Sky News Australian Agenda Campbell Newman 5 August 2012

Interview with Campbell Newman Australian Agenda program, 5 August 2012

Peter van Onselen: Welcome back. You're watching Australian Agenda and we're joined now out of Brisbane by the Queensland Premier, Campbell Newman. Mr Newman, thanks very much for your company. Campbell Newman: Thanks very much for having me. Peter van Onselen: I wanted to go straight to the issue of the National Disability Insurance Scheme if I could. Given that both Victoria and NSW in a sense backed down, is there any room for Queensland to stump up a bit of funding as well now? Campbell Newman: I'm afraid not. You see, we have an absolutely critical budget situation this financial year which we've inherited from Anna Bligh and Andrew Fraser and the Labor Government. To give people a feel, the annual budget of Queensland is about 47 billion and in the budget that's handed down in September the budget deficit will be at least $4 billion. Now, we support an NDIS, we want to make it happen, we want to actually do a much better job as a Government ourselves in looking after people with disabilities
Australian Agenda 5 August 2012 Campbell Newman

but until we sort out the budgetary problems of Queensland we're in no position to put money in. But we'll be monitoring the trials. We'll actually be working with other states and we'll also be undertaking reforms in our own system to do better over the next few years anyway. Peter van Onselen: Premier, can I ask this then because it seems that since the backdown by both Victoria and NSW already Jenny Macklin the Federal Minister has been on the front foot, making the observation that she expects the states to be, you know, sharing in the funding arrangements of this beyond what the Productivity Commission recommended. Where does that leave you post the trials? I suppose, if you're in such a position that you're in, post the trials it looks like you're going to be expected to put much more money into the funding of disabilities in the aftermath of the trials. Are you open to that? Campbell Newman: Look, I want to sort of answer that in two ways. Firstly yes, there's a very cynical game of politics being played by Jenny Macklin and the Prime Minister which departs dramatically from the Productivity Commission report which said that the Federal Government should fund the scheme. But having said that, should the Queensland Government put more money in? Absolutely. To give you as a feel, we're putting $920 million a year into supporting people at the moment. The Commonwealth puts in less than 300. If we were to put in the average per capita that other Australian states are putting in, the figure's about $230 million. If we were to put in the best, if you like, of other states which is WA as I understand it, that would be over 400 million extra. Now we're certainly prepared to lift our funding but right now with the problems we've got with this four billion plus deficit this financial year we simply can't do it. That, by the way, is the reason for the tough decisions my Government's making in cutting staff numbers and programs so we can get the budget back in black in the 2014/2015 financial year.
Australian Agenda 5 August 2012 Campbell Newman

Paul Kelly: I just wanted to clarify that answer, Premier. What you've just said is that Queensland is prepared to put in more so that it's contributing the same amount that other states contribute on a per capita basis, but the big question here is that the Gillard Government wants the states to significantly increase their overall share of disability funding. Are you prepared to do that? Campbell Newman: Well we're certainly prepared to put in more. I say that. And it really depends on how successful we are in getting this state back on a proper, stable, financial position. I understand exactly what you're asking. That's about as much as I can say today because we're dealing with a really very difficult position right now. The reason that I proposed a levy on PAYG tax earnings a few - well, a couple of weeks ago was because I believe that is totally consistent with the spirit of the Productivity Commission report. Let's face it, once we start the NDIS it might start out at seven or $8 billion a year. But I believe it will very quickly grow. It'll be billions of dollars more very quickly because there will be other people who come forward with need. So... Paul Kelly: Just on that point Premier, I mean, do you think the idea of a levy is dead or do you think that this is still a possibility? Campbell Newman: Well look, I just put it in these terms: I am more than happy to support a levy. I hope that other states will do that. There was a golden moment, as I've called it, a week or so ago where the Prime Minister did have the support of all State Premiers and First Ministers of the Territories to actually do this, and I think at that point it would have been a breakthrough nationally. Because we've got to fund it, either the Federal Government have got to find savings in their own $376 billion a year budget or they've
Australian Agenda 5 August 2012 Campbell Newman

got to create a new source of revenue. And it is a new program. It's never been done before and surely we should have a proper, fair, balanced way of raising this money. And it seems to me that through the PAYG tax system that's the best way you can do it. Matthew Franklin: Premier, if I can just ask, since you raised the issue of a levy at the federal level and if you agree at some point in the future the state is going to - the states will have to increase their funding for disability services, have you considered a state-based levy in the same way that you levy people for - with their car insurance, to raise money for this program? Campbell Newman: Well at this stage most definitely not, and philosophically the reason is that we believe right now that Queenslanders have had enough of tax increases across the range of different sort of items, of land tax, payroll tax, etc., and so what we're trying to do is actually recut the cloth. We have about 20,000 more public servants than the taxpayers of Queensland can afford. There was an explosion in public service numbers between 2007 and 2012. And if we sort that out at that stage we'll be in a better position to fund front-line services as we should. And looking after people with disabilities is critically important. It is a front-line service and that's what we're absolutely committed to do. Paul Kelly: If we can just move to another significant spending area now, Premier, that relates to education. The Gillard Government intends to announce soon its decisions in relation to the Gonski report for school funding. Can I ask you, as far as Queensland's concerned are you in a position to make a significant extra commitment in terms of school funding which is what the Gonski report envisaged on the part of the states?

Australian Agenda

5 August 2012

Campbell Newman

Campbell Newman: Well, in terms of Gonski itself per se, no we're not, for the reasons I was outlining before. We are, though, increasing funding in a range of areas through our own programs right now. We've got a special fund for funding of both independent Catholic schools and public schools in terms of capital works. We hope to provide better funding for state schools for maintenance in the next few years. We also want to make sure that we better invest in our prep classes in Queensland. We rolled out a program of supporting more teachers' aides, full-time teachers' aides in our prep classes. So we're going to make our own commitments. But as to the broad sort of vision, if you like, espoused by Gonski, again we don't have the money right now. I'm afraid I have to keep saying this till the cows come home because just to go back to our position, $4 billion deficit this financial year, currently $65 billion worth of debt and the debt, no matter what we do or say, it's heading for a trajectory in two years time of about 85 billion. We hope to stabilise it. We will actually stabilise it then in the 2014/2015 financial year. But if we didn't take the tough decisions we're taking now, we've been told by our Independent Commission of Audit that it will hit $100 billion. So these are very real challenges for us. We'd like to do more across these issues, like disabilities and education, but right now it is just incredibly tight in the budgetary sense for Queensland. Peter van Onselen: Premier, doesn't this just take us back to this sort of issue of vertical fiscal imbalance, the whole federalism compact and the idea that states ultimately rely on largely regressive forms of taxation. You've lost the power to tax income tax since World War II and we have a situation we're increasingly looking forward with an ageing population. A lot of the expenses are going to be expected to come from the states unless this compact and how it is arranged is revisited. Now, Tony Abbott in battle lines talked about the need to fix the federation. Kevin Rudd discussed similar concepts. Are you of the view that we need to have a serious national debate on how taxing

Australian Agenda

5 August 2012

Campbell Newman

arrangements between the Commonwealth and the states can be improved to get to a situation where it's sustainable going forward? Campbell Newman: Well we certainly do. It is certainly a critical issue. But I will qualify it by saying that that doesn't sort of excuse Queensland, you know, Queensland shouldn't be just given a bailout by the rest of the nation for the problems that we now have that were created by Anna Bligh and Labor. But as an overall policy sense, yes, we do have to sort this out. Colin Barnett as Premier of WA is very concerned, and quite rightfully, of the sort of - the way that their state is rapidly losing GST as their royalties grow. Peter van Onselen: But how are we going to do this though, Premier, because at the end of the day both major parties federally rule out doing anything on the GST, and they may talk up in books and elsewhere the idea of fixing the federation but we don't really see much by way of policy. Can the Premiers drive this or do you hear anything out of Canberra that gives you any hope? Campbell Newman: Well, I would hope that the Premiers perhaps could come to an arrangement, certainly the big states, that at the last Council of Australian Federation meeting in Canberra prior to COAG there was a bit of discussion about that, and well, I suppose it's a very, very difficult one. I'd say it like this: my team here in Queensland believe in what we call "competitive federalism". What does that mean? It means that we should adopt an approach which says that it's good to have competition among the states and if a state wants to, for example, actively pursue economic development, and economic activity and build its revenues from those traditional sources, it shouldn't just then be sort of taken away in the whole process of the Grants Commission and horizontal fiscal equalisation. If you run a successful iron ore or coal industry, it shouldn't just then go

Australian Agenda

5 August 2012

Campbell Newman

to help some of the other states then balance their books, and that's what's going on, and that's why I particularly am sympathetic to where Colin Barnett is right now. Matthew Franklin: Premier... Campbell Newman: And that applies then to regulation as well. There seems to be this siren song probably started by Kevin Rudd about five years ago that, you know, if we just have the same regular laws and regulations across the country, that's the best thing. I say to business all the time "Wouldn't you like to be in a jurisdiction that has the most business-friendly sort of regulation, that actually encourages you to invest, that is good for business to operate in as opposed to just one size fits all?". Matthew Franklin: I guess they would but, Premier, can I just take you to another issue and that's the matter of foreign investment, the Coalition this week putting out a discussion paper in which they want to change and lower the threshold at which purchases of agricultural land have to be examined by the Foreign Investment Review Board. The Labor Party says that this is the National Party forcing this upon Tony Abbott - newly emerged Liberal National Party. Where are you on board - are you on board with this proposal and isn't your state probably the biggest potential beneficiary of a sort of food bowl to northern Asia development plan? Campbell Newman: We'd certainly like to see some of our northern areas opened up for new irrigation schemes and we're actually working right now with the Commonwealth on a study up towards the Gulf and we would like to see that foreign investment. But I have to say that I don't have a problem with having at least review of agricultural land purchases in the way that's been described. Now, I haven't reviewed the detail of this proposal but I
Australian Agenda 5 August 2012 Campbell Newman

think - and putting aside the administration that would be required in doing this, going to such a low threshold, I think it's certainly worthy of having that debate because there are some concerns... Matthew Franklin: You would be crying out for foreign investment, wouldn't you? Campbell Newman: We are, but that's why you would set it up in a way that says well, if someone's just going and buying, you know, an existing operation and not actually putting money in to develop and improve agricultural production, then you deal with it in one way. But if someone wants to come in and be a partner, to make an investment, to take land that is only, say, pastoral land at the moment but then through irrigation, development and improvement actually turn it into something that's engaged in horticultural activity, producing, you know, tropical fruits or, you know, vegetables or the like, well, that would be a different thing. Do you see the point I'm making? Paul Kelly: Well, can I just... Campbell Newman: Buying the family farm's one thing but I think people will accept - I think the community in Queensland will accept that if someone's bringing money in to make something better and it's set up in the right way, to improve agricultural production, well, that's something we'd welcome. Paul Kelly: Well, let's just go to the heart of this which is really about investment from China. As far as you're concerned, Premier, do you think that Queensland's in a position to take

Australian Agenda

5 August 2012

Campbell Newman

significant extra foreign investment from China in terms of tapping into potential export markets in China? Campbell Newman: Absolutely and I have met with Chinese - senior Chinese officials this year and we've talked about it so we'd welcome this. But that's the point I'm making. So if we have a piece of country at the moment on the banks of one of these northern rivers that currently is just pastoral country, if the arrangement is that money will come in to invest in essentially an irrigation scheme to improve into that land so that it goes from pastoral operation to horticultural operations, well that's different than just someone coming in and buying the family farm. The point I'm making is that I can say to my fellow Queenslanders "This is good, this is making a huge difference, it is providing jobs and opportunity for all Queenslanders". And that's something then that should be welcomed. So it's about the way that the investment is being directed and how it works is I think the nub of the point here. If you're just selling off, you know, existing assets and you're not getting something in the way of an improvement, especially a dramatic improvement, well then, that's when people tend to get very toey. Peter van Onselen: Premier, can I just switch the topic to the issue of the proposed referendum on indigenous recognition by the Commonwealth. What's your reaction to that as Queensland Premier? Campbell Newman: Look, I think that's something that we need to do. As usual it'll be what's the detail, but you know we in this team, in this state, in this political team would welcome that. Peter van Onselen: Okay, and one final...

Australian Agenda

5 August 2012

Campbell Newman

Campbell Newman: We think it's about treating people with dignity and respect. And may I say though a more important thing is to get economic activity going on Cape York and that's why my team are determined to put in place a proper fire region management plan for Cape York but then unravel the very discriminatory, if you like, legislation that was wild rivers that the former Labor Government put in, because we want people to have a real job on the Cape, people - Aboriginal people to have real opportunity, not just live on welfare. Peter van Onselen: And just one final question if I could, Premier: in a sense a ringing endorsement from former Victorian Premier Jeff Kennett of what you've done up in Queensland. He makes the point that he thinks that Tony Abbott federally has to wield the axe in terms of spending if he wins the prime ministership, the same way that you've done since becoming Premier in Queensland. Do you agree with that? Campbell Newman: Well, I don't think I'm the one who should be dispensing advice to Mr Abbott who's someone... Peter van Onselen: Jeff Kennett was happy to. Campbell Newman: Well, you know, good on him, but the thing I say is that I can't wait for the next federal election and I believe Tony Abbott is the guy who is just doing a tremendous job to lead the Coalition and certainly if we have him as Prime Minister I know that we can sort out a whole lot of the problems that are holding my state back, particularly the so-called green tape where we need to actually streamline the way that major projects, not just mining projects but tourism and the agricultural projects we mentioned before
Australian Agenda 5 August 2012 Campbell Newman

and construction, we need to get rid of the green tape that's holding those projects back. So particularly that's something I think that I'd like to work with Mr Abbott if he becomes the Prime Minister on. Peter van Onselen: All right Campbell Newman, Queensland Premier, we appreciate you joining us on Australian Agenda. Thanks very much for your company. Campbell Newman: Thanks indeed.

Australian Agenda

5 August 2012

Campbell Newman