BEN FORDHAM:
Federal Treasurer, Mr Hockey, good afternoon to you, Sir.
TREASURER:
Good afternoon Ben.
BEN FORDHAM:
How did you spend Remembrance Day?
TREASURER:
I went to a ceremony at North Sydney. It is the second biggest memorial in NSW -the President was telling me -and my father is a member of that sub-branch there. So, it had a special meaning.
BEN FORDHAM:
I am just told that Jacqui Lambie from the Palmer United Party -at least I think she is still with the Palmer United Party - decided against her idea this week to turn her back – she decided not to turn her back. What do you make of that decision?
TREASURER:
Well, I am glad she did that. I am glad she didn’t follow through on her threat.
BEN FORDHAM:
You seem to be quite muted whenever talking about Jacqui Lambie. Is that because you are desperately negotiating with her to get stuff through the Senate?
TREASURER:
No, look, I think Jacqui Lambie…
BEN FORDHAM:
You have to bite your tongue a little bit, don’t you?
TREASURER:
No, I think Jacqui Lambie has a good heart, but…
BEN FORDHAM:
But it was a nut-bag decision, right?
TREASURER:
I think there is just sometimes, you know some of the things that she says are more emotion than having thought them through.
BEN FORDHAM:
But you really choose your words carefully when it comes to Jacqui Lambie, don’t you?
TREASURER:
I choose my words carefully when it comes to everyone.
BEN FORDHAM:
Not so much members of the Labor Party. I mean, you are free to unleash there, but when you’ve got someone like Jacqui Lambie and you need her vote -I can tell, I pay attention when you are talking - you are very cautious with your words and often biting your lip when you are talking about Jacqui Lambie.
TREASURER:
No, I don’t accept that. I mean, I try to say good things about everyone.
BEN FORDHAM:
Okay – good things.
TREASURER:
You ought to hear what I say about you (inaudible).
BEN FORDHAM:
What do you say?
TREASURER:
I say you are a good man.
BEN FORDHAM:
Okay, thank you very much. What about the $51 billion black hole that we read about today; this is according to independent analysis. Where does this come from? Is this independent analysis? Tell me about the history (inaudible).
TREASURER:
Well, look, this is independent analysis and everyone is entitled to their opinion. The figure is wrong, but having said that…
BEN FORDHAM:
The figure is wrong?
TREASURER:
The figure is wrong – yes, but having said, we will obviously release, in a careful methodical way, the update to the Budget in December, which we usually do. There is now no doubt that iron ore prices have had an impact on us. There has been around a 30 per cent fall in iron ore prices between the Budget and now, and iron ore is about one in five of our export dollars. So, it has a bigger impact on our bottom line but they are the things we can’t control, Ben.
BEN FORDHAM:
So, did you factor that in on the old prices and now you are discovering what it is currently worth?
TREASURER:
Yes, but we also took a conservative view on the old prices. So, we actually…
BEN FORDHAM:
Did you factor in a reduction?
TREASURER:
Yes we did, we did factor in a reduction. Not only that, we actually took a position that was below the consensus of the market at the time. So, we took a conservative position, which was absolutely right, and that was one of the things I said we would do. We are not going to over-egg estimates in order to claim we are going to have increased revenue in the future.
BEN FORDHAM:
That 30 or 40 per cent drop off in the iron ore price; what kind of damage does that do to the bottom line?
TREASURER:
Well, we are still working it through and obviously the spot price – that is the daily price, varies and you try and get a bit of a trend, but you will see, it does have an impact on revenue. But what this means, is it is all the more important to get through the savings that we said we would deliver in the Budget. Ultimately there are things that we can control in the Budget, such as reducing government expenditure, and there are things we can’t control such as the income associated with iron ore prices.
BEN FORDHAM:
Can you help me because you say that this is an incorrect figure, the $51 billion figure; where does it come from then? I mean, I know it is independent analysis but these are Treasury figures, right?
TREASURER:
No, no. They are not Treasury figures.
BEN FORDHAM:
They are not Treasury figures at all?
TREASURER:
This is an independent analysis. A respected independent (inaudible), but just the same, the figure is not right and, by the way, we haven’t finalised our numbers because there is more data that we are relying on that will come out of the ABS over the next few weeks.
BEN FORDHAM:
Okay, if you are not sure of the numbers and if you are still waiting on more numbers, how confident can you be that it is it not going to be around that mark?
TREASURER:
I am confident that it is not going to be around that mark.
BEN FORDHAM:
What is it going to start with? A four?
TREASURER:
I am not getting into that game.
BEN FORDHAM:
Not playing guessing games?
TREASURER:
No, no, no. That is…
BEN FORDHAM:
It adds a lot of pressure though, on all of these negotiations. I mean, all of this is going on behind the scenes at the moment. We have unemployment benefit restrictions, we have got higher education reforms that are being blocked in the Senate, Medicare co-payments. I mean…
TREASURER:
But this is it Ben, the Labor Party is now blocking $28 billion of savings, $5 billion of which they announced but never actually got around to delivering. So, the Labor Party can help to fix the mess that they created immediately by helping us to pass (inaudible) of savings. That will help the Budget, that will help the Budget….
BEN FORDHAM:
Chris Bowen, the Shadow Treasurer, says the Opposition won’t back the Government's unfair Budget because, ‘it is fundamentally bad for the economy’, and he says, ‘that as world leaders fly into Australia for the G20, they are witnessing the Abbott Government’s first Budget completely unravelling’.
TREASURER:
That’s just, you know, a ridiculous claim. I mean, Chris Bowen actually promised to fix the Budget. He promised a surplus. This is where Labor is at. They make these…
BEN FORDHAM:
Is your Budget unravelling, though?
TREASURER:
No, no, no, no. I mean, seriously.
BEN FORDHAM:
But it is not watertight, though is it.
TREASURER:
Ben, we have a plan to get the economy back on track. We have seen business confidence figures up today, we have seen consumer confidence figures up today.
BEN FORDHAM:
But with a plan you need a process…
TREASURER:
Well, the process is underway, Ben. You look out the window…
BEN FORDHAM:
But I am talking about in the window – looking into the window of the biggest house in the country, which is Parliament House, you look in that window and we can all see that the people you need to convince to get this stuff through are not willing to help. They are not willing to help you.
TREASURER:
Hang on, hang on, Ben, you have got this wrong. They said we wouldn’t get the Carbon Tax repeal through, we got rid of the Carbon Tax. Then they said we wouldn’t get the Mining Tax repeal through, well we got rid of the Mining Tax. Then they said we wouldn’t get Direct Action through, well we got Direct Action through the Parliament, and it went on and on and on. So, at every point, people say, ‘well you are not getting it through’, well actually we are. All I am saying is that it would be easier if the Labor Party helped us to fix the mess that they created. We have got a plan and that plan is about delivering more infrastructure here in Sydney. WestConnex is part of it but there is going to be cranes all over this city building the infrastructure that is going to build a stronger economy and more jobs over the next few years.
BEN FORDHAM:
Your boss Tony Abbott, our Prime Minister, is meeting with the Russian President Vladimir Putin, I guess around about now, if not, some stage in the next few hours. That is going to be an awkward conversation, isn’t it?
TREASURER:
Well, no. Our Prime Minister will say exactly what he thinks, and he will say what the Australian people would want him to say and that is, President Putin must help us to find those responsible for bringing down that Malaysian jet. And also, the matters in Ukraine need to be resolved, they need to be resolved and Russia should not behave like a bully in the region.
BEN FORDHAM:
When you say that he should say that he needs to help find who is responsible, I mean, his early language on that was even stronger – Tony Abbott, on the day that this happened. I mean, he directly linked the Russians as far as responsibility goes and then a week ago he was talking about shirt-fronting the Russian President; he has dropped off in that language a little bit, hasn’t he? I mean, which you need to be, I mean diplomatically, you can’t turn up and all of a sudden say, righto I am going to go and grab this bloke by the scruff of the shirt.
TREASURER:
Well, this is why it is important that we have these meetings because, ultimately, it gets key people in the room and you make decisions and you resolve differences. Now, I have no doubt that the Prime Minister – our Prime Minister -will stand up for Australia’s interest, he always does that.
BEN FORDHAM:
Is it right that the two of them – the Russian President and the Australian Prime Minister are going to be seated next to each other, anyway?
TREASURER:
At the G20? Yes, of course.
BEN FORDHAM:
Next to each other? So, we thought that the APEC photo was an awkward experience, having a look at that being taken; they are going to be seated next to each other. And that is because why? Because Russia hosted previously?
TREASURER:
Well, that is right. Russia is part of the leadership group of the G20. They actually chaired it last year, and the previous year’s chair sits to the left of the current chair - and next year’s chair, sits to the right.
BEN FORDHAM:
You recently caught up with some of our Special Forces who are well, stationed and ready to go into Iraq and Syria, in our involvement there with the United States and others. We now learn today, 200 Special Forces have been held up since September, however we are finally moving into Iraq and we have had the US President Barack Obama asking for more help overnight. Do we know how much this is going to cost at the moment because ultimately, you are the guy who does the numbers?
TREASURER:
Well, the starting point is, yes I did meet our Special Forces soldiers at (inaudible) in the Emirates – the United Arab Emirates, just outside of Dubai. They are fine, outstanding Australian men. The average age is around mid-30s actually, so they are not terribly young but they are very wise, incredibly well informed. They are not great hulks of people that you would expect like Arnold Schwarzenegger-type figures but they are very smart, they are very keen to get involved in helping, I emphasise this – helping and assisting the Iraqis to defend their own country. Now, on a day like Remembrance Day, I could say emphatically, we should be as proud of our Special Forces today, and our soldiers today, as we would be of the diggers that were in World War One.
BEN FORDHAM:
I know you have got a difficult job because you can’t please all of the people all of the time and with a Budget like the one you have had to bring in, there were going to be a lot of people who were going to be hurt but it must have been hard seeing those Special Forces troops getting ready to go into battle against something as disgusting and as traumatic as Islamic State, and to know that when you jump on the plane and come home, to know that they will only be able to receive a pay rise of 1.5 per cent -that must be hard.
TREASURER:
Well, of course it is hard but they also know that what, in that exact situation, matters most is that they have the best equipment that we can afford, they have got the best support network that we can afford. We are increasing defence expenditure. We are increasing the number of personnel in defence and Bill Shorten got his facts wrong yet again in that area, and we are trying to do it whilst we are borrowing money. Now, as the Prime Minister said, we would be all surprised if anyone got a pay rise greater than what our defence force personnel are going to get.
BEN FORDHAM:
Just whack those headphones on for a moment because Paul is calling through, he has got a question for you. Joe Hockey, the Federal Treasurer live in the ‘Sydney Live’ studio. Paul, you go right ahead.
CALLER:
Mr Hockey, you are doing a good job, all very good. I just have one question to you about the new airport that is supposedly coming out to Bringelly.
TREASURER:
To Badgerys Creek, yep, yep.
CALLER:
Badgerys Creek, sorry. My question is: we should be so lucky to have an airport in the city where a business person can be at North Sydney in his office or at Martin Place within 15 or 20 minutes of landing, what is the purpose of having an airport so far away from the hub?
TREASURER:
Well, I think you are right. You are absolutely right and…
BEN FORDHAM:
Hang on, what?
TREASURER:
Well, there will be no change in activity levels at Kingsford Smith Airport, this is…
BEN FORDHAM:
But he is asking why would you have an airport so far away.
TREASURER:
Because Sydney as a city is going to need a second airport. London is now building its sixth or seventh airport. Most cities in the world have back up airports. Sydney has no commercial back up airport and it is going to be a massive driver of jobs right across Western and South-Western Sydney; absolute massive driver of jobs and prosperity. I mean, you are going to see massive opportunities in Western Sydney associated with the development of this airport.
BEN FORDHAM:
But you can’t agree with your Prime Minister on the name of the airport, because Tony Abbott wants it to be called Bradfield Airport after Dr John Bradfield, the man behind the Sydney Harbour Bridge; you want it to be called Lawrence Hargrave Airport.
TREASURER:
Well, I always agree with my Prime Minster but there might be, in this case, an opportunity to recognise that Badgerys Creek, in my view, should be renamed Bradfield City because Bradfield was a far bigger, a far more significant operator than an airport and there is a good argument…
BEN FORDHAM:
You want to change the name of Badgerys Creek?
TREASURER:
Well, that’s right. I mean, my view is, recognise Bradfield and…
BEN FORDHAM:
So that you can get your name on the airport (inaudible)
TREASURER:
No, no, hang on, it’s not my name.
BEN FORDHAM:
Hang on, so your name gets up. (Inaudible) But this is the name you prefer, right?
TREASURER:
Well, no, no, it is not about preference. Lawrence Hargrave was arguably Australia’s greatest ever inventor; one of the greatest inventors in history and we haven’t properly recognised him in Australia. I mean, his story, if anyone reads his story, how at Stanwell Park, just south of Sydney, he tied himself to a few box kites, lifted himself in the air. The Wright brothers recognised Lawrence Hargrave as one of – the most significant contributor to the development of flight. Alexander Graham Bell flew to Australia just to meet Lawrence Hargrave.
BEN FORDHAM:
So, he is worthy of having an airport named after him?
TREASURER:
He is, absolutely. And Lawrence Hargrave, he refused to patent his invention of the curvature of the wing, which provided the lift associated with propulsion. He refused to patent it so it was open to the world.
BEN FORDHAM:
Have you told the Prime Minister about this because this sounds like a very convincing argument?
TREASURER:
And you know, he made the ultimate sacrifice for our nation. He was never properly recognised. He tried, when he saw that the Germans had taken the technology that he helped to invent to create the Luftwaffe at the beginning of World War One, just before – he went and volunteered in his mid-60s immediately to join the army. They wouldn’t take him, but they took his only son and his only son died on Gallipoli in May of 1915.
BEN FORDHAM:
I am not doubting, at all, the credentials of Lawrence Hargrave.
TREASURER:
And Lawrence Hargrave died just a few weeks after that. Now, I don’t know what more any individual could do to deserve proper recognition. Now, he was recognised on our $20 note but I can’t believe that, you know, from an aviation perspective, Australia hasn’t recognised him the way, perhaps, we should have.
BEN FORDHAM:
Well, what I am going to be intrigued to watch is when you have got a Treasurer who wants an airport named after Lawrence Hargrave and you have got a Prime Minister who wants it named after John Bradfield; it is going to be an interesting one to watch.
TREASURER:
Hang on, I think it is up to community, I think it is up to community…
BEN FORDHAM:
131 873, we can decide it (inaudible)
TREASURER:
Well, you can do that. I think – if you know, the great thing the Daily Telegraph has done through this entire debate, is that it has opened up Australia’s vitally important history to a new generation, and I don’t think we do that enough.
BEN FORDHAM:
True, they kick-started the discussion on Bradfield…
TREASURER:
And the second airport – Paul Whittaker deserves great praise. I mean, I love the fact that he has had the Bradfield series in the Daily Tele because it brings to life the history of our city and it encourages us to all be bold, and I think that is great.
BEN FORDHAM:
You be bold. Great to talk to you, thanks for coming into the studio.
TREASURER:
Thank you Ben, good to see you.
BEN FORDHAM:
Joe Hockey, our Federal Treasurer.