Balancing the budget involves hard choices. As I explained to Mark Parton in this interview with Radio 2CC ahead of the mid-year budget update, my party will always support fair budget savings. But by the same token, we will fight budget decisions which fail the fairness test. Here's the transcript:
MONDAY, 15 DECEMBER 2014
SUBJECT/S: Joe Hockey’s mini-budget
MARK PARTON: Treasurer Joe Hockey is going to have a shocker of a day today. He's expected to reveal revenue has taken a further hit of just over $6.2 billion in just over six months. Things that are out of his control but he knows he's going to get smashed for it. So if we had a budget emergency at Budget time, we've got a potential catastrophe now. Mr Hockey will deliver his mid-year economic update today and there are reports of forecasts of $379 billion in receipts, that follows figures of $389 billion in May. So it's down substantially and many of the experts are saying that deficits over the period will more than double to $100 billion. There's little hope of economic improvement without radical action.
Andrew Leigh is waiting in the wings; Andrew's specialty is economics so he knows how to assess figures much better than you and I. He's about to suggest to us that Joe Hockey is a fool – I'm assuming he is – he's about to slam the Treasurer for failing to reign the deficit in and tell us how diabolically bad it is. But I just don't know that you can have it both ways because for years Andrew has been telling us that there is no budget emergency and that running a deficit isn't a bad thing. It certainly wasn't when Labor was doing it, it was fine. I had many conversations with Andrew, during which he compared our deficit to a home loan and basically said it was nothing to worry about. Unless the other mob is in power, and then it's a disaster. I'm sick of the theatre. Andrew Leigh is the Shadow Assistant Treasurer and the Member for Fraser – morning Andrew.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Mark.
PARTON: Budget deficits will almost double to $100 billion over the next four years – is this a budget emergency?
LEIGH: Well Mark, it's certainly a problem for the nation if Joe Hockey keeps on giving money back to multinationals, keeps on giving money to people with more than $2 million in their superannuation accounts, and wants to give $50,000 to millionaire families to have a child.
PARTON: But aside from all that theatre and political rhetoric, let's talk about it seriously. Do we have to reassess how we do things here to avoid slipping further into the mire?
LEIGH: I think we certainly do need to make choices. We made a range of choices in our budgets during the Global Financial Crisis, Mark. You framed it up as a question of whether debt is good or bad – I would argue that taking on an amount of debt in order to save 200,000 jobs and tens of thousands of small businesses was worthwhile. But in the wake of the Global Financial Crisis you have to pay that down. So we put on a two per cent real spending cap after the GFC and stuck to it. The thing about Joe Hockey is that every time there were revenue write-downs while we were in government, he would say that they were the government's numbers. In fact, at one point he said that if Wayne Swan was a company director, he'd go to jail. Yet now when there's changes in government forecasts, he seems to think he can blame other people.
PARTON: So why can't both sides just agree that there's many things that happen which are out of our control, that we are actually at a crossroads as a country? Why can't you say 'yes' to some of these important budget savings and actually stop bickering?
LEIGH: We've said yes to a range of those budget savings, Mark. I'm certainly not going to be playing the game that Joe Hockey played when he was in opposition; I'm not going to claim that if Joe Hockey was a company director, he'd be going to jail. I think that's silly talk and it was a mistake for him to use that kind of language when he was in opposition.
LEIGH: We've been supporting a range of their savings, but we're taking the fairness test to it. So if it's a matter of saying: 'will Labor support a high income earner levy?' We've said, reluctantly, yes to that. But if it's a question of saying: are we going to support a back door GP tax that's going to hurt Aussies going to the doctor, or support a fuel tax that's going to hit tradies around the country, then we're saying no to that based on the fairness text.
PARTON: The Treasurer is going to be scrounging to find savings anywhere, and it certainly looks as though international aid is going to be trimmed rather substantially. But only an optimist would believe that Canberra, as a city, is going to get through today unscathed.
LEIGH: Well indeed. We've already seen over the last year the biggest rise in unemployment anywhere in the country, the biggest fall in incomes, falls in house prices – as Joe Hockey joked before the election would happen in Canberra. So Canberra has been very hard hit by the Coalition's broken promises, particularly their broken promises that they wouldn't cut more than 12,000 public service jobs and there wouldn't be any forced redundancies. These so-called savings won't end up saving the budget, Mark. For example, if you fire the government's in-house lawyers and contract that work out to private firms, it'll end up costing more over the long run. It's going to mean job losses but not a budget saving.
PARTON: I talk about the country being at a crossroads, but I think the Coalition is definitely at a crossroads in the middle of this term, aren't they? They've really got to assess what's important to them ideologically. Everyone says the polls aren't important, but they are.
LEIGH: I'm really worried that we've had a Treasurer who's been talking down confidence during this year, rather than talking it up. He hasn't exactly inspired confidence by trying to get the fuel tax and the GP tax in through back door means, by saying he'll find any way he can to rip money out of universities, by smoking cigars while bringing down the most regressive budget in history and topping it off by saying poor people don't drive cars. These aren't the kinds of statements that inspire confidence in the economic management of the Treasurer. Again today, we're seeing these horror figures which Joe Hockey is trying to blame on anyone other than himself rather than stepping up and taking responsibility.
PARTON: So it's Joe Hockey's fault that the price of iron ore has gone down internationally?
LEIGH: No. I'm certainly not going to say that. He would have said that in opposition but I'm not going to make that statement. But it's certainly Joe Hockey's fault that he's been talking down confidence during the year, and it's Joe Hockey's fault that he's chosen to make savings only by hurting the most vulnerable while including giveaways for the most affluent. Mark, one of the issues I work on a lot is multinational profit shifting, and I'm shocked by the fact that this government has given an extra billion dollars to multinationals. That's not appropriate at any time, but particularly at a time when we've got a so-called budget emergency. So Joe Hockey can find money for the big end of town when he wants to, but today all he's going to do is hurt Canberra, hurt the most vulnerable Australians, and by some accounts, hurt poor kids in developing countries who will miss out if we cut foreign aid.
PARTON: Andrew Leigh, thanks for being so accessible for us in 2014, have a merry Christmas and we'll catch up again next year.
LEIGH: Thank you Mark, always a pleasure. Have a good break.
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