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Transcript of doorstop interview: Sydney: 24 July 2013: CPI; FBT; motor industry



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TRANSCRIPT

THE HON JOE HOCKEY MP

SHADOW TREASURER

DOORSTOP SYDNEY

WEDNESDAY, 24 JULY 2013

E&OE…………………………………………………………………………………

JOE HOCKEY:

I am standing here at City Ford with Sean O’Connor, the candidate for the federal seat of Sydney, Brent Polites who is the Dealer Principal at City Ford and Ian McLean who is the head of the automotive group that owns City Ford. Talking about the CPI data today- whist the headline numbers are good, the fact is Australians are still struggling with some of the challenges of cost of living. The fact is you are never going to have cost of living properly addressed while you continue to have the upward pressure of the carbon tax on electricity prices more generally during the course of the year, on gas prices and everyday prices of the things people can’t avoid buying. People can avoid going ahead with the purchase of motor vehicles and Kevin Rudd has made it much harder with the changes to Fringe Benefits Tax.

Mr Rudd is in denial about the impact of his on-the-run decision making. The FBT changes are having a very real effect on the motor industry and they are having an effect now and it is costing jobs. The fact that Mr Rudd thinks that because he is relying on Treasury figures they must be right just underscores the fact that he doesn’t understand the impact of his own decision making. The dealers and the industry more generally, is very blunt. 75% of the people who are going to be affected earn less than $100,000 a year. Most of them are driving around in Toyotas, Fords, Holdens, Mitsubishis and the like. The fact is most of them are earning $65 000 a year and according to the Government’s own data more than 300,000 people are going to pay $1400 a year extra in tax. The Government has not got its narrative right on this. On the one hand, Mr Bowen says this is about a Budget integrity measure and then he says it’s about fairness. On the other hand Bill Shorten says there are no rorts and this is about the sustainability of the tax system Today Kevin Rudd says there is a loophole. They’re all over the joint, they’re simply about the money but they don’t understand the full impact of their decisions. That’s why everything this Government does and says you cannot believe because they don’t understand their own decisions.

I’ll just say something more about the inflation figures today. Clearly the Reserve Bank now has room to move for an interest rate cut next month. If the Reserve Bank cuts interest rates it

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is not because the economy is doing well, it is because the economy is being challenged. Challenged by significant headwinds - not only by the transfer and the transition in the economy - but headwinds coming out of Canberra. Kevin Rudd is now causing further instability and uncertainty in the Australian economy and an interest rate cut next month will confirm that. What we want to see is stability in policy making out of Canberra. That’s why the Coalition is strongly opposed to these changes on the run and policy on the run in relation to FBT. This instability is getting worse because the Government is leaking on a daily basis the further problems they have with their budget. You do not create business and consumer confidence by leaking bad news about the Budget every day. I call on the Treasurer and the Prime Minister to immediately release the full accounts of the Federal Budget. Stop playing these games. Stop blaming everyone else for the failure to deliver a surplus. Show the Australian people the real numbers now. Stop selectively leaking information about the Budget because all that is doing is further undermining business and consumer confidence. I’m going to ask the Dealer Principal to talk a little about the impact of Mr Rudd’s decision in relation to FBT on this business here at City Ford.

BRENT POLITES:

This is a very difficult time in the industry. July is a never a good month and there is plenty of uncertainty as we lead in to the election. This decision has really had a dramatic impact on our business - it has slowed down far more than we would have liked. One of our better clients is an organisation that looks after the car buying needs to the teachers of New South Wales - the Teachers’ Car Buying Service. Up until now they’ve had an immediate freeze on any deliveries and as of now they really believe this will cripple their business. They won’t be able to look after the needs of the teachers going forward if this legislation is to pass.

JOE HOCKEY:

Ian, would you like to say something about the impact on your business which sells 10,000 cars a year.

IAN MCLEAN:

The point I’d like to make is that ours is a business that sells around 10 000 new cars a year and any uncertainty causes a slowdown. Right now the buying public are uncertain and when they are uncertain they defer their purchase. We ordered our cars five months ago. The cars keep coming. They’re piling up in the backyards and the customers are deferring. It becomes an immediate problem. We have to fund that floor plan inventory and we need consistency and for the customers to keep buying.

JOE HOCKEY:

Sean, do you want to say something about the charitable sector too?

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SEAN O’CONNOR

The point that I’d like to make is in the electorate of Sydney we have many charitable organisations and not-for-profits that are based here. With the changes that are happening to the FBT, that means the organisations will not be buying cars. It means the workers in these charitable organisations will not be taking cars as part of their salary package due to the extra red tape that is involved in them doing so if they were to proceed. In electorates like mine of Sydney it is having an impact right now as we speak. The changes mean that those cars keep piling up in their car yards until we get a change to this horrible Government.

JOE HOCKEY:

Are there any questions?

JOURNALIST:

Mr Hockey, you are saying that Labor is contradicting itself on this. What about the Coalition? We know you are proposing to reverse it but is there rorting or scamming of this and will you do something about it?

JOE HOCKEY:

There is no evidence of rorting or scamming and the Government has not delivered any evidence of rorting or scamming because they Government has changes proposed in the Henry Tax Review. They then implemented these changes in 2011 in a Budget where they were scraping the bottom of the barrel for savings. Just a few weeks ago the Government said

there was nowhere else to go and they were rolling out this program of the 20% statutory cap in relation to FBT. Now they are saying it has been widely rorted. They are entirely inconsistent. It smacks of policy on the run. It just goes to show, everything Kevin Rudd touches turns into a disaster for others. He keeps moving on to the next item hoping people will forget yesterday but the problem is everyone is hurt by his decisions yesterday. Everyone is going to be hurt by his decisions tomorrow.

JOURNALIST:

So as Treasurer would you assume there isn’t rorting?

JOE HOCKEY:

I want to see the evidence; I want to see the evidence. There has been no evidence put on the table of widespread rorting. As Bill Shorten says - Bill Shorten was the Financial Services Minister - he said there is no rorting. One minister says there is no rorting, another minister says there is. They haven’t got a consistent story but it is people who are paying the price with their jobs.

JOURNALIST:

How many job losses have there been since changes to the FBT?

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JOE HOCKEY:

So far there has been literally hundreds of reported job losses. In one business alone in Melbourne there were 75 people sacked last Friday. That has been the starting point. Again it comes back to the fact Kevin Rudd thinks taking $1.8 billion out of middle incomes workers is painless. It isn’t. You’re starting to see the job losses now and Mr Rudd can’t keep denying the impact of his on-the-run policy making.

JOURNALIST:

If I can ask you about Gonski quickly. Victoria is contemplating signing up. Given that the Catholic schools have come on board now is it still feasible for the Government to be offering what they have been?

JOE HOCKEY:

This is another case of policy on-the-run. Magically the Government finds an extra $600 million yesterday. Where is all this money coming from? On the one hand they’re complaining about revenue falling in the budget and they’ve obviously got multi-billion dollar cost blow out associated with their PNG deal. On the other hand they’re throwing out more money without any accountability to try and get their Gonski plan up. Sooner or later the rubber is going to hit the road - there has to be proper accountability for all this money Kevin Rudd is spending. He does it all the time. Policy on-the-run, expenditure on-the-run, someone else has to pick up the pieces after Kevin Rudd has destroyed the joint.

JOURNALIST:

Speaking of Kevin Rudd, I understand today that Labor is announcing a competitiveness agenda for the Australian economy. Is that a good idea? Do we need something like that?

JOE HOCKEY:

I thought he was meant to be consulting at length with people, but he’s announcing that agenda is he? Well that does not surprise me. Kevin Rudd is full of water and wind. We all know that. The problem is that everyone has to mop up the tears when it all ends in tears.

JOURNALIST:

In your list of problems faced by Australia where does it competitiveness sit?

JOE HOCKEY:

Competitiveness is part of productivity agenda. If you’re going to improve productivity you have got to have a competitiveness agenda. The Coalition has already announced a number of new initiatives in that area including a root and branch review of the Competition Act to ensure there is a fairer balance between the interests of small and large business. Kevin Rudd is a latecomer to all this. He’s always got an agenda. He’s always got a statement. But he’s

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rarely got action and when he does have action he ends up hurting people. Look around here, some of the people are being hurt by Kevin Rudd’s actions.

[Ends]