Subjects: Federal Budget 2002
E&OE...........
JONES:
The Prime Minister is on the line. Prime Minister in the macro sense these are remarkable figures.
PRIME MINISTER:
Oh they are, they';re stand out figures around the world and the good thing is that there';s a human dividend. The most pleasing prediction that Peter was able to make in the Budget last night, was that on advice it will be possible for unemployment to be down to 6 per cent towards the end of the year if things remain on track. Now that is still too high but we haven';t had a five in front of an unemployment figure in this country for more than 20 years and nothing would make me happier than to see that kind of result achieved. Australian families now have lower interest rates and higher real wages and more job security then they';ve for many years. And it';s come about as a result of a whole lot of things over a period of time but despite that we have to invest in protecting what we';ve got, particularly the physical security side of where Australia now operates.
JONES:
Can I just make the point, when you';ve got stronger economic growth, that boosts revenue, households and businesses are forecast to earn more so they';re taxed more, they';ll spend more, so there';ll be more money raised from the GST. Lower unemployment cuts Government costs, fewer people receive welfare benefits, lower inflation means the costs the government are reduced because a whole lot of welfare benefits are indexed to move within inflation, which brings us to an important point : are you getting any feedback that many of what are called the micro voters, the people you';re talking to right now, feel that they';re missing out in some way or other?
PRIME MINISTER:
I think there';s always some people who feel they miss out no matter what the circumstances are. I find Alan honestly as I move around and I talk to a lot of people, I find people expressing a general feeling that the country is going in the right direction. They think the country is better off economically than most, they look at America almost in recession last year, they look at Japan in recession. But by the same token they keep their Government up to the mark and I would never want the Australian public to think for a moment that I';m complacent about what we';re doing and we';ve got to keep working harder.
JONES:
But see we';re also a society as well as an economy aren';t we now, today we';re going to read the headlines about $400 million being spend on border protection and that';s important, $200 million on a detention centre at Christmas Island, three new patrol boats at a cost of $200 million. But $60 million';s being slashed from the Pharmaceutical Benefits Scheme, the people you';re talking to now will pay $28.00 for prescription drugs when they go out, $4.50 for pensioners. Now the Council for the Ageing for example say well the end result is the old people won';t be able to afford their medicines and they';ll end up in hospital so the end cost in health care will rise.
PRIME MINISTER:
Well that is an exaggerated reaction and it';s an inaccurate reaction. We do need because of the spiralling cost of the Pharmaceutical Benefits Scheme, we do need to have a modest increase in the patient contribution otherwise there will increasingly be overuse and it is important to put the case for people looking at lifestyle changes as some kind of alternative to always immediately going to a prescription. Now having said that I acknowledge that there is no alternative for a great number of people and we maintain the safety net arrangement so that if you have a certain number of prescriptions a year, if for example you';re a pensioner or a concession card holder, once it goes beyond that number there is no additional cost. But we can';t as a country continue to sustain a Pharmaceutical Benefits Scheme that is growing, I mean last year it grew at something like 23 per cent.
JONES:
But technology of course provides greater ways of keeping people alive, new drugs come onto the market, so they';re being prescribed where once upon a time they didn';t exist.
PRIME MINISTER:
The growth areas are not just in those that you';ve mentioned.
JONES:
Well one of them was the anti-arthritis drug, now you know how debilitating arthritis is.
PRIME MINISTER:
I do know that but I also know that some of the drugs that are not in that category can be too quickly prescribed as an alternative for some lifestyle change so far as the patient is concerned. And what we need to do as a community is to understand that we are an ageing population and unless we put into our Pharmaceutical Benefits Scheme some sensible controls through price on the use of drugs then we';re going to find ourselves in a few years with a scheme and a system we simply cannot afford.
JONES:
I think everyone understands that, it';s the question of who should pay. Now you';re raising, the budget talks about raising $172 billion, but 53.5 per cent of that comes from the people you';re talking to, the wage and salary earners out there, only 16.7 per cent from companies. So the person contributing all the income tax has all these indirect taxes as well, the PBS thing been cut back from him, the cost of his phone rental goes and he sees every time this erosion of his take home, that';s the micro thing I';m talking about, for God';s sake I just feel I';m missing out here.
PRIME MINISTER:
Alan, some people do feel that, I understand that. But can I say to those people, to use your expression, the micro, can I just say that over the last few years wages in Australia have moved ahead of inflation so people are better off with their wage increases, interest rates are at a 30 year low as you acknowledged. But we had tax cuts as part of the introduction of the new tax system. We';ve had very big increases in family benefits as a result of the introduction of the new tax system. We';ve had a 30 per cent private health insurance rebate. So when you talk, as you legitimately should, about the things that negatively affect people, may I talk about the things that have positively benefited people over the same time horizon so that you get a balanced picture of where the average family is.
JONES:
Righto, well let me just take an example, a woman wrote to me this week, she';s 57, she';s got Multiple Sclerosis, she works 22 and a half hours a week, it gives her a small amount of money but a sense of dignity and well being. Now of course she';ll either have to give up that job or forgo the disability pension because she is not entitled to the disability pension if she works more than 15 hours a week. She was working 22 and a half. If she goes on the dole she';ll have to undertake all the mutual obligation requirements such as turning up for job interviews, doing training courses and so on. But she';s got Multiple Sclerosis, she';s 57, she';s severely disabled. What';s the point?
PRIME MINISTER:
Well Alan there is a, without knowing all the circumstances of that and I would have to look at it because there are certain provisos in relation to the new changes. But can I just say that, if I can talk generally about the disability support pension, the evidence is that there has been a growing resort to this, I mean even the Labor Party in a submission to the welfare reform group last year, or two years ago, said something had to be done, Wayne Swan has said something had to be done to get people off the disability support pensions and it was increasingly being used as a resort, as an alternative to the ordinary pension. And it';s part of the process of welfare reform to provide incentives for people to be more directly connected to the workforce, to encourage people in to the workforce -
JONES:
- everyone agrees with that, everyone agrees with that. You see the detail… a man lost both legs, because this has been going, you';ve been gradually introducing this over the last couple of …. a man lost both legs fighting in the Vietnam War and his disability support pension stopped. I mean, you know where do we…I mean I talked to (inaudible) the other day about it deaf, mentally ill young women who tried to kill herself after Centrelink stopped her disability support pension, she';s deaf and she';s mentally ill. The detail, there';s something wrong with the detail.
PRIME MINISTER:
Well I can';t, I';m not in a position to without all of the facts, to give an authority on a yes or no answer on a individual case as I always do when these are raised with me. I undertake that and look at them and I will in relation to that. But the…I mean the evidence is that we are not becoming, if I can just talk generally to it, the evidence is we are not becoming a less healthy, less disabled society. If anything, therefore it is anomalous, it is contradictory, it is puzzling that there should be an increasing reliance on the disability support pension. It defies common sense.
JONES:
But you see, there is a Commonwealth State disability agreement to pay for people looking after the disabled now…
PRIME MINISTER:
And where putting more money into that.
JONES:
Well you are not.
PRIME MINISTER:
Well we are, it was announced in the Budget.
JONES:
Yeah, no but that';s smoke and mirrors (inaudible).
PRIME MINISTER:
It's not smoke and mirrors.
JONES:
Two years ago, this is the same money that';s already been committed. I';m telling you that two years ago there was a lot of pressure and a report said that urgent, unmet need for disabled services required an extra $294 million funding and rightly, the Federal Government put in an extra $100 million a year of recurrent funding. Now, the States matched that and that was good but the Budget is only guaranteeing that money will continue for two years. That';s not new money, believe me that';s not new money.
PRIME MINISTER:
We';re in, the amount that we';re additionally putting in, we';re putting additional money in over the amount that we have been. The question of whether something has been previously foreshadowed, and I';m just talking for the bit in the budget, doesn';t alter the fact that that the amount of money that is going to be provided over next year and the year after is greater than the amount that is now being provided, I mean that';s an increase.
JONES:
No, well it';s not but I want to (inaudible) questions not. I think that has been already spoken for. So when people providing disability services know of that, the amount that was made last year, they build that into their budgets, they';re not taking it down to the TAB. And at the moment they don';t have money to be able to guarantee all staff who work with the disabled across the country, will have the disability award payments made to them by the end of June. Can you guarantee today that you will end the trauma for families of the disabled and guarantee that these wages will be payed out of the budget that doesn';t have the money?
PRIME MINISTER:
Well Alan, I';m going to guarantee what was announced in the Budget. I mean I';m not going to on the run, provide a guarantee that is going to misunderstood by people and a guarantee that is sought in the particular terms that you have raised.
JONES:
Well let me just tell you the problem. Group homes across this country, group homes are saying categorically they';ll have to close by June 30 because they don';t have the money to cover the award increase to those people who work in those group homes. Now that means there are people listening to you, they know you';re the Prime Minister. They know you were on today, they were listening to see what you';ll say. They are traumatised because they';ve got disabled children who may be turfed out come June 30, they want to know that those wages will be payed. The group homes say, we don';t have the money.
PRIME MINISTER:
Well Alan, what I';m undertaking to do is to look at that particular issue that you';ve raised in relation to group homes.
JONES:
Thankyou.
PRIME MINISTER:
I will do that. But I can only in all honesty with out having more detail, guarantee what was promised in the budget last night.
JONES:
Good on you. Thank you for that. Just one other thing, on all these figures which are outstanding indicate basically that we are one of the wealthiest countries in the world and you must take a lot of credit for that. It';s a direct consequence of Howard and Costello and their economic management. But is it right in that environment that someone on $46 000 should pay 46 cents in the dollar and at the top rate 48.5 cents kicks in at $60 000 when for example, in the United States they pay 38.5 per cent on $600 000. Are the tax rates too high? Should tax reform be back on the agenda?
PRIME MINISTER:
Well I don';t think tax reform should ever be off the agenda but you mentioned a moment ago if I heard you right, that somebody on $46 000, did you say $46 000?
JONES:
No I said $60 000, well $46 000…
PRIME MINISTER:
On $60 000…
JONES:
…pay 48.5 cents in the dollar.
PRIME MINISTER:
Yeah that';s right. Well it would have been, now I think that is too high a tax at that level. Yeah I agree with you, and we actually tried to have that rate coming in at $75 000 but that was changed by the Labor Party and the Democrats in the Senate.
JONES:
Yeah, but I mean if you take a bloke on $50 000 every year now he gets a $10 000 pay rise, $4860 of it goes…
PRIME MINISTER:
Well I agree with you. I mean I';m not saying that we were promising the world at that income range. But when we brought in tax reform, we wanted the top rate to come in at $75 000 and the Labor Party and the Democrats changed that and brought it back to $60 000. So there would have been certainly for the sort of person you refer to, there would have been far greater relief.
JONES:
Right. And you say…
PRIME MINISTER:
I don';t think there';s any sense in having ever increasing tax rates as you go into higher income brackets because it does sap incentive. And one of the great advantages of the new tax system is that about 80 per cent of tax payers that are on top rate of 30 cents in the dollar, now then they start to rise after that. We wanted it to rise more slowly but the Labor Party and the Democrats said that anybody effectively earning $60 000 was rich so they said they had to change that and they did with their numbers in the Senate.
JONES:
Okay you';ve got to go, I';ve got to go. But if I present to you that material in relation to group homes…
PRIME MINISTER:
Yes I will, I will have a look at it.
JONES:
And I';ll do that and I';ll let my listeners know.
PRIME MINISTER:
I will certainly respond immediately.
JONES:
Thank you, and I appreciate your time.
PRIME MINISTER:
Thank you Alan.
JONES:
Thank you Prime Minister.
[ends]