E&OE……………………….…………………………………………………………………

 

 

Tony, good to see you. You say the move is a failure of competency and a failure of trust but hasn't it actually made a realistic decision?
 

TONY ABBOTT:
 

Kochie, we shouldn't be in this position because this is a government which has been spending like a drunken sailor. It is not that revenue is too low, it’s that spending is too high. Revenue is still six per cent higher than it was last year.

 

 

Ok, but as a percentage of the size of the economy, they are spending less than the Howard Government did under the Howard Government’s reign.

 

 

Well, we can argue that toss but one way or another they are spending $100 billion a year more now than they were in 2007 and we have got two new taxes – the carbon tax and the mining tax – and we’ve got 20,000 more regulations. So, you’ve got higher spending, you’ve got more taxes and you’ve got more regulation. That is why this mob don't get it when it comes to the economy.

 

So, where would you cut? How would you get it back in to surplus?

 

Well, we wouldn't have put ourselves into this position and most of all, Kochie, we wouldn't have made all of these repeated commitments to get a surplus and then in a fundamental breach of trust, just dump them on the eve of Christmas.

 

 

I think everyone agrees it was a dumb promise to make in the first place. The world’s changing, you know, you’ve got America on the edge of a fiscal cliff, you’ve got China slowing, Europe is an absolute cot case. The world is pretty nervous. It’s pretty dodgy at the moment and we’re feeling the effects of that. It would have to flow through to our revenues.

 

 

Kochie, the basic problem in all of these countries is governments living beyond their means and what we've got in this country is yet another year and years to come when this government will live beyond its means. That's the basic problem. You cannot spend your way to prosperity. You cannot tax your way to prosperity. But this is a government which is always spending too much and taxing too much.

 

 

Look, there is a time for surplus during boom times, there are times for deficits when governments should be spending more to keep the economy going, otherwise more jobs will be lost and more businesses will go broke. Isn't this the time for governments to be stimulating the economy?

 

 

Kochie, the Labor Party always thinks it is time to be stimulating the economy.

 

No, no but isn’t right now the time, really?

 

 

Well, our terms of trade are still at historic highs. The terms of trade are still considerably higher today than at any time in the life of the Howard Government. If we go back to 2004/2005…

 

Yeah, you didn't have the global financial crisis.

 

 

The global financial crisis was four years ago, Kochie.

 

 

Yes, when the ALP came in.

 

 

They can't keep using this excuse.

 

No, but you are comparing it to the Howard Government's reign which was an incredible purple patch as well.

 

 

Well, let me give you this statistic. In 2004/2005, when unemployment was about five per cent, the Howard Government delivered a surplus of 1.5 per cent of GDP despite terms of trade 40 per cent lower than last year when this government gave us a three per cent of GDP deficit.

 

 

Ok, but America was booming, China was booming, Europe was booming. Let me put this to you, though. The Australian Chamber of Commerce and Industry says it was a good thing to drop the surplus promise and go into deficit. So does the Business Council of Australia, the OECD, the International Monetary Fund praising our economic management in this country. We are an economic miracle. We haven't had a recession since 1991.

 

 

Kochie, it is never a good thing for a government to break fundamental promises and this government has broken its two covenants with the Australian people: no carbon tax and a budget surplus. They’ve broken both of them. You just can’t trust this mob.

 

 

But it is a promise that needed to be broken in the circumstances.

 

 

It is a promise that should have been delivered upon because as this government has been saying all along, a surplus means taking the pressure off family budgets because as long as you are in deficit, you are borrowing more and you are taxing more and that hurts families. They're mortgaging the future to try to give themselves the capacity to buy next year's election.

 

 

But you're saying they should be cutting spending. Cutting spending drags an economy down, pushes up unemployment so Australians will lose their jobs and pushes up companies going broke.

 

 

It never makes sense to waste money and this is a government which has consistently wasted money. Look at the $6 billion in border protection blowouts. Look at the $1.3 billion more they are going to be spending on a higher refugee and humanitarian intake…

 

 

So, cut all that? Cut all those expenses, cut refugee intakes, cut border protection spending, the whole lot?

 

 

We’ve certainly said that we wouldn't go ahead with the increase in the intake from 13,500 to 20,000. But Kochie, this is a government which just yesterday announced that it had rented the premises for the Department of Climate Change for 15 years for God's sake and why did they do that? They did that so they can say…

 

 

That’s a red herring, that is small beer in terms of the overall issue.

 

 

But this is typical, Kochie, of a government which is all about politics and not about good economic management. They are mortgaging our future to try to secure their own political future at the next election.

 

 

Alright, we are out of time. Thanks for joining us.

 

 

Thanks, Kochie. Have a good Christmas.

 

 

You too.

 

[ends]