Interview with Alan Jones, 2GB

Transcript
10 May 2017
Prime Minister
Federal Budget; Schools funding
E&OE

ALAN JONES:

Thank you for your time, very grateful. Now look, Scott Morrison several times last night said that we must live within our means and yet our total debt is rising by about $5.3 million an hour. What seemed to get no attention at all last night was that on the very same day that he’s brought the budget down he issued a direction to the Australian Office of Financial Management stipulating that the maximum face value of Commonwealth Government Securities that can be on issue, which is the debt ceiling is being lifted to $600 billion. This is disguised in the papers with an acronym CGS securities – in fact it’s not $600 billion, it’s $649,000 million. People are saying to me I never thought I’d see the day when a Coalition Government would increase the debt ceiling $600 billion – what do you say to that?

PRIME MINISTER:

Alan it is the consequence, the inevitable consequence of continuing to run deficits and we are doing everything we can to bring those deficits down and we are succeeding. As you can see we are heading to a surplus of $7.4 billion in 20/21. A deficit but a much smaller deficit of several billion dollars the previous year -

ALAN JONES:

But if you were bringing the deficit down you wouldn’t need to increase the debt ceiling. See I don’t believe those figures – and I’m not having a shot at you.

PRIME MINISTER:

Well, no, Alan-

ALAN JONES:

I’m not having a shot at you here but I mean the Treasury have always been wrong in these estimates. I’m just looking at figures here from 2014-15. They said the deficit will be $29.8 billion and it finished up at 37. They are very rubbery figures.

PRIME MINISTER:

Look, we live in an uncertain world, but I’d say this – over the years in different ways in business and so forth I’ve done plenty of projections and forecasts. The assumptions here are conservative-

ALAN JONES:

3 per cent growth?

PRIME MINISTER:

They’re more conservative-

ALAN JONES: 

When growth is now 1.75 per cent?

PRIME MINISTER:

They are more conservative than the Reserve Bank and the IMF – so they are relative. But can I just say something about debt – the critical figure to look at is net debt because obviously the Commonwealth, it has assets on the other side of the balance sheet so net debt is estimated in this year to be 19.5 per cent of GDP, $355 billion. That is too high. That will rise into next year and then it will start to come down and that is because as we move back into surplus over this period – that’s what we are doing-

ALAN JONES:

Can I just say to you simply, I mean you’ve been a businessman, you would not need to increase the debt ceiling to $600 billion if you had debt under control. Now the trouble is that when Mr Rudd was Prime Minister - the Coalition belted him over the head – his debt ceiling was $75 billion. Now the average annual increase in debt under Labor, average annual increase was $36 billion a year. Under the Coalition it is $60 billion a year. How do you stand up in the market place and say we are better economic managers than the other mob?

PRIME MINISTER:

But Alan – two things – firstly, as we know we have been running big deficits and we have made a lot of savings both in Tony’s time and my time but we have not been able to get all of our savings through the Senate. That’s plain. We can’t be accused of not having a red hot go at it but we have to be realistic, we have to be responsible, we have to live within our means. Now as far as debt is concerned gross debt, that is the top line, it grows for several reasons. One – because of course you are running a deficit, you’re running at a loss. Secondly because you’re investing. And whether you’re investing in, if you’re investing in economic assets, whether it is physical assets like the NBN or whether it is in financial assets-

ALAN JONES:

The NBN. The NBN. You’re losing money hand over fist!

PRIME MINISTER:

Well, the NBN is actually, look, I was a great critic of the way Labor went about it but as you know I sorted that mess out and we talked about it a lot and it is rolling out, it will be available to half of Australians by the middle of this year. That’s actually a very big turnaround story – but it is not the theme of the budget from last night. So we should talk about this very fair and responsible budget-

ALAN JONES:

(Laughter) Hang on. Out there they are worried sick about – they see you carting grandchildren around, those grandchildren can’t articulate their concerns that the gross government debt when Tony Abbott became Prime Minister was $274 billion. Since, under Abbott and Turnbull, over $200 billion has been added to that debt. How can you say we are living, as Morrison says over and over again, we are living within our means? He said in the last budget speech last year, his words: “This is not a time to be splashing money around or increasing the tax burden on our economy for hardworking Australians and their families.” And yet here we are on the day of the budget increasing the debt ceiling to $649,000 million. It is worrying the tripe out of people!

PRIME MINISTER:

Well Alan, and it worries me too. That’s why we’ve have to increase tax on the banks, as you know. And increase the Medicare levy from 2019 all part of our programme to bring the budget back into surplus. And when you bring it back into surplus and if you look at the table at 11-13 you can see there in 20/21 net debt starting to come down. And it will continue to come down as you run surpluses, it comes down every year.

ALAN JONES:

Prime Minister those figures are rubbery. I want to stick to the reality-

PRIME MINISTER:

They’re not - Alan they’re no more rubbery than any forecast, whether it’s a forecast of the profitability of your radio station-

ALAN JONES:

No but I’ve told you how, why they’re rubbery. In 2014/15 the Treasurer brought down the statement, Joe Hockey, that the deficit would be 29.8billion, it finished up 37.9 billion. In 2013/14 Swan, still acting on the advice of the Treasury announced a deficit of 18 billion, it finished up at 43.7 billion.

My point to you is you’ve got to go out there in the public place and say we are better economic managers, well in Labor’s last full year in power, net debt you mentioned we must talk about net debt, was ten per cent of GDP and interest payments were $8.2 billion, ten per cent of GDP under the Abbott-Turnbull Governments the debt has soared to 18 per cent of GDP, not ten per cent, and the interest payments are not 8.2billion but now 13 and a bit billion dollars.

PRIME MINISTER:

Yes, but Alan, you cannot turn the federal government around on a dime.

Now what happened was Labor baked in a lot of spending, they baked in a lot of spending which we had sought to pare back, we have had a lot of success actually but not enough. And that is why the deficits continue but we are getting them under control.

And you know you talk about forecast one year being this and then it being worse the next year. Here’s the real deal, back in last year’s budget we said the surplus in 20/21 would be several billion dollars, two billion dollars, as I recall in MYEFO just before Christmas we said it would be one, it’s now going to be 7.4, why is that? Because we’ve taken the tough decisions – yes to cut costs but also to raise revenue. I mean at the end of the day-

ALAN JONES:

How much?

PRIME MINISTER:

And you know this, this proposition that about Liberal and Labor, you’ve worked as part of a Liberal Government you know the fundamental obligation we have is to make sure the economy is managed, the budget is balanced and we do that by both on the revenue and on the spending side.

ALAN JONES:

How much is that house at Point Piper worth, can we just put the rest of it on it? Cause I’ll bet you, I’ll bet you that house and I’ll stick mine with it that you don’t come into surplus in 20/21 as these figures say - I’ll bet you. Because it can’t be done.

Can I just come to this education thing? Last year-

PRIME MINISTER:

That’s a big bet Alan.

ALAN JONES:

Yeah big bet. We’ll both go broke at the same time.

PRIME MINISTER:

Well if we’re talking with our old mate Kerry Packer, our late friend he would have doubled that. But neither of us are gamblers so we’ll stay out of it.

ALAN JONES:

Now listen, I gave you a big wrap last year because you stood up at question time to the Labor Party in February it was, and you leant upon, across the despatch box, you pointed to Bill Shorten and you said “Spending” and you’re angry “Spending more money doesn’t necessarily get you better outcomes”, this is about education, “we won’t promise the money first and then seek to negotiate the outcomes later” that’s what you said. And now you are tipping $18.6 billion, which I might add you didn’t discuss with your party, but you’re dudding the Catholic Schools and Birmingham continues to not listen to the Catholics, and this has created an enormous political storm.

Yet there are research papers everywhere - I quoted this morning, Professor Eric Hanushek from US called Production and Efficiency in Public Schools - “there appears to be no strong or systematic relationship between school expenditure and student performance”. You said that last year now, hello, Gonski’s become the article of faith, some kind of religious relic, and now you are embracing - truly 18.6 billion, what are you doing?

PRIME MINISTER:

He’s very much alive I think it’s-

ALAN JONES:

But what are you doing? You said that last year in question time.

PRIME MINISTER:

Alan the headmaster of your old school – King’s School – Tim Hawkes welcomed this because it is fair-

ALAN JONES:

I know because he is going to get more money, he’s getting more money.

PRIME MINISTER:

Alan you know as well as I do -

ALAN JONES:

He’s getting more money.

PRIME MINISTER:

You know as well as I do -

ALAN JONES:

4,000 per person to 6,000.

PRIME MINISTER:

You know as well as I do, you are a former teacher, an old chalkie –

ALAN JONES:

That’s not –

PRIME MINISTER:

Now hang on, listen -

ALAN JONES:

Don’t try and soften me up. You said to me, we won’t promise the money -

PRIME MINISTER:

No I’m not, I’m telling the truth Alan. You know that the charisma of the teacher is the most important element.

ALAN JONES:

Of course. You’re chucking money at it.

PRIME MINISTER:

Of course it is. So we need to have two things. You’ve got to have money, and you’ve got to have the system of values to ensure that you get quality education. We’re delivering both. We’re delivering it nationally. We’re delivering it on a needs-based basis. As Tim Hawkes said from your old school, he said: “This is right, this is fair, this is just.” We’re doing that, we’re delivering it. We will ensure that having done that and made that commitment to fair, needs-based funding – and every part of the school system is getting more money, including the Catholics, including the Catholics, everyone is getting more money – but we’ll be also getting better results for our kids and grandkids.

ALAN JONES:

Okay, let me just make a couple of points because I’m not too sure you’ve been properly briefed on this either. They’re going to get more money by 2027. No one is arguing about that.

PRIME MINISTER:

They’re going to get more money every year.

ALAN JONES:

No they’re not, they’re getting about $2.2 billion over the forward estimates. They’re -

PRIME MINISTER:

Well that’s more money Alan.

ALAN JONES:

But hang on, hang on, we’ll be short of money that we were guaranteed. Therefore, we’ll either have to stack up fees or, close the school down. But I think this whole thing –

PRIME MINISTER:

That’s simply not – Alan, I’ve got to correct you there.

ALAN JONES:

The Catholics are saying this.

PRIME MINISTER:

They’re getting more money. They’re getting much more money than they would have got under the budget a few years ago. They’re getting more money than they would have got under last year’s budget, which they welcomed and said was fantastic. The important thing is that they are getting more money into their system. How they allocate it is a matter for them, right? But the way it works is it’s needs-based, it’s consistent and it’s national. We should be funding non-government schools on the same basis whether they are Catholic, Protestant, or whatever. Surely.

ALAN JONES:

There’s a question mark as to whether you should be subsiding inefficient governments in South Australia, Victoria and Queensland, for whom public education is their responsibility. They go broke and they waste money and taxpayers in Canberra then, are forced to tip in and make up the difference. But I just think the Gonski formula, Gonski has said, which I think is a completely false promise; funding arrangements, Gonski says, from the original report, should be aimed at achieving an internationally competitive high standard of schooling, where outcomes are not determined by socio-economic status. That’s what he says; where outcomes are not determined by socio-economic status. We need a debate.

PRIME MINISTER:

Why would you argue with that?

ALAN JONES:

Well I am arguing with that.

PRIME MINISTER:

That is a very noble aspiration, surely.

ALAN JONES:

Well let me tell you, I will argue with it because there’s any amount of evidence that children from professional families hear an average 2,000 words an hour. Children from working class families hear an average of 1,000 words and hour. This is research. Children on welfare hear 600 words an hour. So when these kids get to school, there’s a wide disparity in their starting points. But Gonski says the funding is not determined by socio-economic status.

PRIME MINISTER:

No, no, Alan with great respect you’ve misunderstood what he’s saying is – in fact, he’s saying exactly what you said. What he’s saying is, that where you’ve got kids from lower socio-economic groups, where they’re not getting the same amount of education at home from their parents, that’s where you need more resources in the schools. You know this as a school teacher. You know this Alan - you have been there. You have put in the extra effort with the kids from more challenged backgrounds. You know they need more effort. That’s the point that David Gonski’s making.

ALAN JONES:

Okay. Look we’re running out of time but now look. One final comment, do you understand out there that they’re saying: ‘How the hell can you be fighting debt when you’re raising the debt ceiling to 649,000 –

PRIME MINISTER:

Alan we’re raising it in the short term until we bring the debt, deficit back.

ALAN JONES:

Okay, well–

PRIME MINISTER:

But can I make one point Alan–

ALAN JONES:

I have to cut you off, no I’ve got to go to the news.

(Laughter)

PRIME MINISTER:

Alright well you go to the news, we’ll talk all the investments in nation building infrastructure next time.

ALAN JONES:

We will. Next time, good on you.

PRIME MINISTER:

Good on you.

[ENDS]