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Budget 2008: Assistant Treasurer discusses the budget.



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INTERVIEW WITH MARIUS BENSON

ABC NEWSRADIO

TUESDAY, 14 MAY 2008

SUBJECTS: Budget

Headlines describe him variously as a ‘high wire act’, ‘Swan light on inflation’ and a ‘nip and tuck budget’. For a Government response this morning Marius Benson is speaking to the Assistant Treasurer Chris Bowen.

MARIUS BENSON:

Chris Bowen good morning. Will petrol be cheaper as a result of this Budget?

CHRIS BOWEN:

Well this budget’s about putting downward pressure on inflation generally, we have a range of measures dealing with petrol - FuelWatch, which all the evidence shows puts downward pressure on petrol prices and gives consumers a lot more information about where they

should buy their petrol to get the best value. That’s funded in this budget. As is the increased powers in the appointment of the Petrol Commissioner. But, more generally inflation is the big challenge facing this nation and this budget, every inch of it, is designed to put downward pressure on inflation.

MARIUS BENSON:

Same answer for groceries?

CHRIS BOWEN:

Well again, in groceries, this budget funds the measures that we had already announced. The Grocery Inquiry, which will report to the Government in July and we will be looking at their recommendations very closely. Groceries and petrol are a big part of the inflation challenge; of course not the entirety of the inflation challenge and the inflation challenge runs across the board. The best thing we can do for inflation is to keep government spending back under control and that’s exactly what this Government’s budget does.

MARIUS BENSON:

The assessments this morning, the broad drift of them seems to be that as an anti-inflationary budget you’ve wimped and you haven’t done enough.

CHRIS BOWEN:

Well Mr. Turnbull seems to say that we’ve done too much; some people say that we haven’t

Transcript of 14/05/2008

Page 1 of 3 Transcript - Budget - Interview with Marius Benson, ABC Newsradio [14/05/2008]

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done enough; I think we’ve got the balance right. That is to say, we do need to put downward pressure on inflation, but no budget cut is easy, and every budget cut has a loser. We’ve spread the pain and we have made the budget cuts where we with think that

they can most equitably and affordably put, but what we don’t want to do is be silly about it and cut benefits to working families. So, I think we’ve got the balance right; we’ve got the lowest increase in government’s expenditure in ten years, an increase which is a quarter of the average of the last four years. The profligate spending of the previous government has gone. They were the ones who fuelled inflation by using the benefits of the terms of trade boom to fuel the economy, we’re certainly not doing that and I think time will show that we got the balance right.

MARIUS BENSON:

The Treasurer made much of getting tough on richer Australians, setting means tests at a level of about $150,000 a year, generally. It’s a very substantial gesture seemingly but it only generates a relatively small amount of money, about $400 million a year.

CHRIS BOWEN:

Well if you look at a lot of the cuts that we’ve made, they’re relatively small amounts of money, but they all add up to a significant savings result. There is no magic pudding here, if there was one easy saving then life would be a lot easier, but that’s not the case. The Expenditure Review Committee, of which I’m a member, spend hours pouring over a lot of very small savings to get to the eventual savings figure of $7 billion this year, $33 billion over the forward estimates, so means testing is just about everybody pulling their weight and spreading the pain as equitably as we can.

MARIUS BENSON:

You’ve been critical of the former government, but you should be grateful to them, they say, for offering you, or providing you with, such a low level of unemployment. Unemployment, in fact, now is going to go up.

CHRIS BOWEN:

Well we certainly have inherited the highest inflation in 16 years, there’s no doubt that the world economy will make for turbulent times in Australia and for turbulent times in unemployment. This goes to the point that you made before, some people say we should’ve cut further, we think we’ve got the balance right in terms of balancing inflation and unemployment, dealing with the difficult and turbulent economic times that we’re facing .

MARIUS BENSON:

With unemployment going up is it a good time to increase the intake of skilled migrants?

CHRIS BOWEN:

Oh look, if you talk to any industry or any firm in Australia they will tell you their biggest challenge is the skills crisis, is the lack of labour, not the lack of capital anymore, now the lack of labour. It’s one of the things fuelling inflation. So, we think this is, again, a very measured and balanced response to the skills and labour crisis facing this country. I mean I get this everywhere I go, as a local member who has the biggest industrial estate in the Southern Hemisphere in my electorate, as the Assistant Treasurer as I go around the country, this is a regular refrain, we simply can’t get enough workers and this is fuelling inflation, so it would be irresponsible if we didn’t deal with that.

Page 2 of 3 Transcript - Budget - Interview with Marius Benson, ABC Newsradio [14/05/2008]

15/05/2008 http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=transcripts/2008/013.htm&pa...

MARIUS BENSON:

Well if there is such a shortage of workers, why is unemployment rising from 4.2 to 4.75 on projections?

CHRIS BOWEN:

Well again, when you look at the turbulent economic circumstances around the world, there is going to be some impact on Australia. We need to get this balance right; we need to ensure that we get more skilled workers to fill those skills holes. It’s simply not doable from, frankly in the short term, from our existing labour force pool, we need to do that, there will be some impact on unemployment over the next 12 months from the world economic situation, that’s why you can say that we haven’t cut further, because we need to get the balance right.

MARIUS BENSON:

……. Before the budget was brought down you accused the former government of Whitlam-esque excesses in spending. Is Whitlam a term of abuse in modern Labor ranks?

CHRIS BOWEN:

No, I have a lot of affection for Gough, but it’s an inarguable fact that expenditure rose by very high levels during his time. He was dealing with the oil shock crisis and various turbulent economic events at the time as well, as Labor governments seem to do. But, it’s simply a statement of fact that the increases we saw under the Howard Government were reminiscent of the increases under the Whitlam Government. We’ve had to bring that back under control.

MARIUS BENSON:

Chris Bowen, thank you very much.

CHRIS BOWEN:

My pleasure Marius.

Page 3 of 3 Transcript - Budget - Interview with Marius Benson, ABC Newsradio [14/05/2008]

15/05/2008 http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=transcripts/2008/013.htm&pa...