JOE O'BRIEN:
Making news this morning, the Opposition Leader Tony Abbott has revealed his answer to the Federal Budget, and he's promising to scrap the super profits mining tax and cut public service jobs.
VIRGINIA TRIOLI:
If he wins government Mr Abbott also says he'll introduce a two-year freeze on public service hiring ... So for more on the Opposition's response to the budget we're joined now from Canberra by the Assistant Treasurer Nick Sherry. Nick Sherry, good morning, thanks for joining us.
NICK SHERRY:
Good morning Virginia, good morning to your viewers.
TRIOLI:
So, 20,000 more public servants employed during the time, the period of the Rudd Government, that does seem like a heck of a lot. Can you afford to lose some?
NICK SHERRY:
Well it was a modest increase. What I thought was striking about Mr Abbott's response last night was cuts to jobs and bring back WorkChoices.
TRIOLI:
No, he never said bring back WorkChoices, he says (inaudible)
NICK SHERRY:
Oh, yes he did. WorkChoices is coming back.
TRIOLI:
OK, what's the phrase you're relying on for that then Nick Sherry?
NICK SHERRY:
He outlined industrial relations reform and it's bring back WorkChoices, that was one of the centrepieces of his speech last night.
TRIOLI:
Ah, no, he never used the phrase we'll bring back WorkChoices.
NICK SHERRY:
Of course he wouldn't use the phrase …. (inaudible)… he's outlined his reforms to industrial relations, it's WorkChoices Mark 2.
TRIOLI:
I'll leave you to assert that, but 20,000 more employed, so what level do you say you can start to lose some of those positions through natural attrition before it might start to affect public service?
NICK SHERRY:
Well, there's been a modest increase. As I understand in the Howard years there was a nine or ten percent increase in the public service, but the cuts to jobs that Tony Abbott outlined last night …
TRIOLI:
Twelve thousand.
NICK SHERRY:
… Do not improve… the cuts to jobs do not improve the Budget bottom line. His commitment all day yesterday and Mr Robb's commitment was to deliver a Budget surplus earlier than a Labor Government. And he didn't do that, because those cuts he announced to jobs last night are spent on some of his other election promises, so there was no improvement to the Budget bottom line, it was entirely negative, no plan for the future.
TRIOLI:
Is this what budgets should be about these days, just the race to the bottom line, about having absolutely no debt?
NICK SHERRY:
Well a budget should be about strengthening our economy and that was the centrepiece of our budget plan. We will have the lowest level of government debt in the entire western world, we are bringing forward a budget surplus three years earlier, we have a very strong economy, second lowest unemployment in the advanced economies, overall the strongest economy. That should be the centrepiece of a budget, keeping the economy strong.
TRIOLI:
OK, well of course it needs to be noted though we stay in deficit until the budget returns to surplus in 12-13, I mean we were in deficit for those years, but look the centrepiece of your budget and the reason that you believe you can get to surplus so much earlier is because of that resources super profits tax. Now, that's starting to look a little shaky, you've got a concerted and very vicious campaign being waged by all the resource companies against the Government over this tax. If you can't get that through, if you can't get that up, and the Opposition has said they'll oppose it, how do you bring the Budget back into balance?
NICK SHERRY:
Well, two points. Firstly, the budget surplus is not dependent on the resource super tax, it is not dependent on that. What we have committed to is a cut to company tax, a cut to superannuation tax and higher contributions, higher write-off for small business, $5000, and standard tax deduction of $500 rising to $1000 – all that is funded and conditional on the resource super tax. The second point I'd make is the campaign by some in the mining industry against this tax, we've seen it all before. We saw it 25 years ago when profits tax on the off-shore oil and gas industry was introduced. The claims then were very similar to the claims now. The claims then when that tax was introduced all those years ago was that there'd be no oil and gas industry, that the oil and gas industry would collapse. Now that didn't happen, we have a strong oil and gas industry and we'll have a stronger mining industry as a result of the resource profits tax.
TRIOLI:
Sure. But people know how to read the signs, and when you see someone like Ken Henry, most unusually, having to enter the fray and defend the proposal, we all know the Government is really in trouble when it has to call on Ken Henry to do that.
NICK SHERRY:
Well I don't think Ken Henry entering the fray and making public comment is all that unusual. It hasn't been unusual under this government and it certainly wasn't unusual under the previous government …
TRIOLI:
He wasn't allowed to speak in relation to his own review, it's unusual he comes out now?
NICK SHERRY:
Well I went to … I've been going to Budget Estimates for 20 years. I've sat next to Ken Henry over the last two and a half years and I was sitting across from him asking him questions. Ken Henry has always, very appropriately, had plenty to say.
TRIOLI:
All right. Well's there's an interesting story that's running in the Daily Telegraph this morning, and that's that secret polling reveals Tony Abbott is the most popular leader in some key marginal seats because support has died for both the Prime Minister Kevin Rudd and his deputy Julia Gillard. Do you have concerns about those key marginals?
NICK SHERRY:
Look, as I've said to you before Virginia, I mean I've seen polls in my long political career, good ones, bad ones. I've never commented. This Labor Government is focussed on keeping the Australian economy strong. We will govern in the national interest, we will make sure that we deliver the lowest possible unemployment. We're going to keep the economy strong, that is our focus, our focus is not on polls.
TRIOLI:
And just very quickly and finally then, Nick Sherry, is the Prime Minister Kevin Rudd feeling a little more cheerful after his interview with Kerry O'Brien the other night on the 7:30 Report, he did seem to a lot of observers to be quite grumpy during that exchange. Has he cheered up?
NICK SHERRY:
No, I saw passion. I saw commitment. That's what I really enjoyed about Kevin's response. We saw the underlying passion and drive that Kevin's got to deliver a stronger economy with a stronger health system for the future of our nation. That's what I saw.
TRIOLI:
Didn't we see a little brittleness there as well?
SHERRY:
No, not at all. I saw … he gave Kerry, a journalist, a bit of a touch, but I saw underlying passion and commitment for this nation's future. And that's what the Budget's been all about this week. And it's great to see Kevin getting a bit of that passion and underlying focus.
TRIOLI:
All right Nick Sherry, good to talk to you. Thanks so much.
SHERRY:
Morning Virginia, morning to your viewers.