16 May 2014
Transcript - #2014012, 2014

Interview with Emma Alberici, ABC Lateline, Friday Forum

SUBJECTS: Budget

EMMA ALBERICI, PRESENTER:

The Government is six votes short of a majority in the Senate and will need either the Opposition or members of the crossbench to pass its proposed legislation to introduce a Medicare co-payment, reintroduce indexation of the fuel excise and change pension calculations.

Opposition Leader Bill Shorten has indicated that Labor will vote against at least $12 billion worth of measures in the Senate and has challenged the Prime Minister to call an election to let the public decide.

But while the polls show the Coalition is on the nose, support hasn't shifted to Labor but to the Greens and other minor parties.

A short time ago I was joined from the Gold Coast by Steve Ciobo, Parliamentary Secretary to the Treasurer and in Sydney by Opposition Communications spokesman Jason Clare.

Steve Ciobo, Jason Clare, welcome.

CIOBO:

Pleasure to be here.

PRESENTER:

The Coalition told voters that you could fix Labor's debt and deficit with no new taxes and no cuts to health and education. At the very least, don't Australians deserve an apology for all those broken promises?

CIOBO:

Emma, I refute the assertion that we've broken promises. We haven't. When it comes to health and education we are delivering on every single commitment that we took to the last election and when it comes to restoring the balance sheet - so to speak - when it comes to actually starting to pay down the mountain of debt and deficit that Labor left behind, we've had to make some tough decisions and we don't run away from that fact.

And frankly it could not stand in more contrast than what we saw from Bill Shorten last night with the Labor Party obviously living in denial with some $18.5 billion of additional spending that Labor wants to put back into the Budget and no pathway to actually restoring our economic credibility or economic sustainability.

PRESENTER:

Do you think voters are really stupid and they can't recognise a lie when they see one?

CIOBO:

Well Emma, I don't think voters are stupid at all actually. I think voters know that at the last election we made several points very clearly. We said we were going to stop the boats. We've done that. We said we were going to build the roads of the 21st century. We're in the process of doing that with the our infrastructure package - the largest infrastructure package in Australia's history. We said we were going to restore the economic stability and make sure that we were living in a fiscally sustainable way. We're doing that. The other thing we said, the only thing we haven't been able to do is we said we were going to abolish the carbon tax and if Labor actually got out of our way and respected the mandate that we had then Labor would help us to abolish the carbon tax and give households $550 a year more money back in their pockets.

PRESENTER:

Jason Clare?

JASON CLARE, OPPOSITION COMMUNICATIONS SPOKESMAN:

This is extraordinary. I think that the Liberal Party should at least have the decency to admit that they've broken these promises. It is a Budget built on lies. Tony Abbott promised there'd be no cuts to education. He's cut that by $30 billion.

He promised there'd be no cuts to health. He's cut that by $50 billion. He promised no changes to the pension. That's happened. He promised no cuts to the ABC.

This reminds me of the movie "Witness for the Prosecution", Charles Laughton plays a barrister and he's got a witness in the box and says, "Are you lying now, were you lying then or are you a chronic and habitual liar?"

In the court of public opinion people are asking the same question about Tony Abbott.

PRESENTER:

Before the last election Jason Clare, Labor too made some pretty expensive promises, the National Disability Insurance Scheme, the Gonski education reforms and clearly you hadn't budgeted properly for them. We've seen in this Budget the deficit for 2013/14 is $49.9 billion, Labor had said it would be 18 billion.

CLARE:

I disagree that we didn't fund them properly what we did is not just fund them over four years, we funded them over 10. I'm glad you second the question about deficit because the deficit in this Budget for next financial year is higher than in the PEFO figures - the pre-election economic and fiscal outlook - that was put out by Treasury officials before the last election.

They have been complaining about a Budget deficit. The deficit is higher in this Budget. What they've done here is take taxes off mining companies and people that have got lot of money in superannuation and put the burden on the sick and the poor.

PRESENTER:

Steve Ciobo?

CIOBO:

You know it's just as clear to me, Emma, that the Labor Party is still living in denial. Jason Clare sits there and makes comments about what it is the Coalition is doing and how Labor apparently were living within their means.

He says that the Budget deficit is worse than it was going to be under Labor and he points to the PEFO figures, that is the figures that came out pre-election but you know what Emma, the reason the deficit numbers are worse than what Labor had is because Labor's figures were completely shonky. So let's put this to bed once and for all. And I'll give you an example Emma.

PRESENTER:

Can I just interrupt you for one minute. I'll allow you to continue but just on that point about whether the figures were shonky or not, and correct me if I'm wrong but I thought PEFO was independent of Labor and the Coalition and was in fact figures created by the Treasury?

CLARE:

That's exactly right.

PRESENTER:

And by public servants that are away from the political sphere?

CIOBO:

And I'm exactly going to go into exactly this point because that's the case regardless. It is always created by Treasury so let me explain why though because it has got to do with the assumptions that are made. And this is the point, under Labor's figures unemployment was dictated to be at 6.25% and miraculously overnight it dropped from 6.25 down to 5%. What we did with our Budget forecast is we were realistic. We didn't miraculously have unemployment dropping by 1.25%.

We said it would be 6.25% and would probably trend down to about 6%. The reason our deficit figures are different to Labor's is because ours are realistic. Labors were built on false promises and false hope. And I'll give you another stark example Emma, when it comes to border protection, Labor only funded Australia's border protection until 1 January this year. There was no money beyond that for border protection and that's the reason why when Labor says the lie, frankly, that the deficit is worse under us, it's because we actually had true accounting and actual true representation of the costs Labor wanted to sweep under the carpet.

PRESENTER:

Let's look specifically at the Budget you've announced this week. According to some modelling that's been given to Lateline by the national centre for social and economic modelling, the lowest income groups have been selected to take the entirety of the Budget pain with respect to household budgets. Why have you chosen to go that way?

CIOBO:

I'm not privy to the information you've got. I can't tell you whether it's correct or not. What I can say though...

PRESENTER:

Let me give you an example. A single mother who works fulltime on the minimum wage and has kids of school age will be more than $4,000 a year worse off by 2017. In that same year most middle and high income families and all working couples and singles without children will be untouched or better off.

CIOBO:

Again Emma, I'm not in a position to respond to that. You make that assertion. I don't have any of those details. I don't know what the parameters are or what assumptions have been made. When it comes to economic policy let me make one thing clear, the assumptions you make are critical. I can't possibly dispute or answer your question in relation to that but what I can say is this, we attempted in this Budget to make sure everybody was carrying some contribution, low, middle and high income earners and we want to make sure that everyone is pulling their weight and Emma let's be clear about this, none of these tough choices would have been necessary if it wasn't for the fact that Labor got us to a situation where they were actually forcing us to borrow one billion dollars every single month just to pay the interest on their debt which is the equivalent of an average household putting their interest repayments on their mortgage on their credit card. Unsustainable, was never going to work and that's why tough choices had to be made.

PRESENTER:

But are you saying - Jason Clare, I will let you have a right of reply here - are you saying you didn't know measures in your Budget would hit the lowest income groups the hardest?

CIOBO:

Of course I'm not saying that. What I am saying is that you're putting assertions to me. I don't know any of the figures or assumptions built around the figure those it is impossible for me to respond to that. What I'm also saying when it comes to the contribution we made sure this Budget asked everybody to tighten their belt.

PRESENTER:

I guess the question I'm asking is not everyone is contributing equally in that respect, lowest income earners are suffering much more than those at the higher end.

CLARE:

Absolutely.

CIOBO:

Emma, let's look at for example pensioners because that might be the kind of person that falls into the category you're talking about. Labor's approach is to say that we don't need to change anything about pensions. They don't want to increase the age...

PRESENTER:

I was actually talking about a single mother on the minimum wage, I wasn't talking about a pensioner.

CIOBO:

As I said I don't know the assumptions you're talking to so I'm going to talk about an area that has been a key point of discussion in this Budget and that's what we do with pensions, it is also a key area about where there's a difference between Labor's approach and the Coalition's approach. Labor said there was no structural saves by making the age 70 and no structural saves they'd support by changing the indexation method. That sounds fine Emma, I'd love to be able to say that to people to, but the issue is this, how do you pay for it?

Labor does not have on the table a single suggestion about how we actually achieve the savings necessary and I'll tell you what, Labor's pathway of just more debt and more denial is not a sustainable way for this country to keep living.

PRESENTER:

Jason Clare.

CLARE:

Well Emma, Steve talks about people tightening their belts. If you are a single person earning $200,000 then you'll pay an extra $400 or $500 out of this Budget. If you're a family with an income of $100,000, it will cost you thousands of dollars and if you're pensioner, over the next few years it will end up costing you thousands and thousands of dollars.

These are Howard's battlers, Tony's tradies, and these are the ones betrayed by this Prime Minister who promised no new taxes and they're the ones who are copping it in the neck because of a deliberate decision by this Government to put the tax burden on the poor rather than the well-off.

PRESENTER:

But it is easy to criticise, Jason Clare, isn't it, when the trajectory that you, under Labor, was to continue spending without the revenue to match.

CLARE:

What we did is stop a recession. If we hadn't acted we would have went into recession, unemployment would have been 10 or 15 per cent and the debt and deficit would have been worse.

PRESENTER:

But that was '08 '09 or at the beginning of '09 and thereabouts. By '10, '11, '12, '13, you could have begun to turn the ship around?

CLARE:

If hadn’t acted then and did what Tony Abbott, and presumably what Steve, wanted us to do unemployment would be in double figures now and the debt deficit would be worse.

CIOBO:

This is a ridiculous assertion. A ridiculous assertion.

CLARE:

The other thing they want us to do here is rip up Medicare. If you want us to come forward with ideas about how to tackle structural challenges in the Budget, I'll tell you what we won't do. We're not going to allow Tony Abbott to rip up Medicare. We created it, we built it, we'll defend it and Steve, if you want to bring it down you'll have to come through me, you'll have to come through Bill Shorten, you'll have to come through the Labour Party.

CIOBO:

Emma, my point is this, Jason sitting there and he's all about the politics. You see Labor's sitting there and saying pensioners don't deserve a cut, there shouldn't be any changes to welfare, there shouldn't be any changes to single parents, there shouldn't be any changes to parents, there shouldn't be any changes to Medicare. We get it. Trust me. The Coalition gets that Labor doesn't want to change anything. But you know what Emma...

CLARE:

Why didn't you tell the Australian people before the election?

CIOBO:

It's not affordable. We made it very clear... Jason, if you're so concerned about the impact on household budgets, let me ask you this - why, mate, won't your party abolish the carbon tax and give an extra $550 a year to households when we clearly have an electoral mandate to do that? If you're so concerned about people and you're not just playing politics and trying to have a magic pudding approach, why won't you get out of the way and give households a $550 saving.

PRESENTER:

Jason Clare, they did have a mandate, one would imagine, to abolish the carbon tax. We were under no illusions that was one of their chief priorities...

CLARE:

Happy to do that. Emma, happy to do that.

PRESENTER:

... and under that circumstance lot of people may have voted on that promise.

CLARE:

Happy to replace it with an emissions trading system that will work not the dodgy direct action model that no-one likes. The interesting thing about the carbon tax is people were given compensation. There's no compensation for jacking up the price of petrol, no compensation for a new tax to go to the doctor.

CIOBO:

All the compensation is staying.

CLARE:

... that's the problem with this Budget.

PRESENTER:

Bill Shorten has outlined $12 billion worth of measures Labor will oppose over the next four years but the Government doesn't really need your support in the Senate if it can win over the cross benches.

CLARE:

That's their challenge. The interesting thing here is that Tony Abbott's been bad-mouthing Clive Palmer for the last few weeks. I think he's going to cop a bit of Palmer karma. It's up to Tony Abbott to get his legislation through the Senate. What we said last night is we'll stand in the way of you trying to destroy Medicare or create a two-tier university system or destroy the standard of living of pensioners. We created a fair university system, we created the pension and if you want to try and destroy it well then we'll be in your way trying to stop you.

PRESENTER:

Steve Ciobo, Mr Shorten said the was no chance Mr Abbott would call an early election because he knows his Budget is, to quote the Opposition Leader, ridiculously unpopular. How serious is the Government about the prospects of a double dissolution election?

CIOBO:

We think that what Australians are after is stability and maturity and so...

PRESENTER:

I know nobody would like another election, least of all the Australian population, but what I'm asking you is are you actively considering a double dissolution election if your measures in this Budget aren't passed in the Senate?

CIOBO:

I'll tell you this, Emma, in the hypothetical world that we do go to an early election, in that hypothetical world, Labor is suddenly going to find themselves very uncomfortable and I'll tell you the reason why, because all the motherhood statements, all the soaring rhetoric about how they don't want anyone to be worse off and under Labor things with will be peachy keen, and we don't need to worry about the fact that Labor's actually destroying Australia's balance sheet. In an election scenario, all of a sudden Labor's got to put on their table their costings. All of a sudden Labor's got to actually outline where they're going to raise revenue, where they're going to cut expenditure and they'll stop living in this fantasy land that Bill Shorten wants us all to believe in, the fantasy land Jason Clare is espousing tonight where the Labor Party just lives in denial and says the music hasn't stopped, everything can keep going, but when they have to put their costings in place Emma, that's when Australians will have laid bare before them the failed approach that has been the failed approach for last six years and will continue to be Labor's failed approach where they say they're going to protect everything except the one thing that requires the most protection which is Australia's balance sheet and living within our means.

PRESENTER:

Do Labor really have the stomach for another election, making voters go back to the polls?

CLARE:

This is just a bluff, a distraction by Tony Abbott. What's his slogan? How does he convince the Australian people to vote for him after this Budget? I lied to you, vote for me. It's not going to happen. It is just another distraction. The people that might have been suspicious of Tony Abbott but gave him a chance at the last election don't trust him anymore. He made all of these promises, he's broken them, he's broken that bond of trust between a Prime Minister and the community and he'll struggle to get that back.

PRESENTER:

We're out of time. Gentleman, I thank you both very much.

CLARE:

Thank you.

CIOBO:

Thanks, Emma.