Sky AM Agenda - 26 August 2013

On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal Senator Mitch Fifield. I outlined Labor's positive plan for education and infrastructure, and noted the Coalition's $30B of regressive spending - in the form of their $22B unfair parental leave scheme and their $8B restoration of the private health insurance rebate for higher income earners. I also discussed the impact that tens of billions in Coalition cuts would have on health, education and jobs. A transcript is over the fold.


KIERAN GILBERT:

This is AM Agenda, thanks very much for your company. With me now from Melbourne, Liberal frontbencher Senator Mitch Fifield and in Canberra, Labor MP Andrew Leigh. Andrew, first to you, I want to ask you about this commitment made by Tony Abbott yesterday. This plan, over a decade, to have surpluses of 1 per cent of GDP, defence spending back to 2 per cent of GDP and to have each year government as a smaller percentage of the economy. They’re all noble aims aren’t they?

ANDREW LEIGH:

The surplus pledge is a noble aim indeed, Kieran. And people may have noticed that it’s the same as you’ll see in the Budget papers. So after railing against Labor running small, responsible deficits, Mr Abbott is now committing to the same macroeconomic timetable as Labor has already done in the budget papers. But he has a problem, Kieran, I mean he has this extremely expensive parental leave plan, $22 billion. And then on top of that, he’s got $8 billion in restoring the private health insurance rebate to millionaires. Two policies that benefit the rich far more than middle Australia and which will blow a $30 billion hole in the budget. Now the back of my envelope says if you do $30 billion of cuts, you’ll drive up unemployment by about 1.5 percentage points. That’s nearly 200,000 Australians who’d lose their jobs to pay for these two policies which disproportionately benefit millionaires. And really is…

KIERAN GILBERT:

Okay, let’s get Senator Fifield’s thoughts on that. That specific point that Andrew made there about the cuts necessary to fund these big spending initiatives.

MITCH FIFIELD:

Kieran, it’s all we hear from the Labor Party are baseless allegations of cuts and seeking to draw analogies with other governments. Kieran, Labor are operating on the assumption that the Australian economy has reached its growth limits. That the Australian economy will never grow faster than it’s currently growing. We’ve got a plan to create two million new jobs over the next decade. We want to broaden and diversify the Australian economy. We want to see the limits that this government have placed on economic growth removed. So we don’t see the Australian economy as a stagnant equation. We see the Australian economy growing. We have plans to see that happen. We’re going to abolish the carbon tax. We’re going to abolish the mining tax. We’re going to cut company tax. We’ve got a great plan to introduce a HECS style scheme for apprentices where there are skill shortages. So we have a clear plan…

KIERAN GILBERT:


Ok, well let’s put that to…

MITCH FIFIELD:

…to see the economy grow. Kieran, Andrew and the Labor Party are assuming that the Australian economy can be no better than it currently is.

KIERAN GILBERT:

Let’s put that to Andrew then, because that’s the point here Andrew, isn’t it? You either, because the way you’re looking at that, is it not factoring in the possibility that the economy does kick back into gear and we do see strong growth over the next decade?

ANDREW LEIGH:

Kieran, I’m entirely with Mitch in being committed to policies that further strong growth. But those policies, as the mining investment boom tapers down, involve more investment in education. A six year plan which requires the states not to take school funding out, rather the Coaltion’s four year plan which says that it’s okay for states to rip out schools funding as the Federal Government puts money in. And if you really believe that you want to boost the economy’s growth potential, then you’d want to keep the current industrial relations settings rather than to go back to WorkChoices, the lousiest period of productivity growth over the last generation. And you’d want to continue investing in the National Broadband Network, because that’s the infrastructure of the 21st century. I’m yet to meet anyone when I’m out doorknocking who says the real problem with the NBN is the fibre ought to stop in the cabinet down the street rather than come straight to my home. And that’s because people realise the productivity gains that you get from the National Broadband Network.

KIERAN GILBERT:

Well there’s one, there’s a flaw though in your argument though, because, the argument about WorkChoices, it’s irrelevant, they’ve never, Tony Abbott has made it pretty clear that that’s not where they’re heading. So that’s one big component of your argument there which has a flaw in it. And I put it to you again, that if the economy does grow, much more strongly admittedly than Treasury’s forecasting, that they will be able to meet those goals anyway. And they’re saying they’re going to take the burden of those taxes, carbon and mining taxes off, red tape off and then that will foster growth in the economy. What do you make of that argument?

ANDREW LEIGH:

Kieran, I’m all for growth. As you know, my background’s an economist, we love growth. But you need to have clear policies that are going to do that. The Coalition’s policies, giving the private health insurance rebate back to millionaires won’t boost growth. As Saul Eslake has pointed out. Giving $75,000 to millionaire families to have children, that’s not going to boost growth. The Coalition, they look at a kid born with a silver spoon in his mouth and they say the real problem is you don’t have a golden spoon. Here’s a golden spoon for you and by the way here’s a plastic one for the working class kid down the road. That’s not going to boost growth Kieran. And at the same time, the savage cuts that they have to impose, that will hurt growth.

KIERAN GILBERT:

Let’s bring in Senator Fifield on the cuts, because this is the question that’s being asked. I spoke to Christopher Pyne about it. I suppose people are just wondering where the numbers are going to come from. It’s not going to all come from the public service, is it? You’ve said they’ll be 12, I think it was $5 billion saved through cuts to the public service. But where’s the rest of the money?

MITCH FIFIELD:

Kieran, we will have responsible savings. We’ve announced $17 billion of savings so far. We’ll have a little more to say about savings later this week. And we’ll produce our full reconciliation after we’ve announced all our policies. And we’ll do so before Labor did in the last two campaigns, five o’clock the Friday before the election. Don’t worry, we will do much better than that. But Kieran, I’ve just got to pick something Andrew said before. He said ‘we’re all for growth’ and they’re for surpluses too. The only problem is they’re incapable of delivering stronger growth. They’re incapable of delivering a budget surplus. It’s great to be for something but you’ve actually got to have the capacity to do it. And this government, not in a single budget has delivered a budget surplus. And what they’re saying to us is, look we know we couldn’t deliver a budget surplus in our first term, we know we couldn’t deliver a budget surplus in our second term, but no, wait, trust us, believe us, in our third term or fourth term, maybe, maybe, we might deliver a budget surplus. The best predictor of future behaviour is past behaviour. These guys can’t manage money.

KIERAN GILBERT:

What about the cuts that are out there already, this $5 billion cut that’s been put out there, booked, when it goes to the public service, Senator Fifield. The Government argues that advice from the Parliamentary Budget Office suggests that to get $5 billion in savings, it’d have to be 20,000 bureaucrats would lose their jobs, not 12,000 as you’ve previously said.

MITCH FIFIELD:

Kieran, it’s quite strange. This government say that they’re for surplus budgets. They say they’re for savings. But apparently the only savings which are good and decent are Labor savings. Apparently any savings proposed by the Coalition are inherently bad and evil. This is absurd. We all know that the government is living beyond its means. We all know that this current government is practising intergenerational theft. That they’ve refused to live within their means. They’re reaching their hand forward to take money out of the pockets of future generations. Government has to cut its cloth. We’ll do so responsibly. We’ll do so carefully. We’ll do so prudently. We did it under the Howard-Costello government. We repaid $96 billion of Labor debt. We did so responsibly and we’re going to do that again.

KIERAN GILBERT:

Is the government not trying to have it both ways here, Andrew Leigh? You say that they’ve got to provide the numbers and on the other hand you’re saying when they do provide savings that they’re making the wrong cuts. You’ve got to, it looks like, as I say, you’re trying to have it both ways here. They’re providing the savings and you’re critical of those when they don’t, well you’re critical anyway.

ANDREW LEIGH:

You’re telling me we can’t have both transparency and accountability, Kieran? Certainly what we’ve seen from the Coalition is very different from what we saw from Labor in 2007. And even the Coalition in 2010. In both those campaigns, every time oppositions put out a policy, they laid out very clearly how it would be paid for. The Coalition’s done that with one of their policies. The repeal of the carbon price and the mining tax, all of their saves, $12 billion, add up to the $12 billion they lose there. That means their company tax cut is unfunded. It means their paid parental leave plan is mostly unfunded because the company tax levy covers less than half of it. And it means that their $8 billion of private health insurance rebate give back to millionaires, that’s unfunded too. And so the Australian people are entirely entitled to say, well you guys probably have in mind what Campbell Newman did in Queensland which cost jobs and drove up unemployment. Or what the British conservatives have done which has cost jobs and driven up unemployment. Kieran, we’re performing extraordinarily well by global standards. After the global financial crisis, we rose from the 15th to the 12th largest economy in the world. Took on debt equivalent to about 10 per cent of GDP at a time when other countries around the world have debt loads that well exceed their annual income. And we’re on track to pay down that debt over the next term of government, which is, let’s face it, the same debt timetable that the Coalition has committed to.

KIERAN GILBERT:

Twelve days to go. Senator Fifield, what’s the mood like in the Coalition.

MITCH FIFIELD:

Kieran, we’re just focussed on seeking to earn the trust of the Australian people and laying out our plan for jobs and for growth.

KIERAN GILBERT:

You must be pretty optimistic though.

MITCH FIFIELD:

Kieran, 12 days is a long time in an election campaign. We take nothing for granted. The Australian public expect political parties that are putting themselves forward for government to earn the trust every single day of the election campaign. And that’s what we will be doing. And we’ll be talking about plans such as for apprentices, to give them access to HECS style loans. We’re going to be talking a lot about jobs and employment. We need to lift the speed limiters from the economy, to see the economy grow, to see that more people get jobs. And that Australian businesses can look forward, hopefully, to seeing a change of government which will be the biggest boost to business and consumer confidence that they can get.

KIERAN GILBERT:

Andrew Leigh, only 30 seconds left as well, your thoughts, the morale within Labor. Next time we speak will probably be after the election.

ANDREW LEIGH:

We’re certainly the underdogs, Kieran, but I’ve found being out in the electorate just to be terrifically stimulating. Really enjoyed those local conversations in Belconnen and Gungahlin over the weekend. And I think there is a sense that Labor’s positive plan for an economy in transition is the right one. This is the time to build the National Broadband Network, to invest in education, to reduce the burden of the GST from small businesses.

KIERAN GILBERT:

Andrew Leigh, Senator Fifield, thanks if I don’t see you until after the election. All the best and we’ll chat to you then.

ANDREW LEIGH:

Thanks Kieran, thanks Mitch.

MITCH FIFIELD:

See you Kieran.

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