CHRIS UHLMANN:
Treasurer, Joe Hockey, good morning.
TREASURER:
Good morning, Chris.
CHRIS UHLMANN:
Joe Hockey, do you agree with Rupert Murdoch's assessment?
TREASURER:
Well, certainly as he says, loose monetary policy has helped people who own a lot of assets to become richer, and that is why loose monetary policy needs to be reversed over time and will get back to normal levels of monetary policy, normal levels of interest rates. Governments, on the other hand, have also run out of money and can't keep spending money – particularly on the credit card – to try and stimulate growth. So, if loose monetary policy is not available and actually makes the rich get richer and governments have run out of money, how are we going to get growth going in the world economy over the next few years and the only way to do it is through structural changes that make us better at what we do.
CHRIS UHLMANN:
We'll come to that in a moment, but you have sown the seeds of the next crisis haven't you, with money awash around the world, and every time now, for example, the US tries to move to wind that back in, the stock market rebels so they're holding a gun to the head of the US Treasury, essentially.
TREASURER:
I think the US, it has already started its reverse now, it's policy of buying debt, and sooner or later it is going to start to increase interest rates in the United States. Other countries are going to, sooner or later, get to that point as well. Australia's interest rates now are what the previous Treasurer described as 'emergency levels'. So, sooner or later interest rates in Australia will start to get back to normal levels. Now given that governments, Federal and State Governments, haven't got the money to splash out, how are we going to earn our prosperity in the future? And it comes through the sort of mature debate that Tony Abbott has tried to start on the weekend about focussing on how we improve the federation, how do we pay for our future as a nation? And it's right that the Prime Minister should do that and we expect the Opposition to join the debate.
CHRIS UHLMANN:
Of course you do not run monetary policy, you do run fiscal policy and your Budget has been bogged down in a debate over fairness. There are many who would claim that you are making intergenerational equity less likely in the future.
TREASURER:
The most unfair thing you can do is leave your children and the generations beyond, with a level of debt that on birth, immediately, constrains their quality of life. It is a simple fact that if we do not take immediate action on the Budget today, then the burden that we are going to leave our children or ourselves in ten years' time is going to be far greater. So, now is the time to take action on the Budget.
CHRIS UHLMANN:
How do you help a disadvantaged young by denying them access to benefits for six months if they lose their jobs? That's only making the situation worse.
TREASURER:
The starting point is that you have got to have the jobs out there, Chris.
CHRIS UHLMANN:
[inaudible] this measure is punitive.
TREASURER:
No, hang on, governments do not create jobs, ultimately, businesses create jobs and you have got to create an environment where business has confidence to go out and invest, has certainty about the playing field and the rules of the playing field and what we are doing is delivering certainty and stability to the Australian economy that it has been missing for six years. Now, I'll give you the examples: we said we'd get rid of the Carbon Tax – we've got rid of the Carbon Tax, we said we'd get rid of the Mining Tax – we've got rid of the Mining tax, we said we'd spend a considerable amount of money on infrastructure, by reallocating money from other government assets – we're doing that.
CHRIS UHLMANN:
You didn't say you would raise taxes, you didn't say that you would put a $7 co-payment on Medicare.
TREASURER:
What we said was we were going to fix the Budget. We have to fix the Budget, and Chris, look, Labor knows this, in their heart of hearts, the Labor Party knows this. That's why, I think, everyone is a bit surprised about how negative they have been and the best illustration of that is Labor is currently preventing us from withdrawing an R&D tax concession to the 20 biggest companies in Australia. Now, they announced that before the election, now they're opposing us closing down a massive tax break for the biggest companies in Australia. They would rather see us impose more difficult decisions on everyday Australians rather than give the 20 biggest companies in Australia a tax break.
CHRIS UHLMANN:
[inaudible] bewildered by the fact that the Labor Party is being negative in Opposition when you made that template and they saw how successful it was; why would they have a mature debate when you wouldn't have one when you were in Opposition?
TREASURER:
I don't accept that, there were a large number of measures that were unpopular, even with our own political base when we were in government that we, at the end of the day, supported. For example, the Labor Party's changes to private health insurance. We let that pass through the Parliament because we knew the Budget had to be fixed. Now, that was very politically difficult for us but Labor's doing nothing like that and what we're saying is, 'OK guys, are you going to be party to addressing the challenges of the future for Australia?' Because we would like to have a bi-partisan approach to working out whether we can afford our future as a nation.
CHRIS UHLMANN:
And having that conversation means trying to work out how the states can pay for the things that they have to fund. Do we need to lift the GST to do that? Do we actually have to have that debate? You're asking us to do it.
TREASURER:
The Prime Minister specifically raised a number of questions on the weekend; I thought it was an excellent speech, where he said, 'OK we can no longer afford to have one level of government bidding against another level of government in the same area'. I mean, it's the same taxpayer and the same taxpayer's dollar. So, you can no longer go to the Federal Government when the State Government won't help you and vice versa. So, how are we going to make Australia more efficient? And we're prepared to start at a governmental level. Now, the biggest challenge for states is the massive growth in the cost of running their hospitals. They have to find the money for that. We say we are prepared to help to them down that path.
CHRIS UHLMANN:
[inaudible] it's around the GST [inaudible].
TREASURER:
We've never said, 'look for political reasons we're excluding this, excluding that, because we know that we have to earn prosperity as a nation'. Yes, difficult decisions will be made, yes, emphatically, we have to make sure that those most vulnerable in the community are protected and supported. However, if we do not undertake structural reform now, in the Australian economy, we will not be able to have the prosperity that we expect, as Australians, in the future.
CHRIS UHLMANN:
This is a tough debate to have. Can you carry this debate, Joe Hockey? Because you would be aware there has been criticism of you, internally and externally, about the way that you have led the debate over the Budget.
TREASURER:
Well, this is a debate for the nation, Chris. It's not about Joe Hockey or anyone else, it is a debate you have…
CHRIS UHLMANN:
But you have a leading role in this.
TREASURER:
…we will all have a leading role, because everyone is the beneficiary and everyone bears the cost of failure to have a proper mature debate about our future as a nation.
CHRIS UHLMANN:
What about the Budget debate, where are we up to with that? Are you ever going to get your co-payment through the Senate and what about the fact that you don't look like you're going to get your higher education plans through the Senate either?
TREASURER:
Just be patient, Chris.
CHRIS UHLMANN:
I've been very patient, Joe. [inaudible]
TREASURER:
Most of our Budget actually has passed through the Senate.
CHRIS UHLMANN:
It always does – standing appropriations always go through the Senate.
TREASURER:
And other initiatives, such as the repeal of the Carbon Tax and repeal of the Mining Tax which people said would be nigh impossible.
CHRIS UHLMANN:
[inaudible] on a $7 co-payment?
TREASURER:
We are working constructively with constructive parties in the Senate. Now, I hope that, over the days ahead, people will be more sensible, more mature and certainly calmer and instead of putting their political interests first they'll put the nation's interest first.
CHRIS UHLMANN:
Treasurer, Joe Hockey, thank you.
TREASURER:
Thanks very much, Chris.