PRESENTER:
Joe Hockey, good morning.
TREASURER:
Good morning, Neil.
PRESENTER:
So, are you going to recast it at all?
TREASURER:
Obviously, we will deliver a mid-year update in December, we will have another Budget next year and the year after and so on. But the fact is that the principles remain, our commitment to those policies that you talked about a little bit earlier is unchanged and the report in the Australian Financial Review is just wrong.
PRESENTER:
So, is there anything, well, it's all up, still, up for negotiation in a sense, isn't it?
TREASURER:
We have always said that we would negotiate. Wherever there is a sensible Senator, and sometimes they can be hard to find, but wherever there is a sensible Senator we give it a shot.
PRESENTER:
So, when do you get to the stage of saying, 'well we have to give up on this, this, or that'?
TREASURER:
It's a long way away because if we don't do something about the structural challenges that were left to us in the Budget, then in ten years' time every Australian is going to have a government debt of $25,000.
PRESENTER:
But how short are you on what you want to achieve?
TREASURER:
A number of them come into play over a period of time, Neil. There's very few of them that are immediate and have immediate effect. What we're doing is, we've got obviously most of the Budget through. So, the Government is paying its bills, it's still handing out Medicare and Centrelink payments every day, so, most of the Budget has gone through. What we are endeavouring to do is put in policies that make sure our quality of life is sustainable into the future – that's the key.
PRESENTER:
OK, like $7 co-payment, correct?
TREASURER:
Yeah that's right, and look, if we don't make sure that Medicare is sustainable, then ultimately Medicare will do less for people and we'll have a lesser quality of life.
PRESENTER:
So is a $7 payment non-negotiable?
TREASURER:
No, as I said, we're prepared to talk with whoever is sensible, the Labor Party actually passed this legislation some years ago but then changed their mind and changed Bob Hawke for Paul Keating. Well, you know, some of them are still advocates for it in the Labor Party knowing that if, I mean for example, the irony is that every pensioner, for example, has to pay for a prescription for the first 60 prescriptions when they go to the doctor, but they don't have to pay to go to the doctor. Now, what we're saying is, 'Yes, you do have to pay $360 for your prescriptions, we're asking you just to pay $70 to go to the doctor if you go ten times during the course of the year after that it will be free'.
PRESENTER:
Have you got contingency plans here though? Are you looking at new ideas in case you can't get some of these things through?
TREASURER:
Well, we have to, we have got no choice, Neil.
PRESENTER:
What to look at new ideas?
TREASURER:
Yeah that's right. If we don't get the Budget back to surplus, then we can't start to pay down the debt, and it means when the next downturn comes Australia is going to be in a far more vulnerable position.
PRESENTER:
So what are the new ideas.
TREASURER:
We are working them through. I mean, I'd love to share them with you and your audience.
PRESENTER:
I think it'd be a good idea.
TREASURER:
I think it would be a good idea, but it would be inappropriate.
PRESENTER:
We might have a whole new fight on again because we don't like them.
TREASURER:
You know, we're not doing it for popularity here, Neil, we're doing it because it's the right thing to do for the country. You know what it means? It means that we start to get more jobs created, it means we get more people into work, it means they contribute tax and it means we get more money to be able to offer the services people expect.
PRESENTER:
OK, so say something like the $7 co-payment. You can't get that through. You're then going to go and find another idea to achieve the same thing.
TREASURER:
Yes.
PRESENTER:
And that's going to hurt isn't it?
TREASURER:
Well, what are our choices?
PRESENTER:
I don't know, but I'm saying the hurt is going to happen somewhere. Whether it's the $7 co-payment or elsewhere.
TREASURER:
And that's the fundamental point. Ultimately it is not government money that we hand out. It comes from another tax payer. It comes from your next door neighbour, it comes from you. If we're handing out that money and we are handing out more than we are collecting, either we have to increase taxes, which starts to slow down the economy and actually ends up costing jobs – or we have to reduce expenditure. What we're trying to do is reduce expenditure.
PRESENTER:
What about the earn or learn principle, the six month wait for the dole once you leave school or Uni? Is that dead? Clive Palmer seems to have knocked it on the head.
TREASURER:
Well, ultimately Clive Palmer only has three or four votes in the Senate, depending on what day it is. The only way Clive Palmer is relevant is because the Labor Party keep voting with him.
PRESENTER:
But it's been knocked on the head between the two of them hasn't it?
TREASURER:
Well, you know, I tell you, I mean what I've discovered over the last twelve months is that public utterances from Mr Palmer and some others are very different to what ends up occurring in the Senate.
PRESENTER:
How much money is involved in that though?
TREASURER:
I haven't got the specific number on that particular initiative, I mean, there were more than 500 initiatives in the Budget.
PRESENTER:
Yeah fair enough but the same thing happens, if that six month dole business gets knocked on the head you've got to find it somewhere else.
TREASURER:
Yeah, there's no money tree in Canberra, Neil, I've been looking for it.
PRESENTER:
The terrorism situation is obviously going to cost us a lot of money and the involvement in Iraq and that's unavoidable and it's necessary but does that mean that you've got to go and make that up somewhere else?
TREASURER:
Yes we do, no of course we do. I mean we've added an extra $630 million to strengthen our agencies in relation to counter terrorism, that was after the previous Government had cut funding in that area. Now, we need to pay for it. The cost, and I mean human cost of it, a terrorist event in Australia is horrific, but there is also massive economic costs as well. So therefore, anything we do to ensure that an event does not occur in Australia is money well spent.
PRESENTER:
Will we ever see a terrorism tax?
TREASURER:
Oh, God, no. Look, you know, we have got to do everything we can, Neil, to make sure we're safe. That is the first duty of a government, to protect its citizens and we're not shirking that. Whatever we have got to do, and spend to do that, we will do.
PRESENTER:
Even if it delays surplus?
TREASURER:
Look I don't think it will be a huge amount of additional money. I mean, we already spend tens of billions of dollars on national security each year so any additional activity is not going to make a massive difference to the budget.
PRESENTER:
Today is UN day for elderly persons and the Global Age Watch Index has released figures showing one-in-three elderly Australians live in poverty. So one-in-three pensioners live in poverty. That's unacceptable isn't it?
TREASURER:
It is, I mean, I'd like to see the facts behind that. Because in Australia, for example, for someone over the age of 75 we actually spend more on health care and other concessional services than we spend on providing them with the Age Pension. So the total amount of benefits paid to older Australians are substantially more than the actual Age Pension that they receive.
PRESENTER:
OK, what's happening with deeming by the way, pensioners deeming rates?
TREASURER:
It's still very much on track, why, where does this come from?
PRESENTER:
Oh no I just had a caller off-air and they thought that deeming rates were being changed.
TREASURER:
I'd need to check on that.
PRESENTER:
Bill Shorten has just announced Labor won't support changes to the pension or welfare and called on you to outline where savings will be made if you're looking at further cuts. What's your reply to that?
TREASURER:
Actually, it's Mr Shorten that has to identify where the savings are because ultimately he's going to have to deal with the issue if he's ever elected into government.
PRESENTER:
But you're in government.
TREASURER:
We are, and we're sticking to our policy.
PRESENTER:
But you've already told me that you will have to make cuts in other areas if you don't get them through, where will they be?
TREASURER:
And I say to you, Neil, we haven't given up on getting things through. I mean, we haven't given up on getting things through because they're the right policies. So, for example, at the moment, the Age Pension is growing at 6 per cent a year. Our changes that we've proposed reduce that to 5.1 per cent average growth each year. So instead of growing at 6 per cent, the Age Pension total amount in Budget terms is growing at 5.1, secondly we guarantee the aged pension will continue to increase by inflation each year, under our proposal. Third thing is, it doesn't start until 2017 and the fourth thing is, that people ought to know, is we currently spend ten per cent of the Federal Budget on the Age Pension and I want to make sure that people have a sustainable quality of life into the future. That's what we are determined to do, that we do not have a reduced quality of life for any Australian into the future. The only way to do that is to make sure that we can afford our future. Bill Shorten is living in, I mean, I am incredibly disappointed with Bill Shorten. I used to debate him with you on your program and he was someone who had some values. I don't know what Bill Shorten believes in but the inconsistency, for example in relation to tax yesterday, where they're saying that we let people off tax and they're the ones who let them off. I mean, it's incredibly frustrating for Australia to have this sort of situation.
PRESENTER:
Thank you for your time.
TREASURER:
Thank you, Neil.