PATRICK CONDREN:
It seems your Budget has done what Bill Shorten couldn't do and made Bill Shorten preferred Prime Minister.
TREASURER:
Well, that certainly wasn't the intention. The fact is, we've got to do what is right for the country and you can't build Budgets on the basis of what is popular or not, you have got to do what is right for the country and that is exactly what we are doing.
PATRICK CONDREN:
Did you anticipate such a poor polling in immediate response to the Budget?
TREASURER:
Well, yes but I think when people start to see the benefits of the Budget for the economy, see the benefits of the Budget for those most vulnerable in the community over the medium and longer term, they will understand that what we have done is put in place a plan that has been properly thought through, that has taken months and months and months to prepare, that is focused on making our quality of life sustainable and perhaps hopefully even improving our quality of life rather than just letting it drift off and deteriorate over time, which would have been the case if Labor had been re-elected.
PATRICK CONDREN:
Is it the case that in terms of spreading the pain, which you talked about a lot last week, that higher income earners will only feel the pain for a short period of time whereas low income earners will feel the pain, the financial pain certainly, for a longer period of time?
TREASURER:
No, I don't accept that at all, the fact is everyone has to contribute. We are going into the wages of higher income earners so we are taking more money off high income earners and in relation to low and middle income earners, we are freezing the increases in the amount of money we are giving them, or in some cases, for people on higher income or where they have been paid to stay at home, we are removing that entitlement. So we are actually, in the case of higher income earners, taking money from them not freezing the amount they receive back from the taxpayer.
PATRICK CONDREN:
Why didn't your Budget have a breakdown titled 'Detailed Family Outcomes' which Peter Costello instigated in his 2005 Budget?
TREASURER:
Well, we did put tables; we did actually put down tables in with impacts and outcomes for different groups. I'm not quite sure what the criticism is but we've provided a range of different scenarios, we've also provided information on impacts on people.
PATRICK CONDREN:
Well, apparently in 2005, Mr Costello displayed results for six family types at 15 different levels of incomes and your Budget didn't have something similar?
TREASURER:
Well I am not familiar with what Peter Costello presented nine years ago. What I am familiar with, is what we have in this Budget and every government presents information in different ways. We presented all the information; I don't think anyone could suggest we are hiding anything given that everyone seems to have provided information to the community on the basis of their assessment of what the impact is. So I am not sure what the suggestion is there.
PATRICK CONDREN:
Last week on our program, plenty of people – we posed the question to folk, "would you be prepared to pay a higher GST and or broaden the GST base if it meant that there would be less financial pain to them?" – and the vast majority by and large said yes. Is that something you are open to?
TREASURER:
Well, I don't think increasing taxes is the solution to everything and the problem has been that the government was spending too much money. Now, we inherited a Budget that was simply unsustainable, the previous government kept throwing money and wasting money. The net result is, someone has to pay at the end of the day. Well the end of day is coming unless we take immediate action to rectify the problem. So, you have got to reduce expenditure and where you spend money, you need to re-prioritise it into areas that are going to create jobs and strengthen the economy, that's why we are spending an enormous amount of money. For example in Queensland, we are spending over $6 billion for further upgrades to the Bruce Highway, we are spending money on the Gateway Project, an enormous amount of money on the Gateway Project. We are building the Second Range Crossing from Toowoomba which governments have talked about but no one has delivered and it is happening fast on top of infrastructure funding for Roads to Recovery and Black Spot Programs. So what we are doing is we are trying to build the infrastructure for the economy that creates jobs and if we have more people in jobs, at the end of the day, the Government gets more revenue from personal income tax and then we can start to do other things.
PATRICK CONDREN:
Given all those things you just outlined for Queensland, you would think the Premier here would be more thankful for you?
TREASURER:
Well, that's a judgement call. I mean for example, the Labor Government did not put the money in the Budget for the Gonski reforms for Queensland. Queensland did not want to sign up, Labor didn't put the money in for Queensland schools and we found out about it during the election campaign…
PATRICK CONDREN:
So are you…
TREASURER:
Sorry just to finish. Patrick, we topped that up by $1.2 billion over the next four years and we gave Queensland the additional money for schools after the election that Labor was never going to give them. So over the next four years, there is a massive increase in schools and hospital funding. But Labor now, don't have the courage to say that they were never going to fund after that, the $80 billion that is in dispute. What we are saying to the States is, well Labor was never going to fund it, we haven't got the money to fund it, how are we going to work together to resolve this issue?
PATRICK CONDREN:
So why is Campbell Newman then, so vocal in his opposition to your first Budget?
TREASURER:
Well, he is entitled to his view but the Sates are getting $9 billion more over the next four years from the Federal Government – $9 billion. Over the next 10 years, they are getting $1.4 trillion…
PATRICK CONDREN:
And yet Campbell Newman is urging voters in Queensland to ring their local Federal LNP MP and Senator to voice their concerns?
TREASURER:
Well, I am not familiar with that Patrick. He is entitled to his view but when you actually look at the raw numbers that are going out over the next four years, which is the Budget, you will see that Queensland gets significantly more than what they would have got six months ago, or 12 months ago.
PATRICK CONDREN:
On the face of it then, it certainly sounds like you know, you didn't bring the Premiers with you. Is there a reason you kept them in the dark?
TREASURER:
Well, we – it's not as if we kept them in the dark because we have been working with them on a range of different projects. We have been in close consultation with the Queensland Government about roads like the Toowoomba Second Range Crossing and the upgrade for the Gateway Project and so on and we will continue to work with the State Premiers. But, obviously it all comes out of the pocket of the same taxpayer, be it Federal Government or State Government. Now the State Government, as I have heard Campbell rightly say, the State Government runs schools and the State Governments run hospitals, the Federal Government doesn't. So there is no point in the Federal Government just providing bonuses and bonuses when it comes out of the same taxpayer pocket to the states, if the states are the ones running the infrastructure. So what we have got to do is come up with a better plan and that is why we are going to sit down with our Federation White Paper and our Tax White Paper and sit down with the states, and in a methodical way, go through the challenges and meet head on those challenges. But over the next four years, in fact Queensland in particular, is a significant beneficiary.
PATRICK CONDREN:
Then I suppose, Campbell Newman also says that the Commonwealth raises income tax, instead of the GST – tinkering with the GST, that income tax that is paid for, paid by Queenslanders should all come back to Queenslanders. Is that an idea that has some merit?
TREASURER:
Well, all it means is the Federal Government is going to increase taxes in another area, that's all that means. So the Federal Government ends up increasing taxes, including on Queenslanders, to make up for the shortfall. You see the problem, one of the challenges we have Patrick is, we spend more on welfare as a government than we spend on healthcare or we spend on education or we spend on the defence of the nation; it is our biggest payment. And because it is our biggest payment, we need to make these things sustainable so that those most vulnerable, those most frail in the community, are provided with an appropriate safety net. Now, what we have got to do is restructure the way we are doing things, that is hard, that is not easy, we know that. And we are asking everyone to contribute to help to restructure things so that we actually do have a proper safety net in our community. But you know for 14 years, Government, Federal Government has been handing out money telling everyone everything would be okay and it was fine when there was lots of money. As a result of the mining boom and so on, Kevin Rudd and Julia Gillard borrowed the money from the next generation to hand out to the current generation. So that seems you know, well okay they did that, but now we are in a position where someone has to say, okay we have got to start living within our means. We ask families to do it, we ask ourselves to do it and every level of government, in order to provide a sustainable forward path, needs to have a plan that ensures we need to start to live within our means.
PATRICK CONDREN:
Looking specifically at the restructuring of welfare payments, have people been contacting your electorate office in relation to that?
TREASURER:
Sure.
PATRICK CONDREN:
And what is the view that they express?
TREASURER:
Well, I think people are not familiar with all the information. For example, the Labor Party is running around saying we are cutting pensions, well that is complete rubbish. And they say in relation to Family Payments, we are going to rip away Family Payments from every family and that is just rubbish. So there is an almighty scare campaign being run by the Labor Party and the Greens and various others. But I think as people actually do see the details, they will see, what we are doing is responsible and fair and I think they will also understand, it does need to be done because if we do not move now, then we are going to continue borrowing money to pay interest on our debt; that is what we are doing, we are borrowing money to pay interest on government debt at the moment.
PATRICK CONDREN:
But surely all those people contacting your electorate office, not all of them are misinformed people listening to Labor and the Greens, some of them must be directly affected. So my question to you is, does it – does that sort of feedback take a personal toll on you?
TREASURER:
Well you know, it doesn't matter what I feel; I think it matters what the public feels. I think what we have to do is focus on explaining what our program is, explaining that we have done a lot of work on this and that this is the fairest way to make these sorts of decisions. And at the same time, grow the economy because after all, the best thing we can do for the community is create an environment where jobs are created, and well paid jobs are created. That is what we have got to do, we have to grow the economy and there is no doubt that our Budget is a growth package.
PATRICK CONDREN:
Well, Mr Hockey you have bee very generous with your time and I do appreciate it.
TREASURER:
Any time and I really appreciate you taking my call.
PATRICK CONDREN:
Cheers.