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August 20, 2026
PETER STEFANOVIC: Well, to some other major news out of our economy today. Australia is about to crash through the $1 trillion dollar debt mark. That means higher interest repayments when taxpayer money could be spent elsewhere. Joining us live is Shadow Defence Minister James Paterson for this and more. So James, good to see you today. Your first thoughts on crashing through this ceiling.
SENATOR JAMES PATERSON: Well, good morning, Pete. $1 trillion of Labor debt is a very grim milestone for the Australian economy. It's a threshold we've never crossed before, but we are about to cross under Labor. And it ultimately means that all Australians are poorer, and particularly younger Australians who are going to bear the burden of this in the future. It's a direct result of Jim Chalmers' inability to control spending, because revenues are at a 25-year high and rising. But the only reason why that's not delivering a budget surplus is that spending is at a 40-year high outside the pandemic and also rising. And so Labor has driven the budget into deficit, Labor is driving up debt and it's Australians who are going to pay the price.
STEFANOVIC: They're still finding a way to blame you, though, James. I just want to cast this back to post-budget interviews when I questioned Jim Chalmers about it. About owning up to this now being Labor's debt, I should say. This is what his response was back in May.
[CLIP START]
STEFANOVIC: Total spending still outweighs total savings while gross debt is about to break through the trillion-dollar mark. Where is the fiscal control there?
HON JIM CHALMERS MP: Well, first of all, gross debt was going to break through the trillion dollar mark three years ago and because of our responsible economic management ...
STEFANOVIC: It'll be on you though when it does.
CHALMERS: We've been able to get the debt trajectory ... We've been able to get the debt trajectory considerably lower. Even in just the coming year, I think debt is down about $180 billion from the trajectory that we inherited, so debt is down.
[CLIP END]
STEFANOVIC: So it was on you, James.
PATERSON: Look, this is just an accounting trick that Jim Chalmers and Katy Gallagher play. What they do is they take a pandemic-era pessimistic forecast about economic growth and revenue, and they say that's what the Liberal Party would have delivered had it been re-elected. But the truth is that almost all the improvements to the budget bottom line have been a result of a high delivered revenue rather than forecast, not because of policy changes that the government's made. In fact, if you net out all the policy changes this government has made, they've spent more money than they've saved. So they haven't actually improved the budget through policy decisions. They've just got very lucky. High inflation that they've presided over has delivered higher revenue, but they've also presided over higher spending. And so they own every cent of this trillion dollars of debt.
STEFANOVIC: Let's get to the Matt Keogh situation at the moment. You had some pretty passionate claims from Jacqui Lambie last night about issues around the allied health caps. And then I've had veterans on this program as well who say that Matt Keogh was dismissive during a meeting of them this week, didn't seem like he wanted to be there. And their view is that someone who is the Veterans Affairs Minister should be supportive of veterans and they don't feel supported by him therefore calling for him to stand aside. What are your thoughts on that ongoing saga?
PATERSON: The original sin was the policy decisions in the budget to take away support for veterans, including things like the Invictus Games and funding for travel for the Baird family to travel around the country and talk about their son's heroism. And of course, most critically, this $5,000 cap on allied healthcare for veterans. It fundamentally breaks the compact between Australia and our veterans. We ask them to serve. We ask them to take risks. We know that they may be harmed in doing so. And in exchange we say, we'll provide you the support you need. And that's what brought veterans to Canberra this week. I met with them, Angus Taylor met with them, Phil Thompson met with them, and Michael McCormack met with them. But Matt Keogh was too important and too busy to meet with veterans in his own portfolio until he was publicly embarrassed into doing so, and then when he did, he was rude to them. I mean, that is an unforgivable series of mistakes from a minister who just hasn't delivered for his stakeholders, for his portfolio, and the honourable thing for him to do would be to resign. Unfortunately, I think there's no chance that Anthony Albanese will sack him. Because Anthony Albanese is proud to the point of being stubborn and he doesn't want to admit failure in appointing Matt Keogh in the first place. So the only way this is going to change is if Matt Keogh does the honourable thing.
STEFANOVIC: Is there anyone, just to take an argument that I think was mentioned by Katy Gallagher back in the budget days about this allied spending cap, is there any truth to suggestions that it could have been gamed?
PATERSON: Well, like all public spending programs, there are risks involved, and there is potential wastage and there is potential fraud. And it's appropriate that government scrutinise that to make sure that public money is being spent well for its intended purpose. But a $5,000 cap on allied health services is a very blunt instrument. And veterans and their advocates and the service providers in that industry have been warning the government ever since this was announced that it would have adverse consequences for the welfare and wellbeing of our veterans. And they came here to Canberra to share their stories. Now, I think they've made a very good case. I think the government should scrap the cap. But even if you don't agree, the least you can do is meet with them and hear them out. You shouldn't refuse to meet with them. And when you finally meet with them, you shouldn't complain that you're missing drinks at Yarralumla with the Governor-General as a result of having to take a meeting in your portfolio. That is disgraceful conduct by Matt Keogh, for which he has not adequately apologised. And frankly, he's gaslighting these veterans by going into the House and saying that he didn't cross his arms, that he didn't refuse to shake their hands, that he didn't roll his eyes. Well, when veterans are saying that and the Minister's saying it didn't happen, I know who I believe.
STEFANOVIC: Yeah, and just a final one here just this report this morning in your space James as well another drone breach at Williamtown.
PATERSON: That's right, and this appears to be happening on a very regular basis now and the government appears to have no plan to fix it. The talk in this article about some possible new legislation to deal with that, we will approach that on a bipartisan basis as we always do in the national interest in this portfolio/ But laws don't bring drones out of the sky, capability does, and we need counter drone capability on our most sensitive bases and we need it now. Not in twelve months, not in two years, not five years on this government's glacial defence acquisition pathway where everything takes far too long. These incursions shouldn't have happened. The fact that they happened and they were reported to New South Wales Police instead of taken out of the sky shows me that we don't have that adequate protection on our bases and we need to address it as soon as possible.
STEFANOVIC: Yeah, and just a final one here James too, I mean I know you're a fan of AFL as many people are, have you got a thought on this ongoing saga around the Swans at the moment?
PATERSON: Well all of our thoughts should be with the alleged victims in this incident, I recognise the Sydney Swans have taken strong action in standing down their players for their breaches of their code of conduct as players. I think that is appropriate. I hope that the police investigation is now allowed to follow its course. And while, of course, everyone is entitled to the presumption of innocence, if an offence has been committed here, I hope that justice swiftly follows. I do have to say I want to contrast that with the conduct of the Prime Minister in relation to Luke Gosling. Luke Gosling has been charged with a serious offence. He hasn't been stood aside. And if a special envoy in the federal government faces a serious offence like that, needs to stand down, well, I think he should. The Sydney Swans have shown the way, the Prime Minister should step up and do the same.
STEFANOVIC: Shadow Defence Minister James Paterson with us on this Thursday morning. James, thank you.
ENDS