ABC CAPITAL HILL
WEDNESDAY, 16 OCTOBER 2019
SUBJECT/S: IMF downgrading economic growth, infrastructure spending, stagnant economy, energy prices, big stick legislation, emissions rising.
MATTHEW DORAN, HOST: Katie Allen, I want to start with you, looking at these IMF figures – they’re not great. How long can the Government continue to say that, there are, as Josh Frydenberg likes to say, global economic headwinds at play here? How long can you not look at the actual domestic policy setting?
KATIE ALLEN, LIBERAL MEMBER FOR HIGGINS: Well, I think Matt, you’ve got to realise that we are a player in a big global game and I think now is not the time to turn back from our strong economic management. It’s very clear that voters saw that in the hands of a Liberal-National Coalition Government that we really do understand what we are talking about when we talk about the economy. We understand that people want more money in their pocket, they want jobs; they want to make sure that Australians are not on welfare if they don’t need to be. And they really want to see that our settings are right, so that we can have a strong, sensible, certain economic future. Now, we do understand there are difficult global trade winds and headwinds out there. We know about China and the US, and the tensions there, are causing difficulties. But I think that now is not the time to turn back our economic management. And the fact that we’ve actually had continuing growth. Yes, there’s some downgrading in that growth, that continuous growth, when other likeminded countries have not had that same growth. So, I think that we need to look at this as the half glass full or the half glass empty. I’m a half glass full person. And I think that we are heading in the right direction in difficult times. But we have a strong, certain, stable approach to the economy and I think people like that.
DORAN: Something that the IMF also says; it is warning that actions by central banks in slashing interest rates is not enough to sort of prompt further activity in global economies and that there needs to be greater spending by governments. Doesn’t that get to the heart of what needs to be seen here? That the Coalition needs to bring forward more infrastructure spending to kick start what is effectively a very sluggish economy?
ALLEN: Well to be fair I think we’re in a new economic environment now, and so it’s very hard. Economists are telling us we should do this or we should do that and it’s sometimes difficult to know what is going to be the best thing going forward, when you think about the global situation. We just know that at the Australian level we believe that we have the right plan going forward and that that is actually something that has just been voted for by the Australian people and that that’s what they want to see. They want to see a budget that is balanced, they want to see us in surplus and we’ve delivered that, and they want to see that we are creating jobs and we’ve delivered that. We need to make sure our education and training are backing us in so that those jobs are there ready to be created. And we need to be very, very careful about our trade and our implications there and make sure that we are building our trade portfolio and our relationships, diversifying those relationships with other countries, so that when the economic trade winds or headwinds turn into a puff of wind that will head us in the right direction faster; that we’re ready to take those opportunities and move forward.
DORAN: Pat Conroy, much of Labor’s argument here is that the Government is sitting on its hands. Isn’t it just a fact of life that Australia is a very trade-exposed nation and that we are probably more vulnerable to things that are happening overseas whether they be trade wars or other issues and that there is only so much that can be done, particularly when you’ve already seen things like income tax cuts already come through and infrastructure spending being announced.
CONROY: Well, you said ‘announced’ but not actually being ‘spent’. That’s the whole point. This is a Government that is intent on media releases rather than conducting real action. Let’s look at the actual facts. We’ve got the slowest economic growth in Australia since 2001; we’ve got 1.8 million Australians out of work or wanting more hours in the jobs that they have. We’ve got productivity going backwards and for the first time in a long time, net disposable income, real disposable income in households fell last year by 1 per cent. So we’ve actually got households getting poor as we speak. What we need is urgent action by the Government to bring forward stage 2 of the tax cuts, which we have said we will support, and we need urgent spending on infrastructure. They’ve announced all this infrastructure spending, but it’s off in the never-never rather than now. So what the IMF has said is backing what the Reserve Bank has said, what every independent economic commentator has said, is that we need the government to play its part. You can’t rely on monetary policy. It needs to stimulate the economy now because it is in the doldrums. When I walk down my high streets and in my shopping centres there are a lot of empty shops, there are a lot of people looking for work who can’t find it.
DORAN: Picking up on that, and the broader issue of consumer or business confidence, Josh Frydenberg took a whack at Jim Chalmers today and said effectively Labor is effectively talking down the economy. There is obviously concerning figures that are being released here. How much responsibility does Labor have to take to be co-operative when a country does find itself in this circumstance and try and find a solution and get things moving again?
CONROY: Well, we are being co-operative. We have said we’ll support stage 2 of the tax cuts being brought forward; in fact we tried to amend the tax bill that passed parliament to do that. We’ve said we will support infrastructure spending being brought forward. What we won’t do is allow this Government to pretend that nothing is happening; that there is no problem in the economy. There is a massive problem with the economy. We’ve got stagnant growth, stagnant wages, stagnant productivity and real disposable income going backwards, and we will support the Government taking action. But the first thing is the Government has to admit there is a problem that they need to address. And they are not. They are living in an alternate reality where everything is going well and everyone is living high on the land. That is not the case.
ALLEN: I think it is inappropriate to say that we are not taking seriously action about what we are doing with regards to the economy. I mean, it’s very clear that we are doing things to make sure that we improve energy prices; that we bring down energy prices. We’re introducing the big stick legislation. We’re doing a lot of work across a lot of different departments in order to make sure that we’re in the best possible position. You’re talking down things.
CONROY: You’ve had 16 energy policies in six years.
ALLEN: You can talk about Labor having so many policies. You, in particular, changing your point of view.
CONROY: Wholesale energy prices in this country have gone up by 158 per cent in the last three years alone. Gas prices have tripled under your watch. You are driving the economy into the ground. Stop blaming others for it.
DORAN: Let’s pick up on energy – quite a handy segue, thank you for providing me with that. The big stick legislation, Labor still says the Government hasn’t actually explained why or how this policy is going to bring down energy prices. Can you explain it?
ALLEN: Well, I think the most important thing is that the energy market is quite complicated. There are many players involved. What this is going to do is in a thoughtful, proportionate way make sure each of the different layers where energy is being provided, the generators, the retailers, that we actually have in place ensuring that they are going to 1) at the retailer level, pass on any cost reductions to the consumer themselves. From the generator’s point of view, making sure they are not playing with or manipulating the spot market and making sure they are not partaking in anti-competitive behavior. So, it’s all the way through the system. Because, we took to the election that we were going to bring energy prices down. We’ve already started to do things like making sure that we have a price safety net and we need to make sure we understand that low energy costs is going to be a very important thing for businesses going forward – small business, small-medium enterprises. This is a proportionate response to make sure that we are using the right levers to ensure that prices and cost reductions are passed down to the consumer. Because that’s what they want.
DORAN: I think we got a hint of what you think about the Coalition’s energy performance over the last few years, so I will ask you instead, when it comes to the big stick legislation is Labor laying the groundwork here to roll over on another piece of policy? You’ve said that you will push for amendments and that you will not back the legislation if those amendments don’t go through. But we’ve seen similar arguments being made on income tax cuts, on national security, is this going to happen again?
CONROY: We’ve already significantly improved this legislation by opposing it. We’ve seen issues around taking ministerial discretion out of the bill and giving it to the ACCC and the Federal Court, which is where it belongs. We’ve got amendments that rule out complete privatisation of divested assets and that’s really important. But we’ve said one step further is required, which is not to allow this to be a back door for partial privatisation. And we’ve clearly said that if that amendment isn’t agreed to by the Government, we will vote against the bill. That was the decision of the Shadow Cabinet; it was the decision of Caucus yesterday and that’s binding on all members. We will oppose this bill unless the Government can support our amendments that stop this allowing partial privatisation. Now that is really important. But we are skeptical about whether this will have any impact because the main driver of increased energy prices in this country is policy uncertainty. We’ve had 16 energy policies in the last six years by this Government. That is why wholesale energy prices have gone up by nearly 160 per cent since 2015, that’s why gas prices have tripled, that’s why the futures market for wholesale energy has gone up by 29 per cent for the next year. We have seen policy incoherence from this Government and households in my electorate and every other electorate in this country and manufacturers are paying the price right now.
DORAN: I do want to move on because we are rapidly approaching Question Time and we do have to release you back into the wild.
CONROY: Happy to stay.
DORAN: I want to just pick your brains on another issue sort of related and that is the issue of climate targets. Your electorate of Higgins in Melbourne could be described as one of the more socially progressive seats held by the Liberals anywhere in the country. How do you justify to voters or explain to voters what the Coalition is doing in terms of delivering carbon emission cuts when you’ve got legions of scientists coming out saying the Coalition is window dressing here?
ALLEN: I don’t agree at all. The Coalition is doing a very, very good job with actually laying out exactly how we are going to continue to reduce emissions. Remember we have reduced them, and we are going to continue to reduce them. There is a short-term issue with regards to the rapid rise in LNG and exports overseas and also other issues that are playing into this situation. But I’ve looked at all of the modelling going forward. There is a very stable and certain plan called the Climate Solutions Fund, a $3.5 billion investment in renewables. And the people in Higgins love to hear, when I talk about all of the different diversity of issues that we’re approaching. Because it’s not just about the electricity market, which is 33 per cent of the emissions outcomes, it’s about transportation, waste, it’s about fugitive emissions – there’s a lot that we have to work across. And we now have a process that is working through a whole of government approach trying to make sure that we get all these emissions down and we’ve been doing a great job.
CONROY: Sorry, I just need to jump in there.
ALLEN: I just want to finish though. It’s not just an environmental imperative; it’s an economic imperative that we do this. And I would say that we have actually got a Climate Solutions Fund, which Labor likes to talk down. When we say we are going to meet and beat the emissions reduction, we put a plan that’s fully funded in place. And the people of Higgins have listened to me to say that, each and every day on the hustings leading up to the election, and I continue to say that, and I’m going to keep talking until my lips are bleeding that we actually have a plan and we will deliver.
CONROY: Well, with respect Katie, you just lied. You lied – and I don’t use that word lightly – when you said emissions are falling in this country.
ALLEN: They have fallen since 2005. In the last quarter they are 0.6 – that is true.
CONROY: You’ve been in Government since 2013 and emissions have risen every year since 2014. Emissions in this country have risen every year since 2014.
ALLEN: No, they haven’t. It’s not a lie.
CONROY: Look at your own government’s data. You are factually wrong. Emissions have risen in this country every year since 2014.
ALLEN: The curve is going down, I’ll show you later.
CONROY: Well, I am happy to bring up the Government’s own data.
ALLEN: We know there’s an 18 per cent increase in LNG export overseas and that has created a short-term plateau. And we are going to see emissions reduction.
CONROY: Emissions have risen every year since 2014.
ALLEN: They have fallen since 2005.
CONROY: You’ve been in power since 2013. Since 2014 your emissions have risen every year. And that’s your own data from the Government. And that just shows how hard this climate policy is that the Coalition act in a fact-free zone. They can’t even admit and use their own data, let alone look at independent advice. And that’s really frustrating.
You can see the interview here