ABC NEWS WEEKEND BREAKFAST WITH KIRSTEN AIKEN AND JOHANNA NICHOLSON
SATURDAY, 9 JUNE 2018
SUBJECT: GDP figures, wages growth and consumer spending; Foreign Interference, Energy.
PRESENTER: Well, Australia's GDP figures came out this past week. They showed stronger growth for the quarter than expected. In fact, since forming Government, the Coalition has overseen the creation of more than 1 million jobs. And currently the economy's growth rate is 3.1%, the highest of the G7 countries.
PRESENTER: But some economists are warning that this might be as good as it gets, with stagnant wages growth stifling consumer spending and our economy relying on our exporters. For more on this and other political news of the week, we are talking with Labor MP Pat Conroy from Newcastle and joining us in the studio is Liberal MP Craig Kelly. Thanks for being with us.
CRAIG KELLY: Great to be here on a Saturday morning.
PAT CONROY: Good morning.
PRESENTER: Craig, I'll start with you. The fact that exports contributed half of the quarterly increase. Should the Government really be taking as much credit as it is?
KELLY: Oh, absolutely. This is very good news for the economy. This shows the Government plans that we talk about, jobs and growth. It is not just a slogan. We are delivering it. As you said - over a million new jobs. We now have GDP growth at 3.1%. Unambiguous good news for the economy. Exports up. I know we have seen the thermal coal exports up. I'm sure Pat will be happy and celebrating that, coming from a coal region in Newcastle, but we can't be complacent. There is still a lot more work to do. This is why we need to make sure our tax rates are internationally competitive, this is why it's important we get all this tax plan through the Budget and we hope we have the Opposition's support.
PRESENTER: But Craig Kelly, I'm going to quickly follow up with you. Are the people in your electorate, in South Sydney, are they talking about this week's GDP numbers or are they talking about rising household debt, stagnant wages growth?
KELLY: It is not something at the front and centre of everyone's mind, but my electorate has, fortunately, one of the lowest unemployment rates in the nation. We are down at 2.5% for my area. We've seen growth in the area. People are getting jobs. The economy is growing.
PRESENTER: Are they getting more in their pay packet?
KELLY: This is the area that needs to be worked on. Look we have seen increases in profits admittedly and they will flow through to wage increases. You can't have higher wage increases; bosses paying them, unless the companies are making more profit. We've seen that profit increase. The Reserve Bank Governor has said himself, that he is very confident that will flow through to wage increases and this is why it's so important for the tax plan to continue, to get that productivity increase because ultimately that's the only way we can get real increases in wages if we're producing goods and services more competitively in the economy.
PRESENTER: Pat, is this news as good as Craig suggests?
CONROY: Well, it's not. I welcome the National Account figures, they're strong, driven by mining exports from places like Newcastle, but what Craig just espoused is this discredited trickle-down economic theory from the 1980s. That didn't work then.
KELLY: It's working. It is working. It's working now.
CONROY: They aren't working now. Increased profits aren't flowing through to wages. We have got stagnant wages. In fact wages are almost going backwards in some sectors. In the National Accounts figures, household consumer spending went up a miserly 0.2%. Households aren't spending because they are not getting the wage increases that would normally be associated with 3% annual economic growth, and for the first time in Australian economic history, more than half the workforce, more than half the people in jobs have jobs that aren't full-time, paying leave entitlements, providing security at work, so we've got healthy headline figures, but we've got massive underemployment where people want to work more hours and can't get it. They want more entitlements, secure jobs and they can't, and that means they can't spend money, can't plan for a future, can't take out a home loan and that's really concerning that we've got this hidden underbelly of the economy and this Government really hasn't done anything about that in the last 5 years.
PRESENTER: Talking about jobs and this seems as good a time as any, Craig Kelly, just to quickly talk about yours. You are facing a pre-selection battle in the seat of Hughes. How are you feeling about it and do you have the Prime Minister's support?
KELLY: Sure, look, every one of us, whether on the Labor or Liberal side, we have to stand every three years, put ourselves to our prospective parties and then put ourselves to our prospective electorates. I'm no different from that. I'm very happy to go through that process and I'm very confident standing on my record over the last three years of what I've delivered for my local community.
PRESENTER: Craig,Tony Abbott has suggested the Prime Minister should step in and make some calls. Would you like him to do that?
KELLY: The Prime Minister has given me a very glowing reference if I could say so and I'm very confident of where I stand today.
PRESENTER: Pat, we'll turn to you and your electorate. Pat, some news out of your electorate where they've had power shortages. Just tell us a bit about what's happened there?
CONROY: So, earlier this week we had some planned maintenance in a couple of power stations, but on top of that, we had a couple of our very old coal-fired power stations have major breakdowns of units, so Liddell, much controversial Liddel, lost power from a couple of units at Bayswater next door, a couple of its units went down and issues with Vale's Point, so much so the local aluminium smelter, the biggest aluminium smelter in the country that employs 1,000 people locally, was forced to curtail production and in fact they faced a huge issue of aluminium freezing in their pot lines and that reinforces the issue we've got around the energy crisis and the need to get urgent investment into new power plants We've got some very old coal-fired power stations up here, that are looking at being retired. The power companies are trying to retire them and replace them with new-generation, but we've got an energy crisis that this Government has presided over for the last 5 years and my workers, the 1000 workers at the Tomago aluminium smelter are right bearing the cost of their inaction.
PRESENTER: Craig Kelly, there has been talk about forcing AGL to sell its ageing Lidell plant. Why in a free market should a company such as AGL be forced to sell it's assets?
KELLY: Sure. A few comments. I thought I almost heard Pat say there that he supports the construction of a new coal-fired power station. Almost, Pat, I thought you were saying that, close to it. Look, the reality is we have record investments in the electricity sector. Last year, we had $11 billion invested in electricity generation but it was all in intermittent generation; but it was all in wind and solar. Yesterday when we had some of those older coal-fired power stations going off line, because the sun had set, the wind was low, so that was useless to us. We need to get that investment in base load production which we can only do in this nation through coal. This is why when we get to Liddell, why should there be State Government interference in the market? There is already massive government interference in this market through the subsidies provided to renewable energy. This year, $3.6 billion added onto consumers bills to pay for those subsidies. The reason why we are not getting the investment that we would get in base load coal fired power stations is because anyone that makes that investment has to get that return over 30/ 40 years. They look at the policies of the potential Labor Government. They said "they're likely to pull the rug from underneath us" and they don't make the investment. I believe; this is my personal belief, separate to others in the government, that we need to get in and we need to get investment happening in base load coal-fired power stations so that the workers in Pat's electorate and up there in the Hunter Valley and Newcastle at Tomago can have some security in their job.
CONROY: If I can jump in there.
PRESENTER: Sure, Pat.
KELLY: Coal-fired power stations, support them.
CONROY: I just want to make that point. The cheapest and most reliable replacement for our aged coal fired power stations is a combination of renewable energy backed up by peaking gas and pumped hydro or batteries. That is exactly what AGL is proposing to replace Liddell with, but Craig can't escape from the fact that they've overseen an energy policy crisis over the last five years which is impacting my region especially and the workers at Tomago, a thousand workers in Meryl Swanson's electorate of Patterson, in a neighbouring electorate of Hunter and mine at Shortland are suffering because this Government has just left the field of energy policy for the past five years. I agree with Craig we need to get a bipartisan energy settlement, but it can't be by an approach following narrow ideological agendas about the Government building new coal-fired power. That is unrealistic. It's more expensive. In the end, my households will pay more for power because of Craig's ideological obsession with coal.
PRESENTER: Craig, what about storage? Storing the energy when the sun is shining and the wind is blowing so it can be used when the sun isn't shining and the wind isn't blowing.
KELLY: Firstly you would have to have excess of those energies. Now we would have to have massive, massive investments, multiple times the amount of solar power and wind power than we have already for there to be excess of those power sources. We've seen the battery in South Australia, how actually inefficient that is to try to provide additional power to the grid. Yes, it may work for some ancillary services in the short term, but to provide additional power to the grid, I think that Obama's economic energy adviser said it is simply uneconomic.
PRESENTER: Now, can we finally go to the issue of foreign influence in Australia. Craig Kelly, can you confirm the report in The Australian today that the Department of Home Affairs has established a taskforce to safeguard Super Saturday's by-elections from cyber attack?
KELLY: I can't. I don't have insight into that personally, but I understand there is some concern about this. But when it gets back to national security and what we're doing in this space, it is very good to see that the Labor Party is trying to do this in a bipartisan method. If we are going to be dealing with this issue, we can't be taking pot shots at each other on security issues. We have to join, bipartisan, and that appears to be what's happening so far which I think is very encouraging.
PRESENTER: Pat, Labor is offering bipartisan support for this. Is that because Labor has any specific knowledge of threats to do with these by-elections at all, or is that just on a hunch?
CONROY: Well, I think the by-election issue is a furphy, to be honest. We had Christopher Pyne, the Defence Industry Minister who sits on the National security Committee of Cabinet, say that there is no link between this legislation and the Super Saturday by-elections. This legislation is important. We have supported strengthening regulations around foreign interference; protections around foreign interference. We do need to get the balance right to make sure we allow the press to oversee our security agencies along with Parliament to make sure there is no wrongdoing occurring and over the last five years what we've seen is the Attorney-General's Department and this government propose legislation that is very flawed and then the bipartisan Parliamentary Joint Committee on Intelligence has generally worked on those pieces of legislation, recommended amendments and then we've got a good compromise through Parliament. The data retention bill is an example where Labor then proposed additional amendments which the Government, to its credit, accepted. So there has been a reasonably bipartisan approach over the last five years but I think associating it with the by-elections is a bridge too far based on what Christopher Pyne said. The legislation is important. I'm yet to read the full Intelligence Committee report, it is 400 pages long; and I want to make sure that we preserve that very important oversight role of both Parliament and the freedom of press to make sure our security agencies are being subject to the scrutiny they should be, but overall, it is a good process of national security legislation.
PRESENTER: Pat Conroy, I'm just going to cut in. You said the report is 400 pages long. Is Labor going to make its way through that, and can you see Labor supporting that second bill in the next two weeks of parliamentary sittings?
CONROY: Well, on the first bill, which was the subject to the 400-page report with the 60 proposed recommendations and amendments, Mark Dreyfus has already indicated that we're inclined to support it. It is a bipartisan report from the Parliamentary Intelligence Committee. That all things being equal means that Labor will support it as it is, but ultimately it will need to go through our Caucus process where individual members of Caucus can look at it and make their own judgements. I'm confident that the bill will be supported. I'm yet to look at all the amendments to make sure they cover the areas the committee identified as shortcomings. On the second bill, which is around a registry of foreign agents; that bill in its original form was incredibly flawed. For example, every employee of the Salvation Army would have to register as a foreign agent. Every employee of News Limited and The Guardian newspaper would have to register as a foreign agent. The Attorney-General has proposed amendments to fix that up. We're yet to see all of them and we will look at it properly and make sure it is supported in a proper way. We support these strong pieces of legislation, but they have to be done properly.
PRESENTER: Pat Conroy, and Craig Kelly, We will have to leave it there. Thank you.
KELLY: Great to be with you