29 March 2015
Transcript - #2015061, 2015

Interview with Andrew Bolt, The Bolt Report

ANDREW BOLT:

Thanks for your time Treasurer.

TREASURER:

Great to be with you Andrew.

ANDREW BOLT:

Now, you copped a lot of blame for the last Budget not selling and it seemed to get you down a bit. Do you feel personally responsible for the Government trailing in the polls?

TREASURER:

Look, I’ll leave that to you Andrew and others. I accept responsibility for the first Budget - as we all have - and this Budget will be responsible, it will be measured, and it will be fair, and it will consolidate the work undertaken by the first Budget, which was trying to address 40 years of Budget challenges left behind by Labor.

ANDREW BOLT:

When you came into office in 2013, you inherited a net debt of $153 billion. What’s it blown out to today?

TREASURER:

Well, it’s well over $200 billion and it’s increasing – it’s increasing substantially - and why? Because we were left with in-built Government expenditure that was going to continue to grow and grow over time, and as the Intergenerational Report indicates, it was heading towards 37 per cent of GDP, yet tax has always – even at its highest – been around a quarter of GDP. So, you had expenditure rising to a massive part of the Australian economy every year but the tax system would never keep up and of course, we’ve halved that challenge. We’ve halved the massive increase in expenditure left behind by Labor but there’s still much work to be done.

ANDREW BOLT:

Yeah, but if the net debt is soaring under your watch from $153 billion to well over $200 – I mean, this is terrible, and you’re blaming a spending explosion. Can you assure us that total government spending in real terms in the next Budget will actually be down on the last?

TREASURER:

No I can’t and why? Because 86 per cent of all government expenditure is locked in by legislation. Now, the 14 per cent that is not locked in by legislation includes foreign aid, which we have significantly reduced in our last two Budget announcements – the first Budget and then the mid-year update, it includes defence expenditure, which we’ve had to increase given the significant national security threats and the fact that Labor underfunded it. So, after that, everything requires legislation. Now, the Labor Party and the Greens and the independents in the Senate are constantly trying to block any initiatives we undertake to change the legislation to reduce the level of government expenditure.  So, we stand by our words – which I have said all along – that we will get the Budget back to surplus as soon as possible but we can only do what is possible

ANDREW BOLT:

[Inaudible] But if there is a spending explosion, debts soaring under your watch and you still can’t guarantee total government spending will go down. Can you at least say this: the Intergenerational Report says, as the point you just made, you’ve halved the deficit expected under Labor over the next 40 years, right, but we’re still heading for deficits of about 60 per cent of GDP – terrible. Will the next Budget cut that trajectory still further?

TREASURER:

Well, that’s what we’re endeavouring to do. I can’t give any guarantees at the moment, Andrew, because I do not control the Senate. The Labor Party locked in this expenditure. We are trying to reduce expenditure. We have to do that through legislation. We have made a significant step forward in the last Budget, but there’s still much work to be done. We rely on powers beyond our control. Labor created the fire. Now, they’re stopping us from putting it out and it’s very frustrating but we’re getting on with the job, notwithstanding what they’re doing, by reducing expenditure and getting rid of waste, wherever we can, across the public service.

ANDREW BOLT:

Yeah, but you’re not. Spending will still go up under you, the total debt will still go up under you, you can’t guarantee the trajectory of our debt will be altered by the next Budget; all we know so far is that you’re considering a bank deposit tax now of about 0.5 per cent for every deposit - I mean, another tax.

TREASURER:

Well, hang on, there’s a few issues there. The first thing is we have a plan. Our plan was laid down in the last Budget to get Australia back to the point where it lives within its means. Now, we tried to do 40 years of work in one Budget. It was a big ask. I accept that, the Prime Minister accepts that. But we do not apologise for trying to get Australia back to the point where we live within our means. Now…

ANDREW BOLT:

[Inaudible] we’re not doing that. That’s the point – is we’re not doing that.

TREASURER:

Well, we want to do it faster but we are constrained by the fact that we cannot get legislation in some areas – not all areas, but some areas - through the Senate. Now,  [inaudible]

ANDREW BOLT:

 [Inaudible] the bank levy. I mean, where does that come from?

TREASURER:

Well, it comes from the Labor Party. It comes from – they actually announced it [inaudible]

ANDREW BOLT:

Since when were you elected to impose Labor Party smash and grab policies?

TREASURER:

Well, I’ll tell you what, there’s many things I don’t like that I have to implement at the moment that have been the legacy from six years of bad Labor Government. Let’s just go back to – this was announced by Chris Bowen. So, it’s Chris Bowen’s tax. And it was announced – he said – on the recommendation of all the regulators and it's five basis points on deposits, and it's meant to pay for a potential bank failure and, as a trade-off, Australians with up to $250,000 in their bank accounts have a government guarantee. Now, what happened was, he decided to collect the money before a bank failure. Previously, the policy has been that you would impose a levy to recoup money after a bank failure.

ANDREW BOLT:

And that's where it should stay, according to David Murray and now you are doing a $500 million a year grab.

TREASURER:

Well, the trade-off is, David Murray said, that the banks need to increase their capital so they need to go to their shareholders and raise more money as part of the trade-off and, at the same time, there would be a number of other measures that would be the trade-off for getting rid of this fee. Now, what we said was we would send it to the Murray Inquiry, as you correctly said. We've done that. We're consulting on the Murray Inquiry. I will respond to the Murray Inquiry in the next few weeks and that will provide all the details in relation to this Labor proposal.

ANDREW BOLT:

Look, I was sort of hoping you might cut taxes, rather than increase them, but I guess the Budget is what it is.

TREASURER:

Well, Andrew, and just to assuage your concerns: if the Labor Party were in government today, taxes would be higher than they are under us. Of course, we got rid of the Carbon Tax, we got rid of the Mining Tax and we kept all the tax cuts that were meant to be compensation for those taxes. So, we actually have cut taxes and taxes are less than they would have been if Labor were re-elected today.

ANDREW BOLT:

New South Wales election result; what does it prove?

TREASURER:

Well, you've got to stand for something in politics. You have to believe in things and you have to be prepared to fight for policy initiatives that are in the best interests of the community. And it proves that Labor is vacuous. It has no policies, only fear. That's what they ran in New South Wales and the electors in New South Wales said emphatically, we will not buy the fear campaign. It did have some traction, but certainly not enough to give Labor government and quite frankly, Bill Shorten needs to hear the lesson from New South Wales that ultimately you have to stand for something, you have to have some principles, you have to believe in things and you have to provide a direction for the nation. And Labor is not providing that either in New South Wales or nationally.

ANDREW BOLT:

Just lastly, this morning you announced you were joining the Asian Infrastructure Investment Bank. President Obama came and said, ‘look, don't do that, because it will be amplifying China's influence, please stay out of it’. Then he absolutely pooped in our nest by doing a climate change speech to embarrass the Prime Minister. Did that cost him – that diplomatic gaffe - cost him your support for his position, because you are now joining what he said you shouldn't?

TREASURER:

Well, Andrew, we're joining because it's right for Australia and it's right for Australia to be part of a multilateral bank that is going to be providing tens of billions of dollars of loans in our region to our neighbours. Now, if a bank is acting in that way, a multilateral bank with more than 30 countries as members, and is behaving that way in our region, in our neighbourhood, we should be part of it. We should understand what it's doing, we should help to make sure that it has proper governance principles, that it is actually delivering the infrastructure necessary to grow the economy of the Asian region, which in turn helps us. Now…

ANDREW BOLT:

And stuff Barack Obama…

TREASURER:

No, no, no.

ANDREW BOLT:

Because this is a consequence of his diplomatic ham-fistedness.

TREASURER:

I would never say that about the United States – the President of the United States.

ANDREW BOLT:

Of course. So, I will say it for you, you just nod. 

TREASURER:

No, I'm not even nodding because the United States is our best friend and ally when it comes to the defence of our nation.

ANDREW BOLT:

[inaudible]

TREASURER:

From time to time we might disagree but ultimately I think the United States will join the Asian Infrastructure Investment Bank. It will just take a bit of time.

ANDREW BOLT:

Joe Hockey, thank you so much for your time.

TREASURER:

Thanks very much, Andrew, thank you.