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Budget 2002: Opposition Leader discusses PBS; and deficit.

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Subjects: Federal Budget

JOURNALIST: Joining us this morning from Canberra is Leader of the Opposition Simon Crean, good morning.

CREAN: Good morning Liam.

JOURNALIST: What would you have done differently Mr Crean if you had framed this budget?

CREAN: I wouldn’t have slugged Australian families to pay for the deficit. This is a Government that’s put the country in deficit after ten years of economic growth and now it wants Australian families to pay for it. It talks about securing our borders but it’s making families less secure by the financial pressure it’s putting them under.

JOURNALIST: Where would you have found the money?

CREAN: Well, in relation to the Pharmaceutical Benefits Scheme, Liam, we put forward a number of proposals last year in the lead up to the election by which you could tighten up on abuses to the scheme. One such measure is stopping the tax deductability for pharmaceutical companies wining and dining their clients. Now I would have thought that was a fairer way …

JOURNALIST: inaudible

CREAN: Well that’s just one example but we put forward a number of measures. Interestingly the Government has picked up some of them, why not all of them? Because it’s a fairer way of doing it …

JOURNALIST: You agree that something had to be done to control the cost of the Pharmaceutical Benefits Scheme?


CREAN: Yes and we put forward constructive proposals to do it but we wouldn’t have done it by going and slugging families and concession holders. John Howard likes to think that this is just a slight increase; it’s a 30 percent increase Liam. I mean the GST was only 10 percent and people hated it but this is 30 percent; where do they get off, these people?

You see, they seem to think that budgets are just about numbers. But budgets also impact on people and I think they’ve forgotten the people that they’re impacting on…

JOURNALIST: Will you attempt to block any of those measures in the Senate?

CREAN: In relation to the slugging of the charges on families and

concession holders, my strong recommendation to my colleagues and we’ll be considering it tonight, is that we oppose them. Obviously we need to go through that exercise but I’ll be recommending that we oppose them and I expect that will be adopted.

JOURNALIST: Well the Democrats, as you know have already flagged opposing the cuts to the Pharmaceutical Benefits Scheme so I suppose you’ll be arm in arm with them on that level?

CREAN: Well I just think it’s very unfair, you’ve got to go through and analyse the whole budget. I think they’ve missed opportunities to reign in the Pharmaceutical Benefits Scheme. I’m still prepared to have a look at options for that because we put some up, as I say, in the last election, but there are other savings that could have been made. If their concern is about the fiscal balance, I share that concern but let’s face it this Government has put us into deficit. Now Peter Costello was around telling everyone if you go into deficit you put upward pressure on interest rates. No wonder we’ve started to see the beginning of that Liam. What else is to come?

JOURNALIST: I know you’re keen on concentrating on this line about the deficit, now in deflecting that criticism this morning the Prime Minister has made much of the fact that his Government has paid off something like $61 billion of your debt, of debt incurred by the ALP, does that make your argument though for the budget hard to sustain?

CREAN: No it doesn’t because the $60, it’s $62 billion actually, but all of it has been paid by selling assets not from the budget. It’s come off asset sales, now Liam that’s the equivalent of selling the house to pay the mortgage. Anyone could do that but they’re intent on selling Telstra and what have we ended up with? Higher charges, loss of services and the Government thinks that’s good economics. You see and what about …

JOURNALIST: That makes them no better than you?


CREAN: No, I’m saying this …

JOURNALIST: You can’t control the level of debt and then they flog the farm off?

CREAN: No, what I’m saying is that you do have to retire debt but to

make out that you’ve done it through managing the books better is a nonsense. They’ve done it by flogging off assets. But let me also make this point Liam: did the Prime Minister talk about foreign debt or household debt? Because foreign debt has now ballooned to over $300 billion, almost double what they inherited when we left office. Remember the debt truck that they used to talk about? Well it’s parked in some garage now hidden from sight because the Government never wants to talk about it.

What about household debt? It’s now at record levels. That’s why even small increases in interest rates are going to impact on families much more because it’s not just the house mortgage that goes up, it’s all of the credit servicing arrangements. This is a Government that’s put so much financial pressure on households that household debt and credit card debt is the highest on record but you won’t hear the Prime Minister talking about that. That’s happened under their economic management and the real problem with this Government is that it’s not just a deficit this year. If you look at the fiscal balance they’ve fudged the figures. It should be in deficit next year and I understand on a radio program this morning the Prime Minister couldn’t even guarantee that the budget would be in surplus next year …

JOURNALIST: Well it’s a $180 million isn’t it, the fiscal …?

CREAN: $200 million. But do you know how they do it? By making

Defence defer purchases that they would have made next year into the following year. What sort of hypocrisy is that? They talk about strengthening our Navy, strengthening our armed services to fight the war on terror and to protect our borders, but force them to delay purchases of equipment that help them do it so that they can post a figure next year that just gets them in the black. The fiddle, if it were not done, would have us in deficit again next year and that’s why I’ve labelled this a budget of smirk and mirrors because there are fiddles all through it …

JOURNALIST: I’ve heard you use that line already this morning now that’s obviously an attempt to …

CREAN: Well can’t I use it again on your program?

JOURNALIST: (laughs)

CREAN: Do you like it?

JOURNALIST: You’re most welcome to.


CREAN: You’re laughing at it so I can see that you like it but the point

I’m saying is, this is a Government that’s mismanaged the economy …

JOURNALIST: Let’s talk about the economy, let’s talk about driver of the economy because employer groups say this budget will be good for business. Now in that sense do you have anything positive to say about it?

CREAN: I have very little positive to say about this budget because what it’s done is it’s slugged families. It’s slugged the most vulnerable in our community and the only benefit it’s given is to the top end of town. No wonder employers are cheering, no wonder the business community is cheering because the superannuation surcharge tax cut applies to only 3 percent of the workforce. No wonder they’re cheering Liam. You see this is a budget that’s unfair and cruel because it’s a Treasurer draping himself in the flag to protect the nation, if that’s the case everyone should pay but it’s really the most vulnerable and families that are paying, people who have genuine disability and families.

Take the family with the prescription charges. You take a family with three kids, one gets the flu, they all get the flu. Under the current new arrangements they’ll be having to pay another $6.20 each prescription three times for those kids when they all get it. $20 extra just to get the chemist prescription filled, forget the doctor, forget anything else, that’s a $20 hike, what’s fair about that when the top end of town get a superannuation cut?

JOURNALIST: But you’ve already agreed something had to be done about the system. Now is it by degree, would that rise have been $15 if you had of been in charge rather than $20, I mean let’s be realistic about this?

CREAN: No, no, no. I think that the reigning in can be done by looking at the measures that we proposed and other areas of savings and cutting waste that this Government has been into. Take the advertising campaign; remember the Joe Cocker ads? All of that money being spent by the Government on advertising, they’re going to do more …

JOURNALIST: Would you have offered less support to the defence forces?

CREAN: No, I wouldn’t. I think it’s very important that so far as the

defence forces are concerned that they be supported in every way in their fight in the war against terrorism.

JOURNALIST: So all the border protection measures you agree with?

CREAN: Well the border protection is different. I support the fact that we have tough border protection but what the budget papers show is the Pacific solution has failed and it has cost us a fortune. So much so that the Government is now going to have to construct new facilities on Australian soil and budget for large intakes of people, something they said was now solved. If the problem was solved why are they budgeting for more expenditure …


JOURNALIST: Alright Simon Crean we’ll have to leave it there I’m sorry, but thanks very much for your time this morning.