PRESENTER:
Mr Hockey, Labor says that you have padded these figures to make it look worse to build your case for big cuts. Have you padded them out? In particular, the unemployment predictions?
TREASURER:
Not at all. That just goes to prove that Labor does not understand what they are talking about. That is how we got into this mess in the first place. The fact of the matter is, you cannot have forecasts that drop the unemployment rate from 6.25% to 5% in one year with a 3% economic growth figure. It is just nonsensical in that sort of circumstance. That is one of the main reasons why Labor kept claiming that in four years time they will deliver a surplus. They kept massaging them down to an unemployment rate to a level that was not real. I want the truth out there, I want the facts out there. Only by seeing what the real state of play is are Australians going to fully understand what the mess is that we have been left thanks to Labor, unless we can take corrective action in the near future.
PRESENTER:
What will that corrective action be?
TREASURER:
We are going to have to reduce government expenditure. Labor kept promising that expenditure from the government would not breach 2% per annum in real terms. The fact of the matter is they have been running at 3.5% per annum and it is actually been rising over the forward estimates and beyond. The problem is that they have been running expenditure at levels that Australia can no longer afford.
PRESENTER:
Will you still be able to deliver the NDIS in full?
TREASURER:
We are determined to deliver the NDIS, but it has to be affordable.
PRESENTER:
That means it is not in full?
TREASURER:
You know what, I know this might surprise some, but you can actually deliver a programme in full and also make it affordable. It is entirely possible to live within your means and still have the same quality of life or even better. The bottom line is that we want to get rid of the waste that is part and parcel with the previous government. We want to do things more efficiently and more effectively and that is exactly what we are focused on.
PRESENTER:
Is the NDIS wasteful then? Or does it include elements of waste?
TREASURER:
As the Minister responsible for the NDIS has already identified, even on the pilot program there has been a massive blowout in cost. That is because Labor judges the performance of government activity on the amount of money that you throw at them rather than the actual outcomes for people. We are focused on the outcome and what we are going to do is make sure there is value for money for Australia.
PRESENTER:
So what will change with the NDIS?
TREASURER:
You will see the proper rollout of the NDIS, it has not started in full yet. What I can tell you is, Labor got it all wrong when it comes to the rollout of the pilots because there has been a massive blowout in the cost already.
PRESENTER:
Is that, though, an indication that more people require the help of the NDIS?
TREASURER:
The NDIS is a matter for the Minster responsible for the NDIS. I am responsible for the Budget and the economy and the bottom line. From my perspective is that we have to find ways to deliver services within an existing budget framework rather than promise on the never never things with a blank cheque.
PRESENTER:
How you do you justify the Paid Parental Leave Scheme in its current form when you are cutting research funding or trimming back the NDIS?
TREASURER:
Your assumptions are just dead wrong, for a start. Secondly, the fact is the Paid Parental Leave Scheme actually improves productivity by improving participation in the workplace. The PPL, the Paid Parental Leave Scheme, is fully funded and more in our budget. We have actually done the yards on finding the savings to pay for a program that improves productivity. The bottom line is, if we want a stronger economy, we have to improve our productivity growth. We must do that. We need to be able to get more out of our economy by better utilising each unit of labour. That is exactly what the Paid Parental Leave Scheme helps to do.
PRESENTER:
Research also helps boost productivity, why are there cuts to research?
TREASURER:
They are the ones that we took to the last election. They are not specific cuts in research, they are actually part of the program to appropriately fund election initiatives that the Australian people embrace. There are no surprises out of this Mid-Year Economic and Fiscal Outlook, other than the fact that we have been left the $123 billion of deficits and a debt that rises to nearly $667 billion dollars.
PRESENTER:
The environmental defenders office cuts though have taken many by surprise.
TREASURER:
We have been very upfront about the need to make savings to pay for our election commitments. We have done so. But there have been other incidents where Labor, obviously, was not telling the truth about the state of the books. We had to spend money, for example, $1.2 billion fixing up the accommodation on Manus Island and Nauru because Labor never provisioned for the cost of housing people off-shore. They announced it but they never put the money in. We have had to find $1.2 billion to pay for that. Or, Labor made a decision before they went into opposition, they made a decision to make over 14 000 public servants redundant, they never had the guts to announce it and they never funded it. We have got to find the funding for that redundancy.
PRESENTER:
Mr Hockey it is clear that there is a gap between spending and the tax revenue that is coming in. Is there, in your mind, a reason to look at taxes, new taxes or increasing taxes?
TREASURER:
You never tax your way to prosperity. The bottom line is, we are going to let revenues rise within the existing overarching framework of the tax system. But we do not want to introduce new taxes the way Labor which have the effect of taking a baseball bat to confidence in the economy. We want to have a stable taxation system that allows people to get on with their lives. We have got to reduce government expenditure because that has been the root cause of the consistent deficits under Labor.