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Transcript of doorstop interview: Parliament House, Canberra: 20 November 2013: discusses Debt limit; $8.8 billion RBA grant.



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CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR MCMAHON

E&OE TRANSCRIPT DOORSTOP INTERVIEW PARLIAMENT HOUSE WEDNESDAY, 20 NOVEMBER 2013

SUBJECT: Debt limit, $8.8 billion RBA grant.

CHRIS BOWEN: Well, thanks for coming everybody late in the afternoon.

Look, obviously today the Secretary of the Treasury has given evidence before Senate Estimates. Importantly the Secretary to the Treasury confirmed that there is no danger, no risk of Australia’s debt limit going past $400 billion, Australia’s debt going past $400 billion this year. Importantly, in answering questions from Senator Wong, the Secretary of the Treasury made it clear in terms of confidence in financial markets that the Labor Party suggested approach of an increase in the debt limit to $400 billion in the first instance is not inconsistent with that need for financial security and certainty in the markets.

Let me reiterate the Labor Party’s position. One; we are prepared to authorise an increase in the debt limit toady to $400 billion. We were prepared to do that last week, we’re prepared to do that today, we would be prepared to do it next week. As the evidence before the Senate estimates showed and is more than enough to see Australia through this December and well into next year. The Secretary to the Treasury also made it clear that the Budget has significantly deteriorated since the election. Then he specifically referred to the Government’s decision to make a grant to the Reserve Bank as one of the reason for the need to increase the debt cap.

Let me make this also very clear, the Labor Party will always provide the Government of the day with the debt cap necessary to ensure confidence in Australia’s Government. But we’re not going to write blank cheques, we’re not going to provide an increase in the debt limit without justification. Now Senator Wong asked Dr Parkinson if he could provide the Senate Estimates with an updated, an

updated forward projection of Australia’s levels. Dr Parkinson said he would have to consult with the Treasurer. Well that’s fair enough, consult with the Treasurer and the Treasurer should authorise the release of that table, an updated table from the Pre-Election Economic Forecast.

If he does that, if he release MYEFO, an update in the debt projections then the Labor Party will, as we said we last week, act constructively in a mature and a sensible fashion. And the final point I’ll make is this; Dr Parkinson also made it clear that the Treasury had also not advised that a US style shutdown would result if the debt limit were not increased or especially if it were not increased over $400 billion. The only person using that sort of emotive language is the Treasurer. As Dr Parkinson says, the language of all members of parliament is important here in terms of confidence. That’s why I’m taking this opportunity to reiterate the Labor Party’s very clear and might I say very firm position.

We are more than willing to increase the debt limit to $400 billion immediately. We recognise that as being entirely justified and justifiable. And if the Treasurer wants to increase the debt limit further then we invite him to update the Budget estimates. The previous Government’s approach was always to release an update whether it be through MYEFO or other means and then seek an increase in the debt limit. This Government’s put the cart before the horse. They’re seeking an increase in the debt limit and then saying ‘we’ll update the books later’. Well we’re not going to facilitate that. Bank the books, come clean with the Australian people, tell the Australian people the impact of the decisions you’ve taken, you’ve taken since the election and then the parliament can deal with the matter appropriately.

We hear a lot about this being a Government of grown-ups, well the Treasurer is behaving like a spoilt kid stamping his feet up and down, holding his breathe, saying unless I get the debt limit I want then I’m not going to have any debt limit at all, increase at all. Well that’s not good enough. Release the figures, release your update. We know it exists, we know the updated figures exist, the Secretary of the Treasury said he would need to consult the Treasurer before releasing it. Well consult with the Treasurer and the Treasurer can then release them.

Happy to take a few questions.

JOURNALIST: Did you hear Dr Parkinson draw the parallel with the United States where debate over the debt cap and Parkinson said ‘that was an example of politics getting in the way of good Government’. Now do you interrupt that as a suggestion from Martin Parkinson that the domestic politics being played here over the debt ceiling is actually getting in the way of good Government?

BOWEN: I agree with him. I think that the parliament should resolve the matter and the parliament should resolve the matter by the Treasurer showing a bit of leadership and releasing the figures. Both the Labor party and other parties have said if you release the figures, if you release the update do it the way other governments have done it, and of course we’ll respond accordingly. It’s like going into a bank and saying ‘We want a loan, but I’m not going to show you the

documentation’. Well the bank manager here is not saying no loan, the bank manager is saying ‘Show us your docs’. This is not a no doc loan that the Treasurer can get.

He can provide the justification to the Australian people. Let me remind you of this. This is a Government and one of their core clear commitments was to ‘pay off the debt’ to use their language. Now we're seeing evidence that the debt on their watch will increase and potentially increase dramatically. Well show us the figures, show us the update and the Parliament can then deal with it maturely, responsibly and the Labor Party will do that.

JOURNALIST: Is your position there is no longer a need for a buffer?

BOWEN: No, no. My position is this. The latest figures the Parliament has before it are the figures released by the Departments of Finance and Treasury in August which shows debt peaking at $370 billion in 2016/17. That provides a buffer of $30 billion some three years away. That's my position. Katherine.

JOURNALIST: Dr Parkinson’s advice on the $400 billion figure is not as straight forward as you suggest. In fact he said whether $400 billion is reached is a matter for (inaudible).

BOWEN: He's right about that.

JOURNALIST: And also advises that Senate estimates (inaudible). So why do you not accept what he’s saying to the Senate Estimates?

BOWEN: No, no, Dr Parkinson has outlined a significant deterioration in the level of debt since the election. An increase in the level of debt if you want to put it that way, a deterioration in the budget. He's also indicated it would be prudent and I note that he specifically said he did not recommend the $500 billion figure. He specifically said it was not Treasury's recommendation of the $500 billion figure.

So if the Treasurer wants to justify the $500 billion figure he should do so. Now this is a Treasurer who always says "I'm not going to hide behind advice". Well stop hiding behind Dr Parkinson. Come out, release the figures. It's not Dr Parkinson's job to justify Government policy, it's Joe Hockey's job.

JOURNALIST: Dr Parkinson's advice in the Senate hearing was clearly that global investors would be worried about future debates over the debt cap in Parliament and therefore that was a very good reason to go to $500 billion...

BOWEN: No, that is why….

JOURNALIST: Are you disputing that?

BOWEN: No, I'm agreeing with him and that is why I’m explicitly reiterating what has been the Labor Party's clear position: approve an increase in the debt cap to

$400 billion immediately. Would have done it last week. Which is more than enough on all projections as Dr Parkinson has confirmed to get Australia through. And I'm saying to you very clearly, the Labor Party will always provide the Government of the day with the debt limit necessary as is projected in forward estimates. All we're asking for is to see them. It's not too much to ask David, to see the forward estimates. If you say the forward estimates justify an increase in the debt cap, fine, just show them. Not only to us, to the Australian people.

JOURNALIST: Is Dr Parkinson's word not good enough?

BOWEN: I'm going to respectfully disagree with your characterisation of Dr Parkinson's word. Dr Parkinson has outlined Treasury advice. Treasury advice, he specifically said, did not say $500 billion. He does say there is a significant deterioration and it needs to be dealt with. I agree with him. I'm inviting the Treasurer to be a grown-up Treasurer, stop behaving like a Shadow Treasurer, start behaving like a Treasurer, start dealing with the Parliament and provide the Parliament with the information we have respectively requested which is an update in the net debt projections, not too much to ask.

Joe Hockey could fix this and fix it tomorrow by releasing the figures. He could provide them to the Parliament, not in a secret briefing, we’re not interested in a conspiracy of secrecy, we're interested in this Government breaking its culture of secrecy and providing an update to the Australian people. Now, it may be an update that has to be updated later as economic conditions change. We all know that. It will happen under this Government just as it happened under the previous Government. That's not an excuse for not releasing the MYEFO or at the very least, the updated table which we asked for in Senate Estimates and Dr Parkinson said he would need to consult with the Treasurer to see if that could be released.

JOURNALIST: Wouldn't it be better to wait for the GDP figures in December then Treasury could get a bit of an idea...

BOWEN: Every MYEFO has been released in October or November. This Government has invented this excuse that it has to wait until December. Well MYEFO, it would normally have been released by now. There is no excuse for this Government not to release it or to release the updated projections for net debt. The Treasurer hasn't made a public comment, as I understand it, since Dr Parkinson's evidence. I would invite him to come out and either release the updated figures or explain to the Australian people why they don’t deserve to know.

JOURNALIST: Are you satisfied with Dr Parkinson’s explanation around the $8.8 billion investment in the RBA? Why it happened?

BOWEN: I’ve never taken issue, David, as whether it’s a grant or an equity injection. I’ve never made comment on whether it should have been a grant or an equity injection, either way it would hit net debt. My beef with the $8.8 billion transfer to the Reserve Bank, is that it is designed, in my view, to blow this year’s

deficit and increase the chances of getting dividends in future years for political purposes by the Treasurer.

Again, in a similar theme here David, if the Treasurer had nothing to hide, he would release correspondence from the Reserve Bank of Australia and the meeting notes as we have FOI’d and as the Senate has ordered to produce which the Government is defying. If the Government has nothing to hide in relation to the $8.8 billion transfer to the Reserve Bank, then they would be much more transparent about it than we have seen thus far. There is a theme here in the Treasury portfolio and I would suggest to you that it’s across the Government, they are more interested in spin and hiding the facts, than being upfront with the Australian people.

Thank you very much.

ENDS