Transcript of Press Conference



08 October 2014

Subjects: IMF Forecast; SA Government's false Budget claims

Jamie Briggs: Well, today we saw reports on the front page of major national newspapers of the downgrading by the IMF of economic forecasts for future years growth with concerns coming out of China and the developed world. This forecast highlights the need for the reforms that the Abbott Government has been talking about in the budget, particularly in respect of the infrastructure investment that we have been planning through the budget in our growth package and particularly looking at the next wave in addition to the $50 billion that we've put in place in the budget through the asset recycling initiative to get that next wave of infrastructure investment to help deal with what is a substantial downgrade across the globe and the economic consequences of that.

We know in South Australia—in Australia, I should say, that we are seeing some challenges with the construction phase of the mining boom coming off and what we're trying to do as a government working very closely with state governments is ensure that the investment and the infrastructure is picking up some of that downturn and that's why we are so heavily working on infrastructure and investment.

The asset recycling initiative which will be at COAG this week—we're working with state governments. The Treasurer—Treasurer Hockey has spoken to most state governments. He recently spoke to Premier Weatherill and Premier Weatherill indicated his willingness in addition to Treasurer Koutsantonis signing up to the asset recycling initiative at the last meeting of the State Treasurers.

And so we want to work very closely with all state governments to get this initiative up and running and all of our infrastructure investment across the country in place. So it is staggering that the South Australian Government, who is first among equals in needing investment from the Commonwealth Government, continues to run this misleading campaign full of lies about what the impact of the Federal Budget supposedly is on South Australia.

It just seems to me that Premier Weatherill wants to blame everybody but himself for the failings of his government over 12 years. And if you look at their record, the South Australian Government has got the highest taxes of any mainland state and has just increased the emergency services levy, as most South Australians know, by some—in some cases, by up to 200 per cent.

It has had the biggest deficit in the state's history. It has got a bigger debt than when the former Labor Government sent the State Bank broke. Unemployment is rising and probably most concerning for a state government, it has shown a complete incapacity to be able to deliver the most basic services to those in our society who need them the most, and those being the vulnerable children we've seen raised in report after report in recent weeks. So we are saying to Premier Weatherill today: stop playing this blame game. Get your house in order and work with the Federal Government on trying to deliver more infrastructure, more services better delivered for the people of South Australia so we can grow quicker so there are more opportunities for South Australia. That's what the Federal Government wants to do in South Australia. We don't want to play this silly game of politics with tax payer's money with ad campaigns funded by the tax payer, not by the Labor Party, but by the tax payer based on lies, based on documents like what's been produced today which do not represent the truthful situation about what the Federal Government is doing here.

The truth is, what we have done as a government is, firstly, abolished the carbon tax. So when the Premier talks this morning about impacts on those in the lowest quarter of our society, those on the lowest incomes, they, of course, benefit more from the abolition of the carbon tax than most. When the Premier raises these issues, he forgets to mention that education spending in South Australia is up from the Federal Government, health spending in South Australia is up from the Federal Government and road spending in South Australia is up; a point I note in the report that it even criticises. The report is so partisan it even criticises the additional money to South Road. And I ask the question: does the Premier stand by the criticism in the report; there is too much money being allocated to South Road? It's an extraordinary claim.

Question: [indistinct] theory is that the budget is a tactic to get the states to ask for a broadening or raising of a GST and invites you to actually propose that outright and then you'll turn it down, but is that something you would want to see?

Jamie Briggs: We want the states—each of the states to be operating as effectively and efficiently to deliver the services they need as possible. The issue of the GST is part of the federation review and the tax review, which has been announced by the government in recent months. It will be caught up in those reviews. But in the end, the only way the GST changes at all is by agreement of all the states. It's not a tax that the Federal Government collects.

Question: Is it right you're forcing their hand by basically shifting those growth costs in health and education to state governments when you know that they can't wear it on their balance sheets and, in fact, that you can't wear it on your balance sheet either.

Jamie Briggs: Well, there are a couple of issues there—The first point is that this claim that the additional money in the so-called Gonski deal was ever going to be delivered is delusional. The Federal Labor Party never had it in one budget paper that they delivered. Never once. They made claims about commitments that they would deliver upon which were never written down anywhere in budget papers. And unless they're in the forward estimates, they are not worth the paper they're written on.

Question: So when you said that you were on a unity ticket on Gonski funding what did you mean?

Jamie Briggs: Over the four years. That's what we said in the campaign.

Question: But you acknowledge that that money is not going to continue to roll out as it was set out in the agreement in the state governments.

Jamie Briggs: We never agreed to the two years that were not funded in the estimates past the forward estimates. It was always a Labor trick. It was always a Labor claim that never had funding allocated to it, but what the claim the Premier—but putting aside…

Question: [Interrupts] But are you suggesting they should have done a budget over six years rather than four years?

Jamie Briggs: No, no, not at all. You shouldn't make promises you can't keep over six years.

Question: Well, you matched the promise, though. You…

Jamie Briggs: No, we didn't, no, no, no. Go back to what we said in the election campaign. We said we would fund the four years of the Gonski commitment which is what we've done in the Federal Budget. That's what we said we would do.

Question: You also said no cuts to health or education. There are certainly cuts within the forward estimates to health programs.

Jamie Briggs: There is a seven per cent increase this year in health spending in South Australia. There's a 37 per cent increase for government schools over the next four years in South Australia. There's a 7.1 per cent increase in hospital funding for this financial year in South Australia, a 33 per cent increase over the forward estimates and nearly a billion dollars over the forward estimates, increased money from the Federal Government.

Question: But those increases are less than what was forecast in the previous budget which is what we talk about when we talk budget cuts from one [indistinct] to another.

Jamie Briggs: Well, there's two points. Firstly, there's not a cut. There is additional money. Secondly, there's only one level of government in South Australia this year who is cutting money out of the health budget, and that is the South Australian Government. I mean, what we're talking about here is a political campaign being run by a Labor Party leader, not a leader of South Australia.

What I'm saying is that the private conversations I have with Premier Weatherill and Minister Mullighan about additional infrastructure—we'd rather see those conversations than this public slagging match they're trying to have. They say one thing privately, and they say another thing publicly.

Question: Is raising the GST likely to come up in COAG.

Jamie Briggs: I don't think so because it's part of the broader taxation and federation review. If it comes up at COAG, it comes up because the state premiers are raising it. We don't have a desire to raise the GST or to change the GST because we don't benefit from the impact of any change to the GST. It is a matter for the states.

Question: Weatherill says that the Federal Budget's problem is not a spending problem; it's a revenue problem, and cites, for example, the carbon tax, cuts to the corporate tax rate and the mining taxes, measures that could have been maintained to prevent spending cuts. What's your response to that?

Jamie Briggs: Well, the mining tax is a good example of how Premier Weatherill clearly doesn't understand how budgets work or taxation works. The mining tax was a tax that Wayne Swan put in place where he spent 100 per cent of the revenue and raised one per cent of it. 100 per cent of the revenue was spent. The expected revenue was spent. It raised one per cent of the expected revenue, so there's a big gap there.

This is a great example of the Labor Party when it comes to managing their budgets. They've got no capacity to. That's why South Australia's got the biggest deficit in its history this year. That's why we've got a bigger debt that we've ever had since the State Bank. Now, what we're saying to the South Australian Government is we want to help build a stronger economy in South Australia. That's why we're investing more in infrastructure. We're funding 80 per cent of the Darlington upgrade and 50 per cent of the Torrens upgrade. We're spending $2 billion on infrastructure in South Australia and we're happy to talk to South Australia about doing more, either through the asset recycling initiative or through other road projects that they would present to us. On the asset recycling initiative, again, Treasurer Koutsantonis signs up when he goes to the meeting. He goes out and says he doesn't sign up, even though his name's on the press release. Premier Weatherill sees the Treasurer Hockey privately and the Prime Minister privately and says, “Yeah, we're all on board. Where do we sign up?” The Treasurer says, “That's great. Give us the project you want to fund”. New infrastructure projects will be funded out of the asset recycling initiative that South Australia will take part in. We're all for that. We want to work with them. We do not understand why they're spending a million dollars of taxpayers' money in South Australia, trying to run a political campaign about a government that's trying to work with them.

Question: Which contentions in the report are lies, as you [indistinct]?

JAMIE BRIGGS: Well, I've only had a few minutes to have a quick look but, for instance, on page 6, the claim about how much additional infrastructure investment by the Federal Government is wrong, just purely—facts are wrong. It says $40 billion. It's $50 billion and that's been verified. It says the reality is that only—of this, only 6.6 billion is additional. It's been verified that 11.6 billion is the additional money in the budget for infrastructure. And then I go to page 76, where it makes these extraordinary claims about the money on South Road will have opportunity costs. The funding for South Road means reduced funding that is available for other roads, so does Premier Weatherill want the money for Darlington—the Darlington interchange or not?

Question: You also mentioned earlier that—that lower income householders, the ones that the Government says are hardest hit by the Federal budget, are benefitting more than others by the abolition of the carbon tax. How is that the case?

Jamie Briggs: Well, because the impact on their bill—of course, if you earn more, you've got more capacity within your own budget to meet those impacts than what you do if you're a lower income earner, it impacts on your budget.

Question: [indistinct] you've only had a cursory look, but would this report strike you as a good way to spend $90,000?

Jamie Briggs: Well, $90,000? That's the first time I've heard that. No, of course not. I mean, I think this is an appalling waste of taxpayers' money. I think, whether it comes in addition to the 1.1 million they've previously announced about this campaign they've run or not, it's an appalling waste of taxpayers' money, at a time when the South Australian Government shows its biggest deficit in its history and—and at a time when, frankly, it really should be ashamed—it should be ashamed of some of the information that's been released into the public sphere about its record, when it comes to child protection. I mean, I know as a South Australian reading the stuff and seeing the news reports that have been on our televisions in the last few weeks, it is more than disturbing that basic service delivery that state governments are responsible for implementing have failed little children in our society.

In a modern society, a developed city, one of the best places to live on earth, we cannot protect the most vulnerable in our society, yet Premier Weatherill can find a million dollars to run a political campaign. It's a disgrace.

Question: Do you accept Mr Weatherill's assertion that revenue raising may be needed, and particularly if you can't get your budget cuts through the Senate?

Jamie Briggs: Well, I don't accept the premise of the question in that we're not cutting the budget. What we're doing is we are ensuring that programs—some of the programs that the Federal Government funds through its welfare—through the welfare programs and through education spending are sustainable into the future. So we're changing the way that some of those programs operate into the future. We are not cutting - - -

Question: [indistinct] state government doesn't cut the health budget or education budget either. They continue to increase investment year upon year in those programs, but they might cut funding for specific programs.

Jamie Briggs: Well, the figures that I've seen is that the State Government Budget this year reduces the overall amount that they spend on - - -

Question: But every other [indistinct] we talk about the four years as being - - -

Jamie Briggs: Sure. Well, look, we're - - -

Question: Could we just go back to the first question.

Jamie Briggs: Yes, sure.

Question: You can't simply say [indistinct] the security of the Senate. Will you have any other choice but to look at revenue raising [indistinct].

Jamie Briggs: Well, over 90 per cent of our budget matters are through the Senate, so we've got a vast bulk of the budget through contrary to the commentary that is running around. There are a couple of major longer term items that are left. The changes to the higher education system that Minister Pyne is working through. Again, we're confident that, in the end, the Senate will come to an arrangement, as they have on several other bills.

And the GP co-payment for medical access is also still to be considered. I don't think we've actually put the legislation into the Parliament yet, but we're not, at this stage, contemplating additional or changed measures, because we're not yet in the budget cycle for the next year. The ERC will meet, as it does, and will consider the circumstances, the additional money we need for the national security issues that we face and the change in the commodity price that we've seen in the last few months which will, of course, impact on the budget bottom line.

But in the end, we are confident, as the Prime Minister said this morning, that we can meet all of our requirements by living sustainably within our means and ensuring that we have the lowest taxation regime we can to deliver the services we want to.

Question: Do you accept the government's basic argument that the effect of the budget will be felt hardest by people on low incomes, which would have a bigger effect in South Australia because of the proportionally higher level of people on welfare and relatively lower incomes?

Jamie Briggs: Well, there are a couple of points I'd make to that, Dan. The first is, no, I don't accept that there is a bigger impact for people who are on lower incomes because we think we're actually doing—what we're doing this for are for people who are on lower income. We are trying to give people who are on lower incomes more opportunities of work, opportunities to benefit from a stronger economy, which benefits people who have less means more than those who have more in the end. And that's exactly what we're trying to do.

And if you want to look at a failed social experiment, let's look at what Labor have done over the last 12 years in South Australia. Why is it that we are lagging behind every national indicator when it comes to our economy? It's not because of everyone else. It's not because of everyone else. Premier Weatherill needs to find himself a mirror and have a good look in it, because, at the end of the day, the policies he's implemented over 12 years have led to the biggest deficit in our history, a bigger debt than the state bank, higher unemployment than the rest of mainland Australia, lower growth and, as I say, importantly, and I think very importantly and disturbingly, a lack of capacity to implement the most basic services for those who most need it in our society and those are children who need care.

Question: [indistinct] that you've described and the difference between the private [indistinct] and the public [indistinct], is that going to reduce the Federal Government's willingness to support projects in South Australia, without [indistinct] impact for the residents of South Australia?

Jamie Briggs: Well, we are frustrated. We are very frustrated by this and I can't put it more clearly than that. The Prime Minister had a good conversation three weeks ago with the Premier about a series of issues relating to South Australia. As I understand, it was a very constructive conversation. Several issues were raised. In particular, issues around infrastructure. That's how I'm aware of the conversation because I got a follow-up call straightaway afterwards.

Question: Is that duplicity putting projects at risk?

Jamie Briggs: Look, I don't—we want South Australia to grow. It is no good for the federation if South Australia continues to perform more poorly than the rest of the federation. It's no good for all of us who call South Australia home for us to see our state not performing as well as we want it to. And we're fighting very hard in Canberra to make sure that we've got policies which are helping not just to undo some of the damage that was done over the last six weeks, but try to build the capacity of our economy here for the future. So we are interested in working with the State Government cooperatively. We're not going to play this tit-for-tat game, but it does frustrate us and it frustrates the Prime Minister, absolutely, that he sees these lies being put out into public funded by tax payers. Funded by tax payers. This is not even funded by the Labor Party. They don't even have the good grace to fund it themselves. What is essentially a political campaign.