DAVID SPEERS: You're watching PM Agenda, welcome back to the program and let's bring in our panel. Joining us this hour the Special Minister of State Gary Gray and the Shadow Parliamentary Secretary to the Opposition Leader Arthur Sinodinos. Welcome to you both.
GARY GRAY: G'day.
DAVID SPEERS: I want to start with the opinion polls, because in fact we’ve heard not just from some of your colleagues but Tony Abbott as well today that there's too much navel-gazing about polls. We should focus on plans or policies as Labor ministers have been saying. What role, Arthur Sinodinos, first to you, what role do opinion polls play in reality?
ARTHUR SINODINOS: I'm tempted to say to your intro that policies are a bit like your greens and you're sort of meat and veg I suppose and then polls are the dessert. And often a lot of people want to go straight to the dessert.
I've always found over the years there's great fascination among politicians about polls. And even though everybody says the right things which is the poll that counts is down the track when people actually cast an election vote. The fact is we do look at polls because at any point in time they are a snapshot of how people may be feeling. And if they're done scientifically and rigorously they do have a certain standing.
Now that said, no one wants to spend their whole time commenting polls, right? Because we've got to be able to sell a message, and, dare I say it, a narrative. But we do look at polls and the polls at the moment are suggesting problems for the Government. They're suggesting the Coalition is in better shape than the Government.
But other than that what people might do at the moment in terms of their vote, they don't necessarily predict where people will be in seven or eight months.
DAVID SPEERS: That's the point isn't it? They don't tell you what's going to happen in six months, but right now.
ARTHUR SINODINOS: Well, you tell me everything that's going to happen between now and the polling day.
DAVID SPEERS: But, Minister, do you agree with that, they are a snapshot of what the electorate's thinking right now. And right now they have concerns about the Government?
GARY GRAY: Yes undeniably the polls give you a snapshot at that time at which they're taken and it's too trite to say the only poll that matters is on election day. It does remain the truth. But there's a lot more that will happen between now and September fourteenth.
DAVID SPEERS: So what then do you think this News poll and the Nielsen poll last week are telling us?
GARY GRAY: I think unambiguously they're telling us that if there were an election this Saturday the Government would be defeated. I think it's also telling us that the rate of reform and change over the past few years has been very rapid. And that causes people to have concerns. The world is facing substantial troubled waters over the course of the next few years and people feel uncertain.
But I think it's also telling us that at this time of the cycle, when I reflect back, the first quarter of 2007 the then government was trailing in the polls. In the first quarter of 2004 the then government was trailing in the polls. In the first quarter of 2001 the then government was trailing in the polls. The first quarter of 1998 the then government began to trail in the polls following the waterfront dispute. So this is usually a time of year at which people vent their concerns and opposition to government and we're seeing a lot of that.
But that's not to deny that the polls are saying serious things for the Government, I don't resile from that.
DAVID SPEERS: Well, just on this historical context and, Arthur Sinodinos, you've been heavily involved in many campaigns and, you know, come from behind, in John Howard's case on many occasions as well. Is the historical analogy correct?
ARTHUR SINODINOS: Governments are in a position, using incumbency to come from behind. It depends how big the gap is. One of the differences is between the years that Gary talks about and say '07 is that in '07 the gap opened up and didn't really close. It was the same in 1995 when Howard became leader of the opposition after Downer. So there are some periods when people have sort of made up their minds for whatever reasons beforehand.
DAVID SPEERS: And you reckon we're in one of those periods?
ARTHUR SINODINOS: And there's a trigger - no I'm not necessarily saying that. But I'm just saying there are two ways to see this. What the Government will do between now and the budget and after the budget is do the best they can to repair their position, as we did in 2001. And then hope something else turns up which may pull them over the line. In our case we'd repair that position to the point where in 2001 we won a by-election in the outer suburbs of Melbourne.
DAVID SPEERS: And clawed back from there.
ARTHUR SINODINOS: No one expected - and we clawed back from there. So it depends what work the Government can do between now and then and whether the Coalition can keep focused and on the front foot doing policy and not making mistakes. This is a hard time for the Coalition because you've got to make sure you don't take anything for granted. Act every day as if your back is to the wall.
DAVID SPEERS: And not trip up?
ARTHUR SINODINOS: And not trip up.
DAVID SPEERS: We might get to one of those potential trips shortly. But getting back to 1996, of course, Gary Gray, you were the director of the Labor campaign as Paul Keating was about to lose to John Howard.
Laurie Oakes reminded us in his column over the weekend that you had what was called the embassy rooftop strategy to protect as many seats, staffers and even documents that you could, knowing that a loss was about to happen and you were about to go into Opposition. Is it time for a similar helicopters on the rooftop strategy?
GARY GRAY: No, I don't think it is. But I think - it's always time for governments to govern as well as they possibly can. And that's what a government must do at all times. That is what the current Government is doing. It's true; the polls are not good for the Government. That's absolutely clear and only a fool would suggest anything other than that. But it's also time for the Government to be about the serious business of governing and that's what we're doing.
DAVID SPEERS: Just before we leave this though you did say a little earlier that there are messages for Labor in the polls. What are they?
GARY GRAY: I think one of them is we have to do better at explaining why we do what we do. I think that's a clear and obvious thing. And I think the Prime Minister's initiative of getting out to Western Sydney, spending time and clearly doing that is a good initiative. The idea of getting the Cabinet around the place, listening and interacting with communities is a good thing to do. And I'm an optimist that we'll work our way through this difficulty as governments mostly do.
DAVID SPEERS: There's been a lot of cynicism, Arthur Sinodinos, about the PM's plans to spend a week in Rooty Hill. What's wrong with it though really? Isn't this what prime ministers should be doing?
ARTHUR SINODINOS: I think all politicians should be out and about as much as they can, keeping in touch. I've been up the Central Coast with Joe Hockey recently. I've been in South Australia so I don't hold it against the Prime Minister that she's going to Western Sydney. But sometimes you've got to be careful that you don't invite cynicism by looking that you're making a special point of going to one particular area.
And, of course, simply by being in Western Sydney you draw attention to the issues swirling around New South Wales at the moment, which involve, you know ICAC is one issue, cost of living is another, boat people is another.
Just, you know, all the stuff that's been fanning the flames of resentment among previous Labor voters in Western Sydney. And unless the Prime Minister goes there with some solutions, right, if she's just going there on a listening tour people will say, well hang on, haven't you been listening for the last two or three years about our concerns.
So I think what we're looking for next week is solutions from the Prime Minister. And if she's going door knocking it'd be nice to have a camera with her and see what sort of reception she gets out there.
DAVID SPEERS: We'll try and do that. Minister, do you agree that they're the issues? I think you mentioned ICAC, cost of living - ICAC being the [unclear 0:06:55.9] the Macdonald thing, cost of living and boat people?
GARY GRAY: Oh no, I don't think anyone who's concerned with good governance and good government could be anything other than appalled by what we hear out of ICAC. This is the first point.
The second point is that as Prime Minister goes out into Western Sydney and later in a few weeks' time she'll be in Western Australia and she'll visit my electorate and various others. She'll talk about jobs, she'll talk about the protection of jobs and the Prime Minister will also talk about Labor's education initiatives, healthcare initiatives and the growth that's actually happening in our economy and the support for families that we have in place.
Not the destruction of public services that is happening in New South Wales or the removal of important initiatives such as the Baby Bonus.
DAVID SPEERS: Well, you mentioned there that PM will be going to Western Australia in a few weeks I think you said?
GARY GRAY: Yes.
DAVID SPEERS: Of course that's after the state election takes place in the West. Why are Labor - senior Labor figures including the Prime Minister steering clear of your state?
GARY GRAY: Well Mark McGowan's requested that. Mark has said he wants a clear run at the Premier without any of the encumbrances of Federal politics. And that's his call, that's his right and that's what we're doing.
DAVID SPEERS: Because Federal Labor is a drag for state Labor in this campaign?
GARY GRAY: That's the judgement that Mark has made and that judgement is respected by his Federal parliamentary colleagues. Now Mark is a highly competent politician. He'll make a fantastic premier. He's got a great policy platform and he's putting that to the people and he deserves to do that in an unencumbered way.
DAVID SPEERS: When, of course, John Howard was in power there times when some state colleagues may not have wanted him in the state. It's a fairly frank admission there that, yes, this is exactly why Julia Gillard is not visiting the West.
ARTHUR SINODINOS: And the reality is that Colin Barnett has done very well not only as Premier of WA in terms of WA issues, but in playing the traditional WA card against the Federal Government. And Gary is in the difficult position where Barnett's been very skilful in exploiting those differences. And I think it's going to make it hard - without pre-judging the result, it's going to make it hard for Labor in WA. And I think Labor made the judgement they didn't need any more lead in the saddlebags.
DAVID SPEERS: We need to take a break, stay with us though, because we're going to discuss a couple of policy fronts, the Carbon Tax, as well as changes to the ballot paper at this year's election. That the Senate's agreed to stop that metre-and-a-half size ballot paper that we all get fed up with.
DAVID SPEERS: Now we're going to continue our discussion here with the Special Minister of State Gary Gray and the Shadow Parliamentary Secretary Arthur Sinodinos.
Let's turn to some policy. In fact just quickly on the mining tax, Senator, the Coalition and the Greens have combined to set up this Senate inquiry into the mining tax. Obviously you're coming at it from very different starting points. The Greens want to make the tax stronger, you want to get rid of it.
But it's going to be a very broad ranging inquiry looking at everything from how Treasury was consulted, the mining companies how they were consulted, the impact on the budget, any other related matter as well. What's this really going to achieve though, an inquiry, when clearly we know where both the Coalition and the Greens stand on this?
ARTHUR SINODINOS: I think as a sort of governance issue and an exercise in public policy, what went right with the process, what went wrong with the process, it's probably a useful way to do it. To have this sort of inquiry which is pretty all encompassing in terms of the terms of reference and gives us a capacity to understand the roles the various players played. And whether the lessons going forward in terms of how you formulate these sorts of - not just these but policy generally.
Sure from the Coalition perspective, we're not keen on the mining tax. We've said that from day one and our attitude was informed in part by the way in which the tax was implemented. Not just the…
DAVID SPEERS: But you just want to embarrass the Government though essentially you know?
ARTHUR SINODINOS: Well we want to bring out the truth about what happened. Who knew what when? Because in Senate estimates, the public servants have been saying that in effect they weren't responsible for the design of the tax and they couldn't be held accountable for what the companies might do on their depreciation allowances and other items which have given them a capacity to minimise their tax.
DAVID SPEERS: Do you concede, Gary Gray, in the benefit of hindsight there were mistakes made in how this was all put together?
GARY GRAY: The idea here is that we put more taxes on our key extractive industries and we've done that. State royalties have increased substantially and also the Federal Government tax is in place. We are now taxing iron, ore and coal more heavily than ever before in the history of our nation. We have to have that in mind.
And if you tinker with the tax or if you remove the tax, what will happen isn't just that revenue disappears federally but the royalties will disappear out of state coffers too. That's a lower take for the Western Australian Government, a lower take in Queensland and lower royalties take in New South Wales too.
You can't think that altering one aspect of a tax system, which is what this is, won't have unintended consequences elsewhere. And the unintended consequence elsewhere is in Perth, Brisbane and Sydney.
DAVID SPEERS: Let's move onto the carbon tax. There's been, well, some clarification made by the Opposition today on what happens to those businesses who don't want to see the carbon tax go. Hydro power, gas, wind power. Senator, a lot of these companies are doing pretty well. What's going to happen to them if you get rid of the carbon tax? Will they be compensated?
ARTHUR SINODINOS: They won't be compensated directly because we've taken the carbon tax off. Because don't forget taking the carbon tax off also reduces costs or should reduce costs across industry and consumers.
DAVID SPEERS: Except for these guys.
ARTHUR SINODINOS: What will happen is as I think both Tony Abbott and Joe Hockey have said, there'll be the capacity for industries and businesses to apply to an emissions reduction fund in order to get subsidies to reduce their emissions.
DAVID SPEERS: But can a hydro power or wind power company do that? Apply to that fund?
ARTHUR SINODINOS: Well it's open to any business that can show that it can abate in a relatively effective way.
DAVID SPEERS: But my understanding is that's only available for new initiatives. So if you're going to chuck some solar panels on your roof you can apply for access to that fund. But if you're a hydro power or a wind power company that's already running and you are worse off when the carbon tax goes, you're not going to get compensated.
ARTHUR SINODINOS: But as I say they may also be advantaged through general reductions in the cost structure and also to the extent that we have across the board corporate tax cuts and income tax cuts that will benefit industry more broadly.
But I think also with our direct action fund, that will help the transition to renewable energy and that should increase the demand for some of these companies' activities.
DAVID SPEERS: So do you accept that some will be worse off?
ARTHUR SINODINOS: Look there will be impact affects and then there are second round effects so you know…
DAVID SPEERS: What does that mean though? Some will be worse off?
ARTHUR SINODINOS: The impact effect may be that if you have had an advantage because you know you've had more demand your way because of you know the carbon tax…
DAVID SPEERS: The carbon tax.
ARTHUR SINODINOS: …if you lose that demand yes that has an impact on you. But what I'm saying is let's look at what happens to the cost structure overall. If it's a more competitive cost structure that will help them going forward.
DAVID SPEERS: Minister…
ARTHUR SINODINOS: By the way the renewable energy target is still in place under this scenario and that is the major support in the transition to more renewable energy.
DAVID SPEERS: Well let me just get into this, is why - both of you agree, both sides agree on the renewable energy target.
ARTHUR SINODINOS: Yeah.
DAVID SPEERS: It is pushing up power prices by as much if not more than the carbon tax it seems. Why does that need to stay in place if we have a carbon price?
GARY GRAY: Look there are many things about which we agree. But David, I want to take you back to an earlier observation by the Senator. He talks about corporate tax cuts, personal tax cuts, carbon tax cuts and mineral resource tax cuts. You cannot run a budget cutting all of those taxes. You cannot do that. We have to be real about the challenges that face our economy. That means making tough decisions.
We as a government pay a political price for making tough decisions. We know that but we don't sugar-coat the pill. We tell it how it is. We know these taxes have to be in place for good reason, for good public policy reasons.
DAVID SPEERS: But just give an answer.
ARTHUR SINODINOS: No, no but I mean in terms of spending we are prepared to make tough decisions. One of the reasons that the Press Club speech by Tony Abbott had the Schoolkids Bonus in there was to show if you like a payment in good faith about our preparedness to take on those tough decisions when it comes to spending.
DAVID SPEERS: Okay.
ARTHUR SINODINOS: We believe rather than focusing on raising tax, how do we first of all rein in spending.
DAVID SPEERS: Getting back to the renewable energy target though I'm confused. Why do we need this if there's a carbon price in place? It does seem to inflate electricity prices by a lot more.
GARY GRAY: The argument is quite properly put. That you need to shift energy generation in a big way into renewable technologies. And both sides of the parliament have agreed that renewable targets are important. And guess what, even at a tough time for our economy with a hung parliament we are on track to meet that target. That's a good thing David.
We never kidded ourselves that in the short term there wouldn't be costs. There are clearly costs. But equally what we see is some very good outcomes.
DAVID SPEERS: You've said the Coalition will keep it. There are some in your ranks who have concerns about it.
ARTHUR SINODINOS: And for precisely the reasons you mention. The dilemma for us is: it's in place. It's given a certain amount of certainty to industry about the transition, right. It is making the major contribution towards transitioning to more of a renewable energy future. The carbon price per se, the reality with that is it's not at a level which of itself is sufficient to actually exert the influence the Government is claiming.
And what we are saying is the level at which it's at is actually just adding to industry costs without having any real added benefit in terms of reduction of greenhouse gases.
DAVID SPEERS: A final issue before we go, the ballot paper. The Senate last night voted on - agreed to legislation that will hopefully limit the size of the ballot paper which is getting out of control. What are the changes going to involve?
GARY GRAY: The changes involve two steps. The first one is to say a candidate wishing to stand for election to the Senate must obtain a certain number of nominees on the ballot paper. It used to be a few hundred now it's several hundred. It used to be the deposit was a few hundred dollars, now it's a couple of thousand dollars.
And so those increases in nominators, remembering of course that to win an election in New South Wales you need to win around seven per cent of the vote to get a quota. And around seven per cent of the vote means you've got to get around three quarters of a million voters. So getting a couple of thousand…
DAVID SPEERS: I mean…
GARY GRAY: …dollars deposit or a few hundred nominees is quite an easy task.
DAVID SPEERS: There are of course a lot wacky parties and candidates that end up on the ballot paper. But is the other argument here Senator that you're restricting democracy by making it tougher to stand?
ARTHUR SINODINOS: No I don't think the thresholds do that. It's in a sense like a quasi test of public support to show how serious you are and whether you potentially have that broader public support for the very reasons that you mentioned. I don't think it's going to stand in the way of diversity of political opinion.
DAVID SPEERS: I heart John Faulkner saying last night we might end up needing a magnifying glass to read the candidates on the ballot paper…
ARTHUR SINODINOS: Absolutely.
DAVID SPEERS: …if it gets any bigger [laughs].
ARTHUR SINODINOS: Particularly long names like Sinodinos.
DAVID SPEERS: That's right.
GARY GRAY: Gary Gray works well on a ballot paper.
ARTHUR SINODINOS: Absolutely.
DAVID SPEERS: We don't want to limit either of your chances. Always good to talk to you both. Arthur Sinodinos, Gary Gray, thanks for joining us this afternoon.
GARY GRAY: Thanks David.
DAVID SPEERS: We're going to take a break and then we're going to look at…