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ABC News Breakfast -

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(generated from captions) Barack Obama, that will be

broadcast hooer here in

Australia at 10am. Retail

spending continues to fall despite new data

despite new data showing

consumer confidence has risen

to its highest level in two

years. Shadow Treasurer Joe

Hockey joins us now from

Canberra. Good morning. Good morning. The coalition is

finally scoring some points on

the school spending issue. But

it turns out this morning that the Abbotsford Public School,

it was more a problem with the

State Government than the

federal federal, State officials and

federal officials? I don't

know about that. What I do know

is that the local community

baulked at the proposal to

demolish good classrooms to

build new classrooms and it's

Federal Government money. Look,

mate, I mean, the Federal

Government is spending money on

a scale that we have never seen

before. And it's having a

profound impact. A profound impact. A profound

impact on communities that is

detrimental in many cases to

what the community wants. But

it's getting us out of

recession? No, because we

haven't gone into recession and

this money is still in the

process of rolling out. In

fact, according to the last

quarter of national accounts,

the money on the school the money on the school

stimulus actually hasn't even

hilt the ground. So I would say

that most of the money actually

hasn't been spent as of today.

But it all remains a mystery

and what we do know is that

there is tremendous waste. So

is this schools program a prime

candidate for you in terms of

money that you would cut

because you say federal

spending should be cut by $14

billion a year? Well, it

depends how much depends how much money is spent

by the time of the next

election. I mean, if the

election were today, you would

say of course there's

opportunity to pull back on

waste and mismanagement. Just

look at the fact that the

government is spending $250,000

on a school with one student.

With one student! And say to

yourself s that a goodus of

taxpayers' money? Of taxpayers' money? Of course

not! But this government is

determined to throw money at

everything and it's poorly

targeted, result offing in

waste, and it's clearly

mismanagement as well. It all ends up in debt and all of us

have to pay higher taxes. But

the retail sales and the housing figures out yesterday

show money still needs to be

pumped into the economy to keep

it afloat? Well, the

Australian Retailers

Association said yesterday that the worst thing that the worst thing that could

happen to retail at the moment

is to see an interest rate

rise, and the more the

government spending the more

upward pressure it clearly puts

on interest rates. There's no

doubt about that. You see, the

government was only 18 months

ago claiming that every

interest rate rise during the

Howard Government years was a

result of the actions of the

Howard Government. Now this

government is saying, well government is saying, well

that's independent policy.

Wayne Swan is totally

hypocritical on this. Because

on the one hand, every increase

was the fault of the Howard

Government, but now, every

increase is the independent

Reserve Bank acting on its

own. If all this money is

needed now, how can you

responsibly be blocking this

insurance rebate legislation in

the Senate last night and

blowing a further $2 billion hole in the

hole in the Budget? We did not

sign up to a democracy that

just rubber stamps every wish

of this government. We're

keeping Kevin Rudd to his

election promise not to tinker

with private health insurance.

Kevin Rudd pledged that, a

solemn promise to the

Australian people, that he

wouldn't alter private health

insurance, not only has he

broken that promise spectacularly in this Budget,

he did it in the last Budget as well. well. When there was no

financial imperative. This is

the way they operate. They say

one before the election,

something else afterwards. We

will not sign up to the

destruction of private health

insurance. Which effectively

puts more pressure on the public hospitals that Kevin

Rudd said he would fix and he

has done nothing about. But

you're signing up to more debt

which you say the country

should be trying to avoid? No, should be trying to avoid? No,

fact we're not. We actually

offered an alternative to the government involving cigarette

taxes. We actually offered them

an alternative, and quite

frankly, we're saying to the

government, we're not signing

up to every single pressure

that you propose, otherwise

it's not a democracy, it's a

one-party state. Do you believe

going tens of thousands of people are

going to get in trouble, even

if there is a rate rise of 1%

over the next year? How deeply

would that affect people? I

fear a rather deadly cocktail

next year of rising interest

rates an rising unemployment.

Given that under Labor,

unemployment has increased from

means that there 4% to 5.8% as of now, that

means that there are a significant number of

Australians who are losing

their jobs, there are many

Australians who are working

fewer hours than what they

would want. Only a flexible workplace policy has delivered

a lower unemployment rate than

would normally occur during

this sort of economic downturn,

and yet this government is

determined to try to reregulate

every single part of the every single part of the labour

market to such a degree that

obviously employers will start

to lay off people rather than