Transcripts

DOORSTOP INTERVIEW SYDNEY 12.15PM TUESDAY SEPTEMBER 29, 2009

29th September 2009

DOORSTOP INTERVIEW

SYDNEY

12.15PM TUESDAY SEPTEMBER 29, 2009

Subjects: Final Budget outcomes 2008-09, ETS

E&OE…………………………………………………………………………………………..

JOE HOCKEY:

The shroud has been lifted on the Rudd government’s rhetoric with its own figures released today.  Kevin Rudd and Wayne Swan claimed that a wrecking ball went through government revenue and that’s why they had to accrue so much debt. Yet the figures released today indicate that revenue, tax collections for the Commonwealth Government during the worst of the economic crisis are down only 1.6%.  And in fact, it is government expenditure, a massive increase in government expenditure, that has caused the largest dollar deficit in Australia’s history.

This is an end to the rhetoric from the Rudd Government and the truth has come out. They can’t claim any more that a wrecking ball has put a massive hole in their Budget because it is clearly government expenditure that has done it. And it’s government expenditure at record levels that is going to cause interest rates to rise higher than they should be. The fact of the matter is - as revealed today - government revenue has not collapsed. 

The majority contributor in the 2006-07 data to the government’s company tax revenue is in fact mining and financial services[1]. And as the Governor of the Reserve Bank identified yesterday in testimony before the Senate, we had no financial collapses in Australia and our mining revenue continued to be strong given the massive demand out of China.

So all of the Rudd government rhetoric about wrecking balls and disasters is blown out of the water by these figures today which indicate that there are five reasons why Australia survived the economic downturn, but there’s one reason why we have record deficits and that’s massive government spending.

JOURNALIST:

[inaudible]

JOE HOCKEY:

Well, it’s always good news to have a smaller deficit but it’s not good news to have the biggest dollar deficit in Australian history.  It’s not good news to have record levels of government expenditure.

And the government will spin it whatever way they want, but I ask Australians and I ask commentators, not to be conned by the rhetoric.  Have a look at the detail and you will see in the detail that tax revenue during the worst of the global financial crisis actually held up very well.

There was no wrecking ball, there’s no $200 billion black hole in their Budget as a result of the global financial crisis. The problem is this government is drunk with spending.  It’s going to put upward pressure on interest rates, and now the evidence is that it is a direct cause of the massive Budget deficit.  

JOURNALIST:

Wasn’t the government preparing us for the worst?

JOE HOCKEY:

Well, the government over-egged it, the government went too far. It attempted to con the Australian people, but sooner or later, the truth comes out.  Look at the revenue, look at the fact that revenue is there.

Now Wayne Swan claims that there are one-offs in the revenue. Let me promise you, every year there are one -offs in the revenue, every year.

The fundamental point is there is no wrecking ball that has gone through tax collections. The government has still high levels of tax, but it’s also got high levels of expenditure. And it is a fact that the government expenditure on things like pink batts, school halls that aren’t needed, $900 cheques, that’s the stuff that is causing the Budget deficit at a record dollar level.

JOURNALIST:

So are you saying then that New South Wales or sorry, Australia was quarantined from the GFC?

JOE HOCKEY:

There were five reasons and I’ve said it all along  - as the Governor indicated yesterday in his opening statement and I would ask people to look at it - there are five reasons why Australia came through this economic downturn.

Firstly, we went into it in far better shape, far better shape than most other nations.  The government had a record level of surplus, it had money in the bank, it had 4% unemployment.

Secondly, Australia had no major financial collapse and one of the reasons for that is the very good regulation put in over the last few years of the Howard Government.

Thirdly, Australia - as the Governor identified - Australia had record terms of trade, fantastic demand particularly out of China, and that’s had a big impact.

Fourthly, interest rates were able to be dropped significantly in Australia very quickly, and most Australians have variable home loans, so it flowed through very quickly to the average household.

And finally, the government spent a lot of money.  Our argument was not about spending money, our argument was that this Rudd government is spending too much money.  Engaging in reckless spending and that reckless spending is now causing the largest Budget deficit in dollar terms in modern Australian history.

And of course, the evidence today is that there has been no wrecking ball through revenue, so now I would say to the government: “Stop spending money and put it in to paying off your massive debt, rather than putting the burden back on Australian families”.

JOURNALIST:

[inaudible]

JOE HOCKEY:

No, I don’t agree with anonymous surveys, I think they’re fanciful stuff.

JOURNALIST:

[inaudible]

JOE HOCKEY:

Well, the Coalition went to the last election promising to introduce an emissions trading scheme.  We want the government to consider the impact of decisions in Copenhagen at the end of the year.

Look, common sense says why are you selling out Australia’s interests before you have world agreement?  Because unquestionably, if the world comes to an agreement then the Rudd government has to come back to the Parliament and that’s a waste of the Parliament’s time.  It creates additional confusion.

Common sense says if you are going down this path, let’s get it right.  Let’s get it right the first time. Let’s not have a situation where you use the Parliament as a revolving door to keep changing the legislation to accommodate the latest international agreement.

And I’d just ask Australians to look at what Kevin Rudd does, not what he says. And in the United States he said it doesn’t matter whether you have legislation or not when you go to Copenhagen.

JOURNALIST:

[inaudible]

JOE HOCKEY:

Well, let me tell you we’ll keep our counsel on that.  But I’ll tell you what, in the Labor Party, there’s a lot of doubters about Kevin Rudd.  Martin Ferguson is a pure climate change sceptic, and he is a member of the Cabinet.  He is joined by a number of people in the Labor Party.  So I would say, what matters is the division in the government over its own approach, and clearly the government needs to come clean on the real impact of its proposal.

JOURNALIST:

[inaudible]

JOE HOCKEY:

Look, I would say there is significant division in the government. There is significant division in the government, and there is division in the Australian community but climate change is real. Australians, like everyone else in the world, will have to help to do something about it, but it is ridiculous to try to have a global solution with only Australia doing the heavy lifting.

Thanks

[ENDS]