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Shadow Treasurer, Joe Hockey, speaks to political editor Chris Uhlmann.


LEIGH SALES, PRESENTER: Well, politicians in Canberra didn't miss the Qantas announcement today
with both the Treasurer and the Transport Minister urging Qantas to look after hits employees. But
it was other issues dominating Parliament's first session after the winter break - notably: carbon
tax, gay marriage and the economy. Outside the Parliament, the loud message from protesters was,
"Ditch the carbon tax", while inside, Christians were fighting the push to redefine marriage, and
the Treasurer was talking up Australia's financial security. The Shadow Treasurer Joe Hockey joins
us shortly, but first political editor Chris Uhlmann with his take on the day in Canberra.

CHRIS UHLMANN, POLITICAL EDITOR: The second carbon crusade saw the faithful rise again, in their
thousands. There were a handful of non-conformists and a brief schism among the like-minded, but
mostly the crowd, judged by police at over 3,000, had a common purpose, neatly summed by the
Opposition Leader.

TONY ABBOTT, LEADER OF THE OPPOSITION: First, we don't want a carbon tax. And second, we do want an
election. Would you trust this Government with a new tax?


CHRIS UHLMANN: In Parliament's Great Hall, about 800 believers confronted another moral dilemma.

UNIDENTIFIED SPEAKER: A child needs the equal love of a mother and a father, and that is what
marriage calls us to honour as a society.

REBECCA HAGELIN, AUTHOR: Imagine, marriage - the oldest institution of any kind, created and
defined by God himself - is under attack. There is no greater evil.

CHRIS UHLMANN: The possibility of gay marriage divides the major votes and unites foes.

KEVIN ANDREWS, LIBERAL FRONTBENCHER: This a destruction of marriage, not simply a redefinition.

JOHN MURPHY, LABOR BACKBENCHER: They want me to defend the institution of marriage.

CHRIS UHLMANN: When Parliament proper began, it was the fragile world economy that was troubling
the Treasurer.

WAYNE SWAN, TREASURER: The unfortunate reality is that this global instability is going to be with
us for some time.

CHRIS UHLMANN: But he has faith in the nation's ability to prosper.

WAYNE SWAN: Australia is better placed than just about any other nation to ride out the current
wave of global economic turbulence.

CHRIS UHLMANN: We're joined by the Shadow Treasurer Joe Hockey, welcome.


CHRIS UHLMANN: Do you think Australia is well placed if there is another global downturn?

JOE HOCKEY: Well, we could be better placed. That's the point that we made today in Parliament:
that this Government inherited $45 billion in the bank now we have net debt of $110 billion. They
inherited a $20 billion surplus, now we have deficits of $20 billion. So, we could be better

CHRIS UHLMANN: So, your prescription, if there was a recession, would be to cut Government spending
as hard as you possibly could?

JOE HOCKEY: Well, hang on, I'm not suggesting that Australia's going into recession. We still have
the best terms of trade in 140 years. We have an unemployment rate of 5.1 per cent. But Australia
is not as well inoculated as it was in 2008, and that's because of the reckless spending of this

CHRIS UHLMANN: The remedy is a larger surplus, that's what you think?

JOE HOCKEY: Well, to get the budget back to surplus - that's a starting point. Now today was a very
important day because Julia Gillard - on this, the first anniversary of her broken promise on the
carbon tax - today Julia Gillard confirmed that she's breaking another promise, and that is to get
the budget to surplus next year. She said, "No ifs, no buts, before the election, we will deliver
that". Today she started to walk away from that.

CHRIS UHLMANN: Can we have no ifs and no buts on just how much you would cut?

JOE HOCKEY: Well, we've illustrated already we're prepared to make hard decisions, but I tell you
what - as we're going through the budget line by line, item item - we're discovering more and more

CHRIS UHLMANN: Can you give us a figure, though - some people are saying $70 billion - I'm hearing
from your office it's less than that. So would it be $70 billion dollars worth of cuts, would it be
$50 billion worth of cuts? Can you give us a figure as starting point?

JOE HOCKEY: Well, it depends on how much waste we find. This seems to be a bottomless well at the

CHRIS UHLMANN: You said the other day you could find $70 billion worth of cuts if you had to. Could

JOE HOCKEY: I didn't say 70 billion...

CHRIS UHLMANN: You said "50, 60, 70 billion..."

JOE HOCKEY: Well, whatever the case is, wherever there is waste we'll chase it down. I mean, we're
hearing about it every day, Chris. Whether it be Indigenous tobacco programs, whether it be the
fact that the Government handed out $900 cheques to people overseas or wastes of money on pink batt
programs or gross waste in school halls programs or computers in schools, it goes on and on and on.

CHRIS UHLMANN: Do you honestly think you could find between 50 and 70 billion dollars worth of
waste in the Commonwealth?

JOE HOCKEY: Well, hang on, the starting point is we're not going to collect a carbon tax. So that
is $26 billion of less tax Australians have to pay. Currently, the Government is scheduling $31
billion of expenditure against that. So immediately when we abolish the carbon tax there will be a
saving of at least $4 billion in the budget bottom line. For a starting point we're not going to be
spending $400 million administering a carbon tax with 22 new different programs attached to it.

CHRIS UHLMANN: Can you tell us how you go about finding even $30 billion over four years? That's
the size of the Department of Defence. That's 100,000 workers.

JOE HOCKEY: No, it's not right. It's not quite right. Because, over four years, the Department of
Defence is far larger than that.

CHRIS UHLMANN: I'm talking about over four years, you're trying to find the equivalent of removing
the Department of Defence from the Commonwealth budget.

JOE HOCKEY: That's not right. Because over four years the total budget expenditure is $1,500

CHRIS UHLMANN: For the entire Government.

JOE HOCKEY: That's right.

CHRIS UHLMANN: For the entire Government.

JOE HOCKEY: If you take on revenue which is roughly the same - perhaps a bit less under Labor
because they're running deficits - then you actually find that, out of a combined flow of money of
around $3,000 billion, you can't find waste?

CHRIS UHLMANN: And, what I'm saying is, can you find something the size of the Department of
Defence over four years, which is the equivalent of 100,000 workers?

JOE HOCKEY: Well, I don't accept those figures. They're wrong.

CHRIS UHLMANN: Those are the figures for the Department of Defence. That's the size.

JOE HOCKEY: Well, the Department of Defence... Defence spends, over four years, considerably more
than that.

CHRIS UHLMANN: I'm saying over one year. If you spread it over four years, could you find 100,000
workers or four years?

JOE HOCKEY: No, we'll find money. Because, the thing is, this Government wastes money, Chris. For
example, just the fact that they are in debt to $110 billion means that over the next four years,
the debt interest alone will increase to $7.5 billion a year.

CHRIS UHLMANN: If you scrap the carbon tax, will you scrap the pension increases that go with it?

JOE HOCKEY: I'm not going to speculate on how things will be framed.


JOE HOCKEY: We'll wait and see when the election comes. You'll see our policy in detail.

CHRIS UHLMANN: Your boss called for an election today, so surely you're ready today. Will you scrap
the pension increases?

JOE HOCKEY: Well, if there is no tax, there is no need for compensation. You only need compensation
when you cause injury. And we will not cause injury to the Australian people.

CHRIS UHLMANN: And when you cut the carbon tax, will electricity prices fall?

JOE HOCKEY: We would expect so.

CHRIS UHLMANN: Will they fall by the amount that people have been...

JOE HOCKEY: Well, this is part of the... this is exactly what we're saying. Electricity prices are
rising - the GST is on top of those price rises. When we abolish the carbon tax, electricity prices
will fall.

CHRIS UHLMANN: But we're seeing price rises now. Nothing to do with the carbon tax.

JOE HOCKEY: Well, that's right, but electricity prices are going to go up by 10 per cent at least
as a result of the carbon tax. We'll reduce them. Obviously.

CHRIS UHLMANN: So, you will cut the pension?

JOE HOCKEY: I'm not saying we'll necessarily cut the pension. You will see what we have planned.
But I tell you what, whatever is being offered by the Government now isn't real. Because the
Government is collecting $27 billion of carbon tax, therefore increasing the price of goods for
everyday Australians. And they're handing back $16 billion and telling people they're better off.
Well they're not. Because prices are going up. $25 billion.

CHRIS UHLMANN: When you scrap the mining tax, will you scrap the increases to super that go with

JOE HOCKEY: Well, again you will see our full package before the election.

CHRIS UHLMANN: And again, we don't know when the election will be and your boss calls for one every
single day. So surely you must be ready now.

JOE HOCKEY: We... and if the election is called tomorrow, we'll have our policies out.

CHRIS UHLMANN: Will you scrap the super increases?

JOE HOCKEY: If the election is called tomorrow, we'll have our policy out.

CHRIS UHLMANN: Why do you demand that the Government tells us things, and... that you have nothing
to say about the size of your cuts, about the... what sorts of things you'd change?

JOE HOCKEY: Because the Government is the one running the budget today.

CHRIS UHLMANN: And you're wanting to run it.

JOE HOCKEY: We are, absolutely.

CHRIS UHLMANN: All right, so why can't you tell us if you've scrapped the super increase?

JOE HOCKEY: Because we will indicate to you, before the election, exactly, to the dollar, where all
our money is coming from and where it's going.

CHRIS UHLMANN: Would you also, in your direct action plan... is that the best way for the
Government to cut carbon emissions?

JOE HOCKEY: From our perspective, direct action is the best solution at the moment until the world
comes to an agreement.

CHRIS UHLMANN: Is it the best and most efficient way to make savings?

JOE HOCKEY: For Australia, yes.

CHRIS UHLMANN: Is it absolutely?

JOE HOCKEY: For Australia, yes.

CHRIS UHLMANN: So the market is a more efficient mechanism?

JOE HOCKEY: Well, the market isn't in play. There's no global market, Chris.

CHRIS UHLMANN: There will be a market inside Australia.

JOE HOCKEY: There is no global market. Carbon dioxide is a global commodity. Therefore if it is a
global commodity and there is going to be global trading we will be part of that I assume, but -
but there is no global trading of this global commodity.

CHRIS UHLMANN: Joe Hockey we'll have to leave it there. Thank you.

JOE HOCKEY: Thanks very much, Chris.