ALAN JONES:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, Alan.
ALAN JONES:
What is the philosophy which will underpin what you’re seeking to do tonight?
PRIME MINISTER:
Well, Alan, this is a problem-solving Budget because we do have a very serious problem of debt and deficit stretching as far as the eye can see, but it’s also a nation-building Budget because by getting the Budget right we help to get the economy right and, as Joe Hockey has been making clear in recent days, this is the biggest infrastructure spend that the Commonwealth has ever made.
We want to get money out of short-term consumption spending and into long-term investment spending, because that’s what’s going to build up our country for the long-term.
ALAN JONES:
So it’s about $11.5 billion you’re going to lay out tonight?
PRIME MINISTER:
That’s correct, and it includes a very big package for Western Sydney, because Western Sydney has been neglected for too long. It gets the WestConnex up and running sooner, it gets NorthConnex which are all these very important roads for the people of Sydney that have been for too long neglected. There are new roads in Brisbane, in Melbourne, in Adelaide, in Perth, there’s the Pacific Highway, there’s the Bruce Highway, there’s the Toowoomba Range Bypass. These are all very important initiatives to get our country moving again because whenever you’re sitting in traffic, you’re not at work being productive and you’re not at home with your family.
ALAN JONES:
Unless you can persuade Australians of the gravity of the position, they may not accept the medicine being dished out tonight. Are you confident that Australians are coming along with you? And I raise that by saying that you’ve been criticised over a debt tax which is a tax – there’s no use being semantic and you’re not a bloke who deals in semantics – but as I understand that this was the only way that you could grab people like yourself and politicians in it so you could say, “Look I’m putting my hand in my pocket”. The debt tax will cost you about, what, $6,000?
PRIME MINISTER:
About $6,500.
ALAN JONES:
And the backbench about $4,000?
PRIME MINISTER:
Everyone is going to be in this. We’re all in it together and what I don’t want, Alan, is for a pensioner to be able to look me in the eye and say, “I’m bearing pain and you’re not”, because it’s got to be fair. Above all else, it’s got to be fair. Yes, there’s got to be some short-term pain, but it’s pain with a purpose and overall this has got to be a nation-building Budget.
But, Alan, the problem – that’s the thing that we need to focus on – we have a terrible problem and the problem, you put it well, we are borrowing $1 billion a month just to pay interest on our borrowings. Now, anyone who’s been in a personal debt situation knows how diabolical it is if you are borrowing just to pay the interest on your earlier borrowings and the only way to fix this is to cut down your spending and to boost your income and that’s what the Government’s doing this evening.
ALAN JONES:
If I could just take the personal sacrifice, because you know, this is a key, I think, to the leadership here. Also you are asking, are you not, or have asked, the Remuneration Tribunal to approve the fact that you’ve put a stop on parliamentary salary increases and public service salary increases? So, that’ll be another $10,000 you won’t get and, for example, the head of the Department of Prime Minister and Cabinet will lose $40,000. So, the philosophy here I presume is to say, “We’re going to have to wear some pain if we’re going to enjoy the productivity benefits of this at the end”.
PRIME MINISTER:
That’s exactly right, Alan. We’re all in this together. I don’t want people to say, “Oh those blokes in Canberra are making me suffer while they get off scot-free”. So, there will be a deficit levy on high income earners. The lifetime gold pass for politicians – gone, finished, kaput, dead, finally…
ALAN JONES:
Good stuff, good stuff.
PRIME MINISTER:
…and yes, there will be a pay freeze for politicians, judges and senior public servants.
ALAN JONES:
You’re getting plenty of advice from business and editorial writers and so-called media experts and economic experts about the fact that you must Abbott and you must Hockey cut and slash. Where were these people over the last six or seven years?
PRIME MINISTER:
Well that’s a fair point, but look, people like the BCA and Tony Shepherd were certainly giving a lot of good advice to the former government. The former government wasn’t much in the business of accepting advice. We aren’t entirely accepting the advice that Tony Shepherd gave us in his Commission of Audit report, but nevertheless, his general diagnosis of the problem is correct. As a country we have been living beyond our means. We are a great country with a great future, but we were badly misgoverned for six years and tonight’s Budget is all about trying to ensure we get back on the right track so that our children and our grandchildren can have the futures that they deserve and that we want to give to them.
ALAN JONES:
This is a sample of the correspondence I’m getting and there’s a lot of anger in this. Yesterday a letter, beautifully written to me – lovely handwriting, someone had taken the time to compose it – quote, “If Messrs Abbott, Hockey and others require the citizens of this country to shoulder the wheel of financial recovery again, then first let there be seen to be tangible evidence that the creating perpetrators are being purposefully sought out and held accountable for this country’s present dire financial circumstances”. Now, in the wake of that comment you’ve got Rudd, a former prime minister, between December 17 last year and 4th April this year visiting New York, Paris, Munich, Boston, Washington, London, Oxford, Seoul, Vienna, Moscow and Rome demanding assistance from Australian diplomats on the ground in each place. Please tell us we’re not paying for that.
PRIME MINISTER:
Well, I’m pretty sure we wouldn’t be paying for the travel. I’m sure the travel would be paid for by various sponsors and maybe people who’ve invited him to conferences and things like that. We would be paying for consular assistance and other assistance that our embassies would be giving him and I guess that’s the kind of courtesy which our diplomats would extend to a former Australian prime minister abroad. But certainly, Alan, there is no way that the taxpayer would be paying for all of that extensive travelling around.
ALAN JONES:
There’s been a lot of debate about pensions, about changing retirement age – we’re not going to canvass that here – down the track and when you’ll be eligible to claim your pension and it won’t be until 70 in 2035 I think and they’re saying to me, how can Julia Gillard and Kevin Rudd, who created this mess, claim their pensions immediately when they leave office, but the battler out there can’t until five years before he retires?
PRIME MINISTER:
Well, that’s a fair point and, as you know, Alan, they were on the old pension scheme. The old pension scheme was closed down by John Howard, but there are still a number of Members of Parliament – and I better dob myself in here, I’m on the old scheme – there are a number of Members of Parliament left who are still on the old scheme and…
ALAN JONES:
This is the Defined Benefit Scheme?
PRIME MINISTER:
The Defined Benefit Scheme. What we will be doing is finally stopping…
ALAN JONES:
Just to interrupt you there, Prime Minister. For my listeners, just to explain to them, a Defined Benefit Scheme simply is a scheme whereby you take the final average salary of your last term in employment, so if Mr Abbott’s final average salary was $250,000 or $300,000 for each of the last three years, a defined benefit would say he was entitled on retirement to five or six or seven it could be multiples of that salary. So he would know six times $300,000 would be $1.8 million. He’d automatically get that. That’s the defined benefit. That’s been changed now, as I understand it.
PRIME MINISTER:
That’s exactly right. As of this Budget, there will be no more Defined Benefit Schemes left anywhere in the Commonwealth and I think that’s fair and reasonable, because what the Defined Benefit Schemes do is that they saddle future generations with massive debt and what we have been determined to do in this Budget is get the recurrent spending down, reorient it from short-term consumption to long-term investment and then get the debt burden down and when Joe Hockey stands up in the Parliament tonight, Alan, the Australian people will say that while the job isn’t entirely finished by today’s Budget, the job is certainly very substantially started by this Budget and we are well and truly on the road to a sustainable surplus thanks to the work that Joe, Mathias Cormann and the rest of the Government has done.
ALAN JONES:
You’re all about starting things. This all started with Whitlam trying to tell people that you can have free university education and free health and things would be free and nothing’s free, someone has to pay and the taxpayer has to pay. Bob Hawke woke up to this and said, on this programme, he said, “Alan, I can’t have people at Mt Druitt paying taxes so that other people can go to university when the people at Mt Druitt may not get inside a university gate”.
Now the HECS debt, nonetheless, is now at $30 billion, projected to rise to $55 billion. Ross has never been to university, he’s shaking his head here because these sorts of people are paying for it. I notice Professor Chapman, who designed the HECS system, saying this week that the payback threshold should be reduced from $51,000 to $32,000 to help recover more of this money arguing that, for example, university graduate women who marry, have children, will never ever earn a salary of $51,000 so they’ll never have to repay the HECS debt. Are you addressing that issue tonight?
PRIME MINISTER:
There are some changes in this area this evening. I think…
ALAN JONES:
‘Cause it’s big money, isn’t it?
PRIME MINISTER:
Look, it is, Alan, and the fact is that a university education is very good for the people who get it. We estimate that on average you earn about 75 per cent more over a lifetime as a graduate than as a non-graduate. So, it’s right and proper that people who are getting this important benefit should pay a greater share of the cost of it.
On the other hand, we’ve also got to accept that by going to university people are in a position to make a greater contribution to the welfare of everyone, so there are social benefits as well as individual benefits.
ALAN JONES:
Just a quick one before you go, the fuel excise was 38.143 cents a litre when John Howard froze it 13 years ago; that was 42 per cent of the bowser price. You’re going to increase that excise. There are legitimate reasons around the world for this – one is to stop the guzzling of a scarce resource. Now, this will increase the price of petrol, what, by about a cent a litre and move the component of the excise up to what it was when John Howard froze it at about 42 per cent of the bowser price. Am I right on that?
PRIME MINISTER:
Well, it will steadily increase the excise, but depending upon what the price of petrol is, that really determines what percentage of the final price the excise will be. But the important thing about the excise indexation which is restored after 12 years in abeyance is that all of the additional money is being hypothecated to roads and this is the biggest roads spend by far, the biggest infrastructure spend by far in the history of the Commonwealth and there’s also this asset recycling fund which will encourage the states to privatise some of their assets to reinvest it in productive economic infrastructure.
ALAN JONES:
Good on you. Good to talk to you. We’ll talk again. Good luck tonight. Thank you for your time.
PRIME MINISTER:
Thanks so much, Alan.
[ends]