PATRICK CONDREN:
I spoke to Mr Hockey shortly before coming on air and asked him why he was warning us that we are facing falling living standards.
TREASURER:
Well the challenge at the moment, Patrick, is that our nation’s income hasn’t grown as fast as we would have hoped, because iron ore prices have come off about 40 per cent since the Budget was delivered. Coal prices have certainly come down, and even though we’re exporting more which is terrific for jobs, we’re actually getting less income than was expected. So, what we’ve got to do is make sure that we continue with our Economic Action Strategy, to strengthen the Australian economy and grow new markets. As you know, that’s why we’ve been signing free trade agreements with Korea, Japan, China, with more to come.
PATRICK CONDREN:
How much does your Budget have to blame for falling living standards?
TREASURER:
Not at all actually, it’s quite the reverse, that our Budget is about strengthening Australia’s living standards and providing the opportunity for even better living standards. For example, our Budget abolished the Carbon Tax, which has seen a significant reduction in electricity prices. That helps to strengthen the Australian economy and deliver jobs. Getting rid of the Mining Tax is hugely important as it’s taking away any disincentive for businesses to invest in the mining industry and a huge commitment to infrastructure, Patrick, that’s exactly what our Budget did. A huge commitment to new infrastructure and it’s rolling out. It’s rolling out right across Australia, creating tens and thousands of new jobs.
PATRICK CONDREN:
You are encouraging Australians to spend up big for Christmas. What happens if they don’t? What happens if they turn into Scrooge this year, and they don’t spend up big?
TREASURER:
No, they will spend up big. I’m a great believer in Santa Claus and so are my three young children and we’re sticking to the idea that Santa’s not mean and I think Australians will be good this year. I have no doubt.
PATRICK CONDREN:
Well give us an example then, for starters, how much will you as a family spend on Christmas? What sort of an example are you going to set?
TREASURER:
Well, I couldn’t give you the exact number Patrick, because frankly I plead guilty that I haven’t focused on Christmas presents this year. My wife somehow does it between all of her commitments, but we always try to be… it’s not just about your own children, try to be generous to others. I always at Christmas work with a few others to give bikes away to some of the most underprivileged children in my community. That’s not only the right thing to do but it’s good for your soul and it makes those children incredibly happy. I’d urge people to not only be generous to their own family, be generous to those most disadvantaged.
PATRICK CONDREN:
Well, if you can’t put a number on it for the Hockey household, what about for an average Australian household? How much do they need to spend to help out the country?
TREASURER:
Well look, and again Patrick, really, you’ll need to ask your audience that. It really depends what they can afford, and we want Australians who do have a good level of savings to be generous to their families and others this Christmas.
PATRICK CONDREN:
What are the prospects of Australia heading into a recession if the economy doesn’t turn around?
TREASURER:
Extremely remote. I mean the economy is going to get better, and we, you know, there are a number of more recent data series than yesterday’s National Accounts which indicate that you’re seeing the property market come back, you’re seeing property construction with a huge pipeline coming into play, you’re seeing business and consumer confidence back above the long term average levels, which is a positive level. You’re starting to see all the indicators move in the right direction. The message out of yesterday is we can’t sit back and wait for things to come to us. We have to earn our future, we have to earn prosperity, and that’s a hell of a lot of work, but we’re determined to do it, and our Budget is part of that. We’ve got to make sure we can afford our future.
PATRICK CONDREN:
Is it time to put back the predicted surplus?
TREASURER:
Well, we need to start improving the Budget bottom line, that’s what we’re doing, getting rid of waste. We’ve abolished for example, 76 different Government bodies to reduce the size of bureaucracy; we’ve got rid of 57,000 pages of regulation and laws which has freed up about $2 billion a year in the cost of red tape. We’ve approved nearly $1 trillion dollars, 300 new projects got fast approval so that we can get on with those major new projects that are going to create jobs. So, they’re the sorts of things that do make a difference. In our first year we’ve done that and we’re going to continue with that in our second year.
PATRICK CONDREN:
So in terms of the specific question about the surplus, is there a chance that it will be pushed back?
TREASURER:
Well, it was always four years or five years, hence, I’m not setting a date for a surplus, that’s what Wayne Swan did but I’m saying to you that we need to work our way towards it, and we need to work hard to get there. The problem that we have at the moment is we don’t control the numbers in our Senate. We’re asking the Labor Party and all the independents to work with us to try and address this challenge. Unfortunately they’re proving very difficult but the only people they’re hurting are the Australian people with their behaviour. I mean, Mr Shorten is going to worsen the Budget bottom line by $43 billion. He’s opposing $28 billion of our savings and he’s proposing an extra $15 billion of spending. You can’t spend your way to prosperity in this sort of situation.
PATRICK CONDREN:
Plenty of warnings in the financial press today about income recession; what is an income recession, what does that mean?
TREASURER:
Really, I’m not sure what they’re getting at, because if they’re talking about periods when we’ve had a negative quarter in relation to income, there have been a number of negatives over recent years and they’re usually associated with a significant fall in the Terms of Trade. Now, we knew that the Terms of Trade were going to fall, we knew that we were not going to get the prices that we expected for iron ire and coal originally, but they’ve come off faster than expected. Overall I am confident, Patrick – I want to emphasise this – overall I am absolutely confident that we will continue to have prosperity in Australia, but we’ve got to earn it. Everyone knows that. Every one of your listeners who’s a small business person, or at home, I mean you can’t take anything for granted. Even though we’re a blessed nation we’ve always earned our prosperity, and that’s not easy. That means changes like higher education reform, it means changes like helping to pay the way for Medicare. It means changes in welfare and so on. But if we’re going to have those safety nets in the future we’ve got to be able to pay for them.
PATRICK CONDREN:
Mr Hockey, you talked about Medicare. Can you clarify what is going to happen with the $7 GP co-payment?
TREASURER:
Well we’ve been in negotiations with Senators, we’ve discussed the matter with Senators and we’re working our way through that. It is our policy to have a contribution to Medicare, a $7 payment, which helps to make the system sustainable. Now, we’re trying to be reasonable, we’re endeavouring to discuss this issue with key parties. It is proving difficult but we are determined to do what is right Patrick.
PATRICK CONDREN:
Is the $7 co-payment and the money that it would get you as the Treasurer, not you personally obviously, is it just staying on the books to make your bottom line look good?
TREASURER:
Well a budget is a policy decision. A budget is a policy decision, it’s a plan, it’s the way you set up your family budget, your office budget….
PATRICK CONDREN:
Don’t start me on the family budget, my goodness. You talk about Christmas spending…
TREASURER:
Ha ha, well Patrick I’m sure there are rivers of gold coming into your household.
PATRICK CONDREN:
You are kidding.
TREASURER:
Well, I might swap you budgets, actually.
PATRICK CONDREN:
Done. That’s a done deal.
TREASURER:
You know, a budget is a plan, and you know, what we are, we’ve got 75 per cent of our initiatives through. We had 400 budget initiatives, 75 percent have gone through the parliament already, so we’re well underway, but we’ve just got to keep working through those individual issues. People said you wouldn’t get the Mining Tax repeal through, we got it through, they said you wouldn’t get the Carbon Tax repeal through, we got it through. There’s been a whole range of different things…
PATRICK CONDREN:
They said you wouldn’t get the tertiary education reforms through, and they didn’t go through.
TREASURER:
Well so far, but you don’t give up. Previous governments have been back to the Senate on numerous occasions. Sooner or later they see common sense – I would hope, I would hope. That’s my Christmas wish.
PATRICK CONDREN:
I was just about to say, is that your Christmas wish? But on the specific issue of the $7 GP co-payment, has a decision been made to back away from it? And are you only keeping it there to make your Budget look good?
TREASURER:
No, no, no. We are determined to have a contribution along the way so that we can make Medicare more affordable. We are committed, I mean, that’s our policy. The $7 co-payment is our policy. With so many other things, it was actually the Labor Party’s policy, you know.
PATRICK CONDREN:
Sure, sure, but you blokes beat them at the last election the last time I looked.
TREASURER:
We beat them yeah but the problem is we don’t control their votes in the Senate. I mean they don’t even control their votes in the Senate. I think Bill Shorten has lost control of his own Senators.
PATRICK CONDREN:
What about ditching the Paid Parental Leave scheme, would that help the Budget?
TREASURER:
Well as it stands, no because the Paid Parental Leave Scheme is paid for by a levy on the biggest businesses’ in Australia and we took that to two elections. By the way, if we can increase workforce participation of women then it actually strengthens the Australian economy. So, there is a very strong economic argument for Paid Parental Leave. You know, Patrick, in households it is very difficult for families to be able to survive on one income. You usually need two incomes. So when a woman goes off to have the baby, to lose her income can be really hard for a family budget, because the bills still come in, the mortgage still comes in, you know all the electricity bills, the water bills, they still come in, but their income falls during the period when they have a child. What we’re saying is, what Tony Abbott is saying is, and it’s appropriate that we don’t want them to have to suffer financial pain associated with having a child. I think that’s really important.
PATRICK CONDREN:
So what, briefly then, from your perspective, what does the future hold for the Australian economy, and for the average punter that is listening to the program today?
TREASURER:
Well, 2015 will be better than 2014, and 2014 was better than last year. You know with economic growth in the last 12 months of the previous Government, it was about 1.9 per cent, the first 12 months of our Government it is 2.7 per cent. So, we’re on the right trajectory, but we’ve got to work to get to the top of the mountain. You never give up half way up the mountain. You’ve got to keep going and for all Australians I’d say 2015 is going to be a good year, it’s going to be an even better year because we’re laying down the foundations, getting the free trade agreements in place, getting rid of the Carbon Tax and the Mining Tax, starting the Budget repair job, huge infrastructure rollout, getting rid of 57,000 pages of regulation. These are things that have been achieved this year. More to come.
PATRICK CONDREN:
So you are not the Grinch who stole Christmas?
TREASURER:
No, absolutely not. This is, you know, I love my country, we all do I think. We’re very blessed, no matter what comes our way, we are incredibly blessed to be Australians.
PATRICK CONDREN:
Mr Hockey, thanks for your time this morning and Merry Christmas to you and yours as well.
TREASURER:
Patrick to all of your listeners, Merry Christmas and a happy and wonderful, and probably a very hot new year in Brisbane and all around Queensland.