TRANSCRIPT - SKY NEWS FIRST EDITION WITH TOM CONNELL

PAUL FLETCHER MP

Shadow Minister for Science and the Arts

Shadow Minister for Government Services and the Digital Economy

Manager of Opposition Business in the House

TRANSCRIPT

SKY NEWS FIRST EDITION

9 MAY 2023

TOM CONNELL: Well, join me live for more on that. The manager of opposition business, Paul Fletcher. Thank you for your time. Busy for morning billion dollar surplus it's forecast but would it be an important milestone just for voters to care about this issue more ? Because it was just sort of this surplus one day, now that it's happening, they can go right. It can happen. Let's care more about it happening again.

PAUL FLETCHER: Well, Tom, good to be with you. So what the government has dropped to the media is they're saying there'll be a surplus for 2022, 23 the year. That's just about to finish, not the year for which they're preparing a budget, which is 23, 24. And then the out years beyond that. And of course, it reflects a couple of things. First of all, low unemployment meaning high income tax receipts that reflects the economic management of the Morrison Government. We exited the pandemic in one of the best shapes of any country around the world economically 3.9% unemployment at that time thanks to the measures we took and it's continued to fall since then. And of course also a huge windfall in terms of commodity prices that's led to a tax windfall. Mr. Chalmers seems to be wanting credit for not spending the windfall , but it really does reflect those two factors. The real issue in this budget is the strategy over the next four years and particularly dealing with inflation, cost of living pressures and the structural deficit. What's going to happen about the out-of-control spending on things like the national Disability Insurance Scheme?

TOM CONNELL: So you said, well you know, the good economic stewardship of the Coalition, as you alluded to, the unemployment rates continue to come down under labour. They get credit for that. Do they get credit for their spending restraint? Because it wouldn't have happened without that. Do you agree there has been spending restraint, perhaps more than you anticipated under labour?

PAUL FLETCHER: The point I make is they inherited a set of circumstances and in particular a set of decisions over several years that has produced a strong employment outcomes that we have at the moment. That has been key to the budgetary position.

TOM CONNELL: Of course it has, but I'm just asking about that spending restraint as well, because if they didn't have that 87% over two years, the completed year in the next year in terms of money they're keeping from this improvement, that that is spending restraint, isn't it?

PAUL FLETCHER: Well, these are windfall gains and it's pretty basic stuff not to be spending windfall gains. Mr. CHALMERS seems to want credit for that. And he seems to want us to focus on 2022, 23. But remember, he's writing a budget for 23, 24 and the out years beyond that. And what we need to know about is what will be the impact on inflation, on the extraordinary cost of living pressures that Australians are facing, but also productivity issues. You know, Deloitte Access Economics is saying that the economy or GDP per capita is not going to increase, so we'll get some increase in the size of the economy because the population is increasing. But where are the productivity gains? We're going in the wrong direction on productivity at the moment with regressive, you know, back to 1970 style industrial relations rules, already one set passed last year, more more coming later this year. These are the kinds of things we need to see in the economic growth.

TOM CONNELL: Pretty hard when you've got, I think, 11 straight interest rate rises. What about the test you set up there on inflation, though? So if tonight's budget reveals Treasury estimates are saying this won't be inflationary and that turns out to be so, that this does not affect inflation, would that pass your test on inflation?

PAUL FLETCHER: Well, let's have a look at the measures and make an assessment of their economic impact. Mr. Chalmers is saying, Oh, well, this is spending that won't increase inflation, it'll reduce inflation. Well, that would fly in the face of basic economic principles. We know that more government spending is expansionary and in these circumstances will tend to increase.

TOM CONNELL: Part of it, though, I mean, you've got out the fact that they're reducing power bills, so that actually reduces as well how much you pay for it. So on the CPI measurement, which is inflation, that would reduce some of that element, maybe people spend the money as well, but you understand how that at least would not increase inflation.

PAUL FLETCHER: Let's just focus on power bills. They came to government promising people would see their power bills drop by $275. That was the promise repeated 97 times. They're now wanting to claim credit for the fact that through a complicated set of measures, they say that power bills are not going to increase by quite as much as they otherwise would have done. Let's be in no doubt here. Power bills are going up.

TOM CONNELL: That's a test that's been they've set for themselves and it's fair enough. And you'll keep pursuing that. But what about your test on inflation? If this does not increase inflation either in tonight's budget, but also in reality, would that budget then be a satisfactory one for you? That's your big test.

PAUL FLETCHER: We'll have a look at all the measures and make an assessment. Let's be very clear. The Coalition believes that getting inflation down is a key priority. This government has got all kinds of excuses. Apparently it's due to the war in Ukraine and all kinds of other things. This inflation comes from Canberra. This budget tonight needs to show clear plans to get on top of inflation.

TOM CONNELL: All right. Well, that's the big test. What about out of all the spending so far, is there any that you oppose?

PAUL FLETCHER: We'll look at all the measures on their merits. We'll get all the details. We're not going to jump to make judgements based upon what

TOM CONNELL: We know, say the single parent payment, though the extension of that. Is that fair enough?

PAUL FLETCHER: Again, we're not going to make decisions on the run. Our economic team will look carefully at all the measures. Once we have the details, we'll go through our normal shadow cabinet process 

TOM CONNELL: We know that we know the single parent payment. We know that we've got the detail. Why not have a view on that? Well,

PAUL FLETCHER: Tom, we will get the details and we'll make an assessment of them. And on that issue, as others, what we'll weigh up is on the one hand, obviously providing support, but on the other hand, we want to encourage as many people into the workforce as possible, including single mothers. So those are the factors to weigh up. We'll weigh that up based on the details of the measures, not what has been dropped in the media.