CHRIS UHLMANN:
This morning the National Commission of Audit’s call for deep cuts to Government benefits and a sweeping re-organisation of the Nation’s finances has provoked outrage in a long list of sometimes radical proposals. The Commission wants a razor taken to the Age Pension, Medicare, family benefits, unemployment payments and the minimum wage. Doctors say the ideas would Americanise the health system. Welfare workers warn of more hardship, universities say a dramatic lifting of student costs is drastic. The Opposition had branded the report a plan written by big business for big business. In 11 days we will get the Government’s response in the Budget and the man crafting that is Joe Hockey, the Federal Treasurer – welcome.
TREASURER:
Good morning, Chris.
CHRIS UHLMANN:
Now, this document clearly shows, doesn’t it, that both major parties have been giving out welfare that people don’t need, doesn’t it?
TREASURER:
Yes.
CHRIS UHLMANN:
And for how long?
TREASURER:
Well, it’s been happening for some time. The fact is, the system we have in its current form is unsustainable and unaffordable and because of the change in demographics of our country – and we should celebrate the fact that we are all living longer – the fact is that the system that was built and rebuilt on numerous occasions since basically the early 1900s is now creaking under the pressure. If we want to maintain our quality of life, if we want to have a prosperous life, we now need to earn it and there is going to have to be some heavy lifting.
CHRIS UHLMANN:
Well, the political purpose of this seems to be to hang it all on the Labor Party – that is certainly not the case. When you were in the Howard Government you were responsible for putting up Family Tax Benefit A and Family Tax Benefit B. So, you take responsibility for that?
TREASURER:
Yeah, I fully do. I fully do and at that time we were running surpluses and what happened in those days was affordable but what’s happened now is it is clearly unaffordable when you have got debt heading to $667 billion, when you have got deficits of $123 billion over the next four years. The fact is, now is the time to start addressing some of these issues in a considered and measured way. Let’s be realistic about the challenge we take and that is what the Commission of Audit Report does, it provides a realistic picture of what the challenges are.
CHRIS UHLMANN:
Will the changes you make in the Budget add to families’ cost of living?
TREASURER:
No, because we effectively want to have a growth Budget. We want a Budget that is focussed on helping the Australian economy.
CHRIS UHLMANN:
But you will cut the payments?
TREASURER:
[inaudible] building resilience into it, and I am not going to start speculating on the Budget in just a few days’ time, when we bring down the Budget, everyone will have to make a contribution to try and fix the Budget but I want to emphasise, everyone is going to get the benefit of what we do because we will build a stronger economy and the best way to make our quality of life sustainable is to have a stronger economy.
CHRIS UHLMANN:
But the pressures on the Budget have been clear for some time. You have been clearly aware of them for a couple of years. You have been talking about them for a couple of years. Why then didn’t you help out when the Labor Party was trying to reign in some of these costs?
TREASURER:
Hang on we did, I mean, let’s be fair dinkum here, we actually did. The Government and Bill Shorten in particular, came to see me and asked to help expedite some of the changes in relation to payments to single parents. He said it was absolutely necessary to the Budget. He knew the ramifications of it and he asked us to help to get it through the Parliament and we did and even though we didn’t like some of the changes on private health insurance, they went through the Parliament; we did not oppose them. So, quite frankly I think you know if you are looking for irresponsible politics, look at the fact that Labor is not only opposing what we have proposed as savings and took to the last election, they are now opposing the savings that they announced before the election themselves.
CHRIS UHLMANN:
Sure, but in 2013 when Labor paused some of the payments on family tax benefits, the Liberal website said it was a cruel blow to Australian families on International Family Day and at the start of National Family Week – well that starts on May 15 this year. What will your Budget do to them?
TREASURER:
Well, obviously we are going to ask Australians to make a contribution. That’s what we are focussed on, everyone helping to make the Budget and our quality of life sustainable. The fact is, the best sustenance for a family is to have a job – for someone in the household to have a job and we are overwhelmingly focussed on how we can have a growth and jobs Budget that, at the same time, gets rid of the waste and makes sure that the benefits that flow to families and everyone else in the community are sustainable for the long term.
CHRIS UHLMANN:
Do you believe that private health insurance should play a larger role in primary care?
TREASURER:
Well, that’s a matter for the Health Minister Peter Dutton and obviously we are all going to have to contribute to our own healthcare.
CHRIS UHLMANN:
Like a $6 co-payment?
TREASURER:
Well, Tony Abbott and I have been saying that nothing is for free anymore, we can’t; ultimately, tax payers pay the money.
CHRIS UHLMANN:
It’s not free now because people pay a levy for Medicare.
TREASURER:
Well, not everyone pays a levy for Medicare obviously and frankly everyone needs to understand that there is nothing free, there is nothing free. Ultimately, taxpayers have to pay for everything and the tax base is obviously getting smaller and smaller as a percentage of the population through personal income tax as the population ages and we don’t have, we don’t have reproduction in Australia that ensures that we can totally replace our own population.
CHRIS UHLMANN:
Do you intend to slow the roll-out of the NDIS?
TREASURER:
Well, there has been an independent report in that regard and that is obviously the independent report and the advice that we received from the administrators from the NDIS will need to be considered, but I haven’t received any advice to that effect.
CHRIS UHLMANN:
But do you intend to slow it down? Will that save you some money?
TREASURER:
We are not slowing it down as a motivation for saving money. The fact is, there was a report that was recently produced. An independent report that identifies, well they said the NDIS is akin to a plane that is trying to take off half built. Now, what we want to do is make sure that the NDIS is obviously going to work. And it is going to deliver what it promises in an affordable manner. The bottom line here is, if it is affordable then it is sustainable and that’s what we have got to focus on with all our programmes.
CHRIS UHLMANN:
Should you cut the diesel fuel rebate to miners and farmers?
TREASURER:
I am not going to get into speculation about the Budget, Chris.
CHRIS UHLMANN:
Are you considering it?
TREASURER:
I am not getting into speculation about any of it.
CHRIS UHLMANN:
Where are you going to find the extra $11 billion you need to keep your promise to spend more on defence?
TREASURER:
We have said we want to get defence up to 2 per cent of GDP. It was effectively run-down and what’s more is Labor kept, as you know, the Budget is presented in a four year basis – when the Government brings down a Budget and presents the Budget for the year we are getting into and the three years that follow. Labor just kept putting increased defence expenditure in the year that was never presented in the Budget, they kept pushing it out and pushing it out and manipulating the movement of money in and out of defence. What we have got to do is make sure there is a sustainable trajectory in defence expenditure that gives predictability to the defence acquisition people.
CHRIS UHLMANN:
Alright, Joe Hockey, you used to say that Wayne Swan would never deliver a surplus – will you?
TREASURER:
Well, yes, I certainly will.
CHRIS UHLMANN:
And how long will you have to be Treasurer before you deliver that surplus?
TREASURER:
Well, hopefully not as long as Wayne Swan – I can assure you of that. We need to focus on growth. We need to focus on sustainable and affordable Government so there is predictability in peoples’ lives when it comes to dealing with the Government.
CHRIS UHLMANN:
Now, it is true to say that some of your own colleagues are worried about broken promises – have any of them contacted you to say they are concerned?
TREASURER:
We are keeping our promises.
CHRIS UHLMANN:
And what about the promise that you wouldn’t lift tax rates?
TREASURER:
We are keeping our promises and…
CHRIS UHLMANN:
… and if you do lift tax rates will we see that as a broken promise in the Budget?
TREASURER:
I’ll say to you Chris, the biggest promise that has been made was to fix the Budget and to get the economy moving again and we are going to do that. We are going to do that because we must.
CHRIS UHLMANN:
And you did promise no new taxes?
TREASURER:
We said that we are going to fix the Budget and we are going to build a strong economy and we are doing that.
CHRIS UHLMANN:
Well, the Commission of Audit didn’t really look at taxation as such but it did say that it should be capped at 24 per cent of GDP. You were underdone on that, at the moment are you intending to lift taxes further?
TREASURER:
Well, taxes are going to rise at any rate if the economy grows, that is the fundamental point. The best way we can start to address the long term challenges left to us by the Labor Party is to grow the economy, get more people into work – into real work that pays the wages that makes our lifestyle sustainable. That is what we are focussed on Chris and it is fundamentally important that we do everything we can to ensure that we do not have the high trajectory of unemployment that was left to us by Labor and that we actually get on with the job with growing the economy.
CHRIS UHLMANN:
Joe Hockey we will have to leave it there, thank you.
TREASURER:
Thank you very much Chris.