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Opposition Leader claims that national account figures show there is no economic black hole; comments on legalisation of marijuana

JOHN HIGHFIELD: The Federal Opposition's spin on today's growth figures is that they demonstrate there is no $8 billion budget black hole and that spending cuts are only needed by the Coalition to fund the Government's election promises. The namesake of the black hole, Opposition Leader, Kim Beazley, has been telling PM's Catherine Job that today's economic good news is all the previous Government's work.

KIM BEAZLEY: They are our signing off. They are our last set of numbers. They are from the period of the Labor Government, with a very good growth rate coming into it and making an absolute nonsense of this all nonsense they have been going on with about an $8 billion black hole. The only black hole is the $4 billion worth of unfunded election promises that they have got on their plate.

CATHERINE JOB: Are you saying that on account of today's figures there will be no budget deficit?

KIM BEAZLEY: It will be massively different. I mean, there are all sorts of other factors that go into it, but it will be massively different from what they are talking about and they clearly don't have the dimensions of the problems that they are trying to kid the public about.

CATHERINE JOB: But as the economists point out, there is still a budget deficit, isn't it? There's still an underlying structural deficit that's there after 19 quarters of consecutive economic growth, when the budget should be in surplus, shouldn't it?

KIM BEAZLEY: But it's coming off the lowest-spending government in the Western world. I mean, that's the position that we put in place. They want to take the lowest, or second lowest, spending government in the Western world and take it down even further.

CATHERINE JOB: Is it more sensible then to run a budget that's perpetually in deficit?

KIM BEAZLEY: No, because the budget is correcting itself and you can see that from the figures that they have. They have one year's figures but they all conveniently forget the out years. Even on their old figures it was indisputable that three years out, the underlying deficit was $3 billion which is a totally different task and which now, by these figures, will be a totally different figure.

CATHERINE JOB: Well, how long .. if they don't do this fiscal tightening program that they talk about - the $8 billion worth of cuts - how long will it take for the budget to tick itself back into surplus if they don't do that?

KIM BEAZLEY: It's a very different management task between an $8 billion task .. it's a very different management task between an $8 billion task and the $25 billion that we confronted ourselves when we took over that process. And we are the only government in about the last 30 or 40 years in Australia that's delivered a budget surplus. We were the only ones.

CATHERINE JOB: Well, in that memorable speech, the 1989 .. 1988 budget speech when Paul Keating said, 'This is the one that brings home the bacon', isn't this precisely what he was telling us, that when the good times are around you go into surplus? These are supposed to be the good times; we're not in surplus. If this present government doesn't attend to it aren't you going to be the ones yelling the loudest if we go into a recession or a downturn and the budget bottom line blows out even further?

KIM BEAZLEY: Well, if we go into a recessional downturn the budget bottom lines does blow out. But whatever people might think of comparative fiscal management, this is a very interesting point to make - apart from New Zealand, which if we taxed like them, we'd have a $30 billion surplus. Apart from New Zealand, there is no better budget position in the Western world than the one they have even with their so-called $8 billion black hole which now no longer exists.

The percentage of GDP that we are in deficit, compared to that of most of the other .. rest of the industrialised world and the United States, is minuscule.

CATHERINE JOB: So don't they have to attend to it? Should we not worry about the budget deficit at all?

KIM BEAZLEY: It is always worth being concerned about it; there is no question about that, and to try to get yourself into balance. There is no question that that is a useful objective for governments to pursue. But you also have to look at these things comparatively, look also at the sorts of employment situation that you've got in the country, the sort of wages policy that's being pursued. You've got to look at all those sorts of things without necessarily simply treating this issue as the be-all and end-all. Now, they've learnt a lesson on that today.

CATHERINE JOB: Are you saying here then that even when it's an economic upturn, when there's 19 quarters of consecutive economic growth, there's no particular reason why the budget should be in surplus, no reason to feel embarrassed that it's not?

KIM BEAZLEY: Well, the budget is .. we assume the budget was going back into surplus. We assumed, with better growth figures coming through, that that will still be the case, but we can no longer give you a calculation on that because we no longer, of course, have the advice and have the things coming in to us as we would have if we were preparing this next budget.

But we would assume that the fiscal task that Mr Costello has got is that much more diminished and if you look at the sorts of things he is saying, and read between the lines, that is obviously the case. He is no longer talking about filling holes; he is talking about getting even better savings; he is talking about going into surpluses on it.

So he must be in the, sort of .. or must be assuming that he is in the sort of situation that is presenting the opportunity for a surplus without the mad slash-and-burn that he's been talking about.

CATHERINE JOB: Talking about slashing and burning - does a day like today provide a double-edged sword for you; gives you good news today, a means of attacking the Government's spending cuts program, and it's close enough to the election for you to claim credit for the growth. But you could face up on 20 August, on budget night, and discover that they have got a much smaller budget cutting program than you have been shouting about and you'll be the ones with egg on your face.

KIM BEAZLEY: No, that'll be very good for the Australian people if that's the case. And they will look very silly and erratic in the way in which they have been conducting themselves because there is enough documentation, as you well know, leaking out now to indicate that they have got a bunch of Ministers running around likes chooks with their heads cut off, desperately trying to meet these targets that they have been set, to come in with the $8 billion, and now being relieved by that, it makes them look very much political ingenues, which is in fact what they are. And from our point of view our position is always going to be that we want the Australian people to get the best possible outcome that they can, irrespective of the impact on our political fate.

CATHERINE JOB: Another question the Government put to you today - Mr Howard said he wants to know where you stand on decriminalising marijuana, since he laid his cards on the table in Parliament today.

KIM BEAZLEY: Yes, that was pretty cool of Mr Howard. I mean, it's 25 days since .. or 20 days since his Health Minister said that he favoured the decriminalisation of marijuana, why did he choose to correct his Health Minister today? He chose to....

CATHERINE JOB: Well, with respect, it wasn't a correction, was it? It was a different point of view.

KIM BEAZLEY: No, no, but it became pretty darned obvious that that's the activity that he is engaged in when we asked him the second question and saw his response to that. He was choosing to correct him 20 days on, because he wanted to distract public attention from these figures.

Now, if you want my view on it, I am happy to give my view. I actually happen to agree with him on the propositions that he's put forward.

CATHERINE JOB: 'Him', Mr Howard or 'him' Dr Wooldridge?

KIM BEAZLEY: 'Him', Mr Howard. But I fully understand that there are large numbers of members of my party who take the alternative view so....

CATHERINE JOB: So you agree with Mr Howard on that too, do you?

KIM BEAZLEY: ...and they would agree with Mr Wooldridge. But the point of it is this: I don't see any point in grandstanding on it in the Federal Parliament where we don't have responsibility for it, where the States have to handle these sorts of issues and they build up their expertise to deal with it on a day-to-day basis.

I have the reaction, myself, of the average Australian parent, but it is the concern that is just based on a lay person's view of what goes on because I have not been obliged, and nor has Mr Howard, to develop an expert's view, because these issues have to be confronted by the State Attorneys-General and the State Health Ministers and the State Governments and not ourselves.

CATHERINE JOB: But isn't that exactly the same sort of argument that could be made, and was for many years about guns? And does Mr Howard have a point when he said: 'I have the perfect right, indeed, responsibility as Prime Minister, to put my opinion on the record on matters of important social debate.'

KIM BEAZLEY: I am happy to see him put his views on the record; I share similar views myself. I mean, I don't find any discomfort with those sorts of views. But I am entitled as a politician to ask why; why today? And I would say that the reason why it's put on today is because it relates to what we were talking about earlier and, that is, these excellent growth numbers which they desperately don't want to talk about.

JOHN HIGHFIELD: Kim Beazley, the Opposition Leader there.