ALISON CARABINE: Tony Burke, good morning.


CARABINE: Joe Hockey declared last night that “nothing is free, someone always pays.” Is it now time to accept that the age of entitlement is over?

BURKE: Well I think it’s time to recognise that the election promises that Tony Abbott made are well and truly on the chopping block right now.  He was unequivocal before the election that there would be no changes to pensions and you only have to listen to every word that came out of Joe Hockey’s mouth last night, there is no doubt they are gearing up to take the axe to pensions, to break that election promise.

CARABINE: But the Treasurer warned that cutting too hard too soon would depress economic growth. Now that suggests that the biggest cuts might not take place until after the next election, so technically won’t the government still be able to claim that it’s keeping its pre-election commitments, it’s keeping faith with voters.

BURKE: There were no technical qualifications, if there are changes to pensions that are part of the budget announcements, when we get to budget night, that is contrary to what Tony Abbott said would happen before the election. It wasn’t qualified, it was clear, “no changes to pensions” full-stop.

CARABINE: And pensions do seem to be in the government’s target zone. Would Labor support increasing the pension age to 70, especially considering you’ve already lifted it to 67?

BURKE: I think the fact that there has been one lift, doesn’t justify taking it all the way to 70. At the moment we don’t have a clear proposal from the government and so I’m not going to deal with specifics that aren’t there yet. But let me say this, it is one thing for people who are in white collar jobs where you’re not doing physical labour, talking about how long people should stay in the workforce. It’s a very different thing when people are in physically demanding jobs, and these arguments that say ‘oh look, we can just keep adding ages before people retire’, are a world away to the real life experience of people who are in physically demanding work.

CARABINE: Well if we can take a more broad look at where the axe might fall, what’s so wrong with the principle outlined by the Treasurer that government will do for people what they can’t do for themselves, but no more? Doesn’t that mean the vulnerable will still be looked after in our society?

BURKE: Well it’s the exact opposite of what they’re actually doing with the main program they are saying they are going to introduce in this budget. And this is where we’ve been referring to their priorities being so twisted. The reason we talk so much about their gold plated paid parental leave system isn’t only that it’s $5.5 billion, it’s also that is it the opposite of means testing.

The means testing argument that Joe Hockey made last night was essentially the more money you’ve got the less money you should need. Paid parental leave works the exact opposite under Tony Abbott’s model. If you’re working in a shop and part-time work, you’re on something like $18,000 a year, you’ll get $9000. If you’re a millionaire, you get $75,000. It’s the opposite of means testing and there is just no credibility in the Treasurer standing up and talking about the age of an entitlement being over when at the same time, they’re introducing a scheme that’s all about providing more for those who have more when they’re wanting to actually make cuts to pensions.

CARABINE: And Labor will oppose the Paid Parental Leave Scheme in the parliament. What about any spending cuts that are included in the budget, they too will have to pass the parliament. How tough a fight will the government face in the Senate?

BURKE: We intend to hold them to account. There has rarely been a Prime Minister who has come to office more on the argument that he was going to keep his promises. Now the promises he made were crystal clear and ironically the day before the election, which were ‘no cuts to education, no cuts to health, no changes to pensions, no changes to the GST, no cuts to the ABC or SBS’. There were no qualifications, none at all, and I don’t see how Joe Hockey delivers the budget that he’s flagged and Tony Abbott can possibly be doing anything other than breaking the promises he made right up to the day before people voted.

CARABINE: So the budget could be shredded in the Senate?

BURKE: We’ll wait ‘til we see it. We’ll wait ‘til we see it. But at the moment we have opposite arguments that collide on budget night. The arguments from Tony Abbott where he’d claimed he would be a Prime Minister who would keep his promises, and the arguments that Joe Hockey is now making about what’s likely to be in the budget. 

CARABINE: Tony Burke the Treasurer says the government inherited an unsustainable budget position from Labor. How much responsibility will the Opposition accept for the axe that is about to fall?

BURKE: None. Joe Hockey in his first few months as Treasurer, more than doubled Australia’s deficit. He added $68 billion to Australia’s deficit in his first few months and he did it for one very simple reason, he wanted to confect an economic crisis so that he could now bring in the sorts of cuts that he wants. Countries that have triple-A credit ratings from all three major ratings agencies aren’t in the midst of budget emergencies, and certainly countries that can find $5.5 billion for a gold plated paid parental leave system that’s about providing more money to the wealthiest, that they’re not budgets that are in an emergency.

CARABINE: But will those triple-A credit ratings continue? The last time Australia was downgraded was in 1989 when net debt was around 4 per cent of GDP. Debt this year is forecast at over 12 per cent of GDP, so those triple-A credit ratings are not necessarily locked in.

BURKE: Well let me put it this way, the last time our credit ratings were upgraded was when Labor was in office and Joe Hockey was claiming that everything was going wrong. Joe Hockey is the Treasurer of Australia, has been since election day, he has to take responsibility for the changes under his watch and so far, for all the comments he made about debt and deficit, all we’ve seen is Australia’s deficit more than double.

CARABINE: You’re not accepting any responsibility for the spending cuts that will be in the budget, but what about some of the key forecasts released by the Treasurer. Do you accept that the age pension is growing annually at more than 6 per cent, hospitals by 10 per cent, schools by 9 per cent? Do you accept the core argument that spending does need to be cut starting with next month’s budget?

BURKE: Spending always needs to have limits on it, always. The information about the aging population that Joe Hockey is acting as though it’s all brand new, came out in the intergenerational report back in 2010. All of this has been available and available publicly for a long time. But when I talk about when he added the $68 billion to the deficit, and this goes to the expenditure question that you’ve have just asked, one of the key things he did was remove the cap on spending. Now we had a 2 per cent limit on spending.

CARABINE: But did you ever keep to that 2 per cent cap?


BURKE: From 2009 on we did, we didn’t keep to it when the Global Financial Crisis hit and we were right to not to keep to it at that point, otherwise Australia would have gone into recession. From 2009 on, we had the cap on expenditure growth and we kept to it strictly. Joe Hockey abolished it at the end of last year to blow out the budget numbers, and now he’s saying ‘oh presto, I’ll bring one back and that will bring them down again’.

CARABINE: And that spending cap is 1.75 per cent, so that is below what Labor was trying to achieve with the 2 per cent cap. If, well the budget will include a 1.75 per cent cap on spending, what could that mean just finally and briefly for some of those big social programs such as the NDIS?

BURKE: Well they’ve already flagged that they don’t want to keep the timeline on the NDIS. Everywhere you look it’s a broken promise. They’d said NDIS they were the same as us, they’d said Gonski they were the same as us and they’d said there were no cuts to all those areas, health, education, the ABC, no changes to pensions. Every word that comes out of their mouth says now that all of that is back on the table.

ALISON CARABINE: Tony Burke, thanks for joining Breakfast.

TONY BURKE: Always good to talk to you.




Tony Burke