MARIUS BENSON:
Arthur Sinodinos, Joe Hockey yesterday made it clear that cuts are coming and the analysis this morning points to the NDIS, the Disability Scheme, as being firmly in the Government’s sites. Is that a fair reading?
ARTHUR SINODINOS:
What we’re saying in relation to the National Disability Insurance Scheme is that we’re fully committed to rolling it out and delivering it and making sure it meets the needs of the eligible proportion of the population. We will do this in the most cost effective way possible, because we have to have an eye for value for money. What the data from the first batch of launch sites has indicated is that there has been some (inaudible) in the potential average cost of doing that rollout. So we have to look at those costs and one of the best ways to restrain them. We have a duty to make sure that we can deliver an affordable NDIS, because if it becomes unaffordable then it’s at the expense of those very Australians that we are seeking to help.
MARIUS BENSON:
Obviously all Governments aim to put all schemes in the most cost effective way, but now the expectation is, because of what Mathias Cormann in particular said yesterday, that perhaps you will take measures like capping the number of people deemed eligible under the scheme. Is that a reasonable expectation?
ARTHUR SINODINOS:
We’re not going to artificially play around with eligibility criteria and anything else. We’re going to look the sector in the eye and work with the sector to make this scheme as effective as possible and we’re going to meet the expectations of those of our fellow Australians who face pretty difficult lives as a result of a disability.
MARIUS BENSON:
Joe Hockey says that a balanced Budget has to be achieved with cuts to spending rather than tax increases, why then increase spending in a policy like the Paid Parental Leave Scheme, which is funded substantially with a tax increase on Australia’s biggest companies.
ARTHUR SINODINOS:
Well one of the challenges of any Government is to, if you like, try and achieve multiple objectives. In this particular case, the Paid Parental Leave plan is our way of trying to entrench a more sort of efficient approach to encouraging labour force participation, particularly by women as primary carers who come in and out of the work force. We have one of the lowest rates of labour force participation by women in the western world, we need to lift that as our population continues to age. So we need to have something like this and that will have an efficiency benefit if we can maximise the amount of time that woman in particular are able to return to the labour force and contribute to the economy more generally.
MARIUS BENSON:
The blame game is well and truly on in relation to government spending. You blame Labor for the level of spending, but the John Howard years have also been blamed by many analysts because in those years Australia was the beneficiary of a one off resources boom not seen the gold rush of the 1850’s and the Howard Government took that as the new normal and set spending accordingly, which only works as long as the bonanza lasts.
ARTHUR SINODINOS:
Look, in relation to that, the Howard Government left Labor with a legacy of no net debt and very substantial investments in the Future fund and other related capital funds, which stood us in good stead. That very good balance sheet stood us a good stead during the Global Financial Crisis. And yes there was increase spending under the Howard Government and there were increased revenues and the Treasury advised that the best way to deal with those revenues was to return them to people as tax cuts to help promote labour force participation. So we were able to achieve some better sort of spending in terms of national priorities, as well as tax cuts and maintaining budget surpluses.
Now to your point about the deterioration the Budget bottom line. Labor had the capacity in 2008 if it was concerned about any potential deterioration in the Budget bottom line from tax cuts or other measures that we had taken to reverse those measures. They did not do that. When they found an opportunity to spend and continue spending, they did. We supported the first round of stimulus spending with the Global Financial Crisis to give [inaudible] to the economy ,but we did not support the ongoing spending when the peak of the emergency around the Global Financial Crisis had gone. And Labor continued, when the terms of trade were at their highest and had surpassed the peaks during our period in office, they failed to reign in the deficit when they had a chance to put in place the spending restraints that were needed. They didn’t need to keep spending growing at an average of 3.5% or so per annum in real terms.
MARIUS BENSON:
Arthur Sinodinos, Thank you very much.
ARTHUR SINODINOS:
Thanks Marius.