ALAN JONES:
Treasurer good morning.
TREASURER:
Good morning Alan.
ALAN JONES:
Well, where do you start?
TREASURER:
Well the fact is that everyone, everyone in the community has to help to do the heaving lifting and if the heavy lifting is left on the shoulders of one group or one age group or one demographic, then it will crush them. So we all need to do the heavy lifting and that is effective.
ALAN JONES:
We know that we need to but you’ve seen the polls today. 56% of those polls said to you the Treasurer, ‘don’t touch welfare’.
TREASURER:
Well I suspect if we go to every individual and say, “look would you be prepared to receive less welfare?” they’d say no. If went to them and said “would you be prepared to pay more for healthcare or pay higher taxes” or whatever the case might be, every individual will say no and this is a call to arms for the country.
ALAN JONES:
That’s why I am talking to you today; this program is going around the country, that’s why I am talking to you today. It is a call to arms; we’re all going to have to cop it.
TREASURER:
That is the only way we can just maintain our quality of life Alan. I mean of course the numbers are terrible, and the legacy left by our predecessors is quite awful and horrific in some cases but the fact is, we are now forming a judgment about the quality of life that we want, not just for our children but for ourselves and the dignity that we want to have as we age and as we raise our children, the quality of education, the quality of healthcare and it is not about aspiring to be better; it’s about aspiring to maintain what we have because Labor locked in programs that are in their current form unsustainable so…
ALAN JONES:
So what are you going to do with these? In the forward estimates, I was just explaining to my listeners, Joe Hockey is going to bring down a Budget and then in that Budget he has to budget for the next four years so you can see where it is all going. Well of course this other lot have written educational expenditure which will increase three and a half per cent above inflation, health spending 4.2 per cent above inflation. This is down the track, defence projected to grow in real terms by 13 per cent, the NDIS to grow by 125 per cent. Now these are all unaffordable. What do you do?
TREASURER:
Well you start making the hard decisions. So now for example in that final year, as you correctly say Alan, what happens is, the Government publishes the year, the four years of budget forecasts and projections and the bottom line over those four years. So now the fifth year, which has never been published is coming into our budget cycle. The fifth year was the year that Labor kept, they basically created a tsunami of expenditure in the fifth year. So what they say to everyone is they promise all these programs like NDIS and Gonski and hospital funding and they’d only show you four years of funding but in the fifth year was the massive increase and in effect what they have indicated is that there is, what the truth is now that we have identified, is that the deficit actually blows out substantially in the fifth year even when you have taxes, income taxes at a higher than average rate, even with above trend growth and even with an assumption that all the trends will continue. So the Budget worsens even though the economy gets better.
ALAN JONES:
Well let’s, you are dead right. Let’s just take the current one, which is a big enough headache. You currently have got expenditure at 26 per cent of GDP, way above the average of the last 20 years because you have inherited this expenditure from the Gillard and Rudd Governments but your receipts are projected at 23.1 per cent, I mean this does not add up, expenditure at 26 per cent of GDP, receipts at 23 per cent of GDP. How do you fill the gap?
TREASURER:
Well there’s two things here. It’s not only just about filling the gap, which is a challenge because Labor increased, massively increased expenditure during the Global Financial Crisis. The problem was they didn’t bring it back. They never decreased it the way they promised and they’ve just maintained it at around similar levels over the long term but the revenue as you’ve correctly pointed out, is an increase. Now we’ve got to get the balance right between the rise in revenue but we’ve got to reduce government expenditure and we have to do that across the board…
ALAN JONES:
By billions, by billions…
TREASURER:
Of course by billions. I mean…
ALAN JONES:
Well the health budget. Health all around, tens of billions, tens, hundreds of billions the health budget is $130 billion. Let me start with a simple proposition, you and I shouldn’t be getting one cent of taxpayers’ money for health.
TREASURER:
Well I accept that. I often, if I go to a doctor for, just a bulk bill doctor, I offer to pay and they won’t accept it.
ALAN JONES:
Yeah they won’t accept it. There’s a chance to do something about that. I mean aged pensions, okay, $40 billion a year, rising by almost 7 per cent a year. Should someone with a million dollar house get the aged pension?
TREASURER:
Well Alan I know where you are coming from. I can’t respond before the Budget but I think these are debates that need to be had. I mean the aged pension, we are ageing as a population - that’s a good thing, we are living longer but the challenge for us, as I said to you just before that G20 meeting and certainly the comments took off then, the question for us is how do we age with dignity? How do we give people the chance, if they want to, to keep working or to retire with dignity but at the same time ensure that aged care services, health services and importantly for those most in need, the aged pension, continue to be affordable for the nation.
ALAN JONES:
See Bob Hawke on my program all those years ago, I remember him clearly when he stopped the notion of free university education and imposed a HECS, he said “Alan why should someone from Mt Druitt be taxed to the eyeballs to pay for someone whose going to university when these guys won’t even make it through the university gate?” So a HECS, you go and you are going to pay. So where is the HECS for example in healthcare?
TREASURER:
Well that’s right. I mean there is private health insurance and people are paying their way and we welcome that and we support private health insurance. Of course the previous government was effectively trying to close private health insurance down but we want private health insurance to flourish. But as I said Alan, it is not just about the Budget. The second part of it is the economy, how do we keep the economy growing? How do we actually improve growth to get unemployment down because unless we improve economic growth, unemployment is going to keep on rising.
ALAN JONES:
Well that’s what Reagan did. Reagan decided he’d cut taxes and everyone said, “Oh god you are going to go broke cutting taxes” and he said, “but if I can grow the economy and increase productivity, we’ll pay our way”. So it’s that balance isn’t it?
TREASURER:
Well it is a balance and one of the things we have to do, which I came to - I think a historic agreement with the States on Friday was, Governments can no longer afford to have all their capital invested in assets that are mature and that mums and dads through their superannuation or directly, have the capacity to buy, so that it still remains in Australian hands, it is still done for Australia, the asset is still providing it, but the Governments can take their precious capital and put it into new infrastructure that is going to build the new economy and that new economy is going to grow at a speed that allows us to make our lifestyle affordable. This is hugely important Alan, but we have got to make those hard decisions.
ALAN JONES:
Alright now, we have got to go, we will talk to again you before the Budget but this is going around Australia. What is, if you had a one sentence message for all Australians of all ages listening to this now, on today, and we’ll talk to you again before you bring down this budget, but it is now March because the public have got to get ready for this, you’ve got a mess and we have to tidy it up? What would be your one sentence message?
TREASURER:
If we want to maintain and improve our quality of life, then all of us, without exclusion, all of us need to help to do the heavy lifting.
ALAN JONES:
Okay we’ll talk again soon; we’ll keep talking between now and May.
TREASURER:
That’s cool, thanks Alan.
ALAN JONES:
Joe Hockey.