PRESENTER:
Joe Hockey, thank you very much for joining us today. The State Government led by Jay Weatherill recently took out at $1 million advertising campaign telling South Australia that your Government have cut a lot of money out of health and education that had been promised by the previous Government, that they claim were real cuts. Not promises that weren’t funded, but real cuts. They’re even saying, look at the Budget papers, you can see it for yourself. What’s your answer?
TREASURER:
I’d say, Mr Weatherill is telling a fib about what is allocated in funding over the next four years. The fact is, last year, South Australia received $7.6 billion from the Commonwealth Government. In four years’ time they’ll receive $9.4 billion. Over the next four years alone there is a 23 per cent increase in funding for South Australia.
PRESENTER:
23 per cent in which areas?
TREASURER:
Total funding from Canberra to South Australia, there is a 23 per cent increase in funding for the South Australian Government, 23 per cent. Think of how significant that is over the next four years.
PRESENTER:
OK, let’s single out over the next four years, first of all, public schools, what’s the increase in spending there?
TREASURER:
Well the increase in funding for schools is from $1 billion last year, to $1.277 billion in four years’ time. Now, over a four year period, that is a 27 per cent increase in funding for South Australian schools from the Federal Government.
PRESENTER:
What about public hospitals?
TREASURER:
And public hospitals, there is a 34 per cent increase in funding from Canberra to the South Australian Government for public hospitals over the next four years, 34 per cent.
PRESENTER:
So are you telling the South Australians today, that in your Budget expenditures, South Australia is not being cut of any monies whatsoever.
TREASURER:
In total terms, there will be ups and downs at various points, but in total terms, South Australia gets a 23 per cent increase in funding over the next four years from the Federal Government. This makes a lie of Jay Weatherill’s claims, makes him look foolish. South Australians can see through a Premier that is now using every excuse in the world to increase taxes and to make a mess of the South Australian economy. Given Labor has been in for 12 years, Leon, 12 years they’ve been in, they’ve just delivered the biggest deficit in South Australian history, they’ve lost the Triple A rating they’ve now got more debt than when South Australia’s bank failed and they’re trying to blame someone else for their problems. They are wholly responsible for it and Jay Weatherill is playing pathetic school boy politics, trying to blame Canberra. He should focus on the positive future that South Australia has.
PRESENTER:
By the way, on that positive future, everybody is hoping like hell it will include the building of submarines.
TREASURER:
This is something that we are obviously very focussed on. I am very confident, no matter what the decision about where submarines are built, South Australia will have more submarine related jobs in the future than it currently has.
PRESENTER:
Well that could be two jobs and that’s more.
TREASURER:
I think there will be a substantial number, but let’s just wait and see. I mean, Leon, we are very aware of the wishes of the South Australian people. I mean, our colleagues in South Australia are letting us know at every single point. One of the great challenges we have, and it is hugely important the Australian Government focus on what is in our national defence best interest and our national security best interest, and that is something that we are focussed on. But having said all of that, we know how important submarine jobs are to South Australia.
PRESENTER:
OK, you’ve got another problem and that is that there is, according to reports today, a $51 billion black hole in your Budget created to a large extent by the big slump in iron ore prices, the falling iron ore prices, is that going to force your hand to make some readjustments for the Mid-Year Economic and Fiscal Outlook?
TREASURER:
Leon, it is something we are obviously very focussed on. I was criticised for being too pessimistic about iron ore prices in the Budget. Now, the truth is iron ore prices are between 30 and 40 per cent less than they were when we first made our forecast in the Budget. That has a direct impact on our Budget bottom line. There is no doubt about that. I am very focussed on maintaining economic momentum in Australia in the Christmas period and beyond. We are not going to turn our mid-year Budget into a mini-Budget. We are not going to go down the path of trying to make up lost ground immediately. But sooner or later, the Labor Party needs to understand that they can’t keep whinging about spending more money whilst we fail to get the revenue that was anticipated from iron ore exports and coal exports months and a year ago.
PRESENTER:
Let me ask you about an issue with regards to jobs in South Australia, and that is that we have a number of challenges at the moment where it is reported to a Senate committee yesterday, that our northern suburbs could be in deep crisis after the closure of the car industry and of course, jobs are just not going to materialise out of nowhere. We’ve seen from what happened with Mitsubishi shut down, all those circumstances are a little bit different, that many of those people didn’t get redeployed in similar industries they either got out or are doing something totally different. We had a lot of money spent that ended up, really, evaporating. There weren’t too many people who could ring me and say, Leon, I’m now reskilled and doing this. So what are we going to do to enrich South Australia and give it the kind of status that it used to have?
TREASURER:
There are many points there. I am with you. I believe that South Australia can be a great economic state again. The starting point is to have a State Government that is focussed on building prosperity rather than whinging about Canberra. The second thing, from a Canberra perspective, is to get rid of the taxes that have been a hand brake on growth and potential growth in South Australia. I mean, the Carbon Tax is one great example. The Mining Tax sent a message, the very wrong message, to people that were looking at developing the resources of South Australia. The government policy in relation to mining and taxes was unpredictable so we got rid of the Mining Tax. We are opening these Free Trade Agreements and, Leon, services like health and education, aged care services, financial services, they represent 70 per cent of the Australian economy, but only 17 per cent of our exports, and that is one of the reasons why we are negotiating these free trade agreements, including potentially with China.
PRESENTER:
But Bill Heffernan doesn’t like the China FTA. Is there anything that you can do to ensure that all farmers get a good deal?
TREASURER:
Bill Heffernan hasn’t seen the China FTA. I think his concerns are about people paying a fair share of tax and I absolutely share those concerns and I have moved heaven and earth to ensure that people who are earning profits in Australia are paying tax in Australia but having said that, I don’t think, from what I understand, and what I’ve been briefed, the Free Trade Agreement with China, if it is going to be signed, is going to provide Australian businesses with massive opportunities in the second biggest economy in the world that we do not get today.
PRESENTER:
The person that you’ve been talking about here, Premier Weatherill, yesterday put on the table a whole lot of tax reform discussion. He says, all taxes now, let’s have a look at the way we tax, and we have a building crisis in this state, where, even in the last week or two, two prominent building companies have gone under. What would you advise Jay Weatherill to do given that he’s put all these taxes like stamp duties and ESLs on the table? Where he will argue, it’s all very well to tell me to reduce them, but what am I going to do about government revenue to provide services?
TREASURER:
He is getting a 23 per cent increase in funding from the Commonwealth Government, including more GST than previously expected. So, ultimately, the problem is red tape, the problem is the fact that, from what I hear from businesses in South Australia, is that the Government is a do-nothing Government, they take an excessive amount of time to provide approvals, they can’t make up their mind on key issues. I think South Australians need a strong decisive State Government that is focussed on being a facilitator for the private sector not trying to hamper the private sector with new and increased taxes and more regulation.
PRESENTER:
What’s your comment on the massive increases many have experienced on the Emergency Service Levy?
TREASURER:
This just makes up for the fact that Mr Weatherill has no plan for South Australia and what disappoints me the most, Leon, is that the Prime Minister invited all the States and Territories to participate in the discussion about how we can be a more efficient federation. How we can have more efficient and productive government. The only leader in Australia that has said he does not want to participate, is Jay Weatherill. Even the Labor ACT Chief Minister is prepared to participate. The only person that has said no to fixing the Federation and getting more efficient government, trying to get rid of red tape, the only person that has said no, is Jay Weatherill and I think that is hugely disappointing for South Australia.
PRESENTER:
Joe, thank you very much for joining us.
TREASURER:
Any time, Leon, thank you.