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Shadow Treasurer confirms there will not be a bidding war in lead-up to next election; criticises government's fiscal policy.



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Simon Crean - Shadow Treasurer

Interview with Fiona Reynolds

Subject: Fiscal Policy, IVF

Transcript - ABC AM - 11 August 2000

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PRESENTER: Well Labor too says that it won't engage in a bidding war. It's the Government, it says, that has been out spending big and pushing interest rates up. The Shadow Treasurer Simon Crean joins us now and to speak to him, Fiona Reynolds.

REYNOLDS: Mr Crean are you already engaged in a bidding war, as the Treasurer suggested, by promising big spending measures at the ALP Conference last week?

CREAN: No, because we've said that all of our measures will be fully costed, fully funded and against the base line of ensuring that we produce the surpluses necessary to keep the budget in balance over the economic cycle. But what we had yesterday was the Governor of the Reserve Bank issuing a stinging rebuke to the Government's loose fiscal policy - Peter Costello's loose fiscal policy. This was a Treasurer that three years ago forecast a surplus this year of $11 billion but he's produced a structural deficit of $2 billion. That is huge fiscal loosening and when you've got fiscal loosening and when you've got inflationary pressures due to his GST, it's those things that put pressure on interest rates and it's why we've had the Reserve Bank put up interest rates five times in the last twelve months.

REYNOLDS: But the Treasurer has said that Labor is the only threat to fiscal policy, reminding you that you left the Budget in deficit. And he's actually turned it into a surplus.

CREAN: He's turned it into just surpluses and reduced the surpluses significantly. An $11 billion surplus turned round to a $2 billion deficit in three years when you've had three years of strong economic growth is huge fiscal loosening. And to take him - two weeks ago he was in Brisbane, and he said 'so far as the surpluses are concerned Labor has designs on them, but we've got news for them, we're going to spend them'. In other words, his intention is to spend the surpluses simply so Labor can't have the opportunity to do something about it. This is a Treasurer that has not only produced loose fiscal settings in the last three years, his intention is to spend the surplus so Labor can't. That must go down as one of the most irresponsible statements of a Treasurer ever. And it's no wonder that the Governor of the Reserve Bank is critical of this Government's loose fiscal policy. But while you've got a Government with loose fiscal policy and introducing inflationary policies through the GST, Australians are going to pay through higher interest rates. And that's where the tax cuts are eroding. That's where the compensation packages are disappearing to. This is…

REYNOLDS: But Mr Crean you'd have to be pretty pleased though wouldn't you with the unemployment rate yesterday, 6.3 per cent, down to a ten-year low?

CREAN: We welcome the fact that the unemployment rate has fallen. The big concern as we see it, we pointed to this at our Conference last week, is that what is going to happen with the tighter labour market that isn't concentrating enough on skills development, is that we will run into skill shortages. And that's going to add to inflationary pressures. We put out a report at the beginning of this year saying, if the Government continues with its current policy settings skill shortages, skill blockages are going to add further to inflationary pressures. That's the real concern out of the employment figures.

REYNOLDS: Mr Crean the invitrofertilisation debate seems to be continuing to worry the Labor Party. You only recently called for some discipline from the Left, now the Right is pushing for the Party to consider supporting the Prime Minister's plan to amend the Sex Discrimination Act and allow States to ban IVF for single women and lesbians. Does the Right now need to be a bit more disciplined?

CREAN: Look this matter will be resolved in the Caucus next week. I'm sure it will reflect the views set down by Kim Beazley last week at the Conference.

REYNOLDS: Will the Right be told to pull its head in, effectively?

CREAN: I think that the Caucus will determine the matter sensibly and sensitively and I think that the decision that it determines will conform with what Kim outlined last week.

REYNOLDS: Is a conscience vote on IVF a matter more though for the National Executive than the Caucus?

CREAN: No it's a matter for the Caucus, but it's an indication that the Leader has given that there will not be a conscience vote and I'm sure that that position will prevail.

REYNOLDS: Mr Crean thank you for joining us.

ENDS

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.