ELIZABETH:

From Schwartz Media. I’m Elizabeth Kulas. This is 7am.

ELIZABETH:

As Scott Morrison finishes his first overseas trip since winning the election, there are worrying signs for the economy and for press freedom.

Paul Bongiorno on interest rates, AFP raids and Kristina Keneally’s new responsibilities.

PAUL:

I'm ready when you’re ready.

ELIZABETH:

Alright. So Paul, Buckingham Palace this week.

PAUL:

Yes Buckingham Palace, Elizabeth.

Paul Bongiorno is a columnist for The Saturday Paper.

PAUL:

This is, in many ways, the mecca for Australian prime ministers to meet their monarch. Scott Morrison, no exception, he and his wife Jenny, I think they were both a bit overwhelmed because as soon as Mrs Morrison entered the room, she curtsied.

ARCHIVED RECORDING - Unidentified man:

"Follow the circle straight down, this is Mrs Morrison, your majesty."

ARCHIVED RECORDING - Queen Elizabeth:

"Lovely to meet you."

PAUL:

And when the Queen then came over, she curtsied again, and Mr Morrison gave one of those profoundly deep bows as he shook the monarch's hand.

ARCHIVED RECORDING - Queen Elizabeth

"Very nice to see you."

PAUL:

I have to tell you, which I noticed when I was looking at the pictures that in the great of this parlour was an antique electric two-bar heater. It wasn't turned on. But it didn't matter Mr Morrison made up for that with a very warm presentation to the Queen of a biography of Winx. Winx: Greatest of all racehorses. Mr Morrison certainly aware that the Queen is an equine tragic.

ELIZABETH:

Ok, so this followed a visit to the Solomon Islands. How has Morrison's trip going before he got to Buckingham Palace?

PAUL:

Well, I'd have to say he went pretty well, and he got a very warm reception in the Solomon Islands. Not hard to explain because it came with an Australian Grant of $250 million. He said that this was to help them achieve independent sovereignty and independent economic sustainability. Well, look this can really only mean independent of China, and there's no doubt that this is at the encouragement of the United States, which wants Australia to step up its role in its own neighbourhood in countering the influence of China. And Australia realises that it just can't turn its back on its near neighbours and allow China to extend its hegemony. So, Morrison was well-received there, and I think he did achieve what he came to achieve — that is to show that Australia is now taking notice ... it knows that you're there.

ELIZABETH:

Okay. And while Morrison's abroad what's happening here at home?

PAUL:

Well here at home, the big news of the week — on Tuesday the Reserve Bank moved interest rates. That's the rate at which the Reserve Bank charges the retail banks for money and moved it down to one point five per cent, the lowest on record. Now during the global financial crisis 10 years ago, the emergency level of 3 per cent was thought to be pretty extraordinary. Now we're half of that at one point five per cent, and some will remember that even during the GFC when the Liberals were in opposition, they criticised the Government for having to have interest rates at this emergency level. Well now, we could say if that was an emergency this is now what, close to a catastrophe?

ELIZABETH:

And what does this mean for the economy. I mean obviously it's not a great outlook?

PAUL:

Well, well it's not although interesting here the Reserve Bank Governor Philip Lowe, he says the decision doesn't reflect a weaker outlook. Frankly, if you translate this it can only mean a sluggish economy needs stimulating. And the Reserve Bank Governor had a warning yet again to the government that it would have to do more. It would have to play its part, bring forward the massive infrastructure spending and look at encouraging wage growth.

ELIZABETH:

And what about Lowe's call for that infrastructure spending to be brought forward. Where is the Treasurer Josh Frydenberg on that?

PAUL:

Well, look he's made it quite clear in a couple of interviews but in a key one with Laura Tingle, she put this to him and he said ‘Oh well, we've got $100 billion out there for infrastructure over 10 years.’ She said ‘Yes, but when are you going to spend it?’ He said well we'll spend it in the in the forward estimates that is over the next four years. And of course they won't be bringing it forward because with the low economic growth, with the sluggish economy there's only one way he could bring it forward — and that is to go into deficit.

ELIZABETH:

And how likely is it that the government is going to do just that?

PAUL:

Well most economists say to achieve that would now require another of Scott Morrison's miracles — that we would return to budget surplus, next year and for the four years after that. Now of course there are many in Labor who believe and who are quite angry really, that Bill Shorten and his treasury spokesman Chris Bowen didn't nail the government for saying ‘Right. You're promising a surplus next year but you promised one for every year for the past six and you didn't deliver.’ So, we do know that the political heat is really on the Morrison government now. If they don't achieve a budget surplus next year, their credibility will be in tatters.

ELIZABETH:

So, he's basically got a choice to make and at this point, he’s committing to delivering that surplus.

PAUL:

He's committing to political optics.

ELIZABETH:

Okay. And how is the new Shadow Treasurer Jim Chalmers faring through this first couple of weeks?

PAUL:

Well Chalmers this week, in dismissing both the optimistic gloss of Governor Lowe, and then the persistent claims of the government about a strong economy. He said look there's weakness as far as the eyes can see — there’s stagnant wages, weak consumption, underemployment, job insecurity and they're all feeding into the broader economy — and the national accounts when you had a look at the details of them on Wednesday all show that Chalmers claim is just telling it as it is.

ELIZABETH:

And while all this was happening Paul, the AFP were arriving at an apartment in Canberra.

[Music starts]

PAUL:

Yes, in many ways this was a more disturbing element of the week. We after all like to pride ourselves that we live in a democracy, and the cornerstone of any democracy is freedom of the press and what we saw 15 days after an election. Australian Federal Police agents raid the Canberra apartment of Anika Smethurst who's the senior political correspondent for The News Corp tabloids, particularly the Herald Sun in Melbourne. And the next day, if the Smethurst raid wasn't disturbing enough, Australian Federal Police agents raided the ABC headquarters in Ultimo in Sydney.

ELIZABETH:

We'll be right back.

[Music ends]

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ELIZABETH:

Paul, when the AFP arrive at Anika Smetherst’s time on Tuesday, what are they looking for?

PAUL:

She wrote, 14 months ago, a piece that was a front page story in The Sunday Murdoch tabloids, which showed that they'd been discussions at the highest levels within two key government departments that the Australian Signals Directorate should be able to spy on Australians without a warrant.

PAUL:

Well it's clear from explanations, given, for example, by the Attorney-General that they were looking for evidence, for clues on who showed Anika Smethurst, the documents that showed that these discussions indeed were going on within the government. So you had seven agents spending seven and a half hours and Smethurst, herself, put on Twitter she took a picture of the agents looking in her oven. They looked through her cookbooks, they looked through her wardrobe, they looked through her underwear, so it was a completely invasive raid looking for this information.

ELIZABETH:

And then Paul, the next day similar raids at the ABC in Sydney?

PAUL:

Yes. Again about seven agents turned up at the ABC headquarters. But they, they spent seven to eight hours going through the files that were given to the ABC, and that two of their key investigative reporters Dan Oakes and Sam Clark worked on the clandestine operations of our special forces in Afghanistan. The most disturbing included an episode where our troops killed unarmed men and children.

[Music starts]

ARCHIVED RECORDING - John Lyons:

"There are six AFP officers and about four ABC lawyers, they have downloaded 9,214 documents, I counted them."

ARCHIVED RECORDING - Janine Perrett:

"And the fact that this was done, ten days/two weeks after an election is absolutely outrageous - I know people think ‘oh journalists, what’s it matter?’ This is really important."

ARCHIVED RECORDING - Craig McMurtrie:

To have a warrant executed on the headquarters of the national public broadcast in this way, I can’t state it enough, is an unwelcome development, it is really serious and we take it very, very seriously.

[Music ends]

PAUL:

This of course, caused an enormous stir when the ABC reported it through its four corners programs back in 2017 again, look at the timeline, 2017. It's now 2019. So. So this raises questions of the timing and also the motivation. There's no doubt as Senator Patrick says and others have pointed out, including the President of the Parliamentary press gallery committee that this is to intimidate journalists and to send a very strong message to public servants that if they, if they want to blow the whistle the whistle will be blown on them.

ELIZABETH:

And how has Labor responded to this?

PAUL:

Well interestingly, Labor always is wary of being wedged on issues of national security. If they raise anything, they're immediately accused of being weak. So when the initial reports came out Labor and Kristina Keneally now the Shadow Minister for Home Affairs wanted to know more. But by Wednesday, the new Opposition Leader Anthony Albanese, was demanding a briefing from the government on the raids and Albanese said in several interviews it's quite frankly bloody outrageous. He said democracies rely on the freedom of the press and Smethurst was a serious professional journalist who he respects. In fact, he said the whole thing was extraordinary.

ELIZABETH:

And just on Kristina Keneally who has newly been given this shadow responsibility for Home Affairs in Albanese’s cabinet. How has she handled this week?

PAUL:

Well it's quite interesting. There is a view in the Labor Party that Anthony Albanese gave Keneally Home Affairs as a way of sidelining a rival. But Albanese, he's given Kristina Keneally, who is a high profile and competent performer, this portfolio precisely because in the view of Labor but not only of Labor of others. In fact, Peter Dutton, has been an incompetent minister that the giant department that he runs now, the Department of Home Affairs, is a shambles. It has budget overruns, it's had high profile resignations. In fact, public servants past and present have already been talking. Keneally will will definitely be a receptive ear.

ELIZABETH:

And do you think Albanese sort of got Keneally in his mind as something of a secret weapon. I mean she played a pretty good role on Bill Shorten's bus during the campaign.

PAUL:

Yes she certainly did and Shorten used her as his attack dog, not so secret ... she was pretty high profile about it. I guess she's the iron fist in the velvet glove. One thing about her is because she's something of a darling of the media because she's such a, you know, a good media performer and she also has very good ins with the Murdoch conglomerate, if I could put it that way.

ELIZABETH:

Paul, where does Morrison end up the week?

PAUL:

Well I think he ends up the week rather badly, on two counts. Whatever successes he gets from rubbing shoulders with world leaders and in our neighbourhood in our Pacific family, back at home the key claim for economic competence and a strong economy have been undermined by the facts, there's been a brutal reality check on that front. And on the second front here — we have, two and a half weeks after a federal election, at the very least images of an authoritarian government at work. So you'd have to say it's been a very bad week for the Morrison government.

ELIZABETH:

Thank you Paul.

PAUL:

Thank you Elizabeth. Bye.

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[Music starts]

ELIZABETH:

Elsewhere in the news:

Cardinal George Pell’s appeal hearing finished in Melbourne yesterday afternoon. The appeal hinges on whether or not the jury that convicted Pell could really have been without doubt and whether the evidence against him should be regarded as improbable. A decision in the case is expected to be returned in the coming weeks. Cardinal Pell is serving a six year prison term for historic child sexual offences.

And at a press conference in Canberra, acting AFP commissioner Neil Gaughan revealed that over a year ago, police alerted the Coalition to their plans to investigate the leaking of sensitive material. He denied however that the government had been informed of any further developments in the lead up to the two raids that occurred this week. Mr Gaughan also raised the possibility of additional raids on media organisations in the coming weeks.

This is 7am.

I'm Elizabeth Kulas.

We'll be off for the Queen's Birthday holiday, so see you Tuesday.