SUBJECT/S: Budget 2015

PATRICIA KARVELAS: We’re now joined by the Shadow Minister for Finance, Tony Burke, to discuss the Budget and tomorrow night’s Budget Reply speech. Welcome to the program.

BURKE: G’day Patricia.

KARVELAS: You couldn’t be too happy with Labor’s performance in Question Time today, the Government looked pretty relaxed as they answered Labor’s questions.

BURKE: Well if the Prime Minister wants to get up and provide information that’s factually untrue then, you know, if you view it purely as a confidence game that’s one thing. If you view it in terms of the words of the answers mattering then you take it very differently. It appeared from that answer you just played that he didn’t know that tax as a percentage of GDP is higher under his Government than it was when Labor was in power. It’s at a higher level than it’s been since Howard was in. For the Prime Minister to appear to have no idea about that, I reckon that’s a problem. If he looked confident about it well, good on him. It doesn’t change the fact that his answer is factually untrue.

KARVELAS: Labor’s still running on this fairness argument. You keep talking about last year’s Budget, we’re not hearing a lot about this year’s budget rather than the broader economic story. Is this because ultimately the Government’s addressed a lot of the concerns of the electorate, it is a fairer budget. It’s obvious it’s a fairer budget and you don’t have much to say.

BURKE: It’s because the measures that underpin the numbers in this Budget are largely issues that remain unresolved from last year’s Budget. Issues like family payments, higher education – the $100,000 degrees, cuts to schools and hospitals, shifting the retirement age up to 70; these issue are behind every dollar that was released last night. Now I know there’s a general habit we’re all in that you only look at the new measures that are announced – I’m not saying you, I’m saying generally, people only look at the new measures when they’re announced in a budget. The truth is those unresolved matters are factored in to the numbers that have been presented and even with them factored in we’ve got a situation where from one budget to the next the Government has effectively more than doubled the deficit.

KARVELAS: So you need to find savings if you want to be a credible opposition trying to win government. Especially if it’s true that the Government is interested in having an election earlier than we thought would be the case. What sort of cuts are you planning to unveil? What would be one area you’re interested in cutting back on to be a credible opposition?

BURKE: Well I don’t accept what Mathias Cormann just said about the superannuation changes we’ve been proposing as being purely ‘all of that, that’s just about taking people’s money away from them’. When you’re talking about a concession, you’re talking about someone getting a benefit beyond what any other tax payer would get. For people on low incomes, they get extra money from the government through family payments. For people on high incomes, when they get extra money from the Government, they get it through tax concessions. It’s still a cost to the Budget because you’re not paying the ordinary amount of tax that other people would pay. The measures that we’ve put forward on superannuation are sustainable and meet the exact long-term or medium term trajectory that the Budget in fact needs. You don’t…

KARVELAS: You do need more measures don’t you Tony Burke? I mean they’re your superannuation measures and I accept that. But you do actually need to find more cuts to get the Budget back under control.

BURKE: Of course the story…

KARVELAS: So what other areas are you willing to look at?

BURKE: Well, the story obviously this early in a term, we’ve told more about how we’ll deal with the bottom line than any other opposition for a very long time and made sure the policies are fully costed by the Parliamentary Budget Office before they’ve been released. That’s more than $20 billion of improvements to the Budget bottom line that we’ve already put forward.

Now there’s conversations happening about other issues that Chris Bowen has flagged, where there’s been a conversation about negative gearing that’s ruled out doing anything retrospective, that has ruled out doing anything that would have a negative impact on housing supply. Beyond that, we’re the first Opposition in living memory to not rule out the conversation altogether. They’re policy issues that we’re working through, there’s other…

KARVELAS: So is there any chance we might be hearing something about your ideas on negative gearing tomorrow night in Bill Shorten’s Budget In Reply speech?

BURKE: I wouldn’t be expecting that tomorrow night. I’m not going to be flagging what would be there, but I certainly wouldn’t be expecting that one. That conversation still has a fair way to go.

KARVELAS: Let me ask it in a different way. Will tomorrow’s speech be rhetorical, will it be political, will it, I mean it’s always political, but will it essentially be just about attacking the Government’s budget it’s just delivered and its strategy or will you actually be putting concrete new proposals forward that put’s Labor in a position of fighting the next election.

BURKE: It’s fair to say what the public expects will be exactly where we’re at. Which is, it’s still some time before the next election’s expected and given that there’s some time to go a critique of where we think the Government’s up to is an important part of the speech, but only part of the speech.

People are wanting us to use these sorts of opportunities to continue to put forward, not just policy ideas and policy proposals, but there is an expectation that some of those be there, but also starting to knit together a story of what the economy needs and what the nation needs for the future.

I think one of the key challenges when people ask: ‘How is this Budget so different to the last one?’ Is the Government when they were in opposition didn’t take the time to say: ‘Ok let’s actually define the problem.’ It’s easy as an opposition to say: ‘Well the problem is they’re in government, get rid of them and everything will be better’.

To make sure you can provide a decent Government you need to in fact define what are the fiscal challenges, what are the economic challenges, what are the challenges for the future of the nation, and then have that in your mind as you craft your policies.

KARVELAS: Let’s be clear on what’s likely and what’s not likely to get passed or get the support of Labor in this Budget. Shadow Treasurer Chris Bowen has spoken positively about the small business package, but by the looks of it your line of attack in Question Time, the $3.5 billion child care package with the association cuts to the family tax benefit is the ‘no’, is that the main resistance you’re going to put forward on this Budget?

BURKE: Well, I’d add to that the proposals that they’ve got on paid parental leave. We went after them very hard on that today.

KARVELAS: So those two elements are the main things you’re opposing. Is the rest of the Budget, the Northern Australia fund, the stimulus package, which is huge, are they sorts of thing you will pass?

BURKE: On all these sorts of measures you have to wait until you get a level of detail. For example, changes that they’re making to the pension they’ve put forward, until you see the legislation, get some modelling on exactly how that will work, who it will hurt, where the lines will be drawn and how it interacts with other policies. It’s irresponsible to say: ‘Yep, we’ll vote for something that we haven’t seen’. In terms of the issues that were held back from last year, in particular the cuts to family payments that you raised, our opposition to those has not shifted one bit.

Our opposition to what they now want to do with paid parental leave is something we’ve made clear in the last 24-hours as well. Where the Government’s gone from looking at the current scheme and saying ‘they’re hopelessly inadequate’ to now saying ‘they’re generous to the point of fraud’. The truth is for women on those agreements who have both a government benefit and a benefit from their employer, the change the Government’s proposing does nothing for them and nothing for the Budget. From their perspective, they’ve only got both because from a wage negotiation they’ve given up other things to prioritise paid parental leave so they could spend more time with the new child.

The second thing, it probably won’t have much of an impact on the Budget, certainly not what the Government’s forecast. Employers have already started to flag: ‘Well, if us giving money just means the Government will take it away, we’ll stop offering the additional benefit to the extent that we have’. So the extent to which you end up with a saving to the Budget has a big question mark over it on that proposal.

KARVELAS: Well Tony Burke we’ll all be watching Bill Shorten’s Budget in Reply speech. Thanks for joining us on RN Drive.

BURKE: Good to talk to you Patricia. 

Tony Burke