ANDREW O’KEEFE:
Joe, welcome to the show and thanks for making the time after this huge week. For democracy to function properly, people need to know not only who they're voting for, but what. Do you accept that this Budget in a sense breaks faith with the Australian people by misleading them about your stated policies?
TREASURER:
No, we said we would get rid of the Carbon Tax; we are trying to get rid of the Carbon tax. Our opponents are blocking us from meeting that election commitment at the moment. We hope that they will see sense. We said we would get rid of the Mining Tax, we’ve done that, we said that we would stop the boats, we are doing that. We said that we are going to fix the budget; we are trying to do that. And we have laid down I think, the most fundamentally honest document that has been around for years in a Budget. And we said that we would reduce taxes and we are actually doing that in the Budget. We are actually, got less tax collected than would have been the case if the other mob were re-elected. So you know I mean, we are doing our best.
MONIQUE WRIGHT:
There’s been a lot of things though that, let's listen. Firstly lets have a listen to what the Prime Minister had to say in August 2013.
“The condition of the Budget will not be an excuse for breaking promises. Exactly right. We will keep the commitments that we make.”
We have heard that several times in the week. Now that's a promise not to break any promises isn’t it? Are you saying that you are not breaking any promises?
TREASURER:
Look, we can argue the politics of it. If you say that we are breaking promises, that's your call.
MONIQUE WRIGHT:
It’s not just us….
ANDREW O’KEEFE:
It's Australia's call. We are inundated with people saying it….
TREASURER:
Okay Australians can call that. I totally accept that, I totally accept that. I am not going to stand idly by while there is a fire in the kitchen of the home and say sorry I'm not going to put it out. I am not going to do that. I owe it to the Australian people and to families and the future, to fix the mess. Now, if people think this is all a joke, that's their entitlement.
ANDREW O’KEEFE:
But you said you would fix it one way and now you are fixing it another way. You will remember this infamous quote from the Prime Minister; so infamous it's now been turned into a ring tone:
“No cuts to education, no cuts to health, to change to pension, no change to the GST and no cuts to the ABC or SBS.”
TREASURER:
Okay lets go through them…
ANDREW O’KEEFE:
There are several ways in which the promises have been broken….
TREASURER
Let's go through them. Gonski education funding. The Labor Party pulled $1. 2 billion out of it just before the election that was going to Queensland, West Australia and Northern Territory.
ANDREW O’KEEFE:
Because they didn't sign up. Because they didn’t sign up. After the election…
ANDREW O’KEEFE:
That's understandable. They didn't sign up, they don't get the money.
TREASURER:
After the election, we said it's unfair for a funding boost for the other states and not for Queensland, Northern Territory and West Australia. We had to find $1. 2 billion extra for the four years going forward, to increase school funding – we have done that, we have done that. We’ve actually increased school funding. Health – we said…
ANDREW O’KEEFE:
On one reading of the numbers you have increased it.
TREASURER:
Sorry. How?
ANDREW O’KEEFE:
Because they didn't sign up to the funding model so therefore they didn't get the funding
TREASURER:
Ok so we should…
ANDREW O’KEEFE:
So they weren't part of the original funding package. Anyway, but you also pulled out all of the money from education from the States over the forward.
TREASURER:
No, no, no, we haven’t done it over the next four years. We said emphatically we would honour four years, that's what we have done. After that, we are still giving them $200 billion for schools and it's increasing every year by more than inflation so that is actually a continuing increase in education funding over the next 10 years. And the second area - hospitals You said ‘we made a commitment’; we did. We are increasing hospital funding for the next four years. After that, we have said we cannot continue to give the bonus payments. We are still giving an extra $200 billion to hospitals and increasing it above inflation. Now, we have to sit down with the Premiers and go through every item where we give them money that comes from the same taxpayer that they get their money from. So either it goes through us or it goes directly to the taxpayers but we are still giving them increased funding even above inflation.
MONIQUE WRIGHT:
No cuts to ABC or to SBS?
TREASURER:
Well, what we said was, and look I accept this in relation to the ABC and SBS, previously they have been excluded. So there have been cuts in every area of Government but the ABC and SBS were excluded. I couldn't in all conscious, ask families and others in the community to make a contribution without asking the ABC to be more efficient and we have taken an efficiency dividend from them that applies across the Government. I accept what you said but I wasn't prepared to have that in place, given what we had to do in other areas.
MONIQUE WRIGHT:
We just heard the Prime Minister say ‘no cuts to the ABC and SBS,’ along with several other things, ‘no change to pension’ and so on. So this creates a disenchantment, if you like, amongst the electorate. We think how can we possibly trust you? Why did you not say in the election campaign what you are saying to us on this couch, which is, "I need to do what I need to do to fix the Budget?"
TREASURER:
I'll tell you, I'll tell you. Because what the previous Government did was, it built in expenditure beyond the four years of the Budget to unsustainable levels and that was never revealed before the last election. Now you’ll say ‘okay Joe everyone says that’. Well either I fix it or I don't. Either we actually make a contribution now and build things or we don't. And for example Medicare co-contribution, $7 we are asking people to pay when they go to visit the doctor. In the same way they contribute to their own medicines, Pharmaceutical Benefits Scheme which Labor introduced in 1990. When Bob Hawke wanted to introduce a co-payment of $3. 50 in 1991, Australians on average went to the doctor four times a year and now they go 11 times a year, 11 times a year. Every dollar we collect from savings in health goes into a medical research fund, which is going to contribute to the saving of the lives of ourselves, our children. No one has ever had the guts to do this sort of thing but we actually need to invest in our healthcare and find the cures.
ANDREW O’KEEFE:
I think everyone agrees with that but you invest in long-term cures but you prevent people from going to the doctor in the first place. Joe, you mean, you’ve used this Budget emergency as a reason for the half measures that you have adopted across the board. Look, everybody accepts that whilst expenditure outstrips revenue, something must be done to fix the budgetary situation but It seems that the young, unemployed, low income earners, the disabled, Aboriginal people, the environment and ultimately the States wear most of the pain, where high income earners, big businesses and industry are relatively unscathed. I mean The National Centre for Statistical Analysis, NATSEM, has said that the lowest 20 per cent of people are going to have a disposable income reduction of five precent; the highest 20 per cent will have a disposable income of 0. 2 per cent. How is this sharing the pain?
TREASURER:
Well you know, a week ago everybody is abusing us for imposing a tax increase on higher income earners. A week ago everyone was having a go at us. And three months ago, well three months ago, everybody was having a go at us for not providing a $20 million facility grant to SPC or providing more bail-out money for Holden and Toyota. I mean, in a sense you can't win but the fact is that we are cutting over $800 million out of industry assistance, the biggest cuts have been, as a proportion, in the industry portfolio. We now spend more on welfare than we spend on the healthcare of the Australian people, the defence of the nation or the education of our children. And in those analyses that you talked about, the family payment is a supplement to the main household income. So what the Government pays in the Family Tax Benefit system is an income supplement in addition to the family income.
ANDREW O’KEEFE:
To help the most vulnerable people which is our social contract.
TREASURER:
No, the pension system is the one that's an income replacement. The family benefits are a supplement. So when we impose increased taxes, we are taking it from the money people earnt. When we hand out less, we are actually reducing the supplement. And in this case, all we are freezing is the supplement for most families for three years so it won't continue to increase. We are freezing it.
ANDREW O’KEEFE:
We understand that. That one comes out of hard earned and one comes out of what we might call a benefit.
TREASURER:
That's right, that’s the difference.
ANDREW O’KEEFE:
But still ultimately, you can't escape the fact that the bottom rung of people in Australia are going to wear a lot more of the pain of the Budget than those at the top and those at the top will hardly feel it at all.
TREASURER:
Andrew you know what, the fundamental point is that people have got to have jobs. We have to create an environment where the economy thrives there are more jobs and prosperity and that's the best way to help everybody in the community. Now, now…
ANDREW O’KEEFE:
By cancelling Youth Start, for example or Youth Connections, which is a program designed to get long-term unemployed people into jobs.
TREASURER:
No we are not cancelling. Sorry what we are actually doing is, giving for example – you raised these issues, for the first time ever, we are giving students who don't go to university the same concessional loans that university students get, so that you can go and study a diploma or do a sub-bachelor degree. Just a moment, we are giving them the loans that students get, right. Nobody has to repay it until they get to $50 000 of income each year. Secondly, we are giving apprentices $20 000 loan to finish their apprenticeships because there is a lot of dropouts right. These things cost money. We are putting more into job training through concessional loan systems than everyone’s ever done before. And why? Because we believe everyone should have the opportunity to lift. They have to be able to help themselves. We are putting $10 000 on the table for employers who pick up somebody over the age of 50, who is on Disability Pension or Newstart. That has become a cargo net for people with, you know, traumatised bodies from having been bricklayers or whatever, for the first time we are trying to change the culture of business to give people hope that their life doesn't end at 50, they don't spend the rest of the days on DSP and a pension.
MONIQUE WRIGHT:
Well they will need that if we are raising the pension age to 70.
TREASURER:
But hang on, the reason why we are doing that is because, and fantastic, one in three children born today will live to 100 and that's fantastic and we should celebrate that. The Labor Party increased the eligibility age for the pensions to 67 from 2023. We have continued it to say by the time you get to 2035, that's when it will rise to 70 – 2035. Twenty-one years’ notice that its goes up an extra three years.
MONIQUE WRIGHT:
Your Government also said there wouldn't be any changes to pension.
TREASURER:
And we have said all of the changes take effect after the next election so we are being up-front for three years in advance.
MONIQUE WRIGHT:
I just want to ask you about the criticism of some of the messages that have been put across. One of them was you smoking a cigar with Mathias Cormann prior to delivering the Budget and the other was dancing in your office. And then today we are seeing in the paper questions about this $50 000 spent to fly celebrity chef Shane Delia to Washington to cook for 60 members of the G20 who were your guests and then your office saying that's good value for money. That's incredibly difficult for families who are hear that they are going to be really punched, you know.
TREASURER:
Ok let's go through them. In relation to smoking, it's a bad habit I've had for many years. You know what - if people want me to be a fake politician, I can be a fake politician.
MONIQUE WRIGHT:
I don't think it's about that. I think it was the associations that people had with the cigar and opulence.
TREASURER:
You are right. I should hide and be something perhaps that I am not. But I am what I am; you know what I'm not going to change. As for dancing in my office, it was rubbish but my little boy I haven't seen for three weeks and he came along, and he was really happy to see me and I'm sorry that a photographer took the photos and distributed them that way, I can’t control that. But, you know, I'll do what I have to do with my children. And then, let me finish, in relation to the $50 000 dinner reported today. We are the hosts of the G20 this year. We are the Chair of the world's most powerful body. Kevin Rudd and Julia Gillard, to their credit they got us there, they won it. It's costing an enormous amount of money to host, I mean most of it is security. I have five meetings this year, two of them in Washington. I was offered a choice; I could have for roughly the same price, American chef, American food, and American wine or I could have an Australian chef, Australian food and Australian wine and get an Indigenous person there to play the didgeridoo and so I choose to promote my country, which was marginally more expensive than not doing it but by God, I'm proud of my country and was prepared to do it.
ANDREW O’KEEFE:
Joe, I don't think anybody cares if you puff on a cigar with your mate…
TREASURER:
Well they obviously do…
ANDREW O’KEEFE:
No, no, no, we get it, or dance in your office.
MONIQUE WRIGHT:
We get the fact that it isn't meant to offend anyone either, I get that’s not the intention.
ANDREW O’KEEFE:
But I think juxtaposed then with the language you yourself have, characterising you know low-income earners as people who would prefer drink middies and smoke ciggies than taking their children to the doctor, that's how it came across.
TREASURER:
I didn’t say that, I didn’t say that…
ANDREW O’KEEFE:
As Kevin Andrews characterising unemployment benefits as basically couch dwellers who couldn't be bothered to get themselves a job. You know these kinds of characterisations coming out of the Government just don't play well when juxtaposed with what people see to be enormous privilege.
TREASURER:
Andrew, if a camera is hidden on the other side of the road taking a photo of me, what do I do. On the way here I have people taking photos and I said ‘look come out from behind the bushes, just take a photograph of me.’ So you know, mate I am what I am, I am sorry. I am trying my best for my country. That's what I promised to do. It's what I'm doing, what Tony Abbott's doing. You know, if it's easy, we are not even getting back to surplus within four years, we are not even getting back to surplus in four years to start paying down the debt. This shows you how big the task is. I am saying emphatically to the Australian people, if you want us to fix the problem, we have to contribute now. Otherwise it is going to be a far greater cost down the track and Government will start to pull back services from those most vulnerable and that's unacceptable to us.
ANDREW O’KEEFE:
You see, Tony Abbott said ‘no new tax without an election’.
TREASURER:
Yep.
ANDREW O’KEEFE:
Are you going to take it to an election?
TREASURER:
Oh, we will go to the election and our Budget will go to the election and we have said that if there is going to be any change to the GST or anything else, it's going to the election. Now, having said that, the State Premieres are meeting today. I want you to know that they are getting an extra $4 billion over the next four years from GST. Our revenues are falling; the Federal Governments but they are getting more GST revenue. They are getting $9 billion extra the States, in in net terms, $9 billion extra over the next four years. We all have to contribute. Everyone is screaming, I understand that.
MONIQUE WRIGHT:
The States are asking for a greater slice of income taxes though; are they being greedy?
TREASURER:
No I am not suggesting they are being greedy but it just means we have to increase another tax somewhere. It's all the same taxpayer isn't it? I mean, it's all you and me and everyone who watches your show. It's all the same taxpayer, whether it is going to Federal Government or it’s going to the State Government. If you want a service, it's out of the same person's pocket.
ANDREW O’KEEFE:
Well many argue it's not the same taxpayer. The captain of industry who pays $7 to see his GP is a different taxpayer to the long-term unemployed young person.
TREASURER:
Well and that captain of industry is paying 50 cents in the dollar to visit the GP, sorry 50 cents in the dollar to the Government in income tax and the fundamental point, is sooner or later those people move overseas if it becomes too punitive, I mean we have seen that in other countries.
MONIQUE WRIGHT:
Joe before you go, it's your first Budget, were you hoping it might have been more positively received as your first Budget?
TREASURER:
Look what matters to me is that it's honest, it has got to be an honest Budget.
MONIQUE WRIGHT:
But that's the exact opposite words; dishonesty is the word that is being associated.
TREASURER:
That's our opponent's line, that’s their line. I mean look, I don't think you have seen a more honest document, why would we go through all of this if it were easy. It's damn hard but it’s going to be much harder if we don't do this.
MONIQUE WRIGHT:
Do you wish now those statements made before the election, you just didn’t make and say what you are saying now, which is, ‘we will do what we have to do?’ do you wish those statements hadn’t been made?
TREASURER:
Well the fact is, you can't rewrite history; you have just got to deal with what's before you. And like I said, there is a fire in the kitchen to we stand back and say no, no, we are not putting it out, we are not going anything here or do we deal with the matter before us. I know it's hard for people. But I'm saying to you emphatically - it will be much harder if we don't move now.
ANDREW O’KEEFE:
Alright Joe, listen thanks for joining us this morning. It's really good of you to make the time, we appreciate it. We do have a poll we have been asking people to contribute so far this morning (inaudible).
TREASURER:
It’s a bit of lead question there, (inaudible) Budget of broken promises, which is a Labor Party line but it’s an interesting question…
ANDREW O’KEEFE:
It’s a bit of Daily Telegraph type of poll isn’t it?
TREASURER:
The Daily Telegraph wouldn’t ask that sort of question.
ANDREW O’KEEFE:
You reckon? It has been a big response. Anyway, I suppose at this point that's somewhat unsurprising. But Joe thanks again.
TREASURER:
You should ask the question, do you want the Government to fix the problem.
ANDREW O’KEEFE:
We did rephrase the question as saying, "Would you now trust the Government" rather than…
TREASURER:
No, no how about asking whether the Government should start to pay down the deficit and pay down the debt.
ANDREW O’KEEFE:
But that's a leading question as well. I mean everyone agrees that we should, it's how we do it.
TREASURER:
I am interested in suggestions.
ANDREW O’KEEFE:
We need to put out the fire in the kitchen, but do we only send low-income earners in to fight the fire?
TREASURER:
Tell me what the suggestions are and I’m happy to take it on board.
ANDREW O’KEEFE:
You tell us and we will take it to an election.
MONIQUE WRIGHT:
If that's $50 000 dinner in the kitchen, I hope that we put it out. Thank you Joe for coming in.
TREASURER:
Thank you.