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Scott Morrison uses S&P downgrade to push crossbench to cooperate – politics live John Howard on Iraq: there was no lie, there were errors of intelligence – politics live
(35 minutes later)
3.39am BST 4.13am BST
03:39 04:13
Chris Bowen: Today is a sombre day for the Australian economy John Howard does not share the view that Islamic state grew out of the Iraq invasion.
There is a whole lot more of Scott Morrison which I will bring you in a minute but Chris Bowen is on now. I don’t share the view that the terrible conflict in the Middle East is the direct consequence of the operation in March of 2003. I don’t share that view.
Today is a sombre day for the Australian economy. Of course, Australia’s AAA credit rating is not being downgraded today but there is a clear indication from Standard and Poor’s that they are deeply concerned about the fiscal situation. And it has made the likelihood of a downgrade increase. Of course, during the recent election campaign, on behalf of the Labor Party, I warned the AAA credit rating was under real pressure. I said that no matter who was receiving the incoming treasurer’s briefing, it would contain the same information, that action was needed to deal with the AAA credit rating. 4.12am BST
3.32am BST 04:12
03:32 John Howard: there was no lie, there were errors of intelligence
Wouldn’t fiscal consolidation, Treasurer, though, be helped if you would embrace tax reform and look to boost the revenue outlook highlighted by S&P with measures to broaden the base of GST or increase the rate in other tax reform measures to increase the revenue? Howard:
Morrison: In the years that have gone by there’s been this constant claim that we went to war based on a lie. There was no lie. There were errors in intelligence but there was no lie and can I also make the observation that the Chillcot Report imposes a standard of beyond doubt. Can I offer the view that when you’re dealing with intelligence it’s very, very hard to find a situation where advice is beyond doubt. Sometimes if you wait for advice that is beyond doubt you can end up with very disastrous consequences.
The budget actually had a number of those and particularly in relation to superannuation which, again, was clearly not a measure we put out there because we thought it would be popular. We put it out there because we thought it was necessary. 4.09am BST
On the GST, he says the Coalition looked at it and the numbers didn’t add up. 04:09
3.29am BST John Howard says while it was subsequently found not to be the case, the advice was there were weapons of mass destruction.
03:29 It was the judgment not only of the joint intelligence committee in the United Kingdom, and that was informed principally but not only by MI6 but also the national intelligence assessment of October or November of 2002 in the United States which is a distillation of the views of all of the American intelligence agencies including the CIA was that Iraq did possess weapons of mass destruction.
What prospect is there for budget repair given you will have to talk straight with the cross-benchers to get bills through parliament?
Morrison:
S&P are saying that they’re concerned about that, clearly. They’re concerned that the outcome of the election - not the budget, not the policies in the budget or the actions of the government - but the outcome of the election makes them concerned that the pace of fiscal consolidation may be post-poned and that’s why I say, as an invitation more than anything else to the parliament as a whole, is this is something we have to work on together.
(I’ll do a factcheck on this claim.)
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3.27am BST 4.08am BST
03:27 04:08
Morrison note to parliament: credit agencies are watching Context is everything, says John Howard who disagrees with Chilcot
Scott Morrison: His views are naturally informed by subsequent events. We are all informed by subsequent events but as somebody who’s been in a decision-making position in relation to these matters, I make the obvious point that you make judgements based on the information available at the time. Context is everything, as a wise man once said, and it’s very important to keep that in mind.
The parliament will return once a government is formed, budgets will be taken through the parliament and there will be keen eyes watching in rating agencies to see how the parliament responds to ensure that we can maintain the trajectory that the government has set out so that is the consequence of today. His view seems similar to Tony Blair.
3.25am BST 4.04am BST
03:25 04:04
Q to Morrison: Is this your banana republic moment? John Howard is speaking about the Chilcot report. He makes the caveat that he has not read the very large report entirely.
No, I don’t think it’s a time for those sort of alarmist type comments. He does not think another enquiry is necessary.
3.24am BST 3.57am BST
03:24 03:57
Scott Morrison: this is why we have to live within our means Bob Katter: prayers to the good lord
Scott Morrison says the S&P statement provided “important context” for an incoming government, setting out the reality of fiscal and global economic environment. Here is a little bit of Bob Katter from a release today:
This is why we have been saying we need to live within our means, says Morrison. It is an important reminder. The financial oppression of the elderly, the struggling abandoned young families will be addressed
Fiscal consolidation cannot be postponed or slowed... It looks like we’ll be in a very powerful position.
What they’re saying here today so what this means is that our credit rating remains at AAA. That is unchanged as of today...I think it is important then that the parliament and the government, which ever should be formed, bears this keenly in mind as they work through these issues over the weeks and months ahead. We will be saying our prayers to the good Lord and we hope we can get enlightenment through to the people to have to date exercised power in Canberra.
3.15am BST 3.54am BST
03:15 03:54
Ben Raue Bob Katter and John Howard are both coming up in separate press conferences shortly.
3.12am BST 3.51am BST
03:12 03:51
Scott Morrison is coming up shortly. So is Chris Bowen, in a different room obviously. Just a quick take from chief economist of AMP Capital, Shane Oliver, before doubling back to Bowen and Morrison.
On an entirely separate matter, our election analyst Ben Raue has called Chisholm for the Liberal party. That means our count is Coalition 71, Labor 66, with five independents/minors. The rest in doubt. Being put on negative credit watch by a ratings agency is not surprising. Australia has now seen years of slippage in returning the budget to surplus and the messy election outcome threatens more slippage whichever way it goes.
In short, a downgrade is not disastrous but it would be a bad sign for Australia.
Of course being put on negative watch is not the same as a downgrade and a country can remain on a negative outlook for up to two years without being formally downgraded.
But I suspect it’s probable that a formal downgrade will follow unless the new government is able to hold the line on the budget deficit projections which will be hard given the likely state of the Senate.
The $A fell slightly on the news from around $US0.753 to around $0.747 but has since recovered to around $US0.75. Bond yields were little changed.
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3.05am BST 3.48am BST
03:05 03:48
Chris Bowen is asked, given the cost of Medicare’s growth into the future due to demographics (ageing population), do you need further revenue measures to pay for it?
And we have. We led the debate on negative gearing, capital gains tax reform, high income super, we were talking about this 18 months ago, announcing detailed policies. The now treasurer railed against it, tobacco (tax), and we have led that. If you’re asking will we support an increase in the GST, the answer is no.
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at 3.12am BST at 3.49am BST
3.00am BST 3.45am BST
03:00 03:45
Here is a snippet from the S&P statement: Bowen is asked whether Labor will support more of the government’s savings measures. He says we have supported some, not others. Yet the Coalition is still relying on savings which will not pass the parliament.
Scott Morrison’s budget is based on those measures passing as well as highly heroic assumptions on things like the iron ore price. They will not pass and it is about time he was honest about it to the parliament and to the people.
3.43am BST
03:43
Bowen is asked, given the statement, is now the time for a banking royal commission?
I think those two issues are completely unrelated, with respect. The ratings agencies have expressed no concerns about a royal commission into the banks.
3.42am BST
03:42
Chris Bowen:
The Liberal and National parties said there was a budget emergency and that they that they would be the party to fix it and of course what we’ve seen is three years of policy missteps, false starts and missed opportunities, particularly since Malcolm Turnbull and Scott Morrison took the reins we’ve seen a lack of strategy and a lack of coherence in their economic approach.