Australia’s Hockey Says Budget Opponents May Face Own Backlash

Australia’s government says its political opponents in the Senate must be prepared to negotiate on budget legislation or they may face a public backlash.

“If the immediate answer of everyone in the Senate is ’no’, then I think the Australian people will have a low tolerance for that,” Treasurer Joe Hockey said in an interview on Sky News yesterday. “They expect their government to be able to get on with their agenda.”

Prime Minister Tony Abbott’s Liberal-National coalition government faces criticism of its May 13 budget as Parliament resumes today to debate planned measures including spending cuts, a new levy on higher incomes and fees to see doctors. Consumer confidence fell to an almost three-year low and support for Abbott as preferred prime minister dropped below that for opposition Labor Party Leader Bill Shorten for the first time following the budget.

Hockey said the budget measures were necessary to put the economy on a stronger footing and deliver future growth and employment.

“I am confident that we will have a strong growth story in the next two to three years provided we can get what we need to get through the Parliament,” he said, referring to the Senate where the government lacks a majority. “Our measures in relation to asset recycling, infrastructure and importantly not going too hard in the next two to three years are going to help to build employment.”

Economic Growth

The budget forecasts economic growth of 2.5 percent in the fiscal year that starts July 1, lifting to 3.5 percent by 2016-17. The jobless rate is projected to rise to 6.25 percent in 2014-15, compared with 5.8 percent in April.

Consumer confidence dropped to the lowest since August 2011, according to an index from Westpac Banking Corp. and the Melbourne Institute published May 21.

A Newspoll conducted after the budget and published in The Australian newspaper May 19 showed Abbott’s support as preferred prime minister fell to 34 percent, compared with 44 percent for Shorten.

“We are not going to surrender our budget commitments,” Abbott told reporters May 24. “I know some of them aren’t particularly popular but governments aren’t elected to make easy decisions.”

Members of his own party “absolutely understand the iron necessity of getting the budget back under control,” he said, countering suggestions that he and Hockey will face pressure from within the Liberal Party to make compromises.

Careful Assessment

Labor will assess all budget legislation carefully and realizes it can’t rewrite the entire budget, Penny Wong, Leader of the Opposition in the Senate, told the Australian Broadcasting Corp.’s Insiders program yesterday.

“It’s up to the government to negotiate the passage of its legislation through the Senate,” she said. “We have to be clear and upfront about what we’re fighting.”

Wong said Labor won’t oppose the proposed 2 percent levy to be applied to those earning more than A$180,000 ($166,000) a year. It doesn’t support Medicare co-payments, a proposal to impose a A$7 fee on patients when they visit a doctor, with the government planning to use the money raised to kick-start a A$20 billion medical research fund.

That puts Labor on a collision course with Hockey, who yesterday signaled the proposal was one the government is unlikely to budge on.

“I don’t think we should compromise” on co-payments, he said. “If the independents and the Labor party want to have a medical research future fund there has to be a co-payment. You can’t have massive investment in medical research funded by more debt.”

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net Iain McDonald, Jim McDonald

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