Friday, February 13, 2004

The Misfortunes of Virtue

It's been a crap week for Federal Treasurer and Prime Minister In Waiting Cabinet Fall-Guy, Peter Costello. On Tuesday, Senators Ian MacDonald, Robert Hill and Ron Boswell did a fine job of dropping Mr Costello in it on Monday, with repeated claims that the US-Australia Free Trade Agreement would bring in a cool $4 billion in general economic benefits. Senator MacDonald started the pile with his answer to a question from Senator Conroy:

Senator CONROY (2.11 p.m.)—My question is to Senator Ian Macdonald, representing the Minister for Agriculture, Fisheries and Forestry. Is the minister aware of the comments on 24 January this year by the Leader of the National Party and Deputy Prime Minister, Mr Anderson, that it would be ‘un-Australian to accept any free trade deal without sugar being included’? Did the minister read Minister Vaile’s comments on 23 January that ‘central to this agreement is agriculture, and agriculture includes the key elements as far as we are concerned of beef, dairy and sugar’? Is the minister aware that the US offer on agriculture is the most miserly offer on agriculture ever proposed by the US in a bilateral trade deal? Furthermore, is the minister aware that more generous offers have been made by the US in recent months to Singapore, Chile, El Salvador, Guatemala, Honduras and Nicaragua? Minister, what happened to Mr Howard’s ‘special relationship’ with President Bush?

Senator IAN MACDONALD — Mr Howard’s special relationship with Mr Bush has brought Australia a great deal of benefits under this free trade agreement — something like $4 billion worth of benefit to Australia from this negotiated agreement.
(page 30 of the PDF file)

Senator MacDonald repeated the $4 billion dollar figure three more times (Senator Cook was keeping score). Robert Hill joined the fun in answer to a question from Senator Andrew Bartlett.

Senator BARTLETT (2.30 p.m.)—My question is to the Minister representing the Minister for Trade, Senator Hill. I ask the minister: given that the actual text of the newly-signed free trade agreement is not yet available, can he please explain to the Australian people the clear and many inconsistencies between the press releases and fact sheets of the Australian Minister for Trade and the material released by the US trade representative in areas such as quarantine, media and broadcasting, the PBS and foreign investment? Can the minister outline when the full, complete text of this newly-signed, secret agreement will be released to the public so that everyone can assess for themselves the value or otherwise of the agreement. What is the timetable for the attempted passage of any enabling legislation through the Senate?

Senator HILL—I obviously cannot answer for US government press releases or press reports—

Senator Carr—Who should we believe?

Senator HILL—I have great confidence in the releases of Australian Minister Vaile—

Senator Carr—One page! That’s a foolish approach!

Senator HILL—I have to say, Senator Carr, for your benefit, that he has done an excellent job in negotiating this agreement for Australia. On the substantive part of the question as to when the full text will be available, as of yesterday I was unable to get a firm answer on that.

Senator Carr—Haven’t you got a copy?

Senator HILL—No. There was a suggestion of a fortnight, but I suspect it might take a little longer than that ...

Senator BARTLETT—Mr President, I ask a supplementary question. I ask the minister how it is that we are not able to see this supposedly fantastic agreement that is benefiting all Australians—that he has not even read—for at least a fortnight, if not longer? Given this government’s record of dishonesty and of ambiguous and misleading statements to the Australian people on key issues, how can we possibly be expected to take his word for it? Could I ask him to please address just one example in relation to quarantine, where Minister Vaile says that the systems we have in place are not affected, and yet Mr Zoellick says that food inspection procedures that have posed barriers in the past will be addressed, benefiting US products such as pork, citrus, apples and stone fruits. Is the minister seriously saying that we are not expected to believe the word of the US representative and believe his own?

Senator HILL—The honourable senator does not have to take my word for it. As I said, the detail will be explored by the joint parliamentary committee—by his colleagues, acting on behalf of parliament as a whole, both chambers—and a number of pieces of enabling legislation will need to be debated and passed in this chamber. He and the Australian Democrats will have an opportunity to show that they are actually supportive of expanding the Australian economy and providing more jobs or, alternatively, they can vote with Labor and vote no—and vote down $4 billion of benefits to Australia and potentially thousands of new jobs.

(pages 33 - 34 of the PDF file)

Senator Boswell's turn came whenm Senator Conroy raised the vexed question of sugar:

Senator CONROY—Going back to what Jim Pedersen said, the Courier Mail article quoted him as saying:

“We have had faith in the commitments given by Mr Howard, Mr Vaile and other senior Government leaders — and I bet that includes you, Senator Boswell — that sugar was a ‘must include’ in any acceptable US Australia Free Trade Agreement,” Mr Pedersen said.

And what did the National Farmers Federal say? The article said:

… Peter Corish also said his organisations had been “told all the way through there would be access for sugar”.

And what does somebody who actually represents sugar farmers got to say? What did Bob Katter have to say? We all know he had a bit of a stoush with Senator Boswell on the floor of the tally room as they looked at the three or four seats they had picked up after those magnificent three years campaigning against the Beattie government. What did Mr Katter say? (Time

Senator BOSWELL (Queensland—Leader of The Nationals in the Senate) (3.13 p.m.)—I did make the statement that sugar, beef and dairy had to be included in a free trade agreement and that we could not walk away from the sugar industry. I made that statement and I reiterate it. The fact is that agriculture did very well out of the free trade agreement even though the sugar industry was very disappointed, as I was. We are not going to walk away from the sugar industry. We know that we have a commitment to the sugar industry, and that commitment will be carried out. But we were not prepared to sacrifice the beef industry, the lamb industry, the seafood industry, the horticultural industry, the cereal wheat industry, the packaged fruit industry, the wine industry, the wool industry, the peanut industry and the dairy industry for one component of agriculture.

We know that we have to stand shoulder to shoulder with the sugar industry.


Mark Vaile has done a magnificent job. He has got for our primary industries access to the world’s biggest domestic market—the world’s biggest market. He has done that and we are going to make about $4 billion. Just think of this.

(pages 41 - 42 of the PDF file)

Finally, Senator Cook revealed that between them Senator MacDonald, Senator Hill and Senator Boswell had build up a $4 billion pile of pure bullshit:

We know where the $4 billion figure comes from. It comes from an econometric study conducted by the Centre for International Economics prior to the negotiations of this agreement. It is not a figure produced by the centre; it is a figure extrapolated by government calculators from the calculations done by the centre. The qualifications put around that figure were that, if the entire US market were opened and the entire Australian market were opened, after 10 years there may be that level of benefit.

If we look at this agreement we see that hardly any of the US market is being opened but a large part of Australian industry is being opened. So $4 billion is a fanciful figure, remembering as well that it was calculated in Australian dollars when the exchange rate with the United States was 53c to the US dollar. It is now over 70c. So on exchange rate variations alone this package, if it is worth anything, is probably worth well under $1 billion after 10 years—or maybe after 18 years, because the beef quotas do not change until then.

(page 44 of the PDF file)

It's hardly surprising that Wednesday's AM started with the story of the $4 Billion Dollar Ministers (We can revive the economy - we have the agreement. We can make it bigger, richer, stronger than before). When Peter Costello was interviewed by Alexandra Kirk, his first challenge was to put an acceptable face on the combined gaffe of the Bionic Senators. The most charitable explanation I can find for his inept handling of this issue is that no-one bothered to tell him that MacDonald et al had been caught using out-of-date estimates to talk up the Free Trade Deal in the Senate. It's an understandable lapse; Senator Cook didn't let the cat out of the bag until after 3.29 PM so there wasn't much time for the Government to brief Costello for a radio interview the following morning.

Alexandra Kirk went on to ask Mr Costello about Mark Latham's proposal on parliamentarians' superannuation. He didn't do too well with that issue either, offering the standard defence that a good super scheme helped attract the ablest people into Federal politics. People like the redoubtable Senator Bill O'Chee. And Mal Colston. Here's an excerpt:

ALEXANDRA KIRK: So you'd say that the current super scheme shouldn't be changed?

PETER COSTELLO: No, I would ask this question. By changing the super scheme do you think you'll get better MPs? I'm not sure that it'll give you better MPs. I think we oughta do things that will get us better MPS in Australia, but I don't think this is one of the things that will do it.

Once again, it's possible that Costello was inadequately briefed on the issue although, after this exchange between Mark Latham and the Brillo Bullfrog, he had fairly good reason to trust his colleagues to back him in the standard defence of pollies emoluments and perquisites:

Mr LATHAM (2.12 p.m.)—My question is to the Prime Minister. Is the Prime Minister concerned by the high level of public distrust and cynicism about modern politics? If so, does he support Labor’s policy to close down the parliamentary superannuation scheme for new entrants and place a cap on the superannuation entitlements of senior office-bearers in government?

Mr HOWARD—The answer to the first part of the question is yes. The answer to the second part of the question is that I will analyse the policy. I would add that, if the Leader of the Opposition is concerned about that cynicism, there is something he can do tonight. He does not have to wait for the Remuneration Tribunal and he does not have to wait for an election; he can instruct the Federal Secretary of the Australian Labor Party to renegotiate the Centenary House lease.

So (as Tim Blair points out, it's inaccurate to call the Prime Minister's announcement that he'll adopt the Latham proposal a back-flip; he carefully avoided taking a position on the issue in parliament, preferring to go on the attack on the subject of Centenary House. Clearly what Mr Costello said on AM he said on his own behalf, not on behalf of the Government or the Prime Minister. Where Costello sees possible disadvantages in Latham's proposal, and has suggested that in the long-term it might damage the political process, Mr Howard is more sanguine:

"It to me is not the most important issue.

I'm simply not going to shed political blood on something that I don't regard as important, I don't feel that strong about.

I mean, I care about defence and border protection and keeping low interest rates for your viewers, and keeping unemployment down and reforming the industrial relations system."

Another thing Mr Howard clearly doesn't feel too strongly about is hanging one of his cabinet colleagues out to dry. But we knew that already from the Heffernan affair If the treatment that Peter Costello has received from his own side of politics is typical of the way these blokes "stand shoulder to shoulder" you wouldn't want to be a sugar farmer.

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