TREASURER:
It’s good obviously to be here in Queensland. I’ll be meeting with Tim Nicholls in a few moments to talk through some of the issues that are important for the Queensland economy, including the fact we are investing in new infrastructure - over $13 billion in Queensland. Particularly there’s the Second Range Crossing in Toowoomba, Gateway Motorway Project and upgrades to the Bruce Highway. Obviously, there are great similarities between the challenges that Tim has faced here since being elected that we have faced in Canberra. But, he does have the advantage of having a strong majority in the Parliament that helps him to get things through.
We do rely on good will from the Labor Opposition, The Greens, Palmer United Party to get legislation through. I would hope they would see common sense. Certainly Bill Shorten’s statement last night offering nothing other than politics, certainly no policy answer and the Australian people would be right to feel frustrated. This morning I met with Michael O’Brien, the Treasurer of Victoria, I met with him in Melbourne. There is a common view amongst the Treasurer’s that we all recognise there is a huge challenge ahead but if we can lift the economy of the entire nation, every State, and the Federal Government will benefit but most significantly, Australian workers will benefit from more jobs and higher wages.
REPORTER:
Are you willing to go to an election to get what you want?
TREASURER:
Well we have just been to an election; we had an emphatic election victory. The Labor Party is showing no respect at all for the judgement of the Australian people when they firmly, they firmly supported our efforts abolish the Carbon Tax and abolish the Mining Tax. Let’s be very clear, the Labor Party is not even consistent in its politics. On the one hand, they’ll accuse us of not having taken policies to the election and then on the other hand, when we do take policies to the election, they certainly won’t let us keep those policies, such as the abolition of the Carbon Tax and the abolition of the Mining Tax. Now we are going to push for the repeal of those taxes, that is hugely important. But you would accept if nothing else, Labor would want to keep its own election promises and there is $5 billion of savings sitting on the table in the Senate that the Labor Party announced before the election and that they now oppose. So frankly they don’t stand for anything, they don’t believe in anything, all they are about is politics.
REPORTER:
What do you think of Mr Newman’s idea of giving a set proportion of income tax to the States based on their tax (inaudible)? Campbell Newman is talking about taking 20 of the 48 cents going back to the State.. [inaudible]
TREASURER:
The fact is, we do have a Federation White Paper process and a Taxation White Paper process, so we are putting in place processes that we’ve announced more than 12 months ago to focus on helping to restructure Federation and get a better balance and also to take to the next election new tax plan for Australia.
When you move money between States or when you move money between the Commonwealth and the States, all the money comes from the same taxpayer. It comes from the same taxpayer. So, our philosophy is those that actually run the operations, should fund those operations, otherwise if the money’s coming from a third party, perhaps the money won’t be as respected as it should be.
So, from our perspective it’s hugely important that we simplify the Federation, we’ve got a Department of Health in Canberra who doesn’t treat one patient, we’ve got a Department of Education in Canberra that doesn’t teach one pupil. We’ve said that ad nauseum for the past few years.
Over the next few months and the next couple of years, this is the thing we’ve got to address.
REPORTER:
When you were crafting the Budget and taking $80 billion from the States, what were you thinking in terms of how the States would pay for that funding hole?
TREASURER:
Let me be very blunt, very blunt. In the next 10 years, we’re putting well over $1 trillion into the States. In hospitals and schools, we are putting over $400 billion into the States. And, every single year the funding increases.
Now, we said these bonus pools created by Kevin Rudd and Julia Gillard were unsustainable, such as the Gonski education plan. We were very upfront, saying we’d only fund four years of that. In fact, Labor didn’t even properly fund Gonski and as you’ll recall, they pulled the money out before the election that was meant to go to Queensland for Gonski over the next four years.
We’re actually putting $1.2 billion extra and we are funding the bonus pool for Queensland that Labor pulled out just before the election. So we’re putting more money into Queensland schools than Labor did.
In relation to hospitals, the same principle, another bonus pool. Julia Gillard never put down a plan to properly fund them, so it was never going to be sustainable. If the Federal Government has to increase taxes, the State Government needs to work out how to best to fund the needs of hospitals into the future.
REPORTER:
So, you think the States are whingeing about this?
TREASURER:
No, they’re entering into a dialogue and it’s perfectly understandable. The nature of this is we said that everyone has to contribute. That’s what we’ve been saying about this Budget – if everyone contributes, we can build a stronger economy and my Lord, a stronger economy is going to be of great benefit not just to the States but to everyone.
REPORTER:
The dialogue is getting pretty heated. The Premier today said the States have to hang together or be hung separately by the Federal Government.
TREASURER:
I didn’t hear him say that.
REPORTER:
Do you think that would be an unwarranted response?
TREASURER:
I understand the pressure the States are under, but I also think in the main they understand the pressures we are under. If you have a weak Federal Government, you will have a weak national economy and the best thing we can do for State Governments is to have a strong Federal Government and a strong national economy.
REPORTER:
So how do they get out of this $80 billion hole? Should they raise GST or push for raising GST or Campbell Newman yesterday talked about getting a guaranteeing income stream from the income tax?
TREASURER:
Can I just explain to you what’s in the Federal Budget. Over the next four years, State Governments are getting more money, more money than they’ve ever got and over the next four years, they’re actually getting an increase in their GST revenue of over $4 billion. The Federal Government’s revenue stream, the things that come to fund us over the next four years actually fall. When you add in the GST, even though revenue rises, the fact is the States get every dollar of the GST. So, combined with all the money we’re spending on projects like the Gateway Motorway, the Toowoomba Range Crossing, upgrades of the Bruce Highway, we are spending more money on the States than ever before. That’s a good story because we are doing it in partnership with the States and we want them to grow. As for the future, we are going to work with the States. I’ve got an excellent relationship with Tim and we are going to work closely with the States.
REPORTER:
The Medicare Co-payment, is the $7 fee up for negotiation? Would you negotiate a lesser payment?
TREASURER:
From my perspective, it’s hugely important that if people contribute now, then we can build the most significant investment in medical research in Australia. The biggest medical research endowment fund in the world. That’s hugely important. In our daily lives, we often see tragedy and we often see the effect of cancer, or Alzheimer’s or something like that. When it affects a member of our family, we all want to do something. A lot of people try to raise money through community organisations and they do a great job. But now, if the entire community contributes to that research, we are going to actually build something that really can find a cure or a treatment for the affliction that is going to bring down ourselves, or members of our family.
So now if we actually invest, and the $7 co-contribution is part of that, if we invest now we can find those cures and discoveries, but we’ve got to invest. It’s also the case that nothing is for free in our lives. Everyone has to pay in one form or another – through their taxes, or in a co-contribution. Now the great irony is, when the Labor party used to have principles, under Paul Keating they introduced Co-payment in relation to the Pharmaceutical Benefits Scheme. He himself said at that time, you need to have a pricing point to ensure that they’re properly utilised services. So, once upon a time the Labor Party did believe in these things. They’re not only pre-Keating, they’re probably pre-Whitlam in one regard because they too tried to introduce a co-payment in relation to Medicare previously but they failed. So, frankly, I don’t know what the Labor Party believes in these days and what I fear is that they don’t know what they believe in either.
REPORTER:
Is the $7 negotiable and when you hit the $20 billion target in six years, you have $2 going to the doctors and where’s the $5 going to go after ?
TREASURER:
It goes to pay for other health services because there is growth in health that well exceeds the growth in the economy. Over time, the growth in the cost of health in Australia is going to massively exceed the growth in the economy. At the moment, we haven’t got the money to pay for it. There simply is not the money there, so at some point we need to be able to fund it.
REPORTER:
That’s the argument being put by the States, the growth in health exceeds CPI….
TREASURER:
This is why we’re having a Federation White Paper ad this is why we’ve got a tax paper, but importantly, we run our own businesses. We’ve got a Department of Health in Canberra that doesn’t run one hospital or employ doctors or treat patients and we’ve got a Department of Education in Canberra that doesn’t teach one pupil.
REPORTER:
So wipe them out.
TREASURER:
There has been significant reduction in the size of the public service in Canberra and I might say I also picked up Labor’s saying there’s no funding for the redundancies in Canberra. That’s completely wrong. Of the 16 500 that I announced in the Budget, 14 000 came from secret decisions made by Labor just before they left and never had the guts to tell the Australian people. So, we have found the money for those redundancies and there’s no sense of satisfaction about this but we’ve all got to live within our means.