29 July, 2013
Sky News AM Agenda
With Kieran Gilbert and Andrew Leigh MP
29 July 2013
8:45am
E & OE
Subjects: Economy, fiscal responsibility, Galaxy poll, election date
KIERAN GILBERT:
This is AM Agenda, thanks very much for your company and with me now Liberal frontbencher Senator Mitch Fifield and Labor MP Andrew Leigh. Good morning to you both. Andrew, I want to start with you with this pre-election economic statement. The Cabinet meets today. Mr Bowen has reiterated the Government’s commitment to return to surplus in 2016/17. If you are to do that, given the various reports about revenue write-downs, further revenue write-downs, even since the May budget, you really do have that balancing act between making cuts, which could hurt growth, and staying on that trajectory for a credible path to return to surplus.
ANDREW LEIGH:
It’s a challenging time for the economy, Kieran, you’re absolutely right about that. And we’re seeing the transition from that huge investment period in the mining boom, which involved so many jobs in the construction phase. And now to a production phase where the amount of stuff we dig out of the ground and ship overseas will probably even go up. But the amount of jobs decreases because you’ve got a lot of the construction done. But with the dollar having come down a bit, that’s, I think, given manufacturers a bit of breathing space and we’ll be looking to craft a set of policies that allow for that transition.
KIERAN GILBERT:
But in terms of making cuts so close to an election, that’s the difficult political balancing act here isn’t it?
ANDREW LEIGH:
We’ll make responsible savings as we have in the past, Kieran. I think you would’ve seen in the past things like means-testing the private health insurance rebate, phasing out the old dependant spouse tax offset which paid people not to work…
KIERAN GILBERT:
Fringe Benefits Tax changes …
ANDREW LEIGH:
I was about to say the Fringe Benefits Tax changes…
KIERAN GILBERT:
…where there was quite a backlash. That’s the point, isn’t it?
ANDREW LEIGH:
These are never easy decisions, Kieran. I’ve just picked three that were opposed by the Coalition. But ultimately the reason that you make these savings is because we have to make sure that the tax system is serving people as well as it can. And a broadly based tax system makes sure we all pay our way. I just don’t think the FBT loophole was sustainable.
KIERAN GILBERT:
Senator Fifield, do you welcome the fact that we’re having this debate about economic, fiscal responsibility so close to an election. It’s not normally something we talk about, cuts and removing entitlements, just a couple months out from the poll.
MITCH FIFIELD:
Kieran, what we’re really having is a debate about fiscal irresponsibility. Let’s not forget that the reason why this is a government of waste, debt and deficit is because they are spending $120 billion a year more than in the last year of the Howard Government. This government loves to talk about revenue write-downs but the reality is, the reason why every budget has been in deficit and the reason why debt is beyond $200 billion and approaching $300 billion is because this government have not lived within their means. And every economic statement that this government produces, and it looks like we’ll have another one by the end of this week, is essentially a work of fiction. The numbers don’t hold from lunchtime to Lateline. It was only a matter of a month or so back that we had another economic statement. Kieran, the simple fact of the matter is these guys can’t stop spending. So anything we hear in the economic statement about how all of the sudden they’ve discovered fiscal responsibility, you can’t believe it. The best predictor of future behaviour is past behaviour.
KIERAN GILBERT:
Let’s go to this report today, Senator Fifield, the RBA, front page of the Financial Review, warning against government going too far, the ‘Budget Razor Gang’ going too far. And suggesting that things do remain fairly soft, particularly in the labour market and now might not be the time to make significant cuts. Do you think that that’s something both sides of politics need to heed.
MITCH FIFIELD:
Kieran, I don’t think that there’s any danger of this government cutting too far. They’ve never done it in any budget. They’ve never done it in any mini-budget. They’ve never done it in any MYEFO. So I don’t think we need to worry if this government is going to cut too far and come within reach of living within their means. But there is cause for concern that because this government are desperate in some way to demonstrate economic credentials and fiscal credentials that they will, in a rush, make decisions to try and find savings, and do so without proper thought and without proper consultation with the industry or the sectors concerned. And we saw that with their decisions about the FBT. What in 2011 was apparently a terrific and much needed reform all of a sudden overnight became a loophole and a rort. So there’s no consistency with policy with this government. And I think that’s the real danger in the economic statement is that we’ll see knee-jerk reactions, lack of thought and causing damage to different sectors of the economy.
KIERAN GILBERT:
Andrew Leigh, Joe Hockey told me on this program on Friday that the Coalition will provide fully costed policies. He has said that they’ve been in consultation with the Parliamentary Budget Office, state governments where necessary. They’ve had full consultation on their costings. He did raise some concerns about the Government’s pre-election statement and the subsequent pre-election fiscal outlook from Treasury. That’s fair enough, isn’t it? Given that he has said regardless he will have fully costed transparent policies out there well in time for the election?
ANDREW LEIGH:
Kieran, I’ll believe it when I see it. I think this is absolutely vital that we have a discussion about our contested set of policies. You will see Labor’s in the budgets and in the budget updates. And you will see us making hard decisions. To put some facts in response to what Mitch said, we have managed to cut real government spending, something the Howard Government never did. But you’ve also seen from the Coalition now backing away from an earlier promise to put out their policies when the pre-election fiscal outlook was released. That’s worrying because at the last election we saw the Coalition just do costings based on a team of accountants who were later fined for professional misconduct. So given the $11 billion hole in the Coalition’s costings last time, given that they themselves have said they’re $70 billion back, we know they have to put in place some pretty swingeing cuts just to pay for their, for example, tax cuts to big miners and big polluters. So we need from the Coalition, now more than ever, a commitment to transparency. We need them to come clear with policies. We still don’t have a health policy or an education policy from the Coalition. And we need them to do a little bit less bashing of senior public servants and a little bit more creative policy making. Because frankly policy is generally made best in the open light of public gaze, rather than in back rooms and then thrown out at two minutes to the election.
KIERAN GILBERT:
Senator Fifield, I want to ask about this Galaxy finding today in the Galaxy poll. The question in the Daily Telegraph has reported ‘who do you trust most to manage the economy and restore confidence?’. And voters were split on that, Kevin Rudd 41%, Tony Abbott 41% and 18% uncommitted. David Briggs from Galaxy said that given the economy is traditionally a strong suit for the Liberal Party, the result confirms concerns some voters have in the leadership skills of Tony Abbott. What do you make of that polling and what do you make of Mr Briggs’ assessment?
MITCH FIFIELD:
Kieran, what that polling tells us is that the voting public expect both sides of politics to continually prove themselves and to earn the right to form government. And that’s true in terms of economic management. We don’t rely on our record. Certainly, we point to it. We point to the fact that we eliminated $96 billion of Labor debt. We point to the fact that we delivered ten budget surpluses. We point to the fact that we had strong growth. We had increases in real household incomes. We point to all of those facts but we don’t rely upon that, Kieran, because we recognise that the public want us to continually earn their respect, to earn their trust and to earn the right to form a government. So that’s what the poll is telling is. But as I’ve said, Kieran, the best predictor of future behaviour is past behaviour. The Coalition has demonstrated that we can live within our means. That we not only pay down Labor debt, but that we also provide for the future. As we did in the Future Fund. As we did in the Higher Education Endowment Fund. As we did in a health fund. As we did in a communications and infrastructure fund. So we have a record, Kieran, but we’re going to spend every day between now and the election seeking to earn the trust of the Australian public.
KIERAN GILBERT:
It looks like, well the election won’t be on August 31, Senator Fifield. The most probable date now is September 7. And all of the Coalition calls for an election to held now, they’re going to be met pretty soon.
MITCH FIFIELD:
Well, bring it on. I think the Australian people want this parliament to come to an end. And they want the current political situation resolved. Kieran, the single greatest benefit of a change of government will be a boost in business confidence. Every business you talk to, just about, will say that they’re putting investment decisions on hold, that they’re putting hiring decisions on hold because of the policy uncertainty under this government. We need an election. We need it now. The date should be set. The Australian public and business need certainty. For heaven’s sake, bring it on.
KIERAN GILBERT:
Andrew Leigh, I know that, and our viewers who watch this program regularly would know that you don’t engage on the opinion polls. You never have throughout the years that you and I have discussed, have been on this program. But you look at the polling in the last couple of days and Labor’s primary vote at 40. When does it become a predictable quantity in your view? Or do they not have any predictable worth at all?
ANDREW LEIGH:
Kieran, you’d be completely right to slap me around the face with your iPad if the moment the polls started turning for Labor I started saying you can believe them when I’d been saying the opposite previously.
KIERAN GILBERT:
No violence. There’s no violence on AM Agenda.
ANDREW LEIGH:
Well that’s nice to hear, that’s good. But I don’t rate the polls because I think they distract us from the sort of policy issues that Mitch and I care about a great deal. I do think if the Coalition’s keen on an early election, one way of advancing their cause would be to bring on their policies. If you want an early election, then bring out your health policy, bring out your education policy and bring your cuts out of witness protection.
KIERAN GILBERT:
Well I think both of you won’t have to wait too much longer on both those fronts. The election date and all the policies. Andrew Leigh and Senator Fifield thanks so much as always. Good to see you.
ANDREW LEIGH:
Thanks Kieran, thanks Mitch.
MITCH FIFIELD:
Thanks Kieran, thanks Andrew.
ENDS
Media contact: Sarah Bridger
0435 183 137 | sarah.bridger@aph.gov.au