29-November-2011
Portfolio Media Releases
Topics: MYEFO, Budget surpluses, OECD growth forecasts
E&OE
MARIUS BENSON:
The Federal Government will today reveal the magnitude of the blow out in this year’s budget, but it remains committed to delivering a surplus next financial year. The Government will this morning release the figures in its mid-year financial forecast and it’s expected to include, as we’ve been saying, $20 billion in write downs for the Government revenue over the forward estimates, but is still promising to return the budget to surplus next year. For an Opposition view on the economic outlook I’m joined by the Shadow Finance Minister, Andrew Robb. Andrew Robb, good morning.
ANDREW ROBB:
Good morning Marius.
MARIUS BENSON:
The Government says it will cut, it will return to surplus next year, pretty much come hell or high water. You want to see a return to surplus?
ANDREW ROBB:
Look, this is so predictable. We’ve heard now for three years this endless focus on some future surplus, while, in the meantime, the budget just keeps blowing out. We’ve had now, this will be the fourth largest budget deficit in our history, well the other three that this Government brought down were the three largest, so it’s just a track record, the way in which they continue to focus on some future event, which I suspect we’ll never get to.
MARIUS BENSON:
There was a global financial crisis.
ANDREW ROBB:
There was a global financial crisis, but the Government never focuses on what is happening in the here and now. The problem is that this Government has spent recklessly, and wasted money. You think of the pink batts, and the school programs and all the rest, the National Broadband, in fact, it was just said yesterday that it will blow out by $15 billion. And yet it’s all so – it’s inconsequential.
This is the Government that has got no sense of how to manage money. And we’re going to get this whole episode again, talking about some future surplus. That this future surplus, of course, will be – the evidence of it – will be after the next election. So all they’re trying to do is manufacture a story and a prospect of a – it’s like that sign you see on a country pub, you know, “Free beer tomorrow” –
MARIUS BENSON:
(Laughing)
ANDREW ROBB:
– And you come back tomorrow and the sign’s still there, “Free beer tomorrow”, this is what’s going on.
MARIUS BENSON:
But the Government does seem to be getting some pats on the back for its economic achievements, the OECD growth forecasts that are out, it shows that the United States next year maybe two percent growth, Great Britain, half of one percent, the Euro zone, point two percent growth, and Australia four percent. It’s way ahead of the pack.
ANDREW ROBB:
Well again, this is all the future. You go back to last –
MARIUS BENSON:
That’s the OECD’s view.
ANDREW ROBB:
Yeah well, the OECD’s view last year was that we’d be three and a half, four percent, and that’s not going to be achieved. And of course, the OECD numbers, who are they informed principally by? By the Federal Government and the Treasury, the Federal Treasury, so it’s not a surprise that you’re getting again, some fairly heroic assumptions.
This will be, this year – you know, they’re trying to manufacture a number that gets close to, or at a surplus. They’re bringing forward expenditure into this year, they’re going to make it much harder for the Reserve Bank to manage interest rates, because they’re going to bring forward billions of dollars of expenditure, to try and manufacture some sort of number close to a surplus for next year. They’re pushing back expenditure into the following year.
This is just politics, this is the Government’s writ large, it is playing with Australia’s future, by the way in which it is dealing with this budget. It’s done it again and again, it’s wasted money, it’s recklessly spent, they are not a responsible Government when it comes to dealing with the financial circumstances.
MARIUS BENSON:
What about taking the politics out of it, and getting a view from someone like David Murray, who is in the news today, he seems to be giving the Government plans a pat on the back again, he thinks the cuts ahead are the right thing to do.
ANDREW ROBB:
Well I’m not sure what David said, but David is certainly one of the strongest critics over the last twelve months, and someone who is not political, and they’re saying that the Government has clearly spent far too much, and that – you know, the fact is Marius, if there’s no indication in this budget of how vulnerable our fiscal circumstance is if there’s a major recession in Europe, you won’t be able to believe one figure in this document today.
They are just all about smoke and mirrors. Nothing that they’ve predicted in the past has come to be. It’s just a few months ago in May that the Treasury and the Government predicted a $20 billion deficit for this year. Now just a few months later, we hear there’s going to be something in the order of a $20 billion blow out over the forward estimates. Who is making decisions here? They say how effective the Treasury is with forecasting, they’re $20 billion out in the space of about five months. It can give people no confidence.
MARIUS BENSON:
Andrew Robb, thank you very much.
ANDREW ROBB:
My pleasure, thanks Marius.
ENDS