JOURNALIST:
There was funding for tax cuts, for families, big changes to superannuation and security, but what does it all really mean for us? Let's ask the man at the top. Good morning to the Prime Minister. Prime Minister welcome to the show. Now before we get on to the Budget, just your comments. You talk about mateship a lot. What did you think of the mateship down in Beaconsfield over the last two weeks? It has been unbelievable, hasn't it?
PRIME MINISTER:
It was a superlative demonstration of Australian mateship at its best. That is the best and only way in which I can describe it. The men who risked their own lives to save the lives of their mates, demonstrated that commitment to friendship, that commitment to mateship which is a hallmark of Australia. And the way in which the whole community worked together, and all Australia shares in the jubilation and the joy, but that community of Beaconsfield is entitled to a special place in Australian folklore given what was achieved. The way in which every section of the community worked together from the mayor down, the local churches, the other community leaders, the union, everybody worked together in a magnificent fashion and I just think that is wonderful.
JOURNALIST:
They certainly did. We are taking the show back down next Wednesday to say thank you because we just completely fell in love with the entire community. Just quickly, you've got a bit of a knees-up in Canberra I understand? Just tell us quickly about it.
PRIME MINISTER:
What I decided should happen is in a couple weeks time we are going to invite up to Parliament House all of the people that were involved so that in a totally bipartisan way the national parliament can salute this extraordinary achievement, pay tribute to the courage of the two men and pay a special tribute to the courage and bravery of those who risked their lives in order to bring them back from the bowels of the earth. It's the least that the national parliament can do and we are going to organise it and organise it in a completely bipartisan fashion.
JOURNALIST:
That's a terrific gesture. It is really good. Okay, let's get on to the Budget. A big-spending Budget, mid-term, which is unusual, but still a $10 billion surplus. You guys are just rolling in dough at the moment?
PRIME MINISTER:
The economy is strong and we are retaining a strong surplus so it's very responsible. It is a big tax cutting Budget rather than a big spending Budget. There is a lot of extra spending in necessary areas like roads and medical research but we are putting the emphasis on tax relief and I think that's needed. People are paying a lot more for petrol and one of the best ways to help people with the high petrol prices is to put money in their pockets. Fiddling around with the excise or some kind of subsidy scheme on the commodity itself is not the answer. The answer is to put more money into people's pockets because the high price of petrol is having a depressing effect on people's livelihoods, people's incomes and one way of dealing with that, and of course our tax cuts go a lot further than this, but they will make a contribution towards helping the average Australian deal with high petrol prices.
JOURNALIST:
Superannuation is a big one, it's something that's been pretty close to our heart here on the programme. We've followed it and been hoping that you're going to make changes. Why has it taken so long to make changes to super considering it's our money and you know, you want us to look after ourselves?
PRIME MINISTER:
Well we made quite a lot of changes in earlier years. The introduction of the co-contribution system a couple of years ago, that was a very big change but this is the biggest change of all. The dramatic thing about the change announced last night is that it's going to simplify the system and your programme I know has run a strong campaign on this. You've said it was too complicated, there's not enough incentive. Well we've cut right through on that issue and the plan is to get rid of the end tax, whether it is a lump sum or a superannuation pension for people over the age of 60. We are going to get rid of these Reasonable Benefit Limits which are complicated, we're going to simplify the contribution system and also importantly, we're going to effectively halve the pension assets test because that was becoming especially onerous for a lot of retired people and under this plan, you will be able to, apart from your family home, to have an additional $165,000 of assets as a couple without being hit by the pension assets test. Now this is an enormous change.
JOURNALIST:
Yep, Hallelujah. Great changes and particularly for independent retirees as you say which have been left out for so many years.
PRIME MINISTER:
And also, can I say, the self-employed, for years self-employed people got no recognition in superannuation and then about 20 years ago we started to make some changes. But now we've really got them on the same footing. They are going to get a full tax deduction for their contributions and they will also have access to the co-contribution mechanism. So this gives to the self-employed of Australia, a section of the Australian community for whom I have enormous respect, it gives to them full parity of treatment with people on wage and salary incomes.
JOURNALIST:
Well Budgets can be really complicated at times so we've come up with three scenarios. Let's get your views on this. Firstly, a single person earning around the average wage with no mortgage, what is in the Budget for them? How will they benefit?
PRIME MINISTER:
Well if you had say a young couple that have got no children and say between them they had a total income of $85,000 they would get an annual tax cut of $1020 which is just under $20. So that's what they would get.
JOURNALIST:
All right. We'll do the second one. A couple with no kids, both working.
JOURNALIST:
That is about the $1,000 isn't it that you just talked about?
PRIME MINISTER:
Yes, that is about the $1,000 one, yes
JOURNALIST:
Now what about the family with one bread winner, single income family supporting a partner and the kids, say with two kids?
PRIME MINISTER:
If they were earning say $50,000 year which is around AWE (Average Weekly Earnings) for an individual they would get a cut of $1648 a year, which is $31.70 a week.
JOURNALIST:
Just a quick one, why has the Government gone on such a spending spree when interest rates were put up to stop us spending?
PRIME MINISTER:
Well, you've got to remember that a lot of the money that you would otherwise spend, all of us would otherwise spend, on other things is going on higher petrol prices and the spending, spending as a description of tax cuts is really a misnomer. The biggest financial commitment in this Budget is towards taxation relief and people have been entitled to taxation relief. We are in a prosperous situation and it has always been our philosophy that after we've provided a strong surplus, we've provided for defence and roads and health and education and all of those things, if there is money left over it ought to be returned to its owners.
JOURNALIST:
When are you going to simplify the thing?
PRIME MINISTER:
Well it is a lot simpler now, a lot simpler, because we have now got a situation where you have a rate of, you have 25, I'm sorry you have 15, 30, 40, and 45 so there is a cut in the top two rates and the thresholds at which the different rates apply are a lot simpler. The 30 cent threshold or rate doesn't apply until you reach $25,000 and then you have to go right up to $75,000 before the 40 cent rate applies and then double that amount to $150,000 before the top rate applies. I think it is a dramatically simpler system. It gives a lot of incentive for achievers. I think we should always have a society where we reward additional ability and additional hard work and additional achievement and that is what this tax system more than any we've had in the past will do.
JOURNALIST:
Just quickly before I let you go too Prime Minister, one last one about childcare and a few extra places. On behalf of all working parents out there with little ones, about time. How much difference do you think this will make?
PRIME MINISTER:
It will make a lot of difference to a lot of people because we've taken the caps off the after school hours child care and we think it will create tens of thousands of additional places and the other thing that's important is that the Minister is introducing a new system, I think from the 1st of July, where people will be able, if there is no immediate child care availability in the place they want, to know where there is an available place in an area that is close to them. Up until now we've not had a nationally coordinated system which will help them because there are in fact, despite all the stories, there are in fact a lot of child care centres that are looking for business, if I can put it that way. There are a number of child care centres that do have vacancies and sometimes the picture comes through that there are no vacancies anywhere in Australia. That is not the situation and it's certainly not the advice that the Government has and we're going to do something about bringing it to people's attention.
JOURNALIST:
Prime Minister, thank you very much for joining us.
PRIME MINISTER:
Thanks David, thanks Mel.
[ends]