TRANSCRIPT - DOORSTOP - BRISBANE - SUNDAY, 26 JUNE 2016
SUNDAY, 26 JUNE 2016
SUBJECT/S: Labor’s positive plans for the budget
CHRIS BOWEN, SHADOW TREASURER: Good afternoon ladies and gentlemen. Today Labor is announcing the detailed impact of our plans for Australia on the federal budget. Labor has made a case for budget repair which is fair, but also the case for big, important, good quality structural reform for the budget which sees the budget return to balance the same year as under the Government's projections and build to stronger surpluses over the medium term. I will talk a bit more about that in a moment.
But firstly we're also today making an announcement about the process and rigour which Labor has applied to our costings. As you know, we've had our policies costed by the Parliamentary Budget Office. But as well Labor last year engaged three eminent, expert and qualified Australians to assess the underpinning assumptions, the rigour of the work applied by the Parliamentary Budget Office to Labor's policy. I'm joined today by Professor Bob Officer, Dr Mike Keating and Mr James McKenzie. Professor Officer is an Emeritus Professor of Finance at Melbourne University and holds an MBE and PhD from Chicago University and of course was chosen by the Howard Government to conduct the commission of audit. Dr Mike Keating is one of Australia's most eminent former public servants, having been Secretary of the Department of Finance and Prime Minister as well as Employment. And James McKenzie, is a distinguished business person, a chartered accountant, former Chief Executive of Norwich Union Australia. They have examined the costings assumptions behavioural impacts of all our policies. And they provided me with a letter which has been released to you which says, and I quote: "We're of the opinion that the policy costings process has been thorough and comprehensive, that the assumptions which underpin the Parliamentary Budget Office costings are sound and all of the costings in Labor's budget plan are of a similar quality as budget estimates generally and therefore present a reasonable basis for assessing the net financial impact on the Commonwealth Budget." I just want to make clear, we've asked a panel to examine the rigour and the process. We did not ask, nor received, endorsement of the policies themselves. We didn't ask them for policy advice. We asked them to examine the assumptions and underpinning process. That is what they have provided. When Tony has finished his rem arks I will invite Dr Keating to add to our comments. Then there will be an opportunity for you to ask the panel questions as well, but given we will be going a little while the panel will take a seat and will join us again at the questions, at the question time period.
Now, as I've said, Labor has made a series of detailed policy announcements now over a matter of years. Detailed plans which see our budget return to balance in the same year as the Government, which see stronger surpluses over the medium term. And in fact adds $10.5 billion to the budget bottom line over the decade. As you can see from our first graph, the measures that we have announced including; negative gearing, Captial Gains Tax reform as well as not proceeding with the Government's big corporate tax cuts, see us returning to balance in the same year and then building stronger surpluses over the decade. In addition, the next graph compares deficits over the next four years. As you can see, the blue bar which represents the Government's position, assumes that they are able to pass the zombie measures, the unfair measures from the 2014 Budget. We give them the benefit of that doubt, even though that will never happen. You will see there the difference in budget deficits in each year and the red part of the bar graph is the difference created by Labor's investment in Medicare, education, and infrastructure. Jobs, schools and hospitals, which reflects Labor's different priorities. Also of course reflects the fact that we rejected doing negative gearing retrospectively, so it builds over time, for example. But you see the return trajectory, you see that we reduce the budget deficit each and every year in a different form to the Government, but the deficit comes down each and every year for the next four years.
Of course, the Government's graph does not include, the bar graph, does not include the measures which Mr Turnbull announced at their policy launch this morning, not included in that. I would expect to hope that Mr Morrison and Mr Cormann urgently update their budget figures and release their full budget bottom line well before next Thursday, which is their form, to do it on the Thursday before an election. Mr Morrison and Mr Cormann should stand before you and do what Tony and I are doing today and fully reconcile their budget bottom line. Mr Turnbull spent several hundred million dollars this morning. That needs to be accounted for in the Government's figures as well. Now, of course, we've announced as we have gone through a series of savings measures, which I will talk about in a moment, but today we're announcing the final two savings measures that Labor is taking to this election.
Firstly, both Choice and the Australian Medical Association have called for government action to either ban or abolish the private health insurance rebate on so-called junk policies. These are policies in which the policy holder receives no benefit. It simply ensures people for public hospital access they already get as Australian citizens, but enables the Medicare surcharge to be avoided. As I said, AMA and Choice have called for these policies either to be banned or for the private health insurance rebate to be scrapped before these policies. We're announcing today we listened to that case. We will adopt that policy, and this saves $135 million over the forward estimates and $384 million over the decade. Secondly, we've looked closely at the tax deductions available for accountancy fees for tax matters, and the average claim across Australia is $366 a year. We will cap the maximum enabled to be deducted each year at $5,000 for individuals. This affects 40,000 people across Australia. This will raise $295 million over the forwards of $1.7 billion over the decade a reasonable measure. People will be able to continue to pay more than that, but the tax deductibility will be capped at $5,000 a year. This will in fact only affect individuals and not corporations or small businesses.
Now, of course, what we've seen here in the impact of our decisions is the impact on the budget. But Labor is concerned for the long-term as well. And so when you look at the impact of our decisions, we see the budget balance improving, the Government sees it getting worse. Now, there's a reason why the Government won't share with you their ten-year figures because they don't add up. They don't add up. So this is just an example of two of the policy offerings. Labor's policy on the top of reforms to negative gearing and Capital Gains Tax. Now, these reforms start small. They raise only $600 million in the first year, but by the end of the decade they raise $8 billion a year. Important structural reform to the budget. The Government's company tax cuts, their big business company tax cuts, also start small, but cost the budget $14 billion every single year by the end of the decade. They make the budget structura l position worse. They are reckless. It is the biggest fiscal ram-raid on this budget which has been announced during the course of this election. You see the Government worsening the structural position of the budget over the medium term. Well, we in fact have made the important sweeping structural changes necessary to see the budget return.
So, today we are announcing comprehensively in more detail and earlier than the Government, the fiscal impact of our policies. Over ten years, not just four - both. And not on the Thursday before the election after the advertising blackout has commenced but here on Sunday allowing the Australian people to see our plans, for you to scrutinise them today and over the coming days. We are more than happy to see our plans compared to the Government's, but the Government must also provide the same level of detail. They won't because they're embarrassed by their ten-year figures. They won't because they have no plan for Australia beyond their three-word slogan and their 1-point plan of a corporate tax cut which impacts the budget over the medium term. Tony is going to talk about the 2014 budget measures in particular. Then of course, as I said, Dr Keating will share some comments with you. Then we're happy to take questions. We might take political questions to Tony and I first and then you can ask detailed questions to the panel if you wish.
TONY BURKE: Thank you very much Chris. Neither side of politics will deliver the numbers that were contained in this year's budget. The Government refuses to acknowledge this, but it is undeniable. They have $6.9 billion worth of measures known as zombie measures that they have embedded into the budget bottom line that will never, never, pass the Parliament. They cannot and will not deliver the numbers that are contained within the budget. Not only that, whereas you see with the blue line is the budget numbers, the grey line represents what they would actually deliver, and the red line represents what Labor will actually be able to deliver. For the first four years, that means a difference between what the Government can deliver, and what Labor can deliver, where in deficit of across the forwards, the Government's deficit figure, based on the zombie measures never being able to get through is $91 billion in cumul ative deficit. For Labor, what we announce today over those four years, instead of 91 becomes 101. We then have both sides hitting surplus in the same year, and from that time on, the structural improvements to the budget become obvious. What the Government is putting forward by relying on measures that can never make it through the Parliament is that Australia will continue to be held hostage to variations in budget parameters. If you look at their figures, both in terms of what they claim their budget bottom line to be, and what it in fact becomes because of the measures that can never pass the Parliament, is that you end up with future budget projections basically flat lining, only just above parity. Only just above the zero figure. By doing that, it means the budget will continue under this Government to continue to be held hostage to parameter variations or changes in international circumstances. What Labor is putting forward by making the structural changes to the budg et is the only path forward to be able to structurally improve the fiscal situation of Australia. Only Labor is putting forward a plan with structural improvements to the budget. The Coalition, on the other hand, is actually deliberately putting forward a structural deterioration. That is what is embedded in their company tax cut. The hit to the budget gets worse and worse year on year. Whereas Labor, by putting forward the changes in particular to negative gearing and Capital Gains Tax, has a structural improvement to the budget that the Budget and the nation needs. Thank you, Dr Keating.
DR MIKE KEATING: Thank you very much. I think you mostly said what I needed to say, but I’ll just repeat a couple of the most important points. First the panel was there to verify the costings, not to endorse the policies. The second point is that costings of any policies inevitably involve a degree of uncertainty. We've satisfied ourselves, having gone through the independent costings of the Parliamentary Budget Office, that the uncertainty in the estimates put before you are no different to the uncertainty in budget measures and budget documents generally. Thirdly, as was said, the Parliamentary Budget Office is responsible for all the costings which have a budget impact, but in the case of the national NBN, the budget impact is capped at the equity injection into the NBN, and the Labor Party asked us to look at the business plan to check the credibility of that business plan and I can say while I was a scept ic before I read the plan, possibly like many other Australians, been there, done that, I have now, having had the opportunity to read the plan, I'm no longer a sceptic, I think it's a high standard business plan.
BOWEN: Thanks Dr Keating. As I said, we might have questions for Tony and I, and then questions to the panel.
JOURNALIST: As we've seen over this week with Brexit, economic conditions can change overnight. Why are you focusing on out to ten years in the medium term? Isn't the fact that over the forward estimates you're billions of dollars worse off than what the Government is presenting?
BOWEN: The fact is this budget needs good quality structural reform. Now the last thing the real economy needs at the moment with the global uncertainty created is in our view a sort of very urgent and rushed fiscal contraction. What the budget needs as has been argued repeatedly, not just by us but the OECD, is a medium-term view. Now importantly, we see the budget return to balance in exactly the same year, regardless of who is elected. That is important. That's the first point. We then see the surpluses build strongly under us built. Now unless and until you have the quality structural reform as Tony said, the budget is hostage to the assumptions and to economic conditions. Of course economic conditions will change. This is comparing off the same baseline. This is taking apples with apples and saying of course regardless of who wins on July 2, economic circumstances are going to change over the course of the next decade, of course they are. But using the same baseline, the budget position for us over the decade builds very very strongly. The difference over the four years' average is 0.2 per cent of GDP. That is the difference over the first four years. We've shown you the graph, showing the annual figures. All the figures are outlined in the table that I've circulated to you. But we’ve said consistently this is exactly the sort of approach the nation needs and it’s what we’ll deliver.
JOURNALIST: Mr Bowen, the deficit will be more than twice what’s forecast in PFO by 2019 to 2020, so that's $5.35 billion compared to 11.3 billion, how can voters possibly see this as responsible, and how can you possibly turn around so fast in 2020 to 2021 and that's that deficit from $11.3 billion to a surplus of $1 billion?
BOWEN: Well in 2019-20, the Government claims a deficit between five and six billion, but that includes all the zombie measures, as Tony just pointed out. They assume that magically the Parliament and the people will regard all of those 2014 measures as being all of a sudden fair and will pass. Now if you do include those measures as not being passed, their deficit rises to $9 billion. So yes you have a difference between 9 and 11 in that final year. That is the comparison of the real world, a difference between 9 and 11. And Tony has indicated very clearly that those measures, they've been blocked since 2014. The Labor Party has taken a very principled position. And if Mr Morrison thinks he will magically convince the cross-benchers that things like making unemployed people wait a month for food are going to pass the Parliament, well good luck for him, not in the real world.
JOURNALIST: Mr Bowen, will Labor release the correspondence from the PBO and how many of the policy costings have been rated with low reliability?
BOWEN: I understand that's the spin from Liberal Party head office this morning. What we're doing is releasing more than that, by releasing the full rigorous approach taken by the panel, who've had access to all the PBO costings, have been through them, questioned the assumptions, questioned the behavioural impact and have provided the assurance which I’ve released today. Now the Government won't release to you the detailed working papers under the Treasury costings for example (inaudible) that's their decision not to release all the underpinning modelling, and assumptions, working papers in the Treasurer modelling which underpins their budget. So if you are going to have a comparison of the two fiscal plans, you have far more information out from us than you do from the Government, which has not yet even provided you with their budget bottom line. And I wonder when they will. Tomorrow? The next day? Thursday night, like they did last time? They should be releasing the same information that we're releasing today.
JOURNALIST: Just following on from that. PBO gives reliability ratings on costings. So can you tell us what reliability ratings it's given for your ten-year forecasts on super, multinationals and negative gearing?
BOWEN: Dr Keating may be prepared to add to this answer. But the parliamentary budget office does provide very detailed costings. A lot of the measures are capped. And a lot of the other measures have areas of reliability which the panel have considered and regarded as the same basis as the budget. I know the question was to me, but Dr Keating has been through the costings in great detail and might want to add something.
KEATING: The only thing I would add is this: the specific instances you gave, I think they were superannuation and negative gearing, might have been another one I missed. Look, I think you will always get a higher degree of uncertainty with measures where there's quite a big behavioural impact on the one hand. On the other hand, we do have quite a lot of information that's already there, particularly in relation to superannuation. So that while if you like the uncertainty particularly is higher with these sort of estimates, I think these are about as certain as you can be, if I put it that way. I don't think they're any more uncertain than say the company tax on the other hand.
BURKE: If can I add, there is nothing with budget parameters or assumptions that will change the fact that capital gains and negative gearing is a structural improvement to the budget that increases over time and the company tax change is a structural deterioration of the budget that causes more and more budget deterioration over time.
BOWEN: Other questions? Tim?
JOURNALIST: To be clear, Mr Bowen, you’ve adopted the assumptions of the budget. So, for example, on commodity prices, which of course can wreck a budget, your assumptions, you say, you haven't altered those assumptions.
BOWEN: We're comparing apples with apples, you’re right, so we’re comparing the Government's baseline with ours and then we're comparing the impact of decisions. So we're showing the impact of our decisions on the budget, compared to theirs. Now, you know what I think about the Government's assumptions on iron ore prices for example, and real wages of those criticisms stand, that's why I said I will bring down an economic statement within the first three months of taking office, to have those assumptions updated as well as implementing Labor policies. But what we need to do is to compare baselines. You start from the same position and you're starting from the same position, Labor's budget position over the ten years improves dramatically compared to the budget.
JOURNALIST: So Mr Bowen, are you suggesting that in your mini budget, if you’re elected, voters could see the deficits over the next four years’ worsening in a Labor Government? And who knows whether from year six onwards (inaudible)
BOWEN: What I'm suggesting you will always see, as Tony said, a better structural improvement by the impact of our policies. Now Scott Morrison can make the virtue out of the fact he thinks iron ore prices are higher than in his Budget than they are in reality, I’m not going to do that. And as I’ve said before, the assumptions underpinning future Labor budgets will be prepared by the Parliamentary Budget Office, arm's length from government. Now, if Mr Morrison is going to assert to you that iron ore prices will be the same next year and the year after, from what he’s projecting now, well that's a matter for him. I will say we will update those, arms-length from government, through our usual economic statements in budgets.
JOURNALIST: Mr Bowen, how many people will be affected by this policy to remove the junk policies from private health insurance? The rebates. And also how much extra will people who have those junk policies have to pay?
BOWEN: Well, what I imagine what people will do is then go to their health insurer and say, you need to give me a better policy. Which then reflects a benefit to me, not just ensure me for things which I currently can get through the public health system. I would have thought that there are many people frankly out there that don't realise they're paying for health insurance policies which provide them with a benefit they're entitled to as an Australian citizen. So really, it's up to the health insurance companies to reflect on their policies and I would suggest change the policy offering to enable beneficiaries to receive the private health insurance rebate. I suspect that’s what would happen by enlarge. People are going to go to their health insurer and say, I've lost the health insurance rebate, because the Government, assuming we're in office, says that this policy provides me with no ben efit. I'd like to see a benefit, please. I’d like to see a benefit, please. That's as the Australian Medical Association has called for and Choice has called for. I would recommend Choice's work to you. They go through these policies in a lot of detail and show how there's no benefit for people.
JOURNALIST: Just qualify for me if you could (inaudible) the $5,000 cap you were talking about, is that $5000 cap on fees to account for tax?
BOWEN: For tax deductibility. For managing your personal affairs as an individual. You can claim up to 5,000. Above that, if you choose to pay your accountant more, that won't be tax deductible.
JOURNALIST: There are a great many Australians who do.
BOWEN: 40,000. They would be individuals, with respect, with very complex tax affairs as individuals and presumably high income earners.
JOURNALIST: On top of the two measures you outlined, is there any other perhaps smaller ones that underpin these numbers that haven't yet been publicly announced? Anything in there that you've got in there that you said, announced?
BOWEN: No decision has been taken or announced, Heath, no. These savings we're announcing today are it on top of everything else we've announced.
JOURNALIST: Mr Bowen, if the Coalition as a whole because of zombie measures, will it be worse for Labor as well? As in if the Coalition has them, won't you have them as well?
BOWEN: No, because we incorporated them not being implemented in the figures, the point of what Tony talked about. Our budget bottom line shows we will not proceed with them.
BURKE: No matter who is elected the zombie figures, our figures reflect they won't pass the Parliament. The Government is still trying to get away with the con of claiming they will pass the Parliament. There is no speculation that anyone has made that the Government's position in the Senate would be improved after the election. There's no mathematical way of reaching that conclusion. If they were serious about these measures getting through, it's a double dissolution, they could have included them as a trigger. They didn't. These measures will never pass the Parliament. The Government knows it. But they are including them as a numerical gain to try to trick people into thinking they have a better bottom line than they will actually be able to deliver.
JOURNALIST: You've also been criticised for holding your costings, press conference in Brisbane when all the other correspondents at the same time are in the Coalition's policy launch.
BOWEN: The journalists here, you can pan around and see what…
JOURNALIST: You haven't got any of your economics correspondence and that kind of thing. What's your response?
BOWEN: Well firstly, this is a funny way of hiding something, in a press conference with what 40 journalists? And 7 TV cameras? And multiple still cameras - I mean I don't think this could be a suggestion or accusation that is fairly levelled. Now, the fact of the matter is we're announcing this today, not on the Thursday, two days before an election, but a full week. Tony and I will have extensive media engagements tomorrow in Sydney. We will be answering questions as well, we're right here answering your questions, we have logistical reasons for being here today, you know. There's a lot of people involved in this press conference including the panel members, we have logistical reasons for being here today, obviously Labor's been busy in Brisbane this morning, and you're here and we wanted to make sure, frankly, that you knew about this press conference so that you could be here and to ask us any question on your mind this afternoon.
JOURNALIST: Mr Bowen, following on from that, do you think that then it's appropriate that the Opposition Leader is [inaudible] Gladstone, and also I think you called Brexit global uncertainty [inaudible] fiscal contraction, have you factored in the deficits possibly being bigger in the first four years given the global uncertainty that is going on at the moment in the EU?
BOWEN: On the first question, the tradition is that the Shadow Treasurer and Shadow Finance Minister take this along many elections, and indeed the Treasurer and the Finance Minister. We're not calling for Mr Turnbull to release his budget bottom line. We're asking Scott Morrison and Mathias Cormann to do it so that's the tradition and Tony and I are here as the Labor Party's senior economic spokespeople, quite appropriately answering your questions. I think that's fair enough--
JOURNALIST: Mr Bowen--
BOWEN: I haven't answered the second part of the question, then I'll come to you. The second part of the question went to Brexit, look, there's no doubt that Brexit creates some global uncertainty, there's no question about that. I have received, as has Bill Shorten, briefings from the Governor of the Reserve Bank, Treasury Secretary, and the Chairman of [inaudible] under caretaker provisions, as the Government would receive. I'm not going to go into detail about those, that wouldn't be appropriate. But I will say that the major impact on Australia comes from that global uncertainty. Not only the direct impacts on Australia, the UK is no longer a top five trading partner, it is a much less intense economic relationship than it was a few decades ago. Now that global uncertainty will play out, we don't yet know exactly when the UK will leave Europe. It's speculation that it may happen sooner rather than later, there's a process to go through. Obviously for the sake of global calmness you would have preferred that Brexit didn't occur. But it's a fact of life, it's occurring, and it's incumbent on both the Government on the Opposition but I think the Government has now more recently - they weren't originally - they have more recently been more measured in their comments to say 'this will provide some global turbulence', but in terms of direct impact on Australia we can work on the basis that that impact is very, very limited indeed.
JOURNALIST: Mr Bowen, what's the economic impact of the capital gains tax changes on the [inaudible], has the impact on the economy been modelled and are you going to release that?
BOWEN: I refer you to the modelling which has been released by the Australian National University, by the McKell institute and others, the work of economists on this across the board. Again, we released this policy earlier in the year to enable all this scrutiny of our policies for independent people to model it, not-so-independent people to model it, for the Treasurer to commission not-so-independent people to model it, that's all played out in the public spotlight and we are more than happy to have that debate, but we turn up at this debate with policies, Mr Turnbull and Mr Morrison turn up with a dearth of policies. We might wrap it up soon - last question?
JOURNALIST: Can I just ask, Mr Bowen--
BOWEN: I will go to Tim but I've just seen the look on your face and you haven't had a question so we'll have two more questions.
JOURNALIST: Over the last, the term of the recent Labor government and the Liberals [inaudible] budget it's actually turned out to be achieved, they've all been missed, and most spectacularly, and why, beyond your comments about the Liberals why shouldn't Australians look at those forward estimates and go 'Yeah, right'?
BOWEN: Tim, I think the Australian people want a political party, an alternative government with a plan, not for the next ten days, but a plan for the next ten years. Now that does provide uncertainty going forward, of course there's uncertainty as Dr Keating said in any assumption or projection. But Scott Morrison says for example 'budgets are done over four years'. Well, budgets are done over the period that our Treasurer does budgets. So as Dr Keating well knows, there were no forward estimates in Australia until Paul Keating became Treasurer. There were no forward estimates, they didn't exist. Budgets were done year on year, and then there was no forward projection. Treasurer Keating introduced three-year budget estimates, Treasurer Dawkins then took that out to four years. And what I'm saying, in this environment, where Australians have to do a budget repair that's fair over a period of time. It's appropriate to have four years, but also to have a ten-year frame on top of that. And you know, the Liberal party used to say 'oh look at the Labor Party, they're spending all this money on schools and hospitals over ten years, but they're only telling you what it costs over four years'. That was their mantra three years ago. Well, what we're saying is, we'll tell you exactly what our policies cost and make over four years and ten, an extra layer of accountability which the Liberal Party will not tell you. Tony's go now.
BURKE: On budget night, the Government launched a ten-year attack on the budget bottom line with their corporate tax cut. Having announced that, it's no surprise having announced a ten-year attack, they straight away said 'can we please only talk about the first few years?'. That $50 billion, if you look at the hit it has, year on year on the budget, structurally in those final years, it's a huge whack on the budget. Conversely, changes like negative gearing and capital gains tax structurally improve the situation. If you only look across the four years you would never make strong structural improvement to the budget. And what's the outcome of that been? In 2014 we had a budget from the Government that they said in year five, five years out from 2014, they'll be in surplus. In 2015 they had a budget, they said in year five, five years out, they'll be in surplus. A few months ago, they did the exact same thing. Why does that keep happening? It's what Chris said right at the beginning. As long as you don't make the structural changes to the budget, you are going to be hostage to the exact sort of parameter variations that have dominated questions in this meeting.
JOURNALIST: Have you had any advice as to what impact you'll have of having a triple A credit rating, and just one more, on superannuation, what's Labor doing with the Government's measures?
BOWEN: So on the triple A credit rating, I was the one who first said this rating is under threat. Scott Morrison won't acknowledge that, I will. Important decisions are necessary; those important decisions are the ones which see the budget return to good quality structural balance, surplus. They're the decisions necessary. Of course, if we were talking about reaching budget surplus much later than the Government, then that would be a very legitimate point that the ratings agencies would be concerned about, but returning to balance exactly the same year as the government and then building those surpluses over the decade. Should I be Treasurer, honestly I would then talk [inaudible] fiscal plan. In relation to superannuation we've outlined here, we continue to have concerns about the retrospective nature of some of the Government's measures, we want to raise the same amount of money as the Government, we&# 39;d consult in office about the retrospective nature, but we are [inaudible] the same amount of money as the Government from superannuation changes, and there are some measures [inaudible] resources of government which we would then sit down with the sector and work out if there's a better way. But the commitment is to the envelope [inaudible]. Tony will add to that.
BURKE: The strongest argument on the triple A credit rating is to look at what the agencies have said themselves. Look at what Moody's has said. Obviously it means a lot to us in the Labor Party, the three triple A credit ratings were only achieved, we only got to all three, when Labor was in government. But Moody's have delivered the advice. They've said 'you have to deal with both revenue and expenditure'. Scott Morrison just ignores them. And the biggest spend in this entire election campaign is to give away $50 billion of revenue through their corporate tax cut. They are in direct defiance of what the credit agencies are saying we need to do.
BOWEN: Thanks ladies and gentleman. Thank you.