SUBJECTS: Budget Reply, FuelWatch, Fuel excise, education
CHRIS BOWEN:
Well ladies and gentlemen, on Tuesday night the Australian Government released its plan for the future: to put downward pressure on inflation and to help Australian working families.
Tonight we heard the response from the Opposition. Tonight the Opposition sold out its economic credibility. Tonight they threw around money like confetti at a wedding. Tonight they raided the surplus.
The Australian people understand a lower surplus means a higher chance of higher interest rates.
The number one challenge for the Australian government must be to put downward pressure on inflation and downward pressure on interest rates.
Tonight Dr Nelson once again denied that the core challenge for the Australian government is to reduce inflation. Once again Dr Nelson had to reach back to the 80s and 90s to justify his claim that inflation isn't the main challenge for the Australian government when it comes to the economy.
Now this morning we estimated that Dr Nelson and Mr Turnbull had used over $2 billion dollars of this year's surplus. Tonight they added another $1 billion. Taking their surplus to being almost $4 billion lower than ours in 2008-09.
Across the forward estimates, as at this morning, they'd spent $13 billion of the surplus. Tonight they added another $4 billion. Taking their raiding of the Australian people's surplus to $17 billion.
Now the Australian people understand economic credibility. They understand that tonight Dr Nelson and Mr Turnbull threw around their money but didn't put forward one savings plan.
Not one measure to get government under control.
The government has reined in government expenditure after the profligacy of the Howard years.
Tonight Dr Nelson and Mr Turnbull indicated that they were returning to that way of government.
They were returning to throwing around taxpayers' money without regard to inflation and interest rates.
Now on some specifics, in relation to petrol: again, we've outlined our plans - sensible, considered, and responsible. 20 weeks ago Dr Nelson and Mr Turnbull were members of a government. A government which had the opportunity to do something about petrol prices. 20 weeks ago, they were a member of a cabinet which had the chance to reduce petrol excise.
Tonight, after 11 and a half years in office they decide that petrol prices are an issue.
We put our plans out there. we put our plans for FuelWatch which, all the objective evidence indicates, puts downward pressure on fuel prices by about 2 cents a litre at a cost of $20 million.
Their plan costs hundreds of millions of dollars - hundreds of millions of dollars; billions of dollars over the forward estimates.
Tonight, Dr Nelson wrote a cheque he knows he can never cash. This promise has no credibility, it has no reason to it, it has not been properly thought through.
On education: 20 weeks ago, Dr Nelson was the Education Minister. He seems to think that the education problems in this country arose on the 25th of November, 2007. he was a member of a cabinet for a very significant period of time; he was the Minister of Education for a very significant period of time and now he has a plan to fix education. I think the Australian people will pass judgement on his credibility.
I'm more than happy to take some questions.
JOURNALIST:
Don't you want petrol prices to be lower? They want to bring them down, they've got an easy quick way to bring them down, what's wrong with that?
BOWEN:
Everybody wants petrol prices to be lower. The Australian people want a credible, sensible, well thought out plan. Now Dr Nelson hasn't given much detail tonight to his plan, he hasn't said which types of fuel it will apply to, he hasn't put out detailed costings; we'll be examining those very closely.
The Australian people aren't silly. They know what works and what doesn't. They want a government which has a sensible thought out plan. They want a government which is putting downward pressure on interest rates and inflation. Now the Reserve Bank doesn't take into account one-off reductions, when they come to considering their interest rate policy. The Australian people want a sensible plan across the board - Dr Nelson and Mr Turnbull have miserably failed to deliver it.
JOURNALIST:
Would you be willing to consider a cut to the fuel excise after watching what your FuelWatch program does for a while?
BOWEN:
We've put out our plan. FuelWatch is a very good plan. We've put out our plan we've got the petrol commissioner on the job we've got increased investigatory powers now. When it comes to taxation there is the Henry review which will look at all matters in relation to taxation but our plan stands. No doubt fuel excise is an important mater in the community and no doubt the Henry review, the root and branch review of taxation would examine that in due course of its business.
JOURNALIST:
You claim FuelWatch will bring down the prices and with a record budget surplus wouldn't it be as easy to look at the fuel excise.
BOWEN:
FuelWatch brings down petrol prices, puts downward pressure on petrol prices at a cost of $20 million over the forward estimates, this costs billions of dollars over the forward estimates. You've got to have a bit of credibility about this you've got to weight up the value of these plans.
JOURNALIST:
Mr Bowen I understand your attack on their credibility but I don't understand your attack yet at least on what's wrong with taking 5 cents off the cost of petrol particularly if you have a $21.7 billion surplus and their claiming it will only cost $1.8 billion to do it. Won't most Australians say well that leaves a pretty hefty surplus anyway?
BOWEN:
The bigger the surplus the big the downward pressure on interest rates, anything which raids the surplus puts more upward pressure on interest rates. It's not just fuel tax, Dr Nelson and Mr Turnbull spent across the board today they're putting upward pressure on interest rates, they are the tax and spend liberals, they believe in lower budget surpluses and higher interest rates. That's the only conclusion the Australian people can reach.
JOURNALIST:
But won't lower petrol prices put downward pressure on interest rates?
BOWEN:
No, not if it's out of a tax reduction because the reserve bank makes it very clear if there's a one off increase or a one off reduction - they look at the underlying price movements. They will not take into account a one off reduction in petrol prices when it comes to setting interest rates.
JOURNALIST:
Dr Nelson said some pretty scathing things about Australian teacher and education standards is he right or is he wrong?
BOWEN:
Well he was education 20 weeks ago, now we have a plan out there to deal with education standards, we think education has been under invested, we think there are things that can be done about teacher education, we didn't come to this issue tonight. Dr Nelson had the chance to do something about it, apparently he thinks the problems originate over the last five months.
JOURNALIST:
Specifically, when he mentions that problem is he right or is he wrong?
BOWEN:
Well I think everyone agrees that there can be improvement across the board in education, we've made that clear. If we didn't think couldn't be improvements in education we wouldn't have instigated an education revolution.