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Government And ALP Agree On Budget Repair Deal

The Turnbull government and the ALP have negotiated a deal over budget repair.


The agreement on spending cuts will add to the budget’s bottom line and ensure that the government’s Omnibus Bill will pass through the Parliament.

Earlier in the day, the ALP announced the agreement. The deal included an agreement that the ALP would make the first announcement.

Prime Minister Turnbull held a press conference with Treasurer Scott Morrison and Finance Minister Senator Mathias Cormann.

  • Listen to the press conference (15m – transcript below)
  • Watch the press conference (15m)

Transcript of press conference with Prime Minister Turnbull, Treasurer Morrison and Finance Minister Cormann.

TURNBULL: We went to the election with a clear economic plan, to support continued strong economic growth and we’ve delivered that. Strong economic growth.

A key element of our plan is restoring the budget to balance.

We have a huge challenge to ensure that we do not load a mountain to ensure that we do not load a mountain of debt onto the shoulders of our children and grandchildren.

We have to live within our means.

It’s a hard task this one of budget repair, it is a key priority of our Government, a key responsibility of every member of this Parliament.

Now we said we will work across the aisle. We will make and seek to ensure that the Parliament works and that we get results.

Now we introduced an Omnibus Savings Bill that set out $6 billion of savings measures that had been opposed by the Labor Party prior to the election but during the course of the election had been adopted and incorporated into their own alternative budget. There have now been very frank, constructive negotiations conducted by the Treasurer and the Finance Minister. I thank them for that. They’ve done that with their counterparts and have secured agreement to $6.3 billion of savings over the forward estimates. There is more work to be done – a lot more work to be done, but this demonstrates that we are delivering on our economic plan. We are delivering on our commitment to bring the budget back into balance and that with goodwill and good faith, working across the aisle we can deliver results in this Parliament, which the Australian people elected. They elected it to do a job and this task of budget repair is one of the key tasks that every Member of the Parliament confronts.

So I will ask the Treasurer and then the Finance Minister to go through the details of these negotiations and their outcome.

MORRISON: Thank you, Prime Minister and can I also thank the Finance Minister for the work he’s done in bringing this measure to agreement and where we’re able to announce today – the agreement to the Government’s Omnibus Bill, some $6.3 billion. What’s been agreed today, shows that the Turnbull Government is getting on with the business of securing savings in the 45th Parliament.

Obviously, that has its challenges and what this demonstrates is that those savings can be achieved.

Now, this is in response to the Government’s initiative to put the measures that Labor said they supported before the last election and were included in their costings into one bill and it focused attention on the need to arrest the debt by moving forward with these measures.

Now in the course of any discussion, there is give-and-take, as there has to be and there will be in the future no doubt, because that will be the nature of business in the 45th Parliament. But it is important to note that 20 of the 24 measures that were contained in the Omnibus Bill that I introduced into the Parliament last time we were here have been supported unamended in what we’ve agreed to today.

Now, these were measures that had been opposed in some cases for some three years. There were measures in here, including changes to Family Tax Benefit that before the last election it was said they would never ever support and today we’ve been able to get to the position where they are supported. I think for the reason for that is that there is a clear understanding in the Australian community that they expect this Parliament to arrest the debt that they expect this Government to put forward measures on savings to ensure that we can get the budget back under control.

It is a job that is not completed with this today it is a job that is started. The Government’s focus is on getting expenditure under control.

The Omnibus Bill is about expenditure savings. This is not a bill for higher taxes. We believe the way to control and get the budget under control is by pursuing savings in the budget. Higher taxes for higher spending doesn’t arrest the debt, it actually arrests growth and that’s why we are focused on the Omnibus Bill with savings and I will ask Mathias to go through some of the details.

CORMANN: Thank you Prime Minister, thank you, Treasurer. A key priority for the Government this week was securing the successful passage of about $6 billion in savings through the Parliament and as a result of the agreement we’ve been able to reach with the Opposition we will be able to secure the successful passage of more than $6 billion worth of savings. This is an important next step in progressing and in achieving budget repair. It is only another step, there will be further steps required, of course, and we hope that this is the beginning of further constructive engagement by the Opposition with the Government in getting the budget back into balance as soon as possible.

Obviously here the genesis of all of this is that the Budget Omnibus Savings Bill provided about 24 measures which both Labor and the Coalition took to the last election, banked in our respective budget bottom lines and we have pragmatically been able to reach an agreement which is there for all of you to see.

JOURNALIST: Prime Minister, you went to the election with a plan to remove $1 billion from ARENA. Didn’t you have a mandate to proceed with that plan and what is your justification for restoring $800 million of ARENA funding? Does this represent an admission on your part that there is a limit to your mandate?

TURNBULL: You will recall that the results of the election were such that the Government does not have a majority in the Senate. We need to negotiate to secure the passage of legislation. We need to approach the Parliament that the Australian people elected in a constructive and pragmatic manner. And that’s precisely what we’re doing. Do you want to add to that?

CORMANN: In relation to ARENA, what is also important to remember is that what we proposed to do was to reclassify that $1.26 billion from grants funding into capital available for concessional loans or equity. What we have agreed as part of this overall deal, is to restore $800 million of that into grants funding. That has no effect on overall government debt because we will be, of course, reducing the amount of capital available for concessional loans and equity to the commensurate degree. And we’ve been able to replace a capped saving. In the end the funding for ARENA is finite. We’ve been able to replace it with a structural saving and we have been able to secure the passage of a significant saving in the family tax benefits payment space.

JOURNALIST: Mr Morrison, this is the second retreat Labor’s made on the family tax benefit supplements and the biggest saving today was that $1.7 billion. Chris Bowen has just said that’s the final retreat they will make on this. Are you going to keep the remainder of those cuts in your budget plans or are you going to raise the white flag on those?

MORRISON: No – absolutely not. Of course we’re going to pursue the savings that are necessary to repair the budget to arrest the debt. And so Labor has been able to agree only with this much today. There is so much more that needs to be done and our budget measures remain our budget measures and we will continue to pursue those through the Senate and through the Parliament. Now, the only exception to that is the final decision we’ve made in relation to ARENA – but everything else are matters that we continue to pursue. And so Labor have largely tapped out when it comes to savings on outlays. Yes, there are some specific measures around private health insurance and some other issues around dental and we will pursue those, and health debts and so on. But the substantive measures that they now propose are higher taxes. Higher taxes which we believe arrest growth, not debt.

CORMANN: Let me be very clear – the savings measures that we will continue to pursue beyond what has been agreed to in this package, is also the remaining carbon tax compensation related payments, the so-called clean energy supplements. We’ve reached agreement with Labor in relation to three out of 19 welfare payments, but we will continue to pursue the remainder through a separate process.

JOURNALIST: How did the Nationals feel about the baby bonus payments for single parents getting the chop?

TURNBULL: All of these measures have been approved by the Cabinet and by the Coalition party room.

JOURNALIST: This is pretty important to them though, isn’t it? It was part of the – when you became Prime Minister.

TURNBULL: We are a coalition and all of these measures have been approved by the Cabinet and the Coalition party room.

JOURNALIST: Prime Minister, these measures alone, are they going to be enough to reassure the international ratings agencies to protect the AAA rating? And secondly – have you accepted Tim Wilson’s apology?

TURNBULL: The answer, of course – the second part of it the answer is, of course, there was no need to do so. He is a very, he’s very courteous, very courteous but there was absolutely no need. He’s a gentle soul and very courteous.

MORRISON: The answer to the question is it helps but it doesn’t resolve the issue completely. I think what this demonstrates to the ratings agencies is that government in this 45th Parliament can get savings through the Parliament. Now that is a very good story for me to be able to take to New York to the ratings agencies and I will be doing that in the course of the next month. But we cannot rest just on this. There are many other measures. There’s the excise measure on tobacco – that will also be supported. There are other measures that we’ll be pursuing over the course of the next few months, they also must be supported. But we cannot rest on the issue of savings on outlays. And so I think the pressure still continues to be placed on the Opposition. I mean, $6.3 billion is welcome but that is not the full task. There is a much greater task ahead of both the Opposition and the Parliament in supporting the Government’s program.

JOURNALIST: Prime Minister, can I ask you about the plebiscite?

TURNBULL: Just before we do, is there any other questions on the budget?

JOURNALIST: Can you categorically rule out a vote of the parliament on same-sex marriage if the plebiscite bill goes down, as seems likely? And is it the plebiscite or bust for the next three years?

TURNBULL: Mark, what we have set out is exactly what we took to the election. We went to the election and we said we are going to give every Australian a say on this question of whether same-sex couples should be allowed to marry, whether the law should be allowed to change that. Our job as parliamentarians is to attend and vote at the plebiscite, according to our conscience. But right now this is what our job is and this is what Mr Shorten’s job is. Our job is to ensure that the Australian people have the opportunity to express their view and to do so in a manner that is fair and impartial, that is seen as being fair and impartial by all Australians regardless of their point of view on the issue. Now we have set out a mechanism to do that and I might say the Special Minister of State and the Attorney-General will be doing a press conference very shortly to go through all of the mechanics, but it is a very carefully considered proposal, legislation, that will enable everyone to have a say in a thoroughly fair manner.

That’s the important thing. Our job as the Government, as parliamentarians today, is not to try to tip the table one way or another we want it to be an absolutely fair, civil contest, that both sides feel they’ve had a fair go. The Australian people will make a decision and then the Parliament will respect it. Just one more – Question time approaches.

JOURNALIST: WA Liberals are quite furious with the plebiscite. In fact the Deputy Leader in WA, Liza Harvey, has just said “it will be a distraction to the State election campaign, there’s no doubt about that. Clearly they’re not considering WA in making these decisions yet again,” she adds. Will you reconsider, Prime Minister, the timing of the February plebiscite?

TURNBULL: Can I just say to you, firstly the timing – we said we would have it as soon after the election as was practicable, February 11 is the soonest day. If Bill Shorten supports it, if he gets on board and supports the plebiscite, it will be held on 11 February, absolutely consistent with our commitment. On the West Australian dimension I will turn to the great West Australian on my right.

CORMANN: Thank you, Prime Minister. The people in the great State of Western Australia indeed, like people around Australia, have long proven that they’re able to make a difference between federal issues and State issues and I don’t believe that this will be a distraction for the people of Western Australia in the context of a state election. People understand the difference between those two processes. It is very important for us to keep faith with the commitment we made in the lead up to the last election, to deliver the plebiscite as soon as possible and people in Western Australia, of course, hopefully, will make the wise decision of returning the Barnett Government in March.

TURNBULL: Katharine Murphy, that must be the last question.

JOURNALIST: Thank you, Prime Minister. Given Labor’s made it pretty clear now that public funding is just a bridge they can’t cross in relation to the plebiscite, is there anything that you can offer Bill Shorten additionally, to convince Labor to come back to the table and support the plebiscite?

TURNBULL: Katharine, your job is to speculate, my job is to legislate. It’s something for you to speculate about. Let me say to you, we’ve prepared – the Cabinet has approved the legislation, the party room has approved the legislation. I will introduce it into the House this week. The House will pass the bill, I’m very confident of that and then it will go to the Senate and the only person that stands in the way of Australians having a vote on this issue, on 11 February, is Bill Shorten. So he can enable that.

There will be a plebiscite on 11 February unless Bill Shorten decides to block it. Now what he should do is get behind this commitment to democracy. He knows that most Australians, including most Labor voters, are in favour of there being a plebiscite. Australians want to have their say. We’ve set up a fair process so that it will be a fair go for both sides of the argument. Let the people have their say. Mr Shorten should stop blocking this democratic process for which we have a clear mandate from the public. Thank you very much.

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Malcolm Farnsworth
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