Campaign Transcript

TRANSCRIPT OF ABC24 CAPITAL HILL INTERVIEW WITH LYNDAL CURTIS CAPITAL HILL 29 AUGUST 2013 E & O E PROOF ONLY _____________________________________________________________ Subjects: _____________________________________________________________ CURTIS: Penny Wong, welcome to Capital Hill. WONG: Good to be with you. CURTIS: Weve just received a statement from the Departments of Treasury and the Departments of Finance saying that at no stage prior to the caretaker period has either department costed Opposition policies and pointing out that different assumptions might generate different financial outcomes and that also there might be differences between whether the costing is done on a cash basis or a fiscal balance or accrual basis. Is it possible that your assumptions on having the Oppositions policies costed were different to those that the Opposition actually used? WONG: A few points Id make: the first is we did ask Treasury and Finance to cost the Opposition policies on the basis of what the Opposition had said publicly. Obviously we dont know all the detail of their policy because theyre not telling Australians the detail of their costings or their cuts. And we anticipated that Joe Hockey would do precisely what hes doing which is to try and hide from the Australian people the true extent of the cuts that he wants to impose in order to fund his policies, particularly Mr Abbotts unfair and expensive paid parental leave scheme. CURTIS: But different assumptions could have led to a different result couldnt they? WONG: Yes, and theres a very simple way - if Joe Hockey says these assumptions are wrong, is that he can put his costings out to the Australian people. I understand that there is some commentary online that he has briefed it selectively, briefed some of the costings selectively to one particular media outlet. Well, instead of giving them to one newspaper why doesnt he give them to the Australian people? But, I would make one point. There was an interesting statement put out today by Mr Hockey where he essentially conceded fessed up to one of the tricks in his socalled savings that he put out yesterday. Hes conceded that one of the large

components of his saves is as a result of different accounting treatment. As you said, accrual treatment as opposed to cash treatment. Now that is using an accounting trick to try and increase the amount of savings you say you have. The reality is CURTIS: But arent there elements on the budget that are done on an accrual basis? WONG: Absolutely there are, but you need to be really clear about what youre calculating and what youre accounting for and in this context these savings that hes referring to - which include for example the cancellation of free permits to particular firms under the carbon price what hes trying to say is that that action creates money, cash in the bank, so that he can pay out on his paid parental leave scheme. The reality is, if you cancel a free permit its not that you create any cash that you can then spend and this is the great lie at the heart of the $10 billion hole in Joe Hockeys costings just on what hes released to date. CURTIS: If we could look at another part of your costings of the Coalitions costings. You said there was a $2 billion hole in the Coalitions costing of scrapping the low income superannuation contribution, that it would only save $1.7 billion. Why have your colleagues been warning earlier this year that scrapping the measure would be a $4 billion superannuation tax hike? WONG: It is a tax hike. It is a tax hike on one in three Australians, people earning up to $700 a week. This is a tax hike that Tony Abbott wants to impose on 3.6 million Australians to pay for a Paid Parental Leave scheme that massively benefits higher income earners. CURTIS: But why were they saying, Ive got press releases from April and May, that it was a $4 billion tax hike and in your costings you say that scrapping it would only save $1.7 billion? WONG: My recollection is the point that the Treasurer made today in the press conference is this is all about when you count the saving from. We are assuming that Joe Hockey is not engaging in a retrospective change to taxation. You can certainly increase the saving if you are prepared to fess up to people and say, Guess what? Were not only going to double tax you, which is what theyre doing to retirees, part pensioners and mum and dad investors to pay for the Paid Parental Leave scheme, were also going to retrospectively tax you for superannuation contributions youve already made. Well Joe Hockey hasnt told people that. If thats the case, if thats how he gets up increasing the saving he should tell people. CURTIS: Now you also said the Opposition is wrongly claiming a saving of $5.2 billion from losing or having 12,000 fewer jobs in the public service. Your costing from the Department of Finance says it used a rule of thumb methodology and some of the caveats are blacked out. Does a rule of thumb methodology equate to a proper costing? WONG: It is a proper costing that the Department of Finance did. I think the parts that were blacked out probably those parts which would identify the individual public servant or servants who worked on that advice, it wouldnt be appropriate to put their name into the public arena. But I would make this point: Joe Hockey is a long way short of the $5.2 billion he claims is saved by sacking 12,000 public servants through natural attrition. If hes

going to change the assumption and if he has a costing based on sacking everybody a lot earlier, in the next few months for example, if they win office, or has some other change in the assumption - theres a very simple way of doing this, he could put his costing out. I mean whats very interesting here, Lyndal, is that I think its 5:30pm today is the deadline for Treasury and Finance to receive costings by which theyll guarantee that theyll get them out before the election that is policy costings. Labor is meeting that deadline, as yet no one in Australia other than, presumably, Andrew Robb and Joe Hockey, maybe Tony Abbott, has actually seen a full costing from the Coalition. CURTIS: Well if I can ask you about WONG: I would, sorry, of course and the select newspaper outlet that they chose to brief. CURTIS: If I could ask you about one of your spending commitments, Mr Rudd has announced a $1.5 billion commitment to bring forward the construction of two navy supply ships. He said the money had been allocated under the Defence Capability Plan as I understand it the latest Defence Capability Plan hasnt yet been made public, has it? WONG: Well look, the defence budget over the forward estimates, from memory, is over $100 billion so it is not unusual for Defence or governments to prioritise capability within what is obviously a very significant budget allocation CURTIS: So theres been no specific budget allocation yet for this announcement? WONG: There will be a budget allocation within that defence budget to which I referred. And just to get perspective I think its $1.5 billion was the cost that was announced and youre looking, over the forward estimates, from memory, at about $100 billion - $110 billion for the defence budget. Its not an unusual prioritisation of capability acquisition within the defence budget. CURTIS: But it will mean Defence not doing something it might have been going to do and doing this instead? WONG: We have prioritised this for the reasons the Prime Minister announced. Its important in terms of capability, its also important in terms of maintaining, as is in the national interest, a capacity workforce geared up to enable Australia to continue to be to have shipbuilding capacity here on shore. CURTIS: And is this something Defence has told you it wants? WONG: Look, I havent personally had conversations with Defence it wouldnt be my job - that would be something that would be discussed within the defence portfolio and the Minister of Defence but there certainly is a capability requirement which I think was outlined in the documentation and in the announcement today. CURTIS: If I can ask you something I asked a panel about just before you joined us Mr Rudds comments last night at the leaders debate on foreign investment he

says he was anxious about an open slather approach. What about the approach there is at the moment is open slather? WONG: Sorry if I can just I was listening to some of that debate and I was rather amused to see, was it Mr Jensen? CURTIS: Yes. WONG: - saying you know, having a go about changes to foreign investment rules. Does he not know his policy is actually a change to foreign investment rules that the National Party imposed? CURTIS: Yes, but WONG: I just thought it was interesting CURTIS: What is open slather about the approach at the moment? WONG: I think, look, the Prime Minister was reflecting, I think, a legitimate concern that people have raised. We have, I think, sound foreign investment rules and as the Treasurer and I - or the Treasurer I think said today, these are rules which enable two particular objectives. One: the national interest and I think that contemplates a great many matters and the second is that, obviously, assessments are made on a case by case basis. CURTIS: You say youre reflecting community concerns but isnt, as I put to the panel, isnt that what Barnaby Joyce was doing when he was raising concerns and he was attacked by your side for it. WONG: Oh come on, what I have just said to you, Lyndal, what the Prime Minister said last night is a long way from what Barnaby Joyce said. I mean, Barnaby Joyce, if you listen to his contributions, I mean it is an extraordinary proposition this man might become the Deputy Prime Minister of Australia in short order. If you listen to what he was saying he essentially was saying he didnt want any foreign investment for any land acquisition, ever. And I dont think Im being overly exaggerating about what he said. CURTIS: Penny Wong, Well have to leave it there. Thank you very much for joining us. WONG: Good to speak with you. ENDS

Transcript
Senator Mathias Cormann
Shadow Assistant Treasurer Shadow Minister for Financial Services and Superannuation Coalition Campaign Spokesman
Thursday 29 August 2013 ABC News 24 Capital Hill Broadcast at 5:45pm

Presenter: Topic:

Lyndal Curtis with Mathias Cormann Costings

E&OE.

LYNDAL CURTIS Welcome back to Parliament House. The Coalition disputes the governments estimates of its costings, although its still not releasing the figures from the Parliamentary Budget Office that it used for its own costings. I spoke a little earlier to the Shadow Assistant Treasurer, Mathias Cormann. Mathias Cormann, welcome to Capital Hill. Have got a $10 billion hole in your savings? MATHIAS CORMANN No we dont. These are just more Labor lies. Weve got a Prime Minister who is getting increasingly desperate. Hes been telling the Australian people a lie a day. Today he was out there talking about how important it was for leaders to be truthful and then immediately he proceeded to tell more lies. LYNDAL CURTIS

Okay so why has Labor got the figures wrong? MATHIAS CORMANN Well a whole range of reasons. Theyve obviously made a series of claims which are wrong. Our costings have all gone through a rigorous and robust process through the Parliamentary Budget Office. They have all been signed off by our expert committee of eminent Australians, people like Peter Shergold and Geoff Carmody and Len Scanlan, eminent Australians with significant experience in public sector finance. If I just go through some of the claims that Labor made today. Our costing for the 12,000 reduction in the head count for the public service was costed by the Parliamentary Budget Office at $5.2 billioninterrupted LYNDAL CURTIS Through natural attrition only, no voluntary redundancies? MATHIAS CORMANN Through natural attrition. No voluntary and forced redundancies. Now the Labor Party released two documents today in order to try and substantiate their dishonest assertions. One document was out of date by May 2013. It says so explicitly in the document. The document attributed to Finance actually specifically says in the document that the costing was prepared using a rule-of-thumb methodology. That is bureaucratise for on the back of the envelope. LYNDAL CURTIS Could you not end this battle by simply releasing the Parliamentary Budget Office costings that have been done to show us the figures youre using and the assumptions on which those costings have been done? MATHIAS CORMANN Well we are going through a rigorous and robust process, the most rigorous and the most robust process any Oppositioninterrupted LYNDAL CURTIS Is it the most open and transparent? MATHIAS CORMANN and this was my second point. My second point is that we have released more information at this point of the electoral cycle, at this point in the election campaign of any Opposition ever in the history of the Commonwealth. The Labor Party never released this much information at this point of the cycle. LYNDAL CURTIS But the Labor Party has costings up on the website, The Greens have released Parliamentary Budget Office costings; you havent put any out? Would you not be able to end this argument by releasing those figures?

MATHIAS CORMANN And next week, once weve released all of our policies we will be releasing a full list of all of our policies and their cost. A full list of our savingsinterrupted LYNDAL CURTIS And the Parliamentary Budget Office costings? MATHIAS CORMANN If you look at the Economic Statement that the government released, they didnt release all of the Treasury and Finance working documents that went with it. They just released the Economic Statement. We will be releasing all of the appropriate information, people should not measure us with a different yard stick, with a different benchmark then they are measuring the government. The government releasedinterrupted LYNDAL CURTIS The government has put out somethere are some costings up on the websites from the government. The Greens are releasing the Parliamentary Budget Office costings. What is the problem with the Coalition releasing costings so we can find out what you are saying is right, that your assumptions, that the methodology used, your figures are right. MATHIAS CORMANN Well what we are saying is right. We are going through a rigorous and robust process through the Parliamentary Budget Office, which was set up by the Labor Party. We have a committee of eminent Australians, who are experts in public finance who are putting their reputation on the line, signing off on the integrity of our process and the integrity of our numbers. When the government releases their Budgets, year in year out, which they always get wrong, when the government released their Economic Statement, they didnt release all of their working documents along with it. We will be releasing more detail and more information than any Opposition has ever released about their costings and about the value of their savings measures. People can trust our capacity to get our numbers right. What people know from the Labor Party, over the last six years, they havent been able to get their own numbers right. Why would anyone trust them with our numbers? Theyre just playing politics and they are being dishonest. LYNDAL CURTIS Would it not be more open and transparent to release the costings that youve said youve had done by the Parliamentary Budget Office that you say backs up your case that your figures are right. MATHIAS CORMANN Well Ive just told you. We will be releasing more detail than any Opposition has ever released. We will be releasing a full list and a detailed list, making it very clear over the forward estimates, in accrual terms and where required in cash terms, what the full cost of our policies is and what the full value of our savings is and of course people will see that under the Coalition, the Budget position will be better offinterrupted

LYNDAL CURTIS But the PBO cost wont see the light of day? MATHIAS CORMANN Well the Labor Party does not release their Treasury or Finance working documentsinterrupted LYNDAL CURTIS You dont want to be a little better than them? MATHIAS CORMANN Hang on, so you are expecting the Opposition to take it up another couple of levels compared to the government, with all of the resources of government? I mean the government today, for political reasons, in a desperate attempt to mislead people, has selectively released some documents from Finance and from Treasury. That is not what they do as a matter of course. There were all sorts of qualifications in the briefing notes that were released. The government blackened out some key qualifications to the costings that they released. The Finance Department themselves says that it was a back of the envelope type calculation using the rule of thumb methodology. The Labor Party has just completely lost the plot. No wonder that we have got Budget blow-out after Budget blow-out under Penny Wong as Finance Minister, if that is the way she seeks advice from her Department. LYNDAL CURTIS If I could just ask one final question on this matter, so you will not be releasing your Parliamentary Budget Office costings? MATHIAS CORMANN We will be releasing more detail than any Opposition has ever released in relation to our costings and in relation to our savings. And there will be independent verification both on the integrity of the process that we have followed and the numbers that we are putting out there from highly reputable experts in public finance. People across Australia can have every confidence that, unlike the Labor Party, we have got our numbers right. LYNDAL CURTIS Now the government says youve got a $2 billion hole in your costings on the Low Income Super Contribution, the costings done on the basis that contribution stops from 2015-16 and the Treasurer says if you did it beforehand it would it be retrospective. MATHIAS CORMANN Well the Labor Party is getting desperate. This is completely false and the Romans would say look what Labor has done in tempore non suspecto. In April this year, we had David Bradbury out there attacking the Coalition about this particular savings measure when we announced it, saying that this was a $4 billion hit on low-income earners supposedly. So it

was $4 billion then and all of a sudden its $1.7 billion now? Well our costing again, went through the Parliamentary Budget Office. It is a conservative costing. It is a costing of $3.7 billion over the forward estimates. Dont believe what Labor is saying now when they are trying to run a dishonest political attack. Look at what Labor said in April. LYNDAL CURTIS Finally, the Opposition Leader Tony Abbott said last night at the Peoples Forum that he would put a priority on delivering promises even if that meant delaying a return to surplus. Does that push your potential surplus timetable which is, at this stage, unknown out even further? MATHIAS CORMANN Well a couple of points. Firstly, well deliver a Budget surplus as soon as possible and quicker than Laborinterrupted LYNDAL CURTIS So before 2015/16? MATHIAS CORMANN Well youre making the mistake of trusting Labors numbers. Who knows what the numbers will be. Youve got to remember that in the 11 weeks between May and August, between the Budget and the Economic Statement, the Budget position deteriorated by $3 billion a week. Now, PEFO came out two weeks ago. Weve got another 9 days to go until the election. Who knows by how much more the Budget position will deteriorate in the meantime. So all we can do, is we tell you what the full cost of our policies will be, tell you what the full value of our savings will be, tell you what the net positive impact on the Budget bottom line will be, but obviously if the starting position reflected in PEFO is the starting position that we inherit on September 8, then yes we will be able to deliver a surplus consistent with the timetable that is outlined in PEFO. But we are not making that assumption, because if you look at Labors past track record, its a heroic assumption. LYNDAL CURTIS So if the figures in PEFO are the ones youre presented with after the election, you will deliver a Budget surplus on the same timeline that is outlined in PEFO? MATHIAS CORMANN If the starting position is right, then obviously we would be able to stick to the same timetable. As weve said, as a result of our policies and our savings measures, the Budget bottom line will be better off under the Coalition and next week, we will be explaining by how much and by when. LYNDAL CURTIS Mathias Cormann, thank you very much for your time. MATHIAS CORMANN

Always good to be here. ENDS. Media Contact: Slade Brockman 0427 261 980