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James Cullen on Sky News First Edition: Surplus, economy, coronavirus, Sports rorts.

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PETER STEFANOVIC, HOST:  Well let’s bring in James Cullen now, the senior director of government relations at Cornerstone Group.  James, good morning to you, thanks so much for joining us as usual.  A bit to chew through here, particularly when it comes to the economy.  You would have noticed that the Treasurer has definitely watered down his expectations, I suppose we can put it that way, when it comes to the surplus which will be delivered this year.  Is it hanging in there, or is it gone?

JAMES CULLEN, SENIOR DIRECTOR, CORNERSTONE GROUP: There’s a strong expectations management game from the Treasurer and the Government which is understandable given what we’re seeing unfold across global markets.  I think we’re very close to potentially a global pandemic with the coronavirus, which obviously will have tremendous impacts both here and abroad, and obviously China being a key market for us as well. We’re getting to the point, regardless of whether or not we end up with a surplus for the current financial year, if it is a smaller surplus I think there will be a lot of Australians scratching their head and going “what’s the point, what’s happening?” and the tremendous task at hand in terms of rebuilding bushfire affected communities and obviously the work that’s going to have to happen with potentially this global pandemic and what it means for Australians, for Australian businesses, the kinds of resourcing that’s going to be required. So at the moment it’s kind of like there’s obviously a political value in the surplus, we know that, I’m just not necessarily sure that it’s going to have the same value, if we’re really facing these tremendous impacts on the economy and the home front.

LAURA JAYES, HOST: Yeah, that’s what I was going to say as well, back in black, there’s an obvious political goal, and an easy goal for Labor to kick there.  But does anyone really care about the surplus, and could this actually backfire against Labor if they go too hard on trying to pin the Government on that, given we’ve seen coronavirus and bushfires?

CULLEN: I actually think the risks are more with the Government because we’ve had this back and forth with the Reserve Bank and the federal Government over the last twelve months which we’ve spoken about previously, about stimulus and whether or not there was a need for fiscal policy to be doing more to support the Reserve Bank as it looked to cut rates and stimulate investment and increase productivity and wages in the economy, because god knows we need that.  So I think the pressure’s on the Government really at the moment.  Labor’s been calling consistently for more to happen when it comes to bringing forward income tax cuts, and some investment stimulating measures like an investment guarantee, so I really think my concern is that we may see some of these measures come forward in the Budget, whether or not that’s too late I think is really the issue here, because we’re looking at a December quarter which everyone is cutting their forecasts, the March quarter is going to be really tough.  Is it too late, I think we really need to be getting measures out the door now, to be helping boost employment.

STEFANOVIC: But it’s probably not this quarter right, that’s going to be the one that may be in the negative, it’s the next one?

CULLEN: I suspect we’re in a tough quarter now, and I suppose if the coronavirus …

STEFANOVIC: Still negative, do you think though?

CULLEN: … I’m not sure guys, I think it’s going to be a bit flat and I suspect we’ll see banks trim their forecasts for it as well.  You’re right, I think if coronavirus and some of the concerning forecasts around what might happen there, we are really going to see a tough next quarter, no doubt about it.  But I think it all underscores the fact that governments probably need to be doing more, not less, and look in terms of the coronavirus and the handling of it, I think to date the Government’s done a pretty good job.  The daily updates, the Chief Medical Officer, giving confidence, working with the states and territories, I think Australians are going to expect a lot more of that if we see some of those concerns continue to play out, and particularly the economic impacts.

JAYES: Just quickly, are you more concerned about the 136 emails between Bridget McKenzie’s office and the PMO, or the fact that North Sydney Pool got $10 million from a “regional” grants fund?

CULLEN: I don’t know where to start guys, we’ve got the sports inquiry unfolding, I think the Commission’s in front of the sports inquiry, so no doubt there’ll be more to come. I think it’s going to be the gift that keeps on giving, and I really think that if the Government had acted earlier with Bridget McKenzie, we mightn’t have seen the revelations continue to come out.  All of this underscores the need for a federal integrity body.  Australians’ approval and trust in the federal Government and government in general is at record lows.  I think we do need that kind of independent, regular and ongoing scrutiny, absolutely.  The role of the PM’s office here, and the definition of ‘regional’, and that’s before you look at the McCormack grant and McCormack lobbying for the aged care grant in his electorate as well.  So there’s a lot there…

JAYES: Quite a list.

CULLEN: … I think we’re going to see a lot more, you guys have been covering today the Victorian roller derby centre.  There’s going to be those stories all across the country, well deserving sports stories who deserve funding and didn’t get it, and we’ll probably see in the Budget, ironically, yet more money to cover those grants.

STEFANOVIC: Alright, James Cullen, appreciate your insight again, thank you very much and we’ll talk to you again next week.

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