Transcript - ABC National - Polls Apart - 13 May

SUBJECTS: Budget reply speech; Kevin Rudd approval rating; Mining super tax, Bank lawsuit; UK election result

Fran Kelly: Joining me in the Parliament House studio this morning are Financial Services Minister Chris Bowen and the Manager of Opposition Business Christopher Pyne. Good morning to you both.

Chris Bowen: Good morning Fran.

Christopher Pyne: Good morning Fran.

Kelly: Christopher Pyne, let's start with you because the big news later today will be Tony Abbott's budget reply speech, when he gets to his feet in the house and delivers his budget reply. Can we expect a political uppercut - Abbott a former boxer?

Pyne: Well I think what you can expect Fran is that Tony will outline why people should be voting for the Liberal Party in the next election rather than the Labor Party. I'll think he'll explain why the Labor Party doesn't deserve to be re-elected; that the waste and mismanagement of the Government precludes them from winning second term. I think he'll announce that we'll be making some tough decisions about spending because at least one party in this parliament needs to be fiscally conservative, genuinely in both word and deed. The problem with this budget and the problem with this government over the last three years is that you can't believe what they say from one minute to the next.

Kelly: Well if Tony Abbott's going to be believed, he'll have to be putting some detail out there. I mean the Opposition's not going to support the mining tax. He'll have to say which of those programs that it funds will be cut or how he's going to fund them. So we'll we seeing real programs, line by line programs that are going to be knocked down?

Pyne: Well, we're not going to announce our own budget tonight. That's not the job of the Opposition, that's the job of the Government to have a budget. And it's the job of the Government to sell their budget which their not doing a very good job of this week. But our job tonight is to outline why you can trust the Coalition to deliver serious fiscal responsibility rather than the government, and he will be announcing specific measures, which I think will resonate with the public. I think we are in a serious crisis situation with this Government. The mining tax, which they are putting on the resources sector, has the capacity to enormous damage to our economy and to jobs.

Kelly: Ok and I'll come to the real budget, not the budget reply in just a second. But before I leave this, you've been very integrally involved in the attack on the Government's school building program. There's a lot of money not spent there. Is that an area where you think you can trim back some money?

Pyne: We have said that what we will do with round three of the Building the Education Revolution is give the money that's still left directly to the schools for them to manage so that they can get value for money in the same way as we did in Investing in our Schools. Now, if there's any savings that can be made out of that, we'll have to wait and see.

Kelly: Ok, well Chris Bowen's waiting patiently, but really Christopher Pyne; pretty ferocious attack on this budget. The budget reveals that the Australian economy is the best performing economy in the Western world. You've got to be joking saying it's a failure haven't you?

Pyne: But Fran, you can't believe what this Government says in this budget like you can't for the last three years.

Kelly: It's not just the Government saying it; its treasury giving us these forecasts.

Pyne: Let me just give you one example Fran. They've said on the one hand that the mining tax will have no impact on the resources sector in terms of investment. This budget is predicated on a 20 per cent increase in investment in the mining sector every year for the next three years. And yet they're putting a new tax on the mining sector and in the paper this morning treasury is saying a slow down in the mining sector would not be a bad thing for the national economy. Now either it's going to grow by 20 per cent a year for the next three, or it's going to slow down, but it can't be doing both at the same time.

Kelly: Chris Bowen?

Bowen: Well Fran, when you hear an Opposition reduced to attacking the modelling, reduced to attacking the treasury modellers, you know that they've lost the argument on the budget. And that's particularly the case with this Opposition because they've got form. Because last year they said our forecasts and projections were too optimistic. Now they're saying they were too pessimistic. They're saying this year again they're too optimistic. I mean, these are conservative forecasts done by the experts in the treasury and are broadly in line Fran, with the private sector forecasts on all those issues.

I mean, the Opposition's attack is all over the place. They seem to think that terms of trade is function of domestic activity. Terms of trade is a function of international activity and international demand. They've completely confused that. So Fran, when you hear Joe Hockey and Christopher Pyne reduced to saying the Treasury modelling has got it wrong, you know that means they are reduced to accepting that the Government has returned the budget to surplus three years ahead of schedule and ahead of any other major advanced economy. And their debt and deficit campaign is now exposed for the fraud that it always was.

Kelly: Is your "Achilles Heel" though economic management. I know that the Prime Minister made it perfectly clear yesterday that at this election you'll be talking about a contest of responsible management. Is your pitch on that fatally flawed due to the home insulation program?

Bowen: Not at all.

Kelly: Why not?

Bowen: We are more than happy to run this campaign on economic management as the Government who steered the economy through the Global Financial Crisis and has the best performing major advanced economy in the world; as opposed to an Opposition which is all over the place and doesn't have a coherent economic narrative. Fran, if we were two years ago predicting that the Australian economy would do as well as it has done, then there would be people questioning us and frankly questioning our grip on reality. And the Australian economy through the early and decisive action, the stimulus that we took, has been the envy of the world, through what has been the most difficult economic circumstances in 75 years. And the Opposition in their quiet and honest moments would recognise that, but of course they won't publicly.

Kelly: But it's not just the Opposition having a go at you. I mean the mining tax; of course the miners will speak out about it. No one wants a new tax. But Rio's chief Tom Albanese yesterday overnight speaking to a world mining conference really criticised, heavily criticised your proposed profits tax and says it's a worst case scenario.

Bowen: Well, you're always going to expect that Fran. We expected that when we went down this road. We knew that the campaign would be ferocious. I mean, how could it not be? You've got an industry which has a very strong view, a very well resourced industry by the way and we knew that. And these people who say we're not prepared to take on tough constituencies; I mean we've just taken on probably the best resourced and toughest constituency in the country because we think it's in the national interest. This is an argument that's got a long way to go, but it's a good argument to have because it's putting that national interest first. It's also, by the way, putting the mining industry on a much more efficient and equitable tax treatment, which many of them have been calling for, for as long as I can remember.

Kelly: All right. Now we argued a lot about that one last week, so we will move on. This week, this budget week started horrifically for the Government, because another poll showing the Government now neck and neck with the Coalition. Christopher Pyne, how confident are you about winning this election?

Pyne: This election could be won by the Opposition, but obviously we start as very much the underdogs because no Government has lost after one term in 78 years.

Kelly: Tony Abbott said yesterday he thinks you can win this election.

Pyne: If we win the election it will be a remarkable feat. It will be a record breaking feat. We obviously are the underdogs; the Government is clearly the favourite. But what has changed over the last five months is that people have stopped believing Kevin Rudd because he's had more roles than Michael Cane, Fran. One minute he's a fiscal conservative, the next minute he's a profligate spender. One minute he's a Liberal Democrat, the next he's a Christian Socialist. Last night on the 7:30 report he had his angry eyes on. Kevin Rudd is playing out the role of Prime Minister. He's not actually up to the job of being Prime Minister and the Australian public have worked that out.

Kelly: Chris Bowen, is Kevin Rudd your weak link? Is it the Prime Minister? I mean the polls have shown the Prime Ministers approval rating has just plummeted.

Bowen: Absolutely not. Look, this election is going to be tough. We always said it was going to be tough. I've on this program several times it's going to be tight. I don't think there is a favourite; it's going to be tight. The Prime Minister is preferred Prime Minister against Tony Abbott by I think about 15 points. That is a....

Kelly: And falling fast.

Bowen: That's about the standard. That's what John Howard I think was ahead of Mark Latham about the same point in the cycle. I don't think we need to.....

Pyne: Prime Ministers are always ahead of the Opposition Leader.

Bowen: That's not actually right Christopher, but.....

Kelly: I wonder though whether you thought you'd be going into an election with the timing being such that you would be slapping a mining profits tax, the two big resources states, Queensland and WA where you need to win seats or hold seats to win Government. Did anyone think that through?

Bowen: Well Fran, you can't make decisions on these things based on that sort of time frame in mind. If you've got a recommendation from an independent tax review to say taxation in mining isn't working, is broken, it's the most inefficient tax in the country, it's not fair. Then you don't say, "That's all true, but we're going to put it in the too hard basket." Because that's what Government do in election years. You say, "Ok, this is going to be tough. Difficult conversation with the mining industry, with the Australian people, but we're up for it." That's what you say and that's what we've done.

Kelly: Ok, we're almost out of time. Chris Bowen, briefly from you; we just heard about the class action against the banks. I'm wondering if you're supporting that?

Bowen: We don't support one side or the other in a court case, Fran. When I was Consumer Affairs Minister we introduced fair contract laws which Craig Emerson has taken up with gusto, and they apply to banks. I think that's part of the reason we've seen some changes in bank pricing practices. But this is a court case and Government's don't weigh into court cases one way or another.

Kelly: Christopher Pyne, I imagine you've been watching with interest in your spare time the change of Government in the UK; generational change. Leaders, the Liberal Democrat and the Conservative leader are 43 years old. Could you ever see yourself in Coalition, say with Bob Brown as the equivalent?

Pyne: I think the Coalition in the UK is going to be difficult to manage. I've got no doubt about that I mean, it's the first Coalition Government since the Second World War, and there are very firm differences between the Conservatives and the Liberal Democrats. The Liberal Democrats are probably more like the old Australian Democrats. They're more sort of Don Chipp type people than they are Greens though, and I think that will be easier to manage. But it's very courageous of both Nick Clegg and David Cameron to go into Coalition, but it's important for Britain that they get this right. It's very important for Britain and for the Western world that Britain is strong again.

Kelly: Courageous. It's one of those Yes Minister sounding words isn't it? Christopher Pyne and Chris Bowen, thanks very much for joining us.

Ends