28 April 2015
Transcript - #2015041, 2015

In the role of: Parliamentary Secretary to the Treasurer [23 December 2014 - 20 September 2015]

Interview with Patricia Karvelas, RN Drive, Radio National

SUBJECTS: Bali Nine, Budget and AAA Credit Rating

KARVELAS:

It’s our last monthly federal political panel before the Budget and we’re joined in our Melbourne studio now by Kelly O’Dwyer. She’s the Parliamentary Secretary to the Treasurer and Kelly I believe that this is the last panel for you for a while before you take maternity leave.

O’DWYER:

Yes, that’s right Patricia, I’m going to have about six weeks where I take some leave and it’s going to coincide, unfortunately, with the Budget but you can’t chose when babies decide to arrive and it’s going to be a happy event.

KARVELAS:

You can’t and you can’t sort of hold off the baby – that’s a good move there. And in our Parliament House studio is Shadow Assistant Treasurer, Dr Andrew Leigh. Welcome Andrew.

LEIGH:

G’day Patricia and Kelly I’m sorry we’re going to be missing you for six weeks.

O’DWYER:

Yes indeed.

KARVELAS:

I think she’ll be having a better time quietly. Now first let’s just briefly just go back to the events in Indonesia. I found that a very difficult conversation to have I’ll admit with Myuran’s cousin. It’s just such a sad story. There are reports tonight that Indonesian authorities might give these men another six hours with their families. Your response Kelly O’Dwyer? Seems like the whole thing, denying them spiritual advisers being at their execution, it all seems rather cruel.

O’DWYER:

Reports of that do seem very cruel indeed and, like you, I have a great deal of empathy for the families and for what they must be feeling at the moment. You can only imagine how difficult it must be to hear the news that the executions are going to be going ahead and most probably going ahead this evening. We know that both of these men did commit terrible crimes – we know that – and they have atoned for those crimes through the rehabilitation process that they’ve gone through over the last ten years. And all of us, I think most people, I won’t profess to speak on behalf of all Australians, but I think most Australians really abhor the death penalty – they want to see clemency granted in these circumstances and that is true at the very highest levels. Julie Bishop has just done the most extraordinary job at pleading for clemency for both of these men on behalf of the Australian community, on behalf of their families and I’d like to congratulate as well the Labor Party for joining us in that. It’s very much been a bipartisan effort. Now we can hope that that plea will be answered but it’s not looking too good right now.

KARVELAS:

Andrew Leigh you share similar thoughts I imagine?

LEIGH:

Absolutely Patricia. I lived in Indonesia for three years as a child and so have a great respect for the Indonesian people. I do think that this is an opportunity for President Joko to make the right decision. Each of us is better than the worst thing we’ve ever done – that’s true of you, me, each of your listeners, President Joko himself and of course this artist and pastor whose lives now hang on the line. That’s why Australia got rid of the death penalty over 50 years ago. Henry Bolte was the last Australian leader to preside over an execution and it’s why Indonesia itself urges clemency when its own citizens are facing the death penalty overseas – including for drug offences.

KARVELAS:

I want to ask you a political question in relation to all of this. There have been a lot of reports now, and I have certainly spoken to MPs on both of your political sides, who are very angry with the way the Indonesian Government has been managing this issue – the failure to deal with Australia, to listen to Australia’s concerns, even the inflexibility now that we’re seeing in terms of providing a spiritual adviser for both of these men. What will the political ramifications be for Indonesia? Will there be the recalling of the Ambassador to Indonesia? How serious should those ramifications be? What do you think Kelly O’Dwyer?

O’DWYER:

I think it’s fair to say that we have had hearings at all levels. I know that the Prime Minister has spoken with the President of Indonesia. I know that our Foreign Minister has been dealing with her counterpart and right down the chain – I know that there have been dealings at all levels so we do appreciate the fact that there has been a conversation with the Indonesian Government. Now we haven’t had the outcome delivered that we want. That’s absolutely correct. We do respect the sovereignty of Indonesia. I think it’s important for us to say that on the record because we would expect Indonesia to respect our sovereignty too when dealing with their citizens, but that doesn’t stop us from making representations for clemency and we have done that and repeatedly done that. We would like to see a different outcome. We’re not making any rash decisions as to what our response will be in relation to this. I think we have to be very measured because this is a very emotional issue and there are lots of factors at play in our relationship that are beyond this particular very devastating event. I think that the Government needs to be responsible when making decisions in relation to how we manage our relationships. I think we’re just going to see how this plays out. We do believe that we have been heard although we wish our pleas for clemency had been agreed.

KARVELAS:

Andrew Leigh we clearly, I can pick up the claim from Kelly O’Dwyer, we haven’t been heard. We may have been listened to but we have not been heard. Andrew Leigh what should Australia’s political response be?

LEIGH:

Patricia, we’re not commentators, Kelly and I are Members of the Australian Parliament and with an issue as serious as this one there is only one right thing for us to do and that is not to speculate about tomorrow but to make the best arguments we can today. While there’s life there’s still hope and I dearly hope that the Indonesian Government will still at this very late hour will make a decision to grant clemency.

KARVELAS:

Alright, to the Budget now. We said we’d talk about the Budget. There’s still this budget that’s being constructed carefully. Kelly O’Dwyer you’re at the final touches stages I imagine. Is there still some major work to do?

O’DWYER:

Budgets are always worked upon right up until the point that they’re delivered and you would expect that. We’ve got enormous challenges in this budget – enormous challenges as a result of the situation that we inherited from the previous Government. We are spending far more than we receive – huge debt and deficit issues to deal with, to get that under control and we saw reports only today issued by David Murray that says unless you actually get that under control you risk your AAA Credit Rating.

KARVELAS:

So there’ll be elements in the Budget which stave off that danger?

O’DWYER:

We’re looking very carefully at how we construct the Budget to make sure that we put Australia in the very strongest position. We know that under the previous Government our net debt to GDP was tracking towards 122% – that’s Greece like proportions. Under the path that we have now we have been able to scale it back to around 60% which is around Spanish proportions. More work needs to be done. We’ve done a lot of work already but more work needs to be done to get spending under control.

KARVELAS:

Kelly O’Dwyer 15 more years of deficits, is that…?

O’DWYER:

Well, you’ll see the figures in the projections when the Budget is delivered. I’m not in a position to deliver budget today.

KARVELAS:

Darn.

O’DWYER:

We’ll just have to wait for when Joe Hockey does deliver the Budget on the 12th of May but he rightly points out, we’re borrowing $100 million a day. That’s $100 million more than we can afford to spend. That means that we’re racking up deficits and we’re racking up huge debt. And we’re paying an interest bill of around $12 billion a year. Now the Labor Party like to talk about how they’re going to increase taxes in order to bring in $20 billion worth. Well currently on their interest bill alone we are spending more than $12 billion a year. That would have been really good if they’d kept that under control while they were in Government.

KARVELAS:

The Reserve Bank chief Glenn Stevens said today that workers are on the brink of retirement are in a much worse position than those that worked the workforce a decade ago. That means more people are pulling a full or part pension doesn’t it Andrew Leigh? Doesn’t that need reform as well?

LEIGH:

Patricia, our pension is, according to Alliance, the most sustainable in the world.

KARVELAS:

Why should people who are very wealthy be receiving part pensions Andrew Leigh?

LEIGH:

Well if you look at the total spend of our pensions, about 3% of GDP now, it’s projected in the Intergenerational Report to go to 3.5% of GDP so it is a targeted and sustainable pensions. Look Patricia I do need to pick up on some of the things that Kelly was saying about debt going to Spanish or Greece like levels. All of those projections that Joe Hockey talks about are based on his own decisions. He’s comparing his first Budget Update with his first Budget. But he’s not making any comparisons with the state of the books when he took office. Which was with debt heading back towards a budget surplus in the years of the Forward Estimates with Labor having put in place a real spending cap of 2% after the Global Financial Crisis. I don’t think most economists would regard debt and deficits as being the one main criterion for economic success but Tony Abbott certainly made it one when he was in Opposition. And yet upon coming to Government on his own figures, he has debt reaching $1.6 trillion over the next 40 years. This is of course imperilling our AAA Rating and that’s also at risk because of the fact that unemployment is going up, that confidence is going down, that growth is slowing…

KARVELAS:

Kelly O’Dwyer is... going to jump through the microphone.

LEIGH:

…The continual blaming of the Labor Party, you know, these guys have been round in the Garden of Eden…

KARVELAS:

Kelly O’Dwyer… Kelly O’Dwyer we’ve got to kind of wrap up in a second but Andrew Leigh is right isn’t he, doesn’t it come to a point on this that you must stop blaming the previous Government and take responsibility.

O’DWYER:

We absolutely take responsibility for fixing the mess that we inherited. There’s no question about that but I think Andrew’s been somewhat disingenuous in putting the case that he’s put today to your listeners. It’s all very well to say that they put a cap on themselves in terms of capping their real growth in spending – they just didn’t stick to it. So they announced a cap and unfortunately they kept spending and this is the situation that we now have to deal with. It’s not a laughing matter, it’s a very serious issue and I know that Labor would like to be able to pretend that there is no problem, no fiscal problem that we need to deal with, but it is a very real problem. We do need to deal with it because if we don’t deal with it today the impact on future generations on our children and on our grandchildren will be severe. But it will be more than that because when we do face another economic shock – and we’ve had 24 years of uninterrupted economic growth, the idea that that will simply continue is, I think, not believable – the people who will be most affected when we have that economic show are the most vulnerable people in our community.

KARVELAS:

I’m going to have to leave it there but you both will return again. Post Budget and no doubt the Budget will, it’s only two weeks away so I suppose we’ll have to hold our horse and you’ll be post baby then too so we can talk about that nanny subsidy and whether you’re able to use it. I don’t think you’re going to quite going to get it though. 

O’DWYER:

[Laughing] I don’t think I’ll get access to it.

KARVELAS:

Kelly O’Dwyer thanks for joining us. Kelly O’Dwyer of course is the Parliamentary Secretary to the Treasurer. Her last panel for a while, while she takes maternity leave. Very best to you Kelly. Thanks also to Dr Andrew Leigh, the Shadow Assistant Treasurer in our Canberra Studio.