SKY News AM Agenda (11)

04 December 2014


SUBJECT/S: Federal Budget, GP Tax, internal dysfunction in Abbott Government

KIERAN GILBERT: Gentlemen, good morning to you. Jim, first to you on where things are at the moment in terms of the economy. Martin Parkinson, the outgoing Treasury Secretary, warning again that our living standards are at risk unless structural reform is undertaken. I guess I’m just interested in your perspective as to what Labor’s shift will be in the new year as to where you will focus on to try and accommodate those structural changes.

JIM CHALMERS, SHADOW PARLIAMENTARY SECRETARY TO THE LEADER OF THE OPPOSITION: Look Kieran, when it comes to weakness in the economy, the Abbott Budget is really part of the problem, not part of the solution.

What we propose to do next year is to set out an alternative to the Abbott and Hockey approach. If they were serious about growth in the economy – and growth has slowed fairly substantially – if they were serious about that, they wouldn’t be attacking low and middle income earners as they are. There’s no objective observer who thinks that’s the way to boost growth in the economy – to attack low and middle income earners. They wouldn’t be cutting trades training centres. They wouldn’t be cutting schools. They wouldn’t be cutting universities and jacking up the price, to deter people.

So we will set out a positive alternative. Bill Shorten has been saying that – he’s said it as recently as last night. We will be setting out alternative economic policies because the way that the Abbott Government is going about things, particularly in their Budget, is making a bad situation worse.

GILBERT: Is that reasonable given we’re still a couple of years out from the next election that Labor is afforded some time to put up an alternative in the new year?

SESELJA: It’s not just about putting up alternatives, of course they’re blocking most of the measures. Chris Richardson I think nailed it when he said there is only one plan on the table for getting the budget back into surplus and that’s from the Coalition. There’s nothing on offer from the other side. Last night’s interview from Bill Shorten on 7:30, we know that he’s been voting with the Greens and Jacqui Lambie, but last night showed that he’s also taking his economic advice from the Greens and Jacqui Lambie because when he was asked very simple questions about how will you find savings in health, how will you find savings, he had absolutely nothing. He was speaking in the broadest possible terms about growth with no plan for it, no plan for fiscal repair. That’s the fundamental problem and I think last night’s interview was interesting because it was the first time Bill Shorten has been asked the question in that manner and he really had no answer.

GILBERT: Is it fair to say, Jim, that the Government has got the defence that Labor is still blocking even measures that you, in Government, had proposed? That it undermines Labor’s credibility?

CHALMERS: Well no, because Labor has supported something like $20 billion in savings. We have always said that we’re up for a sensible conversation about budget repair. But we’re not going to do things that are inconsistent with our values. We’re not going to do things that smash low and middle income earners – the GP Tax, jacking up the price of petrol, jacking up the price of medicine. We’re not going to do those things because they’re inconsistent with our values.

If these guys were fair dinkum about budget repair, they wouldn’t have re-opened loopholes for multinational companies, more than a billion dollars. They wouldn’t give tax breaks to the twenty thousand wealthiest people in the superannuation system. They wouldn’t have this extravagant paid parental leave scheme. What they’re doing is making a bad situation worse in the economy. They’re making a weak economy even weaker. They’ve smashed confidence. Tony Abbott said before the election if they’re elected, there would be an “instantaneous adrenaline surge” in the economy – but confidence is down thirteen per cent since the election.

GILBERT:  Zed, your reaction to that. Also I put to you that the Mid-Year Economic and Fiscal Outlook due in a couple of weeks, obviously everyone’s saying it needs to be the reboot for Hockey and his economic narrative…

CHALMERS: Reboot number one thousand!

GILBERT: But in terms of the mess, you do have to deal with that fundamental flaw in the budget message and that was that it was unfair. You do have to look like things like super.

SESELJA: Look there’s a range of challenges facing Australia economically, but budget repair is fundamental to it. Now we’ve got a range of measures, not just around the budget, but around growing the economy. So if you look at the Free Trade Agreements that we’ve signed with China, with Japan, with Korea; that’s about growing the economy. That’s about lifting exports so that prosperity can continue in this nation. But budget repair is central to that.

And in response to Jim, what Jim failed to acknowledge and what Bill Shorten failed to acknowledge yesterday, is that if you look at the big areas of spending, if you look at health, if you look at welfare. Now what we’ve done is sought to limit the growth in those areas, not actually to cut spending, but actually to limit the growth. Labor doesn’t support even limiting the growth. So if you’re not going to limit the growth in those areas, it’s impossible to bring the budget to any sort of reasonable shape. And so if you’re going to oppose even measures to limit that growth, what will your plans be in health, what will your plans be in welfare?

GILBERT: How much of it does it come down to simply the Australia dollar, that if the dollar does fall a bit, Jim – and this is out of the Government’s hands obviously – but that would help cushion the impact of the fall in terms of trade?

CHALMERS: In normal circumstances, a more moderate dollar would be a good thing for Australian industry, but you’ve got to look at the economy as a whole. We are in an income recession. For two consecutive quarters, we’ve had national income go backwards. So there is a whole range of things going on in the economy that mean that a depreciation in the dollar will not necessarily deliver the gains that people would love to see.

The problem with what Zed said, Kieran, is nobody from the Liberal Party can explain how attacking low and middle income earners in a budget can boost growth in the economy. You don’t boost growth in the economy by putting a GP tax on. You don’t boost growth in the economy by attacking low and middle income earners right across the board when it comes to attacking their living standards. That’s the problem we’ve got. That’s really the dividing line when it comes to the economic conversation right now. We think that you boost growth by investing in skills, universities and schools. These guys think that there’s some benefit in cutting those things.

SESELJA: Again there’s no answer to that fundamental question. When you look at say the Medicare co-payment, we have to make Medicare sustainable. We do. If you want to see…

CHALMERS: That co-payment doesn’t even go to Medicare, Zed, it goes into a fund.

SESELJA: If in ten or fifteen years’ time you want to see still a sustainable health system then you have to make it sustainable. You actually do have to send some price signals, as we do in the PBS. Is anyone actually saying that having a co-payment in the PBS for medicines – for vital medicines, we ask people to make a small contribution to those medicines, the tax payer makes a much larger contribution to those medicines – surely that’s a good way to go?

GILBERT: I want to finish off… The Immigration Minister said I was Oprah…

SESELJA: I think you’re an excellent interviewer, Kieran.

GILBERT: Actually to correctly quote him he said I wasn’t Oprah, but anyway. The point is, I guess, Zed Seselja is that there is a lot of mess around the Government at the moment in terms of leaks – against the Defence Minister today on his travel bill, his spending on restaurants and then you’ve got the front page of the Fin Review saying that Julie Bishop went bananas at the Prime Minister because there was a report in the Herald Sun that Andrew Robb was going to chaperone her to the UN Summit in Peru. It’s all a bit messy.

SESELJA: Well these kind of gossipy stories about what Andrew Robb said to Julie Bishop or vice versa are not particularly relevant. On those two ministers, I’d say they’re both performing in an outstanding manner. I think there’s no doubt that Julie Bishop in the Foreign Affairs portfolio has done an outstanding job. There’s no doubt that Andrew Robb when it comes to particularly the Free Trade Agreements has been absolutely kicking goals for the Government and for our nation. So these kind of gossipy stories about who said what to who are irrelevant given that when you look at these Ministers that they are getting on with the job and they’re doing an outstanding job.

GILBERT: I guess the problem is you get distracted from focussing on those achievements like the FTAs. And I agree with you, I think Robb and Bishop have been along with Morrison some of the strongest ministers, easily. But when you have these kind of distractions and leaks, it undermines that kind of message.

SESELJA: Well I have no doubt that Andrew Robb and Julie Bishop and Tony Abbott won’t be distracted by the odd story like that, what they will be doing is getting on with the job, working on free trade, working on our foreign relations and for other ministers, working on fixing our economy and fixing our budget.


CHALMERS: It is relevant to their ability to fix this mess that they’ve created for themselves. They are relevant stories; it is a divided and dysfunctional government. They end the year broken down and busted up.

Joe Hockey’s giving a Ministerial Statement today on the economy. What he should do is stand up and say that his budget is not part of the solution, it’s part of the problem. He should say that he’s going to start again with the budget. And he should do the mini-budget sooner rather than later to give people the confidence and certainty that they deserve.

GILBERT: Gents, thanks very much for that. We’ll chat to you both soon – Jim Chalmers and Zed Seselja.