Sky News

Subjects: family payments at risk under Abbott, Liberal Party split.

Transcript, E&OE

11 May 2012

PRESENTER: Opposition Leader Tony Abbott says increases to family payments and cash bonuses could be at risk if he becomes Prime Minister. But he says tax cuts would still be possible without a carbon tax. For more, Sky News political reporter David Lipson spoke to the Trade Minister Craig Emerson.

DAVID LIPSON: Minister, thanks for your time. Tony Abbott makes the point that compensation for the carbon tax won't be needed if he gets rid of the carbon tax. That's a valid point, isn't it?

CRAIG EMERSON: Tony Abbott and Joe Hockey would be the only two people in Australia who believe that electricity prices would fall under an Abbott-led government. Electricity prices have risen through the living memory of all Australians. And for Mr Abbott to say 'trust me – if I'm Prime Minister electricity prices will fall and therefore I can cut your age pension, I can increase your taxes and put 800,000 people back into the tax system by dropping the tax-free threshold back to where it was' is complete fantasy.

LIPSON: But it's not just electricity prices. There are other cost-of-living pressures that will be increased by the carbon tax.

EMERSON: There are cost-of-living pressures. They amount to, on average, $9.90 a week and the compensation is $10.10 a week …

LIPSON: So if he gets rid of the carbon tax …

EMERSON: Well the cost-of-living pressures, to the extent that there are, and I've just quantified them, don't ease if Mr Abbott removes the carbon price. Why? Because electricity prices won't fall. It doesn't pass the common sense test. And Mr Abbott is not only targeting the measures that we're putting in place in relation to the carbon price; what he's doing is saying the Schoolkids Bonus is gone under him because he believes families will squander that on the pokies – a deep insult to Australian families. And, indeed, the increases in Family Tax Benefit, of $300 and $600, would be gone, too, because he's said publicly that that's not there forever. And, David, it calls into question the entire family payment system, because family payments are not dedicated to specific purposes. They are there to help families make ends meet. And what Tony Abbott is saying to Australian families is 'I don't trust you to spend this money wisely because you might spend it on the pokies'. So, all family payments – Family Tax Benefit Part A, all of the allowances, the Schoolkids Bonus – are all at risk under an Abbott-led government.

LIPSON: You mentioned there an insult to Australian families. Another insulted group of Australians were those on the North Shore this week. Did the Prime Minister go too far with her language?

EMERSON: No. What the Prime Minister was saying to Mr Abbott is 'get real'. And what she means by that is when you say to families that they can't be trusted to spend a Schoolkids Bonus wisely, when it is just a contribution to the very high cost of sending kids to school, then he is not in touch with reality.

LIPSON: She suggested that he wasn't real because of his geographic location on the North Shore. That he was cosseted.

EMERSON: The evidence is there. That is, Mr Abbott, in a deep insult to the Australian people, to Australian parents, is saying that they can't be trusted with the Schoolkids Bonus. I'll tell you this: the people of Logan City are livid. And they will know everything that Mr Abbott has had to say about their capacity to spend wisely – not only the Schoolkids Bonus but the Family Tax Benefit Part A and the allowances for the poorest people in our community. He's basically applied a blanket insult to Australian families. Now, that is not an indication of a man who's in touch with the struggle that so many families have to make ends meet, a struggle that we are supporting by making these increases in payment, introducing the Schoolkids Bonus, increasing Family Tax Benefit. And Mr Abbott has basically said 'I'm opposed to the Schoolkids Bonus and I'll rip it out'. And in respect of the Family Tax Benefits, 'they won't last forever'. And why stop there, Mr Abbott? And this is what I'm saying to Australian families: if he believes philosophically that people can't be trusted to spend Family Tax Benefits, now we know – and it will only be revealed if he were to win an election, after the election – the extent of the cuts.

LIPSON: We've seen this morning Michael Kroger take some pretty big swipes at his old friend Peter Costello. Your Party's no stranger to internal hatreds, the difference being that many of those battles we saw were among not just sitting Members but Prime Ministers in the Labor Party. Is this a bit of relief, though, for you to see it happening on the other side?

EMERSON: It's declaration of war within the Liberal Party. It seems to be that the fault lines, to the extent that anyone can understand them, are former Howard staffers and supporters, former Costello staffers and supporters. But Josh Frydenberg knows this: that "Comeback Pete" wants his seat. And he will confirm that to you, off the record. He won't do so on the record, I suspect. But it is true, and this is why Mr Kroger has come out today. He's sick of Mr Costello denying a conversation.

LIPSON: They were from the same faction. They were from the same faction, so it's not really war between the two competing …

EMERSON: Once were friends, now deadly enemies. But that has spilled over into the federal parliamentary Liberal Party. Helen Kroger they tried to remove as Opposition Whip in the Senate, unsuccessfully. But again they went after Helen Kroger; Michael Kroger's unimpressed by that. And so it goes on. But there's no doubt that there is open warfare in the Liberal Party and it will continue to spread.

LIPSON: Craig Emerson, thank you.

EMERSON: Thanks, David.

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