Subjects: Budget; Deficit Levy; Speaker.

KIERAN GILBERT: This is AM Agenda, thanks very much for your company. With me this morning Liberal frontbencher Senator Simon Birmingham and Labor’s Stephen Jones. Gentlemen, good morning to you. Senator Birmingham first to you, things are in a very difficult place aren’t they right now, for the Government in terms of its Budget. They’re pushing ahead trying to sound resolute but really, you’re going to lose half your savings and the revenue measures in the Senate, that seems inevitable. 
SIMON BIRMINGHAM: Not at all Kieran. We’ve seen already the Labor party backflip when it comes to the deficit levy that’s being imposed. I’m sure we will see other changes of position as constructive and sensible discussions happen with the current Senate, with the new Senate. Ultimately this is not an unusual circumstance. Governments for a long period of time have had to deal with whether it was the Democrats or the Greens or Independent Senators like the late Brian Harradine or Nick Xenophon. A whole range of different players over the years have held the balance of power. We will deal with today’s Senate. We will do it in an appropriate way, standing by important measures that we’ve put forward. 
KIERAN GILBERT: We heard from Christine Milne before the break, she’s not even meeting with the Prime Minister. They’ve got to go through intermediaries. 
SIMON BIRMINGHAM: Kieran, it doesn’t take daily or weekly meetings with the Prime Minister to work through these issues. We will, of course, deal with all Senators, including the Greens, constructively. We would appeal to the cross-benchers to act in a civil way but equally we would urge the Labor Party to take some responsibility for the legacy they’ve left. $1 billion dollars a month of interest payments that are having to be paid on the debt that Labor mounted up and a problem that will only get worse without the type of strategy we’ve outline in this Budget to bring it back to some sustainable level.
KIERAN GILBERT: Well that is a valid point. Stephen Jones isn’t it that budgets are, when they’re difficult budgets, are hard to sell because people lose out?
STEPHEN JONES: They’re even harder to sell when your Minister says one thing on higher education, the Prime Minster says something different. Your Health Minister says one thing, your Prime Minister says something different. So it’s a bit hard for us at the moment to know what we’re being asked to make sensible agreements on. I’ve got to say Birmo sounds like he’s been to the Tony Abbott school of diplomacy. If every sensible step we make to show we’re not the complete oppositionists they were when they were in opposition gets called a ‘backflip’, I wish them good luck with the rest of the Senate. Here’s one thing we won’t do – we won’t be giving in on Medicare. Medicare is a no-go zone. We won’t be giving them the green light on cuts to pensions. They’re two things we definitely won’t be doing. We won’t be backing their higher education plans, which are going to double the interest payments on university loans and significantly increase fees.

KIERAN GILBERT: So everything else is on the table?
STEPHEN JONES: Here’s the issue that we’ve got. It’s a bit rich for the Government that didn’t have the courage nine months ago to put their proposition to voters to now turn around and demand that we vote for something that they wouldn’t let the Australian citizens vote for. It’s a bit rich for them to say that.
KIERAN GILBERT: Is the problem, in terms of the sales pitch of this, the fact that you couldn’t get some of these measures out earlier? The WA Senate election, of course was a big stumbling block to that in the last few months. You couldn’t release the Audit Commission before that. It was left to the last minute and you’ve basically had to release it without any forewarning.
SIMON BIRMINGHAM: Kieran, we always knew this would be a difficult Budget because we are taking difficult decisions. We told Australians for a long period of time that getting the budget back in order was a top priority should we be elected to Government. We’ve been talking for a long period of time, in particular Treasurer Joe Hockey, about the need to end the age of entitlement, about the need to put our welfare payments on a sustainable footing. Not just for the next two or three years but for the next 30 or 40 years.
KIERAN GILBERT: The problem is, it seems, according to internal polling that Labor has had done and now is published everywhere, so it’s not that internal anymore, that people don’t seem to have accepted that or realise the gravity of the situation as you see it. You haven’t been able to convince people.
SIMON BIRMINGHAM: Polling always depends on the questions asked and when the Labor Party has basically leaked all of its polling, you would assume the questions were asked in a manner to make sure it could be leaked. So I’m not going to dwell too much on their leaked polling but what we’re hearing from Stephen is a lot of what they won’t do and what they won’t support but nothing about how they will fix the problems that they created. How are you going to pay for all of these things in the future?
STEPHEN JONES: It’s at last two and a half years before Labor will be in a position of putting a Budget before the Australian people. It’s only been nine months since the Coalition told the Australian people “no cuts to pensions, no changes to Medicare, no new taxes”. So if there is a problem that the Coalition is facing with selling their Budget, it’s because nine months ago they told the Australian people they aren’t going to do the very things they are now demanding we vote for. 
SIMON BIRMINGHAM: Two and a half years is just a cop out, Stephen.
STEPHEN JONES: It’s not. They are demanding we vote for something that they told the Australian people nine months ago was not on. That’s a bit rich.
SIMON BIRMINGHAM: We told the Australian people we would get the budget in order. We were very clear there’d have to be difficult decisions. We were clear they were issues around the sustainability of social security payments and welfare policies. We were upfront about all of these things.
STEPHEN JONES: You said you were going to change Medicare? [Inaudible]
SIMON BIRMINGHAM: Crystal clear that we had a difficult challenge ahead of us.

STEPHEN JONES: Absolute rubbish.
SIMON BIRMINGHAM: And that we would undertake a Commission of Audit to go through a process to find ways to put these things on a sustainable footing.
SIMON BIRMINGHAM: Ultimately, you will have to come up with hundreds of billions dollars extra in revenue or you will whack a whole lot more on the nation’s credit card and the problem is, if we don’t take these difficult decisions today, then the remedial action required in years to come will be that much harder and tougher.
KIERAN GILBERT: Let’s look at the state of play now. You haven’t repealed the carbon tax yet, obviously blocked in the Senate but the point is these were the key priorities to block. To get rid of that, to get rid of the mining tax. In fact, the only thing you look like you will be able to do is increase taxes through the Debt Levy. So how do you say that this has been a constructive seven months when you haven’t been able to get through your two signature policies? People are sick of simply saying “they’re to blame”. How do you make that case now that the one thing you will be able to do is a tax increase?
SIMON BIRMINGHAM: You’re right Kieran, we deal with an incredibly obstructionist Senate controlled by the Labor Party and the Greens. That will change on the first of July and we will have a different mix in the new Senate. I’m quite confident that the carbon tax will pass and the repeal will pass and the passage of the repeal of the carbon tax will ensure that, on average, Australian families are $550 a year better off.
KIERAN GILBERT: Is it $550 better off when you’ve got the fuel excise? 
SIMON BIRMINGHAM: Australian families will absolutely be better off overall.
KIERAN GILBERT: Is it still $550 though? I don’t think that’s right.

SIMON BIRMINGHAM: No, no. This is, of course, part of the misleading approach of the Labor Party. Australian families will be better off in net terms. $5.7 billion less in tax – 
STEPHEN JONES: They’re not buying it. It’s not true. 
SIMON BIRMINGHAM: Will be taken next year then would have been the case under your economic settings. $5.7 billion less in tax will be taken next year then would have been the case under your settings.
STEPHEN JONES: Pensions will keep rising twice a year, health and education spending keeps going up.
KIERAN GILBERT: Ok, Stephen Jones. 
STEPHEN JONES: How come the National Centre for Economic Modelling has put out independent research that’s saying a family, an average family with a combined income of just under $100,000 a year is going to be $5000 off? A poor single mother with two kids is going to be $6000 a year [worse] off, while your high income earners – everyone’s being asked to take a piece of the burden – $1200 a year worse off. You can hardly call that a balanced approach. You can hardly say that what you are doing is going to make families better off. They know they’re not going to be better off.  They know they’re going to be hit with a GP Tax. They know they’re going to be hit with a Bowser Tax and they know they’re going to be hit with cuts in pensions and cuts in benefits. They’re not buying it and they’re particularly aggrieved because they were told that the Coalition could work miracles without touching any of these things, and they now understand they were lied to.
KIERAN GILBERT: Do you think that Labor should support some of the other changes though, in terms of family payments and reigning in some of those things? Is that where you should be heading?
STEPHEN JONES: We are not going to be the belligerent Opposition that Tony Abbott’s team were when we were in Government. We’ve already signalled that, whilst we see it as a broken promise, whilst we wouldn’t put it there in our Budget priorities, we will back the increased tax on higher income earners. We will do that, and that is evidence that we are not just sitting there mindlessly saying “no”, but we’re not going to support the attacks on families. We’re not going to support attacks on pensioners and the attacks on Medicare. We’re simply not going to do it.
KIERAN GILBERT: Well, is that a sign they are being constructive? You’ve said it’s a backflip. Mathias Cormann said it was a backflip.
SIMON BIRMINGHAM: Kieran, I welcome it. I welcome it as a first step. I welcome it as a first step and perhaps it’s a tiny acknowledgement, not that they’ll say these words, that there is a problem that was created that needs to be addressed and that we need to take some steps to get the budget under control but it’s one measure. We have an entire package we’ve put forward, carefully constructed. Not just to make a difference to the budget settings in the next couple of years but to make sure that the Medicare policies we have in this country can be sustained in the long term. That pension increases can keep happening.
KIERAN GILBERT: We’ve got one minute left, I do want to ask you both quickly – Bronwyn Bishop using her office for a fundraiser. Is that fair? Appropriate?
SIMON BIRMINGHAM: What was done there was completely paid for out of private funds. Not a single dollar of tax payer entitlements was used. I see no issue with somebody in that regard, given there was not one dollar of taxpayer funds used.
KIERAN GILBERT: Stephen Jones, your thoughts on that finally?
STEPHEN JONES: Completely inappropriate Kieran. Completely inappropriate.
KIERAN GILBERT: This is her office when she’s in the Parliament. Aren’t those independent rules and rules governing her position relating to inside the chamber?
STEPHEN JONES: No, completely inappropriate. The Speaker’s office belongs to the Australian Parliament, the Australian people. The question for the Speaker is this – will she do it again?
SIMON BIRMINGHAM: The Labor Party have run plenty of fundraisers in this building –   
STEPHEN JONES: Never in the Speaker’s office. 
SIMON BIRMINGHAM: Plenty of fundraisers in this building. 
STEPHEN JONES: The Speaker’s office is independent. The Speaker is independent and Parliament works on that basis. Will she do it again?

KIERAN GILBERT: Gents, thank you for that this morning. Appreciate it, Stephen Jones and Simon Birmingham.