Published 8/6/2009
Excerpts Only
SUBJECTS: State Government debt, Defence portfolio changes, State Government to announce Budget cuts after the election
(Intro, discussion about George III and Queen's Birthday Weekends)
Journalist
Last week Kevin Foley handed down his State Budget. This is the one before the election. What do you think Chris Schacht?
Chris Schacht
(Thinks it was well received. Notes that SA kept its Triple-A credit rating, although Schacht doesn't set much store by credit ratings.)
Hon Christopher Pyne MP
Lehman Brothers had Triple-A ratings...
Schacht
(Agrees. Says the Budget had an excellent media strategy and the Opposition wasn't able to lay a glove on either the massive debt or the massive cuts in the Budget.)
Journalist
Christopher Pyne: why isn't the Opposition able to punch through on this?
Pyne
The two things that strike me about State Government Budgets - or this State Government's Budgets - over the last seven years is that they essentially last about two days. They have a big fanfare. They're really glossy documents.
Journalist
Lots of ads on the telly!
Pyne
They're always mirrored with an advertising campaign. In fact the ads started appearing before the nightly news was reporting the Budget. So for many people their first experience of the State Budget would have been an ad campaign that was being funded by them about the apparent brilliance of the State Labor Party.
But the Budgets from the State Government never last for more than a couple of days. We're still talking about the Federal Government Budget four weeks after the event. And that's because they're not believable. The State Government's figures - Kevin Foley's figures - that he announces every Budget, are always found to be wanting within a few months. Sometimes they last six months, and then everyone says 'well nobody really believed those at the time anyway'.
The Budget is entirely framed for a front page of the Advertiser the next day. That was successful. It was framed for an ad campaign. There's an election in ten months time, and the Budget was all based around trying to position the Rann Government for reelection. The figures are always rubbery.
...
The one example I would give you is that the figure they announced of debt was about $3 billion. It turned out to not include the debt from 'off balance sheet' government instrumentalities, like the desalination plant, which the taxpayer's paying for. So in fact the real debt's about $6.7 billion. So that came out on Thursday, and the Budget was handed down on Thursday.
Journalist
If it is such a flawed document that even C1 (Schacht) is prepared to say there are lots of weak points there that the Opposition could have a go at.... (interjecting)... why isn't your Liberal Opposition able to punch through then?
Pyne
The Budget was handed down on Thursday wasn't it?
Journalist
Yeah
Pyne
And my understanding is Martin Hamilton-Smith's official reply is on ...
Journalist
So you think that's the reason it's got such good coverage?
Pyne
Well the reality is the Leader of the Opposition's Budget Reply is next week...
Journalist
What, is he playing by Queensbury rules here? Is he going to hold his fire for a while is he?
Pyne
Well the figure of $6.7 billion has punched through in my psyche as being the real figure of debt in a State which can ill afford to carry $6.7 billion of debt, and Martin Hamilton-Smith highlighted that figure.
Journalist
What about this audit commission? Chris Schacht have you ever heard of a Government holding an audit commission on itself? This is something that Oppositions usually do after they win Government. They say, oh we've got here and look at the books we need to have somebody go through them. But this is a Government doing it to themselves. Isn't it just an effective way of putting off the savings until after the election?
Schacht
(to and fro about cynicism) ... it will be a useful device for the State Government to keep the Government and the public informed and to put some pressure on the Government to keep performing. Now we can all be cynical about this...
Pyne
I thought they'd already had a 'razor gang'?
Schacht
The razor gang is an expenditure review committee which every Government has, State and Federal...
Pyne
Isn't that what they're supposed to do?
Schacht
As I understand it the Audit Commission is to make sure that the figures that you're claiming are wrong or dodgy or rubbery...
Pyne
The Audit Commission's going to make sure that the Expenditure Review Committee's doing their job and the Expenditure Review Committee's supposed to be making sure that the State Cabinet's doing its job...
(interjecting)
Schacht
All I can say is I don't think it's a bad idea. The proof of the pudding will be in the eating.
Pyne
Can I give you another example of a rubbery figure in this Budget?
Journalist
No, we're going to move on. See I've turned off your microphones.
I tell you what we're going to move on to: something that blew me away was the size of the defence budget. It's more than twice the size of the State Budget. We've now got a new defence Minister - what do you think about that?
(Station Break)
Schacht
(Discussion of the size of the Budget. There are many Federal Government Budgets that are way bigger than the State Budget.)
The real decisions that affect the running of Australia are now made in Canberra by the elected Federal Government, and the States, whether they're Labor or Liberal, have to take what comes off the table given to them by Federal Labor or Liberal Governments.
Pyne
Well it's certainly true that the power centre in politics has been moving to Canberra for 108 years, and really going back to the engineers' case in the 1930s began that process, and so you'd expect the Australian Government's Budget, which is $336 billion this year to dwarf anything else in the country. Remembering our GDP is about $1 trillion, so it is a huge part of... which is why the Federal Government is so important. It is a huge part of the economy. That's why it has to be done well. Unfortunately it is not being done well at the moment.
Defence is a very big part of Federal Government spending. That's why it's important to have a Defence Minister in who you can have confidence. Joel Fitzgibbon was not such a Minister, and unfortunately for him he bit the dust last Thursday. I think Noddy would have done a better job as Defence Minister than poor Joel Fitzgibbon was doing.
John Faulkner, even though he's Labor, even though he's been an adversary of mine now for sixteen years - he and I used to serve on the Electoral Matters Committee together, I hope and I think he will do a better job than Joel Fitzgibbon. He does at least have attention to detail, and he's not frightened of anybody.
Journalist
He seems to be very widely respected. Everybody says 'don't mess with John Faulkner. He doesn't tolerate fools gladly', but is Defence a kiss of death?
Schacht
(Discusses the range of people who have been Defence Minister. Claims Fitzgibbon's indiscretions were minor compared to the massively expensive follies that get some in Defence promotions. Congratulates Kate Ellis and Mark Butler on their promotions.)
Pyne
The good Defence Ministers in the last twenty years: the two outstanding ones have probably been Robert Ray for Labor and Robert Hill for the Liberal Party and I think it's fair to say...
Journalist
Not Kim Beazley?
Pyne
No not really. I think Kim oversaw a bit of a decline in Defence - in Defence spending and planning (interjections - not for South Australia?) no, no, but overall that began the decline in Australia in terms of our more inward-looking focus. It was Robert Ray and Robert Hill and the Howard Government that threw open Australia more broadly in terms of our attitude to the world about Defence. Robert Hill began the process that Joel Fitzgibbon was continuing of reforming Defence.
But the reason why Defence is different to all other portfolios, because it is completely different to all other portfolios: there is actually a whole different power centre in Defence. If you're the Attorney-General, you have the Attorney-General's Department, and that runs your portfolio. In Defence, you have the Defence Department, but you also have the military, and they have a 108 year old tradition as well. And they therefore are an entirely different power centre. So you need a Defence Minister who can spend time to get to know both of those different aspects to their portfolio, which is different to being the Minister for Health, or the Attorney-General, or the Minister for Education.
Journalist
(Asks if Defence Ministers can control Department but not military.)
Schacht
(Agrees with Pyne's analysis. Raises issue of civilian side and military side constantly arguing with each other. Issues are not unique to Australia.)
Pyne
You've got to be smart and you've got to be tough if you're the Minister for Defence. Robert Hill was both. Robert Ray was both. Kim Beazley is certainly smart, but I don't think he was strong enough to be Minister for Defence.
Schacht
(Gives Beazley credit for bringing submarines to South Australia.)
Journalist
(Says an sms accuses Pyne of misbehaving.)
Pyne
I haven't been. If I've been misbehaving my mother tells me off and she hasn't told me off so I couldn't have been misbehaving.
Journalist
What, you're more scared of her than you are of Malcolm Turnbull?
Pyne
Much more scared of my mother. Have you not met my mother?
(General discussion between journalist, Pyne and Schacht, about Pyne's strong mother!)
Journalist
Does she know how many times you've been sent out of the class while you've been in Parliament?
Pyne
Well she does because she usually rings me afterwards and says 'how am I supposed to face my friends if you're going to get thrown out of Parliament?'
Journalist
Well how many times have you been thrown out of Parliament?
Pyne
Oh, I think three... three times...
Journalist
Well this listener says suspended for one hour on 3rd June. Do you remember that?
Pyne
No.
Journalist
Well it was only last week!
Pyne
But the Manager of Opposition Business in the House gets thrown out regularly. Anthony Albanese...
Journalist
But you can't remember being thrown out ...
Pyne
I think I might have been thrown out ... Anthony Albanese was thrown out 49 times!
Journalist
So you were thrown out for an hour last week?
Pyne
Manager of Opposition Business is one of those jobs.
Journalist
26 May: also named and suspended for 24 hours.
Pyne
Yeah I remember that.
Journalist
You remember that?
Pyne
Yeah I do.
Journalist
16 March: suspended for an hour.
Pyne
That's a long time ago!
Journalist
12 March: suspended for an hour.
Pyne
Even longer!
Journalist
Last year, 27 November, suspended for an hour.
Pyne
Well I wasn't Manager of Opposition Business then so (inaudible banter). I'm very gentlemanly and mild...
Schacht
(Discusses the role of Manager of Opposition Business - agrees that it is their job to "take on the Speaker and the other side" but "on balance", you either have the adversarial system of democracy, or you can follow Stalin and Hitler.)
Journalist
(Raises a text message sent in asking how the State Government will keep public sector wage rises to 2.5% when wage rises are decided by the commission?)
Pyne
That was the other example I was going to give you before I was not allowed to have control of the microphone momentarily! The Budget says that wage rises are going to be kept to 2.5%. And yet the Budget also says that the employee expenses of Government are going to rise by 6%.
...
There are two aspects of this. I don't think the Government has ever, in seven years, delivered wage rises of less than 2.5%, and that would be an absolute miracle, and we know that those figures won't hold up. The second thing is they have massively increased the employment in the public service. Every time there is a problem, they just add more employees to the public service. So one of the main reasons why we have less money in the State than we should have, and why we've squandered the GST windfalls of the last seven years by this Government is because of the massive increases of bills for the public service.
Schacht
(Argues that 2.5% is a strong argument, and says that the public service would prefer low wage case rather than being sacked - argues that the Liberal Party must identify who they would sack.)
Caller
(Asks Christopher Schacht why the audit commission is necessary in addition to the State Treasury - "puzzling and peculiar - 2ps.")
Pyne
I'm with you, I'm bewildered and baffled. 2 Bs.
Schacht
I understand it is not a usual thing that Governments have done but we are in unusual financial times in Australia, at State and Federal level, and if this means this gives more confidence to people that there is some independent advice made public to ensure that the Government meets its targets, including pleasing C2 (Pyne) here about expenditures etc, I don't think it's unreasonable. I also say, the proof will be in the eating of the pudding. By March of next year, if that Audit Commission has not done its job, ...
Journalist
No no no no. It doesn't start doing its work until after the election!
Pyne
The cynicism of this is they actually don't have to even think about making any cuts until after the election.
Schacht
One of the few times in five years that I've got something wrong.
Journalist
They set it up this year, but it doesn't start doing its work until after the election!
Schacht
Well in that case I have to say the Government will be asked to answer, like Heather who rang in, about its operation and why is it going to take that long to start...
(Segment finishes with discussion about Junior Rugby, in response to C1's normal discussion of volleyball.)