Securing our economic future; executive pay; Prime Ministers hypcrisy (Transcript of the Hon. Malocolm Turnbull interview with Melissa Doyle & David Koch, Sunrise)

9 March 2009

KOCH:
Mr Turnbull joins us now. Good morning to you.

MALCOLM TURNBULL:
Good morning.

KOCH:
What is the problem with using the term cyclone?

MALCOLM TURNBULL:
Well I think it is important to talk about the economy accurately and objectively and the big failing in Mr Rudd's language is that he does not remind Australians of how strong we are relative to other countries, and the reason he doesn't do that of course is because our economic strength is a consequence of the eleven and a half years of the previous government that paid off all government debt, put money in the bank, took obligations off future generations, ran strong surpluses. You see if you use the storm metaphor, lots of different countries, every country has gone in to the storm, but we went in much better prepared and much more solid and secure. Now Kevin Rudd doesn't want to mention that because then he would have to say something good about John Howard and he is allergic to that.

DOYLE:
Another word that many economists are starting to use is the word "recession". We have seen Peter Costello say we're in recession. The Prime Minister came pretty close last night, just have a listen.

KEVIN RUDD:
It is getting tougher and tougher. We had one quarter of negative growth. The rest of the world by and large is in recession, that is the developed economies, and there is only a limit to the amount of time that you can swim against the global tide.

KOCH:
Are you using the R word?

MALCOLM TURNBULL:
Well we talk about recession all the time and for anyone who lost their job at the moment or whose business is suffering or business has closed, who can't get finance - they feel they are in a recession now, but it is a technical term and it means two consecutive quarters of negative growth. We've had one. If the March quarter is negative then, yes, we will be in a recession. So the reality is that the economy is slowing. In some parts of the country it is slowing very quickly and a lot of people are hurting and the problem we face with the Government is that they're racking up billions and billions of dollars of debt....

KOCH:
But we are in recession, aren't we? You've got a finance background. We have almost finished with the quarter anyhow that's going to be judged as the second leg. We are in a recession. We don't need to wait for the figures do we?

MALCOLM TURNBULL:
Well Kochie I think you should always wait for the figures, but again we are wasting time on a semantic debate. Let's talk about what should the Government be doing now?

DOYLE:
Alright, what would you do? What is the first thing you would do if you could today?

MALCOLM TURNBULL:
What I would do is I would bring forward the tax cuts from July 1 this year and July 1 next year because that stimulates the overall economy. It's like a rising tide - it lifts all boats. I would take the burden of employing people, or part of the cost of employing people, off the shoulders of small business and what we have proposed is that Government rebate a portion of the superannuation guarantee contribution for small businesses. So that would immediately over the next couple of years lower the cost of employing people. We provide incentives to invest. So, for example, in green refits, so if building owners want to invest in improving their energy efficiency and water efficiency they get an accelerated, a doubled depreciation rate to give them an extra incentive to hire people to do that. And you know probably the most important thing, I would actually invest in something worthwhile, some infrastructure. I was in Cessnock the other day in the lower Hunter. 83 people have lost their jobs there at the Bonds Factory. You know, this is the Pacific Brands factory - and talking to the local community there, what can be done? Under the Howard Government we set aside nearly a billion dollars to build a link from the Sydney to Newcastle expressway to the New England highway. It is called the F3 Link. Now that money is there, all the land is bought, the planning is done. You can start work immediately. Mr Rudd has done nothing and what the people there were saying is, 'what is this guy doing? He is sitting there on his hands, watching our community bleed jobs and there is a project that is ready to go that will add enormously to the economy, the productivity of the region add thousands of jobs and he is doing nothing'. So the reality is that Mr Rudd says if you don't agree with him you're in favour of doing nothing. I am in favour of doing a lot. I am in favour of spending less money, borrowing less money, but spending it on things which will give us a real lift in productivity, efficiency and give us a real economic stimulus.

KOCH:
Okay. Good idea. The issue of highly paid executives. Are you wading into this? Should there be a cap on executive pay?

MALCOLM TURNBULL:
No I don't think there should be Kochie. What I have said and I have said this for years and years, I mean you may remember - you were a finance reporter at the time - when I took on the board of Fairfax nearly 20 years ago for giving themselves a pretty rich option deal and I took them to court. I have always believed that senior executives of public companies should, or any company, should have their remuneration agreed to by the shareholders. And so if the shareholders want to pay their top executive a huge amount of money that's fine...

KOCH:
So shareholders could vote? Because at the moment they don't, do they? Because they just need be told but they can do nothing about it, the board makes the decision. So you are saying give it to the shareholders, annual meeting

MALCOLM TURNBULL:
Yes that's right.

KOCH:
Perfect.

MALCOLM TURNBULL:
And it certainly should be at least the CEO. That may be all you need; maybe a couple of others. But if the CEO has got to be accountable in that very direct way you can rest assured that he or she will make sure everybody else is paid appropriately.

DOYLE:
You singled out the PM's wife Therese Rein in an article on the weekend. Was the crossing the line to bring family in to it?

MALCOLM TURNBULL:
Well you see I actually praised her. I congratulated her. Therese Rein has done a magnificent job building up a big business both in Australia and overseas and I congratulate her and that is what I said in the article. The only point I made was about Kevin Rudd's hypocrisy. Kevin Rudd is a hypocrite. He has said that the neo-liberalism of the last 30 years has done enormous damage the world. He singled out the Howard Government and he has criticised outsourcing and privatisation. Now, his whole family fortune, very considerable family fortune - he is the richest man ever to be Prime Minister - is based on their family business taking over the outsourced job placement functions of the Commonwealth Employment Service. So in other words he is attacking the very process of economic reform from which he has so massively benefited. Now that is, on anyone's view, hypocritical.

KOCH:
So we have the richest Prime Minister and the richest Opposition Leader?

MALCOLM TURNBULL:
Well that may well be right but the point of the matter is that I don't criticise people for having a quid. If they work hard, they pay their taxes, they create jobs. That is what Lucy and I have done all our lives; we have taken risks, we have started businesses, a lot of them in cutting-edge technology areas. We have created a lot of jobs. We have generated a lot of income for Australia, exporting technology. That has been our life - a life of enterprise. Now Labor attacks me relentlessly for that. I believe it is a good thing. I welcome and admire enterprise. The Australia I will lead as Prime Minister will encourage enterprise, encourage innovation, encourage people to get on and have a go.

KOCH:
Hear, hear.

DOYLE:
Thank you for joining us Malcolm Turnbull. Appreciate your time.

MALCOLM TURNBULL:
Thank you.