MARIUS BENSON:
Joe Hockey, good morning.
TREASURER:
Good morning Marius.
MARIUS BENSON:
A very early morning for a Treasurer speaking from Perth.
TREASURER:
Well that’s the duty, no problems there.
MARIUS BENSON:
You were doing your duty yesterday when you were selling the Budget and one of the points you made while selling that was that any fuel excise increase would actually hit the rich harder than the poor. You said, ‘the poorest people either don’t have cars or actually don’t drive very far in many cases’. You have been pilloried for that remark; do you stand by that remark?
TREASURER:
Well, the Australian Bureau of Statistics data states that the highest 20 per cent of household incomes pay three times more in fuel taxes than the lowest 20 per cent of household incomes. Now, the question is: Why? Why is that the case? Well, higher household incomes usually have more cars and tend to drive further. Now, that is a general statistic, a general statistic, but it also makes a mockery of the Labor Party's claim that somehow the Budget is being unfair because in fact, the Labor Party and the Greens, which have previously supported increased fuel taxes are now opposing them even though higher-income households pay more fuel tax.
MARIUS BENSON:
Well, here is another statistic, this is quoted in the Fairfax papers from the Parliamentary Library, and it is a figure from 2001, and it points out that people on low incomes pay a higher proportion not just in (inaudible) dollar terms but a higher proportion of their incomes in fuel excise and it hits them harder.
TREASURER:
Well, that is the case with any indirect tax, and obviously with the GST, when we introduced the GST there were substantial tax cuts for lower-income people but one of the reasons why we are doing this is because the money, every dollar from the additional fuel excise is going to help to build new roads, particularly for those in outer-metropolitan areas such as in Sydney, the Westconnex project, such is in Melbourne the East West Link and the Gateway Motorway project in Brisbane. Outer-metropolitan area residents also tend to pay higher fuel excises, so what we have said is changes to the fuel indexation will actually go towards roads and particularly roads in the city.
MARIUS BENSON:
But are you arguing that a fuel tax is progressive, meaning that it affects rich people more than others?
TREASURER:
Australian Bureau of Statistics data is not something I’ve concocted, it’s the reality. The highest income quartile of households pays three times as much fuel excise as the lowest quartile in the community. So, you know, this is dealing with the facts. I know there is a lot of commentary about personalities and so on. Bill Shorten is a complete hypocrite on these sorts of things and he has proven to be a hypocrite. He comes to the West and says that he cares about Western Australia but he is voting to keep the Mining Tax and he voted to keep the Carbon Tax. (Inaudible)
MARIUS BENSON:
Just on the fuel tax, you're standing by the basis for your remarks but do you think the remarks have done you personally harm; that you're being portrayed as this cigar puffing Foghorn Leghorn, out of touch with Australians who are out in low socioeconomic areas, forced to own cars and pay for them?
TREASURER:
Well, you know, Marius, the Labor Party is always going to run this personality politics. Good luck to them. Others will join in. I don't care about that commentary. I care about dealing with the facts and ensuring that we have a strong economy and the best thing we can do in Australia for lowest-income households is make sure they have the opportunity to get a job and a well-paying job and everything the Labor Party and the Greens are doing at the moment is making it more difficult to create those jobs. They are doing everything they can to make it harder and not easier for the economy to perform.
MARIUS BENSON:
On the performance of the economy, figures out yesterday show that we have inflation running at three per cent annually and for the past three quarters, the wage growth is running at 2.6 per cent; there has been a national wage cut. Is that good for the economy?
TREASURER:
Well no, we want higher real wages and one of the reasons why we got rid of the Carbon Tax is because that will help to bring down inflation, there is no doubt about that. The fact is, if you want higher real wages, you have to have a more productive economy and that is exactly what our Budget has done. It is about building a strong economy. We have an infrastructure program that is going to deliver over eight times the equivalent of the Snowy Mountains Scheme, over the next decade and that has to be paid for if we are going to create (inaudible) jobs and that is exactly what we are doing in the Budget. (Inaudible)
MARIUS BENSON:
But when you say you want higher real wages, you have been in office for a year and wages have gone backwards, in fact wages are down and unemployment is up; that wasn’t your campaign promise?
TREASURER:
Well, that is what we inherited from Labor.
MARIUS BENSON:
But that was a year ago, in the past year, wages are down.
TREASURER:
Marius, it is an economic fact that unemployment is a lag indicator. We are this year, on average, creating – well, ultimately private sector does, but we are creating an environment this year that is running at three times the job growth each month that occurred last year, under the previous Government. But still we have unemployment too high, too high and the best way to get it down is to: firstly, have a Government that starts to live within its means, secondly, to have sensible plans to bring the Budget back to surplus, thirdly, to invest in infrastructure that is growing the productive economy and fourthly, get rid of the red tape, get rid of the regulation, which is exactly what we are doing with our dedicated (inaudible) to remove regulation in the Parliament.
MARIUS BENSON:
Just on the Budget, you were talking about the need for emergency action; is an austerity Budget in prospect?
TREASURER:
Well, what I said, as opposed to what I am perceived to have said, what I said was, if we do not take action now and start fixing the Budget deficit and debt now, then it may well be the case that in the future, a government will have to do across Australia what the Queensland Government had to do to address the deficit and debt left by Labor and that is to take harsher measures. Now, in our case, we are trying to take the measures now that ensure our spending is affordable. That means, when it comes to new roads we can contribute through the introduction of fuel excise in CPI increases. When it comes to health, we are asking people to make a co-payment in order to make sure the Medicare system is sustainable. In higher education, in order to ensure we can compete with the rest of the world, we are asking people through a loan program to make a bigger contribution. The bottom line is, if we do not make our spending affordable now, then the costs of dealing with it in the future is going to be much greater.
MARIUS BENSON:
Joe Hockey, can I conclude with a word which is – or a question, unrelated to your Treasury responsibility, but the world is watching as tens of thousands of Yazidi flee the Islamic State rebels in northern Iraq and Australia has said that some refugees may be taken; do you believe that special action should be taken to assist the religious minorities – the Zoroastrian Yazidis and Christians who are facing persecution from the Islamic State?
TREASURER:
Well, this is a humanitarian crisis and if we do not act now, then it will be potentially genocide on the scale that we haven’t seen in the world for a long period of time and it is always the case that evil has its way when good people do nothing and we have to stop, we have to stop the systemic slaughter of innocent people wherever it may be in the world. As human citizens of the world, we need to take action, there is no doubt about that and we need to our bit in partnership with the rest of the world. Now, these are the sort of unexpected events that are going to continue to occur and that is one of the reasons why we always need to prepare for the challenges of the future, even though we might not know at this immediate time what they are.
MARIUS BENSON:
Joe Hockey thanks very much indeed for speaking to us from Perth so early on NewsRadio this morning.
TREASURER:
Thanks very much Marius.