PAUL MURRAY:
Treasurer, good evening.
TREASURER:
Good evening Paul.
PAUL MURRAY:
Now, it’s fascinating reading. I want everyone to go and do it for themselves, but there is a very scary picture about just how much money it is going to cost this country to pay for the healthcare system and to pay for the welfare system. I spoke about it with Scott Morrison a couple of days ago. Eight – right now – eight out ten people go to work all day, every day and every cent they pay in tax goes for welfare. That means that there’s two out of 10 who go for things like healthcare and there’s a whole lot more. What is the bigger worry to you; the bill that’s coming our way in the next 30-40 years for welfare or healthcare?
TREASURER:
Well Paul, the bigger issue for me is that we can’t put our heads in the sand about these issues and what pleases me most is that we’re getting these issues out into the open. The Coalition has a plan to address these issues. If the Senate doesn’t want to accept our plan, then we say to the Labor Party and the Greens and everyone else, ‘well, show us what you’d do, so that we can together, work to fix the mess and make sure that Australia has its very best days ahead of it’.
PAUL MURRAY:
But it also does seem that a fundamental point in this Intergenerational Report as well as the previous ones, which is that put simply, there are going to be more people who need help from the government through healthcare and pensions than there are people to pay the taxes. So, with the greatest of respect, is Australia not on some levels a bit of a Ponzi scheme where frankly we need more people to constantly go into the system to pay for the previous generation getting older?
TREASURER:
Well, we do need more workers, there’s no doubt about that and this is not unique to Australia. I mean there’s many other developed nations in the world that face a similar challenge. But not many other countries, in fact, I don’t know of any other countries, that are having the same sort of discussion about their future that we are having now and that is, how can we pay for our future. The Intergenerational Report is a compact between the generations and I stand on the shoulders of the contribution made by my parents, and I expect my children to stand on my shoulders, but we’ve got to make sure that we can afford our future. Now, you’re right, you’re absolutely right Paul, and I’ve heard you many times talk about the challenge of ballooning costs in health and welfare. The first challenge is to accept that there is a problem and our political opponents have been in denial about it. Well, there’s irrefutable evidence today that there is a big challenge. The second issue is you’ve got to have a plan. We’ve come a long way over the last 12 months in addressing the challenge but we’ve still got a long way to go.
PAUL MURRAY:
But is the truth that the necessary medicine for not just the Budget, but for the future, for a baby born this year like my daughter, for your kids and the kids that they will all go on to have is that there is not a solution that is ever going to be political palatable? There’s great seismic things that need to be done, but the Senate is in many ways being rewarded in the polls for saying ‘no’ on the brave decisions that were tried last year?
TREASURER:
Well, we got half way there. Last year’s Budget was a Budget that addressed 40 years of future problems and challenges facing Australia. Now, we might have bitten off more than we could chew in that regard, but we have gone half way there and the Intergenerational Report indicates that we’ve got halfway there but we can’t not continue with reform. The status quo is unacceptable because, as one graph in particular in the report shows, the status quo means that our debt levels will be the equivalent of what Spain’s is today. If we’d done nothing in the last Budget, we’d have debt levels up near Greece and Japan and what they’re at today. So, we can’t sit on our laurels, and the Australian people are up for that, Paul, I mean up for the debate but they want to be part of the solution. We’re going to go to the four corners of the country, engaging them in a conversation about how we can deal with these challenges in the years ahead.
PAUL MURRAY:
So, we have currently an immigration intake of 250,000 people every year. This report suggests that in about 40 years, we’re also going to the best part of – what is it – about 39.7 million people? Now, obviously while your previous Liberal Treasurer, Mr Costello said, ‘have one for the country’, that’s great, but to get to 39 million, we’re going to have to bus in an awful lot more people. Do you expect that a very significant immigration uptick is the way that we will have the people to create the tax base to pay for the previous generations’ workers?
TREASURER:
Well, no. We are taking a reasonable approach to the long-term immigration intake looking at around an average of 215,000 a year, which as a percentage of the population, starts to drop over time. But people are more mobile now than they’ve ever been. A large part of that immigration intake is in fact students coming to study in Australia, temporary residents as well. So, our projections in relation to population growth are not much different over the next 40 years to what they’ve been in the last 40 years. But what we are doing and what we are saying is, ‘let’s plan now for the future, what infrastructure do we need? What education system do we need?’ Importantly, if we’re going to live longer and a child born in the middle of this century is going to have an average life span of around 100 – so, if we’re going to live longer, there will be various points in our lives when we’ll come in and out of work, there’ll be various points in our lives that we’ll want to go back to education. The traditional life of study early, work in the middle and retire is not going to be the case in 20, 30, 40 years’ time. So the question is, how do we start thinking about public policy that provides an incentive for people to continue working well past 65 if that’s what they want to do. It’s a choice – how can we encourage those people to undertake work when they choose to undertake it? How can we encourage mums who have had children too, if they want to, come back into work? Because that in turn is going to help to lift the number of workers in Australia, which in turn, helps to increase the tax base to pay for some of the bills.
PAUL MURRAY:
But what about the scenario though, I mean, how do we not just keep somebody in work in their 50s and 60s, but how do we help them find work? Because the truth is, is that like hirers like, and if a younger person is a manager, they want people sort of to follow in their footsteps and that means they end up hiring younger people. They’re a little bit suspicious of older workers because they might somehow, I don’t know, buck the culture, whatever garbage goes through some people’s heads but that’s the fact. The fact is that a 50 year old might be the best person for the job but it’s the 28 year old who doesn’t have a family who gets the gig. How do we do this? How do we make sure that a 34 year old manager picks a 55 year old to do the job?
TREASURER:
Well, it depends on the job, and what we’ve got to do is look for experience and wisdom. Now, I held a press conference at a Bunnings the other day. One in four of the workers at Bunnings are over the age of 50. And in fact, I made the mistake of going up to an 83 year old worker at Bunnings and asking him how many days a week he worked and he chided me off, he gave it to me, and said, ‘I work, of course, five days a week’. So, I had a stereotype in my head that an 83 year old working at Bunnings is working two or three days a week. I suppose it’s about changing attitudes as a starting point; attitudes of employers, attitudes of younger people, and also finding a different career path. So, obviously a builder or a bricklayer is not going to be doing that job at 55 or 60, so what is the next career path for them? It might be property management in real estate, it might be working at Bunnings, it might be – whatever the case. People are going to have multiple careers. We’ve still got a society that is based on one or two careers where the assumptions are that you’ll have that career for your working life – that’s changing. Therefore, we’ve got to change our attitudes, and we’re going to have to, over time, change workplace laws, change the superannuation laws, to accommodate the changing nature of work and the changing nature of life.
PAUL MURRAY:
Two quick questions: this report also suggests that the best thing for the country is no tax cuts until, what is it, about 2021? Is that something that you will take on advice or do we have to read this as, ‘in a dream world, no tax cuts till 2021?’
TREASURER:
Unless we can get spending down, it makes it very hard to give tax cuts whilst we’re still in the deficit – that’s the problem. Now, in the next three or four years, you’re going to see someone earning average earnings in Australia go into the second highest tax bracket and that’s just going to slow the economy and it’s punitive. So, what we’ve got to do is look for ways to provide more incentives for people to work, not fewer.
PAUL MURRAY:
Alright, last question: I’ve got to ask it on behalf of my mate, are you going to go on Ritcho’s show next week? He gave it to you last night.
TREASURER:
I’m always prepared to go on Ritcho’s show, but I mean, he was a bit angry last night and he needs to take his calm pills.
PAUL MURRAY:
Okay, alright Treasurer. Thank you so much, all the best and thanks for talking to us tonight.
TREASURER:
Thanks, anytime Paul, thank you.