PRESENTER:
Treasurer Joe Hockey, good morning. I want to start with the economic growth figures out. They were surprisingly strong for the first three months of the year. You described them this way yesterday: ‘these are positive numbers, they are strong, robust foundation for growth, our miners are exporting their socks off’. So, is the Carbon Tax really wrecking the economy as you’ve suggested?
TREASURER:
Well, they were good quarterly figures and over a year they’re positive as well. But, they were quite extraordinary and what they illustrated was that there was tremendous benefit in having a March quarter where you do not have cyclone activity around your key ports. And that meant we had uninterrupted exports and the exports were sensational in volume but the prices have come off and that’s had an impact on our Budget.
PRESENTER:
Just on these mining exports, sensational, as you point out. And the sector has really moved from the investment phase into the export phase. Now, is it now the time when a properly designed Minerals Resource Rent Tax could deliver the goods?
TREASURER:
Well, no, because we want new investment in mining as well. And it is hugely important that we don’t have any sovereign risk in our mining industry, after all there has been about 12,000 jobs lost in the coal industry in the last 12 to 18 months in Australia. So, you know, we’ve got to get the balance right. Our miners are already amongst our biggest taxpayers and I think you’ve got to make sure [inaudible] in your taxation.
PRESENTER:
But philosophically, I mean, we’ve had the Petroleum Resource Rent Tax in place for years and years, under the Howard Government. Isn’t this structure better than the royalties stuff?
TREASURER:
I don’t think so, because the royalties go to the states. The Mining Tax is a complete unmitigated failure.
PRESENTER:
In its current form, yes.
TREASURER:
Well, that’s right, and it’s had numerous different forms. The previous Government got every form wrong, with the net result that it just created sovereign risk around the mining industry in Australia. Thankfully, it is going, and we expect that our key political opponents will understand that the best interests of the nation are served by getting rid of the Mining Tax.
PRESENTER:
Just on the economy and what is going to happen from now, you’ve flagged that the next three months may not be as good as those first three months. We had a minimum wage decision yesterday to put up the minimum wage by $18.70; it will be higher when penalty rates apply for a lot of those for retail and hospitality who get the minimum wage. Is that going to hurt employment growth?
TREASURER:
Well, it does because Australia now has, in US dollar terms, the second highest minimum wage in the world. And it wasn’t just the decision that minimum wages flows through the people on minimum wage, which is about two per cent of the working population, a large percentage of that group doesn’t stay on the minimum wage for long, but it flows right through to even people above $150,000 a year, getting that sort of increase. So, those increases in wages do have an impact on job creation. But I still remain confident that we, at this stage, can try and restrict the rise in unemployment that we were left with.
PRESENTER:
But, shop owners, small business owners, do often complain about the Sunday rates in particular, they have to pay. Can we still afford them?
TREASURER:
Well, that’s certainly something the Fair Work Commission needs to consider.
PRESENTER:
What’s your view on it?
TREASURER:
Well, it is, without any doubt, there is an impact associated with higher wages that comes at a cost to jobs. There is no doubt about that. So what you’ve got to get, is you’ve got to improve productivity. And if you improve productivity, which is something that we’re very keen to drive, if you improve productivity then at the end of the day…
PRESENTER:
And is part of that tackling these penalty rates?
TREASURER:
If you improve productivity, at the end of the day, that delivers benefits to everyone.
PRESENTER:
And does that mean tackling penalty rates?
TREASURER:
Well, that is a matter for the future…
PRESENTER:
…for the Government?
TREASURER:
Well, it is for the community as well. I think there needs to be a proper consultation process and we flagged, at the last election, that we’d have a Productivity Commission review of workplace relations and if there are any substantial changes we are going to take them to the next election. That hasn’t changed.
PRESENTER:
Let’s go to the Budget, you’ve today denied tricking the Nationals into backing the increase in fuel excise indexation by floating and then not proceeding with the abolition of the Diesel Fuel Rebate. Can I ask, did you ever really, seriously, consider the diesel fuel rebate?
TREASURER:
Oh, look, every Government considers it. As the Deputy-Secretary of the Treasury identified, I think in Estimates last night, he said: ‘look, every Government… this happens before every budget’.
PRESENTER:
So it was on the table?
TREASURER:
Every government looks at every area. But let me tell you, the story as reported on the ABC is just factually wrong. I was there, I was in the middle of it, the story is wrong. I don’t know how many times key people have to keep saying it, the story is wrong, let’s get away from the argy bargy of the process of the Budget and focus on the policies in the Budget which are part of our Economic Action Strategy to build a stronger economy.
PRESENTER:
The other view that came out of some of those Senate Estimates last night was the admission that some $230 million has been allocated in the Budget for emergency payments to more than half a million young people. The Government is apparently expecting a 30 per cent increase in applications for emergency support. Is this a concession that a lot of young people simply won’t be able to learn or earn and will need emergency support?
TREASURER:
No it’s not. We said with this initiative that we are putting in appropriate safety nets, and that is exactly what we are doing. We are putting a huge number of safety nets in place, we hope none of the safety nets need to be used, but we are not going to leave people to fall to the bottom without a chance to get back and so the story is absolutely right that we want young Australians to earn or learn and not go straight onto welfare.
PRESENTER:
So why do you keep it as an emergency payment?
TREASURER:
Well, because, you want to be absolutely cautious, you know, David, you want to make sure there is a proper safety net and if we are more careful with the way that we spend welfare dollars, taxpayers’ dollars, if we’re more careful with it then we can be more helpful to those who are more vulnerable but at the same time ensure that people can get off welfare, and that’s exactly what we’re doing.
PRESENTER:
People in this situation are going to be desperate aren’t they?
TREASURER:
Well, I’m not so sure about that. I mean, we’ll wait and see, because remember the Labor Party, the Labor Party took 60,000 single parents off a parental pension and put them on Newstart without any safety net and quite frankly we have built in safety nets including wage subsidies and Work for the Dole programs, and of course, if necessary, emergency relief payments that go through non-government organisations and that’s part of the appropriate process.
PRESENTER:
The Prime Minister signalled over the weekend that there would be room for refinements on some of these Budget measurers. Have you thought more about that, what areas you can refine?
TREASURER:
Well, no, we’ve laid down the very best policies that we think are going to build a stronger economy and a stronger Australia. There’s no argument that there needs to be Budget repair and the Labor Party is just not credible in this regard because even their own people say privately there needs to be Budget repair. I mean, Wayne Swan told Bob Carr that it’s a ruinous Budget situation, well, he’s right, so we’ve laid down the best plan we can to try and fix the Budget and build a stronger economy. Now, who else, where are the alternatives? The only criticism of the Budget has been the politics or the process.
PRESENTER:
And about the equity measurers. Look at some of the, particularly contentious areas, the $7 GP co-payment. Would you look at more exemptions from that?
TREASURER:
It’s not a case of looking. We’ve marked down the best policy, David, that’s the key.
PRESENTER:
So you wouldn’t look at exempting more people?
TREASURER:
Well, no one has offered any suggestions. No one has offered any credible suggestions as alternatives.
PRESENTER:
What about exempting pensioners?
TREASURER:
Well, they’re not exempted from the Pharmaceutical Benefits Scheme. The Pharmaceutical Benefits Scheme that Labor oversaw and introduced as a co-payment, it extended co-payment to pensioners. Pensioners now pay $6 for the first 60 scripts, that’s $360.
PRESENTER:
Now they’ll have to pay for all those doctor visits.
TREASURER:
No, they’ll pay $7 for the first ten. That’s $70. So, $70 to go to the doctor ten times and $360 for the scripts.
PRESENTER:
So, you won’t look at that?
TREASURER:
So, from our perspective we’ve built a safety net. Now if people have alternatives, let them put them on the table. But no one is offering an alternative.
PRESENTER:
What about the pension age? You want to increase it to 70, you want to do it in 2035, why not push that out to the middle of the century as the Commission of Audit recommended?
TREASURER:
Well, what’s the argument for that though?
PRESENTER:
The argument from Tony Shepherd’s Commission of Audit was that that was giving enough time.
TREASURER:
He also argued for other changes in the pension that were more onerous, I would argue. The fact is that we’re continuing, you see, Labor increased it from 65 to 67, we gave them bi-partisan support. How about that? Now we’ve continued the same trajectory that Labor put in place to go to 70 by 2035 and now they oppose it and they say it is unconscionable. Bob Hawke said yesterday, and I like Bob Hawke a lot, he said yesterday, ‘you can’t win Government by simply saying ‘no’, you have got to have a suite of alternative policies’. The problem for our political opponents who are blocking all the things we are trying to do; the Carbon Tax, the Mining Tax, PBS co-payments everything else, the problem for the Labor Party is, they’re just not credible. They’re not offering alternatives.
PRESENTER:
The birds don’t like it either.
TREASURER:
They’re probably Greens.
PRESENTER:
Speaking of the Greens, they want you to put the money from increasing the fuel excise into public roads, or at the very least not into roads [inaudible] can you technically do that? Or, doesn’t it just go into the general revenue pool?
TREASURER:
No, we are definitely putting it into roads, they are hypothecating it to roads…
[inaudible]
PRESENTER:
Sorry, the birds, they are quite noisy this morning.
TREASURER:
It’s because of all the other journos here you see, they’re having a good laugh at them.
PRESENTER:
I thought, hypothecation technically couldn’t happen, even with the Medicare levy, in the legislation can you say, ‘this money will go to roads’.
TREASURER:
It will go there and count for roads.
PRESENTER:
And you’re not budging on that to get the Greens’ support?
TREASURER:
No, we’re not budging, because it is a fundamental principle.
PRESENTER:
Have you spoken to the Greens or the Palmer United Party about these Budget measures?
TREASURER:
We’ve entered into some discussions, obviously it is proving difficult, some of the independents are really difficult to speak with.
PRESENTER:
Well, entered into some discussion, have you, personally, spoken to any of them?
TREASURER:
Well, I never discuss what I chat to colleagues about.
PRESENTER:
Have you spoken to Clive Palmer?
TREASURER:
Yeah, I’ve spoken to Clive Palmer.
PRESENTER:
About the Budget?
TREASURER:
I’ve spoken to Clive Palmer from time to time.
PRESENTER:
Have you spoken to him about the Budget?
TREASURER:
I’m not going to go into what I talk about, but of course I have spoken to Clive Palmer.
PRESENTER:
What do you think of Clive Palmer?
TREASURER:
It doesn’t matter what I think.
PRESENTER:
It surely does?
TREASURER:
Not really.
PRESENTER:
Do you think he’s an honourable man?
TREASURER:
Well, it’s for him, I start by assuming everyone is honourable.
PRESENTER:
Can I ask you, there has been another clash this morning between Malcolm Turnbull and a high profile media figure, Alan Jones, and there was one earlier this week with Andrew Bolt. For the record, do you think Malcolm Turnbull is helping in selling this Budget?
TREASURER:
Absolutely, Malcolm is putting in a huge effort as we all are, in endeavouring to focus on the policies of the Budget rather than the politics around the Budget. And I think everyone needs to focus on the policies in the Budget rather than the politics.
PRESENTER:
Treasurer Joe Hockey and the chorus of crows in the background.
TREASURER:
They’re all supporters out there, David.
PRESENTER:
Thank you.
TREASURER:
Thanks.