HOST:
Many thanks for your time, David.
DAVID BRADBURY:
Good evening Ross, good to be with you.
HOST:
First off, we spoke last night, I indicated I thought it was a storm in a tea cup frankly and I still think it might be. These so-called thin capitalisation companies, Christopher Pyne yesterday had indicated that you had somehow leaked this out of the Budget, the lockup hadn't yet finished, and you were talking about the thin capitalisation. The truth is these types of briefings, and it was suggested you'd also be speaking with companies about the proposal, the fact is I would have thought that both sides of politics would have done this in the past and would probably do it in the future.
BRADBURY:
Look Ross, I think that people would be asking questions about why I hadn't contact people if you were contemplating making policy changes. Consultation is an important part of the policy development process. We need to sit down with companies, particularly those that on occasions come and bring issues to our attention. If we're looking to make changes, then on occasions when you discuss things that you might be looking to do it may be that you get feedback that assists you in actually developing better policy as part of that process. I'm at a bit of a loss to understand what the issue is here. But if the concern was somehow that there was some sort of unfair advantage being given to a particular company, then I can say absolutely not. That is definitely not the case. And what I would also say is that, yes, consultation has occurred over a period of some weeks but these are measures, that now that we've seen them, obviously Christopher Pyne was out there yesterday, but now that the Budget has actually been handed down, you'll see that those measures don't come into effect until the first of July next year.
HOST:
So plenty of time for people to see them anyway. As I said, I thought it was a storm in a tea cup. We dealt with those matters last night and explained exactly how overseas companies, the taxation arrangements might be changed if they decide they want to load up their companies here with debt to reduce their profits and therefore their taxes. To most people I would have thought it was a pretty sound type of arrangement. One thing about the Budget today, you are the Assistant Treasurer, you are potentially a future Treasurer of Australia and, or, a future Shadow Treasurer of Australia, depending on how politics goes. The one thing is, how have you learned over these past couple of budgets that budgets should be sold to the Australian public. Do you think you've learned anything that would suggest that things could have been done differently?
BRADBURY:
Well, I'm not sure that I accept all of the nice things that you had to say in that introduction.
HOST:
Well, you are the Assistant Treasurer after all.
BRADBURY:
Yeah, I am. And it's a great privilege to do this job. It's an incredibly difficult thing to do. When you sit down and look at the full breadth of what government is involved in, right across the spectrum, it is a really challenging thing to be doing. In terms of selling the budget, I think that the days of when people handed down budgets and there were all of these goodies that were being thrown about, they were budgets of a previous era. Some of the challenges that countries are facing all around the world at the moment mean that we really have an obligation to be as honest as we can with the Australian people about the challenges that we face and how we intend to confront them. And I think that there's been a bit of talk around the Budget that was handed down yesterday and people have been saying "well this doesn't really look like an election year budget".
HOST:
I think that's actually true. One thing though David, go back to your previous budget, in budgeting, good budgeting, good chief executives, it doesn't matter whether it's the country, the company or your local bowls club, the trick is surely to try and under promise and over deliver. The real problem in politics of course is that you continue to have pressure upon you as the finance committee of that particular organisation to have to over promise in order to keep yourself in political favour. That is the real difficulty of trying to be in that finance role inside government, isn't it?
BRADBURY:
I think it's not even just about whether there is pressure on you to over promise, but there is definitely pressure on you to be clear about what you're looking to achieve. And certainty is something that people are seeking and you know we seek that in all aspects of our life. We want people to be certain about what it is they say and what they're going to do. Obviously, the difficulty with that is that any manner of challenges and changes can come along that can completely move the goal posts and if you've made commitments then sometimes you're going to have to change the things that you said, alter the aspirations, the targets, the benchmarks. And when you do that, you normally get criticised pretty heavily for that.
HOST:
No surprise about that, except the fact is that if you're so dogmatic about what you can achieve and then you don't achieve it, and in this case I'm talking obviously about the commitment to a surplus, it was absolutely the credibility that the government staked itself upon, its economic credentials. Now the government has to go into this election campaign not being able to focus on what was supposed to be its strength, in other words, its economic management credentials. Sure things have changed, but the one thing I'd said to you David is that somewhere deep inside that Budget something in terms of the understanding or the planning of how a fall in the terms of trade and the high dollar was forecast that certainly the dollar would remain or that the terms of trade would come off. That was all budgeted for. The truth is what wasn't budgeted for was the knock on effect on company taxes and that's where there has been clearly a failure in that previous budget.
BRADBURY:
And look, in terms of the impact on nominal GDP, and it's starting to get a bit technical about it all, but the point here is this has been an unprecedented set of circumstances that has created a situation that the revenue that we were expecting to receive just as a result of a coincidence of those factors has meant that we're getting less revenue and that's presented some real challenges and that would be the case regardless of who was in office. And I think the issue here is that the people that we rely upon, I'm not a forecaster, I have my own areas of expertise, but forecasting is not one of them. We have some of the best and brightest people in the country that have been doing this for many years. Nobody is perfect, but I think that if you do look over a period of time at the quality of the forecasting that Treasury has done, then they don't always get it right but I think they get it closer to the mark …
HOST:
The problem is David, you've had to wear the political consequences of this. Do you realise what I mean?
BRADBURY:
I absolutely do. To some extent that's part of our Cabinet system, Westminster system of government. But, look, I acknowledge all of that. I would have loved to be in a situation where every single one of the forecasts that was made in last year's budget ended up coming in right on the spot. That hasn't happened. Life is not perfect. These sorts of challenges pop up along the way. It's been difficult for us politically because of the, we've shed a lot of paint as part of this process, but in the end I think that we've tried to be very honest in the budget with the Australian people about where we are at and what we think we need to do to improve the country and that's investing in things like education and building the DisabilityCare system, but we've also said to people if you want to do these things, these a price tag attached to it and we have to make choices about how we might fund that. Now not everyone is going to agree with the things that we've done and things like the Baby Bonus, but we have tried to set that out for the Australian people so that they at least, as we move into the election, they can weigh that up and make whatever judgements they think appropriate.
HOST:
David Bradbury, very good. I'll tell you what. We've just got a couple of people on the line who both asked us the same question, so I'll paraphrase it for them. And they say that in terms of consulting in regards to those thin capitalisation companies, that it takes two weeks to print the budget so when was the consulting done. Somebody else has called and said that two hours before a budget isn't consultation. Isn't it simply the case that you had been consulting for a longer period of time about this?
BRADBURY:
Over a considerably longer period than that.
HOST:
Ok, David Bradbury cleared that up. The Assistant Treasurer of Australia, out there selling the budget right now. We appreciate your time.