LAURIE OAKES:
[inaudible] no nasties, what changed?
TREASURER:
Well, we made significant progress last year Laurie and that’s underestimated, but we actually have come a long way. Now we are on the next stage of our plan to build growth, and we’re investing. I mean, those free trade agreements are costing the Budget $6 billion, but they’re a real investment in new growth opportunities. We’re investing in small business, but we’re giving them back their own money - $5 billion in tax cuts - and the big part is to give them immediate instant asset write-off, accelerate depreciation, anything they buy up to $20,000. So they can go out and invest in their small business now and get it back on their tax from the 1st of July.
LAURIE OAKES:
Yeah, but handouts, after all [inaudible] confuse people?
TREASURER:
Well, they’re not handouts. These are tax cuts. So we’re giving them back more of their own money….
LAURIE OAKES:
But any government handout is giving us back our own money ….[inaudible]
TREASURER:
Well that’s a reasonable argument, but we’re not turning around saying “here’s a $900 cheque”, we’re actually saying to people if you invest, if you go out and buy goods to build your business, it’s going to employ more people. We’ll support you, and basically it’s a chance to bring forward the depreciation that they were going to have anyway. So we’re just trying to fire up the economy to give Australians a chance to have a go, and we’ve got strong foundations, Laurie. S&P just backed our AAA rating. Most importantly we’ve got a credible trajectory back to surplus, at the same time the economy is increasing in growth.
LAURIE OAKES:
It’s pretty obvious though, isn’t it, that you’re retreating from last year’s Budget?
TREASURER:
Well, not at all. I don’t accept that at all. For example, our higher education proposals are still on the table. We have a number of welfare proposals that are still on the table, and we’ve passed a number; billions of dollars of savings in relation to welfare, but we’ve still got some way to go. In relation to schools and hospitals, we’ve said we can’t keep those bonus payments that Kevin Rudd promised, but never funded, to the states.
LAURIE OAKES:
What about the decision in last year’s budget to change the indexation of pensions, to slow the growth of pensions? I mean you’ve backed away from that…
TREASURER:
Well, we’ve changed the pension arrangements. We’ve said that any pensioner who has $250,000 in assets in addition to in addition to [inaudible], can still claim the full pension. Previously that was [inaudible]. We’ve also said that we’re giving a guarantee to superannuants, we’re not going to impose any new taxes, which is exactly what Bill Shorten wants to do. So we’re saying we’re giving them certainty and stability, and in relation to the pension, we’re reformatting it so those with lower income, and those with fewer assets, actually get onto the full pension.
LAURIE OAKES:
All of that surely is an admission that what you did last year was wrong and the Senate was right to block it?
TREASURER:
Well, it never actually went up to a vote in the Senate. We consulted widely, and…
LAURIE OAKES:
It got the thumbs down…
TREASURER:
….you can never give up on Budget reform.
LAURIE OAKES:
So is that still on the table?
TREASURER:
Well, no, what we’ve done is we’ve offered a different proposal.
LAURIE OAKES:
What about the youth unemployment thing tonight, I mean in last year’s Budget, it was going to be a six month wait for unemployment benefits for anyone under 30. That also got the thumbs down from the Senate, so now it’s a four week wait.
TREASURER:
Four week wait for people under 25.
LAURIE OAKES:
So that was wrong?
TREASURER:
Look Laurie, we need to keep trying. The Senate can rebuff us at various points, but you can never give up.
LAURIE OAKES:
The point I’m making is, was the Senate right to rebuff you on that?
TREASURER:
Well we accept the decision of where things are going. We accept that. But, we have to keep working away. You can never give up on a reform program. Our childcare reforms for example, new investment in childcare, $3.5 billion. It relies on other savings being passed. Now the Labor party says they want to support childcare spending, but they don’t want to support our savings. Well, that’s not going to stack up. It’s not going to stack up because we’re trying to re-direct money to those people who are going to help to drive a stronger economy. We’re going to give them the chance to get ahead, that’s where we’re at. This is a moment that Australia can actually get on with the job and have a go.
LAURIE OAKES:
In this Budget, even today in the lockup you were talking about the need for more savings and the need for Budget reform, and yet in this Budget you’re going to be spending 29.5 percent of GDP, which is the same level as Kevin Rudd, and he was throwing money around during the Global Financial Crisis?
TREASURER:
Well, Kevin Rudd got [inaudible] and this is the legacy that Labor left. This is the legacy they left...
LAURIE OAKES:
You slammed him for that and now you are at the same level?
TREASURER:
Hang on. We are trying to get it down Laurie, you know that. We’ve been trying damn hard, you just asked me about [inaudible]. We’re trying to get the spending down. Labor’s opposing us, and all they want to do is increase taxes. Well increasing taxes is not going to give you prosperity at the end of the day. The only way you can balance the Budget and get prosperity and get more jobs is by living within your means. We have a credible path to that point.
LAURIE OAKES:
But you’re not going to get to a surplus, until what, ten years, isn’t it?
TREASURER:
No, certainly not. We’re on the same trajectory as we were at the end of last year.
LAURIE OAKES:
So when do you get to surplus?
TREASURER:
What we’ve said repeatedly, we’re not putting a specific date on it, because that’s the trap that Wayne Swan fell into, but as you can see in the fourth year of our forward estimates [inaudible] $7 billion dollars, every year we reduce the deficit by around 0.5% of GDP. Hugely important, reducing Government expenditure. The net result is that we are going to get to the point where Australia lives within its means.
LAURIE OAKES:
Now, how much of this Budget [inaudible]. Last year’s Budget was unpopular, because [inaudible] the party room that you almost caused a spill in the leadership. How much did that influence the formation of this Budget?
TREASURER:
Well Laurie, every Budget needs to meet the economic times. Every Budget needs to be part of an overarching plan. Now if we hadn’t got rid of the Carbon Tax, hadn’t got rid of the Mining Tax, we wouldn’t be able to do what we’re doing today. If we hadn’t of got rid of a range of different things that Labor left behind, we wouldn’t be able to do what we’re doing today. They left a mess, we’re cleaning it up. It’s hard, it’s not easy, but at the same time we are strengthening the Australian economy and giving more families greater choice about work, and giving small business a fair go.
LAURIE OAKES:
You’re trying to undo the political damage of last year’s Budget?
TREASURER:
It’s not about politics. I mean, seriously, I came into this job Laurie to do what is right for my country. Tony Abbott is exactly the same, we are trying to do what is right for the country, and all the criticism and hecklers, forget them, all that matters is what we are doing is right.
LAURIE OAKES:
Okay. So it’s not about politics, but let me ask you, how do you think voters will react to it?
TREASURER:
Well that’s up to the voters. What I care about is people going out tomorrow and having a go. Having a go at building prosperity, having a go at employing more people, having a go at innovating, having a go at building their future.
LAURIE OAKES:
You don’t care about votes?
TREASURER:
Well, the election is a long way off Laurie, and from my perspective if I do a good job now, if we do a good job as a government now, we’ll be rewarded at the ballot box. If the Australian people don’t like what we’re doing, they’ll punish us. I fear change, and I fear what the other mob will do.
LAURIE OAKES:
Mr Hockey, we thank you.
TREASURER:
Thanks very much.