Topics: Federal Budget, higher education
E&OE…
Kieran Gilbert
With me on the program now, the Shadow Parliamentary Secretary for Foreign Affairs, Matt Thistlethwaite, and Liberal frontbencher, Senator Scott Ryan. Senator Ryan first to you on Peter Costello’s comments, his opinion piece in the News Corp papers, well he’s really ripped into the idea of a debt levy, just as the cabinet, senior ministers, are finalising a debt tax, Peter Costello’s words were “the proposed tax levy has no economic benefit.” He’s calling on the PM and Treasurer to scrap the idea.
Scott Ryan
Well Kieran, he also outlines that he agrees that this Government’s been left with an enormous mess by the previous government and he provides a political argument, he analyses the politics of dealing with the mess that we’ve been left with, including some measures that have been discussed in the media. Peter is our longest serving Treasurer, he’s a hero of the Liberal Party and these are very difficult decisions and this will be a very difficult budget, but the Government’s committed to fixing the mess that Labor left us with.
Gilbert
He made the political point, Senator Ryan, but he also makes the economic point. He says the “the proposed tax levy has no economic benefit. It will detract from growth by reducing consumption. It will produce no interest rate reduction and if it lasts four years and raises $10 billion, the most it could save would be $400 million, hardly enough to touch the sides of the annual $12 billion government financing requirement.” He’s bagged it economically as well as politically.
Ryan
Well, he does point out there the huge annual interest bill that comes to just over $60 million a day, the $12 billion a year this Government has to pay in interest. But let’s not call it a proposed levy, it’s been mooted in the media, we’re 179 hours away from the Treasurer Joe Hockey standing on the floor of the House of Representatives and delivering his first budget. Every year, before every budget things get discussed in the media, but we’re only just over a week away from actually seeing what is announced in the Bugdet, so let’s just wait and see what happens. The Government has made clear over and over again that we know there are very difficult decisions to make, we know that there are going to be painful decisions to make to bring this budget back into balance because it’s completely unsustainable in its current form.
Gilbert
Matt Thistlethwaite, the point of a debt tax, and as I understand it speaking to senior Liberals, that this is not going to kick in at $100,000, it’s going to be well above that, probably upwards of $150,000 per annum. If it is for income earners on that amount of money, isn’t it fair if people on lower incomes are copping it with welfare and other payments being reduced or removed, that those on higher incomes also contribute?
Matt Thistlethwaite
No it’s not fair Kieran, this is a massive breach of faith with the Australian public. Tony Abbott campaigned and the focus of his campaign was on stable government and no surprises, no increases in taxes and in the first budget of the Abbott Government, when he gets the opportunity, he’s breaching that commitment and increasing taxes and it’s a bad proposal, as Peter Costello’s pointed out. Domestic demand in Australia is quite volatile at the moment and an increased levy or tax like this will put a dampener on domestic demand and that will see job losses in our economy so it’s not only a breach of faith with the Australian public but it’s also bad economic policy.
Gilbert
Well by that argument though, if you’re going to put a dampener on consumption, removing welfare payments or reducing them would also have that impact, wouldn’t it? And again, I put this equity argument to you, as a member of the Labor Party, wouldn’t you ordinarily be arguing for a progressive tax system where you see a situation where people at the upper end also contribute more if those at the lower end are going to take a whack in the Budget.
Thistlethwaite
Well Labor outlined a plan for sustainability of our fiscal position and that relied on ensuring that mining companies that were making super profits on resources that are owned by the Australian people paid their fair share of tax, it relied on ensuring that people with more than $2 million in their superannuation accounts, earning more than $100,000 per year, paid their fair share of tax, changes to the fringe benefits tax regime. Labor has a plan for sustainability for our budget, we weren’t the ones that doubled the deficit when they came to office, the Liberal Party, we weren’t the ones that removed the expenditure cap on public expenditure in Australia. It’s the Liberal Party and Tony Abbot Government that’s done that.
Ryan
Kieran, I’d just like to correct a few of the…
Gilbert
Senator Ryan did you ever think that you’d ever see a Labor opposition in lockstep essentially over policy argument with your former Treausrer Peter Costello, opposing a position of a Coalition Government on increasing tax?
Ryan
Well they’re not. The record of Labor is they introduced a flood levy for an natural disaster, but we’re dealing with a manmade disaster, a Labor-made distaster that is our fiscal situation that is accruing debt at an unsustainable rate. Matt there talked about a cap on spending, it was a cap on spending that Labor never met, they talked about a cap on spending growth, they delivered a 4% cap on spending growth. If I might say around keeping our promises, they only people stopping us keep our promises now on abolishing the mining tax and abolishing the carbon tax are the Labor Party. I’m not going to sit here and let Labor try and reinvent history when they are actually preventing the Government from keeping its promises. We said we would get rid of the carbon tax, Matt and his colleagues are in the Senate stopping us doing that every time we try and bring it to a vote.
Gilbert
And in terms of the moral high ground it’s hard for Labor to take that isn’t it, Matt Thistlethwaite, given the Labor record in recent years, in government that is?
Thistlethwaite
Well what Scott doesn’t point out is since the Abbott Government came to office they’ve doubled the deficit, they’ve added $68 billion worth of expenditure…
Ryan
That’s just untrue.
Thistlethwaite
… to the Budget. Now that was confirmed on the ABC this morning on their Fact Check program, I might add, and as I said Labor stands by its policies, that we had a path to sustainability, a path to ensure that the fiscal position was sustainable into the future and it didn’t rely on a Medicare co-payment, it didn’t rely on hitting pensioners and the most vulnerable in our economy.
Ryan
Kieran this has got to be corrected, Labor never had a path…
Gilbert
Senator Ryan you can make the comment, whatever you like in response, but I do want to put to you as well, the story in the Australian Financial Review this morning that the Military Superannuation Scheme is going to be reined in, it’s one of the last defined superannuation benefits scheme, like the public service used to have, the Military Scheme is apparently going to be reined in as well, what’s the necessity of that?
Ryan
Kieran, it’s a report in a newspaper and it’s one of the myriad of reports we’re getting about things that journalists say they’ve got leaks or journalists are mooting will be in the budget. As I said earlier, we’ve got 179 hours to go until Joe Hockey’s on his feet and then we’re going to actually see what’s in the budget and you’ll probably see it a bit earlier, being in the Budget lockup Kieran. I just want to correct a couple of things Matt said there. The Coalition did nothing other than to start to tell the truth about the budget deficit. If Matt wants to talk about what new governments do when they come to office, let’s look at Labor’s record. They inherited a $20 billion budget surplus, they blew it in a year, and the following year we had a $40 billion deficit. It’s a record that the Coalition will put up against Labor any day of the week.
Gilbert
Matt Thistlethwaite, your thoughts on the Military Superannuation Scheme being reined in, is this a necessity, given the projected growth in it, it’s meant to outweigh the rest of the Commonwealth’s superannuation liabilities within a couple of decades.
Thistlethwaite
Again Kieran, this is a massive breach of faith, no mention of this prior to the election by Tony Abbott and again we see policy on the run here, they’ve decided that they’re going to go ahead with this but no mention of it prior to the election. I do note that defined benefits schemes have been closed in the public service for some years, but if you’re going to do this as a policy approach, surely you would mention that to the Australian public six months ago in the election campaign.
Gilbert
Let’s take a break on AM Agenda, back in just a moment.
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Gilbert
This is AM Agenda thanks for being with us this Tuesday morning, with us Labor’s Matt Thistlethwaite and the Liberal frontbencher Senator Scott Ryan. Senator Ryan, the Newspoll today, not happy reading for the Coalition and one Liberal that I spoke to says that things are going to get worse before they get better. What’s your sense?
Ryan
Well we’ve always conceded that the first part of this term of government was going to involve some very difficult decisions, Kieran. We have to bring the Budget back into balance, that’s going to require sacrifice from all Australians and a reassessment of our priorities and particularly our spending priorities. So without providing a fortnightly commentary, we are very cognisant of the fact that we have some very difficult decisions to make and we need to persuade the Australian people and we need to bring them with us in that conversation.
Gilbert
Are you worried about the impact on the Prime Minister, in terms of his personal rating here, and I suppose the issue of trust on the debt tax, for example, his disapproval rating is up to 56%, that’s the worst it’s been since he took office.
Ryan
Well I’m not particularly worried about any polling numbers Kieran, I think it’s fantastic to have a Prime Minister, after the last five years, who is not as vain as someone like Kevin Rudd. We budget on what’s good for the country and what’s good for our financial situation, we don’t budget on polling numbers, which is what Labor did. Kevin Rudd was always looking over his shoulder to see what Newspoll said before he made a decision or before he talked to the Australian people and that’s got us into the mess we’re in. I’m very proud to be led by a Prime Minister who’s actually making decisions in the national interest rather than in what’s reflected in polling numbers.
Gilbert
Matt Thistlethwaite, your response to that?
Thistlethwaite
Well Kieran the News poll numbers this morning reflect this Government’s broken election promises and wrong priorities, I think you’re seeing pensioners, you’re seeing families extremely worried about the impact of next Tuesday’s Budget on their livelihoods, on their welfare and you’re seeing that reflected in these Newspoll numbers.
Gilbert
In terms of what Senator Ryan’s saying there though, that hard decisions sometimes aren’t that popular in the polls, but people respect leaders who make them?
Thistlethwaite
Well Kieran, prior to the election, one of the campaign focuses of the Liberal Party and Tony Abbott was their so-called “Budget crisis.” They campaigned quite heavily in the community on that, but no mention of these increases in taxes, the changes to education policy, the Medicare co-payment, the increases to the pension, no mention of that at all prior to the election and we’re seeing that looking quite likely in next Tuesday’s Budget and I think the Australian public are punishing them for breaking those election commitments.
Gilbert
The Education Minister was on national television last night on the ABC. The broadcast had to be suspended in the face of a raucous protest, he was as I said on the ABC, let’s have a look at it.
(Clip: Q&A)
Gilbert
Yeah, I don’t envy Tony Jones there in that position that would have been very difficult last night as they overtook the broadcast. Senator Ryan, can I ask you about this because obviously they were concerned about discussion of deregulating the higher education sector. Mr Pyne might face some difficulties on campuses around the country.
Ryan
I didn’t think the Q&A audience could get any more left-wing Kieran, but it managed to last night. I did have a look at the video clip this morning and I sort of half expected Tony to try and say “I’ll take that as a statement.” But on a more serious note, it was a group of Socialist Alternative radicals from our universities, they’ve been doing the same protests now for thirty years. It doesn’t really have an impact on public debate, it doesn’t actually represent the public interest and they don’t represent the views of students. They’re a small group of fringe dwellers who managed to make a bit of noise. On the higher education front, we’ve had the Kemp-Norton Review that has been brought forward to the Government that has supported the maintenance of the demand driven system. It’s made a number of recommendations which the Government is considering and will make announcements on in due course. But, it’s focused on access to higher education for as many Australians as possible and maintaining the quality of that education, knowing that institutions in our region are actually improving all the time and that is critical if we’re going to maintain access to a quality higher education for as many Australians as possible.
Gilbert
Matt Thistlethwaite, Senator Ryan and the Minister Mr Pyne have the support of the Vice Chancellors on this, the universities want this to happen, they believe it’s the best way to achieve quality education, the best education that we can strive for in this country. What do you say to that?
Thistlethwaite
Well Kieran, I’m the first generation in my family to be able to get a university education and I’ve no doubt that my parents and grandparents had the ability, they simply didn’t have the opportunity and I think current system that we have, which subsidises higher education, allows people from lower, middle income families to get the opportunity at a university education and I wouldn’t want to see any changes to policy that removed that opportunity for those from lower socioeconomic backgrounds to get the opportunity of a university education and on the tactics last night I have some sympathy for the students’ argument, but I don’t have any sympathy for the tactics that they undertook to get their augment across last night. I think they weakened their argument by their tactics.
Gilbert
Did more harm than good, as the host said, indeed. Matt Thistlethwaite and Senator Scott Ryan, gentlemen as always, thank you for that.
Thistlethwaite
Thanks Kieran.
Ryan
Thanks Kieran.
(Ends)