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(generated from captions) services tax. What they're saying is that yes, we're going to have a review into the taxation system and the goods table.
and services tax is on the table. As I said to Mr Abbott in the debate the other night very clearly, if you say you're not going to increase the goods and services tax and you're not going to extend it to food, then why is it part of your review? I don't get the logic there. And so what you have is Mr Abbott and his team squirming around the place trying to say well we are going to review the GST but we're not really going to review the GST. The bottom line is this - the two things are linked. Mr Abbott is not being upfront about where his $70 billion worth of cuts to jobs, education and health is coming from because he's really concerned, he's really concerned about what they would mean in terms of the reaction by voters and so the back pocket is the goods and services tax which is on the table for future review.PM, I

to get closer to the Torres Strait during this campaign but there's been -Well we're moving steadily north.There's been some concern -It's still warmer than Hobart, don't you think?I think North Queensland's great.I think all of Queensland's great. But I'm biased.There's been some concern about the porousness of the border around Torres Strait, do you share that concern in light of Somalians coming down? And
secondly, concern in light of the
Somalians coming secondly, are we likely to see secondly, are we likely to a bolstering of border security in a in the Torres Strait?Our policy on border security is clear. We've said to all people smugglers anywhere in the world if you put anyone on a boat and you send them to Australia by boat and without a visa then you won't be able to be settled in Australia. It's a very clear cut message, it's aimed at destroying the people smuggler's model. And it comes
doesn't matter where that boat comes from. As the Immigration Minister said the other day, whether it's through Christmas Island or whether it's across the Torres Strait. I think there are one or two cases that you just referred to. Or whether it's from Antarctica, they will be handled the same under this policy. What I would say in the first part of your question is I think it's time that Mr Abbott and his team, particularly those up here in Far North Queensland, stopped the fear mongering. I'll take one more question.Kris - Christopher Pyne seemed to rule out any chance of the GST, if there is a review would you concede have to make that position clear?Don't you think - I think you know the answer to that which is that if Mr Abbott, if Mr Abbott wanted to increased
rule out a GST from being increased or going on to food, he had multiple opportunities in the debate with me the other evening and he declined to do so. The Shadow Treasury's declined to do so. The Deputy Leader of the Liberal Party have declineded to do so. They're trying to engage in a bit of damage control. My challenge is simply I said the other night. If you
are not planning the possibility of encrease increasing the GST or extending it to food just rule it out. But the fact that you won't rule it out and are insisting it's part of the review I think says it all.The vote today for workers for Holden should they take a pay cut to ensure their future and the Sky debate, isn't this revenge on News Corp?I'll answer your first question because I've already answered the second. On the first point about Holden, we are passionate about investing in Australia's future, building the future. And I've said how many times, Alex, to you and others, building the future means building the future of our manufacturing industries and looking after the 250,000 people who work in the auto seconder. - sector. I'm Pat passionate about that. That's why we've invested $1.5 billion in an assistance coinvestment arrangement, that's why we've added $200 million to that. We take the jobs and the rejuvenation of the automobile sect nor this country seriously. And the alternative is Mr Abbott Ritt d ripping $500 million out and now $700 million out. We are partners with business and with unions in securing a future for manufacturing in the country. I'm passionate about that. And your last point, apart from being a bit of a flick is simply this. There is free-to-air television anywhere, anyone can tune in and watch a debate and I've talked before about 7, 9, 10, ABC, it's a free country. You get the biggest audiences and on the question of the Sky network, the director of Sky News, your senior journalist, approached us on day one of the campaign and said, "Will you come on tomorrow night and debate?" And I said yes, and you could Ciuchcia Mr - could not see Mr Abbott for a trail of dust. OK folks, got to zip.Apologies for the qualities of that link. The PM in the seat of Herbert with the Labor candidate there Cathy O'Toole. That's a Liberal-held seat with a margin of around 2%. The PM was announcing a $30 million plan to develop better skills for people working in the services sector. The preelection economic outlook has come out in the last few minute. PEFO is an independent assessment of the current state of the Budget and the economic outlook set up by former Liberal Treasurer Peter Costello and I'm just printing it out right now as it comes through and we've got our business editor Peter Ryan here and we're going to take a look through it in a moment. It allows the Opposition parties to see a true assessment of the books without political bent from the incumbent government. The figures have just been released, as I said, and I'm joined now in the studio by our business editor Peter Ryan. So Peter, obviously it's only just come out but can - what are the basics that you can see there so far?Well, Joe, just having made it through page 1 of this extensive document and it is an extensive document, I can just say that it does appear on the surface to be in line with that statement that we had in the Budget update from the Government two Fridays ago. The outlook, you know, the economy forecast to grow by 2.5% in 2013-14, 3% in 2014-15, so that is in line with what we've seen. is seen. I haven't had a chance to read through the rest of it seen. I haven't had a chance just yet.If read through the rest just yet.If you just go to page 10 of the document, I just yet.If you just go think you can see there page 10 of the think you can see there the
headline think you can see there headline cash balance forecast for 2013-14 comes in at $37.2 billion and then $33.6 billion the following year, $14 billion the year after that and $5.9 deficit for the 2016-17 year so it seems to be the case that there is - there are in the forward estimates there is a slight downgrade of the outcome.That's right, by around about 7 billion just on the face of that. So a slight blow out in that but we need to put the context to that and I'm just noting in some of the language that is going with this, of course, Treasury is talking about a still challenging global outlook and that all important transition of the investment phase of the resources boom to the production phase which, of course, has seen commodity prices fall resulting in lower cash - lower tax receipts for the Government which is a big cause of all of this.OK, thanks, Peter. So this preelection economic and fiscal outlook has only just come out in the last few minutes. For more let's cross to political editor Lind - Lyndal Curtis, do those figures tally up with what you're seeing?The figures are barely changed from the economic outlook that the Government put out less than a fortnight ago. days fortnight ago. Only a matter of
days ago. Really the only change is in the last year of Budget forecasts for the Budget bottom line, that's gone up by $200 million. So a very little change. I'm joined in the studio by economist, a former government staffer, now runs a firm Economic s Stephen Koukoulas.If we look through the economic parameters for GDP growth, the unemployment rate, as they were
for example, they are exactly as they were on the Government eats statement less than 2 weeks ago. Not much has happen, I suppose, to make them change their line and on the Budget bottom line there's been a few tens of millions of dollars changes in the revenue and the outlays as the Government's got more information or Treasury and Finance have got more information from taxpayers and the like. So there's been a very small change to the Budget bottom line. These are, for all intents and purpose, the same numbers that we saw less than 2 weeks ago.And $200 million in a few years time doesn't mean anything, does it?No, it's the sensitivity of things like the interest rate cut that we saw last week and perhaps the exchange rate. I notice that the technical assumption that Treasury uses 1 cent lower than it was two weeks ago. So these little variations do have an impact on revenue, on outlays and these sorts of things and it's a little bit like a sausage machine in a sense. You change the ingredients like the exchange rate, the interest rate forecast and you can get a different bottom line for the Budget but at the moment the core picture that Treasury's painting here is one where 13-14 fiscal year is with GDP growth of around 2.5, that's their central forecast. Unemployment still going up to 6.25% and because of that we still have a deficit of close to $30 billion this financial the
year, dropping to $24 billion the following year and then getting to a very small deficit and then a very small surplus the year after that.Given that the economic update, the Treasurer released not so long ago wrote down revenue by more than $33 billion over 6 years, it was $7.8 billion in 13-14, given the scale of that revenue write down, could we have expected to see a little bit more write down in revenue or do the forecast periods not actually update that quickly?Having worked in Treasury and seen how these things work, you don't get a lot of information in a fortnight. The only thing that really changes, the only thing that makes Treasury change their view is if there's a real shock to their economic forecasts or they get a real shock on their revenue and expenditure. I dare say nothing like that will have happened. The big changes they see when they get GDP figures, when they get employment figures and even though we saw an employment figure last week, they were not that different to what Treasury were projecting, and based on
all of were projecting, and all of the above it's no
surprise were projecting, and based on all maintaining their view and dare say it will not surprise that Treasury's just
maintaining their dare say it will not be until we dare say we get the mid year outlook for we get the outlook for the new Government around about November or December that we'll around December that we'll see these
numbers around about November or
December numbers changing.Now, just to delve from the world of economics into the world of politics, would it have been a problem, particularly for Treasury, had these numbers changed significantly since the update the Treasurer put out?I think it just reinforces the fact that Treasury are producing their own numbers, that they're not heavily swayed by the Government. It's not in the Government's interest to tell Treasury or advise Treasury or lean on Treasury to produce numbers that are going to be revised significantly. They're the best estimate and as we saw earlier this year, Treasury did put out a comprehensive analysis of their forecasts versus the Reserve Bank's, versus the market consensus and it might surprise some people but Treasury's forecasts are the best, they're not perfect but they're the best. So it just goes to show that Treasury prepare the numbers, the Government take them as given, the good, the bad and the ugly and these ones reinforce the more ugly picture that we saw a couple of weeks ago.Is that a reason for whoever gets in after the election to be more cautious about how much they spend, how much spending they commit to based on revenue forecasts which really have been downgraded for now years since the global financial crisis?Yes, there is an issue here. I'm not saying that we shouldn't query what Treasury is saying or at least have a cautious approach to what Treasury's forecasts are. The critical issue, I think, for the new government when they are formed in a month's time and when they look at fiscal position is to be aware that the move back to surplus is dependent on the economy still growing at 3%. It is dependent on the unemployment rate getting no worse than 6.25%. And it is dependent on tax revenues edging higher and spending being reasonably contained as is the case in this PEFO.Isn't the problem though for an incoming government, it's been a long time since we've seen an unemployment number with a 6 in front of it, economic growth is fore cast as was in the economic slower. Doesn't that mean that you get the problem nah you have slower. Doesn't that mean have a little bit less money coming in in terms of have a little coming in in terms of tax
receipts and a little bit more money going out in terms of unemployment benefits?Exactly, and that's what these numbers are showing. So the fear would be the worse case or a worse case would be if we get the unemployment rate at 6.5%. I don't think that's likely. One of the things that I would be looking at at these numbers is that there's been some better news in the global economy recently. Even last night the iron ore price is up 30% in the last 2 months. That's, if it's sustained, worth a fortune to the economy and to the Budget bottom line in terms of its impact on economic activity. Commodity prices are ticking higher. The errors from Treasury can go both directions. Almost exclusively in the last 3 years they've all been the wrong way as they've overstated the growth rate and overstated inflation and now we've got to the point that perhaps they're looking at the glass half empty.You mentioned commodity prices, they are relatively volatile though, aren't they? You might see something going up but it might not stay up for very long?Yes, like the exchange rate, back in the Budget in May, not that long ago the exchange rate was at 103 and that was the assumption Treasury had to use. We're now at 91 I think this morning. So financial markets and commodity prices these things are hugely volatile and that's the problem Treasury has and always will have, regardless of whoever the Treasurer is in forecasting revenue. These revenue pro projections, the economic projections are there to Treasurer,
present a scenario to the Treasurer, to the Government about how they should be framing the Budget so that the structural underpinnings are improving over time and that they're countercyclical, you're not adding to a boom when the economy is strong and you're not making a downturn harder by cutting spending when the economy's soft.You've said things have changed in recent months, one is the dollar, the other is interest rates. How long do they take to flow through to Budget figures and take to flow through to businesses s where businesses who are exporting might get the benefit of that?We saw the Reserve Bank statement on monetary policy on Friday and they touched on this very issue. They're surprised how much interest rate relief has been given and the slowness, if you like, at which that's flowing through into the real economy because you would have thought that a 2.5% cash rate, mortgage rate below 6% and for small business the lower interest rates, that would have some significant impact on spending, borrowing and of course nominal GDP growth. It hasn't yet. This lag seems to have been held back by what we still keep hearing about the cautious consumer, people still being reluctant to borrow and spend. They're doing OK but I'm just wondering whether we've got this coiled spring of consumer spending that will be unleashed after the election when sentiment presumably picks up, thing that has been talked about up, whoever wins.The other about in recent days thing that has been talked about in recent days is the structural underpinnings of the Budget with some economists particularly saying that there is a structural problem in is a structural problem in the Budget with revenue that both sides of politics have committed to large and growing spending programs, both sides are committed to DisabilityCare, both sides have committed the Labor Party to all of it, the Coalition to some of it, to education spending which grows over time. There's a big new submarine project that will make a call on the Budget some where down the track. Is there the money to pay for that or does whoever get in have to do some really hard work putting the Budget structure on an even footing?The Budget structure could be a little bit better. It's a bit like school reports, you're doing well but could be doing a little better. So I think there's the issue of whoever wins is going to be having to deal with this position where yes, we voters do demand a lot of the Government. We want them to fund DisabilityCare. We want them to fund aged care, we want them to build better roads and all these sorts of things and that's fine it's just a matter most of us don't want to pay tax to cover these sorts of things. So there is a legitimate debate going on there but the one thing that the Government did when it saw these sorts of numbers was to hike the cigarette tax, to change the FBT rules on cars. So they're trying to cover some of the short fall with a structural change in the tax base, if you like. It doesn't mean that there's not more to do after the election.A question now, if you know because you worked in Treasury, when the incoming Government gets its briefing from PM and Cabinet and Treasury, are these the sorts of figures they will be seeing or do they produce another set of new figures for them?These are the numbers they will be getting. There is a GDP number that comes out in the final week of the election campaign. I can't imagine that changing things terribly much. The interesting thing about the blue book which I think the Opposition gets or the red book that the returned government will get, is these are the sort of numbers that will be there. Those briefings for the incoming government are more to problems that Treasury see that they do with some of the structural they would sort of a wish list that Treasury would like a new government to implement. So it will be more those sorts government to implement. will be more those sorts of
things and I dare say tax policy will be on there, spending may be on policy spending may be on there to
some extent and spending may some extent and some of the inequities that we see in things like superannuation.Stephen Koukoulas, thanks for your time.Thank you.We've seen that Kevin Rudd is in Townsville today and he had a bit to say ahead of the release of this preelection economic and fiscal outlook, the Tony Abbott thing is a bit of an unknown quantity today, the reporters were with him in Melbourne and then jetted off somewhere and we didn't know where?Yes, he's announcing a program on fixing mobile phone black spots but I think he's going to an area where there are problems with mobile phone coverage so maybe making the point that these things need to be fixed, it may be hard to get the news out.Maybe that's why we don't know where they are. Thanks, Lyndal. The Federal Government has unveiled its assessment of the Australian economy ahead of the election. The pre-election economic and fiscal outlook figures have just been released in the last 15 minutes or so by Treasury. They indicate the current deficit for 13-14 is $30.1 billion, unemployment at 6.25%That would be peaking at 6.25.The unemployment rate at the moment is about 5.7. So that's an estimate of what unemployment could get to. The nation's gross domestic product at 2.5%. The CPI or inflation at 2.5%. So we've got our business editor Peter Ryan. Let's go through those headline figures from today. So basically unchanged in terms of the forward estimates and the right. No
projected deficits.That's right. No change. It would have been a major surprise, Joe, and it would have been a very big blow to the credibility of the Government if there was any change, any really significant change. As you've said, the key figures are the same, 2.5% for economic growth or GDP, the jobless rate to peak at 6.25%, inflation, the consumer price index 2.5% and the underlying cash balance or the deficit creeping up just a bit to $30.1 billion. So an important moment. A lot of anticipation this morning but we would have had a very big story on our hands had there been a gulf between that update two Fridays ago and what we've seen this morning.Not much has happened in 2 weeks. Where does this take the costings debate? There's been a lot of pressure on the Opposition to come forward with its costings. Why is there continuing to be more pressure on the Opposition and the Government?Now that we have the economic parameters and Finance,
that have come from Treasury and Finance, under the charter of Budget Honesty and these had to be issued within 10 days of the election being called, we now have the economic and parties have to be able
financial goalposts that both parties have to be able to properly parties have to be properly cost their election promises and also to give the public an idea of what their public an idea accounting and mathematical skills are skills are and whether or not they're able to keep the shop efficiently and live within their means. So ate very important, once again, we need to stress these are independent of government, there's no fingerprints of the Government on this. This has come directly from Treasury and Finance and it would appear, looking back 2 Fridays ago, that the Government would have used the most conservative ends of the estimates for these figures.So we can expect this will probably frame the political debate today. Business editor Peter Ryan, thanks for coming in.Now, the other big story this morning is the Essendon story and the AFL Commission or the expectation that the AFL Commission is about to release its recommendations after that ASADA report came down into the supplements program at Essendon last year, our reporter James Bennett joins me now from AFL headquarters in Melbourne. So James, there had been a lot of speculation that these recommendations were about to come out at 9:00 this morning, it's now about 90 minutesar - after that, have we heard anything yet?Not yet. Certainly the expectation, Joe, is that there will be an announcement of any possible charges laid by the AFL Commission some time this morning. Now, these, of course, are charges brought by the AFL, potentially against Essendon the club, and several officials, most notably, of course, James Hird the coach. Also likely to face potential charges are Danny Corcoran, the football operations manager, and also club doctor Bruce Reid. Now, these are AFL charges, potentially for either bringing the game into disrepute or conduct unbecoming. James Hird though certainly outside his house today seemed somewhat incredulous at the prospect telling reporters he didn't believe there was any basis for them to be find it hard to believe that
charges can be laid on individuals or the club when charges can none of oufr play - our players have been shown to players have been shown to take performance-enhancing drugs or they've been harmed and we're dealing with an interim report. We're probably sitting back staggered and shocked that any charges could possibly be laid on those points.James Hird speaking outside his home this morning. So we've got James Bennett standing outside AFL HQ in Melbourne right now. When this announcement does happen are you hearing it's likely to come with media conference or a simple statement from the AFL that's going to appear on the website?Look, we had been told certainly by the AFL that there would be 45 minutes to an hour's immediate - nots - notice for immediate wra when that will happen. That will give us an opportunity to look at any charges that are laid at AFL house. We haven't had any official word of that to date.And James, just looking back through this story this morning over the last 6 months or so, it's hard to get a handle on what is fact and what is speculation about exactly what happened at Essendon over the last year. Can you give us the basics now in terms of what has been - what is fact about this story and what is people speculate ing about what happened at Essendon?Well, look, essentially the situation as it stands at the moment is obviously all of this came to light, was instigated by the Australian Crime Commission's report into potential links between organised crime and drugs in sport. Now that has then led into this more specific investigation of the Essendon club and now the ASADA, the Australian anti-doping authority has released its interim report, it's only an interim report, to the AFL and alongside the Switkowski report which the AFL has into the club's governance practices, this is the AFL determining whether or not the club and officials, like James Hird, have breached its governance code. Entirely separate to that is, of course, ASADA's final report. Now that is aimed at determining whether or not any individual players are potentially guilty of any anti-doping infractions. Now that will take far, far longer. This really, now, is a question of the AFL trying to defend its reputation and under significant pressure to do so ahead of the culmination of the season and the final series starting next month. So this is a very separate question to the question of whether or not the players are guilty of any drug offences. Of course ASADA received new powers, the ability to ask and demand that players come in for questioning and also to requisitino any notes of theres and look through phones. They will now go away and start trying to build a far more comprehensive doping -
case against any possible doping - against any players for possible whereas for possible doping charges
whereas now it's the AFL's role whereas now it's the AFL's to examine whether or not the club has done club
to examine whether or not the club has under its governance policy. So under its there's two very distinct under its governance policy. processes going on here.
Certainly while there's two very distinct Certainly while the AFL's Certainly while the AFL's one is one where there's a time line and a real is one where there's line and a real deadline for
the is one where there's a time
line and the AFL in terms of the AFL in terms to need to do something, the AFL in terms of being seen to need to do something, the
ASADA to need to do ASADA question is one which will no doubt play out over ASADA question is one far longer time frame.And so, James, just finally, there's been a lot of stories over the last 6 months about how many times players were injected and this anti-obesity drug that was on the WADA list or off the WADA list, are you expecting that we're going to hear at all today from the AFL Commission any facts as they see it in relation to the supplements program, the specifics about exactly what was going on inside Essendon last year?Well, look, I doubt it, Joe, because I think that these questions, in terms of what the AFL has to do, what the AFL Commission and its lawyers that have been now examining the evidence they have before them, that interim report, also this Switkowski report into Essendon's governance practices which according to some reports excerpts of that suggest a farmdy pharmacology experiment with no controls. None of the specifics as to what substances night db might have been used need to be delished by the AFL in order for it to substantiate a charge of bringing the game into disrepute. So those questions I don't think would be answered. They're more questions for ASADA in terms of whether or not it can establish any players potentially guilty of anti-doping violations.
Their the lines of what US authorities tried to prove against Lance Armstrong. It wasn't testing but it was evidence from team-mates and from team efficients - officials as to what had gone on at the club. So that obviously was a very, very long-term process. It went back a number of years and that's why that question, those questions are ones which won't be answered in the immediate term. The evidence the AFL has before it in terms of potentially loose governance practices from both ASADA and Ziggy swit - Switkowski are ones it will use to establish potential breaches under its governance rules. That's what we can expect the AFL Commission to explain hopefully later this morning.OK, a very confusing story you've done a brilliant job of clearing that up for us, James, and give us a heads up when you get that 45 minutes warning and we will let our viewers know.Hope so, thanks, Joe.The future of car manufacturing in SA hangs in the balance as Holden workers prepare to vote on a crucial deal today. 1,700 workers will cast their ballot ts on measures including a 3-year pay freeze designed to cut costs and save their jobs.Our reporter Alina Eacott is outside Holden's Elizabeth plant and joins us now. Alina, good morning. Is there any word on when this vote is likely to take place today?Good morning, Joe. A small number of night shift workers have already cost their vote. They did that early this morning. The rest of the 1,700-strong work force will meet at about 1:00 Adelaide time where they will cast their vote, they will hear from Holden boss Mike Devereaux and the unions. That will take a while for that large number of employees to cast their votes. The union tells us they expect it will be complete at about 3:30 and they will then tally that vote and hopefully we'll know the vote later this afternoon.I guess it's hard to know but are there any early indications as suggestions as to which way the vote may go?Yeah, people are remaining fairly tight lipped. The union has not directed workers to vote either way. They've left it up to individuals to decide for themselves. When this deal was first canvassed there was huge opposition to it, about 90% of people were saying they would vote no. In recent weeks they've spent a lot of time going through all the details, hashing out exactly what Holden is asking of them and it's now looking like support is growing. People are realising that if they don't vote for this agreement as much as they might not particularly like some of the conditions, Holden has made it clear that a no vote would likely mean production here at Elizabeth would end in 2016. So if they want production to continue the best thing they can do here further into the future the moment is the best thing they can the the best thing they can do at
the moment is vote for this new agreement.And have numbers
already agreement.And already been significantly cut at that plant over the last already been significantly at that plant over the several years?Yeah, it has been an ongoing process been an ongoing process of whittling down the work force here, just recently 400 workers finished up. They took voluntary redundancies. Speaking to Speaking to people at the time a lot of them felt like as much as they didn't want to leave it was probably best for them to take that option and get out while they could with a decent package in their pocket. So really uncertain times for workers here at Holden. We were expecting to have to wait until the end of the week before finding out the exact result of this as there are about another 1,000 workers in Victoria who do have the right to vote on this collective agreement, even though it doesn't actually apply to them. But speaking to the Manufacturing Workers Union today they indicated that those workers have decided that they're most likely going to abstain from voting given that it doesn't apply to them they've decided they'd prefer to leave the vote to the people here at Elizabeth who will be most affected by the result.

about the deal apart from the

don't know whether we're going