TRANSCRIPT: ABC Capital Hill, Tuesday 21 April





SUBJECT/S: Royal Commission on banks and financial services; Australia’s AAA credit rating; the South China Sea; East Timor sea border 

GREG JENNETT, PRESENTER: Well Tanya Plibersek, welcome. We’ve heard from the ASIC boss, Greg Medcraft, who is not meddling politically, but he doesn’t seem to make a compelling case in his explanation of the need for a banking royal commission. Does that ring alarm bells for an incoming Labor Government, that it may not have the support of an important figure like the Head of ASIC?

TANYA PLIBERSEK, DEPUTY LEADER OF THE OPPOSITION: Well, I think it’s quite right for Greg Medcraft to indicate that, with greater support, ASIC could do a better job in the banking sector. They have had significant funding cuts from the four years, from the 2014 Budget onwards. I think in one year a funding cut of about 12 per cent, although I’d have to double check that.

JENNETT: So why not give them that support and not have the Royal Commission?

PLIBERSEK: Well, absolutely the Government should better support ASIC. But the difference between what ASIC does and what a Royal Commission does, the Royal Commission is able to look at the whole system; it’s not looking at individual instances of wrongdoing, it’s looking at whether the laws are adequate to prevent the sort of unethical and illegal behaviour that we’ve seen from some of the banks. So ASIC should absolutely be well-funded to do a good job of policing the system but what the Royal Commission looks at is whether the system itself is adequate.

JENNETT: But I think he was making the additional point that they can do that without the knowledge of the banks. They could quietly start it tomorrow which may be more beneficial in the gathering of evidence than all the investigations that would start from the beginning of a royal commission. ASIC has that advantage, doesn’t it?

PLIBERSEK: Well it certainly did have that advantage before its funding was slashed by this government and we are very supportive if the Government wants to go to the next budget restoring some of the cuts, that’s certainly a good first step. But what a Royal Commission does is look at the whole system: look a whether the legal frameworks are appropriate, look at whether there are legal or cultural issues that have led to this series of unethical and even illegal events that have taken place. What we’ve seen in recent years is story after story of banks and financial institutions not putting the best interests of their clients first, in fact, putting the best interests of their own profit-making motive ahead of properly serving their customers. And the royal commission gives us an opportunity to look at whether there is a legal framework that could be improved, whether there are cultural issues that need to be tackled across the board.

JENNETT: Alright. Well let’s move on from that, you’re indicating potentially, I suppose, more funding for ASIC. Which leads to a question around the AAA credit rating: Is it a priority or a bedrock principle of Labor that that credit rating must be maintained federally?

PLIBERSEK: Well, of course when Labor was in government we achieved 3 AAA credit ratings with a stable outlook from the major 3 credit rating agencies. First time it ever happened in Australia’s history and it was a very proud achievement for us and it was done during the Global Financial Crisis when the rest of the world was in meltdown. It was actually a very important thing for Australia’s economy that Labor was able to achieve those 3 AAA credit ratings. And it really shocks me that a government that purported to come in to provide better economic management - not only Tony Abbott but of course Malcolm Turnbull again saying that he was going to lift the game of Australia - is now reported to be risking these 3 AAA credit ratings. What they said when they came in, was that they weren’t going to cut spending to health and education and the other stuff, they were going to reduce taxes and they were going to pay down the deficit. Instead what they’ve done is broken the promise on spending, doubled the deficit, increased taxes. All of the major indicators that you would look for, for improved economic management have actually gone backwards under this Government and it seems like Scott Morrison doesn’t have a plan for the next budget to improve that.

JENNETT: Well what we’re talking about is some NAB analysis that actually says the budget needs to demonstrate ongoing restraint, which is exactly what the Treasurer’s been saying, isn’t it?

PLIBERSEK: Well, you know when I was Health Minister I had to find savings in my budget too and I did it by things like means testing private health insurance, that was vehemently opposed by the Liberals at the time. Of course, governments will always have to resort to changed priorities, I mean, different types of spending, different priorities. What we’ve seen from this government – cuts to family tax benefit, cuts to pensions, $80 billion of cuts to health and education – and yet, spending is still higher. It’s at emergency levels like we saw during the Global Financial Crisis, and tax as a share of GDP has gone up at the same time. It takes a pretty special government to cut the services that Australians rely on and still blow the deficit.

JENNETT: Alright let’s move on to some things in your portfolio now, of foreign affairs. The ABC is reporting that there was a meeting of the Chinese diaspora in Sydney at the weekend in which they discussed the importance of supporting China and its activities in the South China Sea. Do you think, particularly if they’re Australian citizens now, that these people should be somewhat more neutral in the stance that they publically advocate?   

PLIBERSEK: Well, I can’t really comment on a meeting I didn’t attend. I’ve seen reports, as you have, of what supposedly went on at this meeting. What I would say is that the Australian position – both the Government’s and the Opposition’s position – is that we don’t take a position on the competing claims in the South China Sea but that they must be resolved in accordance with international laws and norms. That means that there is a current case between China and the Philippines that when a resolution is made on that case, that both parties should abide by that resolution. Should there be any other legal cases internationally, that all parties should abide by the resolution of those cases.

JENNETT: Is it healthy and does it aid cohesion in the Australian community though to have the Chinese diaspora appearing to – again, we weren’t there ourselves – but appearing to be arguing the Beijing line here in Australia?

PLIBERSEK: Well, the great thing about living in a democracy is everybody’s entitled to an opinion. But the position of both the Government and the Opposition is that we will not take a position on the competing claims, that they must be resolved properly in accordance to international laws and norms, and then when they are resolved, all the parties should abide by that. And of course, any Australian citizen should, if there’s a legal question involved here, have the right to express an opinion. But it’s the role of the Government to say that our national view is that when this is arbitrated, all parties should abide by the arbitration.  

JENNETT: Alright, let’s just round out now on another area in your portfolio. East Timor has moved a step closer towards a position that the Labor Party has supported which is, or could potentially be, arbitration on the boundary dispute with Australia - it’s gone to conciliation. Have you thought through the consequences of your policy if it were to be pursued and a median line was taken, what that might mean for Indonesia?

PLIBERSEK: We’ve certainly thought through all of these possibilities. And I guess Greg you can’t but help see the link between the issue with East Timor and what we’re saying on the South China Sea. We don’t have a defined sea border with East Timor, and we haven’t for about the last forty years. If we say to China that China and all nations in the South China Sea have to abide by international arbitration, then Australia should also submit itself to that same legal regime. The first step -

JENNETT: Even if that had an unsettling effect beyond our relationship with Timor-Leste?

PLIBERSEK: Well I don’t believe it will and I’ve heard Marty Natalegawa speak about this publically in the past when he was the Foreign Affairs Spokesperson in Indonesia and he didn’t believe at that time it would. And Gareth Evans in that same seminar also didn’t believe it would. All of the advice that we’ve had suggests that there would be no issue with Indonesia – we have settled borders with Indonesia. The question here is why we have no border. This is not about changing the border with East Timor; it’s about finally resolving a border with East Timor after decades of uncertainty. Now, the people of East Timor were so pleased that Australia was involved in helping them secure their independence but they are deeply and gravely disappointed that we continue now to, it seems deliberately, delay settling this last issue around the sea border. We believe that it’s in the interests of Australia and Timor-Leste to have a settled sea border and for this issue to be put to bed.

JENNETT: Alright Tanya Plibersek, we’re going to have to leave it there. Thank you.

PLIBERSEK: Thank you.