ABC 891

SUBJECT/S: Labor’s Debt; education budget; Possible Farrell return to Senate COMPERE: Mark Butler, Labor MP for Port Adelaide. He is the Opposition spokesperson on the environment and climate change. Good morning to you, Mark Butler. MARK BUTLER: Good morning gentlemen. COMPERE: And joining us I think from Canberra is Chris Pyne, he's the Liberal MP for Sturt and he's now Education Minister, Leader of the House. Good morning to you, Chris Pyne. CHRISTOPHER PYNE: Good morning gentlemen. COMPERE: You won't be driving the debt truck around for the next three years at least. CHRISTOPHER PYNE: Well, I have never driven the debt truck around, not literally. COMPERE: No, but the Liberal Party has and its supporters and with Joe Hockey taking the debt ceiling up to half a trillion, sixty-six per cent up, it will have to stay in the garage will it not? CHRISTOPHER PYNE: Well, the problem is that the Treasury has advised Joe Hockey that Labor's wanton mismanagement of the budget over six years has meant that we will crash through the three hundred billion dollar current debt ceiling that Labor set in December this year with it forecasting to rise to over four hundred billion dollars over the next twelve months. So Labor has left us in a very, very bad state and I think people suspected that, but we are only now starting to see quite how bad their mismanagement of the budget has been. And rather than going back to the Parliament on a regular basis to increase the debt limit which only leads to… COMPERE: Debate and scrutiny. CHRISTOPHER PYNE: Well, no skittish markets and poor confidence in the business community and the retail sector. Rather than doing what Labor did which was have a constant scene of chaos and dysfunction, we are going to have one big rise in the debt ceiling to five hundred billion. We think that's prudent. Of course we don’t have to reach five hundred billion. We don’t have to go there. We will try and reduce our spending, cutting waste and increasing revenue by growing the economy and then not need to use that debt. COMPERE: But, Christopher Pyne, just a few weeks ago during the election campaign, the Treasurer, Joe Hockey, famously said, if debt is the problem, more debt is not the answer. And now he says, well we need to bump it up to half a trillion dollars. CHRISTOPHER PYNE: But, David, we've only been in power for about six weeks. COMPERE: It didn’t take you long to break that promise. CHRISTOPHER PYNE: So we can hardly be blamed for the mismanagement of the last six years by the Labor Party and it would be quite financially irresponsible for us to pretend that things are better than they are. Now, we've inherited a mess. COMPERE: No, but, Chris Pyne, you have been telling us for six years that the economy is an absolute basket case. CHRISTOPHER PYNE: Sure. COMPERE: Okay, so why would you be surprised when you got in that it's a basket case in your view and you need more debt to run it? CHRISTOPHER PYNE: Well, Treasury's advice is that we are heading to a four hundred billion dollar plus figure for debt. That's nothing to do with any decisions that the new Government has made. That's decisions the Labor Party made for the last six years. Now, we've only been in power six weeks. We can hardly be blamed for Labor's debt. Labor has left us a shocking debt, shocking mismanagement because they spent most of the last three years fighting amongst themselves and not actually do the job that governments are expected to do. Now, because we are a responsible government we will make the decisions that need to be made to try and recover the economy and keep jobs. COMPERE: Mark Butler, it's your fault. MARK BUTLER: Well, Christopher has now got an interest in preventing markets from being skittish and ensuring that business confidence is up. They certainly didn’t have that concern over the last few years when Joe Hockey and Christopher and Tony Abbott were raising the levels of hysteria about budget emergencies, about our economy to extraordinary heights. And what we're seeing now is the hysteria of opposition Joe Hockey and opposition Christopher Pyne running to in a collision, running to the realities of running a government and now they have recognised… COMPERE: Are you saying you would have to have done exactly the same thing? In other words, these are fundamentals, you can't change them. Treasury advice would have been the same six weeks after the election if you had been re-elected and that is that debt was going to - you would need to run up to four hundred million dollars and you’ve just to get the dough. You’ve got to borrow it. MARK BUTLER: Well, we've said very clearly that our net debt position is the envy of the Western world. I mean it's about one ninth the rate of the average of developed nations around the world and the hysteria that Joe Hockey kept going on about and there were moments I thought he was going to pop a blood vessel in question time about the budget emergency, the debt emergency, there is no such emergency. But at least we were honest. We have been upfront with the people over the last several years, saying that in order to manage the consequences of the global financial crisis, we went into a modest net debt position. COMPERE: So you think half a trillion dollars is okay? MARK BUTLER: We never contemplated as far as I know and I never saw any advice that we would need to lift the debt ceiling to half a trillion. This is Joe Hockey's revelation. We were talking about something far more modest than that. So quite where Joe has pulled this figure from I don’t know. Presumably he will tell us that when we go back to parliament and ask him some questions about it. COMPERE: Yeah, one of the luxuries of being in Opposition. You can just ask the questions, but are you concerned that it's getting up to half a trillion? MARK BUTLER: Well, we don’t know quite where it's going to get up to and he wants to lift the credit card limit to half a trillion. That's news to us. We were relatively confident that the net debt position we had as a government of about eleven per cent of GDP compared to ninety, nine-zero per cent of GDP which is the average of developed nations, was a sustainable position that we would be able to pay down in due course. But where Joe has got this half a trillion dollar figure, the budget emergency response to the Audit Commission, this is all stuff we are going to have to ask him about in parliament. COMPERE: Okay, now and just quickly traffic here on 891 Breakfast, it's seven minutes to nine, Mark Butler and Chris Pyne and thank you for the advice, a three car crash just above the tunnels on the freeway headed into the city, so on a down track avoid if possible. Emergency crews are arriving there now. Traffic though is either not moving or just crawling along. Christopher Pyne, health education, defence and pensions, they were all meant to be protected from an Audit Commission. Are they going to be? You're the Education Minister, for instance will there be cuts in your portfolio? CHRISTOPHER PYNE: No, but if there's waste you wouldn’t expect us to keep wasting money would you? So… COMPERE: But have you been given a target? CHRISTOPHER PYNE: No, of course not. There are no cuts to health or education. Any planned cuts to defence before the election were announced that they would be reinvested in frontline defence services. But if we identify waste we should not continue to waste money. That would be foolish. We should save that money and spend it back into education or in the case of health back into health and that's what Joe Hockey has said we'll do. COMPERE: But what if the Audit Commission says, look the best way to get this under control is a one per cent efficiency dividend? That's a good way of cutting waste. We see that in a State Government all the time and the result is a cut in services. You can dress it up any way you want, but if they apply a one per cent efficiency dividend or a two per cent efficient dividend across the public service, the Commonwealth public service, that will affect your portfolio. There will be cuts in education… CHRISTOPHER PYNE: Labor and the Coalition both said that we would have an efficiency dividend in the budget in the lead up to the election. So that's quite a different matter. If the Audit Commission is not given the task of finding cuts in education or health, but it is given the task of finding if there is waste and where there is waste it's common sense to stop wasting money and that's exactly what we'll do. COMPERE: Gentlemen, can we just put something to you two that we put to Chris Uhlmann earlier in the week, yesterday I think it was and that is Jay Weatherill wants to spend a billion dollars on transport infrastructure every year for the next thirty years. He made the point that is Chris Uhlmann made the point that somebody is going to have to look at the structure of our budgets, our government spending. That we just expect too much now and the whole thing is becoming unstainable. Health and education alone are consuming our governments without looking at transport infrastructure. Mark Butler? MARK BUTLER: Well, look I didn’t hear that interview, but going back to Peter Costello there's been a process in the Commonwealth Treasury that we continued that I think has been incredibly valuable called the Intergenerational Reports and that guided a significant part of a fiscal strategy over the six years we were in government to ensure that budgets were going to be sustainable in the long term. For example what we did in relation to the private health insurance rebate, means testing that. Those things were informed by very long term budget projections. Now, that was all knocked sideways to a significant degree by what happened in the global financial crisis, but I think at a Commonwealth level under Costello and Swan as Treasurers we have been trying to take that long term view, particularly as the baby boomer generation retires there's going to be a very significant shift in spending and revenue obligations at a Commonwealth level. COMPERE: Okay. MARK BUTLER: So I think that's been a focus of Commonwealth Governments now for a decade or more. COMPERE: Chris Pyne, just quickly your view on that one. CHRISTOPHER PYNE: Well, just quickly and I'm not sure what Jay Weatherill is on about and he's sort of making it up as he goes along as he tries to distract people from the scandal engulfed in the Department of Education and his government. Of course he was the Minister for Education for five years and bears responsibility for it. COMPERE: Sure. CHRISTOPHER PYNE: The State Opposition in South Australia lead by Steven Marshall has already announced that if they're elected they will establish Infrastructure South Australia which will be given the job of ensuring that we have a long term infrastructure plan. This is a vital component in a future economy for South Australia which by the way is facing very bleak times. COMPERE: Okay. CHRISTOPHER PYNE: And so therefore I do support long term planning around infrastructure and Tony Abbott wants to be known as the infrastructure Prime Minister. That will benefit South Australia, but if we keep the Weatherill Government in March, unfortunately more of the same chaotic and dysfunctional administration we've seen in the Department of Education… COMPERE: Okay, we were asking a Commonwealth question, but that's fine. Now, Mark Butler, I notice you’ve got a bit of a cough this morning. Is Alex Gallacher developing a cold? Senator Alex Gallacher who's coming up to his sixtieth birthday and we notice that Don Farrell is on Bill Shorten's ministerial, shadow ministerial team even though his term, because he's lost his senate spot, he didn’t get up at the last election. Maybe Alex won't be with us for much longer. MARK BUTLER: Well, I'm not sure what you are alluding to, but last time I saw Alex Gallacher he was in rude health. COMPERE: Well, no okay, well let's spell it then. MARK BUTLER: And I'm sure I'll see him at the ALP Convention over the weekend and I'm sure he will be in rude health as well. COMPERE: Let's spell it out then. Is a place in the senate going to be found for Don Farrell? And do you create a vacancy by tapping someone like Alex Gallacher on the shoulder? MARK BUTLER: Well, I saw some comments from Alex in the last forty eight hours or so that he was keen on continuing to serve in the senate, but obviously that's a matter for Alex. I've got no information that differs from that. I think he is enjoying his job. He's making a great contribution. I think Don Farrell will continue to make a wonderful contribution as a shadow minister for the time he has left in the senate and I wish it was longer. COMPERE: Chris Pyne? CHRISTOPHER PYNE: Well, if I was Alex Gallacher I wouldn’t go on any boating expeditions with Don Farrell or anybody else. He might end up having a nasty boating accident. [Laughter] COMPERE: Don is a man of peace. We are sure that wouldn’t happen. Chris Pyne, thank you, Liberal MP for Sturt, Education Minister. Mark Butler, Opposition spokesperson for the environment. I will go and get a… Ends