30 September 2015
Transcript - #2015007, 2015

Interview with Paul Murray, Sky News

SUBJECTS: Liberal Party, meeting with National Reform Summit participants, Coalition Government’s commitment to strengthening the Budget

PAUL MURRAY:

I want to talk to you about a lot of things including tomorrow’s summit and this central question about how the heck the government starts cutting spending. Because I agree with you wholeheartedly all in as I was with Joe Hockey which is the country spends more money than it makes. But first the news around this afternoon is that the former Senate leader of the Liberals, Eric Abetz, has gone publically written a letter to supporters and he has mentioned the fact that there are many members of the Liberal Party who he believes have either torn up or threatened to tear up their membership as result of the leadership challenge. What do you think firstly of what Mr Abetz said and secondly what would you say to anyone considering doing that?

TREASURER:

Well firstly I want to thank everyone who has been so helpful in working through this transition. It has been a very smooth transition. I mean these events can be very tumultuous and it impacts everybody in I think a very significant way. But I think the transition has been incredibly smooth I know in my own area in the Treasury portfolio and I appreciate the support we have had from the former Treasurer Joe Hockey for that. We are getting on with the job of bringing down MYEFO later in the year and picking up the various policy initiatives that were being pursued and taking them forward. Many of those will be discussed at tomorrow’s meeting, I wouldn’t describe it as a summit tomorrow, they held their summit and those organisers have come to brief us on the outcomes of that. For those who are still feeling a bit of the events of the past few weeks well the government will just get on with the job, being faithful to the core liberal principals that we have as a party and the Liberal Party is a broad church. I certainly have some views that sit more to the conservative end of that broad church and I am joined by many others in the Cabinet of similar ilk and we are all one big team. We are the Liberal Party, we the Liberal/National Coalition Government and we are getting on with the policies of a Liberal/National Coalition Government as we were elected to do.

MURRAY:

Did Joe Hockey give you any advice on the way out or have you been exchanging text messages? Has he given you a key piece of information about wrestling this giant beast that is the economy?

TREASURER:

Well of course I served with Joe in Cabinet for two years and I served with him on the Expenditure Review Committee of Cabinet. We worked closely on a lot of these issues so we have had many of those discussions over that time. We have exchanged some text messages since and I appreciated that and the good spirit in which Joe has engaged. Again, another person who has I think engaged positively in the spirit of transition, because he knows like we all do that what really matters is not the various jobs that we are all doing here but the job that we need to do for the Australian people. That is what we are very focused on, it has been a very professional transition I believe and we are really hard at work.

MURRAY:

So what happens tomorrow? Is this the people coming to you with new ideas or stuff that has already been seen many times before? Because it seems to me that fundamental to dealing with Australia’s economy and the Budget is you either believe you have to spend – you can’t spend more than you earn or Bill Shorten style, Greens style, Clive Palmer style you can just keep kicking it down the road.

TREASURER:

Well I think where you have to start is what your overall objective is, so why do you want a strong Budget? Why do you want to have a tax system that helps people work, save and invest? You want to do all of this because you want to have a stronger economy where people can be more secure in their jobs. Now in my experience I always start with the outcome I want to achieve and I work backwards. Whether it was in immigration where we all know what happened there with the border protection issues or in the social services portfolio it was a similar task. Now in Treasury what we need is we need the country to earn more Paul. When the country earns more - the way I look at the tax system is a bit like this, we take a dividend as a government from the economy, we are a shareholder in the economy. As a shareholder we want the economy to be growing and the more it grows, the better the government does and the better all Australians do. Now I don’t see the tax system as the government charging the economy and I think a big part of the tax discussion which is taking place is there are those who think we should be pulling more tax out of our existing level of income and that is the way that you balance the Budget. All you end up doing is slowing the economy and punishing people as you chase your spending down the road and if you don’t control the growth in spending then that is what you are left with and it is a negative spiral. So we have to agree that what we want to achieve is the country earning more. Now when you move from that position then I think issues whether it is competition policy, trade policy, budgetary policy or tax policy they all have to serve that goal. We have to put the ideology away and we have to focus on what is going to make Australians more secure and confident in their jobs because they are in a growing strong economy. That’s the goal.

MURRAY:

But the truth is that you have got potentially a Budget before an election but certainly the next twelve months is all about ramping up to that election. You and I know because we have talked about it when it came to welfare, we have talked about when it comes to the economy, you have to cut something very seriously in the next twelve months. How do you work out what to cut that doesn’t immediately get blocked by Labor and by the crossbenchers? Because to me it seems that as good as you are as a negotiator there is always going to be a more populist argument in ‘everyone can have everything and we will deal with the cost later’.

TREASURER:

Well the way you achieve it is you have to explain why you are doing it. That is the point I was just trying to make. Now what we have to do Paul is we need to continue to control the growth in expenditure. Now we have already had some success at that, we have been able to control the growth rate in expenditure from over three per cent to just over one per cent over the Budget and forward estimates. Now that is I think a great start to our budgetary process. But spending of course is still at too high a level. We are at around 26 per cent of GDP that is the same level it was when we were going through the Global Financial Crisis. So it is very important that we continue to keep the downward pressure. One of the ways the New Zealand government was able to do this was simply to say no to new spending initiatives and to ensure that the government was spending the money in the best way that is possibly could. So if you wanted to do something new well you had to do it by changing your expenditure from other places you were doing it. Now that is just called budget discipline. Now you don’t do that as an end in its own right and it is important to keep growth in the economy and so you don’t take an approach to spending that will jeopardise the growth that you will need. But that means you do it at a steady measured pace, you do it by controlling expenditure and working to the objective. That is why you need to look at others areas of policy to contribute to that growth agenda. At the end of the day it is about growth because when you have growth people sitting at home can have greater confidence about their job and that is what keeps me most focused.

MURRAY:

When do you start having meetings with those crossbenchers?

TREASURER:

We have already been having them and the new Prime Minister one of his first initiatives was to reach out to those crossbenchers. I have since had quite a number of discussions with them that continue from previous portfolios and taking them forward. See if we can engage the Australian people on why we need to make changes, why we need to control the Budget and if they understand why they benefit from that, why it makes their job more secure, why it makes it more likely that despite head winds in the economy there are also tail winds, despite changes they can see happening around the world which could be unsettling, we can say no you can be confident because we back your ability – Australian’s ability to get from here to where they want to get five years from now. Government must have that consistent and very clear plan to ensure stability in the economy and growth.

MURRAY:

Well we wish you the strongest hand and the strongest heart as well through all this because the country needs that reform. Good luck with it, good luck with tomorrow and we will keep talking anytime you need to get that message out.

TREASURER:

Thank you very much Paul and you have always been a very keen advocate on these issues and you can rest assured that we will keep our hand firmly to the wheel on this.