The Ford Edsel of Budgets

On Sky Saturday AM Agenda, I spoke with host David Lipson about the suggestion that the budget just needs better "marketing", and the PM's shock revelations of sexism in the Liberal Party.





SUBJECT/S: Mini-Budget; job cuts; surplus; sexism in the Liberal Party 

DAVID LIPSON: Joining me now, the Shadow Assistant Treasurer Andrew Leigh, thank you for your time today.


LIPSON: Starting with these 175 government agencies set for the chopping block. Is there a reason that other areas of government, other departments, can’t handle these agencies?

LEIGH: The thing that always gets me about this government David, is that their only plan for jobs is more job cuts. We’ve already had over 7000 job cuts out of the Canberra public service, now we’re looking at more. Not smart cuts, but cuts that will end up costing Australia more. So for example if you take the Australian Government Solicitor, it’s very clear that going out to the private law firm market for that advice is going to be more expensive. And it all comes on top of now in Australia when we’ve got unemployment at a 12 year high, youth unemployment at a 13 year high, and underemployment - the share of part time workers who are looking for more hours - at an all-time high.

LIPSON: Just picking up on the Australian Government Solicitor, where’s the evidence that that will be more expensive? 

LEIGH: I think it stands to reason that if you’re going out and paying high level private sector fees, getting the private sector to do work that they’re not used to doing, that they’re likely to charge you more for it. This is the experience if we go back to the Howard Government, who had the approach that if it’s in the Yellow Pages, government shouldn’t be doing it. And in the end, they ended up having to bring a whole lot of these functions back to government. The Howard Government slashed and burned the public service in their first years in office, lost a whole lot of corporate memory, but by the end of their time in office, the number of public servants per Australian was back where it had started, and of course that number didn’t rise under Labor. So when Mathias Cormann talks about a bloated public service, our number of public servants per Australian hasn’t been rising under Labor.


LIPSON: It seems jobs will go as a result of this, does Labor see that as a broken promise?

LEIGH: It’s yet another broken promise. We’ve already seen that promise being broken in the case of other agencies with forced redundancies and a spill and fill have been the norm. We’ve seen agency heads, people like Martin Parkinson, the first head of Treasury in 113 years to be dismissed by the government. We’ve seen CSIRO scientists, I spoke to some scientists at the CSIRO who work on eucalypt research. Now Australia needs forestry research on eucalypts, and it's hard to see where that expertise will go if the Government cuts it out. So we’re going to see more job losses, longer unemployment queues. We've got a situation in which unemployment is going up, debt is going up, incomes are going down and confidence is going down. The things that should be going up are going down, and the things that should be going down are going up. 

LIPSON: Joe Hockey has also conceded the Government will miss its surplus forecast, that the deficit will blow out for this year as well. It sounds a lot like what happened under Labor when in a large part external factors caused you to miss your targets. Do you have any sympathy for the Treasurer?

LEIGH: Well the Treasurer last year was saying that a Coalition government would have the Budget in surplus in its first year and every subsequent year, so that’s another broken promise from the Coalition. And let’s face it, even if Parliament simply rubber-stamped the Budget, the deficit would be larger than when the Government came to office, not smaller. And that’s because they’ve said no to revenue from the carbon price, they’ve given a billion dollars back to multinationals, they’ve given huge amounts of money back to people with more than $2 million in their superannuation accounts. Giveaways to those at the top make this look more like a mate-ocracy than a meritocracy. I’m really worried for the Australian social compact, from a government which can’t balance the budget and doesn’t seem to understand fairness.

LIPSON: But Labor did leave behind multibillion dollar deficits, piling up each year in the out years, to hundreds of billions of dollars. Do you take any responsibility for the position the Government finds itself in?

LEIGH: We faced down the largest financial downturn since the Great Depression, and in order to save 200,000 jobs and tens of thousands of small businesses we took on modest levels of debt.

LIPSON: But that’s not the whole story though, you did invest a lot in other projects, education, NBN, et cetera.

LEIGH: Absolutely, but part of that was two-fold. If you look at the school building program, it’s the biggest school building program in a generation, but it was also fiscal stimulus that saved jobs in the Global Financial Crisis. After the Global Financial Crisis we kept on a spending cap, capping real spending to 2 per cent. And we managed to make targeted savings like means testing the Private Health Insurance Rebate, over the objections of the Coalition who said it shouldn’t be done.

LIPSON: Ok well Joe Hockey’s now admitting that they made a mistake, the Government, in terms of selling the Budget, he’s put it down to marketing. What’s Labor’s response to that?

LEIGH: Well I think this Budget is the Ford Edsel, the Betamax video recorder, the spork of budgets. It is a product that the Australian people don’t want, at a price they can’t afford. The problem with this Budget isn’t marketing, it’s the very product itself.

LIPSON: Well Labor though, and this is back on the Budget, is still blocking the $5 billion in savings that you took to the election yourselves. How do you justify that, especially at a time when Glenn Stevens is telling politicians to ‘get real’ or we risk losing our triple A credit rating within 5 years?

LEIGH: Well David if we take the changes to university funding, for example, they were changes that we made in government in order to free up resources to spend on schools. But this government is slashing into schools funding and so we aren’t going to support them in making further cuts to higher education. I’ve seen the very effect of those cuts on a visit to the remote Indigenous community of Titjikala this week, where as a result of cuts in what the Federal Government gives to the NT Government, they’ve just lost their teacher’s aide, one of the very few young Indigenous men with a job in that community. So you’ve got a Prime Minister who says he’s about closing the gap, but who’s very policies are acting to widen the Indigenous gap.

LIPSON: I just want to finish with some of the reported ructions within the Coalition. Again Labor pretty familiar with some of the problems the Coalition is facing now, infighting, centralisation of power, and claims from Tony Abbott of sexism at the core of the criticism against his Chief of Staff, Peta Credlin.

LEIGH: Well it’s interesting that Tony Abbott has discovered sexism within the Liberal Party, and perhaps by the time he finishes his career he might well be ready to apologise for standing in front of signs describing our first female Prime Minister as a 'witch' and a 'bitch'.

LIPSON: But do you believe that there is sexism, do you believe that that is the core of what’s happening there at the moment?

LEIGH: Well I think there’s enough commentary going on from internal Liberal Party sources without the need for me to add to that.

LIPSON: Shadow Assistant Treasurer Andrew Leigh, thanks for your time.

LEIGH: Thank you David.


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