From Coalition debt trucks to no debt limit - Monday, 9 December 2013

This morning I spoke to reporters about the Government's deal with the minor party Greens to scrap the debt ceiling - due to pass the Senate this week. Here's the doostop transcript:




SUBJECT/S: Debt cap, carbon policy and emissions, Holden.

Andrew Leigh: Today, the House of Representatives is going to vote on removing the Australian debt cap, and it’s worth just reminding ourselves of some of the things that Prime Minister Abbott has been saying over recent months. He said during the election that the Greens were the only party that didn’t believe in economic growth. He said that they were more extreme than any other political party running in the election. He said that if debt is the problem, more debt isn’t the solution. He promised to release a budget update within a hundred days. He’s done none of those things, and today he’s going to be striking a deal which, if people had known about it before the election might well have affected the way they voted. And let’s face it, this broken promise from Mr Abbott isn’t the first. Mr Abbott has broken promises over school funding, over his promise that no superannuants would be left worse off, and he’s broken his promise over the boat buy-back. I think that Mr Abbott might have thought that if he just kept his fingers crossed behind his back all the way through the last three years perhaps he could get away with all this promise-breaking. Frankly, I think the Australian people are beginning to think that the only promise you can believe from Mr Abbott is his pledge that if he hasn't written it down, you probably shouldn't take it too seriously. I’m happy to take questions.

Journalist: Why is it so bad to strike a deal with the Greens when you guys struck a deal with the Greens to help form minority government in the last Parliament?

Leigh: This is just the rank hypocrisy of this decision. The going out there before the election, holding press conferences in front of debt trucks. Now, if Mr Abbott had wanted to be honest about that, stand in front of the debt truck and say the real problem with this debt truck is that it’s got a speed limit, he'd like to take the speed limit off entirely, he would have been entitled to do that, but he didn't. He ran on one set of policies, now he's delivering another.

Journalist: Julia Gillard said there would be no carbon tax under the government she leads in the election campaign when she struck a deal with the Greens.

Leigh: Mr Abbott is the Prime Minister and I'm perfectly entitled to hold him to account on his promises to the Australian people, particularly given his interview with Michelle Grattan just days before the election in which he very clearly says that the Australian people would be entitled to take a dim view of politicians who promise one thing and then do something else.

Journalist: Mr Leigh, you’re an economist obviously. Is there actually a need for a debt cap or is it more a symbolic thing?

Leigh: The Labor Party believes that the debt cap is appropriate. We certainly believe that if you're going to increase the debt cap beyond where peak debt estimated to go, then you need to release that Budget update. Mr Abbott promised to do that, he promised to release that Budget update within a hundred days of wining office. Labor always released it in either October or November. Mr Abbot is now pushing it well into December clearly because he doesn't want to level with the Australian people about what his decisions have done to blow out debt; the nine billion dollars to the Reserve Bank now so he can get a bigger dividend later, seventeen billion in tax cuts to mining billionaires and big polluters. Those are Mr Abbott and Mr Hockey's decisions, and they're blowing out debt and that's what he's trying to hide from you.

Journalist: Did Labor do enough to help Holden when it was in government?

Leigh: Labor is committed to a strong car industry. We believe that the car industry is an important part of Australia's manufacturing, and yes, we put significant effort into making sure that Holden had a viable future in Australia, not simply treating it like any other business that could go to the wall, which seems to be the approach that the Government has taken.

Journalist: The carbon tax has reduced emissions by 0.1 per cent. The CEO of Origin is saying it's not working. Is that a good result in terms of emissions reduced?

Leigh: Oh, goodness me! Let's try and find again one serious economist around the country who thinks that Direct Action, so-called 'soil magic' is going to be better at reducing emissions than a carbon price.

Journalist: But is 0.1 per cent? Is that a good achievement so far?

Leigh: This isn't an economy-wide carbon price and if you look at the national electricity market, you've got emissions down seven percent. You're seeing effects of the carbon price taking effect immediately and you're not seeing any of the economic horror stories that Mr Abbott and his team told you would see before the election. If anyone has bought a hundred dollar lamb roast lately, let me know.

Journalist: Back to Holden, we've got predictions it will take a $150 million a year to convince Holden alone to stay in Australia. Is that money well spent?

Leigh: Well, the Government's going to have to make these decisions, but it seems to me that they're not making them in the long-term interests of Australia. This sort of hand-waving and pretending it's not their fault stands in stark contrast from the approach that Minister Kim Carr and others had during our time in office.

Journalist: But is that sustainable though? The long-term future of the industry being propped up by quite a far bit amount of government money? Is that sustainable?

Leigh: There's a range of ways of assisting industries and certainly Labor in government was assiduous in making sure the car had a strong future. Alright, thanks.

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