SABRA LANE: The Prime Minister joins us now. Good morning, Prime Minister, and welcome to the program.
PRIME MINISTER: G’day Sabra.
LANE: You've said that you are appalled by this. The bank's chief executive, Brian Hartzer, is he the right person to sort this out given that he oversaw the 23 million breaches?
PRIME MINISTER: Well, that's ultimately a judgment for the board of Westpac, I mean it’s for the board to make decisions about who should be running banks, not governments. But all I know is AUSTRAC has been doing their job. They're the cop on the beat here. This is the second occasion with a major bank. You’ll remember their very successful investigation which led to the prosecution of Commonwealth Bank and the outcome there. So they're doing their job. The board and the executives of Westpac need to do theirs.
LANE: Should Mr Hartzer or someone resign? And you know, the bank self-reported this instance.
PRIME MINISTER: Well, these are things that the board and the management need to determine themselves. It's not for the government to say who should be in those jobs or not, but they should be taking this very seriously, reflecting on it very deeply, and taking the appropriate decisions for the protection of people's interests in Australia, their safety. As you've highlighted in your report, these are some very disturbing, very disturbing transactions involving despicable behaviour.
LANE: AUSTRAC says this is systemic. Have you been given guarantees that ANZ and NAB are in the clear of similar scandals?
PRIME MINISTER: Well, these issues were raised at the time of the CBA process. And these are things that the Treasury and the relevant agencies, particularly AUSTRAC, will be following through and pursuing very closely with all agencies.
LANE: To the fires, it's already been a very bad season. There are three emergency alerts this morning on Yorke Peninsula in South Australia. Victoria's on Code Red today. The former fire chief, Greg Mullins, he tried to meet with you in April to warn you that this season would be very bad. And that fire seasons in the northern and southern hemispheres are overlapping, making it increasingly difficult to source big water bombers. Why didn't you meet with him?
PRIME MINISTER: This is advice we already have from existing fire chiefs doing the existing job. This is why we put the additional resources into our emergency services and our aviation firefighting assets. These are things that were very well known to the government. I mean, it's the contribution of these issues to global weather conditions and to conditions here in Australia are known and acknowledged. And so we were getting on with the job of preparing for what is already being a very devastating fire season. I've got to say the national coordination and the response effort, I was up in Queensland yesterday, and I've been in touch with the South Australian Premier this morning, in New South Wales it's been outstanding also. The coordinated effort and the response, the learnings from, particularly, the Black Saturday fires have been put in action and that is saving lives and it's saving homes. So we've been getting on with the job.
LANE: He and twenty three other ex-fire chiefs did seek the meeting with you. He's gone to the top because he views this is as very urgent and doesn't think that the Government's factoring in climate change enough, already 250 homes have been lost. We're not even into summer yet.
PRIME MINISTER: Well, look, I take issue with- the preparations, I mean, we were taking the preparations and I think you've seen that demonstrated in the response effort from the state agencies working together closely with the Commonwealth. I mean, in February, I acknowledged the contribution of those factors to what was happening in Australia, amongst many other issues. But let me say this, Sabra, the suggestion that any way, shape or form with Australia accountable for 1.3 per cent of the world's emissions, that the individual actions of Australia are impacting directly on specific fire events, whether it's here or anywhere else in the world, that doesn't bear up to credible scientific evidence either. Climate change is a global phenomenon, and we're doing our bit as part of the response to climate change. We're taking action on climate change. But I think to suggest that with just that 1.3 per cent of global emissions that Australia doing something differently, more or less, would have changed the fire outcome this season. I don't think that stands up to any credible scientific evidence at all.
LANE: The former chief of Victorian Country Fire Service, Neil Bibby, says the federal government fundamentally doesn't like talking about climate change and that politics is the reason why the federal government is ignoring their advice. How do you respond?
PRIME MINISTER: We like taking action on climate change. That's what we like doing. We've got our commitments for Kyoto 2020. Remember, they are the commitments that were put in place to deal with the global climatic conditions that we're experiencing right now. And we not only lived up to those commitments for next year, but we will beat them by 367 million tonnes. If anything, Australia is an overachiever on our commitments, on global commitments, and for 2030, we will meet those as well with the mechanisms that we’ve put in place and we'll ensure we do achieve that and we'll take the action necessary to do that. So, you know, I'm up for taking action on it, not just jabbering on about it.
LANE: Goldman Sachs outlined in a report in September the need to adapt to the effects of climate change and that it could drive one of the largest infrastructure build-outs in history. How much of that thinking has been factored into the projects that you're bringing forward to try and stimulate the economy?
PRIME MINISTER: Well these projects are about strengthening our economy, creating jobs, building our productivity capacity for the future. Getting people home sooner and safer. And all these projects will be done in accordance with the environmental conditions and other approval processes that are in place in our state and territories and will work closely with them to ensure for longer term projects that they move swiftly. And so that the projects we're talking about now, like down in Milton Ulladulla. Now Milton Ulladulla and the Princes Highways, many of your listeners who live down that way, and I suspect, many in Canberra will be very familiar with how dangerous that stretch of road is. And these are the things we're fixing. This is where we've been working in partnership with state and territory governments to get priority infrastructure projects which are good for the economy, good for people's safety on the roads and get them happening now. These aren't once off sugar hit payments. I mean, that's here today, gone tomorrow. But you do pay for it for the next decade -
LANE: And what happens-
PRIME MINISTER: - are actually investing in the economy and investing in jobs.
LANE: What happens, though, Prime Minister, if the billions more you’re spending now don't fire up the economy? What is the next step to stimulate the economy, given that the RBA can't cut interest rates much further?
PRIME MINISTER: Well, the RBA will make their decisions. The government will make our decisions. What we've been doing since the election is sitting down with state and territory Premiers and bringing forward these infrastructure projects. It was exactly the thing that Phil Lowe has been saying for some time and that we've been acting on for a long time. But you just don't go out and spend $3.8 billion dollars based on a phone call over the weekend. You get the planning right. You get the scheduling right. You talk to the states about what the priorities are because they're the ones who ultimately have to deliver the projects on the ground. We've done that work. We didn't rush it. We didn't rush around with our arms flapping in the air in some sort of panicked crisis as the Labor Party wanted us to do. We just took the sober, calm, methodical approach, got the projects ready, put the money in, stood up with Premiers from both sides of politics, everybody working together to get this done.
LANE: Come Budget time if interest rates are still at emergency lows, the nation's growth rate is still struggling and inflation is still low, and unemployment hasn't hit 4.5 per cent, which is the level that some economists think is required before there is a big jump in wages across the board. But you deliver a surplus. Will it be worth it?
PRIME MINISTER: Surplus pays down debt. This is very important. I mean, a surplus is not as I said in the speech last night at the BCA, money that’s sort of left down the back of the couch with no economic purpose. It pays down debt. We’ve got a $19 billion dollar-
LANE: But if the economy is still struggling will it be worth it?
PRIME MINISTER: Well it’s critically important for Australia's future financial resilience. I mean, we are facing headwinds not just now, Sabra, but for years to come. And you just don't go and erode all of your financial resources at a time like this. What you do is you make measured and careful decisions. Let's not forget, Germany, South Korea, Singapore, the UK, all had negative quarters. Australia grew at 1.4 per cent. We grew at half a per cent for the first two quarters of this calendar year. And the bank, the RBA, that is- Treasury, OECD, IMF, all of these organisations are saying that next year will be a stronger year for Australia. So look, what we will continue to do is be measured and we will continue to apply the discipline that has enables us to bring the Budget back into a position of strength so we can fund record levels of investment in to the NDIS. More than 100, 000 extra people will come onto the NDIS in the next 18 months or so, and that will be funded. That will also be putting significant resources into the economy, more funding in aged care, more funding in health and education, all of that on top of the tax relief that we've afforded, the extra infrastructure investment. Importantly, the drought relief and getting those stimulus payments into regional communities, that is having a big impact on those communities, positively.
LANE: A couple of weeks ago, you flagged action to stop what you called indulgent practices by some businesses who refuse to provide services like banking and insurance to the coal sector. What are you going to do about it?
PRIME MINISTER: Well, when we when we've finalised our arrangements, we'll make those announcements.
LANE: And when will you detail that? Would that be something that we should expect in weeks or months?
PRIME MINISTER: No, when it’s finalised we’ll make an announcement.
LANE: Some businesses are following the advice from regulators about future potential risks, APRA and the Reserve Bank have talked about the dangers of stranded assets. Shouldn't companies and boards be factoring that into purchasing decisions that they make now?
PRIME MINISTER: You mean in terms of any changes we might make?
LANE: Well in terms of making investment decisions based on climate risk and based on the possibility of stranded assets in the future?
PRIME MINISTER: Well, our climate action targets are set. They've been set for years. I mean, there's nothing unsure about the fact that we have a 26 per cent target for 2030. I mean, there's been no change to that for years. There's been absolute certainty. I mean, the renewable investments we're seeing in Australia are at record levels and at top-of-world scales. So Australia's action and Australia's response is incredibly well understood. And it hasn't changed and it's not changing. So I think there's a very clear and certain environment as there is a clear and certain environment about what the government's economic policy and direction is- one of stability and certainty, not one of chaos and panic that we saw under Labor, which meant that we're still paying for their recklessness when they lost their nerve years ago.
LANE: The interim report, you just touched on aged care. The interim report from the Commission says it needs fundamental reform and redesign, not a mere patching up. And that frequent minor shifts aren't actually helping, when the final report is returned. Is your commitment- is your government prepared to undertake thorough and widespread reform of this sector?
PRIME MINISTER: We’ve already begun that process and the reason I initiated the Royal Commission was to ensure that we could get to the absolute bottom of all of these issues. I mean, aged care is a very complex issue. As the interim report made very clear, this is not issues just over a few years, this is over 30 years. And I think the Australian public know that. I mean, all Australians, I think at some time in their lives and I'm no stranger to this either, you are dealing with elderly parents or loved ones or others who are going in to this system. And we all have many different experiences of it. And there are many challenges in the system which are which are further impacted by the ageing of the population and the demand pressures coming through. But what I will do, I mean, three issues were highlighted, issues around in-home aged care places; issues about young people being in these care facilities, and I'm pleased that we've got that number already down from 6,200 to 5,600. We're already seeing a change there and we're going to see more changes there. And it also deals with chemical restraints within the aged care system. Now, they are just some early issues that they're highlighting, but they've also highlighted, particularly in in-home aged care, that there needs to be change to how that system is run. And I agree with that. We agree with that. And so we're not just going to throw more money at a problem. Putting more money in will also be accompanied by fixing the system that you're putting the money into. Otherwise, you're wasting money and you're raising people's expectations of better outcomes that won't come without charge.
LANE: Prime Minister, we're out of time. Thank you for joining AM this morning.
PRIME MINISTER: Thanks a lot, Sabra. Good to talk to you.