ABC 774 MELBOURNE
RAFF EPSTEIN: Tony Burke thanks for joining us.
SHADOW FINANCE MINISTER TONY BURKE: It’s good to be with you.
EPSTEIN: It’s all the ALP’s fault Tony Burke. Wayne Swan said five times he’d deliver a surplus, five times he got it wrong. It’s your fault.
BURKE: That’s the theme Joe Hockey’s adopted today and for a while. There’s been a very simple strategy from Joe Hockey in all of this and it’s the moment Tony Abbott became Prime Minister they set about manufacturing a budget emergency, so within a few months, by the time they brought out at the end of the year the mid-year forecast, what they’d done is they’d more than doubled the deficit, added $68 billion to the deficit and removed a whole lot of the fiscal discipline that was in place and then said ‘oh look, it now looks like an emergency, that gives us an excuse to break our promises,’ and the whole context for everything that has been presented today, because that document whether it’s health, education, pensions; piece by piece it just provides an invitation for broken promise after broken promise what’s been released today.
EPSTEIN: But why should we trust the ALP when, I can’t actuality recall if it’s four or five budgets in a row when Wayne Swan guaranteed a budget, assured a surplus was coming, you never got that right. So why should we listen to your assessment of the Government’s budget numbers if when you were in Government and you had access to all the Treasury figures you never got it right?
BURKE: Well don’t look at the documents signed off by any politician, don’t look at the ones signed off by Joe Hockey or Wayne Swan, if you want to adopt it that way and look at what was signed off by the Secretary of Treasury and the Secretary of Finance under the Charter of Budget Honesty that came out as part of the pre-election forecasts, and that tells a completely different story to what Joe Hockey now says because he wants to rely on the figures after he’d doubled the deficit, more than doubled –
EPSTEIN: A sceptic might say, your numbers, your assumptions, Treasury hands you a range of a forecasts when you’re in government. Your’s were overwhelmingly rose coloured, the Government’s might be a little pessimistic but you got it wrong every time, maybe we should believe the Government.
BURKE: No no, Raff I’m referring to a different set of numbers.
EPSTEIN: I understand you’re referring to the one set up by Peter Costello, verified by the Head of Treasury, I understand that but you’re saying the numbers since then can’t be believed. I go back to, we don’t know where the numbers have moved since those numbers came out in the election campaign. If the Government says they’ve moved drastically terribly wrong, I’d rather trust them perhaps than trust the party who’s assumptions were proved wrong.
BURKE: Can I just explain a couple of things in response. In the first instance, in about the last 15 minutes Tony Shepherd the author of that Commission of Audit report has done an interview and he’s acknowledged in the last 10 to 15 minutes that’s there’s not a budget emergency. So even the trusted author, Head of the Business Council, who has authored the report that all of today’s news is about; even he in the last 15 minutes has acknowledged that there is not a budget emergency. Secondly, if you look at what specifically were the changes that Joe Hockey made in those few months when he more than doubled the deficit; he abolished a whole lot of taxation measures that Labor had before the parliament; secondly, he shovelled billions of dollars across to the Reserve Bank that the Reserve Bank hadn’t asked for, but also added to the hit in the bottom line; and the third thing that they did was they changed a whole lot of budget perimeters including a two per cent limit on spending. Now when you remove a limit on spending, of course you get a blow out in spending, that’s what happens when you remove the limit. So one of the games that we’ll see Joe Hockey play is, we had the cap on spending; he does the mid-year statement removing it; sees spending blows out; says how terrible’ s this; then you watch in a couple of weeks’ time in the budget he’ll re-introduce a cap in spending and say ‘hey look, look what I just fixed’. It’s like, well I’ve grown up in Sydney so we catch the train more often than the tram, but there used to be this game where the kids would come up behind you, push you forward then pull you back and say ‘tell your mum I saved your life’ and it’s that exact concept where a crisis has been manufactured so that Joe Hockey can then use that to justify a whole lot of cuts that will hit the people who can least afford it on a report authored by the Head of the big business lobby.
EPSTEIN: Look economists on both sides of the debate, you know coloured by both sides of politics, have said we’ve got a structural deficit. Let’s just talk two simply policies, a lot of idea today out of the Commission of Audit, but the Guardian’s reporting that the Government’s going to effectively stop mining companies claiming the diesel fuel rebate, anyone claiming more than $100,000 might not get it. It’s very clear we’ll get an increase in tax for those over $88,000; those two ideas as policy ideas are straight out of the ALP playbook in some ways. Are they good ideas? We’ve got a structural deficit, are they a good way of addressing the structural deficit?
BURKE: This is a report the Government’s had for two months and we’ve had for a couple of hours, so we’ll, on Budget night the Government will put forward their proposals and as an Opposition, at that point, item-by-item, we’ll start to respond.
EPSTEIN: Okay, but in principle limiting mining companies claiming the diesel fuel rebate and an increase in income tax, whether it’s for four years or longer, but only on those on higher incomes, are they, just in terms of you look at the theory around budgets, if you’re not taking in enough money and you’re worried about how much is going out; are they good ideas?
BURKE: And as I say, I’m not going to get caught up in a game of us responding to government proposals that the government hasn’t even said whether or not they’re going to do them yet. I’m just not going to do that.
EPSTEIN: Okay, one more international figure that might show we’ve got a significant budget emergency that the government claims we have; the IMF Survey of Nations, you'll know this because Joe Hockey quotes this survey a fair bit. Our spending growth is the fastest of any one in the world, so our rate of increase of spending, according to the IMF, is the fastest of all the developed nations and we’ve got the third highest growth rate of debt, so that’s not the volume of debt but the rate at which it is growing. So the IMF study points to significant problems that need to be fixed, doesn’t it?
BURKE: And they’ve based that on the MYEFO document that I referred to, on that document that Joe Hockey brought out which removed the cap on spending growth.
EPSTEIN: Oh okay.
BURKE: If you remove the cap on spending growth, then you do get a spending blow-out. But we had a two per cent cap on spending growth; when you take out, obviously –
EPSTEIN: That two per cent, that’s by how much your spending can increase each year in each portfolio.
BURKE: That’s right. Now, when we first came in we had the Global Financial Crisis, we did put extra money in that year. From 2009 on we kept completely within it and averaged at about 1.35. So we kept that limit the whole way through. At the end of last year to make it look like the budget was out of control, in the documents released, Joe Hockey removed that two per cent cap. You’ve then got spending growth blowing out and that’s what the IMF refers to.
EPSTEIN: Tony Burke I’ll get to people’s calls and texts, but I wanted to ask you a related question, I guess about, that goes to the ALP’s credibility, I don’t know the answer to this question. John Faulkner’s announced his resignation from the Party, senior Senator from New South Wales. Bill Shorten’s talked about the need to get grassroots people involved in the selection of candidates; there’s been some reports that that selection is being rushed so that the grassroots won’t have a say in whoever replaces John Faulkner on the senate ticket. Will the grassroots get to choose his replacement and should they?
BURKE: Well in terms of exactly where that process is up to I’ve been in financial documents the last couple of days, so I genuinely don’t know where that process is up to. What I will say though in answer to the 'in principle' question, I have no doubt that across every part of decision making within the Labor Party we are now going to see increased momentum for decisions being made by the rank and file branch members and that’s part of branch membership currently going through a massive increase in the number of people who are taking up membership tickets. I’ll tell you, I was always a skeptic of these sorts of reforms until I saw the leadership ballot take place that both Bill Shorten and Anthony Albanese contested, and what I saw there in terms of the energy and drive in the party's membership, I think there’s no going back from that and we’ll continue to see that expand. How that applies to a vacancy that’s just occurred I don’t know the answer to that.
EPSTEIN: Look thanks for joining us, I appreciate your time.
BURKE: Always good to talk.