BREAKING POLITICS - FAIRFAX MEDIA
MONDAY, 19 MAY 2014
SUBJECT/S: TONY ABBOTT’S BUDGET OF BROKEN PROMISES
CHRIS HAMMER: To discuss the opinion polls and the continuing fall-out from the Federal Budget, I'm joined in the studio by Andrew Leigh, the Shadow Assistant Treasurer, Andrew Leigh, the member for Fraser here in the ACT, and Andrew Laming, Liberal Member for Bowman, joins us from Brisbane. Andrew Laming where are you this morning?
ANDREW LAMING: I’m down at the children’s park, minus the children, so I hope we will be delivering a clear signal to Canberra.
HAMMER: Now, Andrew Laming, the Prime Minister is sticking by his guns this morning, saying no change, the Budget is right. The opinion polls tell us that people don't think it's right. Is it time for the Government to start compromising?
LAMING: Definitely not. This is the right Budget for the times. It’s a fair but firm Budget and we have to be able to make the tough decisions when after six years they weren’t being made at all. The basic and the bottom line here is the marchers up here on the weekend were no bigger in fact they were smaller than the march from March was. We can only presume that the some of the marchers were happy with the Budget. Look a move of 4 per cent or whatever simply shows that 4 per cent of Australians will change their voting intention because it’s a tough Budget. But those kind of people need to be convinced over time which is something we are really determined to do. It’s the right thing. It does ask business and incomes earners of all levels to make a contribution. And ultimately if you are going to go to the doctor you simply ask if you can be bulk billed and that is still possible. The seven dollars doesn’t have to be paid at every visit and that is a point that is missing in this debate.
HAMMER: Okay but the opinion poll, the Nielson poll, shows that people are not getting that message. The Budget is unpopular. The Government knew that. A majority of people are saying it's unfair and two, a majority of people are saying it's not good for Australia. What's gone wrong?
LAMING: Well first to state the obvious, if I am worse off, one cent worse off, then I’d probably call it unfair, but secondly not everyone -
HAMMER: That was not the question asked. It's whether -
LAMING: They are paying for it now but they are delivering results over one, two, five years or even ten year timeline and after all people are looking for politicians to take long term decisions and when get a long term decision making budget it shocks some people.
HAMMER: So people aren't bright enough to understand the need to get the budget into surplus, because in past budgets, even in tough budgets, people have said, this is good for Australia? They're not saying that this time round.
LAMING: This time around we are asking them five days after the Budget was delivered but in reality Chris let’s be honest, if I flick out sweeteners and bribe people for a vote we look down on that. Here is a Government doing precisely the reverse, trying to make long term decisions, investing in infrastructure. They‘ve already stopped the boats and there is no discussion about. That that’s been achieved. This is a Government committing and then delivering and now we are making long term decisions and I’m sure it frightens a few people. The job in my electorate to reach out to people and assure them that this is the right thing to do.
HAMMER: Andrew Leigh, your opinion on this?
SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Chris, I think the Budget has to pass three basic tests. Does it improve the budget bottom line? The answer is no. The deficit is higher in this year and next year and over the forward estimates than the independent baseline, PEFO, when the government came to office. Secondly, is it fair? Clearly not. We've got independent modelling today omitted from the budget papers but provided by NATSEM which shows that the burden is falling much more heavily on the bottom fifth of the distribution than the top of the distribution. In fact, there's goodies for the top of the distribution, like a tax cut for mining billionaires and a parental leave scheme for millionaires. And then, thirdly you have to ask, is this Budget the keeps faith with the Australian people? And it's very clear that's not the case.
The only person who seems to struggle to work out that he has broken promises is Tony Abbott. Tony Abbott is saying the problem is the hearing of the Australia people. Well, Prime Minister, it's not 46 million ears that are to blame, it’s one mouth that very clearly told the Australian people 'no cuts to health, education, ABC, SBS’. All of those promises broken. And in my electorate, the Prime Minister's responsible for firing public servants. He said the upper cap was going to be 12,000 but now we're seeing 16,500 public servants gone; a very clear broken promise. The poorest people in the world, they've suffered a cut to our foreign aid; foreign aid that saves lives and will now save fewer lives as a result of this budget which still doesn't improve the budget bottom line. To inflict all of that pain and yet not improve the budget numbers, shows you that this budget is about redistribution, effectively class warfare, because it is redistributing from the most vulnerable to those who have the most.
HAMMER: You're very critical of this Budget, but strangely enough, you're quite popular with the Prime Minister who was quoting you all through last week, quoting some statement of yours from some years ago, supporting a Medicare co-payment. Were you wrong then or you are wrong now?
LEIGH: I was wrong then Chris. I'm happy to say that in the more than a decade since I was at university I've spoken to health experts on GP co-payments and I'm of the view that they are not a good idea. But rather than quoting what a low-ranking Labor frontbencher said when he was at university, maybe the Prime Minister should think about quoting what he said last year when he was campaigning to be Prime Minister.
HAMMER: So, I assume you're never going to quote Greg Hunt's thesis back to him then?
LEIGH: I think the question people always have when politicians shift their mind is: has the person changed their view because they've listened to experts and listened to the evidence or are they merely making a decision of political convenience? In the case of the Coalition's position on climate change, that was clearly a leap of political convenience that happened when the current Prime Minister Tony Abbott beat the previous Liberal Party leader, Malcolm Turnbull, by one vote.
HAMMER: Andrew Laming, you know a bit about health. The Prime Minister is saying changes for funding for health will not impact the states for some years to come. The state premiers are saying, no that's not true the impact is immediate. Who's right here, Tony Abbott or Campbell Newman?
LAMING: Tony Abbott in this case because the funding continues over the forward estimates. Most of the debate is around what we called the out years and in that context we are moving towards a more of a shared burden in running hospitals. They are increasingly privatised around the world and they are pulling their budgets under control. The growth of 10 per cent plus is simply not sustainable and I say to Andrew Leigh, my good friend who was writing a lot of common sense when he was at University that you should have followed your head then rather than following your heart now in the Labor caucus because you are dead right then that a co-payment can exist as long as GP’s have the ability to exempt a patient in need which is exactly what they have when they can charge $31 to the Government to see that patient and the collecting two dollars extra off every other patient to pay for it.
HAMMER: Andrew Laming, is it time to start talking about the revenue side of the Budget? Is it time to start talking about a GST or changes to GST?
LAMING: Well that conversation is ongoing. But we have reached the absurd now, Chris, when a government can only do two things. That is spend less money or collect more money and on both counts people are trying to say that Tony Abbott is telling falsehoods. We are a government. We have to make decisions of either reduce spending or to increase revenue and on both counts and from both sides the Prime Minister is being attacked. He never made a promise to make no decisions. He made an abiding promise to fix this budget deficit. A monumental task and it’s happening before our eyes we just have to convince a few more people and we have time to do it.
HAMMER: How can you claim a mandate? We had this big discussion about mandates six months ago. How can the Government claim mandates for many of these measures when you've broken the election promise, saying you weren't going to do it?
LAMING: well of course I could go line by line and show that there has been no falsehoods, no misleading. People have been over read what was said and when people said no unnecessary new taxes they simply assumed that this government would never charge an extra cent .That’s preposterous. The protests on the weekend were not as large as the fake ones staged back in March when they had nothing to fight over when it was called ‘March to do About Nothing’. This will blow over, everyone will tighten their belts we just want to know that everyone is tightening their belts equally and I believe that’s what’s occurring
HAMMER: Well you can, I could have a debate and Andrew Leigh, about the semantics of what's a broken promise and what's not. But the really telling point is what people out there in the electorate believe. The opinion poll is showing that people think the Government has broken its promises, that the budget's unfair, that's it's not good for Australia. What does the Government need to do now? What's wrong with your message that it's not getting through?
LAMING: I concede that. That the initial reaction can be negative after a tough budget. But the alternative with Mr Shorten on Thursday night delivering his ‘I am Labor hear me roar’ speech with absolutely no solutions whatsoever indicate that he has not moved on and the party that has got us into this predicament really doesn’t have an alternative narrative to get us out. People may be looking around and saying ‘wow, is Tony Abbott tougher that we thought he would be’ but in the end there is only the crossbenchers as an alternative because that is one thing that Mr Shorten isn’t.
HAMMER: Andrew Leigh, that's a good point isn't it? Bill Shorten did not offer any solutions. It's simply a speech of criticism?
LEIGH: Bill talked about how science would be at the heart of a Labor Government and he talked about the importance of investing in productivity. Those are vital for laying the groundwork for our future prosperity. And, I think, he appropriately took this government to task. You don't have to be Labor to take this Government to task. Frankly, we've got just about every conservative premier around the country saying that Mr Abbott needs to call an emergency COAG meeting. And they are upset for the same reason that Australians are upset. When Mr Abbott held a meeting of state and territory premiers recently, he didn't tell them that these massive cuts to health and education were on the table.
Maybe Andrew can tell us today how many of the 1200 hospital beds that the conservative NT chief minister says will go around the country, will be lost in Queensland. But these are, aren’t friends of Labor. These are conservatives saying this is a bad budget of cuts. Chris, I think if this were something like 1996 the Government's defence strategy might be better. But this isn't a budget that achieves net fiscal consolidation. This is a budget whose deficits are larger than when they took over, whichever year you look at: this year, next year, or right over the forwards. And so, what they have done, is take from the have-nots and give to the haves. You see you that with the independent modelling. I share Andrew's passion for making sure that we all contribute, but that's not there in the data which shows a five per cent drop in income for the bottom fifth and less than a third of a per cent drop in incomes for the top fifth as a result of this budget.
HAMMER: So, what needs to be done of the revenue side of budget. I asked Andrew Laming about changes to the GST. Do you accept that changes need to be made on the revenue side of the Budget? And if so, what?
LEIGH: I don't accept the GST. I think it's a regressive tax. I do think that if you maintain the carbon price then you get the best of both worlds. You get the most effective and efficient reduction in carbon pollution, which we've got to do, because we are the biggest polluter per capita in the developed world. But then also, you get between $12 and $20 billion for the budget over the forward estimates.
HAMMER: So the carbon tax has become a revenue collection method because originally all the money collected was meant to be given in compensation? So, now you're going milk it to bolster consolidated revenue.
LEIGH: Chris, let's look at what the Prime Minister said. The Prime Minister said he was going to get rid of the carbon price without making any of the changes to taxes or the benefits which Labor did when we brought in the carbon price. The carbon price was textbook: household assistance accompanied by putting a price on carbon pollution. You take away the carbon price, and it's not only hugely damaging to the environment, it's also hugely damaging to the budget. And that's just one of the many decisions that this Government is making that will benefit the most affluent. Repealing the mining tax benefits mining billionaires. Going soft of multinational profit shifting, that benefits the big end of town as well.
HAMMER: Okay. Andrew Leigh, Andrew Laming, thanks so much for your time.
LEIGH: Thanks Chris. Thanks Andrew.
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