TRANSCRIPT - ABC NEWS RADIO - MONDAY, 28 APRIL 2014

E&OE TRANSCRIPT
INTERVIEW
ABC NEWS RADIO

MARIUS BENSON: Tony Burke, good morning. Tony Burke can I ask you about the debt tax, the deficit levy, because the criticism you’ve made of it, as I understand, Labor is making of it is, not that there’s any particular problem with the issue itself, the merits of the issue itself, it’s simply you’re going on the broken promises for the government, which was promising no new tax?

TONY BURKE, SHADOW FINANCE MINISTER: Well Tony Abbott was unequivocal on this, he said there’d be no new taxes, he said they’d be a government that cut taxes rather than introduce them. There was nothing at any moment in the lead-up to the election that flagged this and the only strategy that the Government seems to be on at the moment, in this budget, is to break as many promises as they possibly can in one hit, in the hope that none of them will stand out, and we’re seeing that with health, we’re seeing that with education, we’re seeing it with pensions and now we’re seeing it with taxes.

BENSON: But you’re not really dealing with Government policies at the moment, you’re just seeing kites being flown by Canberra as all Government’s do in the weeks before the budget. 

BURKE: Well I think we all know exactly where the kites are coming from and there’s been no doubt from the language of both the Prime Minister and the Treasurer in the last few weeks as to exactly what they’re testing, and they’re wanting to test whether or not the public will notice if they have, if they break the promises on cuts to education, cuts to health, cuts to the pension and on new taxes, and I think the message should be out there loud and clear to them already that the community’s not going to miss this one.

BENSON: But putting aside the question of broken promises for a moment, what about the merits or demerits on the policy itself, a deficit levy targeting higher income earners to have a temporary impost to steer the budget back to surplus?

BURKE: Well, let’s start with the baseline that the Government’s referring to. What the Treasurer did in his first few months in office was more than double Australia’s deficit. He added $68 billion to it and he did that so that he could then claim there was a budget emergency, so that he could manufacture a crisis. He did it through a combination of the money that went across to the Reserve Bank and changing budget parameters. Now that’s what he did, his first action to double the deficit. To do that and now say ‘oh quick we now need to get the deficit in the reverse direction’ to what the Treasurer did when he first arrived, and claim that that’s the budget emergency that the rest of us have to pay for, really is a bit rich.

BENSON: So you’re saying there is no emergency, there’s no need for a levy?

BURKE: The concept of an emergency is one that has been manufactured by the Treasurer, and you look at what he did in those first few months last year. He transferred the money across to the Reserve Bank so that it added to the deficit right now, but then would pay dividends back to the Government in the future. Just a straight accounting game of money that the Reserve Bank didn’t request. Then he also did things like remove the spending cap. Now there’d been a spending cap of two per cent that, post the Global Financial Crisis, had been, you know since 2009, had been a budget discipline that Labor had always kept to. In fact more than kept to, our figures were well below two per cent in growth. He abolished that all together to be able to blow the future deficit out and then suggests in the last week ‘oh maybe what we need is to have a discipline by imposing a spending cap’, and the number that he’s now proposing is something that is still a higher level of increased expenditure than what happened under those years of Labor from 2009 on, after the Global Financial Crisis. So, each way you look at it, the process has been simple - they double the deficit, they claim there’s a crisis and then they want to level the cuts on those who can least afford it.

BENSON: Tony Burke, can I take you to another financial issue in the news today, which is the report from the Grattan Institute on superannuation fees. It says, when you look around the OECD, Australians paying a fee on superannuation of 1.2 per cent, that’s about three times the OECD average. Are Australian superannuates being ripped off by their funds?

BURKE: There were a few things Labor did in office to deal with this issue, some if it’s still working it’s way through the system. You had the MySuper accounts changes to investors. You also had reforms that were known as SuperStream reforms, which were about driving efficiencies into the back office of superannuation funds, mainly the retail funds, as a way of trying to keep costs down for superannuation holders. So, the concept of the need to continue to address this issue and be vigilant on it is really important. There’s no doubt that superannuation fees aren’t something that simply hits you annually, it’s something that hits you cumulatively and by the time you get to retirement age, it can make a very real difference.

BENSON: And it seems that Labor's reforms, in the eyes of the Grattan Institute at least, didn’t work because we’re still paying three times as much as the global average.

BURKE: I think to expect the sort of cumulative impact of these, of these structural changes to happen instantly would be a stretch. The nature of these reforms is that some of them are still working their way through the system.

BENSON: And a specific proposal from the Grattan Institute is to establish the Federal Government, for the Government to establish a low price default fund for new job starters - do you see merit in that?

BURKE: That’s a recommendation that I’ve seen this morning and we’ll have a look at that. 

BENSON: Tony Burke, thank you very much.

BURKE: Always a pleasure.

ENDS