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Transcript of interview with Peter Cave: ABC AM: 27 January 2011: [flood levy]



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Joe Hockey, MP  Shadow Treasurer  Member for North Sydney 

INTERVIEW - ABC AM

27TH JANUARY 2011

E&OE………………………………………………………………………………………

PETER CAVE:

The Opposition is determined to hound the Government over any tax increase. The Shadow Treasurer Joe Hockey spoke also to Alexandra Kirk.

JOE HOCKEY:

I wouldn't quibble with the extraordinary response. But it needs to be a sensible response. It is patently absurd when we are facing dramatically higher food prices as a result of these floods to then go and impose a levy on Australian households, particularly given that we are in an environment where interest rates continue to rise.

ALEXANDRA KIRK:

The alternative then is that the Government goes further into deficit. Are you willing to set aside your criticism on that front?

JOE HOCKEY:

No. The alternative is not to go into further deficit, albeit they're the experts at that. It is far better to cut back expenditure in existing government programs. People need to understand that the Labor Party in Government today is still running what's known as an expansionary fiscal setting. They are still running a big spending budget as if Australia is suffering the impacts of a recession.

Yet Australia is growing at above trend growth. We have unemployment at 5 per cent. And this Government is refusing to make the courageous decisions to pull back on its own expenditure. Instead as it's done before on cigarettes and motor vehicles, as it's doing again on mining and carbon tax, they just reach for the high tax lever.

ALEXANDRA KIRK:

But the Government is saying in addition to taxpayers or hinting that taxpayers are going to have to pay via an extra Medicare levy, that they are also going to make big spending cuts. So they're saying both.

JOE HOCKEY:

Well it depends how much money needs to be found. I mean at first they were preparing Australia for the Government to have to fork out up to $20 billion. Now from our perspective it is patently clear there are savings to be made. We'll have more to say about that in the not too distant future.

But I'd say to you Alex and to your audience it is patently ridiculous to start taxing homes that have just been asked by Julia Gillard to make generous donations to help flood victims. It is patently absurd to tax homes that they themselves have been afflicted by the floods. So their home's drifted down the river and now Julia Gillard comes along and says: good news guys, we're going to put a flood tax on you.

ALEXANDRA KIRK:

If the Government as expected raises the Medicare levy to 2 per cent for a year, that's expected to cost taxpayers an average $5 a week. Are you saying that people can't afford that?

JOE HOCKEY:

No well it'll be much more for many others. And those people that will be particularly hit are earning between $60,000 and $100,000 a year. You don't look at any particular issue in isolation. You look at the collective impact on your family budget.

ALEXANDRA KIRK:

One of your former colleagues Amanda Vanstone once famously said that a $5 a week impost was the cost of just a sandwich and a milkshake. It wouldn't buy that any more. Do you think really that Australian taxpayers will be up in arms about an extra $5 a week levy?

JOE HOCKEY:

Well you know what the difference is? Amanda Vanstone was talking about the extent of a tax cut. This is a tax increase. And it's a tax increase on top of Labor's increase in the price of cigarettes, Labor's increase in the price of alcohol, Labor's increase in the price of cars.

And they're about to increase the price of minerals which will flow through to our economy. And they're about to increase the price of electricity.

All of those things on top of actual increasing prices of food and staple products for the family and then the Government imposes a levy on top. It's just dumb stuff.

PETER CAVE:

Shadow treasurer Joe Hockey.

[Ends]