TRANSCRIPT: INTERVIEW WITH LYNDAL CURTIS, ABC 24
TRANSCRIPTION: PROOF COPY E & OE
DATE: 24 SEPTEMBER 2012
TOPICS: Budget, Defence, costings, United Nations Security Council
LYNDAL CURTIS: The final Budget deficit for the financial year 2011-12 has improved slightly on the forecast in May. The final Budget outcome released today showed a deficit of $43.7 billion. The forecast in May was $44.4 billion. But the Treasurer says falling commodity prices will mean the government has to find more savings to meet its target of a Budget surplus at the end of this financial year.
Joining me to discuss the day are the Shadow Assistant Treasurer Mathias Cormann, and the Defence Parliamentary Secretary David Feeney. Welcome to you both.
DAVID FEENEY: Thank you very much.
MATHIAS CORMANN: Good to be here.
LYNDAL CURTIS: We'll start with the final Budget outcome released today.
[Excerpt from earlier press conference]
WAYNE SWAN: Now the underlying cash deficit for 2011-12 showed a small improvement of $661 million dollars from the May Budget estimate. This is the smallest variation between the budget estimate and the final outcome for a decade. Good work, Penny. This improvement since the Budget estimate was relatively evenly split between slightly lower payments and slightly higher receipts.
But the Budget is still suffering from the after effects of the global financial crisis and international instability.
JOE HOCKEY: If they were giving out Emmys for spin, Wayne Swan won it today. He has doubled the deficit on what he originally promised, he has increased the net debt by over $40 billion, he is spending $10 billion more in the year and somehow he wants a pat on the back for good work Penny. I mean this is a joke.
[End of excerpt]
LYNDAL CURTIS: Now, if I could start first with some figures that you both no doubt will want to raise during this debate: the Coalition's alleged $70 billion black hole and the Government's alleged $120 billion black hole. David, on the $70 billion black hole that Coalition spokesmen have referred to in the past, that's over four years and your Government's cut or says it will cut $134 billion over five budgets, so you've already done much more than you're claiming the Coalition will wreck the economy by doing?
DAVID FEENEY: Well I guess what we're saying Lyndal is that we have the Budget on a pathway back to surplus and that we are in Government and obviously our decisions to make that happen can be measured.
And what we saw today was some results that prove our forecasts are on track. I thought it was very interesting when Wayne Swan said that this is the closest a result has been to a forecast for some 10 years. It means that the forecasts are reliable and that the Budget is heading in the right direction under Labor.
And I guess what we say when Mathias or others come to contradict the Labor Budget is, well hang on a minute, where are your credentials in this debate? You have got a policy proposition for the people of Australia which has a $70 billion black home in the middle of it. It's laughable.
And how can the Liberals then make it their business to consistently complain about our results that are delivered and measurable when their own budget, their own shadow budget is in such a shambles?
LYNDAL CURTIS: Mathias, on the question of the $120 billion black hole you say exists in the Government's figures, that's based on a newspaper analysis, not on figures from Treasury. It doesn't take into account that some of the spending will involve a contribution from the states. And it's the same size because it's over eight years as the task of cutting… the task that your spokesmen have set of cutting the Budget by $50 to $70 billion over four years, isn't it?
MATHIAS CORMANN: Well let me just say up front that the Labor Party really has no shame when it comes to smoke and mirrors to cover up their complete fiscal incompetence.
I mean, since the last election, the deficit, the budget deficit for the last financial year has actually more than quadrupled. Wayne Swan put out an economic update before the last election when he said the deficit in 11-12 would be $10 billion. It has deteriorated at every subsequent update. $12.3 billion at MYEFO in December 11, $22.6 billion at the actual 11-12 Budget. And of course $44.4 billion at the most recent 12-13 Budget.
And just because it's come in slightly below that significantly deteriorated Budget deficit, now here is Wayne Swan saying fantastic, whoopy doo, we've actually done better than what we thought when we've nearly reached the end of the financial year. It's just ridiculous.
Now, I mean, there is no $70 billion Coalition black hole, of course. I mean the Government is trying to sort of dishonestly accumulate all of the revenue figures over a period well beyond the four years for the carbon tax and the mining tax.
DAVID FEENEY: But they were your own figures, Mathias.
MATHIAS CORMANN: Well that's just not true. I mean, don't believe your own spin.
But what we do know is that the Labor Party over the last four budgets has delivered $173 billion worth of accumulated deficits, including the three biggest deficits in the Commonwealth's history. These are the facts and figures the way Treasury has actually delivered them. And moving forward, we know that the revenue is going to be down. We do know that the Government has been spending like drunken sailors in the last couple of weeks because they're clearly focused on the next election.
So I mean yeah, we know that they now have another $120 billion budget black hole they're looking at on top of the $173 billion worth of deficits that they've already delivered.
LYNDAL CURTIS: If we could go to some specifics for the future, David, the Treasurer says because of falling commodity prices you're going to have to cut harder to get back to surplus.
Now, the Defence Department, Defence has delivered significant savings over the last two budgets. Is Defence going to be called upon again and will the $36 billion submarine program you have be included in the estimates for the Budget update at the end of this year?
DAVID FEENEY: Gosh, there's a lot of questions in that.
Firstly, the future submarine project is something that will come to government either at the end of this year or the beginning of the following year for final decision. That $36 billion number you cited is a number that was produced by the Australian Strategic Policy Institute. It's not a government number. And I think there's a lot of reliable work out there that says that the number… final number might end up looking very, very different.
That major Defence acquisition really isn't one of the ingredients that is being talked about here at the moment.
What we're talking about here at the moment is the fact that the Government is on a pathway to coming back to surplus, that for the first time I think in our history, we now have a government budget that is triple-A rated.
LYNDAL CURTIS: And will Defence be called upon for savings again?
DAVID FEENEY: Well, I guess ultimately that's a decision that's above my pay grade, Lyndal, but Defence obviously is one of the many departments of Government that has to make savings and as you said in your remarks earlier, contributed some $5 billion over the forward estimates to what was a total of $35 billion of savings.
Those were difficult decisions and tough choices, but that's what we had to do to get the Budget back into surplus.
And of course the Opposition can complain about some of our savings choices. That's politics I guess. But really my fundamental point is how can they possibly complain about the state of the economy, the state of the how the economy is rated internationally, when they themselves don't have a Budget proposition that adds up?
That $50 to $70 billion black hole we were talking about, those are Mr Hockey's numbers. They're not numbers that came from me or from you and the Liberal Party can't walk away from the fact that when they abolished the carbon price, when they hand back the mineral and resources rent tax, but keep the benefits those taxes sustain they have a policy problem, their numbers don't work.
LYNDAL CURTIS: Mathias, your side of politics says you can't be expected to show your full costings until you see the pre-election fiscal outlook. Will you have your policies costed by either Treasury or the parliamentary budget office before election day?
DAVID FEENEY: Or perhaps by a catering company as you did last time.
MATHIAS CORMANN: We will have all of our policies properly costed and we will be releasing all of the detail in good time before the next election. But let me just make this point…
LYNDAL CURTIS: By Treasury or the parliamentary budget office?
MATHIAS CORMANN: Well we'll make this judgment closer to the time. But let me just make this point: of course we should wait until we know the final Budget outcome, and until we know what the pre-election economic and fiscal outlook actually says.
Because this is of course a Government which tells us in May 2011 when they release the 11-12 budget that they expect a deficit of $22.6 billion, and then of course when it's all said and done, it is actually a deficit of $43.7 billion. And they somehow try to sell that as a major achievement. That is a doubling of the deficit.
So I mean who knows by how much the Budget position is going to deteriorate for 2012-13, between now and when the election is eventually called?
We will make the final decisions on responsible judgments around policy priorities, of course, when we get closer to the next election, when we do have a better understanding as to what the actual budget situation is at that point in time - as you would expect us to do as a responsible and sensible alternative Government.
LYNDAL CURTIS: But you're not prepared to say yet whether you'll have those policies costed by either Treasury or the parliamentary budget office before election day?
MATHIAS CORMANN: Well we will have policies costed through the parliamentary budget office.
I mean obviously you are well aware of the concerns that we've got that once the election is called there is of course no longer adequate confidentiality around the workings in relation to all off this.
So you know we will have the policies costed by the parliamentary budget office. But you know, you will see in good time before the next election what our costings are and they will be sensible and they will be focused on actually delivering government that lives within its means because the current Government has delivered spending, debt and deficit galore.
LYNDAL CURTIS: We might move on now.
The Prime Minister's out of the country attending the United Nations General Assembly in New York, pushing Australia's case for a seat on the UN Security Council. The Opposition Leader says she should be elsewhere.
[Excerpt from press conference]
JULIA GILLARD: It will go right down to the wire. So we've got to be there putting Australia's case. And look we are encouraged by support we've received from many places around the world. We've been endorsed by the Pacific Island Forum, by the nations in our region in the Pacific.
We've received the support of the Caribbean island nations, that's significant. We do have support from you know many places around the world. But it's tight and it's tough and so I'm here personally to advocate for our election to the Security Council.
[End of excerpt]
[Excerpt of radio interview]
TONY ABBOTT: She should be in Jakarta, not in New York, because that is where Australia's national interest is most at stake right now. Rather than talking to African countries, trying to drum up the numbers to get us a temporary seat on the UN Security Council, she should be in Jakarta talking to President Yudhoyono about how we can cooperate better with the Indonesians.
[End of excerpt]
LYNDAL CURTIS: Mathias a quick Google check would've told Mr Abbott that the Indonesian President as well as the Indonesian Foreign Minister are in New York attending the same General Assembly as the Prime Minister. Should Mr Abbott have checked before he called on her to spend her time instead in Jakarta?
MATHIAS CORMANN: Well, let's just be very clear. Julia Gillard is over in New York to do the numbers to deliver on Kevin Rudd's pet project. She's not over there to do what she should be doing and that is to fix up the border protection mess which Labor has created over the last 4 and a half years in government.
LYNDAL CURTIS: But she is in the same place that the Indonesian is in, isn't she?
MATHIAS CORMANN: And she's over there to try to do the numbers to deliver on Kevin Rudd's pet project which is to deliver a temporary seat on the United Nations Security Council. That is the wrong priority.
The right priority would be for Julia Gillard and her ministerial team to be focused on our relationship with Indonesia; she should be in Jakarta actually trying to fix the border protection mess that they've created.
She should be talking about the reintroduction of temporary protection visas. She should be talking to the Indonesians about an Australian Government policy to start turning the boats around that are arriving here, when it's safe to do so and she should of course be completely dedicating herself to our interests in the region rather than to travelling around New York and Geneva and all of that.
LYNDAL CURTIS: David, Australia needs votes from African nations to have a chance for the seat on the Security Council. It's a continent the Prime Minister hasn't visited. Diplomats lobbied for an invitation for her to attend the African Union meeting in July, only to have the Prime Minister turn it down because she wanted to oversee the introduction of the carbon price. Is it a bit much to ask for votes Africans when she hasn't even been there?
DAVID FEENEY: Let me say a few things, Lyndal. Firstly, Mathias described this as Kevin Rudd's pet project and that's just very annoying to hear, because of course, this should be the country's pet project.
Australians like to imagine themselves as a middle power, a country that is concerned with international law and the peace and prosperity of the international world and the systems that sustain it. And here we are as a country stepping up, having a go making a claim. And we should all be getting behind it rather than harping about it.
And of course, Tony Abbott was so keen to complain about it that he rushed to suggest that Julia should be in an empty presidential palace in Jakarta while the President of Indonesia is in New York. I mean, this is a guy who doesn't know what he is talking about. The Prime Minister is exactly where she should be. She's in the United Nations with 140 world leaders pressing Australia's case. That's her job and that is something everybody, Liberal, Labor or whatever, should be applauding her for doing.
LYNDAL CURTIS: That's where we'll have to leave it. David Feeney and Mathias Cormann thank you very much for your time.
DAVID FEENEY: Thank you very much.
MATHIAS CORMANN: Good to be here.