Can the government get budget fairness right this time around? - AM Agenda




MONDAY, 11 MAY 2015


SUBJECT/S: Childcare; Budget.

KIERAN GILBERT: I'm here with Andrew Leigh, Shadow Assistant Treasurer and Assistant Education Minister Simon Birmingham. Good to see you both. First to you Andrew Leigh on the families package, the economics of all of this. I understand Labor doesn't want families to lose any payment but then if you're going to make the childcare situation more generous, more targeted. The money has got to come from somewhere and the savings that Jenny Macklin articulated earlier, which no doubt you'll refer to as well, they’re not enough to pay for the initial spending.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: We have supported a range of changes that the Government has made including ones which were characterised in a way which we wouldn't have put them forward to the Parliament. But we don't think kids get any cheaper when they turn six, which is at the heart of this proposal the Government's been trying to ram down the throat of the Parliament the last year. Instead, we think the Government should be looking at savings in the area of multinational tax, where we've got a carefully crafted policy, costed by the Parliamentary Budget Office. Or the high income end of superannuation, where we've done the hard work. Labor is well ahead of the policy curve on this and the difference between what we've put on the table and what the Government has done is that our changes won't hurt the most vulnerable in Australian society. They won't try and address the Government Budget by hurting families.

GILBERT: OK, let's go to Senator Birmingham, because have we hit another stalemate here? The Budget hasn't even been handed down but Labor's saying, no, we're not going to have a bar of it.

SIMON BIRGMINGHAM, ASSISTANT EDUCATION MINISTER: Well Kieran, I hope the Labor Party wakes up to itself and steps away from the oppositionist tendencies that have dominated their time in the life of this Parliament. But if they don't, then we will work constructively with the crossbenchers in how to deal with them to get effective reform. It's about a package of reform measures that make it easier across the entirety of the Budget to employ people, and for people to go into employment. They're the real two goals here. Tomorrow night, in terms of the small business package and reforms, that's about making it simpler and easier for businesses to employ more Australians. The changes we're making to childcare are about encouraging and helping families to get back to work where that's their choice. Indeed the changes to Family Tax Benefit Part A say that once the child reaches school age, you also need to be encouraging people back to work as well. All of these reforms are about lifting workplace productivity, getting more people into jobs.

GILBERT: But there is less money being spent as part of this childcare package announced yesterday. There's less money going in than the amount that's coming out from the family payment system?

BIRMINGHAM: No Kieran, look, this is a fundamentally positive reform in terms of what it happening here and this is about getting an estimated 240,000 additional people either into jobs or increasing the involvement in the workforce. There will be a huge productivity lift in the workforce and that, of course, has enormous flow-on benefits. Both in terms of budgetary benefits, what that means for the long term economics environment in Australia, but also in terms of social benefits of having the right role models in families, of people going out to work and having that opportunity.

GILBERT: This all makes a lot of sense when you look at the way the money is being spent. To target the childhood spend to encourage people to get back into the workforce, it's necessary at the micro level and also necessary in terms of our nation's productivity, isn't it?

LEIGH: Absolutely, Kieran. As an economist, I'd certainly support almost all of the goals that Simon is talking about there around participation and productivity. But I do wonder whether the much vaunted surges that he's talking about are going to be like the surge of confidence that was going to accompany the election of the Abbott Government. Which was then followed, of course, by an increase in debt, a fall in consumer confidence, a rise in the unemployment rate. So many of those indicators that should be going in one direction are going the other. We've got the Treasurer now a bit like the main character Weekend At Bernie’s, being propped up there by Scott Morrison and Tony Abbott, unable to go out there and do his job of selling the Budget. You can never imagine that Peter Costello or Paul Keating or Wayne Swan would have been so sidelined in the Budget process, so unable to articulate the reforms.

GILBERT: Let's get the Minister's response to that because it has been the subject to a fair bit of attention, the fact that Scott Morrison has dominated the Government's message in the lead-up to this Budget. Is it somewhat of an audition for higher honours?

BIRMINGHAM: No, Kieran. Scott, as the Social Service Minster, is responsible for one third of Government expenditure. He will be the Minister responsible for implementing the changes around the aged pension, for implementing the changes around childcare. He has significant levels of involvement in terms of policy reform but Joe Hockey is the Treasurer, he is the overall architect of the Budget policy alongside the Prime Minister. This is a Government that is a team, Kieran. This is not a Government that is about one person or two people, this is a Government in which every Minister is expected to perform in their role, that's what we're saying.

GILBERT: There's no doubt that Scott Morrison is performing in that role effectively and is much more effective in terms of that message this year. I guess, you know, having covered Budgets for more than a decade now, I know that traditionally the Treasurer will, for example this morning, give their walk up to the Ministerial door –there were the autumnal leaves behind Peter Costello for years – then he'd come and tell us how great the Budget would be. Wayne Swan carried on that tradition but this morning, no sign of Joe Hockey?

BIRMINGHAM: Kieran, Joe is working incredibly hard on this Budget and we will see plenty of Joe Hockey in handing down the Budget tomorrow and in the sales pitch that goes with the Budget thereafter. Explaining to Australians that this Budget is about getting Australians back into work and making it easier for people to employ other Australians, small businesses in particular. In comparison to the Labor Party, whose policy proposals thus far are a new carbon tax, a new superannuation tax, a tax package on multinationals who has previously proven to be unworkable and that won't actually be effective in terms of being implemented according to Treasury advice. We will actually have a package of proposals that makes sense, that make it cheaper and easier for small businesses to employ Australians and make it more attractive for Australian families to get back into the workforce. You'll hear plenty from Joe Hockey on that, as you will every member of the Government.

GILBERT: There'll be further savings in the public sector as well it seems? The Government looking at a fourth phase of a smaller Government health and education in line for trimming, this is always a clever thing to do for duplication for example in other agencies will be undertaking similar work in other jurisdictions?

LEIGH: Of course, Kieran, we want to make sure we've got a streamlined and efficient public service. But again, this is about job cuts. We've seen 17,000 job cuts in the public service since the Government came to office. I'm worried that so much of what they're doing seems to be ideologically driven, it seems to be based on the notion that if you can find it in the Yellow Pages, the Government shouldn't do it. That seems to be threatening the core public services that Australians depend on. On the comments that Simon was making before, I'm fairly relaxed as to what Joe Hockey chooses as his media schedule. What concerns me the most is Joe Hockey's disengagement with the core debates the nation is facing. Debt and deficits, according to most economists, are not the number one challenge that Australia faces. But Tony Abbott and Joe Hockey made it their test and they've failed that test. They've also stepped away from debates around innovation, inequality and climate change. Those big picture issues see the Australian Treasurer missing in action.  

GILBERT: Let's get Senator Birmingham, just finally to you as we're almost out of time.

BIRMINGHAM: Look Kieran, this Budget really is about framing the right future for Australia, one in which Joe Hockey delivers a Budget that continues to show a steady trajectory back towards deficit. Recognising the very difficult challenge we have, that iron ore prices have nearly halved over the course of the last year since the last Budget. So there’s challenging times but also building the workface capacity of all Australians, that is the central message that I hope Australians will see tomorrow night.

GILBERT: Senator Birmingham and Andrew Leigh, gents, a busy few days ahead.

LEIGH: Indeed. Thank you.




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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.