Hockey Says No Australian Austerity in Upbeat Election Pitch

Joe Hockey, the frontrunner to become Australia’s next Treasurer, said the coalition wouldn’t embark on an austerity drive and expressed economic optimism that contrasts with the governing Labor party.

“The Australian economy is on the threshold of its greatest ever era,” Hockey, 48, said in an interview in Sydney today. “There’ll be no austerity. People just expect us to be careful with their money. You’ve got to look after taxpayers’ money as you’d look after your own.”

Economic management has been at the centerpiece of the campaign ahead of the Sept. 7 election after the Treasury last month forecast the budget deficit will widen over the next three years as growth slows and unemployment rises. The Liberal-National coalition, which leads in opinion polls, has pledged to cut 12,000 civil service jobs and scrap mining and carbon taxes, while Labor has warned the opposition’s plans risk tipping the world’s 12th biggest economy into recession as the China-led mining investment boom wanes.

Echoing his leader Tony Abbott’s free-market stance toward the currency, Hockey said Australia must learn to “deal with the cards as they fall.” He said automakers must stay competitive by responding to consumer demand.

Auto Industry

Facing a deteriorating budget position, the coalition plans to cut A$500 million ($453 million) from carmaker subsidies by 2015. Prime Minister Kevin Rudd’s government has set aside A$5.4 billion for the domestic car industry until 2020 and pledged another A$700 million during the campaign.

“Australia shouldn’t be punished for having competition in motor vehicles and we’ve got to make sure we’re producing motor vehicles that the world wants,” said Hockey, as he campaigned with Abbott at the Sydney Markets’ annual mango auction, which raises money for charity. The two were thronged by media and well-wishers as they greeted workers and customers at the markets.

Manufacturers have struggled with a local currency that has traded about 30 percent higher over the past 12 months than its average since floating in 1983. The Aussie traded at 90.99 U.S. cents at 1:50 p.m. in Sydney.

Second-quarter gross domestic product advanced 0.6 percent from the previous three months, when it rose a revised 0.5 percent, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 31 estimates in a Bloomberg survey for a 0.5 percent gain. From a year earlier, the economy expanded 2.6 percent, also exceeding estimates.

The coalition leads Labor 54 percent to 46 percent on a two-party preferred basis, a Newspoll published Sept. 2 in the Australian newspaper showed.

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