Press Conference PM in Gosnells

as posted on PM NewsPage

07 May 2008

Subject(s): 2008 Budget; Election commitments; Cost of Living; Defence; Infrastructure; Workchoices; Housing Affordability; Tax Cuts; Baby Bonus; ASPI Report; Burma

E&OE

PM: First of all, it is good to be back here with Sharryn Jackson, Member for Hasluck out here in the city of Gosnells, back in Perth, back in WA. The reason for being here is to talk about our preparations for the upcoming budget, our first budget at the new Australian Government and what it means for WA, what it means for the nation.

Four principles underpinning our budget. The first is responsible economic management, which means ensuring that we have an economy which also delivers for working families. Second, delivering on our commitments prior to the election, to those working families, those families who are already under financial pressure.

The third is, honouring our commitments to invest in the nation’s future which means infrastructure, health, education, some other areas as well. And finally, making sure that we are providing for our long terms needs for defence and security.

A few words on each and then happy to take your questions.

The responsible economic management means that we are fighting the fight against inflation. This is absolutely essential. Inflation is the enemy of working families, it is the enemy of the economy and it’s the enemy of businesses.

That’s why it has got to be front and centre in our focus in this upcoming budget. That’s why we will be making cuts to government expenditure to make sure that we produce a responsible overall outcome.

I notice, that the Liberals say that you don’t need to worry about that. That there is no economic case for budget cuts. We completely disagree.

When you have got inflation at 16 year highs, as we inherited from the previous government, if you continue to grow government expenditure at the same rate as our predecessors, you add to inflation and you put further upward pressure on interest rates and further upward pressure on prices in the economy. And those prices affect working families.

Our response therefore is responsible economic management, doing the right thing, making cuts in government expenditure, reprioritising what government does, so that we produce a responsible economic outcome.

Fighting the fight against inflation to make sure that we are keeping the overall health of our economy strong into the long term. That’s number one.

Number two, I said we have to deliver on our commitments to working families. Out here in this part of Perth, working families are also under financial pressure.

Mortgage prices, house prices, rents, cost of petrol, cost of groceries, childcare costs, all going up.

We have got to do what we can to relieve some of that pressure. That is why we will be honouring our pre election commitments to bring in tax cuts for low to middle income earners and secondly, to increase the childcare tax rebate.

If we do that, and we honour our commitments to those working families which we made prior to the election, we help to deliver some, some support to those families who are already under financial pressure.

Despite the fact many economists have said we shouldn’t honour our pre-election commitments to bring about tax cuts, we think it is the right thing to do.

The third principle is this: and that is to invest in the nation’s future. And one of the things I have been discussing today with Sharryn and with the mayor out here in Gosnells is the nations and this part of the nation’s future infrastructure needs.

We have got to invest in the future of infrastructure, invest in the future of education, invest in the future of health.

The previous government said, ‘all these things, let’s just blame the states, make sure it is someone else’s problem’.

Our view is to say, ‘no, we the national Government must become partners in investing in the nation’s future’.

And for WA, the critical challenge lies in partnering with the Government, and others here in this state, to make sure that WA get, gets what it needs for the future when it comes to national support for this state’s infrastructure needs. And that comes right down to the local area as well, whether we are talking about roads, whether we are talking about rail, whether we are talking ports, whether we are talking about broadband. All critically important.

And finally, on the question of providing for our effective long term national defence, here in WA defence is important as it is right across the nation.

You have a strong defence community here in Perth. And therefore we as the new National Government take our responsibilities on national security and defence with the utmost seriousness.

That’s why were bringing in a defence white paper at the end of this year. That’s why that will provide us with a platform for long term planning and we intend to deliver long term strong growth in defence outlays into the future to plan for our effective national security.

Therefore if you are framing a responsible budget for the nation, responsible economic management, ensuring you are delivering for working families and supporting those families under financial pressure, investing in the future and providing for our long term security.

If I could conclude with this. Dealing with the challenge of inflation means dealing with it by cutting unnecessary Government expenditure and boosting our investment in skills and infrastructure.

The Liberals today have said that their response is to simply bring back Workchoices, the enemy of working families. The Liberals have said let’s bring back Workchoices.

We say the path to the future lies in responsible economic management, helping working families under financial pressure and making sure that we have all those responses right for the future.

Mrs Bishop for example, the Deputy Leader of the Liberal party says today “Labor should drop their roll back of workplace relations reforms and build on the reforms of the Howard Government’.

Mrs Bishop from Western Australia has said today that the Liberals plan for the future is simply this: to bring back Workchoices and not to learn from their mistakes of the past. That’s their approach for the future.

Ours is completely different.

A balanced industrial relations system, cutting unnecessary Government expenditure and helping working families under financial pressure.

Happy to take your questions.

JOURNALIST: You talk about families under pressure out here but Treasury analysis said that your policies will bring up prices and inflation (inaudible)

PM: The report you refer to today was from a piece of Treasury advice which, first of all, pre dated the Labor party’s release of its industrial relations plan. It pre dated the release of the details of the Governments plan for the implementation of its industrial relations policy.

And also pre dated I note, the Liberals subsequently radically changing their own industrial relations laws at the time, when they brought in the so called ‘Fairness Test’, which became an absolute nightmare for business.

The key thing to emerge from today is this: the Liberals have said in releasing this early advice, which they had from early last year, the Liberals are saying today that their plan for the future is to bring back Workchoices. That’s the clear cut message.

Under no circumstances will we be brining back Workchoices. We will be cutting Government expenditure and providing necessary support for working families on the way through.

JOURNALIST: Are you preparing Australians basically for a (inaudible) not necessarily a popular one?

PM: We think that a number of the decisions we take will not be popular. But we believe our overall responsibility is to ensure that we have a responsible exercise in economic management and that means making sure that we are fighting the fight against inflation, delivering a substantial Government surplus, cutting back on unnecessary Government expenditure.

I mean, where have we got to in the 21st century when the Liberal Party is now attacking the Labor Party when it comes to inflation from the left and the Liberal Party to us is now saying nationally that there is no economic case to cut Government expenditure.

I don’t understand that at all. Is Mr Turnbull and Dr Nelson saying we should increase instead Government expenditure on the excessive rates of increase in Government expenditure which they had in the past?

I think that’s grossly irresponsible. So responsible economic management, fighting the fight against inflation and ensuring that we cut unnecessary Government expenditure, that’s the way ahead and delivering to working families, some support on the way through.

JOURNALIST:Just regarding these treasury documents, have you had any other advice that your IR plans may have this same answer?

PM:All the advice that we have from government on the question of fighting the fight against inflation has dealt with government expenditure out of control, it’s dealt with capacity constraints in the economy like infrastructure, which pushes up prices if you don’t have enough infrastructure, which also deals with skills shortages like you have acutely in Western Australia. And none of our advice has touched on the question of Labor’s current industrial relations laws.

JOURNALIST: (inaudible)

PM: Well that half a billion that I mentioned this morning from the housing affordability fund goes to bringing down the costs of new developments in new areas like this.

So it doesn’t matter whether you are a younger person or an older person buying into a development like this. If we, for example, partner with Gosnells in bringing about a local application of our National Housing Affordability Fund, that would be available to people buying houses in this development, whether they are older buyers, middle aged buyers or new buyers.

That is one thing. We have a separate policy called the First Home Savers Account policy which helps first home buyers out there buying their first house.

There’s another policy as well, and that is our National Housing Affordability Fund, and that is for people who aren’t yet into the home ownership market but who need access to affordable rental accommodation.

All together, about $2 billion worth of initiatives on housing, in contrast to our predecessors, who didn’t believe this was their responsibility.

JOURNALIST:Tax cuts (inaudible)

PM: The key thing here is to make sure you have got it in balance. We made a solemn commitment to working families before the election, that we would provide tax cuts. And we are serious about what we said. We intend to do that. In doing so, we also cut out Mr Howard’s tax cuts for the wealthiest Australians - billions of dollars worth of those tax cuts for the wealthiest Australians because we believe that people on the lower to middle income brackets is where the help is needed.

At the same time, to be bringing down a budget which is economically responsible, you have got to draw down, government outlay in other areas. And that is why we have been out there through the budget review committee, through the razor gang, cutting into our other lesser priority government programs. That is what we have been doing.

The objective, helping working families, in a practical way, trying to balance their weekly budget, at the same time producing an overall balanced, and overall responsible budget document which keeps the economy strong into the future, but still delivers for working families. You had a follow up?

JOURNALIST: Baby bonus (inaudible)

PM: Well, let’s wait for, let’s wait for our budget night on all the detail. I am not going to go into each individual line item. But you know something, the critical thing for us is to make sure we are delivering for working families, and I don’t understand why you have got the Liberals out there saying that there is no economic case for cutting any Government spending, and at the same time defending welfare payments for the wealthiest Australians, I don’t really understand that.

JOURNALIST: Burma (inaudible)

PM: Well I have seen that report from ASPI which is the think tank which operates in Canberra. And one of the reasons we are currently working with the states and territory governments and in fact, I understand the Ministers from those governments met in March on this question, was to pull together what each state and territory government’s contingency plans are for dealing with a major natural disaster.

We believe this is of critical importance for future planning, not just the traditional reasons. If you look at climate change, the intensity of natural disasters is increasing.

If you look at the pattern of cyclonic activity in and around the world, as well as the huge human impact of that as well. We therefore, must be ready and fully prepared, I believe the ASPI report is timely and a reminder that we need to review all of our preparation efforts. The Government has been working with state and territory governments as late as March on this, and we will have further to say on this in the future.

And on the question of natural disasters, can I just add this, in relation to the terrible loss of human life, through the cyclone in Burma. This is an appalling tragedy, an appalling tragedy, when you look at such a huge loss of life. And I would call directly on the regime in Burma to provide complete and unfettered access to all international aid agencies trying to deliver assistance on the ground in Burma now. Forget politics, forget the military dictatorship, let’s just get aid and assistance through to people who are suffering and dying as we speak through a lack of support on the ground.

That’s a direct appeal to the government in Burma.

JOURNALIST: (inaudible)

PM: That’s simply an initial response, we’re in an assessment phase right now in terms of what is needed. As you know the death toll rises by the moment. One of the principle problems we face at the moment is to ensure proper coordination and proper access on the part of the emergency humanitarian relief agencies. And we ourselves, together with other foreign governments are working with the government in Burma to try and maximise unfettered access for these agencies. Whether it’s World Vision, whether it’s the UN agencies or others. It’s quite critical for the future.


as posted on PM NewsPage

Rudd foreshadows budget cuts

as posted on theWest

Kevin Rudd has defended planned spending cuts in next week’s Federal Budget and admitted some decisions will not be popular.

During a visit to Perth today, the Prime Minister told a media conference in the southern suburb of Maddington that spending cuts on “lesser priority government programs” were needed to fight inflation and curb what he described as excessive spending by the previous government.

While Mr Rudd was keen to talk about the Labor Government’s promised tax cuts and plans to fight inflation, he was tight-lipped about what cutbacks will be announced in next Tuesday’s Budget.

“Inflation is the enemy of working families, it’s the enemy of the economy and it’s the enemy of business and that’s why it has got to be front and centre in the focus of our upcoming Budget,” Mr Rudd said.

He also refused to say whether the controversial baby bonus – increasing to $5000 in July - would be scrapped.

“Let’s wait for Budget night on all the details… I am not going into each individual line item,” Mr Rudd said.

Shadow Treasurer Malcolm Turnbull has rejected the idea of the baby bonus being means tested, saying it should be paid regardless of income levels.

But Mr Rudd said it would be “grossly irresponsible” to continue the “excessive government spending of the past government”.

People on lower income brackets and working families under increasing financial pressure from rising costs in housing, mortgages, food, petrol and childcare, were the focus of the Budget, he said.

He was critical of the Liberal Party’s claims that the spending cuts were not needed.

“I don’t understand why you have the Liberals out there saying that there is no economic case for cutting any government spending and at the same time defending welfare payments for the wealthiest Australians,” Mr Rudd said.

“We completely disagree, when we have inflation at 16 year highs as we inherited from the previous government, if you continue to grow government expenditure at the same rate of our predecessors we add to inflation and put further pressure on interest rates and prices in the economy and those prices impact working families.”

Mr Rudd was in Perth to prepare for the upcoming Budget and discuss its impacts on the State with city officials.

Earlier in the day he spoke at a business breakfast.

KAREN HODGE

as posted on theWest