’t do anything.

JONES:

Well now economic fundamentals, I mean, are we going to blow the economy up simply because we believe the Al Gore hype about climate change. There’s no uniform scholarship on climate change and yet we’re running the risk of tax payers money being burnt more extravagantly than fossil fuels. There was a recent American report on emissions reductions and the scientists concluded by saying, quote: “a severe global emissions reduction policy, through emissions trading, could turn out to be the costliest public policy mistake in human history with costs vastly exceeding the benefits”. Now are you going to allow the tax payers to be saddled with these costs with very skeletal proof that they the costs are legitimate?

DR NELSON:

Well Alan, look, at the moment Mr Rudd has capitalised on the fact that most Australians want to see some action on climate change…..

JONES:

...they’ve been brainwashed…

DR NELSON:

I think as Rupert Murdoch said, we should give the planet the benefit of the doubt. My view is that we as Australians alone cannot solve climate change on our own, but we can do enormous damage to our environmental and economic future if we get this wrong. One of the things that is extremely important to us, Alan, is to examine what will be the cost of Australia signing up to climate change, particularly if there is not a genuine global response to it.

JONES:

But what if CO2, what if carbon dioxide emissions are not responsible for temperature changes? This is the concern. And what are we going to drive business to the wall? Are we going to have tax payers fork out $3 billion every time a budget is brought down when there is no conclusive, uniform proof that carbon dioxide emissions create the kind of change that Al Gore was talking about and others have adopted simply for crass political purposes?

DR NELSON:

Well certainly there have been a lot of flaws found in Mr Gore’s movie…

JONES:

Absolutely.

DR NELSON:

...but Alan from our perspective, we are living I think in vast ignorance of the long term consequences of what is happening to our climate. Our view is that the world is warming generally. We do accept and understand that there is questioning of that science….

JONES:

Very significant questioning.

DR NELSON:

...but we, as far we’re concerned, the key here Alan is that whatever the world signs up to, whatever Mr Rudd signs up to on our behalf, we must ensure and only be a part of it if there is a genuine global response – that’s China, India, the United States and the major polluters. The second thing is we must be very, very clear about what this is going to cost the next generation of Australians economically, and we’ve got to be satisfied on balance that the science behind what we’re doing, that’s the science in terms of climate change and the science of the economics behind this, is as sound as it possibly can be.

There is an unbudgeted train coming down the track in the form of Australia’s response to climate change. That was one of the things that was not in the budget by way Alan – the preparation for the cost of Australia complying with its climate change obligations – and all I can say is that I also think that one of the things that’s happened is that anyone who gets up and starts to put alternative views or promote science which might in some way question orthodoxy is being beaten down as some sort of heretic. We need to have a continuing public debate about it. But generally speaking our view is that at this stage we need to be part of a global solution and we’ve got to go into it with our economic eyes wide open.

JONES:

Okay, good to talk to you and I thank you for your time.

DR NELSON:

Thank you Alan.