Sky News
E & O E - PROOF ONLY
HOST: Prime Minister thank you for your time.
Can I start with the decision to introduce a levy to pay for this disability scheme, what do you say to families who believed you when you said this money would come from within the budget, they wouldn't have to pay an extra levy or higher taxes to fund something they support that but now will see them facing a higher tax?
PM: What I would say to those families, David, is that I have changed my mind and I've done that for three good reasons.
Number one, the amount of tax money coming into the Government is not what we anticipated and I spoke about that on Monday. The set of economic circumstances that mean, even though our economy is strong we are getting less tax money than we expected.
Number two, now we've done the really detailed discussions with the states, had a good look at their figures, their budgets, not only over the next four-year budget period but over the long term.
And I do realise what a big ask it is to get states, not only up to the benchmark, but funding all the growth as more of their state comes under DisabilityCare.
Remembering we're starting with launch sites and then spreading the scheme out.
And number three, I have heard very clearly the calls from the disability sector, from people with disabilities themselves, their families, their carers, their loved ones, their friends who have said that it would give them real peace of mind to know that there was a long term source of funding available here.
So now I'm asking the Australian community to do the same thing that Labor prime ministers have asked in the past.
You've been asked by Labor before to pay a levy in order to have Medicare and Australians embraced that proposition, though of course it was viciously opposed by the Liberals at the time.
I'm now asking Australians to do the same thing with DisabilityCare - for us to all contribute so we can all benefit because you never now, David, what is going to happen in the future; to you as an individual, to your family, to your loved ones.
And so it helps all of us to have a scheme that looks after each of us if we end up with a disability sometime during our lives.
HOST: Okay, but just to pick up on the reasons you've given there for your change of heart on this levy.
Two of those reasons seem to suggest that you underestimated how much revenue would be in your budget and underestimated what this would cost the states. Is that fair?
PM: No I wouldn't put it like that.
Number one, on our budget, David, I said this very clearly to the nation on Monday.
We have now been advised that we are looking at a write-down in the amount of tax money that the government receives of $12 billion in just one year.
So yes, there have been increases to the amount of tax money that we're being told we won't get or perhaps to put it more clearly, we've got updated estimates about how much tax money will actually come in.
And for a whole set of very complicated reasons to do with our high Australian dollar and its impact on our economy, that tax money is less than it's been.
I think that people intuitively understand that conditions have been very tough for some businesses.
So it makes intuitive sense to people that companies aren't paying company tax at the rate that they used to. So there's that.
Then in terms of states governments, of course we are not the custodian of what state governments believe their financial position to be.
Not only over the next four years where they publish budgets but over the next six, ten years and in the period beyond and we're talking about long term financing of this scheme.
So we've learned some things in the discussions with states and territories, absolutely.
HOST: Can I ask you about the timing of legislating this levy.
This morning you said it would be after the election. Now you're saying you may do it before the election if Tony Abbott says he'll support it.
Isn't this up to you as Prime Minister to decide whether you'll introduce the legislation or not?
PM: I'm not seeing this legislation become a plaything, it's too serious for that and I'm not prepared to see that.
When I announced this morning that I would be asking the nation to support a half a per cent increase in the Medicare levy it looked to me from what was reported in today's newspapers about the Leader of the Opposition's position and what the Shadow Treasurer said on radio this morning that they were quite likely to oppose that increase in the Medicare levy.
During the course of the day it's become clear that the Leader of the Opposition is asking for the legislation to be brought to the parliament.
Let me say this very clearly to Tony Abbott and to the Australian people.
If Mr Abbott says that he will support this half a per cent increase in the Medicare levy in order to fund DisabilityCare then I will bring the legislation to the parliament immediately.
If Mr Abbott can't answer that question, what he supports, what he believes in, what he proposes, or he says no to this legislation then I'll ask the Australian people to decide the question in September.
HOST: But isn't it reasonable for an opposition leader to see the legislation, see a bit more detail before making that commitment. Why not just put the legislation in?
PM: David, what's hard to understand here? A half a per cent increase in the Medicare levy.
We've published today the figures about what that means to people at various income ranges. What's hard to understand here?
This isn't a complex piece of legislation; this isn't hundreds and hundreds and hundreds of pages of detailed clauses.
It's the sort of leadership decision that as Prime Minister you've got to front up to very frequently.
We've got to make decisions in this job. It's a responsible job.
You can't just go ‘um, ah.' You've actually got to make a judgement call.
I've made one and I am asking the Leader of the Opposition to make one too.
HOST: But you could quite possibly get this through parliament without the Coalition. The Greens and the crossbenchers have already indicated support for a levy.
If there's time before the election, why not do it?
PM: Look, I'm not going to take this to the Parliament and see it become a political plaything.
Let's go to basic principles here, David, and this isn't about the mechanics of legislation. It's about values and what you believe in.
I believe that no Australian should get left behind; that we're a big enough country and a generous enough country to say to each other that we will look after each other during difficult times, including when people are confronted with a disability or have a child born into their family with a disability.
I don't believe in leaving people behind.
I live in the real world and that means things have to be paid for so you have to make some decisions, not all of them easy decisions or pleasant decisions.
I've made one, David, that I stand for putting a half a per cent increase in the Medicare levy to give us a constant stream of revenue to support DisabilityCare.
Now, we'll need more money than that but that will be a constant stream of revenue going into DisabilityCare.
It seems to me that it is reasonable for me to ask others who say they support the National Disability Insurance Scheme, well are you with me on this?
And if you're not with me on this, what's your way of funding it?
This isn't an area for ambiguity or fudge or platitudes; this is an area for clarity because it matters to so many people.
So if the Leader of the Opposition says yes to the Medicare levy increase, let's get on with it.
If he says no, he should publish every figure that shows how he can fund DisabilityCare without a Medicare levy increase.
He owes that to 410,000 Australians with disabilities, to their families, to their carers; indeed, he owes that to the whole Australian nation.
And if that's the path he goes down people can then look at the two propositions and make their choice in September.
HOST: And do you owe it to those families as well to detail how you will fund this because the levy will only pay for half of the estimated cost. So will you now detail where the rest of the money will come from too?
PM: We are continuing, David, to do what we do which is to make responsible savings to fund the things that we really believe in.
You've seen us do things like make very controversial changes to the private health insurance rebate, a structural save which generates more money in the longer term that can be used to support important priorities like DisabilityCare.
But I've nailed my colours to the mast around this half a per cent increase in the Medicare levy, now I think those who aspire to leadership in this country have to make a decision, make a call and state it very clearly.
HOST: Just finally, will there be any more tax increases in the budget?
PM: I'm not playing the budget speculation games, David. Sorry about that, you'll wait for budget night.
HOST: Alright, two weeks to go then. Prime Minister Julia Gillard, thank you so much for joining us from Tasmania this afternoon.
PM: Thank you.