Transcript of press conference, Canberra
MON 07 FEBRUARY 2011
Subject(s): Victorian flooding; Bushfires in Perth; Queensland flood recovery package; Reconstruction Inspectorate; Insurance; CPRS; Reform; Budget; Newspoll; COAG
PM: Thanks to everybody for gathering in the courtyard, some fresh air for everybody. First and foremost can I say I am wearing a yellow ribbon today because today is the two year anniversary of the devastating Victorian bushfires. Yesterday I had the opportunity to attend a memorial event in Victoria, there were many Victorians at it who has family members who lost their lives in those devastating bushfires, there were many Victorians at it who are still rebuilding their lives after such death and devastation.
This will be a difficult day in Victoria for many people and many communities and our sympathies are with them on this difficult day. It’s a reminder to all of us just how long and painful the journey back from natural disaster can be. It’s going strike those Victorians and Victorians generally as perhaps a very cruel irony that on the day they mark the two year anniversary of the Victorian bushfires, so many Victorian communities are actually battling floodwaters. There are some communities that have seen more rain in two days than they normally see in twelve months. There were some communities evacuated last night who have now been evacuated for the second time, consequently there are a lot of people in Victoria today engaged in battling floodwaters, some of them mopping up, many of them anxious about the future. I want to say my thoughts are with them today, we are working with the Victorian Government to assist those communities through.
And whilst Victoria battles floodwaters, over in the West people are battling bushfires and we’ve seen the loss of homes. People who have been through the devastation of knowing that all of their possessions are gone, many of them not able to take things with them that are precious to them and which are now lost. So there is pressure on today in Western Australia, pressure for those who know their homes are gone and pressure for those that are still battling these bushfires. We are, through our Emergency Management Arrangements, staying in close touch with the Government of Western Australia and we will be working through them as Western Australians face this bushfire problem in their own state.
All of this reinforces that the nation has been through a very tough time, there’s a lot of rebuilding to do. So today I want to announce some new arrangements that the Federal Government will make to do that rebuilding. As Prime Minister I want to make sure that every dollar we spend on rebuilding from the floods and the cyclones is a dollar that gets value for money. I want to make sure that every dollar spent gets the maximum value for money and goes to the regions that need it the most. We will have rebuilding to do in Queensland, we will have rebuilding to do in other parts of the nation, including Victoria.
So I now want to outline the oversight arrangements to drive value for money and making sure assistance goes to those regions that need it.
Firstly, as I think is now well known, the Queensland Government intends to manage its reconstruction work through the Queensland Reconstruction Authority. The Federal Government will have an agreement with the Queensland Government about expenditure of our 75 per cent contribution towards rebuilding.
We will also have two representatives on the board of the Queensland Reconstruction Authority. I can today announce that those two representatives will be Brad Orgill, a former merchant banker who will bring his commercial expertise and eye for value for money to the task. The second representative will the Secretary of the Department of Regional Australia, Glenys Beauchamp, will also serve on the Reconstruction Board. In addition to having Commonwealth representatives Brad Orgill and Glenys Beauchamp on the Reconstruction Board and at the National Agreement between the Federal Government and the Queensland Government, I announce today that the Federal Government will require audited statements for its contributions to be paid against, to make sure that money has been properly spent. That audit requirement will not only be there in relation to Queensland, it will be there in relation to all rebuilding expenditure around the country.
Then thirdly, today I announce we will also create a Reconstruction Inspectorate to oversight work around the country and increase scrutiny and accountability of rebuilding projects. The aim of the Inspectorate is not to duplicate bodies like the Queensland Reconstruction Authority, its aim is to ensure that there is proper accountability, scrutiny and value for money.
In order to do that, then Inspectorate will be able to scrutinise rebuilding contracts, it will be able to directly inspect projects to ensure they are meeting progress milestones, they will be able to investigate any complaints or issues which may be raised by the public, they will work directly with state agencies, including reconstruction agencies like the Queensland Authority to develop contractual frameworks, tendering processes and project management systems. They will be able to scrutinise requests for reimbursement by local government for projects that have been completed and they will be able to examine high value or complex projects prior to execution; that is they will be able to scrutinise the contracts before they are signed.
I can today announce that the Chair of this construction inspectorate will be Mr John Fahey, who is known to the Australian community as a former Premier of New South Wales and also a former Federal Finance Minister. He will be assisted on this board by Martin Albrecht, who is the former Managing Director of Thiess. He will also be assisted by Matt Sherrin from Deloitte.
Their job, as the Reconstruction Inspectorate, will be to provide new accountabilities and oversight. This Reconstruction Inspectorate will report directly to the Cabinet Subcommittee that is guiding the Government’s work on natural disasters, I Chair that Cabinet Subcommittee and Simon Crean, the Minister for Regional Australia is its Deputy Chair.
Can I conclude by saying clearly Australians know that around the nation we’ve got a lot of rebuilding to do. People have seen the damage on their TV screens, people know that we are coming back from an unprecedented series of natural disasters and that we are coming back from a flood crisis of unprecedented scale. People are familiar with the fact that three quarters of Queensland was declared a natural disaster zone, that the city of Brisbane was shut down for days and that was before we saw the cyclone hit Queensland.
People also know that we face natural disasters in other parts of the country and that New South Wales and Victoria in particular have had to battle flood waters and Victoria continues to do so. Consequently I believe as we rebuild from these large scale and widespread natural disasters, that it’s appropriate to have these mechanisms to ensure that every dollar is a dollar that is spent effectively and every dollar spent from taxpayers’ money goes to do work that is necessary to rebuild the nation.
I’m very happy to take any questions.
JOURNALIST: Do you (inaudible) up to more Commonwealth oversight for this spending than we saw in relation to the economic stimulus spending?
PM: This is a purpose designed oversight package for the rebuilding that we will need to do in Queensland particularly, but around the nation.
JOURNALIST: (inaudible) under the pink batts and green loans and BER to some extent (inaudible). Is this, has your administration been informed by the difficulties in those schemes about the need for greater value for money in these schemes?
PM: As I’ve said before clearly as Prime Minister and as the Deputy Prime Minister I had learned some things by rolling out major construction projects. I of course understand that Building the Education Revolution is talked about, I see that in the media too. I would remind that in many thousands of projects, many, many thousands of projects complaint rates were at 3 per cent, but I do acknowledge that I’ve learned some things. I’ve also said publically before, and I’m very happy to say it again, I will, as Prime Minister, take the approach of holding up every decision to scrutiny, holding up every decision to the light, looking at it from every angle, and when it requires us to get assistance in the form of a reconstruction inspectorate to do that well, then we will do so. I believe the form of this body, involving as it does, Mr John Fahey, former Premier – so he knows how state governments work – former Finance Minister – he knows how Federal budgets work – as well as people with expertise in building and accounting will bring a new degree of oversight and that’s the right thing to do.
JOURNALIST: (inaudible) asked these question and you suggested at the time that Brigadier Mick Slater and the role played by Joe Ludwig and others would be sufficient to provide oversight. Why this now, is it a reaction to the concerns of the Independents about the accountability of the money or is it pressure from the Opposition?
PM: It’s my determination to make sure we get value for money for every taxpayers’ dollar spent. I understand I’m asking the Australian community, through the levy, to contribute directly to rebuilding around the nation. We’ve made budget cutbacks but the money that flows from the Federal budget at the end of the day is taxpayer’s money, it’s not the Government’s money, we only have it because taxpayers have forwarded it to the Government in one way or another through our taxation system. In those circumstances it’s the right thing to do to have focussed oversight. When I spoke at the Press Club I did indicate there are a number of oversight mechanisms and I think people should have confidence in them, I think people should have confidence in a Queensland Reconstruction Authority led by Major-General Mick Slater, I think he is a man who instils confidence from communities; I’ve been in communities with him and I’ve seen people react to him, very confident in saying that.
I also believe when we look at reconstruction that’s happened in the past in Queensland, State Government work in coming back from natural disasters, local government work in coming back from natural disasters, Queensland with its climate has seen its fair share of rebuilding in the past and people would know that that’s been done effectively.
In these circumstances, beyond having confidence in Mick Slater, beyond having a partnership agreement between the Federal Government and the Victorian Government, beyond having a dedicated Minister and a Cabinet sub-committee, I think it’s appropriate to build in an additional layer of oversight.
I particularly want to see that additional layer of oversight working for rebuilding around the country; inevitably in this discussion our focus is on Queensland, partly I think because we all know of the size of the task there, partly because at the same time I am announcing our direct representatives to the Queensland Reconstruction Authority, but I want to be clear, this level of oversight will be there for rebuilding done right around the nation.
JOURNALIST: (inaudible) a number of caveats, obviously people who were affected by the floods in Queensland and Victoria and then the cyclone. This is a parochial question, so I apologise in advance, but are there going to be some other caveats for example the hundreds of people who’ve been affected by bushfires on the other side of the continent?
PM: We will need to work through that, as you would be aware we’ve done the exemption from the levy predominantly by using the Australian Government Disaster Relief Payment as the mechanism, though we have struck a special mechanism for people impacted by floodwaters in Western Australia. You will need to allow us to get beyond the days of the immediate bushfire response, that’s where certainly Western Australia’s focus is today and our emergency management people are working with them to deal with the question you asked, but what I can say generally is we want to bring the same approach, which is if people have been hard hit by natural disaster then we’ve said people in those circumstances shouldn’t pay the levy.
JOURNALIST: (inaudible) inspectorate, is it any project that has even partial Federal funding and how long do you think it will need to exist and how big is it, how many people do you think it’s going to employ?
PM: It’s any Federal project that has Federal money. We are flowing money under our Natural Disaster Relief and Recovery Arrangements. That means that we bear the lion’s share of the cost, 75 per cent. So any project that’s got money coming from that 75 per cent will be under the oversight of this Inspectorate. Unfortunately you’re asking me a question that I don’t think anybody’s capable of answering in terms of how long this will take, because we’re still in the days of preliminary but getting firmer assessments about flood damage, but we’re in a whole new ball park with cyclone damage now and the focus there has just been on food, water, shelter, absolute disaster management for those very devastated communities, so we are not very far down the track with damages assessments in terms of infrastructure.
JOURNALIST: Ms Gillard do you have any meetings with crossbench members lined up for the next few days, and what areas of your package are now open for negotiation. You’ve dealt with the oversight matter, you’ve ruled out the disaster fund in the short term, what is potentially up for negotiation if anything?
PM: Michelle I can assure you that I’m on my normal quota plus some for meetings with Parliamentarians this week, so I will be chatting issues through with members of the crossbenches and beyond as Parliament reconvenes this week.
PM: Well I have a normal weekly cycle of meetings when Parliament’s sitting and I’m always happy to have another conversation with people, I don’t mind talking, sitting down having a cup of tea and talking, so we’ll do a bit of that this week. But my message to people will be a very clear one, my message to people is the nation wants us to get on with the job of rebuilding, and I’d also have a message in that regard to Tony Abbott. My message to him is it’s time to put the playing of politics to one side and help us to get on with the job of rebuilding the nation.
JOURNALIST: Prime Minister just in relation to value for money, in the longer term is there any prospect of reviewing states’ insurance schemes, and whether reinsurance should be extended as part of this inspectorate and looking at value for money?
PM: Dennis I’m worried you’ve joined a Bee-Gees revival group over the summer, we may need to talk about that not quite at a full press conference, so that’s distracted me.
I think your question is about insurance. On insurance, I do want to be clear about this and I answered some questions about this yesterday, States and indeed the Federal Government have to make value for money assessments about insurance premiums and it depends how risk rated you are. Queensland, with its tropical climate and vast expanse of the state is in a different position from other areas of the country like Victoria – Victoria doing it tough today but not normally battling with a tropical climate, not prone to cyclones and the like.
So states around the country have done assessments about risk versus reward in terms of being insured, as did in fact the former Federal Government and the then Minister Joe Hockey came to the view that risk versus reward for the Federal Government that is wasn’t the best way forward.
So I do not intend to second guess all of that, there’s no evidence before me which would suggest those decisions have not been properly made.
JOURNALIST: (inaudible) all the work that has been done on the business compensation under the CPRS, but Christine Milne says that’s not going to cut the mustard. What do you say to that?
PM: Well I’ll stick with the comments that I made yesterday, they’re my approach and that’s my perspective.
JOURNALIST: Prime Minister when will you have something to say about further budget cuts just on reconstruction post Yasi?
PM: I note that the budget guessing game has started a little bit early, it seems to me that every year in terms of every fixed anniversary in the cycle, whether it’s the Parliamentary cycle, the government cycle or just normal human endeavour, everything gets done earlier, so we see Easter eggs in the shops earlier than we ever used to, we see hot-cross buns in the shops earlier than we ever used, we see Christmas decorations in the shops earlier than we ever used to, and the guessing game about the budget has started earlier than it ever used to, that means that we will go through the same cycle of responses just for a longer period of time. I’m not going to speculate about what’s in the budget, what I have said is we will find the appropriate room in the budget by making cuts to fund the reconstruction from Cyclone Yasi. We are in a situation where, as a result of the $5.6 billion flood recovery package I announced the other day, we will be getting on with flood recovery work, damages assessments will come in from Cyclone Yasi and then we will make the necessary arrangements to meet that cost. But we’ll do that in a methodical way and work through on all of the details.
JOURNALIST: Prime Minister (inaudible) you spoke last week about welfare reform and getting people back into the workforce. Are you in the game of welfare reform because you see that as an economic reform, or are looking for budget cuts by cutting welfare?
PM: I’m in the space of talking about participation in work because I believe in it. Of the things that have driven me all of my adult life and that I’ve believed in all of my adult life, I’ve believed in opportunity being fairly extended to every Australian child.
Demography is not destiny. I’m only standing here because I got a good education, and it breaks my heart that there are children in this country today who don’t get a good education. We’ve got a moral responsibility to fix that. We’ve got an economic responsibility to fix that.
A fair nation does not unfairly deny children access to opportunity.
I’ve also believed all of my life in the benefits and dignity of work. I think through my own personal life I’ve shown a preparedness to work hard. I’m someone who believes in the benefits and dignity that come from work. I believe those benefits and that dignity should be extended to as many Australians as possible. That’s what’s driving my interest in workforce participation measures.
JOURNALIST: Just to clarify (inaudible) more spending cuts (inaudible) May budget?
PM: Look, we will work through in a methodical way and announce as necessary, but of course the next major economic statement is the May budget, and I would remind you can get yourself into a terrible mess when you do these things off the back of an envelope. We’ve seen Tony Abbott do that in the past and conjure up an $11 billion black hole. We may well be in for a repeat of that cycle.
JOURNALIST: Today’s Newspoll has Labor’s primary vote lower than it was when you replaced Kevin Rudd. Why do you think that is?
PM: I’m surrounded by people who like to make their living writing poll commentary, so I wouldn’t possibly want to substitute my work for yours. You’ll do all of that.
Of course, the Government’s got a lot of hard work in front of it. My focus is getting on with that hard work.
JOURNALIST: Can I ask you, just back on the initiatives you’ve announced, these sort of things haven’t been in place before for State Government spending of federal funds. To what extent is this a recognition that State Governments can’t be trusted spending federal funding, and if that’s the case, won’t this add red tape to the reconstruction effort?
PM: This is a recognition of my determination to make sure that every taxpayer dollar spent on flood recovery, cyclone recovery, is spent effectively. That’s why I’ve announced these arrangements.
The reconstruction inspectorate is going to need to work in a timely way. That is certainly one of my objectives, that the Queensland reconstruction authority wants to get on with the job. Mick Slate is, by definition given his seniority in the Defence Force, a can-do person. He wants to get on with the job. Premier Anna Bligh wants to get on with the job, and I want to see communities reconstructed.
I want people’s lives to go back to normal as soon as possible, and we need to reconstruct to do that.
So, in those circumstances, the reconstruction inspectorate will work in a nimble way and in a timely way, but it will have the ability to check major contracts before they are executed to ensure there is value for money.
JOURNALIST: Which minister is responsible for the spending?
PM: The sub-committee of Cabinet will receive the direct reports from this reconstruction inspectorate. It’s Chaired by me. It’s Sub-chaired by Simon Crean. Simon Crean is taking the lead on the natural disaster recovery outside Queensland. Minister Ludwig is taking the lead on natural disaster recovery inside Queensland. That’s a big enough job for us to specifically dedicate a person to it.
JOURNALIST: (inaudible) what legislation do you need?
PM: Thanks, Paul. It will not need legislation. The obligations in relation to it will be in the agreement between the Federal Government and the State Government, and it will start work as soon as necessary to acquit these tasks, so in the next few weeks.
JOURNALIST: Don’t you need the Audit Act?
PM: It’s not auditing in an Audit Act sense. I did make a reference to auditing, and that reference to auditing is to us paying, in relation to audited accounts and requests for expenditure, so there is an audit function here, and that’s where the audit function is.
Sorry, I just want to be clear about that. Of course, the Auditor-General, the Australian National Audit Office, is still doing, you know, whatever the ANAO determines to do, led by the Auditor-General.
I’ll just come back over.
JOURNALIST: (inaudible) being held, look, I appreciate negotiations are still continuing ahead of next Monday, but is the Commonwealth’s preferred status as the majority funder of health, is that still a condition of the reforms, or is that something that you are prepared to give away if you have to?
PM: As I indicated yesterday, I’ve got a clear focus here, and my clear focus is we are not making additional payments for growth without reform.
How will I judge those reforms? I’ll judge them by their capacity to make a difference to the efficiency of the system, and of course, paying on activity-based funding and efficient price is vital to that; and their ability to make a difference to the experiences of the Australian community.
People don’t judge their healthcare system on Commonwealth-State financial relations. They judge their healthcare system on whether they can find a doctor when they need one in their community; on whether they can find a nurse when they need one in their community; whether they can get access to preventative healthcare for managing chronic diseases - all of the things that keep people out of hospital, and we are a society with very high hospitalisation rates compared with comparable nations, and then, if people need a hospital, whether the hospital can respond to their issues and concerns in a timely way at the emergency department or for elective surgery.
JOURNALIST: (inaudible) the end product (inaudible)
PM: Well, allied with budget speculation, there’s the well-known game of COAG speculation. I know you’re all going to play it. You’ll have to excuse me if I retire from playing the game. I’ll be talking to my colleagues and working on that.
JOURNALIST: You had a position on the GST before. It’s laid down. It’s out there. Is that position still operative, or is it not operative?
PM: The position I’ve just outlined is the position that is driving me on health care reform. Clearly, I’ll be working with Premiers and Chief Ministers in the lead up to COAG on Valentine’s Day, for which I am sure there are cards already in the shops, consistent with my view everything happens earlier than it used to.
Yes, just one sec, we’ll just do two more – one here, one here.
JOURNALIST: On the governance (inaudible) that you put out today, the way in which it’s been structured with the Inspectorate responding back to the sub-committee, of which you are the Chair, are you quite deliberately structuring the system so that you are responsible? You’re taking responsibility for any value-for-money issues that might arise in the spending of this money?
PM: I’m the Prime Minister. I lead the Government. I take responsibility. I’m setting up a system which means we’ve got extra oversight, an extra way of ensuring that we get value for money.
Over here. Dennis?
JOURNALIST: (inaudible) you’ve never heard me sing. I’ll spare you my voice.
Just on COAG, I’m not asking you to speculate, but given that Kristina Keneally has actually started campaigning for the election and there are different views between her and Mr O’Farrell on the health reform. Have you given any idea or thought to briefing Mr O’Farrell ahead of COAG or involving the Opposition in negotiations?
PM: Well, call me old-fashioned, Dennis, but I think it’s normal to extend to Australians the courtesy of voting before determining who their government’s going to be.
Yes, there will be an election in New South Wales and the people of New South Wales will get to elect their government through that process.
Premier Keneally will be attending COAG as you would expect.
PM: I think you can read between those lines, Matthew.