HOST: Prime Minister thanks for your time-
PM: Good morning Kieran.
HOST: Is it your view that there has been a blowout in middle class welfare and that that had to be put to a stop in this budget?
PM: Well Kieran let's be very clear what's happening in this budget with family payments. We are putting a pause on indexation for the thresholds. Now I know that sounds complicated by what it means is that around 2 per cent of families, 2 per cent of families who have been eligible for family payments will not be eligible as their income rises. Now that means well more than 90 per cent of families will continue to see their family payments rise as they've experienced in the past.
HOST: But has it become too generous, did it become too generous in the boom years and it now has to be reined in?
PM: We had to make choices in this budget to bring the budget to surplus, we needed to make choices to make sure that our family payments system is not only sustainable now, not only over the next four years, but over the next forty years, so we have made some choices for the sustainability of the family payments system which will see more than 90 per cent of families continue to experience increases in their family payments.
And I know Kieran that Tony Abbott, as Leader of the Opposition, is now running around describing this measure as too harsh, but Kieran the truth is the Government introduced a comparable measure a few years ago and when we introduced that measure Tony Abbott described it as ‘too soft.' Now he can't have it both ways, he can't say to the Government two years ago ‘this is all too soft, you should be generating a bigger budget surplus' and then run round at the same time and say ‘well we're not backing in any of the savings measures'.
HOST: Newspapers across the country are running case studies of families earning around the $150,000 benchmark, the front page of the Telegraph, I'm not sure if you've seen it, but it's got a case study of the Curtains and it says ‘You're rich enough', a family in Sydney struggling to pay their bills. What's your message to the Curtains and people like them as I say, across the papers this morning?
PM: Well first and foremost I've never used that terminology about families earning $150,000 a year and I never will. I understand that many families earning money in that income range still feel the pressures of everyday life, they feel the pressures of the bills coming in, and I want to work with those families. Now let's just look at how the Government is working with those families - those are the families that want their children to do to a great school, that's why we are continuing to invest at record levels in Australian education.
Those are the families that want their kids to be able to get an apprenticeship, a university place, and that's why we are continuing to invest in that part of the education system. Those are the families that we're continuing to assist with childcare costs - many of those families, if they have an extra child, will be eligible for our parenting payment leave scheme, the PPL scheme. Many of those families too, are very concerned ‘how good is my hospital, my local hospital, if I had to take a child there in the middle of the night, what sort of service would I get?' Which is why we are continuing to invest and reform our hospital system.
So we'll keep working with those families, including by delivering a budget surplus, because a budget surplus is about not adding to the inflationary pressures in our economy and those inflationary pressures are a further risk to the cost of living of those families - I don't want to add to those cost of living pressures.
HOST: But what about, if we go lower down the income scale, people on $45,000 a year. Their end of year supplement is being capped, frozen for another few years and their income in real terms if going to fall as a result?
PM: What that means Kieran is they will continue to receive the same end of year supplement that they have, and then let's look at the budget overall. For many low income earners they will see more money in their pay packet than they used to as a result of us bringing forward the low income tax offset, that's so the money is available week to week, pay packet to pay packet, as people face their bills.
And of course we're working with those people too to keep our economy strong and to give them benefits and opportunity of work, and for all of the families that we've talked about, at every income range, life depends on a strong economy and having a good opportunity to get a job, keep a job, do more training, get more skills, get the next job, get a better job, and that's what this budget is all about: jobs and opportunity for Australian families.
HOST: But you're expanding support for those under the cap, for teenagers 16 to 19, at the same time that those above the cap miss out altogether. Is this not, well Tony Abbott says it's class warfare, are you punishing aspiration as Joe Hockey and Mr Abbott have asserted?
PM: Well this is just inflammatory terminology from a man who is continuously negative. What we are doing is making sure our family payment system is sustainable, the measure you refer to will affect around 2 per cent of families, the measure you also refer to, to increase benefits for teenagers, will affect around 650,000 teenagers, because I think people intuitively know kids don't cost less when they get older.
And Kieran let's just step back a little bit and actually look at where we are in budget week and what is going to happen today. You're asking me about the Government's budget, and what people know from this Government is we will bring the budget to surplus in 2012-13 exactly as promised.
Tonight is the night that the Leader of the Opposition, Tony Abbott, delivers his budget reply. And let's be really frank Kieran, one of the reasons Mr Abbott did not become Prime Minister is because Treasury found an $11 billion black hole in his costings. One of the reasons he's not Prime Minister is Treasury said he was an $11 billion risk to the budget surplus.
Now tonight Tony Abbott's got to square up all of the talk that he's engaged in. He's got to walk into the Parliament and either back the Government's savings or identify credible alternative savings of his own that pass the Treasury test.
HOST: You're calling for detail and an alternative budget pretty much, he doesn't have the resources of Treasury, Labor Oppositions never did, and yet you're setting a much higher benchmark for him?
PM: Oh Kieran that's completely untrue. I know exactly what Labor did in opposition when, for example, Kim Beazley delivered budget replies, he would identify what he would change about the budget. Now if Tony Abbott says he's not up to doing that, the he saying he's not up to doing things that have been done by Opposition Leaders in the past.
So Tony Abbott does have a test to pass tonight, he's got to walk into that Parliament and either back the Government's savings or identify credible alternate savings, and if he doesn't do that then he's a risk to the budget surplus, he's a risk to our economy, and he's a risk to the cost of living pressures on Australian families.
And when Mr Abbot has faced these questions this week with a kind of wave of his hand, he's referred to $50 billion of savings that he says the Opposition outlined last year. Well they're the $50 billions of savings where Treasury said $11 billion is completely wrong and the rest of it Mr Abbott has already spent on commitments he's given the Australian people.
So he walks into the Parliament tonight with no savings in his pocket and with a big challenge in front of him, is he going to outline alternate savings, if he can't then he has to back the budget and the Government's savings measures.
HOST: What do you say to the argument that's been prosecuted about border protection, that budget blowing out over $1 billion and that the families that you've hit in terms of capping the family payments, that they feel, you're saving about a billion dollars from that measure, that they feel they're paying for a dysfunctional policy?
PM: Well Kieran I'm not going to just adopt the wording in your question, the family payments measure, let's be clear about it, we are pausing indexation, it will affect around 2 per cent of families, well more than 90 per cent of families will see increases in their payments. Families with teenaged children will particularly see increases in their payments because we are ending the anomaly that said somehow older teenagers were cheaper to look after than younger children.
Now on border protection, I believe Australians, whatever income they earn, want us to have a tough border protection policy and we do.
HOST: OK on the issue of the Coalition's case in recent days, the Shadow Treasurer says ‘we're going to do everything we can to put pressure on the Government to call an election', one of your frontbenchers this morning suggest that that's a threat to try and block supply. Are all of your deals with the independents, with the crossbenchers, on supply and guaranteeing supply rock solid?
PM: Oh look I'm not going to engage in this kind of distraction, my view is Joe Hockey is only saying that because he knows he can't help Tony Abbott add his budget reply up. Now they want to do everything that they can to distract from the test that Tony Abbott faces tonight.
He walks into that Parliament, no savings in his pocket. One of the reasons he's not Prime Minister is Treasury found that he was an $11 billion risk to the budget surplus. Joe Hockey has engaged in some lazy talk suggestion ‘gee I'm such a good Shadow Treasurer; I could bring the budget to surplus a year earlier than the Government.' Well all of these claims come to their final test tonight. Tony Abbott walks into that Parliament, not one saving in his pocket, and he's got to outline if he isn't backing in the Government's savings measures, where do the new savings come from, and how is that he and his Shadow Treasurer reckon they can get the budget to surplus a year earlier?
On arrangements to pass the budget, of course we'll get the budget through, and let me say this, the test is really not on the shoulders of the crossbench today, it's on Tony Abbott's shoulders. Is he going to walk into that Parliament and say ‘here I am again with a strategy to smash the budget surplus and to increase cost of living pressures for Australian families'? Is that what he's going to do tonight?
HOST: Two quick questions before you go, I know you've got to get going, but electricians, the Master Electricians Australia have raised concerns about the set top box, scheme that this could lead to safety problems like the home insulation program. What's your response to that, this is the peak body, Master Electricians Australia?
PM: Well let's get the facts on the table Kieran and I'm very glad you've asked me. 38,000 of these set top boxes have already been installed. We've worked with the peak body on designing the scheme and the credentials for the people who do the installations - they have to have been in the industry for more than a year as well as pass other tests. When we're talking about the set top box, we're not talking about the cheapest one you can go and get from an electrical store, we are talking about a quality set top box that has the right design features so it can be used easily by older people and by people with disabilities, and of course the cost for this doesn't just include the set top box, it includes the full installation of it, it includes assisting the pensioner, someone on the full pension, some of the most poor people in this country, assisting them so they know how to use it, so they don't end up without TV, and then it comes with a 12 month support package, so if at any point they get confused, or something goes wrong and they've lost their television coverage, they've got someone to rely on.
So that's what is going into this program, and who's it for? Well it's for the poorest Australians, older Australians, full pension rate, disability pensioners who without assistance may, the day after the digital switchover on TV, no longer have perhaps the only companion in their life which is the TV set. Now I think Australians are pretty generous of heart and they know a lot of older people struggle with new technology and they would say it's the right thing to do to assist the poorest Australians with a new technology change.
HOST: So you reject the safety concerns from the people body then obviously?
PM: Well we've worked with a peak body in the design of this scheme, 38,000 done already Kieran.
HOST: Ok, and just one last question, the Opposition's making a lot of the fact that the Treasurer did not know when the last surplus Labor handed down was. Shouldn't he know that and, I mean, do you have the opportunity now to correct the record for the leadership of the Government? What was it?
PM: Oh Kieran I'm not going to play this silly game, distraction, distraction, distraction. Tony Abbott must come into Parliament tonight and talk about the surplus that matters now for Australian families. Anything else just silly game playing from an Opposition desperate to distract from the fact that one reason Tony Abbott isn't Prime Minister is he can't work out how to run the finances of this country.
The last time he tried in the election campaign, Treasury found an $11 billion black hole. Now let's just be clear, last budget reply night, Tony Abbott didn't give any figures, he deferred to Joe Hockey, who then deferred to Andrew Robb, who made such a hash of it his own press secretary couldn't bear to watch it. Then Treasury, an $11 billion black hole during the election.
One of the reasons Tony Abbott isn't Prime Minister is because of that black hole. Then the flood funding package earlier this year, couldn't add it up and huge divisions on the Liberal frontbench about how to do it and it just didn't add up in the end. Tonight's the test for Tony Abbott, is he going to be a risk to the budget surplus, toour economic strategy which is all about jobs, bringing the budget back to surplus and ensuring that we are not adding, through inflationary pressures, to cost of living pressures on the shoulders of working Australians.
HOST: Prime Minister Julia Gillard, appreciate your time today, thanks.
PM: Thank you very much.