ALISON CARABINE:
Joe Hockey, welcome to Breakfast.
TREASURER:
Good morning, Alison.
ALISON CARABINE:
Treasurer, we’ll get to the Mining Tax and the Budget in a moment, but if I could ask you first about this new round of sanctions announced by the United States and the EU targeting Russia. Australia already has financial sanctions and travel bans in place, will they now be beefed up?
TREASURER:
Well, Alison, our priority is to bring home the bodies of the Australians that were killed in the plane crash. That is our priority. To give you some perspective, we have unarmed Federal Police trying to get to the site of the plane wreckage. They need to travel through for one and a half hours each way, each day, through heavy military activity run by Russian backed separatists. So the risks for our people are significant and we are focussed on the priority of bringing our Australians home.
ALISON CARABINE:
That’s a very honourable priority but the Russian separatists are blocking access to the MH17 crash site. Barack Obama says intelligence suggests the Kremlin is continuing to support Russian separatists in Ukraine. Should we be doing more to impose some financial pain on Vladimir Putin and his Kremlin cronies?
TREASURER:
We are unlikely to get continued cooperation and we have received cooperation to date from the separatists and also from the Ukrainian Government, but we are unlikely to continue to get that cooperation should we be actively coming to judgement on responsibility for the plane crash. Now, our priority must be to bring Australians home and we are running a difficult operation in partnership with the Dutch to try and do that but it is not easy. We have to deal with our mission, which is the priority of the bringing the bodies home.
ALISON CARABINE:
And it is a very difficult operation if the separatists continue to block access and Vladimir Putin does not pull them into line. Will that firm up the Government’s position as far as his attendance at the G20 is concerned? I mean, how many chances are you going to give him?
TREASURER:
Alison, you are jumping a number of steps forward. The first thing is, do not readily assume that the separatists are blocking passage. There has been an increase in fighting on the route that the significant unarmed forces are taking to get to the plane. Now, that is fighting between the separatists and the Ukrainians. So, we have agreement from both that they would provide passage, but because of the fighting, it is unsafe to [inaudible] that route. Let’s not jump too many steps forward at the moment. We have to deal with the priority of our mission now, which we have a steely determination to do, but as each day passes we have been prevented from undertaking that one and a half hour journey by rather intense fighting along the road.
ALISON CARABINE:
And I understand that the police will try yet again in the next day. We’ll move on to the Mining Tax. You’ve got some new figures, Treasurer, showing the Mining Tax raised just $600,000 in the June quarter, that’s the net figure. You want to repeal the MRRT, but that’s not going to happen is it? Unless you give ground on some of the measurers it is supposed to fund; such as the low income super contribution and the income support bonus?
TREASURER:
Well, Alison, we’ve gone to two elections, two elections, and sought the mandate of the Australian people to repeal the Mining Tax package. The Prime Minister had the courage to stand before the Australian people in the Parliament and identify areas that we could not continue to pay for, such as the Schoolkids Bonus because the Labor Party announced that it was going to be paid for by the Mining Tax…
ALISON CARABINE:
…they didn’t announce that, Treasurer, if I could interrupt. That $17 billion you talk about, the MRRT was never going to fund the Schoolkids Bonus.
TREASURER:
I’m sorry Alison, you are dead wrong, Penny Wong actually stated…
ALISON CARABINE:
She said it in a radio interview, it was never in the Budget though.
TREASURER:
I’m sorry, if the Government at the time, and you’re right, she said it in a radio interview, the word of the Finance Minister, saying that the Mining Tax was paying for the Schoolkids Bonus, and Labor has not disputed that because it was part of a redesign of the Mining Tax package. Now, we were upfront, before the Australian people, before the election, and said we cannot continue to pay for these things out of a tax that raises no money, raises no money. All it does is create sovereign risk for Australia. Now, the Palmer United Party was elected on the basis that they were going to repeal the Mining Tax package. We were elected on the basis that we were going to repeal the Mining Tax package. We asked the Parliament to respect the mandate we have, because ultimately, if we continue to have expenditure that is funded by the nation’s credit card, rather than being funded by the money we earn, then the bottom line is we are going to lose jobs and we are going to have a lesser quality of life in the future.
ALISON CARABINE:
But you’re not going to be able to repeal the tax unless you give some ground on some of those measurers that the tax was supposed to fund, such as the low income super contribution and the income support bonus. Is there any room for compromise here?
TREASURER:
We are always prepared to talk, but at the moment, no one is offering alternative revenue sources. The Labor Party is all over the joint. First of all they said that they were going to oppose the deficit reduction levy, then they voted for it. First of all they said that they were going to deliver $5 billion of savings to help to pay for the Gonski education reforms, now they are opposing their own savings measurers. The Greens had one of the core election promises, to increase fuel taxes, now they’re opposing changes to fuel taxes. We are the only consistent party here. We have said we will get on with the job of fixing the Budget, to strengthen the Australian economy, to create more jobs, we are doing that but no one, and particularly, the Labor Opposition, is offering an alternative path and this is a significant risk to the Budget and the economy.
ALISON CARABINE:
And, Treasurer, you have said that you are prepared to work with any sensible person in the Senate to get the Budget through. Have you actually sat down with any Senators yet to talk this through?
TREASURER:
Well, I don’t disclose what I’ve been doing, but I can say to you that there is work in progress. We are certainly engaged in discussions, as you would expect, as is appropriate. But I believed there was a common goal. There used to be an agreement between the Labor Party and the Coalition, that you need to get back to surplus to take the risk out of the Australian economy. The Labor Party used to agree to that, obviously the Labor Party no longer agrees to surplus Budgets and that is a significant shift that Standard & Poor’s assumed would not occur. They assumed that there would continue to be bi-partisan support for surplus Budgets as a way of keeping Australia’s AAA rating and not putting undue pressure on our economy, but clearly the Labor Party has ripped up any agreement to support surplus Budgets.
ALISON CARABINE:
It has now been three months since you handed down the Budget. Is it time to acknowledge that the Budget you delivered back in May won’t pass the Senate without some significant changes?
TREASURER:
From time-to-time, there will always be changes that come out of a Budget, having said that, the intent of the Budget is to get back to surplus. To provide a sustainable path back to surplus and to help to create an environment where you have more jobs. It is a finely tuned document because it builds structural savings over the medium and longer term to start to pay down the $667 billion of debt Labor would have left. Now, at the same time, you try and preserve the job creation program by building infrastructure and this morning, Tony Abbott and I are going out to the sorts of infrastructure projects that are building the jobs that are going to build a stronger economy. But you can’t have it all without helping to make a contribution, and that’s what the Budget does.
ALISON CARABINE:
Considering how carefully calibrated the Budget is, if you can’t get it through largely intact, get it through the Senate largely intact, would you countenance a mini-Budget later in the year.
TREASURER:
No, we have laid down the best program for reform. And I would ask our political opponents to honour their commitments to the Australian people, much as we are expected to honour our commitments and support us getting back to surplus and if nothing else support the promises that they took to the last election and got the support of the Australian people for.
ALISON CARABINE:
Treasurer, you’ve mentioned employment, there has been a strong business backlash against the Government’s proposed changes to unemployment arrangements, in particular the forty job applications per month, per job seeker. The Prime Minister seemed to be hinting at compromise yesterday. The Government is going to have to walk this one back, aren’t you?
TREASURER:
Well, Alison, it was part of a request for tender. We are going back out to renew the contracts in relation to jobs services. We are seeking feedback in the tender program about the forty job applications, which is the equivalent of a job application in the morning and a job application in the afternoon for someone on unemployment benefits. It was always intended to be flexible, but ultimately we need Australians who are unemployed with benefits to get into work and we are trying, through the Budget, to create an environment where business employs more people and we are now trying to create an environment where people on unemployment actually apply for those jobs that are created out of the Budget.
ALISON CARABINE:
But Treasurer, when you were Employment Minister in 2007, your own department did an evaluation of Howard Government policies and came to the conclusion that increasing job applications does not appear to have translated into increased employment outcomes. Isn’t this new proposal all pain for job seekers and employers for relatively little gain?
TREASURER:
Well, no, I don’t accept that because ultimately we are focussed on ensuring that there is a closer match between prospective employees and employers. We were the ones, and you’re right, when I was Minister for Human Services, I actually set up a more ambitious program of ensuring that people who filled out job application books actually went and applied for the jobs and actually went through a process, because ultimately, when people are paid unemployment benefits we want to make sure they are actually looking for work and that is what we are endeavouring to do.
ALISON CARABINE:
Joe Hockey, thank you so much for your time this morning, good on you.
TREASURER:
Any time, thank you, Alison.