06-February-2009
Portfolio Media Releases, The Economy
Topic: Economic Stimulus Package.
MARIUS BENSON: Andrew Robb, the Treasury Secretary, Ken Henry set out the Government’s package and the defence of it yesterday. He was the Treasury head appointed by the former John Howard government; did his arguments carry weight with you?
ANDREW ROBB: Ken Henry of course is a servant of the government and you would expect him to make the case that the government has laid out. The thing is we know our approach won’t be popular, but it is the right thing, we are there as the opposition to keep the government accountable, we’re going through an unprecedented circumstance in Australia and we are concerned that there is a sense of panic if you like on the government’s side. We’ve got to take the opportunity to seek advice, to test claims and assumptions, and think this thing through very clearly because implications for debt and debt for the future are enormous out of this package
MARIUS BENSON: It seems an odd argument that you are putting because governments are routinely accused of doing too little too late, you are saying they are doing too much too soon, broadly.
ANDREW ROBB: What they are doing, is rushing out a package which will unwittingly build a mountain of unsustainable debt. You don’t fire all your ammo early in a campaign. There are problems coming in 6 months perhaps in 12 months or in 18 months. We have to have a capacity as an economy to address those sorts of problems.
MARIUS BENSON: The difficulty here seems to be that there are opinions that there are no hard facts. If you could get four experts to say $20 billion now is appropriate, and I could find four more experts to say $42 billion now is appropriate, there are no hard facts of people to judge government and opposition approaches.
ANDREW ROBB: Well, that it is in large parts a matter of judgement and there needs to be prudence. There needs to be clear judgement in these things. There needs to be a calm thinking through of the implications of incurring so much debt. Our concern is that there has been a temptation by the government to be seen to be doing things, to be able to say they are decisive without thinking through the longer term implications. The fact of the matter is that they have already re-borrowed in the space of 12 months, the $100 billion that the Coalition spent 11 years paying off. It is not easy to pay off debt. It’s easy to rack it up. It’s not easy to pay it off, and it will be a millstone around the neck of everybody in Australia and our capacity, when the economy does eventually turn around, our capacity to come out of it, we could be years paying off this mountain of debt. It needs to be thought through. They need to look at what might be occurring in the next 6, 12 or 18 months, what further stimulus are needed and what implications that will have for the national debt.
MARIUS BENSON: Beyond that broadly different approach, are there specific polices the opposition would like to see adopted in the face of this economic downturn?
ANDREW ROBB: Well, our approach is we are not opposed to a stimulus. We have said that from the outset. What we disagree with is the amount and we disagree with the composition. Our concern is that the handout in particular, whilst will be attractive to people, we understand that it is our position is not popular, we don’t feel that it addresses the issue of keeping people in jobs. People will overwhelmingly save or pay off their credit card with that money, it will not address the fundamental problem that you want to keep people in jobs, that you need lower cost of employment for small business, and you need to build a productive capacity. These are the sorts of things we wanted to talk through with the government and see if there was a capacity to come up with a package which was agreed on both sides of the House. No opportunity was given for that, it was a take it or leave it package. It smells deeply of politics, motivation of the Prime Minister on much of this. There is a sense of panic about it and we are deeply concerned that there needs to be a lot more prudence in the way in which the government addresses these problems.
MARIUS BENSON: Andrew Robb, thank you very much.
ANDREW ROBB: Thank you Marius.