Sky's Lunchtime Agenda with David Lipson and Angus Taylor

23 March 2015

DAVID LIPSON:Well, Angus Taylor and Stephen Jones join me now here in the studio, thank you both for your time. It was a special morning, wasn't it Angus Taylor, what are your memories of Malcolm Fraser?


MEMBER FOR HUME, ANGUS TAYLOR MP: Yes look, like Stephen, I was a relatively young boy when 1975 happened and I remember well the event. I was atNimmitabelPublic School and I was probably outnumbered in terms of the views of the kids at that school but it was an extraordinary event. I remember the whole election campaign, in fact I handed out how-to-votes in the Turn On The Lights campaign in 1975. Fraser's legacy is often misunderstood, we heard a lot this morning about his legacy on social reform and measured social reform was a hallmark of Fraser and his regime. But he was also a fiscal reformer and one of the things that people don't remember is that in the three years leading up to the dismissal federal government spending had increased at over 20 per cent a year and Fraser across his term contained it to one per cent,which is an extraordinary achievement. In today's context I think we understand now how extraordinary that was, he was a remarkable man and his regime was a remarkable time in Australian history.

LIPSON: Stephen Jones, how do you remember him and how did he shape your politics?

SHADOW ASSISTANT MINISTER FOR HEALTH, STEPHEN JONES: Well Ill never forget sitting in a grade four class in Wollongong when Sister Mary came in and told us that the Prime Minister had been sacked. We were all shocked and I went on to learn about Gough Whitlam's great contribution to this country. We always focus on the difference between Whitlam and Fraser and they are famous. The dismissal is something that I to this day think was wrong, but I think Malcolm Fraser wasn't a one dimensional man. Something that is often glossed over in the history books is how much of Whitlam's legacy that Malcolm Fraser went on to implement or went on to put in place and legislate because Whitlam hadn't himself had the time to do it. So everything from this legacy around multiculturalism, the Human Rights Commission, in fact that whole human rights agenda, Indigenous reform and land rights, it was started by Whitlam - the great moderniser - but much of it continued by Fraser. So as a Parliament I think that Angus and I will agree on this - we pay tribute to that contribution of Malcolm Fraser. We don't give up, on our side anyway, the contribution about the dismissalbut we do pay tribute to those good things that he did do.

LIPSON: There was so much of his legacy that was praised today. Joe Hockey, the Treasurer, even praised him for starting up the "razor gang", otherwise known as the Expenditure Review Committee, and keep an eye on Julie Bishop here as Joe Hockey makes his speech.

[Clip of Joe Hockey's condolence speech]

LIPSON: She did roll her eyes, as did Christopher Pyne and others on the frontbench - obviously ministers not so happy that the ERC is there to reign in their budgets, but still very important nonetheless. This is a particularly sensitive issue today because there were reports that the foreign aid budget, which has already been cut by $11 billion dollars, will be cut back further in the upcoming budget. JulieBishop this morning said that she didn't know anything about it. Have a look.

[Clip of Julie Bishop stand up]

LIPSON: And speaking to the Finance Minister, Mathias Cormann, a short time ago our political editor David Speers spoke to him and it appears that our Finance Minister has ruled out any further cuts.

[Clip of Mathias Cormann interview]

LIPSON: We will get back to that in a moment, but right now we will go live to Darwin where we are getting an update on Cyclone Darwin.

[Cross to Darwin]

LIPSON: Back to our panel discussion, we just heard Mathias Cormann essentially knock that on the head when it comes to further foreign aid cuts. This is the problem though that Joe Hockey faces isn't it as he tries to reign in the budget, if he is not looking at increasing revenue through higher taxes any further cuts he makes - there is going to be uproar from the frontbench on his side.

TAYLOR: Well we know what the problem is, the Intergenerational Report laid it out very clearly - tax increases wont' solve it. We had a government that locked in spending growth faster than income and if you let that run you end up with Greek-like deficits. Now this is not

LIPSON: So what do you do because

TAYLOR: Well it's a 40 year problem, we've gone half way to solving a 40 year problem in one budget. So we bit off a lot, we bit off a lot but it's a 40 year problem created by the last government and what we have to do is keep looking at innovations to contain our growth in spending. You know, we have got big programs in welfare, in health, in education, growing at eight, nine, ten per cent a year courtesy of the last government and we have to contain those. That is what we have been consistently doing, we are half way there, Labor is not telling us anything about what they are going to do. Theyve got to do something because

LIPSON: What should Joe Hockey do, we've heard the message and it is somewhat confused, Im sure it will somewhat firm up obviously in the weeks ahead, but what do they need to do?

JONES: Look the problem that the Government is facing is that they are caught because pre-election promises that they could solve the world's problems without making any cuts and the reality and the problems that they have between their backbench and their cabinet at the moment. Every area that they might look to, to make a cut, there is a constituency or a cabinet minister or a vote that they might need to secure the leadership

LIPSON: That's the problem

JONES: As Chris Bowen has laid out early last week, we need a gradual path back to surplus and Labor will have a credible plan. We are still at least 18 months away from the next election, we will be releasing policies this year, we released a $1.9 billion dollar policy the week before last which went to cracking down on multinational tax avoidance. We will have more in the bag to announce over the next 12 months but right now you guys are in government so it's on you to

LIPSON: You will need

JONES: The biggest saving that you've got in your last budget by the way was an initiative that Labor put in place; that was savings to the pharmaceutical benefits scheme. You've booked that, you've said that it won't be foreign aid cuts, what

TAYLOR: You've got to raise taxes if you are not going to make cuts and you keep saying you are not going to make cuts. So the other solution I would expect from Labor is something like what they announced a couple of weeks ago which is an attempt to crack down on multinationals, which I can tell you will not work. Like their mining tax, they promised all this revenue, and it was never delivered. This is how Labor gets to surpluses, fictitious sources of revenue, we haven't heard anything about what their plans are.

LIPSON: Quick response Stephen?

JONES: Look these are the guys who made a lot of noise about cracking down on multinational tax avoidance but whenever a realistic proposition is put up to deal with it they throw their hands up in the air and say: "No we can't do that, it won't work!" You've said that this is a serious issue, that base erosion was a serious issue, we are coming up with solutions, you think they don't work so

LIPSON: Stephen Jones, Angus Taylor, we are right out of time. Thank you