E & OE
Andrew Bolt:
I won’t defend Gina Rinehart. She’s a miner rich enough to look after herself.
Anyway, critics who play the man would say I’m just doing it because she owns some of Network Ten.
But that’s what gets me.
People who answer serious argument with smears and with lies and what really gets me is when those people are our government.
Take this week. Rinehart gave a taped speech explaining why the mining investment we all rely on is in danger.
Gina Rinehart (Grab):
Business as usual will not do, not when West African competitors can offer our biggest customers an average capital cost for a tonne of iron ore that’s $100 under the price offered by an emerging producer in the Pilbara. Furthermore, Africans want to work and its workers are willing to work for less than two dollars per day.
Andrew Bolt:
Rinehart warned with competition like that, we can’t load up miners with extra costs.
She said what BHP Billiton chairman Jac Nasser and many worried business leaders also say.
Cut red tape, cut green tape, lift productivity, scrap the carbon tax and mining tax. Nowhere did she say pay Australians two dollars. But watch. That’s exactly what the Government pretended.
Julia Gillard (Grab):
It’s not the Australian way to toss people 2 dollars, toss them a two dollar gold coin and ask them to work for a day.
Wayne Swan (Grab):
What was more dangerous was the ideas – I mean talking about Australians working for two dollars a day.
Andrew Bolt:
Those comments are either very stupid or dishonest. Contrast that with Resources Minister Martin Ferguson, who understood Rinehart perfectly and endorsed her argument in principle.
Martin Ferguson (Grab):
I acknowledge Gina Rinehart as a serious miner in Australia. We’ve got to do everything we can to reduce the costs of delivery of projects in Australia because there’s plenty of competition coming our way – look at Indonesia and coal, look at potentially into East Africa. No one owes Australia a living.
Andrew Bolt:
Ferguson knows we don’t just face extra competition. We have a potential crisis. China’s miracle boom is suddenly in strife. That’s why our iron ore prices have dropped 40 per cent.
That’s why billionaire Andrew Forrest this week put huge investments on hold, and scrapped a thousand jobs.
Newspaper Headline:
‘Fortescue cuts expansion and 1000 workers as iron ore price tumbles’
Andrew Bolt:
That’s why the Government’s Budget is shot to pieces. But when Rinehart points out the problems she gets smeared as the greedy rich.
Wayne Swan (Grab):
She’s made billions out of this country but she doesn’t want to see some of the benefits of mining spread more broadly.
Andrew Bolt:
When Andrew Forrest earlier this year also warned against extra taxes, he got smeared as a tax evader.
Wayne Swan (Grab):
For every Andrew Forrest who complains about high company taxes, and then admits to not paying any, there are 100 or more that go about employing Australians.
Andrew Bolt:
Again, Swan’s claim that Forrest doesn’t pay company tax? That’s false, too. With our future at stake, this country deserves a more civilised debate from this Government. Not this smear and misrepresentation.
So what I’m defending? Not Gina Rinehart, but our right to an honest debate.
Andrew Bolt:
Joining me now is the panel, former Liberal Treasurer Peter Costello and former New South Wales Labor Treasurer Michael Costa.
But before we start, Julia Gillard flew back from the APEC summit in Russia yesterday after learning her father had died.
That is a terrible blow for her, and my sympathies and those of the panel are with her.
But the business of the nation goes on, and so will the discussion.
Michael, this week the government announced another big spending program, a new education plan costing $6.5 billion dollars a year on top of NDIS and the rest, just when the economy seems to be heading for a really dark spot, what do you make of this?
Michael Costa:
It’s got nothing to do with economics or education, its got to do with the internal problems of the ALP, I mean she’s still worried about Kevin Rudd and forces that are operating against her, so we’re going to see stunt after stunt attempting to show her as a vision politician, and attempt to deflect and divert from the underlying tension.
These promises are on the never-never, leaving aside the fact that there is probably no causality between funding and education outcomes in any event.
This has been a campaign of the teachers unions across the country to try and increase funding for their members, without dealing with work practices and we know that, but it’s not about that it’s about politics, it’s about showing her as a visionary taking oxygen away from the Rudd forces.
Andrew Bolt:
I don’t understand the timing of this Peter because we’ve seen in the last month or so with national disability which is $10 billion a year with this teaching thing which is $6.5 billion a year, you’ve seen one scheme after an other and we’re still a year out from an election. I’ve added it up, it’s four percent of budget outlays which have just been promised.
Peter Costello:
The thing that amazes me about the education announcement is that you will recall Julia Gillard announced we were going to build the education revolution back in 2007, when the government was elected. Five years on, after we’ve been building the revolution for five years we suddenly discover actually standards have been going backwards. What we need now is to set a target for 2025. How long does it take to build a revolution?
Michael Costa:
This is the counter revolution.
Peter Costello:
What accountability has there been on all of the spending of the last five years, which is building the revolution, we now are told we’re going backwards, so because you couldn’t actually build a revolution after five years and improve things what we’ll now do is we’ll push our targets out for another 13. One thing that we know is that in 13 years Ms Gillard or Mr Rudd wont be around or anybody whose currently sitting, this is really the politics on the never-never. It also worries me on the NDIS, the NDIS is obviously appealing to a people who do it really tough in our society, and so you come along and you make a promise to them, that you’ll fix their problems. But its an $8 billion per annum program. The government sets aside $1 billion over four years, under funds it chronically. And to hold out a promise to these people with out any prospect of delivery, I think, is quite callous.
Andrew Bolt:
What’s the strategy here Michael? Normally you leave your promises until several months out from the election, these are huge promises that are being made a year out.
Michael Costa:
She is focusing on a potential election, in the caucus. This is what this is about. This is about setting herself up, firstly to take oxygen away from Rudd and secondly to focus on her caucus and say I’m a visionary, I’ve got strategy for the future.
Peter Costello:
You know what Michael? I’d feel better if I thought there was a strategy. I actually think that there is no strategy. Then you have Tanya Plibersek who goes out and says, $4 billion in dental plan, she says this is new money, you have the Prime Minister Gillard in the Solomon Islands. She says no actually this is a saving measure. Now it can’t actually be new money and a saving measure. One or the other. To actually allow a health minister to go out on a $4 billion promise with out any coordination, now here’s the point I think. I think the treasurer has absolutely lost control of the budget. I don’t know what the finance minister is doing. You go and you try and look at these announcements. Normally when you have an announcement at the federal level they’ll say $4 billion. So much in the first year, so much in the second year, so much in the third, bottom line of the budget will be accordingly this, this, this and this. None of that, none of it. To actually think that the process has been so degraded that you can make $4 billion worth of promises which can on the one hand be savings and on the other can be new money.
Michael Costa:
That health announcement was worse than that, because the health minister also came out and attacked the Queensland government for attempting to find some savings within the health budget. The very same week. Quite clearly this is not driven by the economics or the finance, it is politics.
Peter Costello:
They’ve lost control.
Andrew Bolt:
There is two things about it that I find strange, one is that you announce a substantial, you know $4 billion is not small money, and then you move onto another promise that’s even bigger $6.5 billion allocation the week after, it’s like they have no confidence in one scheme that you can…there is no real, there is no political impact, there is no political impact from doing this. The other thing is that it comes at a time when we are all wondering whether the China boom, and the mining boom associated with it, are headed for, if not a crash then a severe slowing down that is going to hit the budget here, what’s your view?
Michael Costa:
Well look, China will correct but we’re going from a bubble to a boom. I’m not, I’m certainly bearish about the bubble, but I’m bullish about the boom. China will continue to grow, it’ll grow at 5, 6, 7 per cent not 9, 10 , 11 per cent.
Andrew Bolt:
5 per cent is way under what is being predicted and what the budget is based on.
Michael Costa:
That’s right, and it’ll have an impact on revenues. There is no question about that. But to right off the boom is really a knee jerk response to that. I mean Gina Rinehart was right this week. The reality is that we are facing competitive pressures. For example, our capital spend in terms of install capacity on coal, has gone up by I think 120 per cent over four years, the rest of the world has gone up around 40 per cent. We are becoming uncompetitive, and that’s a real challenge for us, and rather than the sort of knee jerk debate about whether China is going to fall over what we need to look at are things that are under our control. Which are our cost structure, our productivity, government regulation, and the things that government can do something about.
Peter Costello:
Andrew the problem here is that we have been in deep deficit, when prices have been at their peak. Now prices are coming off there peak, where are we going to be. Now, back in the late 1990’s early 2000’s we were balancing the budget, we were running surplus. The iron ore price was about $30 and the thermal coal price was about half of where it is now. We could balance our budgets. Then those prices trebled and we went into deep deficit. Now they are moderating again. What have we done with those four years of boom, we haven’t put one dollar in the future fund. Not any repayment of debt. With all of that money we had the chance to actually buy ourselves a better tax system, and all we got was the MRRT. The MRRT is dead, it’s a dog, it’s not going to raise any money. So for the peak of the boom and this is where Australia has squandered its opportunity, for the peak of the boom we will have nothing to show for it.
Andrew Bolt:
If we can move on quickly to a couple of other topics, the problems in the opposition side, but very quickly, chances of a recession?
Michael Costa:
Very Low.
Peter Costello:
Prices are still double what they were, back in the late 1990’s early 2000’s.
Andrew Bolt:
So, no?
Peter Costello:
It’s a squandered boom.
Andrew Bolt:
Now let’s have a free kick for you Michael. Cubby Station, what on earth is Barnaby Joyce on about? We have had Wayne Swan approving Chinese investors and Japanese investors, to buy a cotton station, our biggest, in Queensland, that has been in voluntary receivership for three years. Now Barnaby Joyce, the National’s leader in the Senate has some problem with it. I can’t quiet make out what it is, have a look.
Barnaby Joyce (Grab):
We are talking about the largest property in Australia in value. The largest irrigation property in Australia. The largest water licence in Australia.
Andrew Bolt:
What is Barnaby’s problem?
Michael Costa:
Preselection for Maranoa.
Peter Costello:
I have no idea; I think that it is completely absurd. He wants to knock off the sitting member Bruce Scott. Barnaby comes down into the lower house, becomes leader of the national party, deputy prime minister. The good thing about all of this is that Joe Hockey has made a strong stand and Tony Abbott has sided with Joe Hockey rather than Barnaby Joyce, and that is a big step forward.
Andrew Bolt:
What is going on? Obviously Barnaby is trying to exploit anti-Chinese investment sentiment with out actually saying it.
Michael Costa:
Well he virtually has said it, I mean it’s a dog whistle issue and he’s jumped on it. I think it diminishes Barnaby Joyce, I think that he’s better than that; I don’t think that he actually believes it. I think that it is frightening for the national political debate that he’s reduced it to that level.
Peter Costello:
I think that he does believe it. I think that Barnaby is genuine. I would never accuse him of not being serious. I think that he is genuine. I just think that he is mistaken on this. The good news is, on the foreign investment policy, Joe Hockey made the point it’s a matter for the Shadow Treasurer, which it is, and Joe Hockey came out and made the right decision.
Andrew Bolt:
Well it seems that he has been forced back into the fold. He didn’t dare say what his problem was, which I thought was very interesting.
Peter Costello and Michael Costa thank you so much for joining me.