CARLTON:
Peter Costello good morning.
TREASURER:
Good morning Mike.
CARLTON:
The Australian is saying this morning, I will quote here: ‘Mark Latham has pulled off a potent strike into Howard's heartland with this Medicare Gold idea.' What do you think?
TREASURER:
Oh you have got to look very carefully at the fine print and when you look at the fine print you will find that this proposal for older Australians going to hospitals, it doesn't include private rooms, so that the promise to put older Australians into the private hospital system may not be all that it is cracked up to be. Of course they can already have free treatment in public hospitals and if you can't be guaranteed the private room and the doctor of choice in a private hospital that is not going to be much different really.
CARLTON:
But it does guarantee all of those Australians over 75 absolutely, you would have thought, no more worry about the health bill.
TREASURER:
Well again, if there are hospital beds for everybody, that is one thing, but if there are the same number of hospital beds and you are guaranteeing places for people that are over 75 that will only be done at the expense of somebody else in the community. So you have got to look at this very, very carefully. You may well say to people over 75, well you can have that bed at the expense of somebody else but somebody else could in fact be quite worse off.
CARLTON:
That is the question doctors are raising this morning. They are saying, where are you getting the doctors, where are you getting the nurses, where are you getting the beds from? Do you see that as a big flaw in this idea?
TREASURER:
Oh I think that is a really big problem here and people should think about that carefully. If you are guaranteeing beds to a certain sector of the community, that is fine if you are in that sector, that is fine, that is great for you, but if you are not in that sector, that bed could well be coming at the expense of somebody else in the community. It doesn't fix the problem, what it does is it just shuffles around who gets access to the beds. And as I understand their policy, Mr Latham no doubt will be asked to clarify this today, it doesn't even guarantee the over 75s private beds. Many of these people take out private health insurance, Mike, because they want a private bed in hospital and a doctor of choice. And to say to them well, don't take out your private health insurance, we will put you in a shared ward isn't going to be very appealing to them I don't think.
CARLTON:
Have you done the sums on this one, does the maths stack up? He says it will cost $2.8 billion, I think and he will pay for a lot of that in savings?
TREASURER:
Yes, we don't think it does stack up Mike and I had a…
CARLTON:
You were always going to say that but why not?
TREASURER:
…well I haven't been able to do it overnight but I will be doing it over the course of today. Mr Latham could put it into the Treasury today if he wanted it done independently and I would urge him to do so, but he has been holding back his promises from independent scrutiny so far, so I assume he is going to do the same on this. But no, in answer to your question, no, I don't believe it does add up.
CARLTON:
Alright. Would you match Labor's quarterly indexation of pensions, pensions are increased four times a year?
TREASURER:
Well pensions at the moment are increased twice a year to 25 per cent of a wage index. So with quarterly indexation it wouldn't be that you would be giving more money it is just that instead of having a $6.40 increase as we had in September you would have say a $3 increase in June…
CARLTON:
Oh hold on, that doesn't say (inaudible) you'd be getting more money.
TREASURER:
Well I was just going to say the increase in September, the indexation was $6.40 I believe, a fortnight. So, instead of doing that you would get $3 in June and $3 in September.
CARLTON:
But you would have that in your pocket, that is better than what you are offering.
TREASURER:
Well you know, you would get the same amount of money, you would just get it over a different time frame.
CARLTON:
You would get it earlier, you would have it in your pocket, instead of having to wait six months for your rise, you would get it every three.
TREASURER:
No, you wouldn't get the six monthly rise, you would get half of the six monthly rise and the other half at the time of the six monthly indexation. All I am saying, is I am not making a big point of this, I am just saying that people should understand it, it is not actually more money, it is the same money, it is just paid on a different time frame.
CARLTON:
Yes, but it would be more money. Instead of it, you get one at the start of the year say, and instead of having to wait six months you would get an increase in three months…
TREASURER:
Well, that's what I said…
CARLTON:
…you would get a smaller increase, but you would get it…
TREASURER:
…it is not actually more money.
CARLTON:
…in your pocket.
TREASURER:
It is not actually more money, it is just, it is the same money but it is paid over a different time frame, that is the point I am making.
CARLTON:
That is not a bad idea, is it?
TREASURER:
Well look, I am not going to say that the world will move on this particular issue, but I am just making the point that at the end of that day, you have still got 25 per cent of the wage index, it is just paid over a different time frame.
CARLTON:
Yes, alright, but you sound hesitant about that.
TREASURER:
I am not hesitant about it, I am just making the point that at the end of the day, it is the same amount of money. Sure it is paid over a different time frame. That is the only point I am making.
CARLTON:
I just wanted to ask you one more question about this Medicare Gold idea. OK, we know how many people we have at the age of 75 and over now, down the track there are going to be a lot more elderly Australians, is this going to get more and more expensive as time rolls by?
TREASURER:
Oh, obviously it will as the population ages. We also know that people draw down on health and hospital services much more heavily as they get older. A very large proportion of your health costs and of your hospital costs will be drawn down in the last years of your life for obvious reasons. So as the population ages, of course, the promise that has been made will dramatically grow. But as I said, the way in which I imagine Mr Latham wants to ration this is if he keeps the number of beds as they are, the way he will contain costs is just by putting other sectors of the community out of hospital beds. So that, I imagine that is the way in which he would be intending to fund this, but putting other people out and clearing those beds for older people.
CARLTON:
How much are you, the Government, actually spending at this election?
TREASURER:
Well over four years, the promises that the Government has made is around $7 billion.
CARLTON:
The Financial Review is saying it is about $12.7 when you take into account tax cuts and so on, $12.7 off the bottom line.
TREASURER:
Well look, I don't know where they get their figures from, but these are the accurate figures over four years, and we are forecasting surpluses over the same four years of about $17 billion.
CARLTON:
And I see Mr Latham this morning saying that his surplus will be $4 billion better off than your surplus.
TREASURER:
Mr Latham was part of an Australian Labor Party that said that the Budget was balanced when we were elected and it was $10 billion in the red. Mr Latham was part of an Australian Labor Party that produced five deficit Budgets totalling $80 billion between 1991 and 1996. Mr Latham has no capacity to understand fiscal management and when I hear these words being trotted out by Mr Latham, it just confirms to me that he has no real understanding of economic policy. He doesn't know the numbers, he hasn't managed the Federal Budget, his last day out was on the Liverpool Council and if you want to believe that kind of thing you would be as silly as Mr Latham is.
CARLTON:
Apart from that why don't you tell us what you really think.
TREASURER:
Well I must say, here is the failed Mayor of the Liverpool Council, now giving us lectures about financial management. I have done nine Federal Budgets, seven surplus Federal Budgets, we have reduced net debt by $73 billion and I am not in a mood to take lectures from the failed Mayor of a failed Council on financial management, Mike.
CARLTON:
OK, but you are the ones with a spending spree, aren't you? You are the ones throwing the money around.
TREASURER:
Mr Latham has now got $24 billion of promises out there, he refuses to submit his policies to the Treasury…
CARLTON:
Where do you get $24 billion from?
TREASURER:
…well I have got the list here. He says he can set many of them off, his gross promises are $24 billion, he refuses to put them into the Treasury for costing. We have got an absolute sham overnight – get a load of this – he says he is putting in his tax policy, right? Mike, this is a very important point, he says he is putting in his tax policy, but he quarantined from analysis the so-called ‘savings' which are supposed to pay for it. He quarantined from analysis his claim that he could get a participation dividend. He quarantined from analysis his reversal of the GST concession for small business. This is the biggest fraud I have ever seen. We are now what, nine, ten days out from a Budget…
CARLTON:
From an election.
TREASURER:
…oh, I'm sorry, ten days, you are quite right Mike, I must have been getting worked up, we are now nine days out from an election and he is quarantining parts of policy from scrutiny.
CARLTON:
How do you think it is going at the moment, is it about line-ball? The Prime Minister said the other day it is still very tight.
TREASURER:
I think it is very tight, yes, I think either side could win this election, yes.
CARLTON:
That close?
TREASURER:
Yes I do, look, it is nine days to go, the polls are very tight and either side could win it. Much depends I think, on how much scrutiny is put on the Labor Party policy over the next nine days.
CARLTON:
Alright, good to talk to you.
TREASURER:
Good to speak to you Mike.
CARLTON:
Thanks very much indeed.