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Transcript of interview with David Speers: Sky PM Agenda: 21 November 2013: Debt limit; IMF report endorsing Labor's economic management



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CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR MCMAHON

E&OE TRANSCRIPT TELEVISION INTERVIEW SKY PM AGENDA WITH DAVID SPEERS THURSDAY, 21 NOVEMBER 2013

SUBJECTS: Debt limit; IMF report endorsing Labor's economic management.

DAVID SPEERS: Chris Bowen, thank you for your time. If we can start on the debt ceiling. There's been more evidence today before Senate Estimates, this time from the head of the Office of Financial Management that the debt ceiling does indeed need to go higher than the $400 billion you are offering. Will you accept a higher figure now?

CHRIS BOWEN: We will accept a higher figure when Joe Hockey has justified it with the release of MYEFO. And from what I’ve seen of the evidence from the Australian Office of Financial Management you are talking about, they do say that debt will increase over the forward estimates and will need to be increased. I have said clearly we would vote for $400 billion now and we would vote for more than $400 billion if Joe Hockey released updated figures showing the impact of decisions he's made as Treasurer, which have increased the debt levels, which have increased the deficit, if he outlines as Treasurer the deterioration in the budget bottom line which has occurred since he became Treasurer.

If he's upfront with the Australian people and outlines the case for the increase in the debt-cap then we’d certainly accommodate an increase to $500 billion. In the meantime nobody, David, has or can suggest that $400 billion wouldn't be more than enough to see the Government through this year. If they want to make a case for more they can do the decent thing, be upfront with the Australian people and release the updated figures.

SPEERS: Yes, but that’s the point here. Yes, it would get them through this year but not the next few years. Why should this Government, any Government have to keep coming back to the Parliament to have this battle year after year or twice every

few years, doesn't that create the uncertainty that surely both sides of politics don't want to see.

BOWEN: Well they don't have to David. They don't have to come back for more if they can justify the case. The previous Government did ask for increases in the debt limit on each occasion it was based on a Budget or Mid-Year Economic Statement. All the figures were there and clear for all to see.

SPEERS: That will come before Christmas.

BOWEN: After we have voted. David, we are taking a very reasonable position here. The Liberal Party used to vote against increases in the debt-cap, full stop. We’re not doing that. We have in fact voted for an increase to $400 billion. We are prepared to vote for $500 billion if the Government can release its update. Get rid of the culture of secrecy.

SPEERS: What about these senior public servants, Head of the Treasury, the Head of Financial Management? What stock do you put in what they are saying?

BOWEN: We have full respect for all of them and Dr Parkinson was Secretary of Treasury under us and would have continued as the Secretary of Treasury if we’d remained in office.

SPEERS: He said $500 billion would be prudent?

BOWEN: He also said that it would not be inconsistent to have $400 billion and then come back for approval for a bigger increase. But the Government doesn’t even need to do that. We have a week's Parliamentary break then Parliament sits for two weeks, if they release the updated figures, the updated debt tables they can do it through MYEFO, they can do that at the time of their choosing, tomorrow, if they do that than we would be able to facilitate what they’re are asking for. It's a no doc loan, the previous Government didn't do it. This is a Government which was elected on the promise of paying back the debt. All they have done so far is asked for a $200 billion increase.

SPEERS: Do you accept this is hurting investment in Australia at the moment? This uncertainty?

BOWEN: I have been watching the markets very closely David. I’ve not seen any evidence of that. However I am concerned that uncertainty is bad. That’s why I would call on the Treasurer to stop the games, stop the childish behaviour, don't stamp up and down and say ‘I want my $500 billion, if you won't give me $500 billion, I’m not going to agree to $400 billion’. Either just agree to $400 billion and then say I’ll come back when I can justify it, or even better, release MYEFO then the Parliament can deal with it, once and for all.

SPEERS: Would you accept the middle ground, $450 billion?

BOWEN: Look, it's not a poker game David, if the Treasurer has something to put on the table he can. The best thing to do would be to be up-front with the Australian people, release MYEFO, then we don't have to worry about trade- offs and compromises we can just vote for the debt limit which is justified by MYEFO.

SPEERS: Can I turn to the International Monetary Fund report, it has given something of a tick to Labor's budget management saying compared to the rest of the word, Australia is in pretty good shape but it doesn't see growth returning to trend of 3% until 2016, so again doesn't that back the case we are in for a bit of an uncertain time over the coming years?

BOWEN: Well, you do make reference to the economy which Joe Hockey and Tony Abbott inherit David and it is useful to look at what the IMF says, I don't want to detain you for long but it is a very informative opening sentence to the IMF report: “Australia's economy has performed favourably in recent years compared to other advanced economies with a track record of sustained growth, inflation close to target, a resilient financial sector and public debt still low relative to other advanced economies.” That is a pretty ringing endorsement of Labor's economic management…

SPEERS: They made the point the budget is in structural deficit and that spending cuts are needed. They are backing the case for spending cuts. Are they right about that too?

BOWEN: I make the point, that they very clearly make a very clear point up front that public debt is low compared to other countries. Yes, they do then go on to talk about the budget. They call for early action, Joe Hockey should release his MYEFO so we can see the impact of decisions he’s already taken like the Reserve Bank transfer of $8.8 billion, the tax break for people with more than 2 million in the superannuation accounts. Release the figures.

SPEERS: What about the spending cuts? Do you accept the need for spending cuts?

BOWEN: Labor in office had prudent measures in place to see Australia return to surplus over time. We pointed out that the Government’s, the new Government’s, the then Opposition's policies of tax cuts for mining companies, et cetera, would mean that they would need to see cuts elsewhere. We were told that wasn't true. Now we are seeing it play out.

You would have watched question time, David, and see it played out. All the cuts that we are referring to that this Government has either taken or guarantee they won't take in the very near future. So we are deeply concerned about that. Every Budget needs management, Labor managed the Budget so that we left a triple-A credit rating from three credit rating agencies, low public debt compared to the rest of the world. Labor knows about that. Now the Government has to be held to account for meeting their pre-election commitments.

SPEERS: Shadow Treasurer, Chris Bowen, we’ll have to leave it there. Thanks for joining us this afternoon.

BOWEN: Thanks, David, good on you.