KIERAN GILBERT
With me now from Melbourne is the Shadow Small Business Minister Bruce Billson and from Sydney the Assistant Treasurer David Bradbury. Gentlemen, good to see you. David, the HSU raid yesterday was quite extraordinary to watch.
DAVID BRADBURY
Yeah, certainly some extraordinary scenes there but obviously Kieran there are a range of matters that are under police investigation and also before the courts at the moment so these are not really matters, I think, anyone is in a position to trawl through in any particular detail. But, there are processes in place and I think we need to let them run their course.
GILBERT
The Federal Government seeking to have the HSU placed into administration, the Federal Court hearing that today. There has to be a chance that the HSU just falls over completely or at least the East branch.
BRADBURY
Kieran there are a number of hard working, long term individuals that have been involved with that particular union. People have dedicated their working lives to representing working people in their sector. There has been a lot of controversy and a lot of attention to some of the allegations that have been made. In the end, people deserve representation, effective representation and I hope for the sake of those people that whatever occurs over the coming days and weeks is something that ensures they have adequate representation and the voice that working people need when they go in to bat and go into the situation of negotiating with employers in what I think we all recognise is a position of unequal bargaining power.
GILBERT
Bruce you'd agree largely with that, would you not? There would be a lot of workers and members of that union that have been doing the right thing for many many years.
BRUCE BILLSON
Yeah I think that is a fair observation but it also goes to that excellent proposal Tony Abbott has put forward which would see the directors of companies and the liabilities and responsibilities and potential penalties for wrongdoing carried over to union officials ensuring better accountability and a separate regulatory oversight body to make sure that unions are doing the right thing and that hard working Australian men and women aren't watching this spectacle play as they're having to watch now.
GILBERT
Bruce the Commonwealth Bank has joined the NAB in passing on at least some of the RBA cut this week. The Commonwealth Bank passing on 40 basis points of the 50 basis point reduction, do you think that is enough?
BILLSON
No, I don't think it's good enough. Not passing through the full cash rate reduction from the Reserve Bank is not good enough by the Australian banks and the Reserve Bank statement clearly makes the point that funding cost pressures that have in part has been what has justified banks not fully passing on the cash rate reductions in the past aren't there now. There has been a softening in those pressures, they're nothing like they were 12 months ago when the banks were making claims that they were adjusting for increased funding costs and those pressures on funding costs have come off. So there is no justification and as you look at the spread, the gap, between the cash rate and what businesses are paying and mortgage borrowers are paying it is far greater now than it was back in 2007. So there is plenty of scope for relief, the funding cost argument has been debunked by the Reserve Bank itself. The banks are profitable and strong as they should be, the banks should do the right thing and pass on the full value of the cut on to its borrowers.
GILBERT
David the Westpac bank has announced first half profit of just under $3bn today so they're not struggling. How come the banks aren't listening to Treasurer Swan on this?
BRADBURY
I think these are difficult matters. We're not in the business of re-regulating the setting of prices within the mortgage rate or other banking markets. That is not something I think any government in this day and age is going to want to get involved in. What I thought was interesting has been over the last couple of days, we have seen an acknowledgement of that very point from the Shadow Treasurer Joe Hockey. Just to put this in some context, you only have to go back about a year ago when Mr Hockey was running around attacking the government saying that it was weakness in the leadership of the Treasurer that the full flow through hasn't occurred in previous cuts to interest rates where cash rate flow through was not passed on. Yet I saw yesterday that Mr Hockey has actually now conceded that for the very first time if he were to be in government as the Treasurer, that he would have no power, no ability or no capacity to force the banks to do that. What we see here is the setting of a bench mark for our Government by the Opposition, a bench mark that they know they would never be able to achieve. But the reality here is that as a government what we think is most important is that we put pressure on the banks to be transparent about the decisions that they're making and the analysis that Bruce has put forward is actually a very sound one in terms of funding costs. We would certainly be saying that customers of the Commonwealth Bank as indeed customers of the NAB no doubt would be very disappointed with the decisions that have been taken there. Equally, there is an opportunity for the other banks to actually come good and actually deliver the full cut over the coming days and I think that they will win a lot of support out there from consumers if they do that.
GILBERT
I don't like the chances of that, I wouldn't have much money on it to be honest. Let's move on, the Budget David you heard what Christine Milne had to say there. There's a real prospect here, the Government is going to forecast a return to surplus but you might not be able to get all your savings through. You're going to rely on the Greens, Wilkie, these individuals and parties have said they are not inclined to back all of your savings measures. That would be a disastrous situation, wouldn't it if you were unable to get these savings measures through and the forecasts you've been making so much of.
BRADBURY
Well Kieran we are going to hand down a responsible Budget that returns to surplus. Handing down...
GILBERT
But it might not be passed.
BRADBURY
Handing down the Budget is the first step. Seeking passage of that through the Parliament is the next step. Kieran, in the typical way of journalism in this country at this point in time you've focussed on the Independents you've focussed on the Greens, what about the Coalition? What we're talking about in the Coalition are people that portray themselves as the alternative government, in fact if you believe Mr Abbott, they're on the precipice of walking into the Treasury benches. Every decision that they take in relation to this Budget, every savings measure that they block, will be an extra amount of money they are going to have to pull back or to address if they are to avoid an even bigger Budget crater than the $70 billion black hole they have before them. It's not just the Independents and the Greens that will be held to account for the decisions they take on this Budget. Mr Hockey is out there saying the age of entitlement needs to come to an end, when we put forward sensible proposals that are addressed at returning the Budget to surplus, every time the Coalition votes against them, that will mean they have an even bigger savings task ahead of them. They need to come clean on which services, which payments, which areas of government expenditure they're going to rip the guts out of if they get into government.
GILBERT
Okay let's give Bruce a fair crack at that. Bruce, your response to that? Because obviously it's something that, you look like the drover's dog to win the next election, that you're almost certain to be on the Treasury benches. You've got to think about that don't you?
BILLSON
Well it was interesting listening to David droning on there. He never once recognised the accountability and responsibility that the Government, his team, the people on the Treasury benches right now have for doing what they say they're going to do. The Government's record is the four largest Budget deficits in Australia's history that followed the four largest Budget surpluses in Australia's history under the Howard Government. We've seen Budget forecasts herculeanly optimistic through the government's eyes that have seen projected deficits blow out enormously. It was supposed to be a $12bn deficit this year, it ended up being a $40bn deficit. Yet on the back of all that experience we're supposed to expect a Budget surplus to be forecast next year. Have a look at the concocted numbers that will be in that Budget Kieran. Have a look how this year there is $1bn for the energy markets to keep the lights on if the carbon tax causes problems to electricity supply, next year it's not $1bn it's $1m. One thousandth of the amount of money to keep the energy market secure next year then it goes up to $1bn the year after that. That kind of book-ending of Budget expenditure to try and concoct the most contrived surplus that won't actually be delivered is what we're faced with and David and his team should face up to their accountability. They're the government, they need to deliver, we've laid out a savings plan, we've delivered surpluses before and if given the opportunity we'll do it again.
BRADBURY
You haven't got a savings plan. You haven't got a savings plan, you've got three word slogans and the point here is you've got a $70 billion crater that you've got to fill and it's about time you characters became honest with the Australian people and explain which services, which payments you're going to rip the guts out of in order to fill that crater. You're out there calling for an early election, if you want an early election then be honest with us about what you're doing.
GILBERT
Lets have Bruce respond.
BILLSON
Well we try and have a sensible budget discussion and David Bradbury goes from droning to shrill but still won't face up with his responsibilities. We mapped out savings objectives, we've got form to show how we have delivered surpluses in the past. We know the Labor Government has gone from a $270 billion Federal budget to a $370 billion in just four years. We've mapped out savings it's about time the Government...
BRADBURY
You've got a $70bn black hole.
BILLSON
Rather than being dysfunctional and blaming everyone else they should be responsible.
BRADBURY
Bruce, let me make this point. Joe Hockey is no Peter Costello. Joe Hockey is no Peter Costello. So don't come in coasting off the record of those that might have presided over the Treasury benches in the past, let's have a look at what we've got with Joe Hockey, we've got someone who has generated a $70 billion black hole has no plans to fill it. It's about time he came honest with the Australian people and said which cuts he is going to make in order to fill it.
BILLSON
Wayne Swan is no Peter Costello. We've just had a conversation about that and no amount of this sort of finger pointing is going to change the fact that you're supposed to be in Government...
BRADBURY
Wayne Swan would wear that as a badge of honour.
BILLSON
You should organise yourself to live within your means.
GILBERT
Alright gentlemen...
BILLSON
The Australian people don't think that is an honour.
BRADBURY
Well you didn't even think he was good enough to make him your Leader.
BILLSON
*Inaudible* desperate and dysfunctional government.
GILBERT
You can finish this after the show and continue the discussion because you're not listening to me and I'm wrapping up the program. Gentlemen, thank you for that.