SUBJECTS: Hockey's $14 billion spending cuts, Private Health Insurance rebate, Government stimulus, Building the Education Revolution
MARIUS BENSON:
Chris Bowen, Joe Hockey is now promising that a Coalition Government would have savings of $14 billion a year, is that something the Government should have as its target?
CHRIS BOWEN:
Well this sounds like another thought bubble from Mr Hockey who is not famous for attention to detail.
Last night, the Opposition voted down the government's reforms to the health rebate which would have saved $1.9 billion over 4 years.
So on the one hand, they're voting down sensible savings measures and on the other hand Mr Hockey has indicated that they would cut a very significant amount, on some calculations $14 billion which is a very, very significant amount from Government spending. They need to outline what their plans to do so are.
I think the Australian people will be very interested to here what funding cuts they have, what spending cuts they have, considering they're opposing our sensible spending cuts.
BENSON:
Just on that issue of the private health insurance rebate which was knocked back by the Senate last night as you mentioned, $1.9 billion over four years, does that provide new specific problems in drawing up the budget?
BOWEN:
Well it will leave a hole in the budget and we will need to now reconsider our position in relation to this matter but this just underlines – the Opposition said there were no tough decisions in the budget – and yet, when they have the chance to vote on a tough decision, they squib it, they squib the reform, they squib the chance to make a saving and they go for the cheap political option, instead of supporting the Government in savings measures which are designed to help the budget return to surplus over the economic cycle. It just shows they say one thing and do another thing.
BENSON:
In broad terms, the Opposition is saying the Government is spending too much and in too much haste. Julia Gillard has conceded there have been bumps on the road as you rushed out the $42 billion in assistance. Just how much money, how many billions have bounced off the back of the stimulus truck as you hit those bumps in the road so far?
BOWEN:
Well look, we have been for example in the middle of the biggest school rebuilding program in Australia's history and Julia Gillard said in the House yesterday; she outlined the number of projects there are, and the number of schools being rebuilt and the number of complaints. It's a very tiny proportion and you're always going to get a little bit of that and I can tell you as an MP, you talk to principals, school communities, P&Cs about this program, everyone that I've spoken to says that they are going well; that they love the investment in their schools, you're going to get the odd one here or there where they think it could have been done differently or better.
BENSON:
The Treasurer is in a newspaper column this morning again saying that without the stimulus the recovery (inaudible) does that mean the stimulus spending may not total the proposed $42 billion?
BOWEN:
Well you'll always get automatic stabilizers coming into place in terms of the budget bottom line, but in terms of the stimulus package, we're committed to seeing the stimulus package through and that means the quantum remains as we indicated earlier.
BENSON:
Is the level of Government spending putting pressure on interest rates?
BOWEN:
No, certainly not and you will not find one economic commentator, one serious objective economic commentator in the country who will agree with Mr Turnbull's hypothesis there. What you find is Government spending at the height of the boom can crowd out private investment but Government spending when economic activity is still patchy, we saw some figures out yesterday, housing finance down two per cent, retail trade down one per cent which shows that there is still a case for Government spending stimulating the economy.
Now Australia's debt as a proportion of bonds issued around the world is something like 0.01 per cent, so to suggest that Australia's spending is somehow putting upward pressure on interest rates, it's just fanciful.
BENSON:
Chris Bowen, thank you very much.
BOWEN:
Good on you Marius.