Transcript of Interview, ABC 936 Hobart, Statewide Mornings with Leon Compton

Interview

BPC003/2014

03 February 2014

Leon Compton:

Jamie Briggs is the Assistant Minister for Infrastructure and Regional Development in the Federal Liberal Government. He joins us in the studio this morning. Mr Briggs, good morning.

Jamie Briggs:

Good morning, Leon.

Leon Compton:

And thank you for coming in this morning. You're here to make some announcements. Let's get into those first up. You'll be paying some of the $100 million to some of the businesses that were promised it. Over the next couple of days. Which businesses specifically?

Jamie Briggs:

We spoke late last year I think, Leon, when I was out here looking at some of the proposed grants that had been announced by the previous government and some by this government in this election campaign. And I said to you at the time we were working through a value for money test with these businesses and some of them in these organisations and some of them we still are but we've been able to conclude some of the agreements. My department has along with the relevant organisations come to some arrangements. One is the Huon Aquaculture, which is obviously an important business in the aquaculture space in Tasmania, and another is a community project in Dunalley, which is related to the community hall which of course was destroyed in the bush fires. So that has a community impact obviously, an important community.

And the other is part of our economic growth proposals in Tasmania, and we know Tasmania is in a position where it needs some investment to help lift it out of its economic doldrums. And the Abbott Government made very clear in the election campaign that we would make some of those investments but I should make the point that we will also do is work with the state government in trying to find ways to cut red tape, reduce taxation and drive more opportunity in Tasmania for all businesses and not just some through government grants.

Leon Compton:

Okay. Let's talk about the example of SPC, the food processing plant on the mainland, in Victoria in fact that was rejected for an assistance package to restructure only last week. There's a profitable company, they want to restructure, they're told you're not going to get government money to do that. It's your business. This Huon Aquaculture, a valuable, a company that's profitable. And getting $250,000 or some. Sorry, 3.5 million from the Australian Government. Is this the sort of deal in future that your government will be saying no to?

Jamie Briggs:

Leon, it's a very good question and I expected the question on SPC. The answer is yes. I think what we're doing with Huon and with Cadbury - obviously the other Tasmanian business which we're providing funding to and there are some others as part of the 180 million economic growth package in Tasmania. Remember Huon's also part of the forestry deal too so there's another part of that as well. It will be the exception rather than the rule. The reality is the Federal Government is some $500 billion in debt. We've got deficits for a decade unless we address that. And that's what the MYEFO document told us at the end of last year, the mid-year economic and fiscal update.

And so we have to as a government take steps to live within our means. Now what the Abbott Government will do is invest heavily in infrastructure, productive infrastructure, freight rail, roads to help drive economic growth, allowing all businesses the opportunity to grow. And we won't be as a general rule picking one business over another to fund. Now the issue with SPC or Coca-Cola Amatil is who its parent company is, if you look at the reality of that situation, they're asking for $25 million from the Federal Government, $25 million from the Victorian State Government and they're going to invest 90 million themselves.

They made a substantial mid-year profit; 300-odd million and we think that's terrific. But we would have to be borrowing money; taxpayers would be borrowing that 25 million to pay to a profitable company who obviously didn't think it was worth them spending that extra money on their own business. Now I don't think that's a proposition that's acceptable.

Leon Compton:

And so what you're saying though is what I'm hearing is that in future you'll be just as tough on Tasmanian businesses that ask for similar amounts.

Jamie Briggs:

Well, Tasmania in a sense is an economic project which has failed. And it's a good time really for a state election in that respect because you have the highest unemployment, the lowest GDP per person; you have the lowest life expectancy. Economically Tasmania is in trouble, and now is the time to have a good look at what is the plan for the economy in the future. You can't just keep relying on the generosity of the Federal Government or taxpayers in other states to prop up the bottom line. That's reality.

Leon Compton:

I wanted to talk to Rod Sims about this from the ACCC. It was interesting over the summer break that he was saying look, and Joe Hockey said we can deal on this. The states need to liberate some of their infrastructure assets and that the Government is prepared to return the corporate tax receipts to the states that they would otherwise have foregone. If they do that, that money could then be spent on other infrastructure. Do you think Tasmania, the Tasmanian state holds sort of assets in state ownership that could be sold off, privatised, sold off and invested back in infrastructure?

Jamie Briggs:

Well, look that's a proposal that the Treasurer, Joe Hockey, is putting to the state governments and I think Tasmania should have a look at it. Ultimately, Tasmanians will have a view on what assets that they are willing to - or they think are worthwhile selling or privatising for want of a better term. And I'm not going to get into specifics on which ones would be a good idea or not but it is fair to say if your balance sheet has the potential available capital to invest in productive infrastructure which benefits all Tasmanians then it doesn't make a lot of sense to not use that when you've got no capacity through your own budget. And the reality is all state governments, even Western Australia which is performing economically far better than every other state, they're all got budget bottom lines which are in really bad condition. And I mean the Western Australian budget bottom line last year led to them having a credit reduction.

Now what that means is there'll be higher borrowing costs so if you borrow to invest in this infrastructure you're paying more for that money. If you've got that available capital on your balance sheet, it makes some sense to recycle that capital and we're seeing that example in New South Wales where Mike Baird, the New South Wales Treasurer, privatised the ports, port of Newcastle and Botany, and they're using the proceeds of that privatisation to invest in a project called WestConnex which is linking the Western Suburbs in Sydney which would reduce traffic times by 40 minutes coming in from the Western Suburbs. So clearly a productivity uplift, clearly a benefit for people travelling to and from work every day, work and family benefits through all of that. And that is in effect because they've unleashed or released capital on their own books for the benefit of all people.

Leon Compton:

Should Tasmania think about divesting itself of its port assets?

Jamie Briggs:

Well, look, I don't want to tell the Tasmanian Government what they should be doing but I think Tasmania needs to realise that you can't keep along the path of being a mendicant state and expect the other states to continue to accept that. There will have to be some very tough decisions made by whoever wins the next Tasmanian election. Clearly this election in Tasmania will be fought and won; it should be fought and won on who has the best economic plan for the future of Tasmania.

Leon Compton:

What sort of tough decisions?

Jamie Briggs:

Well, you need an economic growth plan. You need to find a way to reverse the trend, reverse the higher unemployment, to unlock some of the opportunities that Tasmania's got and undoubtedly there are some terrific opportunities down here. You have got a very strong aquaculture sector; you've got a very strong forestry sector. You've got a very strong agriculture sector, full stop. Dairy in Tasmania's doing very, very well. Richard Colbeck, my Senate colleague, constantly tells me how much opportunity there is for the Tasmanian dairy sector. And, likewise, with a range of agriculture products, they're the sorts of things that I think governments should invest in as far as creating the infrastructure which allows those opportunities to do better.

There's obviously been a Productivity Commission report. There's an ongoing Productivity Commission report into the freight costs of getting to and from Tassie. That's one of the challenges. So that's something that we can work with, the Tasmanian Government on also. But Tasmania's got to help itself.

Leon Compton:

On 936 ABC Hobart, ABC Northern Tasmania. Jamie Briggs is the Assistant Minister for Infrastructure and Regional Development in the Liberal Government. He's our guest in the studio this morning and you're welcome to drop us a note too via text 0438-922-936 is the number; 0438-922-936. You're welcome to send us a text.

You're making some infrastructure announcements today as well in Tasmania.

Jamie Briggs:

Part of our nation-building plan, we've got $36 billion in the forward estimates across the country. The forward estimates sorry, being the four-year budget cycle which we're announcing. And in Tasmania there's this substantial commitment, there's 800 million committed to, amongst others, the Midland Highway upgrade which we'll work with the Tasmanian Government to identify projects to continue to upgrade that important piece of infrastructure. There's freight rail as part of that. 117 million to upgrade the freight-line network - again lifting productivity and economic opportunity.

And that's getting back to the very first question about industry assistance versus how you run an economy. Our belief is that if you can invest in the infrastructure which will help all businesses to do better, then you are, that is a far better way than trying to pick out certain sectors or certain businesses themselves. And in a situation where there is relatively little money around, we are in heavy debt, heavy deficit, we have to be wise with our investments.

Leon Compton:

Well, what about the choices that Tasmania makes for itself, though? I mean three northern ports, one southern port to service 500,000 people. You've got four hospitals for example, three of them based in the North. Andrew Wilkie says we need to have hard conservations about that if we want to reduce public health waiting and elective surgery waiting lists. I mean how well do you think Tasmania's going? Put your infrastructure ministry hat on in making the hard decisions about where money is spent…

Jamie Briggs:

Again, I don't profess to be a Tasmanian expert on the base of state politics and their decisions, but I think, as I say, at a time when there is a state election and there are obviously going to be competing parties, Labor and the Greens on one side and the Liberal Party on the other side - people should have a look at what is the plan.

There will have to be decisions made about how do you bring budgets under control and we're going to have make very hard decisions at the federal level. This year will be a tough year and we are living beyond our means. When you've got budget deficit year on year of some $40 billion, you are borrowing each day to pay for essential services. Now, in the end what that will mean at some time in the future is those in society who genuinely need government assistance will eventually be the ones who pay the highest prices, because if you can't manage your budget, you can't make the investments for those people who really need government.

Leon Compton:

Mr Briggs, is there a suspicion from some, based on your early form in this government, that even though you say the vulnerable in the community ultimately will miss out, that, in fact, that tends to be where your party is looking at finding the savings?

When you came to power, Christopher Pyne started attacking Gonski and talking about redistributing money potentially out of the state school system. You're talking about trying to find savings from those on welfare. But there's not a lot of talk about generous superannuation contribution discounts that wealthier people get and so on. Where will you find this money in the tough budget coming up in May?

Jamie Briggs:

Well, I'm obviously not going to reveal all, and those decisions are still in flux, and in a lot of ways we're waiting for the Commission of Audit to bring in its report. I don't think it is a matter of, as you say, picking on the most vulnerable at all. In fact, I think that's exactly what it's about. I mean, what we really do need to have as a society is a discussion about what we expect government to do and what government can afford to do or can do.

We ultimately want to be a country where we are paying a level of taxation which ensures that we can grow and be more prosperous and have higher living standards, but at the same time ensuring that we can deliver the services to those who most need it. And so it is a time when we can look at, and we should look at, how do we deliver those services, where is the money going? And I think all those discussions have got to be held, and this is the year to have those discussions. And people have different views on that.

It is ironic though that the Labor Party wants to attack, before we've even released a draft of the Commission of Audit or an interim report. They're the party, of course, who attacked single parents during their term, and you know, single mothers. They don't talk about that very often these days, but the Labor and Greens, when they were in government federally, they attacked single parents.

So, you know, let's cut the hypocrisy, let's actually have a genuine and open discussion about how we want the Australian Government to look in the future. We've got an ageing population, we all know that, we've got some economic challenges at the moment with the mining investment phase tapering off, and, therefore, higher unemployment, at the same as we've got what looks to be some rising inflation from global factors.

So it will be challenging times. It'll be challenging on the federal budget and it'll be challenging for all of us.

Leon Compton:

Greg in Kingston Beach asks the declining ageing population is Tasmania's greatest problem. What plans does the Federal Government have to increase the population of Tasmania and its tax base?

Jamie Briggs:

Well, look, I would say that is why we want to create an economy where young Tasmanians and people from interstate want to be here because there is opportunity. If there is no job, there is no point being here. If you don't have the opportunity here to create a living, create a business, create some opportunity for yourself, then you will go where there is, and that is a lesson not just in Tasmania, but in my home state of South Australia as well. We've got a similar issue. If your economy is not creating jobs and opportunity, you will slowly wither.

Leon Compton:

And so just broadly, you've had a conversation, we've learnt from SPC Ardmona that there's likely to be few corporate bailouts and, indeed, support for companies that are otherwise profitable. So what does that mean for the next two and a half years of this Liberal Government in terms of Tasmania and how you're seeing what you can do for the state?

Jamie Briggs:

I think what I'd say to Tasmanians is if you think what has been in place for the last 16 years is working, stick with it. If you think it's time to change and to try cutting tax and creating opportunity and change.

Leon Compton:

What you're doing now is campaigning for the State Liberal Party…

Jamie Briggs:

No, no, no.

Leon Compton:

…and I want to move sort of beyond that.

Jamie Briggs:

No, I'm not. I mean, elections are a time of a choice. It was Paul Keating who said when you change the government, you change the country. If you change the government here, you change the state. And I think, you know, now is the time. You've got the highest unemployment of anywhere in the country, you've got a rapidly ageing population, as your texter says, you've got the lowest GDP per person, and you've got the lowest mortality rate - sorry, the lowest life expectancy.

I don't think it is working right now, and so what we want to do to help create a stronger economy, no matter who wins the Tasmanian election, is invest in the productivity, lifting infrastructure, and also at a federal level ensure that we're living within our means so we're taking pressure off people's taxation pressures. And that is clearly what we said at the election we'd do and that's what we're implementing.

Leon Compton:

When will you be delivering the $16 million to Cadbury?

Jamie Briggs:

That is a matter that Ian Macfarlane, my colleague, is working with Cadbury on. So you're going to have to talk to Ian about that, but I'm sure we're working through that as we've been working through the value for money process on the other $100 million from the Forestry Agreement proceeds or discussions that we've had, including the Huon exercise. Also, the Tasmanian Airport - the Hobart Airport, who I'm seeing this afternoon as well.

Leon Compton:

So when will, I mean, when are you talking about extending the runway? I think it was 500 metres, from memory, as part of the election…?

Jamie Briggs:

I think that's right. We're in the midst of the discussions with them, including this afternoon. I'm talking to the CEO out at the Hobart Airport this afternoon. But that's a commitment that we're working through and we'll implement when we're at the point where we can make those announcements.

Leon Compton:

Are you working on this as a priority?

Jamie Briggs:

Of course.

Leon Compton:

I mean, these sorts of infrastructure projects create employment, which obviously creates the money-go-round. Is it a priority?

Jamie Briggs:

Look, all of our election commitments are a priority, and part of my job is to implement those and there are a range of them across the country and that's one of them. And, as I say, I'm down here today in part to have those discussions, in part to confirm the infrastructure investment that we've announced, and also to put to bed some of the more outrageous claims that were made last year about the $100 million not being implemented.

Leon Compton:

Well, will all of it be implemented? It doesn't sound like you can say - you can answer that question directly given that you're doing a value for money audit of all of them.

Jamie Briggs:

We are doing a value for money audit of all of them, and you would expect that. Some of them on that list were difficult to find the process on how they were actually implemented. But can I make the point, though, and I think it's an important point; the State Government has attacked at times the pace that we're implementing this. I think you'll find some of the proponents have yet to hear from the State Government about their own commitments on this matter, and today, in fact, on the Huon example, you'll note there's commitment from Huon, there's a commitment from the Federal Government, but at this stage, I don't think there's a commitment from the State Government.

Leon Compton:

It's been good to talk to you in the studio this morning.

Jamie Briggs:

Thanks, Leon.

Leon Compton:

Thanks for coming in.

Jamie Briggs:

Thank you.

Leon Compton:

Jamie Briggs, Assistant Minister for Infrastructure and Regional Development, on 936 ABC Hobart, ABC Northern Tasmania.