PRIME MINISTER:
It’s good to be here in Geelong, it’s good to be here at Backwell IXL. This is a business which has been going for more than 150 years. It’s a fifth generation innovative Australian business. Obviously they’re conscious of coming adjustments. This is a Government which wants to make it easier for businesses like this to survive and to flourish in the months and years and decades ahead. We want this to be a sixth and seventh and eighth generation business, not simply a fifth generation business and that’s why I’m so pleased to be here today with Industry Minister Macfarlane, with Premier Napthine, with the local member Sarah Henderson who has been fighting for Geelong since she was elected last September, here to announce a $155 million growth fund to help affected parts of Victoria and South Australia to deal with the impending closures of the motor industry in the years ahead.
This $155 million growth fund will include money for skills recognition, money for employment services, money to help businesses transition to new markets. There’ll also be funding for businesses which are seeking to innovate and there’ll be some limited funding available for local infrastructure. The objective as always is to maximise prosperity, to maximise employment, to build on the inherent creativity of businesses like this to help workers, who might be moving from one job to another - to go from a good job to a better job. That’s what this is all about. It is about helping workers to go from good jobs to better jobs, from good employers to other good employers, from successful businesses to even more successful businesses. That is what this fund is all about.
I want to thank Ian Macfarlane for the work he’s done with business leaders in Victoria and in South Australia to put this fund together. I want to thank the Premier Denis Napthine for his contribution and I should really acknowledge the good citizenship of companies like Holden and Toyota. Yes, they are winding down their manufacturing in this country but they certainly intend to continue in this country and the fact that they have been prepared to help with this fund is a sign of their commitment to their workers, their commitment to this country.
INDUSTRY MINISTER:
Thanks very much Prime Minister and today is about transitioning industry in Australia to its next phase. Industry in Australia will become more sophisticated, it will require a new set of skills. Businesses like this one will be continuing to change their product makeup if you consider that this company began making stoves, it’s now making sophisticated parts for things like renewable energy. This is typical of the businesses we want to transition into the next phase and their workforce will need to be reskilled, their skills that they currently have will need to be recognised and we’ll need to make sure businesses have a strong future. So the fund is about those five components of reskilling, about assisting the replacement of those workers in businesses that do close, attracting new businesses, assisting businesses themselves to make the capital investments and finally some limited infrastructure for the community as part of keeping the robustness of the community together.
PREMIER NAPTHINE:
Thank you very much Prime Minister and Minister Macfarlane. From the Victorian side - we welcome this $155 million package to work with the automotive industry, work with the automotive supply chain as they transition to the future. This is about assisting the workers affected by these changes, this is about assisting businesses affected by these changes, this is about providing new and even better opportunities for those workers and those businesses. Backwell IXL is a living example of where strategic assistance from the Victorian government has paid for additional equipment here - securing jobs, creating new opportunities for a business that has changed over time. So we welcome the Federal Government’s $155 million package. This will work with Holden, Toyota and Ford to make sure that the workers affected by these changes are given every opportunity in terms of recognising their existing skills, enhancing their skills and enhancing their employment prospects into the future as well as growing the jobs across the economy for these workers.
QUESTION:
Is the South Australian government on-board with this?
PRIME MINISTER:
I might ask Minister Macfarlane to add to this answer. We want them to be part of this; we have been involved in negotiations with them. We are hoping to get some $12 million from the South Australian government to match the Victorian government’s contribution so that it will be a $155 million fund. But my understanding is that we still have to get a signature on a bit of paper from them.
QUESTION:
Do you have any idea at this stage what proportion of that $155 million will be spent in Victoria and what proportion will be spent in South Australia?
PRIME MINISTER:
Well the money is essentially there to be spent on good projects and we are relying on businesses and communities and institutions to give us good projects and we’ll spend the money with expert advice on the best projects and I guess in the end if Geelong and Victoria have got innovative and creative projects there’s more money for them. If Adelaide and South Australia and Elizabeth have got innovative and creative projects there’s more money for them. So, it is a bit of a competitive process but in the end we will try to ensure that everyone gets a reasonable share of this $155 million.
QUESTION:
Is this an admission that the original fund wasn’t big enough?
PRIME MINISTER:
The original fund was established when we had the announcement from Holden late last year and we have increased the fund because we subsequently had the announcement from Toyota. Both of them essentially impact in similar regions and that is why we’ve expanded the original fund.
QUESTION:
Alcoa is also closing down soon. Will there be any assistance for workers who will be losing their jobs there?
PRIME MINISTER:
My understanding is that we are continuing to talk to Alcoa and we will have more to say that will be Alcoa specific in the weeks and months ahead.
QUESTION:
Is that likely to be a specific fund or added onto this fund?
PRIME MINISTER:
Well, I don’t want to pre-empt announcements that might be made in the future but my instinct would be to use existing mechanisms rather than to create new mechanisms.
QUESTION:
That business shuts in three months’ time there must be a sense of urgency though to get some announcements happening?
PRIME MINISTER:
Well, it’s not as if there is nothing happening. There was a Ford package put in place for this region some time ago and my understanding is that that is an ongoing package to help people displaced in this region – particularly motor workers – but it is an ongoing package and some of the money in this package is to continue services that have already been put in place for the region.
INDUSTRY MINISTER:
Discussions with Alcoa have been ongoing for some time and there are opportunities for Alcoa workers and the establishment of new business in this region. So, we are working through that with Alcoa but this is an automotive package that we are announcing today. We will deal with the Alcoa closure separately.
QUESTION:
Just to be clear South Australia hasn’t agreed to this yet?
INDUSTRY MINISTER:
No, they have agreed. I spoke yesterday to Tom Koutsantonis, the Treasurer and also the Resources Management Minister. They have agreed but there are further discussions going on both with Victoria and South Australia about potential expansion of this scheme. South Australia, the Premier is overseas and they have asked that their part of the announcement be delayed until his return but they are definitely on board.
QUESTION:
Prime Minister, just on another matter, have you broken a key election promise by reducing the threshold for the paid parental leave to $100,000?
PRIME MINISTER:
Budget finalising is a difficult business. It’s a particularly difficult business when this is the first Budget of a new Government which was elected to fix Labor’s debt and deficit mess.
Let’s never forget that Labor has left us with deficits of $123 billion, debt projected to peak at $667 billion. It all comes with an interest bill of $10 billion a year – that’s $10 billion of dead money.
This Government didn’t create the problem – this Government was elected to fix the problem. We were elected to fix a problem and fix it we will and we will do it in ways that are fair. That is the essential point.
Now, yes, some days ago the ERC decided that the cap for the paid parental leave scheme would be reduced to incomes of $100,000 a year. So, you will only be paid paid parental leave under the Government scheme up to a maximum level of $100,000 a year income. Under all the circumstances I think that is fair. Obviously, I regret that we find ourselves in very difficult fiscal circumstances but under the circumstances where everyone is going to have to share in bearing the burden of fixing this particular problem I think it is reasonable.
QUESTION:
Prime Minister, did dissent within your own ranks leave you with no choice but to cut back the paid parental leave scheme?
PRIME MINISTER:
I have been thinking for some time about how we can best adjust all of these things to best fit the circumstances of the Budget emergency that we inherited. Now, inevitably Labor was gilding the Budget lily pre-election. Inevitably, you get into Government and you discover that things are every bit as grim and then some as had been portrayed. I don’t want any section of the community to feel that they are getting special privileges here.
I think everyone has got to be in this together. We are going to fix this problem together. Everyone from the top down is going to be part of fixing Labor’s debt and deficit mess and yes that does include regrettably an adjustment to the paid parental leave scheme.
QUESTION:
What do you say to women who earn between $100,000 and $150,000 who thought they would be eligible for this when they voted for you?
PRIME MINISTER:
Well, they’ll still be eligible. I want to make it crystal clear they will still be eligible but the maximum rate is capped at $100,000.
So, if you are earning $150,000 or $180,000 or $250,000 for that matter you will still be eligible for paid parental leave under this scheme but the maximum rate at which it’s paid has been capped at $100,000 a year.
Look, I would have preferred to stick absolutely with the original policy. The policy we took to not one but to two elections but given the circumstances that we are in, given the Budget emergency, a lot of things have to be adjusted.
A lot of things have to be adjusted and everyone is going to have to do his or her bit to deal with the problem that we have inherited; to deal with the debt and deficit mess that Labor left this country with. We were elected to fix a problem, fix it we will, but above all else we’ve got to do it in ways that are fair and that’s what the Government will ensure in these final 10 days or so of Budget preparations.
QUESTION:
Does that include sticking with the deficit levy despite dissent within your own ranks?
PRIME MINISTER:
I’m not going to provide a running commentary on each and every bit of speculation that we’ve seen in the press over the last few days.
I just want to assure you that we will fix the problem and we will do it in ways that are fair. I don’t want low income earners or recipients of government services to be saying to me, “Look what’s happening to our services, Prime Minister” and for someone in my position, apparently to be getting off scot free, so to speak. I mean, everyone has to do his or her bit. We are all in this together.
We were elected to solve a problem, solve it we will, but we’ve got to do it in ways that are fair and I don’t think that we can be looking for economies in government spending without also asking people who are on very high incomes to do their bit to address the problem.
QUESTION:
So are we more likely to get increases in PAYE rather than a debt levy?
PRIME MINISTER:
Well again, I’m not going to speculate on the precise detail that you’ll see on Budget night in 13 days’ time – I’m not going to speculate on the precise detail of what’s going to happen on Budget night. I just want to assure people that there is a debt and deficit disaster that this Government is grappling with. We were elected to do precisely that. We are not going to let people down, but we’ve got to do it in ways that are fair.
When you’ve got $123 billion of approaching deficits, when you’ve got $667 billion of projected debt, you’ve got to act. The sooner you act the better, because once debt gets to a certain level, you don’t control debt, debt controls you. We don’t want our country to be driven by the level of debt. We want to be in charge of our own destiny and that means getting debt and deficit under control.
QUESTION:
Does it pain you though to break such a signature policy – the PPL?
PRIME MINISTER:
I want to maximise services, I want to minimise tax, I want to be doing things that will be universally applauded by the Australian public – that’s what every politician wants. No politician embraces policies that will inevitably cause some grumbling – no politician does – but we were elected not to take easy decisions; we were elected to take tough decisions.
We weren’t elected to give people everything they want; we were elected to do what our country needs and what our country needs, above all else at this time, is to get Labor’s debt and deficit under control.
That was the problem that we were elected to address, address it we will, but we’ll do it in ways that are fair.
QUESTION:
Weren’t you elected on those promises as well? A lot of people would have voted for you because of that promise.
PRIME MINISTER:
Look, we took a policy to the election – a policy I passionately believe in, a policy of a fair-dinkum paid parental leave scheme.
We will deliver fair dinkum paid parental leave, but because of the Budget emergency that we find ourselves in, we are going to have to bring down the cap, we’re going to have to limit the rate at which it’s paid to an income level of $100,000 a year.
QUESTION:
What sort of savings do you hope to make through that reduction?
PRIME MINISTER:
The savings won’t be vast, but they will be sign that everyone is in it together and that we are having to make sensible and fair adjustments across a whole range of policies so that all of us will be making our contribution to address Labor’s debt and deficit disaster.
QUESTION:
And the levy on business will stay the same to pay for the PPL?
PRIME MINISTER:
That’s correct and the point I want to stress though is that only businesses with taxable incomes in excess of $5 million a year will be paying that levy. I want to stress that because obviously the last thing we want to do is to put additional burdens on small business because small business inevitably are the ones that always do it toughest when times are difficult.
QUESTION:
Does this mean do you think that the legislation can be introduced soon given that it’s likely to get support from The Greens?
PRIME MINISTER:
Look, again I’m not going to speculate on the timing of particular measures, I’m not going to engage in detailed speculation about a whole range of Budget measures. I just want to reassure the Australian people this is a Government which is taking charge of the situation in which we find ourselves.
You elected us to do a job – you elected us to do a difficult job – we will not let you down. We will not let you down.
Over time, yes of course we want lower, simpler, fairer taxes. Over time, we want fairer, better services. That’s exactly what we’ll get, but there do have to be difficult decisions in the short-term. There will inevitably be disappointments in the short-term so that everyone’s future can be better.
Thank you.
[ends]