LYNDAL CURTIS: The Opposition's finance spokesman and Manager of Opposition Business in the House of Representatives Tony Burke joins me now. Tony Burke, welcome to Capital Hill.


CURTIS: If I could as you first, does Labor need to keep open the option of having boat turn backs in its policy suite should it return to Government?

BURKE: Our policy hasn't changed and we've just heard the quotes know from Richard Marles about that. So our position hasn't changed on this issue, there's a number of concerns we've been raising for a number of years, all of that remains.

CURTIS: The concerns largely about the relationship with Indonesia, the Government's turn back policy has been in operation for quite some time now, exactly how has it damaged and I say damaged, not cause a kerfuffle, but damaged relations with Indonesia?

BURKE: Well we’ve got a new Indonesian Government in place now, at the very first Australian media conference issues of sovereignty were raised by the new President, so I don't think it's for me to speak on behalf of Indonesia there. But certainly –

CURTIS: But aren't they concerned more about incursions than the actual turn back policy?

BURKE: Well I think we’ve got to be careful of reading too much or too little into the opening media conference with the Australian media. Simply to say that the sign post’s been there and it's something that we're going to have to watch very closely.

CURTIS: Do you think that policy of turning back the boats - whether you like it or you don’t like it - is actually working?

BURKE: I can't say that I know exactly what they're doing out there. The secrecy surrounding this has been, has certainly been a significant part of people being able to have a discussion about it.

CURTIS: But boats have stopped coming so as part of the policy suite the Government has implemented, which includes offshore processing that Labor introduced, can you say definitely that it's not working?

BURKE: Well, I'm not going to get into a hypothetical about a policy as to what’s happening in our oceans when I haven't been briefed and don't know what’s happening there in our oceans. There's been for a long time some principles which we've put out about concern and objection. They went to safety at sea, they've also gone to the issues of the relationship with Indonesia and our policy’s remaining exactly where it was on that.

CURTIS: If those concerns could be addressed would it be an option to keep it?

BURKE: Well, let's not get ahead of ourselves because we're talking about an if on a policy where neither do we know the realisation of the condition you've just put in place nor do we know exactly what they're doing in the ocean, so you've got a hypothetical on a hypothetical there.

CURTIS: Did Mr Marles go a bit far by saying if it could be safe, if Indonesia agreed, then that would be a complete game changer?

BURKE: Look, the interview that Richard’s gave just given on The World Today I think puts to rest some of the feverish speculation that's taken place overnight.

CURTIS: If we could move on to another issue that was raised on the weekend, the Prime Minister has put Federation reform firmly on the agenda. He's got a white paper coming up, he talked about the possibility of changing financial arrangements including changing indirect tax in return for lower income tax, is that one way to settle down the problems the States have with their Budgets and allow them to get on doing the job they’re supposed to do?

BURKE: Let’s make no mistake, this is not about GST versus income tax. The game that the Prime Minister is playing is a game that they made clear the night the Budget came out. They've been wanting to deny the $80 billion in cuts to hospitals and schools that are contained within the documents they released on Budget night. What they are doing there is saying to the States "$80 billion off your school schools and hospitals, now come back to us and ask for a shift in the GST." This is an excuse for this Government to cut funding to schools and hospitals, nothing other than that. And for, and to now throw in “oh no, it’s all about income tax,” that's only because they've been found out and exposed not just by us here in the Federal Parliament but by every State Premier and every State Opposition Leader about what they've been doing in wanting to tear away funding to local schools and local hospitals.

CURTIS: Haven't financial arrangements between the Commonwealth and the States been part of every discussion about how Federalism works and shouldn't it be part of this discussion about how Federalism works?

BURKE: The discussion’s an old one. I'm not pretending that there's something brand new about a discussion about financial relationships between the Commonwealth and the States. What’s new is nobody up until now has decided to try to effectively take hostage funding to schools and hospitals and say, "Unless you agree to a new tax deal there's all your basic funding going, for key local infrastructure."

CURTIS: But the Prime Minister while he hasn’t wanted to embrace the prospect of change to the GST has at least now raised it as an option and it's one that he might be taking to the next election.

BURKE: Let's face it, he raise it on Budget night, he just didn't want to admit it. He didn’t even want to admit that the cuts were there, and he stood up in parliament time after time claiming that the $80 billion in savings don't amount to a cut. Even though they're there in his own Budget papers. He thought doing that would cause State Governments and Oppositions to come to him saying please let us have the GST increase, it hasn't happened, so now he's pushing the argument that he thought the Budget would play the trick for.

CURTIS: The Government appears to have slowed down its legislative process for the Budget, we’ll hear from the Health Minister Peter Dutton in a moment, who suggests the GP co-payment might not go to Parliament this year, can the Budget – can the Government claim the savings of measures not yet passed when it releases the mid-year economic update?

BURKE: There's never been a Budget with a level of chaos that we've seen with this one. They still haven't announced the money and the figures on Paid Parental Leave, which is meant to be the Prime Minister’s signature policy. There have been over the years occasions where there may be one or two measures, you know, in the order of $1-2 billion or something like that that haven't made it through parliament yet that they keep on the Budget papers. We're talking this time for MYEFO for the mid-year forecast when they come out at end of December, for there to be something in the order of $20 billion in the document that's wrong. There's never been a Budget where the level of chaos we've seen in the course of this year has been attached and it's not just attached to the first few months going through the parliament, mid-year forecasts something in the order of $20 billion worth of figures are still going to be wrong.

CURTIS: So if the Government keeps those figures in MYEFO particularly for measures that are not due to start until next year, will MYEFO be trustworthy?

BURKE: Oh it’s, the last MYEFO was a fraudulent document. The last MYEFO they changed the projections, they shifted money across to the Reserve Bank and only after a couple of months as Treasurer Joe Hockey managed to double the deficit. Ever since the mistake of it last year they've been trying to climb their way out of just a fiscal mess, and at the Budget it got worse, we're going to see in December this year, I expect, it get worse again. You cannot trust any of the numbers they're putting forward when there's $20 - more than $20 billion worth of gap.

CURTIS: Tony Burke thank you very much four your time.

BURKE: See you again.


Tony Burke