Julie Bishop - Member for Curtin

Sky Business News with Brooke Corte

Subjects: Greek elections; G20 summit

E&OE…

BROOKE CORTE    We are joined by the Shadow Minister for Foreign Affairs and Deputy Leader of the Opposition, Julie Bishop, also now from Canberra. Julie Bishop thank you for your time. What is your response to what we have seen out of Greece on the weekend?
 
JULIE BISHOP    I think there should be widespread relief that we have avoided a catastrophic exit by Greece from the Euro. The pro-austerity, pro-bailout party New Democracy appears to have had a decisive win. It is proposing a unity government in Greece so at least there will be some political certainty and now we need to see some action on the economic front, and this where the hard work will really be beginning. New Democracy have indicated that while it embraces the main targets of the austerity program it does want to renegotiate parts of it, it wants to tweak part of it, so there is still a long way to go and a lot of hard work ahead.
 
BROOKE CORTE    So some stability, is it realistic to expect that we get action of the type that you are speaking about any time soon? It just sounds so difficult to get all of them together to agree on the same thing. When do we expect action? We’ve been hoping and wanting it for many years now.
 
JULIE BISHOP    Well first New Democracy will have to form government. It has called for a unity government so there may well be a coalition of pro-austerity, pro-bailout parties but as long as there is a decisive win for New Democracy at least there will be some political stability and then they can get on with the business of embracing the austerity package.
 
I believe that New Democracy will want to make it more palatable and there have been some discussions from European leaders that perhaps they could reduce interest rates, perhaps extend the repayment periods but Germany, for example, has made it quite clear they will not renegotiate the targets relating to budget deficits. So the underlying problem remains, the Greek debt remains, and now they have to get on with the hard work of reducing the deficit and starting to reduce debt. That is going to mean a lot of pain in pension and wage and job cuts, and so we can only hope that the new government is able to get this underway as soon as possible.
 
BROOKE CORTE    If the problems and the debt remain as you say, and everyone would agree, do you think the confidence problem here in Australia that we have had watching all of this also remains?
 
JULIE BISHOP    No question. There is a lack of business, consumer and investment confidence in Australia. People are concerned that there are dark clouds gathering still on the European global horizon generally. We have got less recovery in the United States than has been expected, we have got slower growth in China than had been expected and parts of Europe are in recession, some say in depression. So we are looking at this concerning global picture. And of course Australia is so dependent upon China wanting to buy our commodities at high prices that people are worried about what will happen and unfortunately our government has squandered many of the opportunities that we would have had to resist any further global downturn. This would have to be the worst time for the government to be introducing an economy wide carbon tax, for example.
 
BROOKE CORTE    I suppose it would be one of the better times to be cheering about the state of Australia relatively speaking at the G20, for example, for us to say “if you are looking for safe havens Europe is still in a mess look at Australia, invest in our country”.
 
JULIE BISHOP    Well there is a good investment message to send but unfortunately Australia also has a sovereign risk issue. Australia is being mentioned in the same sentence as sovereign risk because the government is introducing an economy wide carbon tax, it is introducing a mining tax, there is a lack of certainly in business circles and Australia’s debt and deficit continues to grow.
 
We have had, by Australian standards, four of the largest budget deficits in history, the descent into debt by this government has been the fastest in living memory and so the options that we would have had available should there be another global downturn are no longer there. They have been squandered by this government. And I have to say, the introduction of an economy wide carbon tax is very disturbing for overseas investors.
 
BROOKE CORTE    Julie Bishop, thank you very much for your time this morning. It is such a big story so we appreciate it.
 
JULIE BISHOP    My pleasure.
 
BROOKE CORTE    Thank you. Foreign Affairs Shadow Minister Julie Bishop there.