SUBJECT/S: The Abbott Government’s broken promise on Future Submarines; Tony Abbott’s broken promise on the GST; GP Tax

KIERAN GILBERT: With me on the program now Labor frontbencher Michelle Rowland, and also the Parliamentary Secretary for the Environment Senator Simon Birmingham. Senator Birmingham, as a Senator for Adelaide, for South Australia, you’re much more aware of this than most, that it’s a very sensitive issue in South Australia isn’t it, the next generation of submarines? As a job provider, as much as anything, it looks like David Johnston has ruled that out happening.

SENATOR SIMON BIRMINGHAM: Well Kieran, it is very important that we maintain the capability in Australia to ensure that we can service and sustain our submarine fleets in the long run. It’s very important that we do see more jobs in South Australia in the future associated with submarine work. That remains the commitment of the Government that there will be more submarines in future and there will be more jobs in South Australia in future as a result of those submarines and that work will be centred around the South Australian shipyards in future in relation to our submarine fleet.

GILBERT: Didn’t the Minister and the Prime Minister give undertakings that the next subs would be built in Adelaide before the election?

BIRMINGHAM: Kieran, the Defence policy that we released before the election, and the Labor Party did not even release a Defence policy, the Defence policy we released was crystal clear in saying work would be centred around the South Australian shipyards. That was the commitment given in our Defence policy, that remains the commitment, it should deliver more jobs. Of course the tragedy is we shouldn’t even be having this debate today. Back in 2007, Kevin Rudd promised that there would be more submarines and that work would start in 2007. Six years later and Labor hadn’t settled on a design, Labor hadn’t signed a contract, Labor had stripped more than $20 billion out of the forward submarine procurement program, so of course we’re facing a situation as David Johnston rightly points out of having a capability gap, a capability risk. We can’t afford that, we will make swift decisions, we promised we’d make them within 18 months of the election.

GILBERT: Essentially that’s the Government saying that we had to buy the submarines off the shelf, they might be maintained in Adelaide.

BIRMINGHAM: Again Kieran, there’s a very binary nature to this debate that seems to have developed that is entirely false. This idea that you either just have submarines from overseas or just have them designed and built in Australia. The Collins class submarines are a Swedish design. They had French propulsion systems, they had American combat systems. The Airwolf Air Destroyers that we’re building at present are based on a Spanish design. There’s always been international collaborations and that’s what we would expect in the future as well.

GILBERT: The former Treasurer as well Wayne Swan was asked about this issue this morning. Let’s have a listen to what he had to say.

WAYNE SWAN [CLIP]: It’s outrageous at a strategic level, and it’s outrageous at an industry policy level. Australia certainly does have the capacity to be a very much involved in the construction of part or all of those submarines in this country and I think that their decision to go completely offshore is a threat not only to the economy but also to our national security.

GILBERT: Michelle Rowland, to you. As Senator Birmingham says, it might not be a decision of completely going offshore, but in order to avoid a capability gap, that Australia might have to have at least part of the submarine from either Japan or elsewhere.

MICHELLE ROWLAND, SHADOW MINISTER FOR CITIZENSHIP AND MULTICULTURALISM: Kieran, this needs to be called out for what it is and that is a cop out. There was a very clear promise made, taken by the Prime Minister to the last election that these submarines would be built in Adelaide. That was the commitment that was made and that is why the people of South Australia are so up in arms about this. And I’ve seen some of the evidence come out in questioning of Defence that supposedly saving money in the short-term is actually going to cost more money in the long-term as well when we talk about making sure that the maintenance and so forth is undertaken. But I will say this too Kieran: it’s important that we have an open tender process for this. People need to know that this is being done transparently and for all the talk that we just heard the reality remains that this is a broken promise to the people of South Australia. It is a job on which South Australians were relying, the Premier has made that very clear and I think all South Australians have probably also made that clear to the Senator who represents that state.

GILBERT: Why not have an open tender? That seems to make sense as Michelle Rowland argues.

BIRMINGHAM: Kieran, there are only a very small number of options around the world. We will follow the type of processes that have been set in place since 2003, processes used by the Howard Government, by the Rudd and Gillard Governments for Defence procurement. The proper process, a two pass system through Cabinet, full advice from the military chiefs about what our capability requirements are. But Michelle can talk about a cop out, we had six years of cop outs from a Labor Government that promised in 2007 submarines and promised work would start and did absolutely nothing. We are going to make this decision and we will fill that capability gap unlike what Labor did.

GILBERT: There’s been a suggestion that this decision is going to be in part based on foreign policy as opposed to defence policy, i.e the Prime Minister is keen to foster relationships with Japan, that would be a mistake wouldn’t it to buy submarines based on…

BIRMINGHAM: That is absolutely not the case. The Prime Minister has been crystal clear that first and foremost we must make sure this acquisition, our biggest military acquisition of submarines meets our Defence requirements. He’s been very clear that this first and foremost has to be a Defence decision. Then of course we have to consider the budgetary implications and yes I am very mindful of the implications for South Australia. And Michelle is right, I’ll give her one point here – she’s right that there are long term issues in relation to the sustainment and maintenance of submarines that you have to be conscious of in making your decision. That’s why we need to make sure there’s enough Australian involvement in this process to ensure you have a fully sensible and sensitive to the Budget decision that takes account of the long term, not just the short term.

GILBERT: Michelle Rowland, the Government and as Senator Birmingham points out the Prime Minister has said that it must be the Defence requirements that are the key priority here. Would you make a judgement based on industry and jobs over the requirements of the military?

ROWLAND: Kieran, I fail to see in that argument how we can’t have both industry policy being satisfied, having Australian built subs, and having our Defence capability satisfied. And even the question that we’ve had over recent times from the Department, again I see nothing to say that those two things can’t be compatible. And I would also point out again, I think we’ve got to come down to this central point: this was a crystal clear promise taken to the last election by this Government, that these would be built in Adelaide. So I think it’s one thing –

BIRMINGHAM: Michelle, I’ll give you a copy. There’s the policy we took to the last election. I know you can’t give me one of yours because you didn’t release one but there’s the policy –

ROWLAND: It’s one thing for the Senator to come here and cry crocodile tears over South Australian jobs. The reality is the promise was made to build these in Adelaide. That is why there has been such an outcry in Adelaide. And to say somehow we’re going to end up compromising Defence capabilities if these are built in Australia, well actually to the contrary, there have been questions raised about whether it is indeed suitable to have this important piece of military hardware outsourced overseas.

BIRMINGHAM: So Michelle, where in 6 years did you make a decision?

ROWLAND: I don’t see why this Government –

BIRMINGHAM: We wouldn’t even be having this debate today if your Government signed a contract.

ROWLAND: Stop trying to talk over me.

GILBERT: Okay, let’s wrap it up and then Simon can answer this question.

ROWLAND: I don’t see why this Government thinks that somehow this has to be a choice between keeping commitments and building them in Australia, and meeting Defence capabilities. The very fact is that they go hand in hand.

GILBERT: Just quickly, we’ve got to wrap it up.

BIRMINGHAM: We’re keeping the commitments in our policy, which you can have a copy of Michelle. I know you can’t give me a copy of your policy.

ROWLAND: You tell that to your South Australians that next time you go to the polls. You tell them why you broke the promise.

BIRMINGHAM: Michelle, you tell us today why is it that you’re part of a Government that stripped $20 billion out of the forward program for purchasing submarines? Made no contracts, made no decisions, left nothing for us to work with in terms of submarine acquisition.

ROWLAND: If your sole defence on this matter is look what you did in Government, Labor’s fault, something something something, this is…

BIRMINGHAM: I’m asking you a genuine question. We’ll go to the next election having made a decision. You couldn’t do it in six years.

ROWLAND: You made a promise at the last election and you broke it.

BIRMINGHAM: You couldn’t do it in six years.

ROWLAND: Go break another promise.

GILBERT: Let’s take a breather. Quick break, back in just a moment.
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GILBERT: Thanks for your company on AM Agenda. With me the Shadow Minister for Citizenship and Multicultural Affairs, Michelle Rowland, and the Parliamentary Secretary for the Environment, Senator Simon Birmingham. Let’s get to the issue of the GST. Why is Labor going to an automatic knee jerk scare campaign on the GST. Why can’t we have a debate about it if many economists believe this is what should happen in terms of revenue raising for the states?

ROWLAND: Well for a start, this is a clear broken promise by this Prime Minister.

GILBERT: They haven’t done anything yet, have they?

ROWLAND: He says he wants to open up debate about doing something. For a start his first promise that he made in the final days of the last campaign was no changes to pensions, no changes to education etcetera. This was one of the last ones we were waiting to tick off in the broken promises boxes. Quite frankly I find it quite incredulous that this Prime Minister wants to talk about having a mature debate when he was the most divisive, obstructionist Opposition Leader we’ve had in the modern age. Quite frankly I’m very happy to have a discussion about this matter and I actually like to come from a view point that hasn’t really been discussed very much, and that is, at COAG we have the states, we have the Commonwealth, we also have local government. I have a local government background and I am very concerned that a lot of cost shifting has gone onto local government.

Why do I raise this in this forum? Well for a start if the Prime Minister wants to have a mature debate he needs to look at the impact that his Budget has made on the economy and on certain sectors. We can talk about the states, and health and education cuts, many of my colleagues have canvassed that in the last couple of days, and I’m happy to talk about that further. But, the $1 billion cut to Financial Assistance Grants for local government is one that is being felt by every single rate payer in this country. So if you want to talk about a mature discussion about the GST, this Prime Minister needs to own up to the impact that his rotten Budget is having on the working people of Australia, the rate payers of Australia, on the councils that aren’t going to be able to deliver the services the rate payers require.

GILBERT: On this issue of the GST, the Shadow Treasurer Chris Bowen was speaking to the media this morning. Let’s have a look.

CHRIS BOWEN [CLIP]: Mr Whyalla Wipeout, Mr $100 Lamb Roasts now wants to have a sensible discussion with the Australian people about economic reform. We welcome him to the economic reform debate. We’ve been participating in the economic reform debate far more constructively than he ever did. We’ll be doing so based on our principles and our values. Our principles and our values which tell us an increase in the GST is not justified, and the broadening of the base is not justified.

GILBERT: Is it a bit rich for the Prime Minister to be calling for a mature debate, a constructive debate when as you heard there from the Shadow Treasurer reminding everyone of his comments about wipe-outs and $100 lamb roasts and so on?

BIRMINGHAM: Kieran, I don’t think a debate about an individual policy measure like the carbon tax or the GST are analogous to the debate or discussion about the future of federation and how that interplayed between the Commonwealth and the States actually works. Now we’re big enough as a Government to deal with the political swipes from Michelle or Chris Bowen or others on the way through, but what I hope is that they are serious when they say they’ll have a serious discussion in terms of how the federation works and where we go in the future with that. The GST is a secondary or probably even a tertiary issue here for this discussion. The real question that needs to be asked is do people think the way the federation works at present best maximises productivity in Australia? Does it best minimise waste or buck-passing or blame shifting between the Commonwealth and the States? Now I think the answer to that is pretty clearly no and what we’re wanting Government to do is to work with the states, work with states of all political stripes to work with oppositions of all political stripes and say how do we fix the federation. Like anything that’s 113 years old, it needs a few repairs.

GILBERT: The Prime Minister was pushing his case last night on the issue of the GP co-payment, speaking to a group of medical researchers, let’s hear a bit of what he had to say to that dinner last night.

TONY ABBOTT [CLIP]: Please, don’t leave tomorrow without knocking on the door of a cross bench Senator and saying for our country’s sake, for our country’s sake, for the world’s sake, have a look at this fund.

GILBERT: Senator Birmingham, is it fair to say the Government doesn’t think the research community for eternity has done enough in terms of arguing the case of this policy which would benefit their research funds?

BIRMINGHAM: I think the medical research future fund has been one of the silent stories of the budget and it’s important that we have a bigger and larger discussion about it and it’s important that those who would benefit from it greatly and could provide transformative benefits to Australians and to the rest of the world from it are fully engaged. I think we have seen increasing engagement over a period of time and the dinner and the gathering last night is another step and another sign of that. But this medical research future fund, the potential to build a fund to drive Australia as a global leader in medical research is something that can transform lives for the future is an enormous idea and it’s got great potential and capacity and it’s something that we should be having a proper discussion about the benefits of and how we get it implemented.

GILBERT: Yeah, it’s the way to get there isn’t it with the GP co-payment that remains very much unpopular. If it does go through with the support of the cross-bench I guess that would require some compromise, Michelle Rowland? If there is compromise and compensation for those…exclusions for those on lower incomes and welfare, why not? It does sound like a good idea, the funds at least.

ROWLAND: Labor is not going to compromise on this. The reality is that this is a stepping stone to undo the universality of healthcare in this country. And as much as Simon might want to scoff at that, I represent an electorate which has one of the highest bulk-billing rates in Australia, in the high 90s. The reality is that people have already started stopping seeing their GP. In an area of Australia which has some of the highest rates of chronic diseases, preventable chronic diseases as well, people require ongoing visits to a GP, ongoing management of people’s conditions. The last thing that we need is to have people being slugged every time they go and see their GP.

GILBERT: Okay. Michelle Rowland, Simon Birmingham, thanks very much for your time. Have a good day.