Campaign Transcript

TRANSCRIPT OF TREASURER CHRIS BOWEN ABC INSIDERS 11 AUGUST 2013 E & O E PROOF ONLY _____________________________________________________________ Subjects: Election Campaign; Australian Economy; GST; Election Debate; Peter Beattie _____________________________________________________________ BARRIE CASSIDY: Treasurer, good morning, welcome. CHRIS BOWEN: Good morning Barrie, good to be with you. BARRIE CASSIDY: How much of a setback is to lose two candidates in a single weekend? CHRIS BOWEN: Well Barrie, as you know, I can't even recall an election campaign where there hasn't been a drama with a candidate from one side or another. The key question is what you do about it, how you respond, what leadership you show. I think the Prime Minister yesterday showed that leadership. As suggestions emerged he ordered an immediate inquiry, got the report back, consulted with senior colleagues, and then insisted on the highest standards, not only of behaviour but of accountability of his candidates, and took the difficult decision to ask the National Executive to remove them as candidates. And I think that's how a leader, a prime minister or leader of the opposition, should respond when difficult issues emerge in relation to a candidate from either political party. BARRIE CASSIDY: Well now, in order to pick a replacement do you think he'll show leadership and take the decision away from those in Victoria who seem to be fighting among themselves on this? CHRIS BOWEN: Well the National Executive will have to make this decision. Obviously we always prefer rank and file ballots, but when you're in an election campaign it's very justified for the National Executive to make a decision and make a decision quickly. And I expect that's exactly what they'll do. BARRIE CASSIDY: OK. The Prime Minister opened the campaign by pinning his hopes on trust - that Australia should trust him to better manage the economy. But

since July, in the Nielson poll, he's blown a five point lead in trust over Tony Abbott. He now trails by seven points. It does appear that the electorate's not buying that. CHRIS BOWEN: Well Barrie, this election is very close and I think anybody trying to call this election week one into a five week election campaign is making a pretty big mistake. It's close, it's tight, we're the underdogs. But this election will be decided on the big picture, on who has the best economic plan for the future, who's got the most positive plan for dealing with the challenges and transitions in the economy. And, who's being honest with the Australian people. We've seen the Opposition at sixes and sevens about their costings, about when they'll reveal their costings, about whether they'll even reveal their budget bottom line. I mean the fact that you've got an alternative prime minister and treasurer who think that they can get away, in the modern era, without being honest with the Australian people about what their policies add up to, and what impact they'll have on the budget, and what they'll cut to pay for their promises is extraordinary. And well continue to make that point. BARRIE CASSIDY: In your case, though, just before the campaign started you revealed a blowout in the budget deficit and rising unemployment. Is that part of the problem there, that it just confirmed in people's minds that the economy is deteriorating under Labor? CHRIS BOWEN: Well, we called it as we saw it. We made the decision to be upfront with the Australian people about the impact in the budget of changes in the economy, and how we would deal with it, what our plans are. We've been very clear about that, we laid it out. We laid out what policies we would take to the Australian people, how we would pay for some of the decisions we've made, how we would set the path back to surplus. And there were some difficult decisions, and some controversial ones. But we've laid them out clearly. Now that stands in stark contrast to the Opposition, Mr Hockey saying we won't add our policies up. Mr Abbott saying the Australian people can do the maths. Their policies don't add up, and the Australian people are entitled to conclude, if they don't lay out how their policies are costed and paid for, that they will have to make very significant cuts to basic services - to health, to education, payments to families - to pay for their promises. BARRIE CASSIDY: But the quote that you just gave then was mid-week. Since then they've said they will fully cost their policies and they'll give a final budget position. CHRIS BOWEN: Well let's see Barrie. They've been at sixes and sevens on this all week. The Shadow Treasurer has been taking a different position to his Leader of the Opposition, they've been at odds with each other in public. The Shadow Treasurer said the pre-election financial outlook would not be worth the paper it's written on; then Mr Abbott said that's what they'll base their projections on. Mr Hockey has said "we won't be adding our policies up", his words, not mine. Mr Abbott has said that it will all be laid out. Well, I'll believe it when I see it. But when they lay their policies out, it shouldn't be in the last day before the election is held. And the policies will need to be clearly and properly costed by a central

agency, the experts in the field, not by an accountancy firm who might be fined after the election for breach of professional standards. Remember this Barrie, these guys have got form. At the last election they didn't submit their policies for costing. After the election the Department of Finance costed their policies and found huge errors, an $11 billion error. Nine out of 10 of the savings were wrong in terms of their costing. Now this time, if they want to be taken seriously as credible economic managers, they will need to be much more upfront with the Australian people. And you know this, and I know this Barrie, they're engaging in Magic Pudding economics. We can cut taxes, we can get a surplus, we cannot cut services - and it just does not add up. And that's why they're not being upfront with the Australian people, because they know it doesn't add up. Mr Abbott and Mr Hockey know their policies don't add up, and that's why they are running away from the scrutiny that the Australian people in the modern era are right to expect. BARRIE CASSIDY: Well the last thing we heard from Tony Abbott on this, I suspect we'll hear it again tonight, is that the costings will based on the Parliamentary Budgetary Office and then will be verified independently. CHRIS BOWEN: Well let's see what that means. As I say Barrie, last time they used an accountancy firm which was then fined for breach of professional standards because the work was not up to scratch. Mr Hockey has said he'll use some state government agencies, well state government treasuries have come out and said that that would be completely inappropriate. They released during the week a $5 billion policy with one line in the release about costings - no figures, no tables. They say it's been costed by the Parliamentary Budget Office, but they've not released any of the details. And they say theyre paid for by savings as previously announced, and they can't even agree on how much they've previously announced. The Leader of the Opposition, the Deputy Leader of the Opposition and the Shadow Treasurer have all used a different figure. They say BARRIE CASSIDY: Well they're saying $17 billion CHRIS BOWEN: $13 billion BARRIE CASSIDY: $17 billion. CHRIS BOWEN: Well one has said 13, one has said 15, one has said 17. And then they've allocated that money to other things, they've tried to double count their savings.I mean this just doesn't cut the mustard. BARRIE CASSIDY: In what way are they double counting? Theyve said $17 billion, and you know what that is, most of it is the big cuts to public service numbers, the school kids bonus, that sort of thing. $17 billion is more than enough to cover the company tax cuts and the changes to the carbon tax.

CHRIS BOWEN: Well, as I've said Barrie, they've used three different figures. We believe there is a $5 billion hole in that analysis. But if they want to be taken seriously - submit the figures to Treasury, submit the figures to the Department of Finance, comply with the Charter of Budget Honesty. Were doing it. BARRIE CASSIDY: They say they will. But where's the double counting? CHRIS BOWEN: Well they have not said they'll comply with the Charter of Budget Honesty Barrie, which is to lay out the figures, to have them centrally costed and to put it out before the Australian people. Now, we say they announced a range of measures in reply to the budget, which they used to fund the abolition of the carbon price; they also say they'll abolish the Minerals Resource Rent Tax and they'll return to surplus, but they haven't said very clearly that they'll put out how they'll return to surplus, when and how much. And also, what other cost cutting will they do. They rely on the post-election commission of audit, Campbell Newman style, which is not the way to treat the Australian people with any degree of honesty or respect. BARRIE CASSIDY: Isn't it true, though, that if both parties were honest with themselves and with the public, that you're both locked into spending more than you can actually raise over the coming years, and what is really needed is some real structural reform to the economy. CHRIS BOWEN: Well no I don't agree with that Barrie, and I'll give you two examples of the different approach that we take. Now, we have said, last Friday, that we will return to surplus in 2016/17 with declining terms of trade. Now to get to budget surplus with declining terms of trade and less government revenue means a bigger task; but it means a structural improvement to the budget. The decisions we've taken actually lead to a structural improvement to the budget. The alternative, however, is what Mr Abbott and Mr Hockey are doing. To use one example, they say they'll have a company tax cut, which they cost at $5 billion, we don't accept that costing, but they cost it at $5 billion. One of the savings they use is the deferral in the superannuation guarantee - now that's just a deferral, that saves money for a couple of years. But if they're to be taken at their word, say that they will increase the superannuation guarantee in time; so that saving is not ongoing. So they're committing to a promise which will cost money for years to come with a saving that will only provide saving for a couple of years. So they are making the budget structurally worse, they are leading to a structural decline in the budget. It just shows how irresponsible their approach is. BARRIE CASSIDY: But on the other hand, you're asking us to believe that you'll get to a surplus, $4 billion or something, four years from now when the most recent figures were out by $33 billion in just three weeks.

CHRIS BOWEN: Well Barrie, the world economy is volatile, it's more volatile than it has been for a long time. It'll be volatile if I'm sitting before you again in a months time as Treasurer. It'll be BARRIE CASSIDY: But that's the point CHRIS BOWEN: volatile if Mr Hockey does. BARRIE CASSIDY: that's why it's almost meaningless, then, to have a stab at a $4 billion surplus four years from now. CHRIS BOWEN: Well it's still the appropriate thing to do. Based on all the advice from the Treasury and the Department of Finance, and I've yet to see anybody who says that they could do a better job in terms of forecasting than the Department of Treasury and Finance, they've laid out what they see as credible projections and forecasts for government revenue. And any responsible treasurer or prime minister would base their decisions and their forecasts on that advice. BARRIE CASSIDY: And will Kevin Rudd be running hard on this GST (Goods and Services Tax) scare campaign tonight? CHRIS BOWEN: Well, Barrie, here lies the issue; the Opposition themselves say the GST is part of the issue, Mr Hockey says that. They say that they will not rule out increasing the GST; Mr Hockey says it's part of the equation. They won't be upfront with the Australian people about how they're going to pay for their promises. So, therefore, the Australian people are very entitled to draw the conclusion that if they say the GST's on the table, and they refuse to be upfront and honest with the Australian people about how they'll pay for their promises, then the GST is on the table, it's taking them at their word. BARRIE CASSIDY: But all they're saying is that it'll be part of a review some time into the future, and if they ever decide to do anything about it they'll seek a mandate at the following election. What's wrong with that? CHRIS BOWEN: Well that's not what Mr Hockey has said. And as I say Barrie, let them be upfront BARRIE CASSIDY: But what has he said that's different to that? CHRIS BOWEN: Well what he's said is that it's part of the equation, it's part of the equation in terms of the GST BARRIE CASSIDY: Yes, will be reviewed as part of a long-term CHRIS BOWEN: Well we're ruling out increasing the GST. We're ruling out putting it on food. We're ruling that out clearly and decisively, whether we're elected in this election or the election after. Mr Hockey and Mr Abbott can do the same. They can take the decision not to refer an increase in GST to the tax review. But here we have a tax review and a commission of audit putting of all their decisions until after the election, and not being upfront with the Australian people about it.

BARRIE CASSIDY: But they're saying they won't consider it until the review sometime in the next term, and then they're saying they'll seek a mandate. So surely this is a debate to be had at the next election, not this one. CHRIS BOWEN: No. Well if you vote for Tony Abbott, Barrie, it's very clear the GST will be on the table. If you vote for Kevin Rudd, we are ruling out increasing the GST. Very, very clear - a very clear distinction. BARRIE CASSIDY: So who takes the most responsible decision then, in terms of a full scale review of the taxation system - the party that rules things out right from the very beginning or the party that rules everything in? CHRIS BOWEN: Well we don't think an increase in the GST is justified, Barrie. An increase in the GST would hit families on low and middle income families more than it hits other people. So we don't think that's justified. That's a legitimate and appropriate policy decision for us to take. Now, Mr Abbott takes a different view, thats fine, that's his right. But we are pointing out he takes a different view. But in relation to your question about what Kevin Rudd will be doing tonight in the debate: he'll be laying out his positive plans for the future; he'll be laying out our plans to invest in infrastructure; our plans to invest in the National Broadband Network, our plans to increase superannuation; or plans to deal with the transition underway in the Australian economy. That's what he'll be doing tonight. Now Mr Abbott can also be upfront with the Australian people tonight. He can reveal how he's paying for his policies. The time for excuses is running out, the pre-election forecast comes out on Tuesday. Every day is another day closer to that pre-election forecast being out, and he needs to base his forecast on that pre-election fiscal outlook document, prepared by the Departments of Finance and Treasury with no interference from the Government. And then he needs to lay out how he'll pay for his policies, what he'll cut and what he'll increase in terms of taxes to pay for his policies, because at the moment his sums just don't add up. BARRIE CASSIDY: How important do you think the debate will be in the whole context of the campaign? CHRIS BOWEN: Look, I do think it is a good opportunity. This is not a time where leaders can engage in sound grabs and 30 seconds bites. An hour long debate before the Australian people; this will be the first one. Of course Mr Abbott is a formidable politician, he shouldn't be underestimated in terms of his ability to put his case. But I think Kevin Rudd has the best plan for the future, and we are very much looking forward to him having that opportunity for him laying it out in the debate tonight. BARRIE CASSIDY: And just finally, do you think there will be a Beattie bounce in Queensland? CHRIS BOWEN: Look I think Peter's a great addition to the team. He was a very good premier of Queensland; he made sure the Queensland economy was strong, a

lot of jobs created during his time as premier, public finances were strong. I think he remains a fantastic addition to the team in Queensland. I'm looking forward to campaigning alongside him. And certainly he's got a tough fight in Forde, it's always tough to take a seat off the Opposition, but I believe he gives a very good chance of doing so. BARRIE CASSIDY: Treasurer, thanks for your time this morning, appreciate it. CHRIS BOWEN: Thanks Barrie, good to talk to you. ENDS