05-December-2011
Portfolio Media Releases
E&OE
Topic: Election costings, Parliamentary Budget Office, WA Dams trip
PAUL MURRAY:
Good morning Andrew.
ANDREW ROBB:
Morning Paul.
PAUL MURRAY:
Andrew, do you still think the costings released by the Coalition on the eve of 2010 election were valid?
ANDREW ROBB:
I’ve got absolute confidence in the work, we did months and months of work, and then it was looked at thoroughly by an accounting firm, and then I had several hours with the head of Treasury, we had some disagreements, but I still felt our position was totally valid and that I knew more about it than he did.
PAUL MURRAY:
Why did the Coalition present them as being audited when they weren’t?
ANDREW ROBB:
Well, Joe, I think, used that in a colloquial term. I mean, he’s on radio and he used audit as a sort of colloquial term, not as a, as it would be interpreted by – as strictly – by an accounting association. So that’s, in a sense, it was a technical issue that we’ve heard about in the last week, but Joe was just trying to demonstrate that it’s been very thoroughly looked at.
PAUL MURRAY:
But he’s the Treasury spokesman. When he says, “this is an audited statement”, that means something.
ANDREW ROBB:
Well it does, but he was using it, if you go back and have a look at when he first talked about it, he just used it in a colloquial sense, and I think he was just trying to demonstrate the thoroughness in which the accounting firm, and they were in our offices, or nearby, for weeks and weeks and weeks, as we sent the material up to them as we finished more and more costings and it was an exhaustive exercise, and I think that’s where the misunderstanding has been reached. Then a person who’s close to Labor went to the association and said – who’s an auditor – and challenged the fact that it was not an audit. Now, the association, the accounting association, have rapped the company over the knuckles, because they said in their final letter to us that they didn’t specify exactly, or spell out exactly they type of assessment they’d made.
PAUL MURRAY:
Well they’ve said that it was neither an audit nor a review.
ANDREW ROBB:
That’s right, yes, that they hadn’t classified – see, the thing is, the only difference is, between an audit and what they really did was that they accepted our assumptions. Where there were policies, such as, we made an education rebate more attractive, and instead of sixty-one percent take up, we’d assumed eighty percent take up. Well, in the end Treasury assumed eighty-four percent. That was a – that four percent difference – was a billion-dollar hole, but it was just an assumption, and they accepted those assumptions –
PAUL MURRAY:
Yeah, an audit –
ANDREW ROBB:
And they weren’t in a position to look at those things, but in every other respect, I mean, most other policies are a question of straight mathematics, arithmetic, and they went through all of those.
PAUL MURRAY:
It was a one-page document, it hardly looked comprehensive.
ANDREW ROBB:
Well I can tell you Paul, they spent weeks and weeks and weeks after we’d spend months and months and months going through each of these. We had 305 policies, as it turned out, Treasury ticked off, Treasury went through and said that 296 of them were valid, and that they had disagreements with the other nine. So they said that this organisation had satisfactorily assessed 295 of them, so it’s not exactly a situation where there’s massive differences, and in every case, when we got into those other nine, they were differences of assumptions. Like we assumed a different take up, Treasury another one, we were probably both wrong in the end. That’s where the differences lay.
PAUL MURRAY:
Well Treasury found that it was out by $11 billion.
ANDREW ROBB:
Well I know because they picked three or four programs in particular which they disagreed with assumptions that we made, and in fact one program they said they disagreed that it should be Government policy, this conservative bias which I won’t bore you with the detail of it, and they wouldn’t accept it, it was two and a half billion dollars, and then three months later, in the half-yearly economic forecasts, the Government itself used what we had done. So there was a lot of politics being played in all of this, I can tell you Paul.
PAUL MURRAY:
Well sure, it was an election campaign.
ANDREW ROBB:
No, politics by public servants as well, and I spent hours and hours and hours with Ken Henry, I mean, I spent two years on the investment team with the Gorgan Gas Project, I’m an economist by training, I did modelling for many years commercially, and I do know something about it. I’d spent a lot more time than he ever had on the number of these projects, and I can tell you we did argue for three and a half hours. On some issues I fundamentally had him cornered, and all he could say was, “we’ve made a decision, we’ve made a decision”, so I said to him then, “the politics in this thing is reeking, Ken, and you’re going to hang around my neck these black holes, when all you can say to me in defence is that you’ve made a decision”. That was the nature of the sort of discussion at the end, and that’s why I felt so strongly ever since that we were set up. I very strongly defend those costings and we will do an exhaustive job again.
PAUL MURRAY:
Well do you concede that this finding by the Institute of Chartered Accountants against the two accountants who did them, that it’s actually damaged the Coalition’s economic credibility?
ANDREW ROBB
No, not one skerrick. This has got nothing, this is really just the association rapping this company over the knuckles for not specifying in their covering note at the end of months of work, exactly the nature of the assessment that they had undertaken. It doesn’t reflect in any sense on the actual work that was done, it reflects on the fact that they did not, as a company, as a registered accounting firm, in fact the fifth biggest in the country, they hadn’t in their letter specified the nature of the work accurately; they just did a broad note, and now that is what they have been rapped over the knuckles for. It is a very technical issue which has got nothing to do with our assessment of all of these items. Yet, I mean, of course, the Government is going to use it. People are not going to understand all of this stuff we are just talking about, and the Government will say this shows we can’t add up.
PAUL MURRAY
Well I think they will understand one thing, I suppose, the bottom line is this, that voters have got a right to be able to trust what the Coalition says it’s election promise costings are. I mean, these ones don’t look as though they were trustworthy because they were portrayed as being audited and they weren’t audited. What are you going to do going up to the next election?
ANDREW ROBB
Well I tell you the other thing is voters have got the right to trust that the Treasury will be totally independent, and not be swayed by the Government of the day. I just say to you on several of those items, there was a fundamental disagreement, they couldn’t answer it, all they could say was we’ve made a decision, and as a consequence, the whole process has been politicised. Next time, we have argued strongly, and we went to the election for a Parliamentary Budget Office.
Now the Government in the end was forced by the Greens to adopt that policy, but they’ve made a budget allocation, brought the legislation in, but here we are, you know nearly half way through the term, and there’s nothing being done about it, they’re trying to force us in to a corner on this Parliamentary Budget Office, they’re calling it, you know, something that sounds impressive. They’re going to put it in the corner of the library of the Parliament and probably put three or four treasury people in it.
PAUL MURRAY
So you won’t be able to rely on them leading up to the election?
ANDREW ROBB
Well we will submit, before the election is announced, whatever policies we’ve got finalised, because we have been assured that that office will not pass it on to anybody else. We will submit them before the election, but the Government has said, and again in the legislation, that once the election is announced, that anything we give to the Parliamentary Budget Office automatically goes up on the website. Well we might want to announce it three weeks later, we might want an independent assessment from the Budget Office, to make sure that we’ve made the right assumptions, and we’re not looking to, there is absolutely no mileage in us, for one second, trying to come up with a number which has got a wrong assumption in it.
I mean, we will work with whatever the figures are in the end, in the same way the Government does. It doesn’t question what Treasury says, but of course, Treasury forecast, just last May, that there would be a budget deficit of $22billion this year, and now its $37billion, so Treasury, a few months later, Treasury, they’ve got form about not getting forecasts absolutely right, I mean, they’re billions and billions out in the budget deficit in the space of five months. But we will do our very best to get this Parliamentary Budget Office up, and independent, and submit it there so there can be no argument.
PAUL MURRAY
Andrew, look I know you’re heading up with some of your Coalition colleagues to look at water issues and the Kimberley, but you’re also in Perth today talking about your book on depression, “Black Dog”.
ANDREW ROBB
Yes, “Black Dog Daze” – I’ve got the Western Australian launch at lunchtime at the Travelodge today, and it’s just my account of not tackling a depressive condition I had in the mornings for 43 years, and I decided to write a book about it, because finally confronting it after months of experimentation and other things, I’ve been able to successfully now manage it for 18 months, I’ve had mornings like I’ve never had since I was twelve years of age, and it’s just, it’s magical really, and I’m just really keen to spread the word that all of those people, and there is probably hundreds of thousands out there who’ve got some sort of condition or they think they might have.
Forget about the stigma, you don’t have to tell the world, just go along, get some professional help, talk about it to your family and those you love, but you don’t have to tell the world, and there are now many solutions for many people, and their life can be transformed.
PAUL MURRAY
Great stuff, thanks for talking to us today, Andrew. Appreciate it.
ANDREW ROBB
Good, thanks. Good on you, Paul. Bye.
ENDS