Australian Agenda
31
st
October 2010
Greg Hunt
Sky News
Australian Agenda
Greg Hunt
31st
October 2010
Interview with Shadow Environment Minister, Greg Hunt
Australian Agenda program, 31st October 2010
Peter Van Onselen: Hello and welcome to Australian Agenda. I’m Peter Van Onselen.
Well, the opposition was very much in the headlines this week, not least of which for
some discussions around banking, but also on policy fronts that were debated in the
parliament concerning climate change and of course the environment. We’ll be joined
shortly to speak on these issues with the Shadow Environment Minister, Greg Hunt. But
first let me introduce the panel, national affairs correspondent for The Australian,
Jennifer Hewett; national political correspondent for News Limited, Steve Lewis; and The
Australian’s editor-at-large, Paul Kelly. We’re joined in the studio now by the Shadow
Environment Minister and climate action minister as well, Greg Hunt. Thanks for your
company.
Greg Hunt: Good morning.
Peter Van Onselen: Can I go straight to the issue of Tony Abbott taking three times to
refuse to endorse Joe Hockey? I know it was earlier in the week, I know he then came
out ten minutes later on radio and did endorse Joe Hockey’s nine point plan. Why didn’t
he do it those first three times?
Greg Hunt: There is very strong support, both from Tony and from the opposition more
generally for what Joe’s saying. We’ve set out two very strong principles for national
direction.
Peter Van Onselen: Why did it take so long to get to that strong support?
Greg Hunt: Tony made that very clear. He does support it. He was focused on his
message for the moment. That was a momentary issue. What we are very clear on is
two fundamental principles which have come out of the week. One is competition is the
key to reform to protect consumers. We lost the second tier banking sector, we lost the
second tier lending sector, whether it’s from the non-banking financial institutions
through the course of the global financial crisis to a very large extent, that’s eroded
competition, that’s created moral hazard. Therefore we need to reinstitute measures to
support competition, precisely the opposite of regulation – greater competition. Then the
second thing is simplification, a direction of simplification of the tax system and
simplification of bureaucracy. That was the subject of Tony’s Deakin lecture. So two
very powerful principles, two very powerful speeches, one from the Shadow Treasurer,
Joe; the other one from the leader, Tony Abbott.
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Peter Van Onselen: What came first though, the popular side of this, because it is
popular in the community, the position that Joe Hockey’s taken, or the policy imperative?
Also, has the Liberal Party or has the Coalition done any research on this which would
lead me to believe that the populism might be pretty important to you?
Greg Hunt: I think we go back a long, long way, back to the Campbell enquiry over 30
years ago. This notion of finance sector competition and reform is part of our DNA.
What we have agreed upon through the Henry Review, we actually gave strong support
to the process of the Henry Review, simplification of the tax system, and related to that
is competition within the banking system. These are two arms. So that is an absolute
fundamental. We also happen to think that the public wants us to hold the banks to
account. There’s no question about that and we’re aware of that from our work.
Steve Lewis: Greg Hunt, is there not a danger though for the Coalition, the party that
has championed deregulation of the economy, that you start sounding a little bit like the
Greens, Bob Brown who wants to put a cap on CEO wages, etcetera? That Joe Hockey
sounds as though he’s talking about putting another layer of regulation using
government levers to regulate the banks?
Peter Van Onselen: That’s certainly what Don Randall thought.
Steve Lewis: Is there not a danger that you’ve gone too far with the rhetoric at the very
least?
Greg Hunt: We need to be very clear on this.
Steve Lewis: You haven’t been very clear. The Coalition has not been very clear.
Greg Hunt: There are three ways that you can effect competition and effect the
protection of the consumer. One is you can regulate. We rule that out clearly and
absolutely in terms of interest rates, margins, salaries. Let the market compete. The
second is through providing a more competitive set of arrangements. These are the
types of things which Joe set out in the nine point plan. The third is community pressure
which is a legitimate element.
Steve Lewis: Absolutely.
Greg Hunt: We’re focused on the second of competition and the third of community
pressure. We are not going down the path of regulation.
Steve Lewis: Let me ask you this specifically. When the nine point plan was discussed
within shadow cabinet, were concerns raised by yourself or other members that the
optics of this was the Coalition wanting to put another layer of regulation, or moving
towards a Greens type approach to bank bashing?
Greg Hunt: I think the story that came out this week was wrong and incorrect. Let me
be absolutely clear on that. The mood of the cabinet has been very unified around a
shadow cabinet. Let me not get ahead of myself! It has been very unified around the
notion of competition, that we want to establish a strong competition agenda. That
means, just as Graeme Samuel said, from the ACCC, that we need to be aware of any
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price signalling by the banks; just as the IMF said, we need to look to see if we can
support greater competition in the second tier level.
Jennifer Hewett: But Greg, it seems to me that everyone says yes, competition’s very
important, how could you disagree with more competition in the banking sector?
Everyone seems to be remarkably short of any ideas of how to actually increase
competition, including the opposition.
Greg Hunt: In the nine point plan, Joe Hockey drew on one of David Murray’s ideas in
relation to looking at what New Zealand did with the Kiwi Bank. We are not proposing a
license for Australia Post. What Joe did is he made reference to David Murray’s idea
that perhaps Australia Post could act as an outlet on a competitive basis for some of the
second tier lenders. That’s an interesting example. It’s an underutilised national asset
in a space which needs to be advanced. We’re putting that out as an idea for
discussion. It wasn’t ours originally. We wish we could claim it, but it’s a very, very
sophisticated member of the banking community, one of the heads of the big four
previously, who’s proposed it as a competitive measure.
Paul Kelly: If we just look at what the banks have been saying, to what extent do you
think the banks have misread the political system and misread public opinion in terms of
what they’re been doing and saying recently?
Greg Hunt: I think the mistake, not from everybody, but from Mike Smith, I’ll be
absolutely clear on this, is that there is no sense of the social compact, that having
received a bank guarantee which was a corollary to the good work of two decades in
establishing prudential regulations which meant that Australia did not follow down the
crisis path that the rest of the world had, there is a duty to work in concert with the
public.
Paul Kelly: But what does this mean? What does this social compact mean? This is
some new concept. What does the opposition mean when it talks about this?
Greg Hunt: I think it is a duty of responsibility to ensure that having received support
from the government there is not an absolute approach that they are beyond criticism.
Paul Kelly: In other words, reassess and take a profit cut?
Greg Hunt: I think that they have to simply recognise that they are not immune from
criticism.
Jennifer Hewett: That’s quite different.
Peter Van Onselen: How do you enforce the social compact?
Greg Hunt: There’s a very simple way. There are things which are for legislation, and
then there are things which are for debate. I am a huge advocate of free speech. If
somebody’s critical or opposite, I’ll stand up for their right to do that. Our right is to be
critical if we think that somebody’s failing in their social obligations, but at the same time
to say to the banks, you have a legal right to do what you’re doing, but think as to
whether or not there are certain points beyond which you should not go – fair, legitimate
and reasonable public debate.
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Jennifer Hewett: But isn’t this just kind of convenient political rhetoric, social compacts
being responsible? What you’re really saying is banks should actually reduce their
profits.
Greg Hunt: We are saying that there should be competition to drive that process. That’s
the key thing. What are the two or three key initiatives of the nine point plan? One is a
son of Wallis, grandson of Campbell enquiry into the national system. Two is the ACCC
price signalling-
Jennifer Hewett: Are you saying that chief executives can’t actually talk about the
pressures on them in terms of pricing?
Greg Hunt: No, of course they can.
Jennifer Hewett: Well that seems to be the issue, that you’re not allowed to have price
signalling. Somebody’s price signal is somebody else’s information, the public’s right to
know.
Greg Hunt: I would look to what the head of the ACCC said; so that’s not us, the person
in Australia who is charged with overseeing competition. When the head of the ACCC
says that there is a price signalling issue amongst the four majors, then we take that
seriously. I take the chairperson at his word.
Paul Kelly: I wonder if we could just move to your portfolio now. You’ve followed the
pink batts scandal very carefully. I think you’re proposing to introduce a private
member’s bill concerning this. What are your proposals here?
Greg Hunt: There are two things here. We’ll be releasing tomorrow a private member’s
motion calling on the government to immediately disclose the full failure rate under the
pink batts program. Secondly, we will be introducing into the parliament in the coming
fortnight of sittings a private member’s bill seeking a judicial enquiry. The reason we
want a judicial enquiry into the home insulation program is the Auditor General, and this
is not a criticism, is only empowered to investigate the operation of the department in
implementing the program, not in a position to investigate the link between the four
tragedies and the program, not in a position to investigate the provenance, the nature,
the quality of the policy and the advice received by the ministry from outside of the
executive, and not in a position to investigate the executive. This has been the greatest
failure of public policy in a single program since the Second World War, in my view. It
must be the subject of a full judicial enquiry.
Paul Kelly: Do you believe that you can get the support of the parliament? You can get
the support of the Independents and the Greens for this?
Greg Hunt: I don’t presume their support. I will offer them a chance to have input into
the substance of the bill. They will not be given a fait accompli, and I will speak with
each of them and make myself available in advance of the parliamentary term and
during the period of the fortnight.
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Steve Lewis: With the motion that you’re releasing tomorrow, do you need to get the
support of the parliament to get that level of information, the failure rate? Do you need
the actual numbers in the parliament to get that through, presumably?
Greg Hunt: The government should proceed immediately.
Steve Lewis: They’re not going to. They’re not going to give you the intelligence motion
that you want unless you get the numbers in the parliament.
Greg Hunt: The Prime Minister should disclose the rate of failure. If that doesn’t occur
then we’ll continue with the motion to immediately have the Prime Minister and the
Minister Greg Combet table the rate of failure under the home insulation program.
Steve Lewis: How is that different to what we’ve already had with the Auditor General’s
report for instance? What do you expect to emerge from this, if you were successful?
Greg Hunt: The Auditor General was given figures up until March, that was 13,000
investigations of homes, and had a 29% failure rate included in that. After that the
figures were turned off. We now know that there have been 100,000 inspections of
homes. We believe that the figure for failure is extremely high.
Steve Lewis: Higher than 29%?
Greg Hunt: I know it’s a high figure. I’ve had that information during the course of the
last month.
Steve Lewis: Higher than the 29%?
Greg Hunt: But I don’t know whether it is 29% or it’s higher or lower, but I’m told that it is
a very high figure. This is public safety information which is being disclosed from the
public. The message is that the Prime Minister and the government have failed to learn
any lessons from the home insulation program.
Paul Kelly: Do you think the Greens and the Independents have got an obligation to
support you to get out this information, which clearly seems to be in the public interest?
Greg Hunt: I would hope that the Greens and the Independents do support us. I believe
that this information should be in the public, and I hope that they will support us, and I do
not believe that there’s any barrier to them supporting us. But it is up to me to make the
case to them, and if they choose to decide otherwise, it is up to them to explain why they
would oppose the release of public safety information.
Paul Kelly: If we can just move to pricing carbon, do you think this parliament will
legislate to price carbon?
Greg Hunt: I think it is completely uncertain what Julia Gillard will do. She was the
person in Australia who convinced Kevin Rudd not to proceed with the ETS. She was
the person who in Australia who on election eve made her last day pitch that she would
rule out a carbon tax. So I don’t think that she has any commitment in this space. I think
she has a sort of political desire to be seen to do something, but she is deeply afraid of
the power price impacts. In the spirit of transparency, this week, having laid down the
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Henry Review modelling, the Prime Minister must release the Treasury modelling into
the electricity price effects for ordinary Australians of a price of carbon.
Paul Kelly: How important is that modelling?
Greg Hunt: The modelling is critical. We know from Kevin Rudd’s announcement on the
3rd February of this year, the second day of parliament, that there would be a 19%
increase in power prices over and above any other impact in society in the first two
years. We know from the NSW IPART that there would be a 25% increase over the first
three years. But beyond that there is total silence, and many people have talked about a
doubling of prices. The public deserves to know if their electricity prices will double.
Jennifer Hewett: But obviously electricity prices are going up anyway, and one of the
things that the generators say is that without a carbon price, without some certainty on
where carbon prices are going, you’re not going to have the investment in new power
generation which the country needs.
Greg Hunt: I think there are two things here. We know from the NSW Independent
Pricing and Regulatory Tribunal that there would be an approximately 35% increase in
power prices without a CPRS. With any form of emissions trading scheme or carbon tax
there would be a 60% price rise. So it’s an additional component over the first three
years of 25% on top of anything else. The second element is the power sector is now
beginning to raise alternatives to an emissions trading scheme or a carbon tax. Both of
those are forms of the same way of pricing the release of carbon. They are beginning to
look at ideas such as a gas/electricity target or clean energy target. They’ve said they’ll
come back to us. We’re not proposing that at this stage, but we would like to see what
the power sector has.
Steve Lewis: Are you attracted to something like a clean energy target? How far are
you, the coalition, in terms of formulating your alternative approach? Because you will
have to come up with a formal alternative approach to whatever the government comes
up with.
Greg Hunt: The direct action model, which in technical terms is a carbon buy-back, it’s
abatement purchasing, operates on a market basis, an auction basis. That policy is a
bedrock policy that remains in place, untouched, and we have complete commitment to
that.
Peter Van Onselen: You must find it very hard though. You were the Shadow Minister
that under Malcolm Turnbull’s leadership was really side by side him in the trenches
trying to sell your party on supporting the emissions trading scheme, as he crossed the
floor on ultimately. But now you’re selling Tony Abbott’s direct action plan. That must
be difficult for you?
Greg Hunt: No, my focus has always been firstly action on climate. I’m genuinely,
deeply concerned, passionate. I believe it’s an issue. I would never trade that in. It is
fundamental to who I am. The second thing though is that I believe in a market
mechanism, but there are two different approaches on market mechanisms. There’s the
production tax, where you charge for everything that’s put out, or there’s the abatement
pricing, which is a little bit like laser surgery as opposed to chemotherapy, where you
simply target the lowest cost emissions. I argued for that four years ago in a speech to
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the Centre for Independent Studies, and I have always thought that that was a
mechanism which went right to the heart of using the market to reduce emissions in the
cheapest possible way.
Peter Van Onselen: So what was the little man in the back of your head telling you
when Malcolm Turnbull was pushing the ETS? Was the little man telling you direct
action is the better way to go, but you kept your thoughts to yourself? Or is the little man
in your head now telling you that Malcolm Turnbull was right, but you’ve got to support
Tony Abbott because he’s the new leader?
Greg Hunt: The honest answer here is I did set out very clearly my preferred approach
four years ago. I did that before either was on the table as Coalition policy, and it came
at some cost, I have to concede, which was the idea of a lowest cost approach of carbon
buy-backs, because it’s how we deal with water, it’s how the UN deals with carbon, it’s
how NSW, Victoria and South Australia all deal with carbon, although they are much less
formed systems, with the exception of NSW. So my approach has always been to
support a market mechanism. My argument, and it’s very interesting if you go back over
the transcripts of the last few years, my argument has always been that the ALP
approach, firstly to drive up power prices and secondly, as they then had for quite a
while, to drive up petrol prices, is to use enormous pressure on essential services, which
is very ineffective, because prices have to rise enormously before there’s any real
impact.
Paul Kelly: I’d like to ask you about the debate about Green preferences inside the
Liberal Party. The Liberal Party has got a generic tactical decision to take at state and
federal elections about the distribution of its preferences, whether it gives those
preferences to the Greens or to the Labor Party. In a general sense, how do you
approach this issue? And what do you think the Liberals should do?
Greg Hunt: My view is firstly pragmatic rather than ideological. They are both parties of
the left and neither of them is our support. My approach is that it should be a decision
for the administration, either at federal level or in a state election, that you don’t need
parliamentary people debating it in public. So the approach is let the administration
decide. But in general, I know their view is if they want our preferences, they should be
giving something back. That relates to both sides.
Paul Kelly: But the Greens have indicated that they’ll give you nothing.
Greg Hunt: Then that’s a risk they take. I’m not going to telegraph the punches in
advance. I have been very involved in this, but at the end of the day it’s for the
administration.
Peter Van Onselen: But you would be comfortable, if the Greens don’t give something
back, in preferencing Labor over the Greens?
Greg Hunt: We will make tactical decisions. It’s not an ideological issue as far as I’m
concerned.
Steve Lewis: It’s quite a different approach you’re taking to the one that John Howard,
for instance, advocated this week. He was saying the Greens are far worse than the
Labor Party, and I guess by implication that the Coalition or the Liberal Party should
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always look to put the Greens last when it comes to that choice. You’re saying
something quite different.
Greg Hunt: My approach is to be practical and pragmatic on this.
Steve Lewis: How much support do you think that approach has got within the senior
ranks of the party, both political, but also administrative?
Greg Hunt: Let’s watch what happens in the Victorian election. I think that it’s
reasonably well understood at the senior levels in Victoria what we’ll be doing. But it’s
not for me to pre-empt the decision of the Victorian party.
Peter Van Onselen: It is a big issue though, isn’t it? Because it’s effectively an issue
that not getting something back from the Greens cost Tony Abbott the prime
ministership. I’m thinking in particular of Jason Wood in Latrobe. He lost his seat. He’s
a noted environmental campaigner on a range of issues. But he did not get Green
preferences in that seat, and the Liberal Party didn’t demand Green preferences, despite
for example preferencing the Greens in the electorate of Melbourne.
Greg Hunt: With respect, I disagree, because what I’ve done is looked at all of the
Green preferences in every seat across Australia. Where preferences were undirected,
we would get about 20%, 21%. Where they were directed, there was about a 4%
difference. So over 10,000 votes, that’s about 400 votes. It didn’t make the difference
and it wouldn’t have made a different preference direction in any single seat in Australia.
So it made a difference to the overall gross two party preferred, but the distribution of
preferences, if they had been undirected in any of the marginal seats, would not have
affected the result in any single seat on our best estimate.
Paul Kelly: You’ve just made the argument, haven’t you?
Greg Hunt: It depends upon whether or not there are close seats, however. On this
occasion there was no seat under I think it was about 0.4%. In the last parliament there
were a number of seats within a couple of hundred votes.
Paul Kelly: Don’t you think it’s extraordinary, this idea that the Liberal Party should
preference Labor and keep in power Labor governments which are prepared to enter
into alliances with the Greens?
Greg Hunt: Our goal is to defeat the Labor Party under every circumstance. The
question then is how you can best do that. If they have to allocate more resources to
fighting the Greens in their heartland seats, that means that they have less resources to
fighting us in the marginal seats.
Peter Van Onselen: Mr. Hunt, before we let you go, one final question. There’s a report
on the front page of the Sunday News Limited papers today about an unnamed Labor
minister, who has apparently done something untoward. There are no details to go with
it from that, partly because in the story it says that the minister said he would sue if he
was named. What’s your view generally on the issue of politicians’ private lives? Are
they public business?
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Greg Hunt: I am very, very old school on this. I think that Australia is different to the
United States and different to the UK. Australians are much more relaxed. If it is
affecting somebody’s public office, then it’s a matter for public concern. If it’s not
affecting public office, I think Australians are pretty low-key. We’re perhaps not as
relaxed as the French are, where it’s almost obligatory that something goes on!
Steve Lewis: Makes politics more interesting.
Greg Hunt: Well it does. I think we have a good healthy balance here, and if it’s not
affecting public life, I don’t think we should be talking about it. The one interesting thing
out of this story, we don’t know who it is, we don’t know what they’ve done, we don’t
know who’s making the case, so all of that’s pointless, but it does indicate internal in-
fighting within the Labor Party. It’s the Labor Party that is pushing around an attempt to
topple one of their own ministers, which could have catastrophic impacts for them as a
government. So there is clearly division within the house.
Peter Van Onselen: A little bit like the story that may not have been true, but was
nevertheless backgrounded by a shadow cabinet minister about what was going on
inside shadow cabinet, with Joe Hockey arguably being slapped down by Julie Bishop.
But we will leave it there. Shadow Environment Minister, Greg Hunt, we appreciate your
coming and joining us on Australian Agenda.
Greg Hunt: It’s a pleasure.
Peter Van Onselen: We’ll be back in a moment with a panel discussion about the
week’s events in politics in Canberra this week.
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