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(generated from captions) Government will not do foolish things. We will do strong and sensible things which build on the good relationship that we already have with Indonesia and the other point I should make Neil is that this is a broad and deep relationship which is going to git broader and deeper over time and the last thing that anyone should want is to have Australia's relationship with Indonesia boat's issue which I am boat's issue which I am sure will be put a Bassing will irtaptThe PM speaking on commercial radio irtaptThe PM speaking commercial radio earlier today. Let's take a moment now to take a closer look at new Government's border protection policy. Indonesia claims that the plan to turn back boats is illegal. Sit? - is it?It's the proms they will test the credibility of the nuft PM. Can Abbott
he really stop the boats. Mr Abbott is confident that he can but Indonesia sees things differently.We in the parliament fully support what was said by our Foreign Minister that we will fully reject the policy.He's talking about turning back the boats in international waters.It might be legal in your perspective but in our perspective it might be different story.And just to be clear.It's illegal.Well, he is right. It's illegal to pick up boats in international waters but that's not the Australian Government's policy. Details about how Mr Abbott plans to turn the boats back are sketchy but one phrase in the operations sovereign borders policy is instructive. Operation re-Lex, that was the operation where the Howard Government turned back the boats so the new policy will essentially be...We'll bring you that piece later. We're going to go live back to the blue room in Parliament House where Joe Hockey and Finance Minister Mathias Cormann are holding a media conference.Welcome to our first press conference in this room. Today, the Minister for Finance and I are releasing the final Budget outcome for Labor's second last Budget. This is the Budget that they promised to deliver a surplus of more 500 occasions, it's now come out to be an $18.8 billion deficit. The fact of the matter is it is a litany of failures in political promises, and represents the truth about Labor's claims to be responsible economic managers. The fact is that the Government promise as I said, a 0.1% surplus end up being a 1.2% deficit, 18.8 billion dollars. Receipts were down, mainly because of changes in the terms of trade, payments were actually higher than what the Government originally forecast, the net debt that the Government forecast in the 2012-13 Budget was $143.3 billion. Turned out to be higher, $153 billion. And of course the gross debt, the market value and balance sheet terms, that's not the debt ceiling, equivalent but the gross debt and market value terms increased from $274 billion to $285.7 billion. Now the fact of the matter is these are the Labor Party's numbers. Their second last set of numbers. Based on their second last Budget. We are carefully methodically going through all the details of the current Budget and we'll have more to say about the current state of play in due course. But I want to emphasise again, these historic figures, these are the figures historic figures, figures from the second last Budget of Labor.To just reinforce what the Treasurer has just said, the final Budget outcome today just confirms the detierating state of the Budget after six years of Labor. Weave got to remember that in 2007 Labor inherited a very strong Budget position with a $20 billion surplus. We are inheriting a $30 billion deficit. In 2007 Labor inherited a position with no Government net debt and of course we're now heading for $200 billion worth of Government net debt. The Labor Party has consistently blamed the GFC for their failure to achieve promised Budget surpluses but of course the to,
promises the Treasurer referred to, the promises made on more than 500 occasions of a surplus in 2012-13 were all made after the global financial crisis. So this is of course only Labor's second last Budget, we will of course have some further consequences of Labor's Budget mismanagement to deal with moving forward but these are the figures here today for 2012-13. REPORTER: Isn't the $18.8 billion figure precisely the figure that Labor gave in its economic statement just before the election, the last document that it had complieled before PFEO?It's very similar but this is for the previous finance year, not the current.You went to the election knows you concede in retrospect Labor went into the election telling you that the starting point for 2013-14 was an $18.8 billion deficit?No that's not quite right. The starting point for 2013-14 different and there was a $33 billion deterioration between the Budget and the Government's economic statement about what the Budget was going to deliver for 13-14 in the forward estimates. This is a historic figure. This is last year's financial year and it is in our view best to compare it with the promise Labor made on over 500 occasions to have a surplus. They promised to have a surplus on over 500 occasions, today the truth is out. It's a deficit of $18.8 billion and it's rising. And we have to deal with it. REPORTER: You promised to have a surplus in your first year 12 months ago and you've gradually changed your position?Well, I don't accept that 12 months ago I did say that. I said we have to deal with what we have. The previous commitment we gave at the 2010 election going back was that we on our promises at the 2010 election would be able to get the Budget back to surplus. Now, we're dealing with an entirely different set of numbers.An important point to make also is that between May and 2013 and the Budget, and the economic statement in August 2013, the Budget position detierated by more than $30 billion and of course by about $3 billion a week, so obviously what we've said during the election campaign and what we will deliver is that the Budget position will be better off under the Coalition as a result of the savings that we have announced during the election and which we will now be implementing in Government. REPORTER:They're actually better of an underlying cash balance basis than the numbers as forecast in 2013-14 Budget for 2012-13?Actually, matters for 2012-13?Actually, what
matters in terms of the final Budget matters in terms of the Budget outcome for 2012-13 is the 2012-13 budget. Obviously by the time the 2013-14 Budget was released the 2012-13 financial year was nearly over and you wouldn't expect there there to be that much more variation compared to what was already a significant detiration to the tune of $20 billion by that time.REPORTER: Now that we've got a fair handle on the Budgetary position I assume...Please do not assume that. The final Budget outcome. This is the final Budget outcome for Labor's second last Budget. Please do not assume that these numbers are relevant to the state of the books that we have inherited today. Please don't do that. REPORTER: Both of you said in your opening remarks that you're going to have more to say in the forth coming period, is that - are you making ground there to make more cuts than you promised before the election?No, the prepresented numbers in before the election?No, prepresented numbers in the pre-election economic and fiscal out look are different to what exist today. There has been a deterioration, a been a deterioration, a further deterioration in the Budget. We are methodically going through every line item of the Budget . And identifying where the numbers are robust and also appropriately looking at some of the forecasts and identifying whether they are robust or not. (INAUDIBLE) REPORTER:We will have a lot to say between now and Christmas about the state of the Budget, to
about what we are going to do to fix the Budget but I say again, we are methodically going through a process, we're carefully going through and looking at every number and for example can the Government claimed it was going to raise $1.8 billion bill hang quing changing the fringe benefits tax rules in relation to motor vehicles. Obviously, after consulting with the motor vehicle industry, with the car leasing industry and others, that $1.8 billion figure was unreal. It was unreal. It was - the facts as they stand based on evidence from the industry which the Government never consulted, clearly illustrates that that number was wrong, let alone the potential compensation costs that would have had to be delivered to - sorry, delivered to charities and others for the significant change that would have resulted from a continuation of that policy. Now, we are going through those numbers carefully and, you know, it's quite a reflation. REPORTER: Given that you're going through all these numbers carefully, have you reached any sort of view at this stage on whether the 2013-14 Budget numbers are likely to be accurate?The 2013-14 Budget numbers obviously are not accurate, because the Government changed them in the economic statement that was delivered just before the election and the pre-election economic and fiscal outlook. Again, I say to you, the numbers that were released in the economic statement have detierated. REPORTER: By how say that they REPORTER: By how much?I can say that they have detierated.Tim, give everyone a detierated.Tim, a go.Don't look sad. We'll get a go.Don't look sad. to you.REPORTER: What has made it worst given it worst given that since the last six, seven weeks terms of trade have gone up if anything, the dollar is lower, those key driver it's were making things worse have gone away...There will be some variations in relation to times of payments and a range of other things but it's not a significant detiration but it is a deterioration, and I don't want to be in a position that predecessors from the Labor Party found themselves in where they were continually releasing numbers and the numbers continually change. If we release a set of numbers we want to make sure they are absolutely right and there will be some variability, of course there will, but let's just get it as close to accurate as possible in the circumstances. REPORTER: On the bigger picture of the economy you've had your initial briefings now, there's talking about housing bubbles and so forth out there, what's your view based on your
briefings so far about the your view outlook for the economy, whether there is any sign of overheating in property or whether there are some dark clouds there? FrtsLook, the fundamental point is that what Australia needs is an injection of confidence. And we have done that by having a change of Government. The Australian people have done that by having a change of Government. Australia is now open for business, emphatically. And you can see confidence helping to bring back some retail spendling, you can see it in business confidence as well. That's a good thing. I'm not going to speculate on further forecasts, I'm not going to do that. I will release the mid-year economic and fiscal outlook if good time and you will see and the forecasts and that will be based on a robust assessment of a range of different variables, including the terms of trade.REPORTER: Are you worried about a housing bubble?No,, I think the most important point is at this stage that there is confidence back in the real estate market in Australia and I would say to you that rising house prices actually help to make marginal property development viable. And there is a shortage of supply out there and what this will do is make supply more readily available.There is an opportunity for the Opposition of course to help us strength economic growth by supporting our plans to scrap the carbon tax, scrap the mining tax, and of course abolish all of that unnecessary red and green tape which has accumulated under the previous Government.REPORTER: Is there an expectation that capital gains tax will be rebated in the next 12 to 24 months and have been you breefd on the tapering program...There's - no I haven't in relation to defence, but as you can say there's a variation in defence in the final Budget outcome which which is identified in the payments. Page 7. Sorry? Go back?A bit overwhelmed. Have you been back?A bit you been briefed on the economic tapering program and return to normal interest rates?I was in Bali for the APEC Finance Ministers last week so I was sworn in on sworn in on Wednesday, jumped on a plane on Wednesday, spent a number of days with calculation from other Finance Ministers from around the world, there was extensive discussion about the decision of the US Fed. My strong view is that we've got to focus on our own challenges and those challenges are how do we sustainibly grow the Australian economy, that's what we've got to focus on. There will be market volatility and people will speculate about what the Fed is going to do but I would just say let's focus on our economy, on getting the fundamentals right, that means having a strong Budget, that is returning to surplus, that means dealing with the challenges of Government debt that we've inherited including the dent limits, getting rid of the carbon tax, getting rid of the mining tax, closing down the Clean Energy Finance Corporation, my dance card is pretty full at the moment and I'd just say to you, we obviously monitor what is happening in global financial markets but we are going to do everything we possibly can to avoid or minimise the influence of global volatility on the Australian economy.REPORTER: On a house keeping matter, your time as Treasurer now, have you time spoken to the Reserve Bank and have you reaffirmed the Government with the wants the Reserve Bank to target interest rates at the 2-3% level or have you...I haven't given them that formal engagement process yet, but I have have had briefings with the Reserve Bank, yes.REPORTER: During the election or before, you talked about broadening or looking at the way Treasury forecasts particularly revenue and perhaps bringing in some private sector assistance, have you taken any steps on that?I have had - well, I was sworn in last Wednesday, I have spent three days travelling, I have been here all week as much as I love Canberra, I just want to afirm that, I'm here all this week and here all next week and then I'm expected to go and I will go to the IMF World Bank and G20 meeting in Washington, so in that time I'm being fully briefed on as much as possible. REPORTER: You mentioned a range of things on your dance card, among the various issues facing the Australian economy is the slow-down in capital vements work related to the resources boom. Is that a reason to accelerate infrastructure spending and if so, is the Federal Government got a role in that?Yes, we are looking at ways that we can stimulate growth. And particular ly in the next 118 months and beyond. There is a challenge that we recognise in Opposition and the Government talked about of sustaining growth and increasing economic growth and from my perspective, and the Coalition's perspective infrastructure investment that is based on proper cost benefit analysis is a good investment that helps to improve productivity growth and that's the sort of thing we need to drive.Just in relation to this, I refer you to the Coalition's pre-election costings where you will see that there is a list of 31 key infrastructure projects where we've said that we would either accelerate, expand or make new commitments in terms of additional infrastructure which comes at a total cost of about $11.5 billion, some of which comes out of existing resources in the nation building funds but of course there is a net increase that we have put out there quite transparently in our pre-election costings of about $4.6 billion once you take redirections and repiertsations into account.Tim! Phil and then OK?REPORTER: Mr Hockey, mentioned just then you want to return the Budget to surplus, Mr Abbott said it during the election campaign probably about 500 times that was his intention, based intention, based on what you know now can you tell the people when you will return the Budget to surplus?Our plan over the next few months to return the Budget to surplus. I'm not going give an on the run assessment of the current Budget. We'll deal with it in a careful prudent methodical way.REPORTER: I have a Dorothy Dixer for Senator Coronation Street. You said... You said you're inheriting a $30 billion deficit...And growing.This says 19. We all know that last year's deficit was phone y... Because so much spending was shifted into 2011-12 and same into 30-14. Do you have an underlying deficit figure which says what it would have been had all payments been made in the normal timetable?Let's just make a couple ofs onvations here. In the lead-up to the 2010 election you might recall that Labor promised a $4.5 surplus for 2013-14, the Budget in May that became an $18 billion deficit and of course by the time of the economic statement and the pre-election economic and economiesical outlook that had detierated further to $30 billion so the point that I was making was a historical one and that is that when Kevin Rudd and Wayne Swan took Government in 2007 they inherited a very strong fiscal position from the
Coalition with a strong fiscal Coalition with a $20 billion surplus, no Government net debt, about surplus, no debt, about $50 billion in the bank debt, bank and the Government at that time was cleblingtsing more than a time than a billion dollars of net interest payments per year, if you fast forward to 2013 and look at the situation at the Treasurer and I have inherited for 30-14, it is $30 billion of deficit and grow, it is net debt which is heading to $200 billion and will exceed that over the forward estimates according to Labor's estimates and Labor is - has been spending about $10 billion on net interest payments a year so that just shows the dramatic turn around and the dramatic deterioration in the Budget position of six years of Labor.We'll go to David.REPORTER: What do you see as the risks that the Australian economy is facing based on the brief briefings you've received from Treasury?The greatest risk to the Australian economy has been a continuation of the Labor Government. Sure, since the election, well, we have give commentary on the run about the Australian economy. Joking. I'm not going to start dissecting the Australian economy in our first press conference. I want us to be at our best as a nation. We want us to be at our best as a nation and we will do whatever we have to do to ensure that growth continues, that we try and address the rising unemployment legacy that Labor gave us, that we try and prevent the massive increase in Government debt that Labor has left us and that we deal with some of the things that Labor didn't want to deal with or couldn't deal with and as part of the dance card one of the challenges we have is that so much of what Labor said in the last 12 months has proven to be fundamentally incorrect.Jacob and then one more?Any impact on the budget from the IPCC report?On this current Budget? I can't give you an answer on that. I haven't seen this new IPCC report. It was released overnight I understand.REPORTER: You of helping
mentioned earlier that the idea of helping the economy by stamping on interest rates and Senator Mathias Cormann mentioned the $11.5 billion in the Coalition costings, do you think that you can add to that? Do you think that over the next six months you can actually investment and do you think you
can unveil further infrastructure can unlock private sector
investment investment and help make that happen?David, PM Abbott has happen?David, PM said he wants to be known as an infrastructure program PM. He will be.Back to the fringe benefits tax. You said that the change the Government made wasn't going to raise the $1.8 billion. That came from Treasury. These are the same people now advising you, are you saying those numbers are wrong? What would it raise and what does it say about your relationship with Treasury that the numbers they provided only a few informs ago are so wrong?The starting point is I have a very good relationship with Treasury, in fact, yesterday myself and Minister Bilson and assistant Treasurer Synergy and Verve and the parliamentary secretary Steven Ciaobo four of us went and addressed 9 00 of the staff. The media missed it. It was outdoors actually and it was the first time anyone can recall that happening. We talked with them and I said emphatically, a strong Treasury is a strong Treasurer. And therefore we need to work together in partnership and we are and we are. It's based on mutual respect and I will not be using the Treasury as a political shield or a political sword.Or on the FBT?I'll have more to say about what when we realise the mid-year economic and fiscal outlook. Two more.Based on the relationship of mutual respect, why is Dr Parkinson's contract bun trunicated?I don't think that it comes back before the end of
the year, will you legislate to raise the debt ceiling before Christmas and also when you let us know when we're going to see MYEFO, the point that Saul Eslake was making that if you do postpone till February...Wayne Swan said when he was asked about the debt ceiling, it will be someone else's problem. Well meet someone else. I'm standing before you. This has to be dealt with. And it's Labor's legacy. The debt limit is an issue that we are dealing with now. Quite obviously the major pieces of legislation in the first week of parliament the repeal of the carbon tax package, the repeal of the mining tax package, the closure of the CEFC, we have to increase the debt limit because I am advised that we'll goal extremely close to the debt limit of $300 billion before Christmas. Now, Labor refused to deal with it, they didn't have the courage to deal with it. We will deal with it and it will be Labor's limit, it will be what they would have left us with. The final major piece of legislation from our portfolio perspective is cleaning up Labor's mess of announced but unlegislated initiatives in relation to taxation. We are methodically going through that list. Twice been very little stake holder engagement, the Government in the last few months announced a mole range of tax initiatives without understanding what the impact was on the economy. We are dearfully going through those initiatives and that's why I is a I we've got a full dance card and you will see and here a considerable amount from us over the next few years.On the times of MYEFO, firstly we haven't made a decision on the timing and as the Treasurer said we're going through a calm, methodical structured process to make that decision once we've considered all of the relevant advice but let me make two observations though, firstly we of course have had a Budget update in the form of the MYEFO in August and secondly the charter of Budget honesty Act actually explicitly provides for the mid-year economic and fiscal outlook to be released by the Treasurer by the end of January and of course the Government will fully comply with the provisions in the charter of Budget honesty actThanks everyone.And that was Joe Hockey, the Treasurer and of course the Finance Minister Mathias Cormann giving the final Budget outcome for the 2012-13 financial year and that's their first press conference since the Coalition came whack to Government and they were quick to jump on the comparison
figures and give a bit of a comparison of how they see it reflecting on Labor's performance in Government but let us give you a quick summary if you missed the start of that of where the final Budget figures for financial year lie. figures for the 2012-13 financial year 2012-13 year, the Budget deficit came 2012-13 year, the deficit came in at $18.8 billion. Back in billion. Back in the May Budget Labor had predicted it would be $19.49 billion so that's actually an improvement of $1.5 billion however the Coalition has been pointing to the prediction made in the 2012-13 Budget, not the most recent one in May and they say if you take the comparison then Labor was predicting that they would be in surplus so it's significantly worse off so your point of view on whether the situation has improved or worsened depends on whether or not you take the more recent figures or look back to two Budgets ago as your base point. When it comes to net debt the other figure that the Coalition is also been keen to points so, the final net debt was $153 billion for 2012-13, back in May it was predicted to be more we're seeing
than $160 billion so again we're seeing a slight improvement there from what was predicted to be the final outcome in May to what we have seen announced today Nick.Melissa Clarke, Joe Hockey was quick to emphasise that he's not confident yet about the true state of the books left to it by Labor. He's not willing to expand beyond these figures that have been released today?No,, he was quite reluctant to go much beyond the brief here. He didn't want to talk about when a next MYEFO might come, when the next Budget update that the Coalition puts together might come and we heard Mathias Cormann say they haven't decided when. He didn't want to talk about when the debt ceiling might be raised given