4BC Federal Politics Panel

13 May 2014


SUBJECT/S: Federal Budget

CONDREN: With the federal politicians obviously in Canberra this morning, they will be geeing up, I suppose, for the Budget which is going to be delivered by Joe Hockey today. Jim Chalmers from the ALP and Wyatt Roy from the LNP, and shortly before coming on air, I asked Wyatt if Black Tuesday would live up to its name when Joe Hockey delivers his budget.

ROY: Well it’s the day we stop writing the budget in red ink. We stop the policy of the Labor Party which is to borrow against the next generation which is exactly what the Labor party has done. The debt burden for every Australian is over $24,000 if we don’t do anything so we will have a government that lives within its means and goes for growth in the private sector.

JIM CHALMERS, SHADOW PARLIAMENTARY SECRETARY TO THE LEADER OF THE OPPOSITION: Well look, nobody is going to be spared tonight from this Government’s ambush on middle Australia. I think what people will see is Joe Hockey and Tony Abbott will reach deep into their pockets to pay for their broken promises and their twisted priorities. No amount of blaming Labor or no amount of spin or self-congratulation or backslapping will hide the fact that people will be worse off tonight as a result of all these broken promises.

CONDREN: Wyatt, will there be any broken promises in tonight’s budget?

ROY: No, but Jim actually makes a good point in what he just said, that -

CONDREN: Can I just pursue that – your notion in terms of broken promises? Did the Coalition not say that, when during the election campaign did the Coalition indicate that there would be an increase in the fuel excise?

ROY: Well, all Australians will have to bear the pain of the Labor Party taking an enormous, sort-of, credit card bill out against the next generation. Now, I don’t know exactly what will or won’t be in the budget, we’re going to have to wait a few hours, but if we are to pay back that burden, Jim is absolutely right – every single Australian will feel some pain. When you take out $900 cheques for people and you give that away to dead people and you give that away to people overseas, at some point somebody actually has to pay that back.

And tonight, Jim’s absolutely right; every single Australian will feel some pain. These are not easy decisions. But it’s not okay -

CONDREN: Well, it’s not really every single Australian, is it?

ROY: It will be.

CONDREN: It isn’t because, some research done by Fairfax shows that in the 2011 and 2012 financial year, 75 ultra-high earning Australians paid zero tax.

ROY: Well, everybody pays tax and we want to make sure everybody pays tax in terms of closing loopholes and governments of both persuasions have done a lot of work on that over time. But what you will see in the Budget tonight is a Government that has to live within its means, we will have to raise revenue across the board and that is not an easy thing. It’s not something we want to do. But I’m not prepared to be part of a Government that simply says it is okay to continue borrowing more money. I mean, the Labor Party actually doesn’t have a policy, other than taking out a bigger credit card bill, against the next generation. So we have to live within our means, we have to have a responsible budget because the cost of not doing that is unimaginable and I’m not prepared to leave an Australia to the next generation that has less opportunities than the one we currently have.

CHALMERS: Two quick things about that Pat if I can, just to quickly respond. The first thing is that your listeners need to understand that decisions that this Government took in December last year when they were in Government added $68 billion to the deficit. Decisions that Joe Hockey is responsible for and he can’t blame Labor for – that’s point number one.

Point number two is budgets are about priorities. And the reason we say that the Government’s priorities are twisted is because at the same time as Wyatt goes on about “we’ve got to live within our means”, they’re going to give $50000 to the wealthiest mums in our community just to have a baby. And we say that those priorities are out of whack.

CONDREN: Isn’t the reality though Jim the fact that someone has got to pay back the Labor debt and you blokes are responsible for a great swathe, a huge chunk, of the debt that the current presently holds?

CHALMERS: It is the case that the Global Financial Crisis cut a big hole in government revenue and that we need to do work to repair the budget over time. That is a fact. The Labor government took $180 billion of savings decisions to repair the budget sensibly and responsibly in a way that was well-motivated and a way that didn’t hurt the most vulnerable in the community.

And that’s really the contrast – you’ve hit the nail on the head really Pat – the contrast is we were repairing the budget in a responsible way that cared about jobs, the sick, the frail, the aged and the disabled, and these guys are taking a slash-and-burn approach. It’s really an ambush on some of the weakest people in our community. And it’s all based on this political con, that there’s some kind of budget emergency, and there isn’t.

ROY: Can I just make one quick point Pat and it’s really important? Jim said that this wasn’t a spending problem from the Labor Party. Of the seventeen advanced IMF economies, Australia’s spending increased the fastest of the lot of them. We had the third-highest increase in debt of those seventeen advanced IMF economies.

It is really the case that the Labor Party had a very good fiscal position when they came to government, they had a $20 billion surplus, they had a lot of money in the bank from the Coalition government and of those 17 advanced economies, they spent more than any one of them.

CHALMERS: Wyatt hasn’t heard of the Global Financial Crisis, obviously.

ROY: Well you spent more than any one of those countries, and we have to pay that back. You talk about there not being a debt crisis. Well, there is an enormous burden on us. We are increasing our debt at the third highest rate of those advanced IMF economies. We had the highest increase in spending of those IMF economies. The only reason we’re not like Spain and Greece and all these other countries is because when you came to Government, we had a $20 billion surplus from the last Coalition Government, we had an enormous amount of money in the bank. We can’t continue down a path where we say it is simply okay to keep borrowing against the next generation.

CHALMERS: Pat, just very quickly on the International Monetary Fund that Wyatt mentioned.

CONDREN: You’re both spending a lot of time saying ‘just very quickly’.

CHALMERS: Yeah, and then we go on for ages. Pat, Wyatt raises the IMF. The IMF put out a report about a month ago that said over the last six months – and remember that Joe Hockey has been Treasurer for eight months – over the last six months, the quickest deterioration in a budget in the countries that Wyatt was referring to was in Australia. And that goes right to the core of Joe Hockey creating this so-called budget emergency, adding $68 billion to the deficit, trying to blame us for it and just trying to create an excuse to swing the axe harder.

ROY: But the report I referred to was about your time in government.

CHALMERS: Yeah, I’m referring to a more recent report.

CONDREN: And I think people have heard you guys and your colleagues blaming each other throughout the course of the budget kite-flying exercises, and the Prime Minister has been on radio this morning confirming a deficit tax. There’ll also be a fuel excise, as well as a GP co-payment in the budget. Wyatt, how do you recover the political capital that you will squander by breaking these promises?

ROY: Well, people will talk about the polls and the political capital of this, but today I actually want to talk about the future of the country and the economy. You know, if I lose my seat in two-and-a-half years and I know that I was part of a Government that actually did something for the country, and left an Australia that…

CONDREN: Yeah, we’ve had five minutes of you and Jim making political points…

ROY: No, what I’ve been outlining is the scale of the problem…

CONDREN: What I want you to do is to canvas… and a lot of people have been ringing into our program and talking about broken promises and this wasn’t part of the plan that they voted for. So, how do you reconcile that with the listeners who perhaps feel a bit deceived by the Abbott Government?

ROY: Well, the question is what is the alternative?

CONDREN: No, no, no, the question is…

ROY: But that is how you reconcile…

CONDREN: But the question remains, what do you say to the listeners who feel deceived by your government?

ROY: I say to them I’m not prepared to be part of a government that keeps borrowing their money against the next generation. And inaction now will result in a much bigger problem further down the track and as I said, if we just keep going down this path, we’ll be spending more money than all those other economies across the world.

Go over to Europe, see what it’s like to be a young person in Ireland or Greece or Spain. I’m not prepared to be part of a Government that is not going to take the difficult decisions that actually need to be taken. As I said, nobody wants to do this. You know, I don’t want to do that, I don’t want to be part of making these difficult decisions – there’s no joy in that, but the cost of inaction is too great and we have to – all of us, all Australians – have to be part of this repair task because we’ve kind of had a very big party for the last six years. We’ve woken up with a big hangover and we all have to be part of sharing some of the burden to get us back to a path where we can have a strong economy, where there’s strong investment in the private sector, where there’s greater growth, more people have opportunities to find a job and we can spend more taxpayer money on these kind of things that we want to talk about.

I’ll give you one example.

CHALMERS: Paid Parental Leave, let’s take Paid Parental Leave as an example.

ROY: Twelve billion dollar interest bill on the debt this year. If we didn’t have that you could upgrade all of the Bruce Highway for $8 billion, you could upgrade the Gateway Motorway for 1.2, you could build a tertiary hospital for $2 billion and you still have hundreds of millions of dollars left over. So if we keep racking up this debt and this interest bill, that’s money that we can’t spend on infrastructure and services and health and education for future generations. So we have to be realistic about this and that’s what tonight is about. We’re recharting our course and saying that we are going to live within our means, so that for future generations we can invest in those vital services that future generations deserve…

CONDREN: And Jim, those points are perfectly valid, surely, given the state of the books that Labor left.

CHALMERS: Labor left Australia a triple A credit rating from all three ratings agencies. First time in our history that had happened actually, it didn’t even happen under Peter Costello. We made $180 billion in savings, we had a budget position better than almost all the rest of the world and we’re proud of the decisions we took in Government.

I mean, we did what hardly any other country could do, we stared down a global recession. Wyatt and all the Liberal Party like to pretend that that Global Recession didn’t happen. They don’t like to talk about it because Labor’s policies under Wayne Swan and Kevin Rudd and Julia Gillard were so successful. So when it comes to budget decision-making, I’ll stack our record up against theirs any day.

ROY: I was just going to make one real quick point about the promises as well.

CONDREN: Just quickly.

ROY: How many times did the Labor Party say that delivering a budget surplus was the best thing you could do for the economy. You promised it, you said that you would do it and yet you never delivered – you delivered the biggest deficits the country has ever seen.

So are you the Labor politician who thinks surpluses and budget responsibility is a good thing, or are you the Labor politician that thinks borrowing more people’s money is a good thing?

CHALMERS: Pat, Wyatt would love us to spend all of this interview talking about the Labor Party. This is your government, this is your budget…

CHALMERS: Let me finish. I let you go on for about 25 minutes a moment ago.

CONDREN: Very quickly.

CHALMERS: This is your budget and you will wear these broken promises and twisted priorities like a crown of thorns in your electorate. And you can bang on about Labor all you want, but you guys are in charge.

CONDREN: Now, I’m going to say goodbye and thank you gentlemen for your time. Happy budget day and we look forward to going over the entrails in the coming days.