SPEERS:
Good evening Treasurer, I am going to start with a question on the promises that were made. Prior to the election, Tony Abbott said that, “we are about reducing taxes not increasing taxes”. He said, “During the election campaign, the only party which is going to increase taxes after the election is Labor”. Given this Budget does increase taxes on petrol, on high income earners, there’s a new levy for going to the doctor, will you now admit you have broken a promise?
TREASURER:
No, because we actually said, as you correctly said there, that taxes would be lower under us, and they are. As you can see from the Budget papers, the decisions we have made since…
SPEERS:
Well with respect Treasurer the quote was, “that the only party which is going to increase taxes is the Labor party”; you have increased taxes.
TREASURER:
If you go to the first part of the question – the quote, we said, “We would have lower taxes under us than under Labor and as you can see from the Budget papers, we actually have reduced taxes, compared to what would have been the case with Labor, so we have delivered on that promise. Now, if you are saying that we were never going to tax change, change tax rates or make alterations there, David you can assert whatever you want. The bottom line is we have to fix the Budget and we are doing it whilst having lower taxes that would have occurred under Labor.
SPEERS:
But this argument that it’s lower than would have been, that was never said to voters prior to the election. Under this Budget, taxes go up and up and up as a proportion of GDP in every year of the four year forward estimates, you are taxing more as a proportion of the economy.
TREASURER:
Well and taxes were going up and up and up on the trends presented before the Budget, so when the pre-election fiscal outlook was presented, you could actually see that taxes were going up and up and up and we said, we were going to get rid of the Carbon Tax, we were going to get rid of the Mining tax, we are going to give tax cuts without the Carbon Tax, we have delivered on that. Now, even then, before the election, we never knew we were going to inherit $667 billion of debt. We never knew that David.
SPEERS:
Well you did talk a lot about a Budget crisis prior to the election; you did talk a lot about a Budget crisis. Are you seriously saying tonight, that you have not broken that promise that you wouldn’t increase taxes?
TREASURER:
Well you can argue about whether it is broken promises or not, that’s your call.
SPEERS:
No, I am just asking if you acknowledge, when trust was such a big issue prior to the election, whether you will acknowledge you have broken a promise?
TREASURER:
David we gave a commitment that we would fix the Budget and strengthen the Australian economy and we will.
SPEERS:
Alright well, let’s get to some of those measurers to try and strengthen the Budget and strengthen the economy. You’re ending the agreement struck by Labor on hospital funding that the Commonwealth would meet 50 per cent of the growth cost of hospitals. This is going to mean you are spending $15 billion less in 10 years’ time than Labor had planned. How do you expect states will make up that difference, through the GST?
TREASURER:
Well that would be a matter for the States. The Commonwealth Government doesn’t really have hospitals, we have got a hospital in Tasmania which is a legacy issue but we don’t run the hospital system the states do, we don’t run the school system, the States do. And the States at Kevin Rudd and Julia Gillard’s invitation, used the Commonwealth Government as a honey pot. Well, there is no endless sea of money at the Commonwealth level, the fact is, and who ever run the operations needs to accept primary responsibility for funding them.
SPEERS:
But they are not flush with cash as you know so how do you expect they will raise funding? Is this starting to lay the groundwork for increasing the GST?
TREASURER:
That is a matter for the States. They receive every dollar of the GST. They’ve got other taxes but it is up to them, maybe they will run their schools and hospitals more efficiently.
SPEERS:
Now you are also asking Australians generally, to pay $7 to visit the doctor and $5 more for medicines. Most of this money will go into the new medical research fund for the future that you have announced tonight. But for a family with a couple of kids, they are going to be worried tonight about their medical bills, they’ve got their petrol prices going up as well and many will lose their family benefits.
TREASURER:
Well I say to them, that if every individual in Australia tonight looks at how the Budget immediately affects their bottom line, then they may be disappointed. If everyone contributes, we are going to build a stronger economy, and that means you might have a job that pays more, you might have greater job security, because only through collective effort are we actually going to ensure that the economy gets stronger. It’s not, you know prosperity, it’s not an accident, it’s not a gift, you actually have to earn it, and we are asking all Australians to make a contribution, to build the biggest medical research fund of its kind in the world. This fund may well help us to find a cure for Alzheimers or cancer, how good would that be, and we need to invest now through cure and discovery to make sure our health system is sustainable.
SPEERS:
And as part of making that contribution everyone doing their bit, shoulder to the wheel, can we really still afford to make payments of up to $50,000 to new mums?
TREASURER:
Well that is through the paid parental leave scheme and that is fully funded by a 1.5 per cent levy that we took to the last election and to the election before, on just over 3,000 of the largest companies in Australia, so that’s fully funded out of another source of revenue, and the fact is we need to have increased workforce participation. As I said in my speech, if you are able to work in Australia we need you to go to get paid work in Australia.
SPEERS:
Now as you announced prior to the Budget that you were going to increase the access age for the pension to 70, can I ask will you also plan to increase the access age for superannuation. There is always the risk that retirees would just blow their super and go on the pension?
TREASURER:
Well that may be an argument now that maybe an argument now, because 80 per cent of the people over the age of 65 are receiving a pension, either a full pension or a part pension. So, obviously we said, we promised at the last election, there’d be no adverse changes to superannuation in our first term and we’d discuss it with the Australian people before any significant change and we are going to do that, we are honouring our election promise.
SPEERS:
But for superannuation, is there a need to keep, and the Commission of Audit went to this as well, to keep them rising in sync.
TREASURER:
Well David, you are not urging me to break a promise are you? You know, that’s right, there is a lot of people out there urging us to break promise on all these things, we’re not breaking our promises, we are keeping our promises, and one of those was that we are not going to change superannuation, and if we’ve got to change retirement incomes policy, of that scale, then we will take it to the next election.
SPEERS:
Can I ask, how flexible are you on all of these budget measures, when it comes to negotiating in the Senate? We have heard from Clive Palmer, we have heard from Christine Milne already they don’t believe think there is a budget crisis, a budget emergency, a debt problem, really in Australia and they are not inclined to support the deficit levy or any of these other spending cuts.
TREASURER:
Well then we end up with bigger deficits and we end up with more debt and the pain associated with trying to fix the problem is going to be far greater, far greater, down the track. My view is, that you fix the roof when the sun is shining, in this case if we do not contribute now David, if we do not contribute now, then the pain associated with budget repair is going to be far greater in the future, when we potentially have more people unemployed, when we potentially have much higher interest rates to deal with.
SPEERS:
And finally how certain are you we will get back into surplus by 2018-19?
TREASURER:
Well I am certainly not going to go down the path of Wayne Swan and big heroic promises. There is much work to be done; there is much work to be done. It is unfinished business, and certainly, the obstructionism from the Labor Party, the Greens and Clive Palmer, it simply makes the task much harder for future Australians.
SPEERS:
Treasurer Joe Hockey, thank you so much for joining us on the night of this your first budget.
TREASURER:
Thank you very much David, thank you.