Subject: (May Budget)


KIERAN GILBERT: This is AM Agenda. With me now, the Shadow Assistant Treasurer, Andrew Leigh and the Assistant Education Minister, Simon Birmingham; Good to see you both. First of all to you, Andrew Leigh, on the economics of all this. I understand Labor doesn’t want families to lose any payment but then if you’re going to make the childcare situation more generous, more targeted, the moneys got to come from somewhere and the savings that Jenny Macklin articulated earlier, which no doubt you’ll refer to as well, they’re not enough to pay for the initial spending.

ANDREW LEIGH: Well Kieran, we have supported a range of changes that the government has made, including ones which were characterised in a way where we wouldn’t have put them forward to the parliament; but we don’t think that kids get any cheaper when they turn 6, which is at the heart of this proposal the government has been trying to ram down the throat of the Parliament for the last couple of years. Instead, we think the government ought to be looking at savings in the area of multinational tax where we’ve got a carefully crafted policy costed by the Parliamentary Budget Office, high end superannuation where again, we’ve done that hard detail work. Labor’s well ahead of the policy curve on this and the difference between what we’ve put on the table and what the government’s done is that our changes won’t hurt the vulnerable in Australian society, they won’t try and address the government budget by hurting the family budget.

KIERAN GILBERT: Ok, well let’s go to Senator Birmingham because…have we hit another stalemate here? The budget hasn’t even been handed down and yet Labor’s saying “nup, we’re not going to have a bar of it”

SIMON BIRMINGHAM: Well Kieran, I hope not, I hope the Labor party wakes up to itself and steps away from the oppositionist tendencies that have dominated their time in the life of this parliament, but if they don’t, we will work constructively with the cross benchers and try to deal with them to get effective reform and it’s about a package of reform measures that make it easier across the entirety of the budget to employ people and for people to go in to employment, and they’re the two real goals here. You’ll see tomorrow night, in terms of the small business packages and the reforms there that that is about making it simpler and easier for businesses to employ more Australians and the changes we’re making to childcare are about encouraging and helping families to get back to work where that is their choice. Indeed, the changes to family tax benefit part A are about saying that once a child has reached school age, you also need to be encouraging people back to work as well. All of these reforms are about lifting workplace productivity, getting more people in to jobs and the childcare package…

KIERAN GILBERT: …Do you accept that this is less money being spent as part of this childcare package announced yesterday? There is less money going in than the amount that’s coming out from the family payment system.

SIMON BIRMINGHAM: Kieran look, this is a fundamentally positive reform in terms of what is happening here and it is about getting an estimated 240,000 additional people either in to jobs or increasing their involvement in the work force. There’ll be a huge productivity lift for Australia. It of course has enormous flow on benefits, both in terms of budgetary benefits, what that means for the long term economic environment in Australia but also in terms of social benefits of having the right role models in the family of people going out to work and having that opportunity…

KIERAN GILBERT: …This all makes a lot of sense when you look at the way that the moneys being spent, in terms of trying to target the childcare spend to encourage people to get back in to the workforce. It’s necessary at the micro level, the family level, but it’s also, as you know, necessary in terms of our nation’s productivity, isn’t it?

ANDREW LEIGH: Absolutely Kieran, as an economist I’d certainly support all of the goals that Simon’s talking about there around participation and productivity, but I do wonder whether the much flaunted surges that he’s talking about are going to be like the surge of confidence that was going to accompany the election of the Abbott government; which was then followed of course by an increase in debt, a fall in consumer confidence, a rise in the unemployment rate. So many of those indicators that should be going in one direction are going in the other and we’ve got the treasurer now, you know, a bit like, you know, the star of Weekend at Bernie’s, being propped up there by Scott Morrison and Tony Abbott unable to go out there and do his job of selling the budget. You could never imagine that Peter Costello or Paul Keating or Wayne Swan would have been so sidelined through the budget process, so unable to articulate the reforms…

KIERAN GILBERT: …Alright, let’s get the Minister’s response to that because it has been the subject of a fair bit of attention, the fact that Scott Morrison has dominated the government’s message in the lead up to this budget, is it somewhat of an audition for higher honours?

SIMON BIRMINGHAM: No Kieran, Scott, as Social Services Minister, is responsible for around one third of government expenditure, he will be the Minister responsible for implementing, for implementing the changes around the aged pension, for implementing the changes around childcare. Significant levels of involvement in terms of policy reform, but Joe Hockey is the treasurer, he is the overall architect of the budget strategy alongside the Prime Minister…but this is a government that is a team, Kieran, this is not a government that is about one person or two people, this is a government where every Minister is expected to perform in their role, that’s what we’re seeing from Joe and that’s what we’re seeing from Scott.

KIERAN GILBERT: There’s no doubt that Scott Morrison is performing that role effectively and been much more affective in terms of the message this year but I guess, you know, having covered budgets for more than a decade now, I know that traditionally the Treasurer would say for example this morning, give their walk up to the ministerial door, the autumnal leaves behind Peter Costello for years and then he’d come and tell us how great the budget would be. Wayne Swan carried on that tradition, this morning, no sign from Joe Hockey. 

SIMON BIRMINGHAM: Kieran, Joe is working incredibly hard on this budget, and we will see plenty of Joe Hockey in handing down the budget tomorrow and in the sales pitch that goes with the budget thereafter and explaining to Australians that this budget is about getting Australians back in to work, making it easier for people to employ other Australians for small businesses in particular…

KIERAN GILBERT: …the Prime Minister’s office hasn’t sidelined him in this?

SIMON BIRMINGHAM: No Kieran. In comparison with the Labor party whose policy proposals thus far are a new carbon tax, a new superannuation tax, a tax package on multinationals that has previously shown to be unworkable and that won’t actually be effective in terms of being implemented according to treasury advice, we will actually have a package of proposals that makes sense, that make it cheaper and easier for small businesses to employ Australians and make it more attractive for Australian families to get back in the workforce and you’ll hear plenty from Joe Hockey on that, as you will every member of the government.

KIERAN GILBERT: There’ll be further savings in the public sector as well, it seems. The government looking at a fourth phase of a smaller government with health and education in line for trimming, is it always a clever thing to do? To be looking for duplication for example, where other agencies might be undertaking similar work even in other jurisdictions as well, state federal divides and so on.

ANDREW LEIGH: Kieran, certainly you want to make sure you’ve got a streamlined and efficient public service but, again this is about job cuts and we’ve seen 17,000 job cuts in the public service since the government came to office. I’m worried that so much of what they’re doing seems to be ideologically driven, seems to be based on the notion that if you can find it in the Yellow Pages, the government shouldn’t do it and seems to be threatening the core public services that Australians depend on…but just to go to one of the comments that Simon was making before, I’m frankly fairly relaxed as to what Joe Hockey chooses as his media schedule, what concerns me the most is Joe Hockey’s disengagement with some of the core debates the nation is facing. Debt and deficit are not, according to most economists, the number one economic challenge that Australia faces but, Tony Abbott and Joe Hockey made it their test and they failed that test and stepped away from debates around innovation, inequality, climate change. Those big picture issues see the Australian Treasurer missing in action.

KIERAN GILBERT: Alright, let’s get Senator Birmingham, just finally to you, almost out of time.

SIMON BIRMINGHAM: Well Kieran, this budget really is about framing the right future for Australia one in which we get and Joe Hockey delivers a budget that continues to show a steady trajectory back towards deficit, recognising the very difficult challenges we have; that Iron Ore prices have nearly halved over the course of the last year since the last budget. So, challenging times, but also building the workforce capacity of all Australians. So that is the central message that Australians will see tomorrow night.

KIERAN GILBERT: Senator Birmingham and Andrew Leigh, gents, a busy few days ahead.