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Transcript of doorstop interview: Canberra: 10 August 2010: Coalition costings; tax reform.

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Transcript: Wayne Swan, Doorstop Interview, Canberra

Wayne Swan posted Tuesday, 10 August 2010


Subjects: Coalition costings; Tax reform.

TREASURER: I just wanted to say a few things about the economy first, because yesterday we had some very strong job ads figures, they hit an 18 month high. I think that is yet further confirmation of the strength of economy, of the Government’s stewardship of the economy over the last couple of years. We’ve had 350,000 jobs created in the past year, and of course, we have got underlying inflation moderating.

We have got a cash rate at 4.5 [per cent], it reached 6.75 [per cent] under the Liberals, something Mr Hockey seemed surprised about yesterday in the debate. And of course, we’ve avoided a recession. Had the Liberals been in power during this period Australia would have experience a recession and I think that just, yet again, demonstrates the lack of economic judgement of the Liberal Party.

And we have seen further examples of that, particularly in the last 24 hours. Not only do we their new grocery tax which will push up the cost of living, push up the cost of doing business, push up prices at the supermarket and more broadly. But yesterday we see that their spending commitments are a real risk to our surplus, to fiscal discipline in our Budget, and of course, we saw that $7 billion gap between Mr Abbott and Mr Hockey in terms of their spending commitments which they have not clearly been able to explain overnight at all.

But overnight we’ve seen a further example of gross incompetence of Mr Robb and the Liberal team. Because overnight Mr Robb issued a press release claiming to cost Labor’s spending commitments, claiming that they were higher than we had put forward. And it is quite an extraordinary document, and I think we should take a bit of time to go through Mr Robb’s release.

On page five for example, just one example of how shoddy the document is in terms of their assessment of our spending commitments, it lists tax breaks for green buildings twice, at $180 million, which is just a basic, stupid, error.

Of course on page two there is another one of those. They have got down $15 million for an investment in a club when in fact it is only $1.5 million.

But the really glaring errors - these are just the stupidity and shoddiness of the document - but the really serious errors here relate to the fact that they claim we have not offset in the Budget significant elements of our spending.

So, contained in here is $467 million in projects funded from the National Health and Hospital Reform Package and the GP Super Clinics program. Now, all of that has been offset by us in the Budget. Now, I was listening to Mr Robb on the radio this morning and he claimed that they had no way of knowing whether these matters are offset in the Budget. But the fact is they do. Because when we make these announcements we issue a press release, and as you know we have been completely accountable. Every day of this campaign we have gone through and outlined what our spending commitments are, we’ve given a tally of spends and saves. And this is the case when we make these commitments. So, listed here is the GP Super Clinic at Blacktown, and on the bottom of the press release it says that these were provided for in the ‘10-11 Budget.

So Mr Robb hasn’t done his homework. He simply hasn’t done the hard work to try and run over, if you like, in the media cycle the embarrassment of yesterday, of the $7 billion difference. He has simply tallied up a whole lot of Labor commitments without correctly recording the fact that they’re offset. His assessment also includes $642 million in projects which have been funded by the Region Infrastructure Fund, and are therefore funded.

So it just takes an immense lack of economic judgement to these things as wrong as Mr Robb, Mr Hockey and Mr Abbott have done in recent times.

And, of course, we have got the story in the Sydney Morning Herald this morning of the $800 million hole in the savings that they are claiming for the abolition of the NBN. Which is all a very powerful case for the Liberals to submit, as they said they would have done by last Friday, all of their $27 billion worth of spending commitments to Treasury and Finance for costing.

Now, I note yesterday when there was commentary from them about the $7 billion gap, they sought to say that the difference between Mr Abbott and Mr Hockey was explained by the fact that Mr Abbott was not taking into account revenue from the mining tax. The fact is that on our count, their spending commitments - without taking into account revenue, or issues associated with the mining tax - is at least $25 billion.

So this could only really be cleared up by it all going in for proper scrutiny through the Treasury and Finance process which they said - Mr Robb has said on Sky News, but apparently he’s now wiped that, it was an event that never happened, but it’s there in black and white - he said they would all be in by last Friday. So I think what we do have is yet another example of just the misjudgement and incompetence of the Liberal team.

I saw a blast from the past on TV yesterday; Barnaby Joyce made reappearance into the campaign saying he wished he was still [Shadow] Finance Minister. I tell you what - Mr Robb is giving him a fair run for his money.

Okay, over to you.

JOURNALIST: Mr Swan (inaudible) to Treasury is so important, why did you when you were presiding over the process in 2007 put Labor’s policy in 24 hours before the election?

TREASURER: We put a lot of our policies in. We put some in a little bit later than others, but we certainly put a very substantial number of them in.

Let me just make a point about this, because this election is being fought on fiscal responsibility, it’s being fought on surpluses, it’s being fought about who can have the stewardship of the economy to bring the Budget back to surplus. Mr Abbott is claiming that he can bring the Budget back to surplus more quickly. This is the central thrust of his campaign, yet he is out there with massive spending commitments which he won’t submit.

If you just go through, for example, some of his various big spending policies which have not been submitted. Now, let’s be very clear about this. We estimate he’s got spending commitments of $27 billion, they’re saying somewhat less. But just look at what’s involved in these, their paid parental leave scheme, $8 billion. Now, this is a very big recurrent expenditure item for the Budget, not just for the here and now, as we go on. He’s claiming that his 1.5 per cent increase in the company tax rate is only going to be temporary. That will raise $6 billion. There is a $2 billion gap there. This is a very, very big change to the Budget. His health and hospital commitments - $3.8 billion. His 1.5 per cent claimed tax cut - $2.5 billion. And so on.

So they’ve got 1.5 per cent of their spending commitments in for assessment in $27 billion. I don’t think it’s too much to ask to see the major ones go in, which have been announced ages ago. Not just today, not coming next week, have been out in the public arena for a long period of time.

JOURNALIST: (Inaudible)

TREASURER: Not at all. There is just no comparison. Look at their spending commitments. They’ve got 1.5 per cent. That is, 98 per cent of their spending commitments are not submitted - are not submitted. Now, this is coming from a crew who are claiming that somehow they can return the Budget to surplus. Now, if they’re going to be taken seriously here we’ve got to see these policies submitted.

The fact is, that they are out of control. Anybody who could issue the press release like has been issued by Mr Robb overnight has got some serious problems with their competence.

JOURNALIST: Mr Swan, yesterday you reiterated that your second term tax agenda is what was already announced. Last night the Prime Minister seemed to say that Ken Henry’s recommendations on income tax and welfare were matters for medium term consideration. Does medium term mean the second term? And if it doesn’t, how can you possibly justify pushing this off into the far distance?

TREASURER: No, I don’t think the two are inconsistent, and I think you were at the press conference where I went through in some detail our position. I said the things that we committed to when I announced the response of Henry Review would be things that we do in our next term. I then went through the things that we would never do. Then I went through the things that were left and said that there were things we would consider doing in the medium term and taking on.

JOURNALIST: So would you consider them next term?

TREASURER: No, no, they could well be debated but we wouldn’t be putting them to the people. We wouldn’t be doing them next term, but if we had the consideration of any of those items they would go to the people at the next election.


TREASURER: Because what we are doing next term is what we committing to before this election, and I think you might recall I said at that press conference I was attracted to simplifying the tax system but it was complex. When you go to simplify the scales you have also got to deal with the intersection of the transfer payments system and I spoke at length about all of those things. I said for the longer term, that there is some attraction in some of those approaches that they are very difficult, very time consuming and they can’t be done quickly.

JOURNALIST: But it’s a long, long way away?

TREASURER: Well, it’s a very, very complex system and Ken Henry said the same. It’s not the view of the Henry Report that some of that complexity can be done in a three year period

JOURNALIST: Mr Swan, Joe Hockey today on radio made the point that Treasury doesn’t always get it right (inaudible) assumptions and projections. Isn’t one of difficulties with this whole argument here, whose assumptions do we take as credible? Even with that $800 million dollar figure today, isn’t that an assumption on what interest rates will be?

TREASURER: It’s for Mr Hockey to actually submit his policy and get the verdict of the Treasury. You know, it’s always the last refuge of a policy free zone to bag the Treasury.

Now, Joe Hockey has just been bagging the Treasury every time he hasn’t got an alternative framework to put forward. Who would ever forget his claim in the last Budget that our forecasts were to optimistic, and look at where we are now.

Mr Hockey said our stimulus wouldn’t create a single job, said it wouldn’t work, said it wasn’t necessary. We stand here today with 350,000 jobs created in the last year and 450,000 jobs created through this term. What we now know is that had Mr Hockey been there, that wouldn’t have happened and Australia would have went into recession. I think we blew away all the dishonesty yesterday in his debt and deficit argument pretty clearly, and that is an advance in terms of the economic debate.

JOURNALIST Mr Swan this whole tradition of sending policies off to Treasury, then you say they haven’t been funded properly-


JOURNALIST: (Inaudible) We do it every election, isn’t there a better way? I mean, maybe, should the Opposition and you if you were in opposition agree to put your policies in at a certain time? Should they have more access to Treasury officials to craft their policies? Why do we have to do this every three years?

TREASURER: This is the Charter of Budget Honesty put in place by the previous Government. We are complying with it; the previous government that put it in place is not complying with it.

JOURNALIST: Last time you were happy to-

TREASURER -is not complying with it, and they are massively not complying with it, and what are they hiding? An alternative agenda for massive cuts to health and hospitals after the election? What are they hiding?

JOURNALIST: You said that the $900 million hole in the Coalition estimate on-

TREASURER: The Sydney Morning Herald today says there is a $800 million hole.

JOURNALIST: Will you release the so called confidential (inaudible)?

TREASURER: No, this is broadly correct from my memory of briefings that I saw some time ago, it is broadly correct, the interest costs as are explained in the Sydney Morning Herald. But there is one way to satisfy all of this, put it in to the Treasury. Let’s find out.


Tags: coalition, costing, costings, reform, Swan, tax, treasurer, treasury Tags: Bowen, budget, Coalition, costing, costings