PATRICK CONDREN:
Treasurer Joe Hockey, good morning
TREASURER:
Good morning Patrick. Happy New Year!
PATRICK CONDREN:
Happy New Year to you as well. The bookies have Malcolm Turnbull odds on to be PM at the next election – he has come in from $1.60 to $1.45. Have you got any money on him?
TREASURER:
No, and look I am not going to respond to bookies or gossip or innuendo or speculation – none of that mate. I am focused on doing the job. I expect he is and everyone else is, on doing the right job for Australia.
PATRICK CONDREN:
Okay, now you’ve foreshadowed a tough Budget. How will you sell it…
TREASURER:
Hang on, hang on. I haven’t foreshadowed a tough Budget. What I said was that we’ve got to live within our means and I think everyone understands that, and living within our means is about addressing the fact that every day, Patrick, we are borrowing $100 million just to pay our daily bills as a government. So, we are collecting $100 million less tax than we are actually spending every day and that’s unsustainable into the future.
PATRICK CONDREN:
So what is the economic outlook from your perspective then? You say we’ve got to live within our means. You’ve talked about the debt and the bills associated with that. Is it a bleak economic outlook?
TREASURER:
No, we’ve made good progress. Australia has faced significant headwinds over the last few years and in the last 12 months, despite facing significant headwinds, and as you know in Queensland, I think about 16,000 jobs in the coal industry and construction industry relating to resources – 16,000 jobs have gone in Queensland in the last 18 months, yet there are still good signs of a growing economy and we are doing this despite what’s happening overseas, we’re doing it despite the falling coal prices and in iron ore prices. So, last year, we saw job growth in Australia run at three times the speed it did at the previous year under Labor. Last year, we saw the largest number of startup businesses in Australian history – over 200,000…
PATRICK CONDREN:
And yet unemployment is running at over six per cent?
TREASURER:
Which is still too high and we are not growing fast enough; the economy is not growing fast enough to create the jobs that we need. So, whilst we’ve been running at around 600 jobs – new jobs – a day, up from 200 under Labor, it’s still not enough to address the growing needs of the workforce.
PATRICK CONDREN:
Well, what about tax breaks? Small business is, you know, a key component of our economic infrastructure; what about small business? Any tax breaks for them?
TREASURER:
Well, very important. We went to the last election saying that we were going to give small and medium-sized enterprises a company tax cut of 1.5 per cent – we’re honouring that commitment. But look, the interesting thing is we are seeing a massive change in the Australian economy and in the global economy, Patrick. So, the engine room of the Australian economy into the future is going to be small business – it is going to be those businesses in particular that sell services, be it accounting services, health services, education services and so on. We’re not only going to expand the opportunities in the Australian market – but we have got huge opportunities in our region and that’s one of the reasons why we signed those free-trade agreements, to get into places like Korea and China and Japan without them taxing Australians and that means we are competitive on the ground there and our services exports are going to be a huge, huge beneficiary of that and it’s going to be those small businesses that are starting up that are coming up with new ideas that are going to drive the future of the Australian economy.
PATRICK CONDREN:
Are you considering including the family home in pension asset-testing?
TREASURER:
I have seen no proposal to that effect – none. We rejected it last year…
PATRICK CONDREN:
Not having seen a proposal, does that mean you’re not considering it?
TREASURER:
Well, we haven’t considered it and there’s no proposal and there are no plans. So, I mean, I haven’t seen anything to suggest that. So, I’m not sure where it came from.
PATRICK CONDREN:
Well, it’s on the front page of the Fin Review.
TREASURER:
Well, it must be right. Don’t get me into being too cynical about the media at the moment. I have a great deal of respect for the media.
PATRICK CONDREN:
Your eyes are brown. So, in terms of the family home in pension asset-testing, is it something you would consider?
TREASURER:
The answer is no. We have not considered it. We are not proposing that we go forward with that. Obviously, we want to make our future sustainable and when I release the Intergenerational Report, which comes out once every five years – around the end of this month – it’s going to have some startling and very encouraging statistics about Australia’s future…
PATRICK CONDREN:
For example, give us hint?
TREASURER:
‘Give us a hint’…
PATRICK CONDREN:
Give us a taste if you would?
TREASURER:
The encouraging thing is we’re going to live longer. I think that is a good thing, particularly for our life today [inaudible]
PATRICK CONDREN:
I’ve got to tell you that’s not necessarily a good thing.
TREASURER:
No, it is – well, it is if we have a good quality of life and that’s exactly what we’re focused on – how we’re going to have a better quality of life. Now, there is a difference between longevity – that is living longer and ageing. We want to delay the ageing process. We want people to live in better health, with greater prosperity for longer and then have greater choice. Now, the encouraging thing is, when you look at the massive technology developments that are coming down the pipeline, and I think a little earlier on – I understand – on your station there was quite a discussion about medical research. The advances in medical research have given us an enormous boost in longevity but it’s also given us enormous boosts in quality of life. Now, the question is how do we as a government and future governments, be they Liberal or Labor or anything like that, how are they going to be able to afford the quality of health, the quality of aged care, the quality of education, that we need to have to be a more prosperous society into the future…
PATRICK CONDREN:
Presumably you are going to answer the question now?
TREASURER:
That’s right.
PATRICK CONDREN:
You don’t need the media, you don’t need Sarah Ferguson. You can ask and answer your own questions!
TREASURER:
The interesting thing, Patrick, is that we can do it. Australia is a smart nation. We’ve always been able to be better through our own ingenuity, through our own innovation. We’ve always been able to improve the quality of life for Australians, we’ve just got to work at it, we’ve just got to work at it. Now, in 1901, life expectancy for men was 55. In 40 years’ time, it will be around 90. So, there’s a huge transformation happening.
PATRICK CONDREN:
Do you want to live until your 90?
TREASURER:
I want to live till, you know…
PATRICK CONDREN:
Till you stop.
TREASURER:
[Inaudible] Yeah, that’s right. Well, you know, I want to have a quality of life. I don’t want to be a financial burden for my children, and I think that’s very important as well because we’re not replacing ourselves as a nation in terms of population. We haven’t got that sort of population growth where we, you know, are completely replacing mum and dad. So, what we’ve got to do is ensure that this generation that lives today is not passing the buck to future generations and that’s one of the reasons why we are very focused on living within our means in the Budget, why we are focused on paying down the debt, but importantly, we are focused on looking forward, looking at the challenges over the next 40 years and identifying what we can do now to make sure we have a decent quality of life.
PATRICK CONDREN:
If your Budget – your next Budget is too tough, is there concerns that it could continue to sap consumer and business confidence and stall growth?
TREASURER:
It’s not a question of being tough, it’s a question of doing what is right. Now, we made some very difficult decisions…
PATRICK CONDREN:
But you are splitting hairs surely, I mean…
TREASURER:
You know, I’m not sure. The definition of tough, right – let’s talk about the definition of tough…
PATRICK CONDREN:
If we must.
TREASURER:
You know, Greece is, quite obviously, overnight, it’s on the threshold of very substantial financial issues. There is massive social dislocation in Greece. They are failing to pay their bills. They are facing quite a tumultuous few days. That is a very, very tough period when you’ve got unemployment that is – youth unemployment that is around 50 per cent. Thank god Australia is not there; we do not want to get there. But if we make the right decisions now, we can ensure that we never get there – there’s no chance of ever getting there. If we make the wrong decisions now, and if we think that we can just keep putting everything on the credit card, then one day, one day, we are going to face a very, very difficult road and that’s when the pain will be far greater and that’s when it will be really tough.
PATRICK CONDREN:
See, you as Treasurer trying to sell a Budget will call it right, other people might call it tough, that’s a perfectly legitimate [inaudible]
TREASURER:
Yeah, I mean, people are entitled to do that. We are very focused on households and how we can ensure that people have money in their pocket – that’s why we got rid of the Carbon Tax, which is $550 a year for the average household. It’s a huge boost for business as well. We’ve got record low interest rates. Thankfully – and this is not the making of the government but it is a huge benefit for households to have a dramatic fall in petrol prices – that makes a real difference. And obviously, we kept, for example, we kept the tax cuts associated with the Carbon Tax but got rid of the Carbon Tax. So, that means that people have more money in their pocket today than they would have had under Labor – there is no doubt about that. Now, that all helps but we’ve got more work to do.
PATRICK CONDREN:
Can I ask you a few other questions that are kicking around today, if you would? The Sarah Ferguson interview on Budget night – an ABC review has found that it breached the broadcaster’s bias guidelines when she interviewed you on Budget night. Do you think Sarah Ferguson treated you unfairly?
TREASURER:
Well, I’ll leave that to others, Patrick. I…
PATRICK CONDREN:
Did you feel particularly aggrieved after the interview?
TREASURER:
Look, my feelings don’t really matter.
PATRICK CONDREN:
Of course, come on, you are a sensitive new-aged guy.
TREASURER:
No, my feelings don’t really matter. I’ll leave that to the ABC, I’ll leave that to the ABC.
PATRICK CONDREN:
Do you – have you, have you looked at the findings of this particular review?
TREASURER:
No, I haven’t, no I haven’t. Look, you know, there is just so much gossip and commentary around Canberra at the moment that some of us need to get on with the job of doing things for Australia rather than for ourselves or commenting on each other and I’m certainly getting on with the job of doing things for Australia.
PATRICK CONDREN:
Speaking of which, Malcolm Turnbull was on Q&A last night. In terms of – he was asked about Philip Ruddock’s sacking as the Whip. He described – Turnbull described Ruddock as an icon and said he was well-loved. Do you love Philip Ruddock?
TREASURER:
Well, it’s a special kind of love. It’s not that sort of that normal love, I suppose. Look, I get on very well with Philip Ruddock, he’s a very decent human being.
PATRICK CONDREN:
Should he have been sacked?
TREASURER:
Well, that is a matter for the Leader. I note that Warren Entsch, the Member for Leichhardt and former Whip for the Coalition Party, said that he made that recommendation to the Prime Minister. So, you know, it speaks for itself.
PATRICK CONDREN:
Mr Turnbull on Q&A again last night, also said that we need to be better at selling our message. Do you think he was referring to yourself in terms of the Budget or was he more referring to Tony Abbott?
TREASURER:
I think he said we. So, all of us have a responsibility. All of us have a responsibility to do more and we have a collective responsibility to take the nation with us on this journey. Now, again…
PATRICK CONDREN:
Do you think you’ve done that or do you acknowledge that you haven’t?
TREASURER:
No, no, I think there’s more to do. I think there’s more to do, Patrick – I recognize that, and that’s one of the reasons why, when we release the Intergenerational Report, there will be a very deep community-engagement program where we reach out to the community providing all the information from the independent analysis in the Intergenerational Report; we reach out to the community and engage in a conversation with the community about how we can solve collectively, some of the problems and meet head on some of the challenges that Australia faces over the next few decades…
PATRICK CONDREN:
All right, Mr Hockey…
TREASURER:
… [Inaudible] It’s exciting in that sense. I think the nation is ready for a conversation about our future. I think we are, in every aspect of our lives, we are facing change, not initiated by government necessarily, but actually initiated by new technology. I mean, as someone pointed out to me the other day, apps have only been around six years. I mean, mobile phones have been around, what, you know, as a common form of device, for what a decade? Or maybe a decade and a half? You know, it really is – we have seen massive transformation in our lives and the things that we thought were stable and predictable are no longer like that because…
PATRICK CONDREN:
And is that one of the challenges that you as a government hasn’t come to grips with because of the changes that you talk of and therefore, you’ve been left fumbling to a certain extend?
TREASURER:
It’s affected every government in the world, Patrick. I mean…
PATRICK CONDREN:
Sure, sure, sure, but you’re running the show here.
TREASURER:
Yeah and look, I think it has affected every government in the world. I mean, you look at the disruption that’s occurred because of new technology in everything from gambling, where you have internet-based gaming, or taxis in the face of Uber, or now you know, television licenses used to be basically a license to print money. TV stations had a broadcasting license. Now, they’re being hit by everything from YouTube and Netflix, right though to pay-tv. Everything is changing. Now, what we need to do is make sure the consumers are protected during this period of change but also that consumers are the sovereign – that they’ve got greater choice and that the government is standing side-by-side on this journey with consumers. Now, this is something that governments around the world are facing, and the consumer is now more empowered than at any other time, so we’ve got to change our mindset and we’ve got to have a deeper and better engagement with the community in finding ways to ensure that we have a better future.
PATRICK CONDREN:
Joe Hockey, thank you for your time this morning, I do appreciate it.
TREASURER:
Anytime, Patrick. Thanks very much.
PATRICK CONDREN:
Excellent, we’ll see you tomorrow morning at half past eight. Thanks Joe.
TREASURER:
No worries, I’ll be in the studio! See you then.
PATRICK CONDREN:
Good on you, thank you.