IMF bells the cat on Abbott's budget forecasts - PVO NewsDay

E&OE TRANSCRIPT

TV INTERVIEW

PVO NEWSDAY

THURSDAY, 25 JUNE 2015

SUBJECT/S: Citizenship; IMF report; Q&A; Infrastructure

PETER VAN ONSELEN: Joining me now from Canberra I have the Parliamentary Secretary to the Prime Minister, Christian Porter, and Shadow Assistant Treasurer Andrew Leigh, two men probably better known for their careers before politics. Andrew, you were a prolific professor of economics at ANU, and Christian Porter, you were a former state Treasurer in WA – I bet you're glad you're not in that role now with the way their budget is looking. Gentlemen, thanks for your company. Let's start by talking about citizenship. I want to ask you, Christian Porter: are you comfortable about stripping the citizenship of minors? That wasn't, as I understand it, in the 1948 Citizenship Act but it will be in the new legislation.

PARLIAMENTARY SECRETARY TO THE PRIME MINISTER CHRISTIAN PORTER: I'm not entirely sure whether your assessment there about the first run of the s35 drafting is correct. But nevertheless, the Minister here has the residual ability to exempt persons who would otherwise fall into the category. So I'm more than comfortable with the way in which it has been drafted. It seems to me to be rather elegantly drafted with a mind to constitutionality.

VAN ONSELEN: So does that mean, Christian Porter, in your view you're happy with the way it has been drafted and if it is amended from here, will you be unhappy with that? Because quite often there's significant amendments that follow a first draft.

PORTER: Well indeed. But that doesn't mean there's not potential improvements that might be suggested through the Joint Standing Committee process. But look: the legislation is the legislation. I read it in detail and the Explanatory Memoranda. I even forced myself to read the Communist Party case again a couple of nights ago, and I'm completely content that this has been well drafted.

KRISTINA KENEALLY: What about the issue of retrospectivity? Is that something you'd be happy to see come out of the committee's deliberations?

PORTER: My own view is that it should be given very serious consideration. Kristina, on your point about the efficacy of it, my observation would be that this is going to be a far greater improvement to our physical national security if we consider, at some point, retrospectivity. Obviously the Joint Standing Committee will have a look at that, but I think it deserves very strong attention.

KENEALLY: So you're saying that Australians will be safer if we have the retrospectivity, and I can accept that point, that there are currently people in jail that when they are released will have the right to live in Australia unless there's retrospectivity. I understand the argument the Government is putting and the Opposition seems open to that. But how is it making Australians safer now? What's wrong with the Foreign Fighters Act that we can't deal with Australians who are overseas, who have joined up with ISIS or other terrorist organisations against Australian interests? Why do we need to strip them of their citizenship as well?

PORTER: I think it's two things. The first thing is the ability to strip someone of their citizenship sends an extremely powerful message to would-be participants in overseas terrorist activities.

VAN ONSELEN: So it's largely symbolic?

PORTER: Well no, not at all. The second thing is that it has the practical effect of denying entry back into Australia for what are extremely dangerous people. On the first point, there are many of these young, foolish individuals who are going over there to join arms with terrorist organisations and who may or may not, at some point, think that wasn't the best of ideas and want to come home. The message that's being sent to all such people who are presently in Australia is that if you go and do that, you may find yourself never able to return to Australia. I think that is an unbelievably powerful message to would-be terrorists.

VAN ONSELEN: Potential deterrence there. Ok now Andrew Leigh, you've been very patient there. I want to shift the topic slightly and get your reaction to what the Prime Minister said not that long ago at the press conference that he just gave. He said that heads should roll over this, in relation to the re-airing, by the ABC, of that Q&A episode. What's your reaction to the Prime Minister's comments that heads should roll? Do you agree with him?

SHADOW ASSISTANT TREASURER ANDREW LEIGH: I think the Q&A program clearly made a mistake in allowing that particular individual on the program.

VAN ONSELEN: But what about in replaying it, Andrew Leigh?

LEIGH: Well, a range of outlets – including your own – have been replaying that segment, Peter, so I'm not sure that's an accusation that can only be leveled at the ABC.

VAN ONSELEN: Sorry to jump in but I just want to be clear about this. Do you have a problem with them re-playing an unedited version of the program? I understand that other networks have played that particular segment as news in order to provide a news commentary about it, but they've just replayed the whole show without editing that segment out. That seems to be what's upset the Prime Minister; what's your view on that decision to do so?

LEIGH: I certainly don't think they ought to be gratuitously replaying that segment. As I've said, it was an error of judgement by the ABC Q&A program to allow that particular individual on the program and to air his comments in that way. But there's a range of other things the Prime Minister could be drawing our attention to. For example, he might be talking about the 80,000 parents who are going to lose parental leave as a result of legislation he’s introduced today; or indeed about the continuing impact of his cuts to health and education. So all of these things need to be kept in their proper perspective.

KENEALLY: One of the things he also could be talking about, Andrew Leigh, is the IMF's report this morning. Recommendations coming forward from the IMF that Australia needs to slow down its rush to a budget surplus, take advantage of low interest rates and borrow to invest in productive infrastructure. I've got to think that maybe the Labor party would welcome a report like that?

LEIGH: Kristina, we're certainly aware that the IMF is raising some concerns about how believable the growth forecasts are that the Treasurer has in his budget. We've already got growth running below where it was forecast to be in the Budget. It's at 2.3 per cent when the Budget said it'd be at 2.5 per cent. Then there's the projections of it rising to 3.5 per cent, and the IMF is raising questions about how sustainable that is. If you want good fundamentals for growth, you've got to be investing in education rather than cutting it back. The Government's Intergenerational Report has us halving our spending on schools by mid-century. You've got to be doing more on infrastructure, yet the Government has been retreating from infrastructure spending since coming to office.

VAN ONSELEN: But they've just signed on for the Asian Infrastructure Investment Bank.

LEIGH: That's a welcome decision, Peter. We've joined the end of the queue rather than the head of the queue as Labor was urging us to do last year, but it is the right decision for Australia to make. But we need to make sure that we're putting more money into the productive capacity of the economy. The reason that Labor made the National Broadband Network such a centrepiece of our activity in the last government was that we believed Australia should rank high for broadband penetration, and not, as I now understand it, something like 30th in the world. That, again, impedes our productive capacity. They're the sorts of reforms that the IMF has in mind when they say that if we don't get serious, we won't make the growth targets.

VAN ONSELEN: Alright, let me just jump in. I want to get Christian Porter's reaction to some of what you've just said there, particularly the idea of the 3.5 per cent growth target and the IMF's projection that perhaps this looks unlikely. How do you react to that, Christian Porter? You're a former state treasurer.

PORTER: Yes, I had a look at that IMF report. There's a lot in there, but I don't – and this Government doesn't – buy into the notion that there's not a problem with debt and deficit, or that somehow we should be relaxed about further spending increases. The difficulty with the situation that we inherited is that when you inherit debt and deficit – which we did, big time – you end up in a situation where you are paying $1 billion a month to pay the interest on the borrowings that Labor borrowed when they were in government.

VAN ONSELEN: At least interest rates are low, though, Christian Porter. If ever there was a time to have debt, it's now with record-low interest rates.

PORTER: Peter, you are a glass-half-full kind of guy, mate. You're seeing the donut not the hole. I mean, this is $1 billion a month and the opportunity cost of that money is, of course, productivity-driving infrastructure. But at what point do you say $1 billion a month is too much? I'd argue that point is now.

KENEALLY: What about the opportunity cost – as the IMF points out – in giving generous tax concessions in terms of superannuation and capital gains? The IMF makes the point that that is potentially not the best use of taxpayer money.

PORTER: Look, every man and his dog has a view about our tax system.

KENEALLY: But this isn't every man and his dog – this is the IMF!

PORTER: As I say, when you look at that report, not all of it is incredibly sensible. On the issue of super, that is off the table. You've got two clear choices between the Government and the Opposition. We say that you should restrain the growth in pension expenditure itself. The Opposition prefer to look at ways to tax people more on their super, and that's simply not a path we're travelling down.

LEIGH: Which is extraordinary, really, when you consider what's happening with these numbers. You've got pension expenditure which will sit at about the same share of GDP at mid-century as it does now, while superannuation tax concessions are set to double over the course of just the next four years.

VAN ONSELEN: Andrew Leigh, can I just bring you to some other issues because we're almost out of time but I want to get your reaction to this idea that if paying down debt is so important and if Labor is so concerned about it, now that you've come on-board with the fuel excise indexation, why are you requiring it to be spent on roads? I mean, shouldn't it be going into debt reduction?

LEIGH: Peter, what we've said on fuel indexation is that $1.1 billion should go to the Roads to Recovery program. That's a program which not only helps to deal with the infrastructure deficit – local councils say they've got a $15 billion infrastructure deficit – but it also makes up for the $1 billion that the Government cut out of local governments in their first budget. It's an important job-creation program on the ground too. I know in my own electorate there's a range of local roads that have been assisted through Roads to Recovery spending. So it not only helps to sustain jobs at a time when the Coalition has taken unemployment from five-point-something to six-point-something, but it also help to invest in the productive capacity of the economy through better roads throughout Australia.

VAN ONSELEN: Alright gentlemen, we'll have to leave it there. We know you've both got to run off to Question Time. Thank you, and enjoy the Parliamentary recess. 

ENDS

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