EMMA ALBeRiCI: And now the Opposition's Finance Spokesman Tony Burke is with us. Welcome.



ALBERICI: The Government is reshaping the welfare budget so only those in most need get government handouts. Hard to argue against that, isn't it?

BURKE: Reshaping is a fair euphemism for what they've done to pensioners. The shift to pensions when you change the indexation rate the way they have, amounts in real terms to a cut in the pension. They've actually taken a method of indexation that is even less generous than what the Commission of Audit recommended. So for pensioners, despite the ‘no changes to pensions’ promise, they are landed fair and square with over time what becomes a real cut. That's hardly providing for people most in need.

ALBERICI: Well, why should people, when it comes to other parts of the welfare budget, why should people earning more than $100,000, as they did under your government, much higher than the median wage, why should those people be eligible for any welfare payments?

BURKE: Well let’s not forget and you mentioned the last Government, we actually have a good track record on dealing with means testing and looking at means testing. When we did that we were told by Joe Hockey and Tony Abbott that we were presenting a one-child policy. We were told that bringing in means testing meant we we’re engaging in class warfare. That was what they thought of means testing before the election. Now there's a lot for us to work through on all of these issues for what's come out tonight. But certainly the rhetoric that they gave us for three years has been completely turned on its head tonight.

ALBERICI: The deficit levy, now that we know it will hit those earning above $180,000, will you support that?

BURKE: When it was at $80,000 we had a very clear view that - no matter which way you look at it it's a broken promise. When it was at $80,000 we put out an immediate statement that at that level we would oppose it. With what they've put out tonight, it's something that we'll have a look at. It's no longer as big a priority for us as it was. 

ALBERICI: Will you support it or not?

BURKE: We're not making that announcement tonight. Tonight what we're making clear are the issues that are of greatest concern to us and certainly it's still a broken promise. Had it been at $80,000 it would have been a different situation to what it is tonight.

ALBERICI: OK, so $5 from the Medicare co-payment will be used to fund medical research, so the money remains in the health budget. Joe Hockey says it's the most generous endowment fund in the world, what do you say?

BURKE: Having money for medical research is good. Saying the people who should pay for it is based on who happens to get sick is a terrible way to do it. This is a direct attack on universal healthcare. It's a direct attack on Medicare and added to it is a cut in the scheduled payments for doctors, which is designed to do one very simple thing. This is a deliberate strategy to try to get people out of bulk billing and make healthcare less accessible.

ALBERICI: OK, $80 billion in cuts to the States, Joe Hockey says the States have to accept responsibility for what they run. Hospitals and schools are the purview of theirs, not Canberra. Do you agree?

BURKE: Well, the day before the election we were told ‘no cuts to health, no cuts to education’. Tonight in the budget we're told $80 billion worth of cuts to hospitals and to schools. If people were somehow meant to think that health and education was to have nothing to do with hospitals and schools, I think they could be forgiven for being completely misled by what the Prime Minister said to them before the election. This is a complete breach of faith.

ALBERICI: Isn't Joe Hockey saying there that that money just needs to be found by the States?

BURKE: What he's saying is their words before the election meant nothing. This was not, you know, equivocal caveat, carefully worded promise, it was just out there, clear, no cuts to health, no cuts to education. Tonight those words mean nothing.

ALBERICI: Will the premiers and chief ministers be left with any choice but to demand a rise in the GST as a result of this?

BURKE: This is the interesting part of it. You go through the promises made right up to the day before the election. No cuts to health, no cuts to education, no changes to pension, no changes to the GST and no changes to the SBS or ABC. No cuts to the SBS or ABC. Now all of those have been broken tonight with the exception of GST and it does look like some groundwork has been laid.

ALBERICI: Isn't the reality though, Tony Burke, that the only reason Australians are now facing $30 billion of cuts is because yours was a government that for its entire six years was living beyond its means?

BURKE: That's the argument that says there's some sort of budget emergency. Countries with budget emergencies don't have triple-A credit ratings from all three ratings agencies. They don’t -

ALBERICI: You have to separate the state of the economy and the fiscal state of the country and you have to admit you were living beyond your means.

BURKE: To do that you need to use the MYEFO figures and when you've had Mathias Cormann doing all of his interviews on different networks today, he keeps quoting figures that were brought in at the end of last year, not the pre-election figures. Figures that were changed after Joe Hockey had doubled the deficit and in terms of spending, because the whole government story line about what happened to spending rests on one principle. They abolished when they first came to office the two per cent cap on spending. We brought that in in 2009, always kept within it. We were actually running at 1.35 per cent, well below the 2 per cent cap on spending.

ALBERICI: But you were spending more than you were earning, that's the bottom line, isn't it?

BURKE: What they've then done is they’ve removed the cap on spending growth and what do you know when the cap's not there, spending goes out of control and they're able to say ‘oh look how bad that is’. The spending that they're referring to only grows at that rate because they remove the fiscal strategy of that two per cent cap.

ALBERICI: And yet, Tony Burke, over the six years Labor was in power your spending on average was 25.1 per cent of GDP over the forward estimates of this Government it will be 24.9 per cent, it's still less than where you were.

BURKE: And the average includes the Global Financial Crisis when you had both a hit to revenue, in a very big way and at the same time a need to have expenditure at that point in time to prevent Australia from going into recession. Had we gone into recession at that point in time the state of the economy and, subsequently as a result of that, the state of the nation's finances would have been in a much worse situation. We did the right thing then protecting jobs and that's why Joe Hockey had to cook the books to be able to make it look like there was some sort of budget emergency.

ALBERICI: Tony Burke, we'll leave it there. Thank you so much.

BURKE: See you again.