29 July 2013

Interview with Lyndal Curtis, ABC News 24

SUBJECTS: Coalition costings, Charter of Budget Honesty, Fringe Benefits Tax.

LYNDAL CURTIS:

Chris Bowen, welcome to ABC News 24.

CHRIS BOWEN:

Thanks Lyndal.

CURTIS:

Last December when he was abandoning the surplus promise Wayne Swan said the Government wouldn't be chasing revenue downgrades with spending cuts - is that still the Governments attitude?

BOWEN:

Well I've made the position clear Lyndal that we will stick to our Budget strategy, which includes returning to surplus in 2016-17. I've also made it clear that there have been revenue impacts, that the decline in the terms of trade, what the world is prepared to pay us for our goods, I do think it's important economically that there is a clear pathway to surplus.

CURTIS:

Does that mean returning to what's called balance which is a very small surplus in 2015-16?

BOWEN:

Well obviously I'll be outlining the pathway to surplus in 2016-17 in the very not-too-distant future, but I have said we're sticking to the Budget strategy which includes the return to surplus in 2016-17 and obviously stepping towards that including 2015-16.

CURTIS:

So if there are further revenue downgrades, you might have to chase a few of that, a bit of that, with soft spending cuts, not just cut to pay for your own spending?

BOWEN:

Well, if you are returning to surplus and you have a reduction in revenue, then there are decisions that need to be made responsibly to get to surplus. Now, our key strategy here, our key objective is to ensure that we continue to support jobs and growth, very clearly we need to do that, we have a good record but we can't take our eye off the ball on that particular matter. Making sure we have plenty of support in the economy, working with the Reserve Bank to ensure that we maintain a very solid record of jobs and growth. And that means not cutting to the bone in these circumstances, not reckless cuts to schools or hospitals or important services for people but taking responsible decisions so that we're returning to surplus over the cycle, responsible decisions which are the right thing to do without cutting to the bone and wrecking our economic growth and jobs record.

CURTIS:

Do you worry about taking any spending cuts to an election campaign?

BOWEN:

Obviously Lyndal any tough decision is obviously in this environment tough politically, but I don't think the Australian people are looking for politicians and leaders who are taking the easy options at the moment. They're looking for politicians who are taking responsible decisions, supporting jobs and growth but returning the Budget to surplus which is the responsible thing to do. Now, does every tough decision have some sort of political downside? Of course it does, of course it does but that doesn't mean you avoid those tough decisions. This is not what this Government is about.

Now the key question is - are you going to be upfront and open about these tough decisions like we are being, put your decisions out there, put all your figures out there pre-election, or are you going to hide behind some sort of post-election commission of audit and run away from the Charter of Budget Honesty, which is the alternative approach, which our opponents have put out there, not the approach that we will be taking.

CURTIS:

But Mr Hockey, the Shadow Treasurer, says while he's not going to look to the pre-election fiscal outlook prepared by Treasury and Finance about ten days into the election campaign for costings, he is using the Parliamentary Budget Office, doesn't that mean that Coalition costings will be done properly?

BOWEN:

No, not at all. He hasn't even said that he will use the Parliamentary Budget Office for all his costings. He'll still use some sort of private costers by the look of his statements like he did last time and those private costers were fined for professional incompetence because of the dodgy work that was done on the Liberal Party costings at the last election. Let's be clear about this Lyndal, this is frankly a scandal.

This is the Liberal Party trashing the Charter of Budget Honesty, which was in fairness, to give credit where it's due, put in place by Peter Costello and John Howard. Now, every political party has abided by those rules since then. Now why are they doing this? Because they are simply not up to the job of putting together a coherent alternative Budget. They are not up to the job of closing the ring between their decisions and ensuring a sensible fiscal strategy. The Opposition's economic team is simply not up to it and they are hiding and trashing the Charter of Budget Honesty which is nothing short of a scandal and we'll be holding them account for that.

CURTIS:

But won't the Parliamentary Budget Office, for the costings the Opposition does use the office for, be looking at what the Government says in its economic statement and what Treasury says in the pre-election outlook and base its decisions on those?

BOWEN:

Well there are two issues here - there is the pre-election outlook which the Treasury and the Department of Finance will release, and that's the bottom line, that's what decisions should be based on - to then determine what a budget surplus or deficit would be under the Liberal Party. Now they're saying they will refuse to co-operate with that, they'll refuse to recognise that, a process established by John Howard and Peter Costello. Then there is the second issue of the costing of individual policies. Now all our policies will of course be appropriately costed through the normal ways, through the Department of Treasury and Finance. Now if the Opposition is going to use the Parliamentary Budget Office for some and private accountancy firms for others and the Department of Treasury and Finance not for any, I mean this is just not acceptable. You must comply with the Charter of Budget Honesty. If you look back at what Peter Costello said about it - he was very clear about the Charter of Budget Honesty. It was about the pre-election economic outlook and it was about using that process to establish costings and agreed methodologies so that political party policies were out there for the Australian people to see and then could be judged accordingly. Now, what we've got is an economic team led by Tony Abbott and Joe Hockey which has decided it's all too hard so we need a free pass, they're saying, from the Charter of Budget Honesty, we need a get out of jail free card which will mean we don't need to use the Charter of Budget Honesty – it is completely unacceptable and it is fiscal vandalism.

CURTIS:

But when you were last in Opposition in 2007 your costings were put in very late into that process. Isn't that a case of do as I say, not as I do?

BOWEN:

Well, they were put in, Lyndal, they were put in. And if you look back at the process of elections since 1998, the Liberal Party was very keen to ensure that the Labor Party complied with the Charter of Budget Honesty and any Opposition, whether they be Labor or Liberal which doesn't comply with the Charter of Budget Honesty, leaves themselves open for commentators like yourself and other members of the press gallery to be rightly indignant with their fiscal vandalism and their lack of transparency. Now Joe Hockey and Tony Abbott will not be allowed to get away with this con job on the Australian people of refusing to have their policies properly costed and funded and out in an open and transparent way.

As I say Lyndal, we'll be making decisions which some people will criticise, other people will welcome, some people will say we have gone too far with this measure or that measure, but it will all be out there clear, open and transparent. We're not going to hide behind some sort of Campbell Newman style commission of audit which it says before the election "Oh well we're not going to do anything which the Australian people won't approve of" and then after the election start cutting into schools and hospitals and basic services - that's their plan and they will not be allowed to get away with that from this point of view.

CURTIS:

Does that mean your economic statement will outline all the things you propose to announce during the election or will you too be leaving some spending announcements for the election so people won't see all your costings until then?

BOWEN:

No, all our costings will be very clear and transparent and open and costed through the Charter of Budget Honesty, absolutely.

CURTIS:

One final question - you've been copping a bit of flak for the decision on Fringe Benefits Tax on cars. Tony Abbott says it is a tax hike - is it?

BOWEN:

No, not at all. What this is, is ensuring our tax system is fair and equitable and sustainable. And all we've asked is that if people are claiming a car through their employer that they show some company use, some business use, a log book, even an electronic log book which can be kept for three months and then get a tax deduction for five years. Now, if Mr Abbott and Mr Hockey are going to beat their chest and talk about responsible decisions and a return to surplus and tough decisions that need to be made but at the same time say it's inappropriate to ask people to keep three months' worth of records to justify tax relief for five years, then they're just a joke quite frankly.

CURTIS:

Chris Bowen, thank you very much for your time.

BOWEN:

Thank you Lyndal.