12 May 2015
Transcript - #2015100, 2015

Interview with Leigh Sales, 7.30, ABC

LEIGH SALES:

Some of those points that they raised, I am able to raise now with the Treasurer Joe Hockey, who has just joined me. Treasurer, [inaudible].

TREASURER:

Great to be here, Leigh.

LEIGH SALES:

Treasurer, is this what political retreat looks like?

TREASURER:

No, not at all. It’s part of our economic plan to strengthen the foundations for our future prosperity, and it’s working. It’s working, because we’re getting the Budget deficit down, we’re getting back to surplus, importantly, the economy’s going to continue to grow and it’s going to improve its economic growth.

LEIGH SALES:

Last year you were telling Australians that everybody had to make sacrifices, because [inaudible] had no choice but to make painful decisions, because the state of the Budget was that parlous, and that to do anything else would constitute intergenerational theft. This year, it’s time for handouts and new spending. How do you explain that about turn?

TREASURER:

I’m sorry, but there are no handouts.

LEIGH SALES:

A tax break is a hand out.

TREASURER:

Well no it isn’t, it’s actually giving Australian small businesses some of their own money back to invest in new plant equipment that is going to create jobs. We want to create jobs. Well, what we are trying to do is strengthen the Australian economy and give people a chance to innovate, to have a go. And in this instance, an incredibly good environment to do so when you’ve got official interest rates at their lowest level ever; reduced electricity prices by getting rid of the Carbon Tax. Petrol prices are lower than they’ve been, and these are fantastic foundations for the real innovators in our economy and the real growth [inaudible] in our economy, small business, to have a go.

LEIGH SALES:

But Treasurer, on this point about the [inaudible], since the last Budget you’ve [inaudible] plans, you’ve dropped talking about the debt and deficit emergency, and you’ve relied on excuses for which you [inaudible] your predecessor Wayne Swan, do you accept that voters are thoroughly confused, not only about what your Government stands for, but also about your competence?

TREASURER:

Well no, I think they’re confused about what you’re saying, because we’ve laid the foundations in the last Budget, and we had started implementing [inaudible] a plan that was well under way. We’ve faced incredible headwinds. I mean, the iron ore price has more than halved, and importantly….

LEIGH SALES:

And when Wayne Swan used to say things like that [inaudible]

TREASURER:

Yes, I did, and the problem was Labor locked in future growth and spending that was unsustainable. Our trajectory on spending is that it keeps coming down, and that is hugely [inaudible] new spending, and they put time bombs in the Budget that were unfundable.

LEIGH SALES:

I should be able to take that up with Chris Bowen very shortly. Let me take you to something that’s an example of what I’m talking about as to why the public might be confused, which is Paid Parental Leave. The Coalition went to two elections promising a very generous scheme. The Prime Minister said it was something which he believed passionately. It was much more generous than what is currently available. Now, not only has that policy been dropped, in the Budget you’re winding back a currently less generous scheme that is available to women, and accusing women who legally access to be double dipping and being [inaudible]?

TREASURER:

Well firstly, I don’t think it’s fair that someone can get their private scheme paid for by their employer…. [inaudible]

LEIGH SALES:

[inaudible] the second part of the question is, that’s confusing to people, is that when you have one policy and you replace it with another?

TREASURER:

I’m about to answer the question, please. And what I’m saying to you is I think it is unfair that someone can be receiving from the taxpayers a Paid Parental Leave Scheme, such as an employee of the Government, and then they can go to Centrelink and get another Paid Parental Leave Scheme paid for by taxpayers. We think that double dipping is unfair. Of course you get a minimum of $11,500 and that’s guaranteed if your employer does not give you that money. But if they do, then it’s meant to be a safety net, it’s not a salary topper. In relation to other things, we are trying to avoid what the Labor party always wants to do, and that is increase taxes. We are trying to avoid that [inaudible] people to have a go, and we’re not going to do that by borrowing money as a Government and then handing out in cash to people. We’re not doing that. We’re giving people more of their own money back.

LEIGH SALES:

Speaking of borrowing money, for the past five years we’ve heard you talk repeatedly about a Budget emergency, about a crisis of debt and deficit. When you were using that language, net debt was about 12 percent of GDP. Under your Government, [inaudible] 18 percent of GDP the year after next, yet now you don’t see an emergency?

TREASURER:

Well, hang on. What about what we were left with and where it was going?

LEIGH SALES:

And I will take that up with Chris Bowen, but what I’m saying….

TREASURER:

It is a very important point…

LEIGH SALES:

[inaudible] I’m saying that you said it was an emergency when it was 12 percent, now it’s 18 percent, we’re not hearing talk about [inaudible]….

TREASURER:

We’re trying to reign it back. It was going to $667 billion. And we pulled it back.

LEIGH SALES:

But why?

TREASURER:

If I can answer the question. We pulled it back from a trajectory of $667 billion, we’ve reduced that by $110 billion. Most significantly, we inherited a Budget that was borrowing over $130 million a day just to pay the bills. We’ve got that down to $96 million [inaudible]. Still more to be done; still more to be done. But we are trying to redirect precious taxpayer money to the things that are going to grow the economy.

LEIGH SALES:

You’ve not explained to me why there’s been the change in [inaudible] language?

TREASURER:

Because we’re fixing the problem. Because we are….

LEIGH SALES:

I just pointed out to you that net debt has gained [inaudible] 18 percent of GDP…

TREASURER:

Because we are trying to get the deficit down, and when you get a deficit down to zero, and you start running surpluses, that’s when you can start paying back debt. The fact that we are getting the deficit down, we’re reducing the size of Government every year, that’s hugely important; by 0.5 percent of GDP every year. So when you reduce the size of Government, and you empower the size of individuals and families…

LEIGH SALES:

But Treasurer, on this point about the size of Government, today the Budget repair [inaudible] Government spending a percentage of GDP, is 25.9 percent. That is the same as [inaudible] previous Labor Government [inaudible] spending at the height of the global financial crisis.

TREASURER:

Not true. They got to 26 percent….

LEIGH SALES:

You’re at 25.9!

TREASURER:

Well that’s too high. I agree. And what we’ve had is that we’ve had [inaudible] expenditure that has faced a slower growth in the economy, plus significantly facing global headwinds. What we’re doing, what we’re doing, is we’re focusing on how we can build export opportunities for the future, we’re building new partnerships with Japan, Korea, China, India and a range of others, to give that part of the Australian economy [inaudible] small business the chance to start to export in the same way that the iron ore miners and others have been able to export.

LEIGH SALES:

Over and over again, Treasury make statements in the Budget papers, such as that the level of spending highlights the need to do more of [inaudible] the task of Budget repair remains ongoing and more work needs to be done for future Budgets to continue to build a sustainable [inaudible] trajectory. You’ve warned in the past, as everyone will remember, about taking the easy path and leaving it for the future generations, it’s called intergenerational theft, why [inaudible] in this Budget?

TREASURER:

Well, we’re not.

LEIGH SALES:

Well you’re not capping spending.

TREASURER:

Well hang on, I’m sorry, compared to the mid-year update in December, every year in the forward estimates we’re spending less in dollars than we were going to 6 months ago.

LEIGH SALES:

But the forecast shows…

TREASURER:

….most importantly, we are reducing spending as a percentage of GDP, we’re reducing the deficits as a percentage of GDP, we’re reducing the size of Government as a percentage of GDP. Government, now, the Australian Government now has fewer employees than any other time, back to 2006, so we’ve made decisions. I’m not suggesting we’ve said, not for a second, that it’s job finished. There’s more work to be done, but we are trying to ensure the Australian economy grows and grows fast, as a result of our initiatives.

LEIGH SALES:

Are you leaving it to a future Government to have to deliver the type of Budget you tried to deliver last year? Someone’s going to have to do that.

TREASURER:

We’re not passing the buck. We’re not passing the buck, because the buck stops here. Every dollar of taxpayer’s money needs to be treated as something very precious, and what we’re doing, we’re going after the multinationals that are not paying their fair share of tax, we’re applying new tax thresholds to backpackers in Australia, and we’re getting rid of some of the rorts, all the rorts that you can get rid of, in relation to [inaudible]. At the end of the day we’re not asking Australian families to pay more tax, because we want to give them every opportunity to have a go. We want to give small business every opportunity to grow their business to employ more people, innovate, to invest, that’s what this Budget’s designed to do.

LEIGH SALES:

Treasurer, the final question. After [inaudible] do you accept that this Budget is make or break for you as Treasurer?

TREASURER:

It’s not about that. It’s about my country. I came into this job to make Australia better. I came into Parliament to make Australia better.

LEIGH SALES:

I don’t doubt that Treasurer, but your backbench was very unhappy with the outcome of last year’s…

TREASURER:

You can run about the gossip of Canberra.

LEIGH SALES:

That actually occurred.

TREASURER:

You can go through all of that commentary and gossip, I’m focused on one thing. And that is building a stronger and more prosperous Australia. That is my only motivation, and that’s what this Budget provides.

LEIGH SALES:

Treasurer, thank you very much.