A massive deficit for Hockey's mini-budget

Ahead of the release of Joe Hockey's mini-budget, I joined Sky AM Agenda to talk about the importance of governments taking responsibility for their own economic decision-making. Here's the transcript:





SUBJECT/S: Joe Hockey’s mini-budget; economic priorities; jobs.

KIERAN GILBERT: We're joined by Shadow Assistant Treasurer Andrew Leigh and the Assistant Minister for Social Services, Senator Mitch Fifield. Senator Fifield, it's all a bit gloomy but the government has really got to take accountability for all this now, after more than a year in office?

SENATOR MITCH FIFIELD, ASSISTANT MINISTER FOR SOCIAL SERVICES: Well, I think the MYEFO today, Kieran, will really be a bit of a wake-up call for the Australian Labor Party, about the damage that they caused to the budget and their responsibility to play a role in budget repair. We've seen Labor voting against something of the order of $20 billion in savings measures in the Senate, including about $5 billion of savings measures that they themselves proposed when they were in government. So I hope today's MYEFO causes Labor to take stock, to recognise that they share in the responsibility to help fix this problem that they created.

GILBERT: But Minister, do you accept  15 months now into office – that voters don't really cop that sort of explanation, that they want the government to come up with the answers instead of the finger pointing? 

FIFIELD: Well Kieran, I think we have come up with the answers; Joe Hockey's first budget was a good document. The problem is that the Labor party fail to take any responsibility for the damage that they caused. Now let me speak for a moment as the Manager of Government Business in the Senate, in a Senate chamber where the government of the day does not command a majority in its own right. Management of the Senate and the legislation that goes through it, including budget legislation, is a shared responsibility of all political parties and the Australian Labor Party have abrogated that responsibility.

GILBERT: That's something that Chris Richardson from Deloitte Access Economics has pointed to time and time again – Andrew Leigh, is there a point when Labor is going to cop some of the blowback here? It's trying to be obstructionist and say ‘no’ as we saw the Coalition do in opposition, but when you're trying to rebuild your own economic credibility surely there's got to be some concession that the structural improvements to the Budget need to happen?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, I was frankly a bit surprised to hear Mitch speaking in that way. He's a smart guy and I would have thought he would want to step up to the plate and take responsibility. I'd assumed he'd want to be owning promises that the Coalition made last year, such as saying that a Coalition Government would have budget in surplus in its first year and in every subsequent year; that there'd be no surprises, no excuses and the adults would be in charge. But instead he seems to be taking a leaf from his Joe Hockey play book of going around and smoking a cigar while blaming poor people and blaming everyone else but yourself. If this budget's problems are marketing, then I've got a bridge you might like to buy. This budget is a product that the Australian people don't want, at a price our society can't afford.

GILBERT: Chris Richardson says it is the right prescription, that this sort of thing which looks to medium– to longer–term expenditure needs to be done without hurting the economy in the short term. When does Labor come up with its alternative, because you must concede that there are some structural issues in the budget that need to be dealt with?

LEIGH: Kieran, we've supported a range of savings in the budget. We supported the high income earner levy for example and a range of the changes to means testing family payments.

GILBERT: That's hardly reform though is it? The high income levy?

LEIGH: Well these are changes we wouldn't have made but they add to the bottom line and we were willing to support the Government on them. We've also suggested the Government could find more revenue around fair taxation of multinationals but they've given $1 billion back; scrapping their unfair parental leave scheme that gives $50,000 to millionaire families; and going ahead with targeted savings around people with more than $2 million in their superannuation accounts. That's a range of areas in which savings could be found.

GILBERT: Is the iron ore price, in your view, now at a more realistic level or do you expect it maybe will climb again? Because it's $60 per tonne and that leaves a huge hole in the Budget revenue.

LEIGH: Kieran, forecasting commodity prices is a mug's game, because they are what economists call a ‘random walk’. Like the exchange rate, today's price is the best guess of tomorrow's price. Certainly that's played a part but let's face it: Peter Costello saw off the Asian Financial Crisis, Wayne Swan saw off the Global Financial Crisis and Joe Hockey is now telling us he can't see off a fall in the iron ore price? When is he going to stop being the Shadow Treasurer in drag and actually step up to the main job?

GILBERT: Senator Fifield, your reaction to some of these criticisms from Andrew Leigh? You know, the falling iron ore price paled in comparison to what other treasurers have faced in recent years, recent decades, as you know as a former advisor to Peter Costello yourself.

FIFIELD: Well, Labor always had incredibly heroic assumptions in their budget including in relation to commodity prices. We've taken a far more conservative approach and as Joe Hockey has said, we probably should have taken a slightly more conservative approach again. But I'm glad that Andrew drew a distinction, or a comparison, between Wayne Swan and the GFC and Peter Costello and the Asian Financial Crisis. Peter Costello addressed the Asian Financial Crisis, he kept the budget in surplus and continued to pay down debt. But Wayne Swan, in the face of the Global Financial Crisis, plunged the Budget into deficit, plunged the nation into debt and that is why we are in the situation we're in today. I know it bores Labor, but it bears repeating that when they won office in 2007, Australia had no net debt. No net debt at all and the budget was in surplus; the majority of Peter Costello's budgets were in surplus, I think 10 of the 11. So I've got to say the more that Labor like to draw comparisons between Wayne Swan and Peter Costello the better. But the reason we're in this situation, which Labor forgets, is that they inherited a budget in surplus, they inherited no net debt, they trashed the joint and now they're not willing to play any part in the budget repair.

GILBERT: We've got to go to a quick break, back in just a moment with Andrew Leigh and Senator Mitch Fifield. But first we're also going to hear from Martin O'Shannessy from Newspoll.

[Martin O’Shannessy interview]

GILBERT: Back to Andrew Leigh and Senator Mitch Fifield – Senator Fifield, your thoughts on where [the polling] is at at the moment? You've heard Martin O'Shannessy's take on it, disunity is death and there's been a fair bit of comment about the Prime Minister's Chief of Staff, both private and public.

FIFIELD: Look Kieran, staff are not combatants, there shouldn't be public commentary about them and I don't intend to make any. But just in relation to the polls more broadly, we haven't been governing with an eye to the polls – unlike our predecessors. We've been getting on with the job of doing what we said we would do, which is abolishing the carbon tax, abolishing the minerals resource rent tax, re-introducing Temporary Protection Visas and legislating our Direct Action plan and we're just going to keep on focusing on the job at hand. Today that's the release of the MYEFO and what we hope is a wake-up call to the Australian Labor Party to get on board and join in the job of budget repair. 

GILBERT: Senator Fifield, though you're showing admirable restraint this morning, your colleagues aren't. You've heard from a number of them over the weekend, you've seen the coverage in the newspapers from Warren Entsch to Ian MacDonald and Julie Bishop said yesterday on Sky News that she wouldn't have used the language that the Prime Minister used in suggesting that sexism was at play at the criticism of Peter Credlin. Would you urge your colleagues, ministerial and others, to rein it in?

FIFIELD: Look Kieran, as I said before, staff aren't combatants. There shouldn't be public commentary about them and I won't be making any.

GILBERT: On the issue of sexism, before I let you go on that issue, do you think that is something that is at play?

FIFIELD: Look Kieran, I don't comment about staff.

GILBERT: All right let's go to Andrew Leigh. You have seen obviously the news reporting, the coverage, do you think it's unfair that the Chief of Staff, a staffer, is being the subject of this sort of critique?

LEIGH: Kieran, I just it find it extraordinary that the Liberal Party has now discovered the sexism within their ranks. Maybe by the time the Prime Minister is ready to leave office he might be up for apologising for standing in front of signs describing our first female Prime Minister as a ‘witch’ and a ‘bitch’. 

GILBERT: Well, your thoughts on the coverage of staff members as put by Senator Fifield – is that unfair, is that something that shouldn't happen?

LEIGH: I think Mitch is right that staff ought to be off limits but I'm far more concerned about the jobs being lost in the Australian community that I am about particular Liberal Party jobs. We've seen unemployment now up half a percent since the Coalition won office, unemployment at a 13-year high, youth unemployment at a decade high, and underemployment – the share of people wanting more hours – at an all-time high. This, after we were told that a Coalition government would be a shot of adrenalin to the economy. But confidence - business or consumer - is in the doldrums and part of that is because the Australians just aren't confident that the Treasurer is competent. 



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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.