TONY BURKE, ACTING SHADOW TREASURER AND SHADOW MINISTER FOR FINANCE: The Government’s been going along two very different pathways and they’re about to collide. The Treasurer has been wanting to manufacture a budget emergency and the Prime Minister has been wanting to claim that he would be a Prime Minister who kept his election commitments.
In order to create the budget emergency, Joe Hockey in the MYEFO document, the mid-year economic forecast, last year made changes to budget parameters, made a massive transfer of cash across to the Reserve Bank and in doing so more than doubled the deficit adding $68 billion to the deficit, to manufacture a crisis that he could then claim he had to ride in to fix. Notwithstanding and ignoring the fact that Australia had a triple-A credit rating from all three major credit rating agencies.
At the same time Tony Abbott made for four years as Leader of the Opposition, his mark on claiming he would be a politician who kept his promises. For three years he did not stop talking about a media interview the Prime Minister Julia Gillard gave the day before the 2010 election. Well the day before the 2013 election Tony Abbott said there would no cuts to education, no cuts to health, no changes to the pension, no changes to the GST and no cuts to the ABC or SBS. If Joe Hockey intends to deliver the budget that he is talking about then the Prime Minister’s record on telling the truth ends completely and emphatically on budget night.
It simply is impossible to deliver the sort of budget Joe Hockey is flagging and allow the Prime Minster to be true to his word. Joe Hockey yesterday was quite up front in a television interview when he made clear that there will be changes to the pension, when he made clear that he believes in changes to the pension, and more leaked reports out today claiming that it’s not only the age at which people receive the pension that would change, but also the rules around receiving the pension and eligibility for the pension would change.
The words of the Prime Minister were crystal clear the day before the election: No changes to the pension. Either Joe Hockey gets the budget that he wants or the Prime Minister keeps his pre-election commitment, but both cannot be true. Joe Hockey has manufactured this budget crisis, manufactured it completely. In that MYEFO document as I said, he added $68 billion to the deficit, he changed budget parameters, he abandoned the fiscal strategy of the Government and in doing so, more than doubled the deficit.
We know that in order to deal with the emergency the Prime Minister has to, the manufactured emergency, the Prime Minister has to break commitments and this will come down to which commitments are the priority for Tony Abbott. Is his commitment to not changing the pension more important than his commitment to deliver a paid parental leave system for millionaires? Is his commitment to somebody earning $20,000 dispensable but his commitment to pay $75,000, to a high income earner for having a child, something that he believes must be kept?
If anything we are being told about this budget is true then the Prime Minister is in the business of breaking commitments and he’s either going to break commitments to the wealthiest people with his paid parental leave system or he’s going to be breaking the commitments to pensioners.
JOURNALIST: With pensioners, seniors groups are saying that it’s basically going to shift them from one welfare system to another welfare system with Newstart potentially in-between, surely that can’t be good for anyone, either the economy or the people who are on the pension?
BURKE: I don’t know what sort of twisted priorities would lead someone to look at some of the people on the lowest incomes in Australia and say that’s where you target, that’s where you land the axe, and at the same time in the exact same budget say that you have no trouble finding $5.5 billion for the paid parental leave system. The budget isn’t in the emergency situation Joe Hockey claims – we wouldn’t have the triple-A credit ratings if it were. But if you work on the basis that Joe Hockey is determined to deliver the sort of budget that he’s strategically leaking, the question then becomes, where do you let the axe fall? And the priorities from this Government are really clear: The more needy you are, the more deserving you are, the more likely the axe is to fall on you.
JOURNALIST: They’re saying that I think, the cost of the pension will increase by $90 billion in the longer term. That money will have to come from somewhere I guess, won’t it, over the next 10 to 20 years?
BURKE: Yeah and these issues were flagged in the intergenerational report. The intergenerational report as I recall came out at something like the end of 2010. All of the information that Joe Hockey is now relying on has been in the public sphere, publicly available, fully available for any politician to have a look at and include in their discussion, for more than three years.
But Joe Hockey has waited until now to suddenly discover the information about Australia’s population ageing. All of this information was available, he is doing what sadly some people predicted he would, which was to manufacture an emergency so that he can deliver cuts he thinks should be made. Not because of the fiscal situation, but because there are a number of payments that he just doesn’t want people to get and at the same time have no trouble finding new money, $5.5 billion no less, for people who are among the wealthiest in our society.
JOURNALIST: Does Labor support raising the retirement age to 70 now?
BURKE: We supported it going from 65 to 67, we did that at the same time that we did the largest structural increase in the pension in its history. So, and that’s the position that we took.
BURKE: If the Government has a proposal, it’s for the Government to put it forward in the budget and for the Government to do that. But be in no doubt, they made an election commitment that they would not be changing the pension and we intend to hold them to account on that. But it’s not, you know, they’re the ones with the latest figures, with the information, it’s for them to make a decision. As Opposition we will respond when they have a clear proposal. The way that they are strategically leaking leads us down a pathway that says they are planning to take the pension eligibility age to 70 – that would be a clear breach of an election promise. But we’ll deal with a Labor response when we have a Government proposal.
JOURNALIST: How do you intend to pursue the Government over broken promises then?
BURKE: Well it’s very clear. You go through the list of what Tony Abbott said the day before the election. No cuts to education, already broken with their abandoning Gonski. No cuts to health, we know where they’re headed with the GP tax. No changes to the pension, they’re now making clear that that’s changing. They want to reopen the debate on the GST, and we’ve had the reports already about the ABC, we haven’t had reports that I’ve seen about SBS. That might be the only one that’s left from that pre-election commitment. But the words that will haunt this Government will be the words of Tony Abbott the day before the election. The day before the election, there was no nuance, no clarifying words, it was clear what would not happen and on every one of those issues it now appears we’re heading to a budget where promise after promise will be broken.
JOURNALSIT: You brought up the Paid Parental Leave Scheme, but what about the NDIS? The Treasurer said that pensions need to be cut or the pension age increase to help pay for that. Is that something you accept?
BURKE: The National Disability Insurance Scheme had the information and the costs put out well in advance of the election. The Government, the now Government then Opposition, stood up and offered bipartisan support for that. They didn’t clarify that there would be an offset that they were going to attack the pension as a result, they simply offered bipartisan support for the National Disability Insurance Scheme. If they offered that support before the election, they shouldn’t be making it conditional after.
JOURNALIST: Should the GST go up? I mean it’s one of the lowest in the developed world I think, 10 per cent. Is there scope for increase?
BURKE: We’re opposed to changes to the GST and that’s Labor’s position. It was the Liberal Party’s position before the election, after the election, like with everything else, it seems to have changed.
JOURNALIST: What about retailers’ calls for changes to the way imported things bought online?
BURKE: We looked at that really closely when we were in Government. The challenge that we found at the time was that you would actually spend more money collecting the revenue than you would in fact raise, and that’s hardly a good deal for the tax payer.
JOURNALiST: Just one quick question. Bob Carr raised Wikileaks and Edward Snowden in the defence of publishing private conversations with world Leaders – does Labor think that’s an appropriate defence?
BURKE: I work on the basis that if I have private conversations with people they stay there. Everyone’s got their own way of dealing with that. Thank you.