Senator the Hon Mathias Cormann
Minister for Finance
Date: Friday, 23 May 2014
TREASURER: Good morning. Here we are in Perth, continuing our dialogue with the Australian people about the Budget. The fact is that the Australian people know that if we do not take strong and decisive action to fix the problems that we inherited in the Budget. Then the costs associated with the repair job in the future will be far greater. Clearly in dialogue that I had yesterday and this morning on morning radio as well with people, it is clear people understand that something needs to be done. The only people that think the status quo will fix the Budget are the Australian Labor Party. And they are still deluding themselves to believe that if nothing is done, the Budget will repair. Well as Doctor Parkinson said in April, you would need to have five and a quarter per cent real growth each year to bring the Budget back to surplus if nothing is done now that is patently a quite unbelievable number given that we are currently at below trend of around three to three and a quarter per cent. Five and a quarter per cent is completely unreasonable which effectively proves that the Labor option of do nothing is not an option. So I now call on Mr. Shorten in the upcoming two weeks of parliament to take a more mature approach to the Budget mess that he created, that the Labor party created, but this generation of Members of Parliament need to fix. I am calling on Mr. Shorten and the Greens and the Independents to recognise that the Budget must be fixed and if they have better ideas, they can put them on the table. So far, we have heard a whole lot of guff from the Labor party. They said they wouldn't be giving $8.8 billion to the Reserve Bank, well the money is gone, the Reserve Bank is now paying dividends back to the Government, if they say they are going to strip $8.8 billion in the future out of the Reserve Bank, that is a very, very significant announcement. If the Labor party think that reversing our commitment to the Paid Parental Leave scheme will save them money, they are wrong. Because the Paid Parental Leave scheme is a fully funded scheme, standalone scheme. So the Labor party now is opposing nearly $40 billion of savings over the next four years. In addition, they are defending the failure of the Carbon Tax and the Mining Tax, which still has a punitive effect on the economy and certainly it doesn't help the Budget, so I would say now is the time as we approach a week of Parliament, two weeks of Parliament, for the Labor party to come clean about what they're proposing as part of the Budget fix. I will hand over to you the Minister for Finance.
FINANCE MINISTER: Thank you Treasurer. We are working hard to build a stronger economy here in Western Australia and nationally and to repair the Budget mess that we have inherited from Labor. Labor is opposing both our efforts to build a stronger economy and our efforts to repair the Budget. Labor is opposing our plans to scrap the carbon tax, to scrap the mining tax, both initiatives that will strengthen economic growth, in particular here in the great State of Western Australia and will have significant flow on consequences and significant beneficial effects nationally. Stronger growth of course leads to increased opportunity for everyone to get ahead, but also to increased revenue for government. So Labor doesn't want to do anything that helps lift government revenue. They don't want to do anything to help reduce government expenditure, which is highly reckless, highly irresponsible and shows a dangerous indifference by Labor to future opportunities across Australia. And then of course we are investing in the infrastructure of the 21stcentury. We are investing in productivity enhancing infrastructure, including here in Western Australia, through the $1.6 billion investment all up, including a $925 million federal government investment in the Perth Freight Link. Today I read in the newspaper that Labor is opposed to that too. So we have got a Labor Party which is opposed to anything that helps build a stronger economy, which helps create opportunity for everyone to get ahead and which will help lift government revenue into the future and Labor is opposed to everything when it comes to making sure that government lives within its means, to make sure that our spending growth trajectory is more sustainable into the future. The $40 billion in savings that Labor is now opposing or saying that they will oppose includes $5 billion of savings that Labor themselves initiated, that Labor themselves banked in their last Budget, that Labor was too lazy to legislate in the Parliament, they just banked the money in the Budget, but never actually did the hard yards to legislate those savings and now that we are doing the hard yards, making sure that the Budget is repaired over time, Labor is standing in our way. We are here today calling on Labor to get out of the way, to support the important efforts to build a stronger economy where everyone can get ahead and to support the efforts to ensure that government spending is more sustainable into the future.
JOURNALIST: Which key aspects of your Budget do you realistically think you will be able to get through before the changeover?
TREASURER: Well I'm not going to start passing comment on the passage of legislation. I'd just say that it is time for Bill Shorten to become a responsible Leader of the Opposition and start showing some restraint instead of being all complaint. He is just chief whinger of the complaints desk and frankly as Leader of the Opposition and as someone who helped to create the mess, he should be taking some responsibility to fix it.
FINANCE MINISTER: The Budget that we've put forward and the Budget that we have delivered in the Parliament and that we will seek to legislate through the Parliament is the Budget that Australia needs and as the Treasurer has said, Bill Shorten needs to start taking responsibility for the mess that he and his team have created in Government and he has to start facing up to the solutions that are required. If he doesn't like our solution, he should start telling the Australian people how he proposes to fix the mess that Labor left behind.
JOURNALIST: But how is his strategy any different to the strategy that you adopted when you were in Opposition?
TREASURER: Well it's very different. Because, for example, in Tony Abbott's last Budget in Reply speech as Leader of the Opposition, he laid down $5 billion a year of savings including the abolition of the School Kids Bonus. So we were very upfront and when there were changes being made in the welfare space, we actually supported their passage through the Parliament, so there is a lot of selective memory going on, there's quite a bit of amnesia. Bill Shorten has got to stop being the nation's chief whinger and start focusing on the mess that he created and he's actually making difficult for us to clean up.
JOURNALIST: Treasurer, the negative reaction to the Budget exemplified by the negative polls that are around the Budget, does that demonstrate that the Australian people don't have the appetite to make the sacrifices that you say are necessary to fix the Budget up?
TREASURER: Australians know that the mess needs to clean up…interrupted
JOURNALIST: Then why did react so fiercely to your [inaudible]
TREASURER: We are not in the business of focusing on opinion polls, we are in the business of focusing on the right policies to fix the mess.
FINANCE MINISTER: This is an important point. This is a marathon and not a sprint. We are taking responsibility to put Australia on a stronger foundation for the future again, to fix the Budget mess that we've inherited. People were never going to be universally happy about slower growth in benefit payments or temporary tax increases and the like. People will over time, we believe, accept that the decisions that we have made are the right decisions for our country's future. This is not something that is going to be judged by the first opinion poll one week after the Budget, this is going to be something that is going to be judged after people have had some time to see the impact of the decisions that we've made and how they are strengthening our country moving forward.
JOURNALIST: There was an article in the Washington Post which described the Budget as a draconian austerity Budget and was the extreme least popular of the past four decades in Australia and described Tony Abbott as quickly becoming one of the world's most hated Prime Minister's. Is this extremely damaging when something like the Washington Post publishes things like this about our nation?
TREASURER: No, because I think it was the New York Post that praised it as a magnificent Budget and an illustration of what Government has got to do around the world to prevent going down the path of austerity measures. So you have one editorial from one newspaper, I'll have another editorial from another newspaper. What matters is the policy.
JOURNALIST: The Federation White Paper. What realistic chance do you think that there that Western Australia can get a better deal on the GST and particularly its distribution coming out of that process.
TREASURER: We will see how we go down that path but we recognise that Western Australia does have a legitimate concern about falling proportion of GST coming to this State.
TREASURER: Well let's see how the White Paper goes. You're asking me to comment on something that hasn't been drafted. Yes?
JOURNALIST: With regards to speculation that there is consideration within the Coalition for a Mining Tax. Is there any sense to that?
TREASURER: No, no.
FINANCE MINISTER: We are the party that is absolutely and totally committed to scrapping the mining tax, which is good for Western Australia, which is good for the economy and for jobs in Western Australia. The Labor Party is the party that has come up with a tax, which hit a very important industry for Western Australia very hard, which created uncertainty, which has cost jobs, which has lessened the level of investment into an important industry, which hasn't raised any meaningful revenue. The little in revenue that it has raised, we have started to refund because on reflection it turns out that the mining companies that paid initially didn't actually have to pay what they thought they had to pay. So we've got a tax here which was bad for the economy, bad for jobs, bad for investment, bad for Western Australia, which doesn't raise any meaningful revenue, when the Labor Party in government had already spent all of the money that they thought it would raise and more into the future. No wonder that we've inherited such a mess. That was one of the real Wayne Swan incompetence specials, the mining tax. Who can come up with a tax that leaves the Budget worse off as well as leaving the economy worse off? Only Labor can be so stupid to come up with a tax that is so bad and then stand in our way as we try to get rid of it. I mean it is unbelievable.
TREASURER: And I agree. Thank you.