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Transcript - Financial Review Sunday - 14 July 2013

14th July 2013  |  Comments  |  Transcripts

14 July 2013

TRANSCRIPT OF THE HON MALCOLM TURNBULL MP
INTERVIEW WITH DEBORAH KNIGHT
FINANCIAL REVIEW SUNDAY

Topics: National Broadband Network; ADM Proposed Take-Over of GrainCorp; Interest rates
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DEBORAH KNIGHT:

But first there are fresh revelations this morning on the campaign of the borad of the National Broadband Network to save director’s jobs, we can reveal that NBN co-chairman Siobhan McKenna has met with senior Canberra bureaucrats outside the communications sector to emphasise her own credentials and to try and cement her position ahead of the federal election.

The NBN has also confirmed it has hired powerful lobby group Bespoke Approach to try to secure the support of coalition MPs.

In a moment we will speak with shadow minister for communications Malcolm Turnbull but first a look at the NBN’s troubled legacy.

And joining us this morning shadow minister for communications Malcolm Turnbull and Tony Boyd, Chanticleer columnist for the Fin Review, good morning to you both.

Malcolm Turnbull you’ve been highly critical of NBN co and its board and they’re obviously expecting the worst under a coalition government. Who’s next to go, will Siobhan McKenna, will her head go under a coalition government?

MALCOLM TURNBULL:

Well we’re not making any comments about personalities.

The only observation I’ve made is that it is remarkable that such a large board doesn’t have anyone with hands-on experience in building a telecommunications network or running one and if you were assembling a board, for a project of this kind, that’s the sort of experience you would want to have on it.

So people can draw their own conclusions from that but I don’t want to make any personal observations about the prospects of one director or another in the event the coalition wins government.

DEBORAH KNIGHT:

They’re obviously fearful of their positions though if they’re hiring a private lobby group, Bespoke, to be involved to try to secure their positions.

MALCOLM TURNBULL:

It raises a lot of questions. Bespoke is a very good firm, my old colleague Alexander Downer is one of the principals and I’ve got great respect for him so I make no criticism of Bespoke, they’re very capable.

But you have to ask yourself why is the board, the chairman and the board, hiring a lobbying group to promote the qualities of the board – not the senior management? Apparently Mr Quigley knew nothing about this by the way. So this has been done by the chairman and the board and directors should only be spending the company’s money in good faith and in the best interest of the company.

Now the question that Siobhan McKenna and the directors have to answer is whether this investment in Bespoke, to go out and lobby for the – promote the virtues and talents and accomplishments of the directors as distinct from the company, whether that is really rather more in the directors interest than it is in the interest of the company as a whole.

And there’s been a lot of case law about this and I have to say as now pretty much a bush lawyer, I think it’s very questionable whether that should be an expense borne by the company. Maybe something the directors want to do, I struggle to see why it’s in the company’s interests.

TONY BOYD:

I wonder if we could ask Malcolm, do you think that the appointment of the new CEO should happen after the election because there’s actually the possibility that they might replace this person before there’s potentially a change of government.

MALCOLM TURNBULL:

Well I think it would be remarkable if they did that. The election is either 6 weeks or 12 weeks away, it’s not very far away. I don’t think you would find people of real quality that would be prepared to take the job up.

DEBORAH KNIGHT:

Who would you recommend? Ziggy Switkowski, is he your top pick?

MALCOLM TURNBULL:

Well Ziggy Switkowski is a very capable telecomm executive, he’s more at this stage in his career in the non-executive director role, he’s chairman of Suncorp and other companies. He’s hugely capable person and very familiar with government business enterprises.

But again, I don’t want to comment on- I mean, Ziggy Switkowski is the sort of person that should have been on the board frankly but I don’t want to comment on. I know the Fin Review has a lot of speculation about who might be the new CEO, I’ll leave that to you guys, to run the odds on that.

DEBORAH KNIGHT:

Well so much for politics being kinder and gentler the Liberals have launched major attack ads this morning against Kevin Rudd.

[LIBERAL PARTY ADVERTISMENT]:

Last time Kevin Rudd was Prime Minister he left behind a trail of disaster. Kevin Rudd was borrowing $100 million every day and now we have a $254 billion debt. He wasted up to--

DEBORAH KNIGHT:

You are spooked by Kevin Rudd aren’t you? And rightly so with the opinion polls it looks like Tony Abbott and the coalition, the Liberals are flat footed on this one.

MALCOLM TURNBULL:

That’s not right. All that ad is doing is reminding people of Kevin Rudd’s record.

I mean Kevin is trying to persuade people that he is just sort of reappeared on the scene and all of the disasters of his first term as Prime Minister are in the far distant past.

The failures of the Rudd-Gillard governments were either directly at the hands of Kevin Rudd or were policies – such as the NBN – that were mismanaged and misconceived by Kevin Rudd.

If Kevin Rudd at the outset had done a proper cost benefit analysis – as he promised he would – and analysed all of the options for ensuring all Australians had very fast broadband, analysed the costs and benefits of different technologies, if he’d done that homework we wouldn’t be in the mess we are at the moment.

TONY BOYD:

But he has come out today through one of the Sunday newspapers and said that he’s going to scrap the carbon tax, obviously that leaves a big hole in the opposition’s budget for you as well.

MALCOLM TURNBULL:

Well it doesn’t leave a hole in our budget, because our policy as you know is to abolish the whole Emissions Trading Scheme and including the fixed price -

DEBORAH KNIGHT:

But it leaves a hole in your attack on Labor going into the election doesn’t it?

MALCOLM TURNBULL:

Well I don’t think so. What he’s proposing to do is to terminate the fixed price period 1 year earlier and that will leave a $4.5 billion hole in his budget but there will still be in effect a tax on carbon.

The term carbon tax is used in two senses; it’s sometimes used in a more technical sense to distinguish between a fixed price on carbon and a floating price that you get from an Emissions Trading Scheme.

So people might say I prefer a carbon tax ie. a fixed price as opposed to an ETS or vice versa but overall whether the price is – if you’re paying $25/tonne for a permit on a floating scheme of $25/tonne as a carbon tax it’s still 25 bucks so it’s still so overall, you can generically, general sense describe all of these mechanisms as a carbon tax.

DEBORAH KNIGHT:

On the issue of leadership, you personally are twice more popular if the opinion polls are to be believed than Tony Abbott.

When we told people we had you coming on the show a lot of people were saying Malcolm we love Malcolm! Are you still singing from the same songbook as Kevin Rudd was prior to being reinstated as Prime Minister, saying he had not ambitions for the leadership, can you categorically rule out having no ambitions for the leadership.

MALCOLM TURNBULL:

Well let me just say there’s a big difference between me and Kevin, many differences I might add.

DEBORAH KNIGHT:

Similarities though, you’re both quite popular among voters.

MALCOLM TURNBULL:

One of the biggest differences is that yes, I lost the leadership and Tony Abbott became the leader of the opposition. I have worked diligently as a member of the team and we are a team – that’s a big difference between our show and Labor’s. Labors is a personality cult, it’s going to be all about Kevin, our project is all about our team.

DEBORAH KNIGHT:

Will you rule out a tilt?

MALCOLM TURNBULL:

Of course! There’s not going to be any change in our leadership, that’s not going to happen but the big difference is that I am part of that team. And look Deborah, I know there are a lot of people out there who would rather I was leader of the Liberal party – it’s ridiculous to deny that or pretend that’s not happening.

But the message I have for them is this: we are a team. If they think I am a person of capability and quality and so forth, they should be comforted by the fact that I am part of that team in a senior leadership position.

Tony Abbott is not going to be elected – if he is elected – as a president or a dictator. He is first among equals, we will have a conventional, traditional, cabinet government.

So if you’re a Malcolm Turnbull fan rather than a Tony Abbott fan, you may prefer Malcolm as I was in the top job rather than Tony but I will be at the top table. And so I say to those people who support me: vote coalition, vote for the team of which I am part, of which Tony Abbott is leader, which Julie Bishop is part, Joe Hockey and a very fine group of people who work together with stability, coherence and consistency for three years, as opposed to the rabble we’ve seen from Labor.

TONY BOYD:

But should investors be worried when you’re communications minister in the sense that contracts with Telstra – the $11 billion deal with the NBN, that could well be turned on its head – there’s other contracts with publically listed companies, should people be concerned with you as communications minister?

MALCOLM TURNBULL:

Well I think most people in business will be relieved because I do have a background in business and I understand the importance of contracts.

We’ve made it very clear that Telstra shareholders will be kept whole, so they have nothing to fear from a change of government.

As far as contracts with contractors are concerned, well the problems are actually not with anything we might do, the problems are that the contractors are losing a fortune, you know Silcar has been very open they’ve lost a fortune, Service Stream has lost so much money their listing has been suspended.

SEGMENT TWO

DEBORAH KNIGHT:

Well the buyout does have Ron Greentree on board, as you can see the consumer watchdog has given it the tick, Malcolm Turnbull what do you think, should the deal be allowed to go ahead?

MALCOLM TURNBULL:

Well it’s obviously a matter for the treasurer and the foreign investment review board. We don’t have access to all of the information they have so.

DEBORAH KNIGHT:

It could be delayed though until after the election.

MALCOLM TURNBULL:

Well in that case we will make a very responsible decision.

I’d just make this observation, that I think the concerns that have been expressed are very genuine. And I say this as someone - I’m not a grain farmer but I am a farmer, beef and cattle interests. And I can just say that I am not troubled by foreigners buying Australian agricultural land because they can’t take it away with them, they invest in it and so forth.

But I can see the anxiety that farmers have about there being, the Australian interest being taken out of agribusiness, out of the big corporations that are actually buying the products that farmers are producing.

That anxiety is real and it’s something that has to be addressed, it can’t just be pushed aside as parochial country people expressing untutored views about economics, it’s real.

TONY BOYD:

But Malcolm you’d have to say that Senator Heffanan has raised a great point there about foreign companies not paying enough tax in Australia, do you agree that companies like Google and others should be paying more tax here?

MALCOLM TURNBULL:

Absolutely, I think Google, if Google was paying tax in a conventional way I think it’d be paying probably half a billion dollars of tax in Australia.

If you assume Google is doing about $2 billion of revenue in Australia and it’s operating globally on a, say a 40 per cent pre-tax margin, so that’s $800 million of profit that would be taxable here and then of course you add on to the GST.

I’ve talked to Patrick Pichette the Google CFO, there needs to be a change to the global rules on transferred pricing to deal with these big multi-nationals, it’s just not working at the moment and we are the losers.

SEGMENT THREE

DEBORAH KNIGHT:

Welcome back, stocks around the world capped of a strong week after Federal Reserve chairman Ben Bernake said the central banks bond purchasing program will continue for the foreseeable future but the signs for the broader Australian economy and particularly employment are not strong.

The chances of an interest rate cut have now jumped up to 75 per cent, how far Malcolm do you think that rates need to fall to start stimulating growth in the non-mining sector?

MALCOLM TURNBULL:

Well I think you’ll see considerable stimulus coming from the fall in the dollar as well so there are two big elements at work here: rates and of course the currency. The currency has stayed high, notwithstanding the decline in the terms of trade, it now seems to be adjusting, if that comes back considerably, that will make a big difference domestically.

DEBORAH KNIGHT:

Let’s hope it plays out.

ENDS

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