16 April 2016
by Jacob Greber
Malcolm Turnbull turns Moody's warning on Labor
Prime Minister Malcolm Turnbull says this week's damning Moody's assessment about Australia's failure to bring down debt needs to be heeded by the Labor opposition leader.
"Moody's is giving advice to the effect that we have to live within our means," Mr Turnbull told reporters in Beijing. "You may have heard me say that before, and really the lesson of the Moody's advice should be heeded by Mr Shorten."
The reports follow Thursday's politically explosive warning by Moody's that the failure of the political system to deliver genuine spending restraint has left Treasurer Scott Morrison with almost no choice but to increase taxes if he wants to preserve the AAA rating.
Labor has seized on the report as vindicating the opposition's decision to raise some $100 billion in extra taxes and wind-back concessions on high-end superannuation.
However in an effort to return the pressure on Labor, Mr Turnbull attacked the opposition leader by accusing him of making $51 billion in unfunded spending promises.
"Every dollar we spend, as you'll see in the budget on May 3, will be funded," Mr Turnbull said.
"What Mr Shorten is promising is simply higher tax and more debt, bigger deficits. We don't know which new taxes he'll propose but the one he has proposed already are absolutely calculated to slow growth, inhibit employment."
Mr Turnbull reiterated his criticism of Labor's plans to cut negative gearing would undermine the economy's transition away from mining.
"Whereas every single element of our policy, [the] China-Australia free trade agreement, innovation, competition, investment, infrastructure and more that you will see in the budget, everything we are doing is calculated to drive growth and drive innovation," he said.
Mr Shorten, speaking earlier on speculation the government will adopt Labor's plans to hike tobacco excise and cut super concessions, said it was clear the "budget is a mess, the government doesn't know what they're going to do or in fact what they're doing.
Moody's timing criticised
"For months and months they've consistently attacked Labor for making sensible budget repair," Mr Shorten said.
"Then yesterday we see one of the world's preeminent rating agencies basically confirm that the Turnbull-Morrison approach on the budget is just rubbish.
"And today, we now see the government picking up some of Labor's very sensible ideas."
The bluntness and timing of the Moody's report - including its overt listing of Labor's policies - has surprised Canberra insiders.
Senior levels of government were particularly angry over what has come to be regarded as a political statement by Moody's given the agency would have known that the great bulk of the budget is already locked into place.
Therefore they would have known that the document's impact on actual budget settings would be minimal.
Another interpretation is that the agency has moved to flag its concerns in advance in order that it can point back to its warning when and if it moves to downgrade the AAA rating.