WEDNESDAY, 3 JULY 2019
DAVID BEVAN: Let’s welcome Simon Birmingham. Good morning to you Sir.
SIMON BIRMINGHAM: Good morning David.
BEVAN: Sarah Hanson-Young, Greens Senator from South Australia, good morning to you.
SARAH HANSON-YOUNG: Good morning.
BEVAN: And Mark Butler, Shadow Minister for Climate Change and Labor Member for Hindmarsh, good morning to you.
MARK BUTLER: Good morning David. Although I note you called Simon, Sir, and you greeted Sarah and I pretty averagely I might say. Not a great start.
BEVAN: You’re right, ay’ you Butler.
HANSON-YOUNG: I’m happy to be part of the people Mark.
BEVAN: Can we start with Sir Simon Birmingham?
BIRMINGHAM: I think we had that episode a few years ago and it ended badly.
BEVAN: It ended badly for everyone. Hugh White is not a man to be dismissed lightly; he will actually be featuring tomorrow in our book of the week. His latest book is How to Defend Australia. He is an emeritus professor at the ANU and he wrote Australia’s 2000 Defence White Paper, he was a former ministerial adviser to Kim Beazley and Bob Hawke. He says in his latest book that he’s not advocating nuclear weapons but we need to have a serious discussion in this country because we can no longer rely on the United States, nuclear weapons is an option that Australia needs to consider. Simon Birmingham?
BIRMINGHAM: Well I think the idea of nuclear weapons for Australia is one that we reject. It is one where Australia stands by the nuclear non-proliferation treaty. We have worked hard as a country to try and contain the spread of nuclear weapons. The treaty and adherence to it is by no means perfect but we would hardly have credibility in the position we take in relation to other nations such as North Korea and Iran, in the sanctions we impose and the efforts we take to contain and restrain them in the development of nuclear weapons. If we were suddenly to say “oh well none of those rules apply and we should just get on in developing them ourselves,” what we have instead said as a Government is to say we need to get our defence spend back on, we’ve done that. Under the last Labor Government it fell to some of the lowest levels in a decade, since about the 1930s. We’ve got it back up to the pathway to be about 2 per cent of GDP, to invest in our defence forces and our defence equipment. South Australians are well aware of that through the record $90 billion investment in naval capability. It’s about ensuring we are fit for purpose for the future.
ALI CLARKE: But isn’t the whole idea of you can have all the wonderful boats and subs in the world but if someone has a nuclear bomb you’re not going to stand a chance?
BIRMINGHAM: Ali there is an argument that can be put there, the mutual deterrence approach which was described through the Cold War era and otherwise is one that has stood there and one that nuclear armed nations essentially deter the otherside of ever using them by the virtue of the fact they have such weaponry. Thankfully it has been a deterrent in one way or another and we have not seen the use of such weaponry since World War II and we all hope and pray that that continues to be the case. The more nations that have more nuclear weapons around the world than the greater the threat they will be used and that’s essentially at the core of the nuclear non-proliferation treaty.
BEVAN: But everything you’ve said, Simon Birmingham, is predicated on the United States being our large, powerful friend in this region. And Hugh White’s thesis is the United States is declining that just doesn’t exist anymore, that paradigm doesn’t work anymore and we’ve got to work to consider how we would defend ourselves because there is going to become a time when we will not be able to call on the United States on their nuclear deterrent any longer.
BIRMINGHAM: I don’t accept that element of the thesis, David. The US remains a very significant global economy, the number one global economy, the number one global investor and indeed arguably the number one military power as well. Certainly other nations are on the rise as we see greater equality happening around the world in economic status, income status and attached to that in military capability as well. So others are on the rise but that doesn’t mean the US necessarily is on the decline and as we witnessed last Thursday the alliance between Australia and the US remains incredibly strong and so close. As was evident as the Prime Minister met not just with the US President but also the President brought along multiple members of his Cabinet to that meeting.
BEVAN: We might give Mark Butler a chance to respond. Mark Butler, do you think there is any merit in what Hugh White is asking us to consider?
BUTLER: No I don’t. I think Hugh White’s work is always really useful, it stretches our thinking and that is the job of an academic like Dr White, but while I think everyone would agree that the Asia Pacific region is a changing, dynamic region and I think anytime spent about acquiring a nuclear weapon would be a time wasted. Australia has a very proud position of leading global advocacy in winding back nuclear weapons, not expanding the number of countries that have them. I think changing that position now would really damage our standing in that advocacy but also be an entirely impractical position for us to take. I don’t think there’s a single nation in the world, including our allies, who would give any support whatsoever to us having nuclear ambitions. I think it would simply serve to simply destabilise the broader Asia Pacific region, but particularly our more immediate region. Yet let’s have a discussion about what the rise of China means for the region but time spent on discussing a nuclear weapons capability would be time wasted.
I also agree with Simon that I think Dr White is overstating the impact of the rise of China visa vee the American capability in this region. I mean this is not a black and white issue, there are shades of grey and I think the US is going to continue to be the most significant military power for a very long time, and continue to project substantial influence into the Asia Pacific region. So yes, there is a change underway; yes, it has substantial implications for Australia but let’s not leap to a position that is completely at odds with a long standing position of Australia’s which is to have fewer nuclear weapons in the world, not more.
CLARKE: Sarah Hanson-Young?
HANSON-YOUNG: Look I think the problem of the premise around our relationship and our ability to rely on the US is the most important aspect of Hugh White’s thesis and it is not good enough just to say because we have been allies forever, we have to actually look at it objectively and it is interesting while I don’t support the idea at all that we should enter into some kind of nuclear capacity here in Australia, and I see a number of experts have already rejected that idea, they do acknowledge we do need to think about things differently in terms of our relationship. Look I am worried about what is happening in our region. I look at what is happening in Hong Kong right now and I think of a fight of everyday people in Hong Kong for democracy yet here in Australia our politicians and our government is relatively silent. I think it is an insight into what the future is going to look like if Australia doesn’t have a more mature approach to foreign issues.
CLARKE: Simon Birmingham after the RBA cut interest rates to 1 per cent yesterday are you worried about our economy?
BIRMINGHAM: I’m not worried about our economy. Our economy has got great resilience and its economic fundamentals are strong. We’ve got faster economic growth in Australia than any G7 economy except for the United States. There are certainly pressure points caused by local factors beyond our control like the drought and the global trade uncertainty. All of those things are issues we know we have to keep responding to and ensuring we have enough resilience in our economy as possible. By getting more money into households pockets through both tax cuts in terms of fiscal policy and through interest rate reductions in terms of monetary policy is important in terms of keeping the economy going. That’s why our over $100 billion worth of infrastructure investment is really important in terms of keeping the economy going and it is why in my portfolio and to make sure we keep finding new trade markets to open into, notwithstanding the global tensions between China and the US.
BEVAN: Mark Butler, 1 per cent interest rate means the economy is barely on life support. It is easier for the Prime Minister and Simon Birmingham say that is why we need these tax cuts through. Is Labor actually going to get its act together and pass the tax package?
BUTLER: We need more tax cuts through that is the point we have been making and we need an infrastructure package brought forward. In South Australia, for example, only 4 per cent of the infrastructure package allocated to South Australia in the last Budget will be spent over the next four years. 96 per cent of it is off in the never never as is most of the tax cuts promised by Scott Morrison over the last election. So we are very worried about the state of the economy. Interest rates are now at 1/3 of the Global Financial Crisis, which Joe Hockey described as emergency levels. Economic growth is not going well, for three quarters in a row economic growth has been running in Australia at lower than population growth, which means that per head of population the economy is going backwards. Productivity growth has been negative for four quarters in a row, wages are running at below inflation. Phillip Lowe, the RBA Governor, last night again said that we needed something more than monetary policy to assist the economy, we need more fiscal policy put in place and we need more infrastructure spending to put in place.
BEVAN: But if Labor won’t pass a tax package.
BUTLER: We passed it last night through the House of Reps, we’re arguing-
BEVAN: Let’s not be cute here we’re talking about the Senate here; it has to get through two houses. If it won’t pass a tax package as clearly spelt out and endorsed at a federal election only a few weeks ago, what is the point of having elections?
BUTLER: The point, David that we have been making for the past couple of days, particularly yesterday in the Parliament, was we are complete agreement with the Government about the elements of the tax package that applies this year but the rest of the tax package is off in the never never.
BEVAN: Yes but if you wanted to decide tax you should have won the election.
BUTLER: The point I’m making is that under the Government’s tax package 1.3 million Australians get no tax cuts through this entire term of Parliament. We’ve argued for the 2022 tax cuts in the Government’s tax package to be brought forward because we’ve heard the calls from the RBA Governor for more fiscal policy to start propping up the economy. We’ve said today that two of the Government’s tax cuts should be brought forward to this year. That would be able to happen in a way that is consistent with protecting the projected surplus in the Budget for this financial year. We’ve argued that and we are going to continue to argue that in the Senate over the coming 24 hours.
BEVAN: Sarah Hanson-Young should the Government just start printing money?
HANSON-YOUNG: I think what they should start doing is actually start funding things that will actually create jobs and infrastructure spending.
BEVAN: But that’s what Donald Trump’s been doing, he’s been printing money.
HANSON-YOUNG: I don’t think that is the answer. I think the answer is actually spending the money in a more prioritised way so the money actually flows to the people who need it. This is the biggest problem the Greens have with the Government’s tax package, the bulk of the money, at the end of the day when it is all going to be spent, is going to benefit those at the wealthy end. The bulk of the money is going to those that are not struggling right now. Meanwhile, low income workers who haven’t had a pay rise in donkeys years continue to struggle. Those on unemployment benefits, those struggling on Newstart, there is no indication the Government is going to move to give them a rise in this term of government and meanwhile infrastructure projects that would create jobs, whether that is in public transport or helping to make sure the economy can transition to the jobs of the future through clean technology that is the type of job creation and nation building projects that should be funded. When interest rates are so low, as they are, this is the time to borrow money, create projects, create jobs and look with the decision that was made by the RBA yesterday you’ve got to wonder how on earth can the Liberal Party and Scott Morrison crow about being great economic managers – they’re not. They are driving the economy into the ground, they are giving tax cuts to their big mates and everyone else can suffer.
BIRMINGHAM: Try making that argument, Sarah, to the 1.4 million Australians who have got a job over the last five and a half years. Try making that argument to Australians who have us get the Budget back to a position of balance.
HANSON-YOUNG: What have you done to lift wages Birmo?
BIRMINGHAM: The first thing you’ve got to do to lift wages is actually have strong employment levels and that is precisely what we’ve managed to achieve. That is what we consider to be the single most important achievement of our Government, job creation and getting the unemployment rate down.
HANSON-YOUNG: What about helping people get a job by making sure Newstart is at reasonable levels so people aren’t living in poverty?
BIRMINGHAM: It is now conceivable that we are going to see rates of unemployment sitting at rates the RBA are suggesting full employment could even be achievable of a figure beginning with 4. That is not something Australia has seen before but it something we are working towards and have got real achievements and accomplishments, not just in creating those jobs but overwhelmingly full-time jobs, creating a record number of jobs for young Australians, getting women’s workplace participation at record levels as well. These are achievements that are part of economic strength in Australia it is certainly the reason why people ought to back the Australian economy. Yes, there are pressures we have to confront and deal with but I can tell you walking around talking to other nations, they all still want to know how Australia does it. How it is we’ve done 28 years of consecutive economic growth, created these jobs and brought our Budget back to balance and can afford to deliver tax cuts that Labor ought to just get out of the way and let through the Parliament to give the certainty to households and businesses so they can invest in the future.
CLARKE: Okay Sir Simon Birmingham, Sir Mark Butler and Madame Sarah-Hanson Young thank you for your time.