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Transcript of doorstop interview: 24 September 2012: Final Budget Outcome



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E&OE…………………………………………………………………………………

JOE HOCKEY:

What an extraordinary performance today from Wayne Swan and Penny Wong! Last year the Government had above trend growth and yet they delivered a significant increase in the Budget deficit to approximately $44 billion. With above trend growth, the deficit grew, year on year, with spending increasing $10 billion from the Budget promise to the outcome. The deficit increasing, as I said, around $21 billion from the promise to the outcome, and net debt increased $41 billion from the promise to the outcome; so if there was an Emmy Award for spin, Wayne Swan and Penny Wong won it. They are making it up as they go along.

When you actually look at the deterioration in the Budget, there is no room for self-congratulations - above trend growth and they’re still raking in the third biggest dollar deficit in Australian history. That means the accumulated deficits under Wayne Swan have been over $173 billion. And, of course, there has been a massive deterioration in the balance sheet. Wayne Swan said there is a record investment pipeline - but we’ve now heard of another major mining project delayed today. He said the fiscal position is in “very good shape” and yet with above trend growth we’ve seen a massive increase in the deficit. Whenever the government compares us with the United States and Europe, look behind the numbers, because that is what the government does; it benchmarks us against the worst performing countries in the world instead of the best performing even when they have above trend growth.

The Government also wanted people to focus on a future promise - a future promise from the last Budget that they’ll have a Budget surplus this year - well what we do know is that what they promise in a Budget is very different to the outcome. Today was about an outcome, and a significant deterioration in the promise that was made about 15 months ago. If Australia were a company, today you would have sacked the board of directors for their incompetence. Their first Budget deficit outcome: $27 billion. Their second Budget deficit outcome: $55 billion. Their third budget deficit outcome: $48 billion - and today they were patting themselves on the back because there was a $44

billion deficit outcome.

I do want to touch on one particular aspect of the numbers which I draw your attention to; the Government was congratulating itself today for its improvement in the numbers from the Budget a few months ago to what is the number today. In fact, Wayne Swan said “Good work, Penny,” in bringing it in at nearly $44 billion. Page 7 of the Final Budget Outcome identifies in the bottom two points that the government has been caught out fudging its own numbers. It tried to delay the impact of a $500 million dividend from the Reserve Bank into this current financial year where it is promising to deliver a $1.5 billion surplus - but they were caught out by their own audit office, and the audit office forced them to account for that money in the last financial year which I understand, I am advised, indicates that there would have been a $500 million deterioration.

Doorstop - Final Budget Outcome Monday, 24 September 2012 Errors and Omissions Excepted

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Secondly, the Australian Reinsurance Pool Corporation; again they tried to fudge $400 million. They were caught out, and now they’re claiming these are somehow the benefits of good management last financial year to improve their numbers last financial year, but the fact is they were caught out trying to fudge the revenue to make their numbers look better this year. This is Labor writ large.

There has been a significant deterioration in the total liabilities of the Commonwealth. The net worth of the Commonwealth has deteriorated in the 12 months from $141 billion to $247 billion. These figures indicate that the Labor Party can’t be trusted when it comes to money. They can’t be trusted to tell the truth. They are all about spin. But sooner or later the rubber hits the road when it comes to the numbers, and Labor has to account for its $120 billion of new spending promises on top of their four record deficits already. Questions?

JOURNALIST:

Mr Hockey, tobacco receipts are $341 million in the papers released today. Does this decline show that the Government has done enough to rein in smoking as an issue in the community? Should they consider raising tobacco excise further and would the Coalition support that?

JOE HOCKEY:

Well when you get your revenue numbers wrong you don’t just increase the tax - but that’s what Labor defaults to. They were the ones who increased the tax, you wonder whether it was about reducing smoking or whether it was about revenue - that’s what Labor does.

JOURNALIST:

But revenue from tobacco excise has actually decreased which would lead one to conclude that the measures the Government have taken have worked, I’m saying should we stop raising taxes on tobacco or should the Government…

JOE HOCKEY:

I think the Government should stop increasing taxes, full stop.

JOURNALIST:

Wayne Swan says that the public finances still continue to be amongst the strongest. Do you agree with that?

JOE HOCKEY:

No. He benchmarks us against the fastest deteriorating economies in the world. He benchmarks us against the United States and Europe, instead of benchmarking us against what he promised; 15 months ago he promised a $22 billion deficit, it has turned out to be a $44 billion deficit. He

promised that he was getting spending under control. Let’s look at that - in the last 12 months, spending increased by around $10 billion - $10 billion. He keeps talking about the lost revenue. Well, the lost revenue in the last year was around $11 billion, but the deficit doubled. It doubled. And Labor is now spending over a billion dollars more on interest alone.

JOURNALIST:

You take issue with what Mr Swan said, but John Howard said recently the Australian economy was doing better than most.

JOE HOCKEY:

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Despite the Government. This is an incompetent Government that is deliberately misleading the Australian people. If they were giving out Emmys for spin, Wayne Swan won it today. He’s doubled the deficit on what he originally promised. He’s increased the net debt by over $40 billion. He’s spending $10 billion more in the year and somehow he wants a pat on the back for “Good work, Penny”. This is a joke. This is a serious joke, and, of course, Wayne Swan - when he can’t explain the numbers - he defaults to an attack on Tony Abbott. I mean Tony Abbott’s responsible for me running three minutes late for this press conference, or a flat tyre or traffic in the street. I mean, come on. These people need to be held accountable and they are not.

JOURNALIST:

On another matter, are you a Holden or a Ford man? Do you understand the emotional appeal of these cars to Australians and will you rule out taking any steps under a future Coalition Government that would put at risk the production of the Ford Falcon?

JOE HOCKEY:

I am a Holden man. I like my Holdens, but I was also a great fan of Allan Moffat and Colin Bond in what were the days of the Hardie Ferodo. Any other questions?

JOURNALIST:

You understand…

JOE HOCKEY:

I understand, but can I tell you? Everyday the Government runs a deficit, everyday the Government increases the debt, it makes it harder, not easier, to be able to invest in innovation and industry. And you know what? They just make it tougher.

JOURNALIST:

Do you acknowledge that this was the smallest variation between a Budget estimate and a final outcome?

JOE HOCKEY:

It was fudged. It was fudged.

JOURNALIST:

So you are saying…

JOE HOCKEY:

The variation. Good work Penny, because the ANAO has caught you out trying to fiddle the revenue from the Reserve Bank and you’ve been caught by your own audit body.

JOURNALIST:

China is looking at making a major investment into dairy companies down in Tasmania. What is the Coalition’s position on that? Obviously it is subject to FIRB scrutiny.

JOE HOCKEY:

We will see how that goes. We will see how it goes through the FIRB process. Thank you.

[ENDS]

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