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Transcript of interview with Neil Mitchell: 3AW: 21 January 2011: flood levy; return to surplus



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Joe Hockey, MP Shadow Treasurer Member for North Sydney

INTERVIEW - 3AW WITH NEIL MITCHELL

21ST JANUARY 2011

E&OE………………………………………………………………………………………

Subject: Flood levy, return to surplus.

NEIL MITCHELL:

On the line is Shadow Treasurer Joe Hockey, good morning.

JOE HOCKEY:

Morning Neil.

NEIL MITCHELL:

What would you rather have? Cuts to spending or a new tax?

JOE HOCKEY:

I think they have got to cut and reprioritise spending and it seems absurd to me that the government is paying for electricians to put up the NBN in Queensland whilst households can’t get electricity and the government is paying carpenters to put up school halls in Queensland when there are houses that have no rooves.

NEIL MITCHELL:

So what would you cut?

JOE HOCKEY:

We’ll be saying more about this but there are obvious programs - Cash for Clunkers, which the government is committing so many millions to, they are spending something like $800 million on productivity places, $750 million on a range of environmental programs. This is a government that is addicted to spending.

NEIL MITCHELL:

In reasonable terms how much would you have to cut to at least fix the flood problem?

JOE HOCKEY:

It was interesting, Tony Abbott and I had a meeting with the Insurance Council yesterday, they said that so far out of Queensland they have had 12 000 claims totalling a maximum of nearly half a billion dollars. No one knows at this stage what the total claims will be and obviously in Victoria they don’t know what the total claims will be as well.

I think we have to wait and see what the claims amount is and the amount of damage to homes and small businesses but what you can be sure of is, having been out to flood areas, there are roads that are damaged, electricity facilities that are damaged - that is the sort of infrastructure that the government will have to front up with.

NEIL MITCHELL:

The question is whether you can raise enough money by cutting or, if not, what do you do? Do you stay in deficit longer?

JOE HOCKEY:

No, I don’t accept you have to. The challenge Neil going forward is this is going to be a tough quarter for the economy. There will be a huge impact from the floods. There is going to be a massive rebuilding program that is going to take place. That is going to drive unemployment probably below 5%, it is going to stimulate inflation, if the government is paying for electricians on the NBN and it is paying for electricians on school halls then it is going to make it far more expensive to get electricians to repair houses so prices are going to go up. The Reserve Bank will see through this for a while but ultimately the Reserve Bank will start to worry about inflationary pressures and then it will put up interest rates. You have got to be smart about this and the government is not being smart about it.

NEIL MITCHELL:

So if they do decide to go with the levy will you vote against it in the Parliament?

JOE HOCKEY:

Yes, because we will offer an alternative approach.

NEIL MITCHELL:

Can you get the independents to support you? Could this be that important that it could bring down the government?

JOE HOCKEY:

Can I tell you Neil, that Tony Windsor said one of the reasons that he decided to go with Labor was that he was claiming that we weren’t saving as much as we were claiming to save in our election promises. Ironically he said that was influential. Now he says it doesn’t matter if the government is in deficit. From my perspective it does matter, because every Australian ends up paying a price for higher inflation and higher interest rates. What you have got to do, like every Australian family is doing in their home, is you have got to start to pull back on your expenditure. This government doesn’t know how to do it. It is afraid of making the hard decisions.

NEIL MITCHELL:

So could this be important enough to bring down the government?

JOE HOCKEY:

If they lose total control of the economy towards the end of this year by getting this wrong then who knows - it could have that impact. But, frankly, I think you have got to have good policy and good policy delivers good government.

NEIL MITCHELL:

I think there is a good chance that Julia Gillard seems to have lost confidence, she’s floundering. I think there is a good chance that you lot could be in power by the end of the year. If that happens would you still commit to going back to surplus by 2013?

JOE HOCKEY:

Absolutely. Can I tell you Neil, I am absolutely committed to this to the core of my bones. I will tell you why, we are facing these sorts of events every year, not on this scale, but we had the fires last year, we have had tsunamis, we are facing unforseen events on a regular basis. The best way to prepare for them is to have a big budget surplus, to have no debt, to have the capacity to spend the money and worrying about paying for it later. That is the best place to be.

Julia Gillard seems to contract out to committees every hard decision, she did that on the mining tax with the Argus committee, she did it on climate change, she set up a committee, now she has set up a flood committee. For God’s sake, she is a Prime Minister, she is there to govern, she should govern, make decisions, spend the money that needs to be spent and make the hard decisions about saving money where it has to be saved.

NEIL MITCHELL:

I believe you have been helping some friends clean up. Where have you been?

JOE HOCKEY:

I was up at Rochester and a mate of mine lost his house up there and I don’t want to overstate it but you do what mates do. I wasn’t the only mate that turned up but it’s heart wrenching.

NEIL MITCHELL:

Its distressing stuff, isn’t it?

JOE HOCKEY:

Yeah, just the mud, and this guy is right on the Campaspe River, and it’s also the emotion. At the end of the day when a few of us sat down on the sidewalk with all his home belongings out on the sidewalk and we had a beer and you could see that his eyes started to well up and you could see that he was looking at everything he had on the sidewalk. I think that is when people start to realise the real impact of what has happened.

NEIL MITCHELL:

Thank you for talking to us and thanks for helping. Shadow Treasurer Joe Hockey.

[ends]