PRESENTER:
Treasurer, welcome back to 7:30.
TREASURER:
Good to be with you.
PRESENTER:
Now if there were such a thing as a Joe Hockey mantra of late it would be that governments need to live within their means. So why are you extending the national credit card limit by two thirds to $500 billion?
TREASURER:
This is Labor's legacy. They were leaving us with a debt of $370 billion on their own projections. I have been advised that that will be significantly larger and we are not going to allow ourselves to get into the position that the US is in where there's tremendous uncertainty about the capacity of a country to live within its means. Now, this is a debt limit increase and it's the legacy of Labor. It is the fact that they said that debt would go to $370 billion but the debt limit is currently $300 billion.
PRESENTER:
But the old Joe Hockey used to say if debt's the problem then more debt isn't the solution. What happened?
TREASURER:
I can't stop the debt that has accrued because of Labor policy. I'm going to have to have remedial action and that's going to come in the form of a Commission of Audit. The Commission of Audit is going to deal with these issues which is what we announced today.
PRESENTER:
Three months ago you said that the Federal Budget was in free fall. If there's as much of a crisis as you say there is, and then why not get cracking straight away, have a mini budget and start chopping?
TREASURER:
We need to be careful, prudent; we need to have a proper process, that's what we're going through. Today we announced the commission of audit, the first time in nearly two decades that you've had a proper look, an independent look at all the nuts and bolts of Commonwealth Government expenditure. We're focused on getting it right.
PRESENTER:
The audit that you've announced today is incredibly broad. It seems to cover every dollar of government spending, kind of looks a bit like a licence to break election promises?
TREASURER:
It isn't. It isn't at all. We stick to our election promises. This is a way of making sure that we pay for our election promises.
PRESENTER:
But the brief you've given to your auditors is that they should review government expenditure, keeping this in mind, that government should do for people what they cannot do or cannot do efficiently for themselves but no more and, of course, that government should live within its means. If those auditors come back to you and say Mr Hockey, your paid parental leave scheme doesn't really fulfil either of those criteria, are you tough enough to make that call and take away that policy?
TREASURER:
This is about paying for our policies and ensuring at the same time that there is a proper path to growth. We have got to grow the Australian economy but we have got to have a government that does not waste money. That is what we are focused on.
PRESENTER:
So your election promises are insulated from changes arising from this audit commission?
TREASURER:
Yes, they are. We will deliver on our election promises.
PRESENTER:
So when two days before the election you told this program that you wouldn't be cutting the health budget, the education budget, the defence budget and health and medical research, we've said that emphatically, those budget areas are quarantined also?
TREASURER:
Yes, but it didn't mean that you can't identify waste in those areas and reallocate it to other priorities in the same portfolio. The suggestion that there isn't waste in budgets of tens of billions of dollars is absurd. So what we've got to do is prioritise the expenditure in those areas but overall the envelope have committed expenditure in those areas will continue.
PRESENTER:
So if you come up with - I mean Commissions of Audit in the past have often recommended quite radical savings, they certainly did in 1996, will you take any changes, any cuts you didn't flag before the last election to another election as a mandate issue?
TREASURER:
We need to deal with the Budget as it stands and quite frankly it has deteriorated since the election. This is the moment of truth for Labor. We are discovering all the things that they failed to reveal properly to the Australian people and over the next few weeks and months will explain that to the Australian people but most importantly we are going to have a road map to get the Budget back in good shape.
PRESENTER:
I will take that as a no to my question, then Treasurer. You have set a savagely tight deadline for this audit. First report by the end of January and the final by the end of March. Will you commit to releasing those reports, publicly and when?
TREASURER:
We will release those report and we will do so within the Budget context. These will feed into the Budget and that's the appropriate place to go.
PRESENTER:
Government should live within its means is what you've been telling Labor for years. It's been repeated by you over your recent travels and it's at the core of this audit, but how is it living within your means to hand out billions in compensation for a carbon tax that you're getting rid of? How is it living within your means to introduce a paid parental leave scheme to which Clive Palmer's wife would be entitled? How is any of that living within your means?
TREASURER:
The key fact here is that we went to the election with those commitments; we are going to deliver on those commitments. We think it's important to continue to ensure that you have a growth pattern in the Australian economy, part of that growth package is going to be getting rid of the carbon tax on one July next year, that's hugely important. Australians will get a windfall benefit which will be good for the economy. Getting rid of the carbon tax but keeping the compensation.
PRESENTER:
But didn't you explain in Europe last year that the age of entitlement was over, that wind fall benefits were something that is to do with the past and not the future?
TREASURER:
These aren't windfall benefits. These are prudent programs that have been properly paid for.
PRESENTER:
You just called them wind fall benefits.
TREASURER:
No, no. I'm sorry because I'm saying that the compensation that we are providing from one July next year - which is the compensation that was originally for the carbon tax - is about putting money in people's pockets which is helping to stimulate the Australian economy. That is why it is not an entitlement. Giving people back their tax is not an entitlement. It's about them having more control of their own money.
PRESENTER:
In terms of government's own behaviour, how is it living within your means to claim as members of your government have, public funding to go to weddings and sporting events and to visit investment properties in Cairns to the tune of $5,000 to the taxpayer? How is that living within your means as members of a government?
TREASURER:
Wherever people have acted inappropriately or wrongly they should be properly dealt with and they should deal with the Department of Finance on that.
PRESENTER:
The Queensland Government has just introduced new rules to subject members of Parliament to the bog standard Australian Taxation Office requirements about claimable work expenses. Is it time for federal politicians to be subject to the same?
TREASURER:
I will leave that to the Minister for State and I'm sure the Minister for State will consult with members of Parliament and others about that.
PRESENTER:
Joe Hockey, we're right out of time but thanks for joining 7:30 tonight.
TREASURER:
Thank you very much.