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Transcript of interview with Michael Rowland and Karina Carvalho: ABC News Breakfast: 23 October 2012: MYEFO 2012-2013



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TRANSCRIPT

THE HON JOE HOCKEY MP

SHADOW TREASURER

ABC NEWS BREAKFAST

INTERVIEW WITH MICHAEL ROWLAND AND KARINA CARVALHO 23 OCTOBER 2012 E&OE…………………………………………………………………………………

PRESENTER:

Joe Hockey is the Shadow Treasurer and he joins us now in the studio. Good morning.

JOE HOCKEY:

Good morning.

PRESENTER:

Thanks for being here. Doesn't this show a firm commitment to fiscal policy by the Government to bring the Budget back to surplus?

JOE HOCKEY:

Well it would if it were real, but the fact is even by his own admission Wayne Swan said ‘Look, we don't want to have any impact on the economy’ and normally a fiscal tightening, if it were real, would have an impact. But this is full of fiddles, and he is fiddling accounting treatment of the Future Fund, which brings $2 billion onto the Budget. He is fiddling with company tax receipts which brings $8.3 billion onto the Budget, so, this is what they do, they play these sort of deceptive games.

PRESENTER:

But all Governments fiddle to achieve budget…

JOE HOCKEY:

Don't label us with his tarnished brush!

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PRESENTER:

The Howard Government never played accounting tricks to get the budgetary aims in progress?

JOE HOCKEY:

Not to get to a surplus. We actually had real surpluses otherwise there wouldn't be any money in the Future Fund and also we wouldn't have been able to deliver tax cuts most years of our Government. So what he is doing is trying to meet a political goal, but he is fiddling along the way and what that does is undermine business and consumer confidence. There are some initiatives in there that are deceptive. A little earlier I heard you talk about middle-class welfare, there are 1 million private health insurance policy holders with an income of less than $24,000 a year - that is not middle Australia. They are people that are actually struggling to pay their private health insurance, particularly older people, and these people are going to face significant premium hikes.

PRESENTER:

Deceptive is a strong claim. What is deceptive in what we saw yesterday?

JOE HOCKEY:

Well, deceptive about the way he is trying to pretend he is delivering a surplus that is going to reduce the debt burden on the Commonwealth Government. The fact is the Commonwealth Government is going to continue to borrow money and yet they're trying to pretend they're having a surplus. For example, they're borrowing off Budget for the National Broadband Network. They're borrowing off Budget for a Clean Energy Finance Corporation. Normally these initiatives are on the Budget, therefore it would be a significant deficit.

PRESENTER:

Let's go back to the company tax reporting and what you were talking about with the private health insurance. So you're saying with the private health insurance changes the Government is abandoning its base?

JOE HOCKEY:

Well, what I'm saying is that the Government is not telling the truth by saying they're protecting the poor and most vulnerable. The poor and most vulnerable are also in numerous cases in receipt of the Baby Bonus, they're not introducing a means test, a further means test on the Baby Bonus, they're just cutting it for anyone who has a second or third child. So this is not an attack on middle-class welfare, this is simply a way of trying to create a surplus.

PRESENTER:

But the Baby Bonus was introduced to increase the birth rate. That's been achieved now. So is it still even necessary?

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JOE HOCKEY:

Well, I think a lot of families still have costs associated with the birth of a child. The question is in the total context of this announcement yesterday, how does it impact on families? Now, if you've got private health insurance and perhaps you go and have a child at a private birthing clinic, then you will be hit two ways - you will lose part of your Baby Bonus which would have been used to help pay for that cost, but also you will have private health insurance increases.

PRESENTER:

If you're so opposed to what the Government is doing on private health insurance and the Baby Bonus, why don't you come out now and say ‘we won't support those measures when they are put before Parliament’?

JOE HOCKEY:

Well, we want to see the details of the legislation.

PRESENTER:

You seem to know a lot about the Baby Bonus. Don’t you know enough?

JOE HOCKEY:

I claimed it twice with three children. But we want to see the total context of the Budget. It is important that you look at things in a measured, holistic way. This change, for example, to business taxation, the business community had no warning of this. There is an ongoing Business Tax Working Group that the Government set up to consult with business about a vast array of business tax initiatives. It's never been mentioned.

PRESENTER:

They've got two years to get ready for it. It won't kick in until 2014?

JOE HOCKEY:

Well, you've got to start planning cash flows. It will have a significant impact on the liquidity and capital requirements of business. Put it this way: If your bank comes to you and says “Could you please pay 14 months of your mortgage next year instead of 12 months?", you would be thinking that's quite a hit.

PRESENTER:

It is not an increase in company tax per se though.

JOE HOCKEY:

Some people say that…

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PRESENTER:

Even the Business Council is saying it won't increase company taxes.

JOE HOCKEY:

Okay, but then the $8.3 billion they are banking doesn't exist! I mean, if Wayne Swan gets $8.3 billion, then that has to come out of someone's pocket, so I don't know how it doesn't exist if it is actually in the Budget Papers as new income.

PRESENTER:

With those company tax reporting changes, if that does go through Parliament, if you win Government, will you reverse it?

JOE HOCKEY:

Well, we are still consulting even as late as last night with the business community to understand what the impact is on cash flow, on capital requirements, and everything depends on the timing of the election. We don't know when the election is going to be.

PRESENTER:

Are you speaking to the crossbenchers as well?

JOE HOCKEY:

No, we haven't engaged with them. They don't listen to us. They are a rubber stamp for the Government. So, frankly, it's often a waste of time talking to the crossbenchers.

PRESENTER:

What else are you having a look at to possibly oppose when it comes before the Parliament?

JOE HOCKEY:

We will go through them item by item. It is no use giving a running commentary. We've got to consult our own partyroom, but we have an economic strategy. Our economic strategy has four key points: Number one, live within your means. Number 2, get rid of the mining tax and carbon tax. Number 3, a six-point plan on productivity. Number 4, engaging with Asia. There was nothing announced yesterday that addresses the $120 billion of commitments, there was nothing about the whitepaper for Asia. It was a document that was bereft of economic strategy.

PRESENTER:

Just very quickly, you are arguing from a position of opinion poll strength, as the Nielsen Poll said yesterday you would win convincingly if the election were held tomorrow. You are far ahead of Labor on the two-party preferred vote. Given that, why is Tony Abbott still

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unpopular with voters? 60 per cent, according to that poll, disapprove with the way he is doing his job.

JOE HOCKEY:

Well, I would say to you being Opposition Leader is the toughest job in Australian politics. I'm not the first to say that and Tony Abbott is prosecuting the case on behalf of everyday Australians, and he is doing a fantastic job. I mean, it's very hard to hold this Government to account, they are playing every trick in the game.

PRESENTER:

Still most voters prefer the Prime Minister?

JOE HOCKEY:

Well, you know what, it's not the feeling I get out there. Ultimately opinion polls go up and down, every politician says that, but the truth is in the Canberra elections on the weekend, the Liberals were going to be hammered according to the polls and the Liberals got a 7% swing in their favour. So I'm always a bit healthily skeptical about polls.

PRESENTER:

Joe Hockey, thank you for your time.

JOE HOCKEY:

Thank you.

[ENDS]