Transcript - Interview with Fran Kelly, RN Breakfast

E&OE……………………………………………………………………………………………………………………………………………………

Subjects: Government Debt, School Education Reforms

FRAN KELLY:

Late last week, gross national debt reached $490 billion and it's set to burst above the half a trillion dollar mark in about three months' time. Eric Abetz is a former Cabinet Minister and he's criticised his own government's decision to scrap the debt ceiling back in 2013. He says it was deeply regrettable and will be a huge millstone for future generations. Senator Abetz, welcome to breakfast.

ERIC ABETZ:

Good morning, good to be on the program.

FRAN KELLY:

The debt ceiling was legislated out of existence four years ago, why was that a mistake?

ERIC ABETZ:

Because what it did is allowed Parliamentarians to take their focus away from the actual debt level and each time that we make a deal with the crossbench throwing a hundred million dollars to the Greens or some money to the Nick Xenophon group or Pauline Hanson's group, each and every time we increase the debt and in those circumstances I think it's very helpful for budgetary discipline to have a focus and realise that there's a ceiling beyond which we cannot and should not go because if we do keep going, as we have been, and I compliment the Government for reducing the trajectory, for reducing the deficit, but of course each deficit actually adds to the debt and that is what the next generation and the generation after that will have to repay with interest. We prejudicing their future and we owe it to them not to do that.

FRAN KELLY:

Well if the gross national debt is now 490, are you basically ringing the bell saying that under the Coalition we're in for a debt and deficit disaster? Is that what you're saying? Sounds like we've already got one?

ERIC ABETZ:

I clearly spelt it out before that yes, we do have a debt and deficit disaster. The trajectory left to us by Labor has been whittled down substantially and when you've got an irresponsible Leader of the Opposition like Bill Shorten who refuses to vote for his own savings, savings that he took to an election, and when they are put before the Parliament, they are voted against it is that sort of irresponsibility that needs to be called out for what it is. Same with profligate spending and in those circumstances having a debt ceiling will provide a degree of discipline to the Budget to ensure the future of the next generation. I was a part of the Howard Government where I can honestly say that at the beginning of the Howard Government to the end, every single Australian was left better off, we paid off debt, and we were in good shape.

FRAN KELLY:

To be fair, those were boom times, there was a mining boom through those years, there was no global financial crisis, the Treasurer Scott Morrison is feeling more upbeat, he's intimated that all these years of really hard slog will soon be behind us, not long to go now. He's suggesting the times will improve and it will suit us. So perhaps the debt ceiling doesn't need to lift, the global economy will do it for us.

ERIC ABETZ:

Well let's hope that the global economy does lift but let's not underestimate the hard work of John Howard, Peter Costello and their government in ensuring that we got rid of the debt. We were told we were irresponsible in doing so and Labor always wanted to spend more. We had fundamental taxation reform with the GST, the good times didn't just drop out of the sky it was as a result of good, hard disciplined economic policy that then benefited all Australians. We have to get back to that and the Coalition is doing that but being impeded by Labor and opportunistic crossbenchers and in those circumstances I believe having a debt ceiling will assist in concentrating the mind.

FRAN KELLY:

No sign that the Government's going to stop the spending in this coming Budget, in fact the Treasurer's already told us that there's going to be delineation of the debt - there's going to be good debt and bad debt and there's going to be a significant amount of spending on infrastructure. No one holding them to ransom there. This is the Government's own policies. Do you support the spending on infrastructure? And do you support this notion of good debt, bad debt?

ERIC ABETZ:

Infrastructure is important and at the 2013 election, we went to the Australian people with a comprehensive plan for infrastructure and that was part and parcel of our very first Budget which is now being followed through up until, I trust, tomorrow night and that will continue...

FRAN KELLY:

...but if there was a debt ceiling, they couldn't spend on the inland rail or the second airport in Sydney...

ERIC ABETZ:

...it depends on where you set the debt ceiling but in all the circumstances, what we need to do is ensure that we don't borrow for health system, for our education system, for our welfare system because to do that is to prejudice the future of the next generation. If we borrow money and, as a result, leave an asset for the next generation well that is something we can look back on and say we've bequeathed something to the next generation. What I fear is that at the moment, we are still bequeathing a defect and debt situation which should be reduced even further than we have been. As a Coalition, we've been doing a good job but we have been stymied by Labor and opportunists in the Senate and we've got to call them to account, call them out and say 'what you're doing is selling out our young Australians, the generations, and that's not good enough.'

FRAN KELLY:

You're listening to RN Breakfast, it's twenty-two past eight, our guest is Liberal Senator Eric Abetz. Well the education system is all about the next generation. What's your view on the announcement that they're going to invest $18 billion more into schools funding? $2.2 billion over the next four years.

ERIC ABETZ:

I look forward to the Minister's briefing to ensure that I get a full grasp of the issues...

FRAN KELLY:

...is it a good idea in theory?

ERIC ABETZ:

..suffice to say, I have seen education expenditure over the last decade go north at the rate of knots with results free-falling at the rate of knots and so extra expenditure clearly is not the answer. We outspend substantially Singapore, Korea and Hong Kong on education yet they command a lot better results than us so money clearly is not the answer. What we need to do is focus on the basics and that is something where the state education systems, and this is another concern that I have, it's called the 'state' system for a good reason, it is  state governments responsibility and the more that the Federal Government intervenes, the more that we take over responsibility, and therefore the people will be judging us on the expenditure rather than what it ought be: it is a state government responsibility and the state governments should be responsible for the funding. 

FRAN KELLY:

What about the shift though of the acceptance of needs based funding and since the Government announced this, much of the debate has centred on how catholic schools will fare under the changes. Are you worried about that, does the sector have a right to be concerned? Have you looked at this?

ERIC ABETZ:

The catholic sector has expressed very real concerns and if I understand the figures correctly, the catholic sector can expect a 3.7% increase, independents 4.2% and the government schools 5.2% so we will be shifting increases very much in favour of government schools...

FRAN KELLY:

...no, no - evening up so every student gets the same?

ERIC ABETZ:

It's a very interesting issue here, if I am a parent that sends my child to a private school, I'm paying that out of my after tax dollars and reducing the tax burden on my fellow Australians. The person next door, earning exactly the same amount of money that I do can send their child to a state school without having any increase in their school fees so if you look at fairness, if you look at equity, if you look at needs how is that fair? So it depends on your philosophical approach and I believe that fairness has to be looking at how the parents fare in this debate and as a Liberal, I fully support parental choice and that choice has to be real with appropriate support because otherwise what happens is people will send their children to state schools simply because they can't afford to send them to a private or a non-government school and that in itself is not fair.

FRAN KELLY:

So, it sounds like Tony Abbott's right when he says there will be vigorous debate in the Party Room tomorrow about this. You want some debate? 

ERIC ABETZ:

We will always have respectful, professional debate in the Party Room about a whole range of issues. How many of my colleagues may or may not raise it and whether the Ministerial briefing will overcome concerns, let's wait and see but there are certain benchmarks that I believe are important and that is parental choice is well and truly protected when it comes to the education of children.

FRAN KELLY:

Senator Abetz, thank you very much.

ERIC ABETZ:
Thanks for the opportunity. 

About Eric

Eric Abetz has been a Liberal Senator for Tasmania since 1994 and has served in a range of Leadership, Ministerial and Shadow Ministerial roles.

Read more

Contact

136 Davey Street
Hobart  TAS  7001

(03) 6224 3707

Senator.Abetz@aph.gov.au

e-newsletter