PRESENTER:
Treasurer Joe Hockey joins us now. Good morning Treasurer.
TREASURER:
Good morning Sam.
PRESENTER:
In releasing the update, you have said Australians are going to have to adjust their expectations of what governments can provide – that we have to live within our means. Talk us through that.
TREASURER:
The fact is we have only been in Government just over 100 days. We have gone through every cupboard, looked at every space and found that we have inherited from Labor a deficit of $123 billion and debt is going to rise to $667 billion unless we take action. The fundamental point is that expenditure has been way over what they promised. Unless we pull back on government spending then Australia is going to face some very, very hard times. The worse thing we can possibly do is leave our children a lesser quality of life than that which we have inherited. That is what we are going to end up doing unless we take immediate action.
PRESENTER:
Treasurer, the Opposition says you are planning to take the axe to middle Australia. Let's listen to Shadow Treasurer Chris Bowen.
Joe Hockey is softening up the Australian people. He is preparing the ground for deep and brutal cuts come Budget time.
Chris Bowen, Shadow Treasurer.
PRESENTER:
What is your response to that? Who do you think is going to feel the most pain from the cuts that are going to come?
TREASURER:
I tell you what. Unless we actually pull back on expenditure every Australian is going to feel the pain when you cannot afford to go to the doctor, when you do not get the welfare you need, when you do not get the community support you need, when you do not get the infrastructure you need. You see, Labor does not get it. My opponent does not understand that cannot continue to borrow money just to live day-to-day. Sooner or later the debt is called in. That is exactly what we have to deal with. It is not something we relish. We are not ideological about it, but we have got to fix the problem. The problem is that expenditure has been running at 3.5% real growth over the last few years. It is going to 3.7%, when the [Labor] Government promised 2%. We have got rising unemployment and the worst thing you can do to people is leave them without the opportunity for a job. We have got to get things moving. I heard your story a little earlier – I think it was about the development on the East-West in Melbourne. The fact is, unless we build this productive infrastructure, people will lose jobs. We need to get on with retooling the nation and we need to build productive infrastructure.
PRESENTER:
Treasurer I imagine we are heading for some massive cuts come next May, come Budget time. What about health and education? Will you leave health and education alone?
TREASURER:
What we have said is the total funding for health and education is not going to change. We are not going for net cuts to health and education. But if we can spend the money that is there in health and education better – deliver better outcomes - then we will do that. There is no doubt in my mind that every taxpayers dollar is more precious now than ever before. We have got to use it more carefully. That is the only way we are going to start to pay down the debt and the deficit that we have inherited.
PRESENTER:
Joe Hockey, we have to leave it there. Thank you.