SUBJECT/S: The Liberals’ Budget Chaos; the Moss Review.


BARRY CASSIDY: Tony Burke, welcome. 




CASSIDY: Glenn Stevens there saying the country is not on the correct path for the long run. Surely that's an indictment of both the Gillard/Rudd Governments and the Abbott Government? 


BURKE: I think you need to look at the full comments Glenn Stevens has made to isolate the problem that we're dealing with. The problem we're dealing with is not an immediate budget emergency. He describes the conditions right now as benign in the clip you just played. What we're dealing with is a situation where the full trajectory, particularly over the 10-year period, is something that needs to be addressed. 


There's no point doing some massive, immediate fiscal consolidation that just hurts consumer confidence and has an ongoing impact on unemployment, which was what the Government tried to do in the last budget. We need to accurately identify the problem that we have, which is a 10-year genuine problem, to make sure that we do turn that around. The circumstances -  

CASSIDY: I think he is saying the solution starts now. He is talking about the need to weatherproof against a recession?


BURKE: That’s right. And in doing so, acknowledging that the way we handled the Global Financial Crisis was the right process. That when you have a significant downturn like that, there are times when you need to be able to engage in stimulus.


The two mechanisms that were available back then, were the fiscal stimulus that was put in, plus the lowering of interest rates. Now, the cash rate is already down as low as 2.25 per cent. There is not the flexibility there that there was back then. So that process of doing it sensibly over 10 years is what needs to be done.


What the Government did in the last Budget was to create a situation where they went so hard and hit the household budget so hard that they ended up having an impact on both consumer confidence and business confidence. NAB's got business confidence currently at zero on their rating level. Now if you have that sort of impact, that doesn't help you in the long-term anyway. 


CASSIDY: But again, extend your attitude, it seems to me what you're saying is that when Tony Abbott says "close enough in four years' time", that's good enough from your point of view as well? 


BURKE: Well no, let's not forget the graph Tony Abbott refers to gets close in four years' time and then falls off a cliff and gets deeper and deeper -


CASSIDY: That makes the same assumptions they make about you, that he will do nothing beyond that to address that problem?


BURKE: I don't think we can use the criticism of the document as defence of Tony Abbott because it is his document. There's no line of the three lines he refers to - and it was in one of the sections you showed earlier in the program - there's no Labor line in that document. 

The one that shows the worst result is what Joe Hockey brought down when he doubled the deficit a few months after the last election. The middle line is roughly what they've got through the Parliament at the moment; presuming no changes for 40 years. Then the top line they want to refer to includes policies they ditched in the days before that document was released. 


There's plenty of ways of criticising the document. But I don't think the criticism can be used as a defence of the person who wrote it.


CASSIDY: Ministers these days are still saddled with a price tag attached to policies from your previous governments. As Ken Henry said starting point has got worse. The problem is getting harder. It's difficult for them to address it because of the Senate recalcitrance?


BURKE: It takes a special sort of incompetence to be able to blow out the deficit in the order of $80 billion as this Government has, while also attacking families. That’s a special sort of incompetence they’ve got there. You're right about the parameters changing, but let's not forget: parameters will always change. If Peter Costello could deal with an Asian financial crisis, Wayne Swan could deal with a global financial crisis, Joe Hockey should be able to deal with a change in the iron ore price. Effectively that's what they're complaining about, an incapacity to be able to deal with.


CASSIDY: It takes a special sort of cheek doesn't it for Labor to spend as much time as they did on debt and deficit this week? 


BURKE: Well, if Tony Abbott goes into the election claiming 13 to 14 per cent of your debt to GDP ratio is a ‘debt and deficit disaster’, and then stands up and says 50 to 60 per cent, ‘that's a pretty good outcome’ - that level of hypocrisy needs to be called out for what it is. We don't hesitate for a minute, don't hesitate for a minute, for calling them out on the hypocrisy on debt and deficit comments they made before the election. 


Before the election, it started with them saying they'd have us in surplus from the first budget; then it became within three years; It then pushed to five; and now they're saying ‘well we won't get there for the next 40 years’. That's what's shifted from what Tony Abbott said he would be as Prime Minister to what they became from the day Joe Hockey doubled the deficit and they did a deal with the Greens to make debt unlimited. 


CASSIDY: The former head of Treasury Ken Henry said restraint alone won't do it any more, tax increases will be needed. It's very important that people understand that. Do you understand that? 


BURKE: Well, the first policy that we released was to increase revenue. It was a policy on multinational tax reform to deal with profit shifting around the world. That over the course of the first four years raises in the order of just under $2 billion. We've offered immediate bipartisan support if the government wants to go down that track. Now yes that’s a small measure, I acknowledge that; $2 billion is still significant. In terms of the broader 10-year issue, it's a small part of it. But let's not forget, this was released in the first half of the term as a fully costed policy against a government that released its policies eight months after the election in their first budget. 


CASSIDY: Then again we have a leader who's promising this is a year for big ideas and we've had one? 


BURKE: Well, we're in March and we've released that policy. As I say we're the first opposition that I can think of where you've had a fully costed policy come out in the first 18 months; and costed by the Parliamentary Budget Office so there's no arguments about black holes or problems there. 


The policy work's continuing to be done. I don't think you can judge the entire year by where we're up to before we hit the end of March. 


CASSIDY: As a former Immigration Minister, I want to ask you about the Moss Review into sexual abuse on Nauru. Surely this demonstrates is that this arrangement was set in place without adequate safeguards and both governments have to take some responsibility for that?


BURKE: There are messages for both sides of politics in this report, no doubt about that; and messages that need to be looked at carefully and closely. I'm glad the Government ended up in a position where they've adopted all of the recommendations of the report. 


I remain alarmed with the Prime Minister's immediate reaction, where he referred to things happening sometimes in institutional situations. Given the gravity of what this report refers to, we need to all be willing to say there are messages for all of us, to look at the report carefully, and to make sure that while we do have an imperative to want to stop people drowning at sea, we also have to make sure that if people are in our care, directly or indirectly, that they're protected from that sort of abuse. 


CASSIDY: Thanks for your time this morning. 


BURKE: Good to be back.


Tony Burke