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Transcript of interview with Ross Greenwood: PM Radio National: 30 July 2014: Budget; Consumer confidence



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Hon. J.B. HOCKEY Treasurer

TRANSCRIPT

MONEY NEWS WITH ROSS GREENWOOD, 2GB

TUESDAY, 29 JULY 2014

ROSS GREENWOOD: First thing‟s first: could it be argued that the bounce back in consumer confidence is because the Senate has knocked back some (inaudible) than they thought they might have?

TREASURER: No, I don‟t think that is a suggestion. Look, if you look at every Budget that has had a similar impact as the one I brought down in May, you can see consumer confidence bouncing back. We said that would be the case, it would come back and it is starting to come back - in fact, quite strongly. That is to be encouraged because fundamentally, we know that the Economic Action Strategy we‟ve laid down is delivering a plan that will make tomorrow even better than today for business and obviously for people who want jobs.

ROSS GREENWOOD: The other point also is Access Economics now says your Budget has gone from one that saves the Nation money to now costing it; that is Dr Chris Richardson saying this. Does it actually mean the political response to your Budget has been a failure thus far, that you haven‟t been able to get the spending cuts through that you really wanted to - the case for Budget repair as you put it?

TREASURER: Well, you know what Ross, the first thing is, in terms of spending reductions, this is effectively half the scale of what Peter Costello delivered and what Paul Keating delivered. So, it is half the size of the savings, half the toughness if you like of a Costello Budget or a Keating Budget but the problem is that the Labor Party have just been entirely inconsistent dealing with it, the Greens have been entirely inconsistent and look, work in progress is where we are at with the independents. Who would have thought that the Labor Party would be voting against their own savings measures - $5 billion of them? Who would have thought that the Greens would have been voting against changes to fuel excise that they have long advocated. I mean the hypocrisy of our political opponents is breathtaking and as you said rightly, Standard & Poors have re-affirmed our AAA but on the basis that there is bi-partisan agreement on getting rid of the deficit and paying back the debt and the problem is that Labor is not agreeing to start to reduce the deficit that they created and they are certainly not doing anything about helping us to pay down the debt they created.

ROSS GREENWOOD: And though it is absolutely true that if say for example, Labor was successful in going into another election, in convincing people that these measures are not necessary, it too would confront exactly the same issues that you confront today?

TREASURER: Exactly the same, exactly the same and the fact is, they said before the election they needed to be addressed but after the election they are doing everything they can to stop us addressing it and that‟s the problem.

ROSS GREENWOOD: Except for one thing and that is if you start (the inaudible) big chunks of the Budget that is healthcare, you looked at the ageing of the population and the welfare bills in Australia. These are things of course that don‟t hit the high-end of town, they hit ordinary families and those ordinary families start to get very nervous and very worried about their lifestyle, their kids lifestyle, about how long they might have to work; this is a relatively easy political message to sell to the community surely?

TREASURER: Well, that is one of the reasons why we had the Deficit Reduction Levy and Labor said before the Budget they were going to oppose it and after the Budget they supported it and it is one of the reasons why for example, we wanted the change in fuel excise because higher income people do make a contribution - a much bigger contribution than everyday Australians through the fuel excise system. But of course, the bottom line is that government expenditure has been cut in a range of areas. I mean for example, we made some very difficult but appropriate decisions in relation to subsidies for big multinationals. Now, Labor opposed them, they wanted us to give billion dollar subsidies to multinational corporations, that‟s what they wanted us to do. So, they can‟t have it both ways, on the one hand cry crocodile tears about the impact on everyday families and yet on the other hand advocate giving billions of dollars of handouts to corporations because that is exactly what Labor did. And by the way, it was Labor who actually hit single mothers harder than anyone ever has in one of their last Budgets, where they took 60,000 single mothers off a Single Parents Pension and put them on the Dole. So, frankly their hypocrisy is breathtaking.

ROSS GREENWOOD: Alright, you were in New Zealand last week. The New Zealand economy clearly has had an enormous change, a turn around which has been quite staggering because of breathtaking Government and some brilliant reform which has been brought in which hasn‟t been the subject of Upper House and Lower House debate. The Government simply got in there and did it; raised GST, changed around government spending, did a range of things that is difficult for governments here in Australia to do. You also were asked while you were there about the so-called Budget emergency and indeed the state of the Australian economy. I will just give you your response there:

“There is no crisis at all in the Australian economy. The fact is, you need to move on the Budget to fix it now and you need to undertake structural reform to strengthen the economy in the years ahead”. But you have said here that (inaudible) „…Budget position is driven by excessive and unnecessary spending. Real government spending per person has almost tripled over the last 40 years and the International Monetary Fund warns without policy change, Australia would record the fastest spending growth of the top 17 surveyed advanced economies‟. So the question is, is there a Budget emergency or are we okay?

TREASURER: Well, that‟s exactly right. Now, you are smart enough and your listeners are smart enough to know the difference between an economy and a Budget but unfortunately the Labor Party and a whole lot of different critics on the left don‟t understand the difference; probably why they

created such a mess. The fundamental point is, the Australian economy is relatively strong and we want it to get stronger to create the jobs but the Budget is in crisis according to - don‟t believe me from saying it, listen to what John Edwards who was Paul Keating‟s principle economic advisor, appointed by Wayne Swan to the Reserve Bank Board, he said just a few weeks ago, „I‟ve no doubt there is a Budget crisis‟. Now, that sentiment has been backed up by the Governor of the Reserve Bank, the Secretary of the Treasury, the Business Council of Australia, Access Economics. It has been backed up by Paul Keating, Bob Hawke and Angel Gurria - the head of the OECD, even Wayne Swan said the position of the Budget is ruinous. Everyone has said - of any credibility has said, „we‟ve got to fix the Budget, we can‟t keep borrowing money‟. Even Standard & Poors in their report, which you have in front of you, said “if we do not get back to surplus, there are huge risks for the Australian economy”. So, that is what we are doing, we are doing what needs to be done to create the jobs and the prosperity. Our political opponents are verballing us at every point, they are completely misleading the Australian people about what the truth is.

ROSS GREENWOOD: Okay, so last week you told me at the book launch, No Ordinary Joe, if Budget cuts this year are not achieved politically, then you will go again in next year‟s Budget and make the cuts you see necessary. Bill Shorten keeps asking the question about where you will cut; I don‟t think that‟s a bad question actually. Where would you cut and politically how would you achieve them? Would you try, for example, to make cuts that don‟t have to go through our Parliament?

TREASURER: Well, the starting point is, I am working with sensible people in the Senate to try and get the Budget through.

ROSS GREENWOOD: You mean Clive, you mean Clive Palmer?

TREASURER: Everyone, everyone. I am dealing with everyone who is prepared to be sensible. If for a moment, Bill Shorten put down his class warfare lines and started to focus on what is good for the nation, I would be prepared to speak with him about the Budget or the Greens who refuse to accept our phone calls for a long period of time, I am prepared to sit down with them. But I am prepared to do it on the basis that we have a common goal and that is, to make sure that Australia lives within its means; that we actually do get back to surplus, that we start to pay down the debt and that we do not leave ourselves financially in a worse position tomorrow than we should be in, as a result of the Budget.

ROSS GREENWOOD: Treasurer Joe Hockey, as always great to have a chat with you on the program.

TREASURER: Thanks very much Ross, thank you. [END]