Transcript - Joint Doorstop - 8 Sept 2009

JOINT DOORSTOP INTERVIEW WITH THE HON. CHRISTOPHER PYNE MP, SHADOW MINISTER FOR EDUCATION, APPRENTICESHIPS AND TRAINING

PARLIAMENT HOUSE, CANBERRA

Subjects: Senate inquiry into waste and mismanagement of the schools stimulus debacle; Senate Economics Committee; Kevin Rudd; interest rates; Australian economy

E&OE...........................................................................................................................

MALCOLM TURNBULL:

There is nothing more certain than that reckless Government spending is putting upward pressure on interest rates. The Labor Party used to claim that it had fiscal policy and monetary policy working in the same direction. We now see the Reserve Bank flagging higher interest rates, tightening monetary policy at the same time as the Government is ramping up its own spending program.

There has been no rigorous or any cost-benefit analysis of these programs and in particular the Julia Gillard Memorial Assembly Hall program, the so-called Primary Schools For the 21^st Century program, now $14 billion, has not been subject to the rigorous analysis the Government claims all of its spending programs should be scrutinised under. And so that is why we will seek today to refer this schools stimulus debacle to the Senate Education Committee to examine line by line the Julia Gillard Memorial Assembly Hall program, to identify the waste and mismanagement, and to hold the Government to account as it spends tax payers' dollars in a way that we can see already is putting upward pressure on interest rates.

In addition to that, as you know, the Greens have moved to set up a more general inquiry into the stimulus and we will support that, and together with Senator Fielding we will be proposing amendments which will enable the Governor of the Reserve Bank to attend, and also to enable other expert witnesses to attend the hearing as well and also to enable that hearing to have adequate time to properly consider the whole question of the efficacy of the Government's stimulus program.

QUESTION:

Isn't the Auditor-General already doing this job with schools?

CHRISTOPHER PYNE:

With respect to the Building the Education Revolution.

QUESTION:

Why are you doubling up?

CHRISTOPHER PYNE:

The Auditor-General is not expected to report until, at the earliest, the end of this year and quite possibly in February of next year. The Auditor-General is looking into the Building the Education Revolution from the point of view of what parameters should be put in place and what parameters should have been put in place before to ensure that there is an efficacy of spend. We can't wait until February, I don't think the Australian taxpayer can wait until February and, more importantly, the Senate has a vital role in overseeing Government spending and Government policy and this is the appropriate...

QUESTION:

You're the one who referred this to the Auditor-General. If you couldn't wait 'til February, why did you refer it to him?

CHRISTOPHER PYNE:

Well there is absolutely nothing to be lost by having a Senate inquiry while the Auditor-General is doing his important work in establishing the parameters for the public service that should have been in place. There is absolutely no reason why a Senate inquiry can't go on at the same time as the Auditor-General is doing his work.

QUESTION:

Do you think you have the support of the crossbenchers to set this up?

MALCOLM TURNBULL:

We are certainly seeking that support and of course we seek the support of the Government. If the Government is so proud of its Julia Gillard Memorial Assembly Hall program, if the Government is so persuaded that this spending is not going to put upward pressure on interest rates, then it should welcome this inquiry because it will give the Government an opportunity to demonstrate the truth, the wisdom of what they have been claiming to the Australian public about how they are spending our taxes.

QUESTION:

Forgive me but is the inquiry, your Senate inquiry into whether it's going to put upward pressure on interest rates or the management of BER?

MALCOLM TURNBULL:

Well there is no question that Government spending, the more the Government fuels aggregate demand as the economists would say, will put upward pressure on interest rates. There is no question about that. There may be countervailing factors, of course, but the impact of Government spending on interest rates is almost beyond argument. That is a necessary connection. The higher the level of Government spending, the higher the level of Government debt, the higher the level of interest rates and taxes in the future. That follows as night follows day.

Now governments should be spending money on infrastructure but they should spend money wisely and effectively, and so the real issue is what do we have to show for this $14 billion program other than a series of Julia Gillard Memorial Assembly Halls and signs and posters reminding voters of the Labor Party's generosity at the time of the next election.

QUESTION:

But do you think that interest rates at three per cent are sustainable? Can you believe an economy as Australia should keep interest rates at three per cent for an extended period of time which is what you're suggesting?

MALCOLM TURNBULL:

Well interest rates are a matter for the Reserve Bank. There are a number of factors that impact on interest rates but the simple fact of the matter is this and the Dun and Bradstreet report out today underlines this - there are many Australian households, even with rates at today's levels, who are under financial stress. The Government should not be acting in a way that is of necessity going to put upward pressure on interest rates, in particular if it not achieving real benefits and really positive outcomes for that investment and expenditure - and that's what the Senate committee should look at. It's the Parliament that should hold the Government to account and that's what we will continue to do as the Opposition.

QUESTION:

Mr Turnbull what was your reaction to yesterday's speech by Kevin Rudd in which he said that only the Labor Party was responsible for reforms in the last quarter century?

MALCOLM TURNBULL:

It was extraordinary. It was as though he had erased every part of Australian history that didn't feature the Labor Party. It was like listening to a speech by a communist party general secretary extolling the virtues of the dictatorship of the proletariat at some rally. It was incredible. It was graceless, it was ungenerous and it showed a lack of appreciation of the sweep of Australian history that I think everybody - I think of you, one of the members of the Press Gallery aptly described it as 'boorish and boring', and it was both. It was very, very disappointing.

QUESTION:

Mr Turnbull you've said a little earlier that fiscal and monetary policy aren't working together, well they are at the moment aren't they because the Reserve Bank has yet to lift interest rates, and if it does it can go some way before we get out of the expansionary zone, so those policies are in tandem at the moment?

MALCOLM TURNBULL:

Well the point I'm making is that the Reserve Bank is flagging and the market is certainly expecting monetary policy to tighten, rates to go up and if the Government is going to continue spending, continue firing up the stimulus that it's so proud of, then they will be pulling in opposite directions - that goes without saying.

Let me just make this point though - and we should leave you now and go off to Question Time - but let me just make this point: there has never been a debate about whether there should be a stimulus or not. That wasn't the issue. Our critique of the Rudd Government's stimulus was as to its quantity and its quality. We said they were spending too much money and they were not spending effectively enough - in other words they were recklessly spending and borrowing too much and they were not getting enough value, enough bang for the tax payers' buck.

So we proposed a better approach, for example, to investing in our schools which would have involved a spending program, an investment program which would have reacted to what schools wanted, that would have reached out to school communities and said, as we did when we were in government, what do you want? What sort of facilities do you want? What type of investment do you need? Instead of having Julia Gillard Memorial Assembly Halls imposed on every primary school in Australia whether it needs it or wants it or not.

QUESTION:

To what extent do you think the Government can take credit for Australia avoiding recession?

MALCOLM TURNBULL:

Well I don't believe it can. I mean the reality is that our strong position is because our economy was built on very solid foundations. I mean number one, we did not have a banking collapse here. We didn't have a banking crisis in Australia. Why was that - because of the prudential and financial regulatory reforms put in place by the Coalition.

Our Government went into this downturn with no net debt, with cash at the bank. Why was that - because of 11 and a half years of sound economic management paying off Labor debt under the Coalition.

And as just about every economic commentator has observed another vital factor of course has been the strength of the Chinese economy, the continued demand for our resources exports and of course you could say that if there is one government stimulus that has had a very beneficial impact on the Australian economy, it's the Chinese Government stimulus.

Now on that note we must go. Thanks very much.

[ends]