To discuss the Federal Budget Shadow Treasurer Joe Hockey. Good morning to you Joe.

Good morning, Karl.

Big night for you too. What do you think of the Budget"

Well, there are some good things. It's good to see the pension increase. That's what we tried to get up last year and failed and I think it's good to have some money spent on infrastructure now, but it's now the biggest debt in Australia's modern history and the biggest deficit in modern Australian history and they’ve lost control of the nation's finances.

Well, Wayne Swan says it's easy to be critical. He says you and the Coalition need to manup. Take a look look at this

The pressure is really on the Liberals because they've got this con job going on deficit and debt. They would is have to borrow as much as we are borrowing because of the revenue downgrades and if they weren’t going to borrow that money, what they would have to do is savagely increase taxes right now or savagely cut services right now, which would deepen and lengthen a recession. It's about time they got real.

OK, are you going to get real?

I think he is living in Wayne's World. I think he’s in his own, own little TV show there. You know what, the most upsetting about this is that there is reckless spending. Last night he announced $22 billion of new infrastructure spending. That's the same as the cash handed out over the last few months by the Rudd Government. Two-thirds of the debt, two-thirds of the debt that Kevin Rudd has accrued is in fact new spending, and the fact is that they've got no control.

They've lost control of the Budget. They've not only spent all the proceeds of the last mining boom, they're mortgaging the next mining boom, and they've got no plan for recovery. And the best way to do it Karl, is to grow the pie. It is to provide incentives, real incentives for small business in particular. The engine room of the economic recovery is going to be small business.

Are you going to provide, Joe, any details on this, on the specific nature in which you would stimulate the economy?

Oh, yeah

There was some incentives for small business in terms of the budget last night but you're talking about a pie, that there is a whole lot more that is needed to be done?

Absolutely, absolutely. Look, we will have a detail plan. Look, judge us on what we've done for Australia and not just on what we say we're going to do. When we left 18 months ago, the budget was in surplus, there was no net government debt, in fact, we were ahead of the rest of  the world and there was only 4 per cent unemployment. Today we're going towards 1 million unemployed, the biggest budget deficit in modern Australian history, and the biggest debt. And they've got no plan to pay it off.

You can’t blame Labor for the worst economic downturn since the Great Depression

seriously?

That’s interesting. Look, Karl, it's interesting you say that because the Reserve Bank said last Friday this downturn in Australia will not be as severe as the 1990 recession. That was the Reserve Bank last Friday. One of the reasons is we went into this in far better shape because we paid off all of Labor's debt last time. But now they're spending - they're giving drunken sailors a bad name. They are spending on a scale that we've never seen before in Australia, never seen before. Spend, spend, spend, and what have Australians got for it? Nothing.

So what are you going to do when it goes to the Senate? Are you going to vote against it?

Well, we will be very reasonable. We will be very reasonable. I think we've got to look at each measure carefully, consider the true impact on the budget, and I give you this pledge: We are so shocked at the size of the debt and the deficit and the massive ball and chain that is around the leg of every Australian as we get out of this problem, with this debt, that we will take a very responsible approach.

Alright, so you're going to allow some things through then?

Yeah, absolutely. We will be very responsible, which is in stark contrast to them. Remember they opposed us on privatisation, on tax reform, on IR reform.

But you’re in a situation. Sorry to interrupt Joe, you're in a situation where you're being highly critical of them, but you’re going to allow them through the Senate, those changes?

Well, you know because, their total savings… You know, they are spinning this line that it’s a tough budget and it is for those that might be affected but let me tell you Karl, all of their savings, all of their tough measures represent just 1 per cent of the money they are spending in this budget. 1 per cent! Imagine at Channel Nine if you had to have real cutback and they said we are going to have a really tough time at Channel Nine we’re just cutting 1 per cent of all expenditure. I mean everyone would laugh. That's what Wayne Swan and Kevin Rudd are doing. They're talking tough but it's just 1 per cent of all the money they are spending. Nothing!

OK, OK, when’s Malcolm going to front up? We haven't seen him for about 24 hours?

No, no, no, he has been around, I tell you. This is the traditional process. Don't start this. I know where you're heading.

Yeah, yeah, yeah.

Don’t start this, don’t start this

You like it, though don’t you?

He gives a big speech tomorrow night as is the usual.

Yeah I know you like it. All right Joe, good to talk to you. Thank you very much for your time.

Any time, Karl.