DAVID SPEERS:
Prime Minister, welcome.
Starting with your Budget, a number of your key measures – the fuel excise increase, the GP co-payment, the changes to the pension – look set to be defeated based on what Labor, The Greens and the Palmer United Party are saying. Where does that leave this Budget?
PRIME MINISTER:
I don’t think anyone should assume that they will be defeated because everyone needs to understand that the Commonwealth could not go on as it was. We could not just pretend that Labor’s debt and deficit disaster didn’t exist. What the Government has offered is our solution to Labor’s mess and frankly, Labor has to offer its solution to Labor’s mess if it’s not going to accept our solution to Labor’s mess.
DAVID SPEERS:
But if they don’t budge and The Greens and then Palmer as well, what do you do?
PRIME MINISTER:
Well, we get on with governing the country and what we’ve put forward is a series of measures, which in many respects are tough, but in many other respects are visionary and which are right for the country at this time.
DAVID SPEERS:
You did say yesterday that you don’t believe these crossbenchers will try to completely frustrate the business of government because if there was an election again hardly any of them would win their seats. Now, are you really prepared to go to a double dissolution election on some of these things, or is that an empty threat?
PRIME MINISTER:
I want to go on with giving this country good government and good government means not continuing to pay the mortgage on the nation’s credit card and that’s the problem.
DAVID SPEERS:
Does it also mean sending voters back to the polls?
PRIME MINISTER:
Well good government means the government putting its Budget into the parliament, as we will, the parliament dealing expeditiously with these measures and, in the end, passing these measures.
DAVID SPEERS:
But if they don’t, will you force it?
PRIME MINISTER:
Well, I expect all Members of Parliament to engage with the Government and to deal fairly with the measures that the Government has in good faith put forward to address Labor’s debt and deficit disaster. As I said, David, we have put forward our solution to Labor’s debt and deficit disaster. If Labor’s not prepared to accept our solution to its mess, let’s see what their solution to their mess is.
DAVID SPEERS:
You also said you expect some horse-trading. I’m just wondering what your approach will be – are you prepared to negotiate, to move at all on some of these more contentious measures?
PRIME MINISTER:
Look, I want to get our measures through the Parliament; that’s what I want to do. Now, I’m not going to be absolutely unreasonable, I’m going to respectful towards the Parliament and the Senate, but we need to address the spending disaster which the former government left us. We’ve got to have long-term restructuring to make our economy stronger. It’s right and proper that we have more price signals in our health system and let’s never forget that every dollar that we save in health is reinvested in medical research.
DAVID SPEERS:
Just on that price signal – the $7 co-payment to see the GP – how do you regard that? I see the Treasurer Joe Hockey’s likened it to, or compared it to, the price of a pack of cigarettes and, you know, a couple of stubbies of beer. Is that how you see it as well, as really not much for some to pay?
PRIME MINISTER:
David, I don’t for a moment lighten the difficulties that inevitably some people are going to face as a result of changes that have been made over the years, but we’ve long had a co-payment for the PBS. Labor itself introduced a co-payment for doctor visits back in the 1990s. Smart frontbenchers like the current Shadow Assistant Treasurer think that a co-payment makes sense. In their hearts, Labor Members of Parliament know that this is actually an important economic reform.
DAVID SPEERS:
But for pensioners who are also going to be hit in other ways?
PRIME MINISTER:
And that’s why it’s important that there be a safety net there and after 10 visits we go back to the standard bulk-billing arrangement.
DAVID SPEERS:
Which is $70.
PRIME MINISTER:
Yes, and let’s not forget that we will abolish the carbon tax and keep the carbon tax compensation which means a couple of hundred dollars a year in many cases.
DAVID SPEERS:
Let me ask you about health, more broadly. Do you see a role for the Commonwealth in funding hospitals?
PRIME MINISTER:
Look, I certainly think it’s important that we try to ensure that over time all levels of government are sovereign in their own sphere and that’s what I want to talk to the states about. I want to talk to the states about sensible adjustments to our federation to make it work better and I would like each level of government, more than is currently the case, to be sovereign in its own sphere.
DAVID SPEERS:
Does that mean any role for the Commonwealth when it comes to hospitals?
PRIME MINISTER:
Well, let’s see where things go. Obviously at the moment, the Commonwealth doesn’t have any role in running public hospitals, but we have a substantial role in funding public hospitals.
DAVID SPEERS:
And what should that be?
PRIME MINISTER:
Well, let’s see where these discussions go as part of the federation white paper, but the federation white paper has been Coalition policy for about 18 months now. I can’t remember whether it was the last budget reply or the budget reply before that when I first put on the table a revised federation. Let’s see where those discussions go.
DAVID SPEERS:
Do you have a preferred outcome, though? I mean, should it be 40 per cent, should it be 30 per cent, should it be nothing?
PRIME MINISTER:
Well, David, let’s see where these discussions go. What we’ve said at the moment is that we are not going to continue indefinitely the cash splash that the Rudd/Gillard government agreed to and we shouldn’t be bound by commitments that the former government made which were never affordable and which never would have been paid in the first place.
DAVID SPEERS:
I’m wondering about your own positions on this. When you were health minister in the Howard Government you argued for a Commonwealth takeover of hospitals at one point and even as opposition leader in 2010 that you said, and I quote ‘if we’re fair dinkum about ending the blame game, we do need to have the potential to move to 100 per cent of Commonwealth funding of hospitals’.
PRIME MINISTER:
And the position that we took to the election was that we would honour the agreement for the forward estimates, but we didn’t regard ourselves as bound in the out years…
DAVID SPEERS:
But your own thinking on Commonwealth funding support for hospitals has changed?
PRIME MINISTER:
Now of course, David, what was then the out year is now the last year of the forward estimates and we’ve given an indication to the states of what we’re prepared to do: to fund schools and hospitals on an indexation plus population factor basis.
DAVID SPEERS:
Now the states are going to have to find this money, then, by the sounds of it, they don’t have too many ways of doing that and it doesn’t look like they’re ever going to unite on supporting an increase in the GST. It is within your power, isn’t it, to change that GST agreement so that the Federal Government can change it by itself?
PRIME MINISTER:
Well David, I know that you want us to jump five or six steps ahead and provide answers to problems that will arise in three or four years’ time, but the existing arrangements continue for the next three years. There’s a federation white paper process underway, there’s a tax white paper underway. The federation white paper will be shaped by a steering committee, headed by the Secretary of my Department on which all of the state premier’s department directors-general are represented. This is going to be a cooperative, consultative and a collegial process and I am confident that the end result will be a federation that works better.
DAVID SPEERS:
Sure, and I’m just asking the principle here because you and the Treasurer and others often argue that it is up to the states to change the GST; that it is their responsibility to do that but technically you can do it without them.
PRIME MINISTER:
Well, we’ve got this reform process under way and I am just not going to even begin…
DAVID SPEERS:
I’m just asking if you will acknowledge that this is within your power – it is isn’t it?
PRIME MINISTER:
Look, David, we have said that nothing will change here. We have no plans for change here and frankly I want the process to start before I want to engage in all sorts of speculation.
DAVID SPEERS:
Can I ask you about foreign aid? I think in the many post-Budget interviews you have done I’m not sure if this has come up even once but it is the single biggest cut in the Budget - $7.6 billion from foreign aid. Before the election there was bipartisan support for this Millennium Development Goal target of spending .5 per cent of our Gross National Income on foreign aid. Has Australia now abandoned that Millennium Development Goal target?
PRIME MINISTER:
Well, David, let’s get back to the basic problem. The basic problem was Labor’s debt and deficit disaster and this idea that we could borrow money to give it to people overseas is frankly even less plausible than the idea of endlessly borrowing money to pay ourselves benefits that the country can’t afford.
DAVID SPEERS:
But plenty of other countries do it. Even the UK in a far worse debt situation and they are paying a whole lot more, they are meeting their target. Is our target now abandoned?
PRIME MINISTER:
Well, the interesting thing is that the former government constantly pushed the target off. As soon as it was time to increase the spend, it pushed it off for another year.
DAVID SPEERS:
It did.
PRIME MINISTER:
What we have said is that it remains an aspiration but we are not going to contemplate moving in that direction until we have got the Budget back into a situation of strong and sustainable surplus.
DAVID SPEERS:
Finally, can I ask you about the Royal Commission that your predecessor Kevin Rudd is appearing before – the Inquiry into the Home Insulation Programme. The Commission has decided that full Cabinet documents are to be made public so that he can defend himself. Are you worried about Cabinet confidentiality being breached?
PRIME MINISTER:
Look, I have sat in a Cabinet now for quite a few years. I have seen a lot of Cabinet Ministers make a lot of contributions. I have made my contributions around the Cabinet table. Every Coalition Cabinet Minister is making a passionate contribution around that table as to what is best for the future of our nation and I don’t see that anything is ever going to change that.
DAVID SPEERS:
But does this fundamentally change the supremacy of Cabinet secrecy? That a Royal Commission can now have it all exposed?
PRIME MINISTER:
Nothing is going to change the vigour, the candour and ultimately the constructiveness of the Cabinet conversations that I have been part of and that I expect to be part of in the months and years ahead. I am confident that that would also be true of the other side. In respect of this particular Royal Commission, David, I think it is important that this Royal Commission be supported and encouraged to get to the bottom of what happened here because, let’s face it, this is the most disastrous domestic programme that the Commonwealth Government has ever been responsible for. We have got to learn the lessons and frankly if Mr Rudd can speak freely, have access to relevant documentation, if the other ministers and officials can speak freely and have access to relevant documentation that surely helps the Royal Commission to do its work.
DAVID SPEERS:
So, you’re not worried about a future government holding a royal commission into something that has happened under your watch and all the Cabinet documents being made public?
PRIME MINISTER:
Well, I am confident that we won’t run a roof batts-style disaster and, frankly, if we ever do it ought to be investigated.
DAVID SPEERS:
Prime Minister Tony Abbott, thank you.
PRIME MINISTER:
Thanks.
[ends]