PRESENTER:
Our Federal Treasurer Joe Hockey is on the line, many thanks for your time, Joe.
TREASURER:
Not a problem.
PRESENTER:
Look, here is the interesting part about this, the deal with the Greens. Yesterday you could not get an agreement with the Greens or the Labor Party regarding Temporary Protection Visas. Today you are doing a deal with the Greens over debt limits. I mean it is a very strange game politics, isn’t it?
TREASURER:
Yes, it is strange. It is amazing to many that the Greens saw common sense on dealing with these very significant economic issues when the Labor Party did not. The Labor Party has been playing games. It is reckless given that they created the debt and they are trying to stop us dealing with it.
PRESENTER:
Was it serious? You said earlier this week, in Question Time, that you had been contacted by the ratings agencies in regards to when Australia would technically breach its debt limits. How close did we come?
TREASURER:
The deadline is still next week. This Bill needs to go through the Parliament as quickly as possible. The Labor Party has the capacity to frustrate the passage. It is really up to them about whether they are going to play russian roulette with this issue or whether they are just going to accept that they got it dead wrong and accept that there has been an agreement with the Greens.
PRESENTER:
But under this deal there is no debt limit. Peter Costello, the former Treasurer, indicated over the weekend that he thought the debt limit was not a bad idea because it put some discipline on politicians.
TREASURER:
He never had a debt limit. Let us be very clear about that. Peter Costello never had the debt limit. Labor introduced it in 2008 at $75 billion and they said we will never have to breach it. Then they increased it to $200 billion for the Global Financial Crisis, saying they would never breach it and they did. Then $250 billion and now $300 billion. On the best available information the legacy of debt Labor has given us is well over $400 billion. From our perspective we have got to deal with this problem. Getting rid of the debt limit means that we can focus on the actual debt, on paying down the debt, and get away from these games. The second best option is to abolish the debt limit. The best option was to put it beyond contention at $500 billion, but the Labor Party wanted to play games. We were not prepared to let them play games. The Greens even said that the Labor Party is being reckless about this.
PRESENTER:
Does the economic growth rate for the last quarter, which is again below trend which implies less tax receipts coming through into the Government coffers - does that put even more urgency on this debt limit?
TREASURER:
Of course it does. It means that there is greater pressure on the Budget. Today we saw the release of the National Accounts – which is a summary of Labor in Government – where the economy is stuck in second gear, the unemployment rate is rising and of course the Budget is deteriorating and the debt is increasing. We will turn it around. It will get better. It is going to take a lot of hard work, but it will get better. What I am most annoyed about is the fact that everything we are trying to do at this moment to reduce the debt such as put in place the abolition of the mining tax, which will save over $13 billion because of its expenditure and getting rid of the Clean Energy Finance Corporation, which will reduce debt by over $7 billion in addition to the $13 billion. The Labor Party is opposing all that and more.
PRESENTER:
You have done a deal with what was described by the former Resources Minister Martin Ferguson as a party of protesters who sit under a tree and weave baskets with no jobs, that’s the Greens?
TREASURER:
He would know because they were married to the Greens during the last six years.
PRESENTER:
What sort of the deal did they extract from you?
TREASURER:
It is there, I just tabled in Parliament. It is an agreement where they want greater transparency about the debt in the Budget papers and in the Intergenerational Report and I said ‘Yes, I don’t mind.’ The more information I can get out there about the legacy of Labor’s debt the better. I have no problems with that. I have no problems with being held to account for what I have had to deal with as an inheritance from the Labor Party.
PRESENTER:
Is it right that every $50 billion of debt that the Government incurs, that it must come back to the Parliament and table a document showing how that money is being, or will be, spent?
TREASURER:
It will trigger a debate but there is no power of veto for the Parliament. It is different to the United States; the Executive in the United States is separate to the Legislature. The President presents a Budget to the Congress. The Congress then debates it and it has a deadline, whereas the Executive in Australia sit in the Parliament, we are part of the Parliament. We never had a debt limit and never had one previously until Labor, in a fit of testosterone induced hubris, said let’s have a debt limit we will never reach and they broke it every time. They treated it as a debt target rather than a debt limit.
PRESENTER:
You said that this will also be included in the Mid-Year Economic and Fiscal Outlook, which is due sometime soon, we presume. Is the ink dry on that?
TREASURER:
No. Because we only had the National Accounts for the September Quarter today. They will be put into the process and when we release the Mid-Year Economic and Fiscal Outlook, which will be before Christmas, it will show the Australian people the true state of both the economy and the Budget that we have inherited from Labor. With the Commission of Audit after that, we will set about fixing the problem and in the Budget next year, which we deliver in May, we will lay down the plan for delivering a stronger Budget and a stronger economy
PRESENTER:
Strange game politics, there is no doubt, Treasurer Joe Hockey, we appreciate your time.
TREASURER:
Well, it is not a strange as media, Ross, we can both tell a few stories there.
PRESENTER:
Thanks for your time.