NEIL MITCHELL:
On the line is the Treasurer, Joe Hockey. Good morning.
TREASURER:
Good morning Neil.
NEIL MITCHELL:
Well look, thanks for your time. You’re clearly a supporter of Tony Abbott. Have you spoken to Julie Bishop or Malcolm Turnbull to get their guarantees?
TREASURER:
No and I don’t play those sort of games. My focus is on the Australian people mate. That’s what they want me to be focused on and that’s what I’m focused on. There were a few things mentioned yesterday in the speech that I think helped to build hope about a better future for Australia.
NEIL MITCHELL:
Well one of your colleagues, Ian Macfarlane, the Minister for Industry and Science, has said Julie Bishop needs to declare publicly that she won’t challenge. Do you agree with him?
TREASURER:
Neil, I promise you – you know when I spoke to you earlier in the year, I said we’re not going to get into commentary. That was a New Year’s Eve resolution and I’m not going to comment on others. I want to get on with some of the challenges we have Neil.
NEIL MITCHELL:
Okay, well let’s look at that. Do you agree that the Government’s in a difficult positon because you’re spending half your life looking over your shoulder? How do you make tough decisions when you’ve got this restlessness in your own Party?
TREASURER:
Change is difficult; change is difficult for people but we have to do what is right. Now, every day I’m facing a challenge that the Government spends $100 million dollars more than it collects in revenue and to make up that $100 million dollars I have to borrow the money. At the moment we’re paying $40 million dollars a day in interest on the debt we inherited from Labor. Now, that is unsustainable. At the same time, we’ve got to create jobs, and last year, even though we created nearly 600 jobs a day, three times better than Labor, it’s still not enough. So…
NEIL MITCHELL:
So you need tough decisions right?
TREASURER:
Well you do need difficult decisions. Look, the only solution Neil is when you’re spending 100 million dollars a day more than you’re collecting as a government: you either have to increase your revenue and that means increasing taxes, which in fact can slow the economy; or you have to cut your spending. And we’re trying to do both in order to ensure that we actually get a better outcome and live within our means.
NEIL MITCHELL:
But that’s part of my point. How do you make the tough decisions? How do you make unpopular decisions if you’re going to have a government that is apparently being judged by an opinion poll at least by its backbench- ‘Oh the Prime Minister’s unpopular, the Government’s unpopular’; You can’t make tough decisions in that environment.
TREASURER:
We’ve got to work harder at it; we’ve got to work harder at communicating.
NEIL MITCHELL:
Well, does your backbench not get that?
TREASURER:
I don’t know. Look, you know, I think that when Parliamentarians focus on their own jobs rather than the jobs of Australians, then they deserve to get a whack around the head.
NEIL MITCHELL:
Well that’s what’s happening isn’t it?
TREASURER:
Yeah, and look I would say to people, focus on the jobs of everyday Australians, not on your own job – you know, preserving your own job or enhancing your own job. The bottom line is we have to make difficult decisions. There is no easy solution here. I mean it’s terrific that electricity prices are down, petrol prices are down significantly and interest rates are low. That’s all terrific and that makes it easier for households. But Neil, you’ve got to focus on the issues that matter to people. I mean yesterday, I dropped off my youngest son at school for his first day of school and I was talking to the mums – most of them in tears – we talked about the challenges and they said look…
NEIL MITCHELL:
Why were they in tears? Oh the kids.
TREASURER:
Yeah the kids going to school.
NEIL MITCHELL:
Okay it wasn’t because of you.
TREASURER:
It’s a long time for you Neil, [inaudible] My mum was happy to send me to school I must say, she couldn’t wait for it to happen. But the fact is they want flexibility in life, they want to be able to get back to work. We need them to get back to work but they’ve also got to pick up the kids. So they want childcare that is flexible and affordable, and that’s what Tony Abbott talked about yesterday.
NEIL MITCHELL:
Peter Costello’s given you a whack in the paper today, saying the government spent summer too obsessed with issues people don’t care about. People want to know about paying bills and education – he says you’re being well off beam, is he right?
TREASURER:
He’s right about the static; there is a lot of commentary and there is a lot of commentary from former Members of Parliament, former Ministers, a lot of commentary from commentators and plenty of insider gossip in Canberra. I think the deep resolve of Tony Abbott, myself and the Coalition team is to get on with the job of governing for others, not for ourselves but for others and that’s the Australian people.
NEIL MITCHELL:
Now, Paid Parental Leave which was dumped – it always had to be dumped, I mean we’ve all been saying it was a bad policy – okay, what’s ‘plan B’? Is it drawn up yet?
TREASURER:
We’re working – we are consulting with colleagues, with stakeholders.
NEIL MITCHELL:
So you don’t have it yet?
TREASURER:
No, we’re working on it because the Productivity Commission, the independent body, did a full report into childcare and it needs to be more flexible, it needs to be more affordable. There is going to be a massive increase in demand for childcare over the next few years. The interesting thing, Neil, and why we’re doing this is: if we can increase female participation in the workforce, give more women the opportunity to work, if we got to the same level of female workforce participation as Canada, our economy would be $25 billion dollars bigger, meaning everyone would be wealthier. So, what we’ve got to do is we’ve got to facilitate that choice. The second thing, Neil, as you know, and this is something Tony Abbott addressed yesterday, the cost of housing is just beyond the reach of a single income family these days. So, a lot of women don’t have a choice, they have to work in one form or another to help pay the bills. So, we’re trying to address that as well. Flexible and affordable childcare is important. The second thing which I know your listeners will be interested in, particularly given the rising house prices in Melbourne, is there has been evidence, which will emerge over time, that there has been a significant increase in the number of foreigners buying Australian residential real estate unlawfully. That is, existing residential real estate, not new real estate – we welcome that investment because it helps to create jobs in construction – but they’re not allowed, without approval, to buy existing Australian residential real estate and we’ll have more to say about that in the next few days.
NEIL MITCHELL:
Yes but you’ve been letting them get away with that. I mean you’re talking about a new childcare policy you don’t yet have and enforcing laws that haven’t been enforced.
TREASURER:
No, no, hang on. Well that’s true it hasn’t been enforced because it never was enforced under the previous Government.
NEIL MITCHELL:
Or your Government.
TREASURER:
You are about to see that change. And the second thing is, in relation to childcare, people want us to be more consultative- they’re absolutely right, I totally understand that. Therefore, we have to raise an issue in order to start the conversation with the Australian people. Otherwise if we just announce it, the media calls for details, they say ‘well you’ve made up your mind, you’ve announced all the details’. So what we’re doing is we are consulting with the Australian people all along the way and we are focused on family, on small business and on infrastructure.
NEIL MITCHELL:
Will you drop the levy on big business for the PPL?
TREASURER:
Big business will not be paying any more tax than they are today. But having said that, we’ve got to pay for our families package. So, we’ll have more to say about that as we get closer to the Budget.
NEIL MITCHELL:
There’s a bit of an air of panic here though. I mean, we’re going to say that, we’re going to draw up that, we haven’t got that, we’re going to reinforce these laws. Is all this a strategy or this is a ‘short-term let’s fix the problem’?
TREASURER:
No way.
NEIL MITCHELL:
When was this all first discussed? When did you decide to drop the PPL?
TREASURER:
We’ve been discussing it with the Prime Minister for some period of time and obviously when the Mid-Year Economic and Fiscal Outlook was released just before Christmas on that terrible day of the Lindt Café siege, we saw the deterioration in the Budget because of the fall in commodity prices. There’s lots of things we’d like to do Neil, but sometimes we can’t afford to do it when we’re spending $100 million dollars more a day than we’re collecting.
NEIL MITCHELL:
Does all this mean there is more toughness to come? We’ve got a tough Budget, there’s more pain ahead. I mean you’ve attempted to impose some pain, which didn’t get through the Senate; is there some more pain ahead?
TREASURER:
I don’t want to – it’s not about inflicting pain, it’s about doing what is right and you’ve got to be careful when you spend taxpayers’ money. I mean, people work damn hard to pay a lot of tax and I want to be really careful with their money. There are areas where we can be more careful with people’s money, making sure there is no rorting, there is no abuse. I think we’ve got to make sure that every dollar of taxpayers’ money we spend is spent wisely.
NEIL MITCHELL:
So taxes are going up and spending is coming down, correct?
TREASURER:
We are not looking to increase taxes – tax rates – we are not looking to increase tax rates, but obviously if we can grow the economy we will get a bit more revenue.
NEIL MITCHELL:
Would it be fair to say, you and I are high-income earners, we will both be paying more tax next year?
TREASURER:
I think everyone pays more tax each year because…
NEIL MITCHELL:
That’s another problem.
TREASURER:
You know I want people to earn more. That’s what I want.
NEIL MITCHELL:
Come on, you know what I’m asking. Are you going to hit the wealthy?
TREASURER:
I’m not going to engage in speculation about the Budget or anything else. I just want to say to you Neil emphatically, our job is not to be commentators, our job is to focus on the best interests of the Australian people and I am damn well determined to do that.
NEIL MITCHELL:
Okay, a couple of quick things. A couple of backbenchers are saying scrap the whole idea of Knights and Dames; your view?
TREASURER:
They’re entitled to their view. I’m not distracted by the issue.
NEIL MITCHELL:
Petrol going up?
TREASURER:
Well I mean it’s going to bounce around, but it’s come down a long way, a long way. In fact…
NEIL MITCHELL:
Don’t take credit for that.
TREASURER:
No, no, I’m not. Hang on, you asked me about it. You asked me for an opinion and then say…
NEIL MITCHELL:
Okay, fair enough.
TREASURER:
You know, it’s quite interesting because the fall in petrol prices, the Treasury advised me, is equivalent to two cuts in interest rates. So, that’s a dramatic help for families and I welcome that. Just like I don’t control interest rates but we can do things to take a bit of pressure off interest rates going up. That’s good as well. But we can have an influence on electricity prices and getting rid of the Carbon Tax helped to do that. So those are the things that matter to everyday Australians; how can we get the bills down. That’s all good but what we’ve got to do is generate more income for the nation and individual families.
NEIL MITCHELL:
I’m getting caller [inaudible] who say electricity prices have gone up since January – I’ll check that.
TREASURER:
They would have come down – they wouldn’t have gone up as much as they would have if the Carbon Tax was still in place.
NEIL MITCHELL:
And a very final point- the Reserve Bank meets today, and as you say, it’s their decision but if interest rates go down further today it’s not a great sign for the economy is it?
TREASURER:
We’re facing offshore challenges Neil. The United Kingdom Chancellor of the Exchequer, George Osborne, who’s the equivalent Treasurer in the United Kingdom, he was saying that the actions in Greece represents the biggest threat to the world economy. I fully expect that global economic forecasts are going to come down over the next few weeks as a result of what is happening overseas. So, I think everyone around the world is going to be trying to find ways to get some growth into their economies. Now you’re right, it is the decision of the Reserve Bank, but circumstances have changed since the last change in interest rates, particularly on a global level, and I think they’ve got to be mindful of what’s happening around the world when they make their decision this afternoon.
NEIL MITCHELL:
Thank you for your time.
TREASURER:
Thanks Neil, any time.