The Hon. Joe Hockey :: Shadow Treasurer

Transcripts

ABC NEWS BREAKFAST WITH VIRGINIA TRIOLI

13th May 2009

E&OE……………………………………………………………………..

VIRGINIA TRIOLI:

Now the Opposition has wasted no time in attacking last last night's Federal Budget. Opposition Treasury spokesman Joe Hockey joins us now from Canberra. Joe Hockey, goodmorning, thank you for joining us.

JOE HOCKEY:

Good morning Virginia.

VIRGINIA TRIOLI:

What were you hoping to see last night" Did you wat to see a tougher Budget for these difficult times?

JOE HOCKEY:

I wanted to see a plan for recovery. I wanted to see something that would give us hope that the Government that is delivering the biggest budget deficit in modern history, that is delivering the biggest debt in our history as a nation - I would have hoped they'd have had a plan to get us back on track, to create jobs, but there was nothing there. It was regrettable, I mean, but, you know, this is the way Labor does it.

VIRGINIA TRIOLI:

Well, Treasury according to forecasts the recovery is coming and will come strongly, we’re looking at a downturn for the next period and a half and then a very strong bounce back,indeed, to above trend recovery levels.

JOE HOCKEY:

Well, it seems to be a very heroic assumption, both the IMF and the Reserve Bank which the Treasurer, until last night, was always fond of quoting, both of them said it will be a slow recovery. In the case of the RBA, they said, from a recession that is less severe than 1990. So they've sort of got the budget the wrong way around. They've spent too much money, they've spent it unwisely, they claim that it's the worst recession since the Great Depression whereas in fact only last Friday, the Reserve Bank said it will not be as severe for Australia as 1990, and yet they have such ambitious jumps - such an ambitious jump out - that no-one agrees with them.

VIRGINIA TRIOLI:

So, you believe that the bolts will be shot as, I think, Ross Gittins, puts it in the Sydney Morning Herald today, by the time the recovery has come around?

JOE HOCKEY:

Well, we have consistently said as an Opposition, you have to have petrol in the tank, and what is clear is that this Government has not only spent all the proceeds of the last mining boom, they are mortgaging the proceeds of the next boom. And the fundamental point here, Virginia, and it's so incredibly annoying, of the $188 billion of net debt that this Government is accruing in the Budget, $124 billion comes from new spending announcements made by Kevin Rudd since the last election. So, it is a big spending Budget, in fact the biggest ever. It is a big, big debt Budget, and one million Australians will be unemployed.

VIRGINIA TRIOLI:

You said last night they’ve failed to lay down a path to invigorate the Australian economy. Tell me how you would do that?

JOE HOCKEY:

Well, the first thing, we wouldn’t be spending recklessly, We wouldn’t have spent the cash splashes out there. The interesting thing is, the cash -

VIRGINIA TRIOLI:

No, don’t tell me what you wouldn't do, tell me what you would do.

JOE HOCKEY:

Well, no, no, no, no. I’ll tell you what we would do, because a lot of this money still hasn't gone out the door. It still hasn’t been spent. The cash splashes have gone out the door, they’re roughly equivalent to all the infrastructure spending in the Budget. Isn't that interesting, $22 billion passed out obvious the next few months, $22 billion over four year, which is the cornerstone of the Budget last night. Secondly, we wouldn't go ahead with the $3 billion in pink batts. Thirdly, we wouldn’t be spending $14 billion on school halls. It's just too much money. We would always focus on infrastructure, that's very important, as we did when we were in Government. But, importantly, you’ve got to grow the pie, focus on small business, focus on growing the pie, creating jobs, giving small business an incentive to employ more people, to continue to employ more people. There's none of that in this Budget.

VIRGINIA TRIOLI:

Well, no it sounds actually, on two key points, like you’re in complete agreement with the Government. The focus on infrastructure, which your critics you’d actually say wasn't there during the Howard years, leaving that to one – well no, we’ve heard the arguments both sides and heard you this morning saying that you did, so we'll leave those words there.

JOE HOCKEY:

No, no, no, no Virginia, Virginia, wait a second -

VIRGINIA TRIOLI:

The second agreement, right, the second thing in which you agree with the Government is the focus on small business and there have been tax incentives there for small business to pull their way through the downturn.

JOE HOCKEY:

Ok, well, let’s deal with the first suggestion first. Under the Howard Government, infrastructure increased from - spending across the nation - increased from 3% of GDP to 5.3% of GDP, and GDP doubled over the 11 years of our Government. So there was a massive increase in expenditure whilst we were in Government. The good news was a lot of that was funded by the private sector and didn't have to be funded by the public sector. The second thing is – sorry, what was the second question you had?

VIRGINIA TRIOLI:

That you clearly agree with the Government on supporting small business too. As you put it, invigorate the Australian economy because there have been tax incentives for small business announced by Wayne Swan.

JOE HOCKEY:

Well, the interesting thing is in the mid-year economic statements the Government committed to this rebate for small business at 30%, they allocated a sum of money. In the Budget papers it's revealed that sum of money wasn't taken up. So they’ve increased it from 30% to 50% for small business. The problem for small business is, they haven't got the money to go out and buy this equipment. The problem is cash flow, the problem is, they’re trying to keep staff on board

whilst they've got diminishing, and then the Government gives them an incentive to buy a new piece of equipment, a new piece of equipment, obviously imported - where does that leave the small business? The small business won’t have the money to take advantage of this.

VIRGINIA TRIOLI:

Joe Hockey, what strengths, what real strengths do you see in the Australian economy right now?

JOE HOCKEY:

Well, the fundamental strength is our people. The fact that we, as a nation can get through this. The fact that we went into this downturn in far better shape than almost any other country. We went in with no Government debt, 4% unemployment, and a Budget surplus. 18 months later, what has happened? Well, the surplus has been blown, the Government is now inheriting or now creating the biggest debt in living memory and we’re down a path of endless deficits. The problem is we don't have a plan for recovery, Virginia, it's a real problem. Because ultimately, all the assumptions in the Budget are based on Kevin Rudd not making one single major new policy announcement between now and 2017 and no one believes he won't do that.

VIRGINIA TRIOLI:

Joe Hockey, will the Coalition let this Budget pass the Senate?

JOE HOCKEY:

We will be very reasonable. We will be very, very reasonable.

VIRGINIA TRIOLI:

Define reasonable for me, Joe Hockey.

JOE HOCKEY:

Well, we are shocked at the size of the deficit. We are shocked at the size of the debt. The total savings measures in this Budget represent just 1% of total outlays. If the Labor Party spins to you the line that this is a tough Budget, you’ve got to have a laugh. Total savings measures are about 1% of all the money they’re spending.

VIRGINIA TRIOLI:

So will you let it pass or not?

JOE HOCKEY:

We will look at the details of it and we will be very reasonable. You know, we’ll be a lot more reasonable than they were with us.

VIRGINIA TRIOLI:

I’m going to take that as a yes, should I then?

JOE HOCKEY:

No, I’m saying we'll be very, very reasonable. But Virginia, bear in mind, last time the Labor Party was in - and it's very interesting - last time they were in, they opposed us on tax reform, they opposed us on Budget surpluses, getting the Budget into surplus, they opposed us on industrial relations reform, they opposed us on privatisation, even when we had mandates to do all of those things. Now, they demand that we support them on initiatives that they never took to the Australian people. In fact, they’re breaking last year's promises and they’re making new promises about things from things paid maternity leave for the next election, in the same breath.

VIRGINIA TRIOLI:

Joe Hockey, good to have you on board.

JOE HOCKEY:

Anytime, thanks Virginia.

[ends]

Updates

Transcripts

ABC NEWS BREAKFAST WITH VIRGINIA TRIOLI

13th May 2009