Another excerpt from Leigh Sales’s interview with the Treasurer
Legg sales: Net debt this year will reach $ 703 billion, and by June 2024 it will be a trillion dollars. In the global financial crisis of 2008-2009 and the years that followed, the coalition attacked the then Labor government on the grounds that debt and deficits were signs. From inefficiency and mismanagement. Why don’t I apply the same argument to you?
Josh Freidenberg: “We did not bake in the tunnels …”
sales: “No, I’m asking about using fiscal policy?”
Friedenberg: “I am responding directly to that. We spent 90 percent of the money in the budget over two years. The second point is that the GFC saw the global economy 0.1 percent. This year, the OECD predicts the global economy is contracting at 4 percent. You cannot compare.
sales: Yes, but the biggest Labor deficit was $ 54 billion and your deficit was four times that.
Friedenberg: “Because of the financial resources we presented the first balanced budget and we saw it decrease from 5.7 percent …
sales: But the Treasurer, everyone will remember, for years and years the coalition over Labor debt and deficits persisted, the accumulation of debt was a sign of economic inefficiency and mismanagement. Everyone remembers that and you are doing it now as a form of responsible economic management?
Friedenberg: Once again, they baked in the tunnels and spent it on pink bats.
sales: But you don’t take up the principle I’m talking about. Isn’t it the reason I shouldn’t argue that she was always as dishonest and cynical as she proves?
Friedenberg: I think you are making fun today. Frankly, we are dealing with a pandemic that happens once in a century. Australian gross domestic product fell 7% in the June quarter, a record high. If you take refuge in New Zealand, it’s down by more than 12 percent. If you take refuge in France, it will be around 14 percent. If you take refuge in the UK, it’s over 20 per cent. Our net debt to GDP, even after all the spending in this budget will peak at 44 percent. Less than half of other similar ones …
sales: Treasurer I’m just trying to get the facts for an Australian audience and get a historical look at the past. Can we treat the Australian public like adults, can we agree to use debt deficits to relieve finances …
Friedenberg: “We have always been responsible.
sales: “She was responsible when the work did it and she was responsible when she did it today. Is it a legitimate tool?”
Friedenberg: “It sits side by side with monetary policy. When it comes to monetary policy during the GFC, it has fallen by 425 basis points, $ 125 billion for stimulus. During this crisis, since the cash rate was already low, it might only fall by 50 basis. The point and it is up to the fiscal policy to respond We did so responsibly and set ourselves a set of principles that we were consistent with, namely that our spending was targeted, proportionate, and temporary and using the existing systems.
sales: The principles of the coalition for years and years surplus are a sign of economic efficiency. This is your response to the crisis that I do not argue with is incorrect proves the correctness of what the Labor Party did during an economic crisis.
Friedenberg:The truth is, unless you are a disciplined financial manager and put the budget in a position of strength you cannot respond on a rainy day. The truth is that we put the budget in a much better position than we inherited and this has given us the ability to respond like we did today and we have already saved about 700,000 jobs and tonight’s budget will see the creation of nearly a million new jobs over the coming years.
the sales: “Treasurer, in the same interview last year you were prematurely demanding credit for a budget that was back to black. Will you save surplus as a cashier? “
Friedenberg: “I’m not setting a date for that. The truth is that we printed a series of deficits tonight and a greater debt burden, but that was a heavy price to save lives and livelihoods, and we had no other alternative but spending as we have helped make Australia a stronger nation and helped see Australia go through.” Better out of this crisis than almost any other advanced economy around the world.