NEIL MITCHELL:
Joe Hockey.
TREASURER:
Good morning Neil.
NEIL MITCHELL:
Mid-Year Economic Outlook is close; can you promise us there is no new nasties in there?
TREASURER:
Well, the argument about nasties or not is for other people to pass comment…
NEIL MITCHELL:
I guess I mean new measures – new Budgetary-type measures?
TREASURER:
There has to be new measures. For example, we have always said that when it comes to issues like national security and decisions that we make for new spending during the course of the year that we need to find savings to meet the cost of those new measures. Having said that, there has obviously been a deterioration in revenue associated with the massive fall in iron ore prices and we are not going to be trying to find new savings to make up for that revenue shortfall.
NEIL MITCHELL:
But will there be measures for new savings and or new revenue?
TREASURER:
Well, there is always a saving to be made when you have got a Budget of around $400 billion a year but we are going to be very measured, Neil. We are certainly not going to do anything that would harm the Australian economy.
NEIL MITCHELL:
Would you be able to do something like regulate the $7 co-payment in [inaudible].
TREASURER:
Look Neil, we have stood by this policy, we stand by this policy. It is hugely important that we make sure that Medicare continue to be affordable and accessible to everyday Australians and one of the great challenges – and we should celebrate it, but one of the great challenges we face is that we are an ageing population and as an ageing population there are demands on the health system and we need to make sure that Medicare is affordable well into the future.
NEIL MITCHELL:
But I understand, that but can you do something in the statement rather than rely on getting it through the Senate?
TREASURER:
Well Neil, we have been really determined to get our Economic Action Strategy into the Senate and through the Senate. Quite frankly, it is now time for Mr Shorten to recognsie that the Labor Party has to play a constructive role rather than a destructive role in Australia’s future.
NEIL MITCHELL:
Yeah but that is not an answer, Treasurer.
TREASURER:
Well, that is my answer. We are determined to get our plan through the Senate, Neil. It is hugely important…
NEIL MITCHELL:
But in a couple of weeks we are going to sit down and get this statement from you. Are we going to have material in that statement that ruins Christmas for us?
TREASURER:
No.
NEIL MITCHELL:
No?
TREASURER:
No, absolutely not. I want Australia to spend money; I want Australia to have a great Christmas. I want people to not only make Santa happy, but make Australia happy by going out and shopping.
NEIL MITCHELL:
Now, I was going to ask you that. I assume, as we go into holidays and if there is any money around, this is a big spending time; you want people to spend?
TREASURER:
Absolutely, absolutely. I want Australians to get on with their lives. Tomorrow will be better, Neil. Tomorrow will be better.
NEIL MITCHELL:
When is tomorrow?
TREASURER:
Well tomorrow – next year. Next year will be better than this year and the year after.
NEIL MITCHELL:
What February, January, January, February, December?
TREASURER:
The whole year. I mean, it is going to get better. Look Neil, we live in a great country, we live in a fantastic country. We are so blessed but we have earnt this prosperity. We have as a nation worked together to earn this prosperity and now is the time for us to work together again to build the prosperity of tomorrow.
NEIL MITCHELL:
And what do we need to do other than spend? I mean what else are you saying we need to do for prosperity?
TREASURER:
Well as a nation we need to be confident about the future, to have faith that we can get greater prosperity. And I will tell you how we do it Neil, you know one of the things that you learn when you grow up in a small business family – number one: you have got to live within your means and that is what we are trying to do by fixing the Budget. Number two: you have got to try and grow your market share and one of the reasons why we have signed free trade agreements with Korea and Japan and China and there is more to come, is that we are opening up our future, particularly in the Asian region where we are going to see the emergence of this massive two billion people middle class that want the sort of things that Australians can give them.
NEIL MITCHELL:
In this rebuilding we have to cop some pain as well, don’t we?
TREASURER:
Well, we are. This is the transition. We are going from a period of massive investment in the mining industry and construction in the mining industry to production. So, we are exporting; our volumes are increasing dramatically. We are exporting our socks off in iron ore and coal and we are about to go into an incredible LNG phase [inaudible] but the thing is that we are not building those new mines anymore so the construction jobs are no longer in the mining sector and that is why we have to fire up the infrastructure sector, building the roads and the rail and the ports and the airports that are going to lay the foundations for our future prosperity.
NEIL MITCHELL:
I would like to ask you about that in a moment, but we are told today to expect a reduction in living standards. Now, what does that mean to the average person? If I am [inaudible] reduction in living standards sounds scary. What does it mean? How does it affect me?
TREASURER:
We are warning that that is the case…
NEIL MITCHELL:
But what does it do?
TREASURER:
Well, it basically means that you have less prosperity…
NEIL MITCHELL:
Does it mean that you can’t buy things that you want to buy?
TREASURER:
Well, in everyday terms, it does and you know it is the same lesson at a national level as it is at a local level as it is in your family budget, that if you live within your means, if you pay down your debt, you have choice when you have money. You have got a choice about whether you buy a new car or renovate the home or pay for an even better education for your children. You have got choices where you can go for a holiday. [inaudible] So, this is the same for the nation, Neil.
NEIL MITCHELL:
But does this mean that if there is a reduction in living standards, I have got to put off the new car, I have got to put off the new renovations?
TREASURER:
No, no it doesn’t and in fact if you are living within your means, if you are living within your means as an individual, you will be fine. What I am trying to do is ensure that all Australians have the opportunity to live within their means. Now, our national income has come off, our national income has come off because we have relied heavily on iron ore exports. Iron ore prices are now around 35-40 per cent less than they were at Budget time. Iron ore is one fifth of our export income as a nation – one fifth. So what we are doing Neil is we are saying, ‘okay our export income has come down, we have got to be more efficient and try and do what we can in Australia’. Get the reforms through that are going to strengthen our economy overall and that means we are better prepared for what could be continuing low prices for iron ore and coal and so on.
NEIL MITCHELL:
Well your reforms – or several of them have been blocked. That is why I look at this Mid-Year Outlook and say well is there going be trimming in this. There is going to have to be trimming, isn’t there?
TREASURER:
Well, even if they are blocked, you can’t give up Neil. You wouldn’t expect us to.
NEIL MITCHELL:
[Inaudible]
TREASURER:
Let me go back a step. If we are blocked at first, we have got to keep trying and you know, there may be an argument about reshaping a particular individual initiative or offering an alternative, but we must keep trying to fix the Budget because ultimately, if we strengthen the Budget, we strengthen the household balance sheet, we have a greater chance of withstanding the pressures that might come in the future, but we also have got a greater chance to make the right choices in the future because we have money in our pocket.
NEIL MITCHELL:
Okay it is seventeen to nine. Joe Hockey – he is talking about reshaping initiatives; does that mean Paid Parental Leave? I ask him in a moment. What about Victoria and the $3 billion, I ask him in a moment. But what about you? He says spend more for Christmas. What will you spend for Christmas? Have you got the money to spend for Christmas? Can you afford it? What is the atmosphere in the real world? Is the economy slowing, or not? If you are in small business, if you are wage earner, 9690 0693 – 13 13 32.
[AD BREAK]
NEIL MITCHELL:
[Inaudible] assessing or changing some of their commitments and I began by asking whether he was going to fiddle with Tony Abbott’s infamous and much criticised Paid Parental Leave promise.
TREASURER:
I’m not fiddling anything.
NEIL MITCHELL:
There are reports today that it is being reworked. Is that right?
TREASURER:
Well, I am not going to speculate on any individual initiative other than to say, we are doing everything we can to continue with our policy to increase workforce participation of women, to help families get more flexibility in the way they go about work and to build the prosperity that people expect.
NEIL MITCHELL:
But would it be fair to say all individual initiatives as you say, are actually on the table now – having a look at them?
TREASURER:
Well, no. We are working our way through individual Budget initiatives but there is a much bigger picture here, Neil. Next year we are going to have a look at the structure of the Federation. For years, people have complained about duplication between Commonwealth and States governments. I remember Jeff Kennett starting this conversation years ago about health and education in Canberra and you know, this is something that has been coming and if we are going to be more efficient and we are going to be better at what we do, we need everyone to participate and I urge the new Premier of Victoria to participate in this discussion.
NEIL MITHELL:
Are we talking about efficiencies and trimming or are we also talking about revenue measures? Is there likely to be increased taxes or increased revenue?
TREASURER:
Well, no. In fact, our overall revenue [inaudible] is actually down, Neil.
NEIL MITCHELL:
Yeah but you can get it up by putting [inaudible] some more taxes.
TREASURER:
Look, I have said before that we are not going to have any significant new initiatives that are going to harm the Australian economy and at this time, introducing new taxes would effectively hurt the Australian economy.
NEIL MITCHELL:
You are talking about infrastructure and spending; Victoria – is Victoria still a chance to get its $3 billion, despite the election result at the weekend?
TREASURER:
Well, we have already given Victoria $1.5 billion…
NEIL MITCHELL:
Yeah but you are going to take it back. I mean, is it going to stay there?
TREASURER:
Well, I am waiting to see what the new Premier does, Neil, and I would just say to you that the National Accounts that came out yesterday show that it is vitally important that Victoria roll out infrastructure and roll it out fast.
NEIL MITCHELL:
But he has got a plan for – he says he is going to roll out infrastructure, just not the East West; will you [inaudible] of the deal?
TREASURER:
Let me just finish. One of the reasons why we committed $3 billion to the full East West programme was that we wanted the jobs to start now and as I just said before, the mining industry has being coming off quite rapidly. That is one of the reasons why the National Accounts yesterday were below the overall market expectations. So, all those construction jobs in mining – people are leaving those mines now because they are fully built. So, that is why, as we speak, Neil, there are 250 Victorians working on East West and that is ramping up to 7,000. So, when we gave the commitment for East West, it was on the basis that the work actually had to start now. So, it is starting now. So, I would say to the new Premier that if he has an alternative where the work actually starts now and immediately he can find 7,000 jobs, then we are always prepared to listen. Having said that, I see no alternative to East West because work is underway right now, right now.
NEIL MITCHELL:
But if he can come up with a proposition that starts work immediately, the money could be there, right?
TREASURER:
Well, I need to know what it is. We need to know what it is. How many jobs are going to be created and how are they going to transfer the 250 workers already on East West directly into these other projects he might have but, more importantly, the pipeline of 6,750 other workers that are expecting a job on East West, now.
NEIL MITCHELL:
Treasurer, thanks for your time. Just finally, there are a lot of old war horses in the papers today telling you all how to sell a message and what Tony Abbott needs to do; what is the message? I mean you haven’t had a great year, well you haven’t had a great few months…
TREASURER:
Well, I don’t accept that, Neil. Look you know, you are a reasonable man [inaudible] you are a reasonable man…
NEIL MITCHELL:
No I’m not.
TREASURER:
Well, okay you are not. I am trying to pump up your tyres here Neil, it is Christmas but you know, this year, we have signed free trade agreements, we have delivered in full on getting rid of the Carbon Tax and getting rid of the Mining Tax. We are getting the Budget under control…
NEIL MITCHELL:
So, you have got to sell better? Is that the [inaudible]
TREASURER:
Well, give me a chance. I am having a go here. We have got rid of 57,000 pages of legislation costing business and people $2 billion a year…
NEIL MITCHELL:
Yeah and you have been frustrated in the Senate and you have broken promises.
TREASURER:
Don’t be so negative, Neil. Be positive about [inaudible] we have approved $1 trillion of projects – 300 projects that are going to build the jobs of the future. It has actually been a significant list of achievements this year, but you know what, Neil? There is much more to be done and we have a steely determination to do it.
NEIL MITCHELL:
Alright, well give me points out of 10 for your year, what was it?
TREASURER:
Points out of 10 – I will leave that to you, you’re the commentator.
NEIL MITCHELL:
What if I gave it a five?
TREASURER:
Well, I would be disappointed.
NEIL MITCHELL:
Thank you for your time, have a good Christmas.
TREASURER:
Thanks Neil, see you later.