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Transcript - 23509

Interview with John Stanley and Garry Linnell, Radio 2UE

Photo of Abbott, Tony

Abbott, Tony

Period of Service: 18/09/2013 to 15/09/2015

More information about Abbott, Tony on The National Archive website.

Release Date: 20/05/2014

Release Type: Transcript

Transcript ID: 23509

Subject(s): Budget 2014

PRESENTER:

We’ve got the Prime Minister in our studio in Canberra now. Mr Abbott, good morning.

PRIME MINISTER:

Good morning.

PRESENTER:

Good morning, Prime Minister. Thanks for joining us.

PRIME MINISTER:

Pleasure. Thanks for having me.

PRESENTER:

We don’t have to go into a long running diatribe about how people are unhappy out there – you know that. Why do you think there’s been such a harsh reaction to the Budget?

PRIME MINISTER:

Well, no-one said it was going to be easy to fix Labor’s debt and deficit disaster. Obviously, some very tough measures had to be put in place, but I believe in the marrow of my bones that these measures are fair.  Everyone is making a contribution; people earning over $180,000 a year are paying the deficit levy, Members of Parliament are having their pay frozen, motorists will pay the fuel excise indexation, so everyone is making a contribution. We need to make a contribution, because we just can’t go on borrowing $1 billion every single month to pay the interest on Labor’s borrowings. We just can’t go on. What we saw on the front page of The Financial Review this morning is that if these measures are blocked by the Labor Party in the Senate, our AAA credit rating is at risk and if that goes, well that does all sorts of damage to our country’s fundamental economic standing.

PRESENTER:

Did you ever think though that you would ever be less popular than Julia Gillard?

PRIME MINISTER:

Oh well, look, I didn’t come into politics to be popular; I came into politics to do the right thing by our nation and that’s what people expect of their government. They expect their government to do what’s right and necessary for our country and that’s what we’re doing. I mean, plainly – plainly – we didn’t construct this Budget for the political convenience of the Government. We constructed this Budget for the long-term economic strength of our nation. We have a plan to solve the debt and deficit disaster that Labor left us and it’s the only plan, because Labor’s plan, if you were to believe the Budget Reply, is to keep borrowing and keep spending.

PRESENTER:

Now the GST is back on the agenda, whether or not it be broadened or lifted. There’s a fairly significant push to broaden it. If the states came to you and said, “Will you change the legislation around the GST?” would you change it? Would you be prepared to do that?

PRIME MINISTER:

Well you’re asking me a hypothetical question. What I want is taxes that are lower, simpler and fairer. That’s what I want and that’s why we’ve got this taxation reform white paper which will crank up later in the year. But look, what the states do is their business and we also have a Federation reform white paper that was flagged well before the election because I do believe, over time, the states should be more soldiers in their own spheres and I want to see our Federation work better than it does now.

PRESENTER:

But you must have your own opinion on the GST and whether it’s time to broaden it, surely?

PRIME MINISTER:

Well my opinion is that we pay more than enough tax already and we have got to, over time, get taxes down but obviously we’re only going to get taxes down over time if we make government more efficient and that’s what I want to see. I want to see more effective, better run schools and hospitals because that over time will give us better services and lower taxes.

PRESENTER:

Talking about taxation, I think there’s a sense that the ordinary taxpayer is certainly doing their heavy lifting and their share of the bulk. What about Google and Apple and some of these big multination companies who have been getting away with, effectively tax evasion, for years?

PRIME MINISTER:

Gary, that’s a very, very good question and this is one of the things that will be looked at, amongst others, by the G20 in Brisbane in November. We do have to ensure that companies pay their fair share of tax. Particularly, we need to tackle this transfer pricing issue. It’s always been an issue, but it’s particularly an issue when it comes to e-commerce where things can happen in very low tax jurisdictions, even though the revenue is earned in other jurisdictions, so we do need to look at this.

PRESENTER:

Mr Abbott, just on the question of the reaction to this, have you sat around with your staff? You do these strategy meetings. Why has it gone so pear shaped in terms of the reaction to all of this?

PRIME MINISTER:

John, I don’t accept your description. Yes, yes, there has been a reaction to the Budget. We nearly always get a critical reaction to a tough Budget. We haven’t had a tough Budget since 1996 and we certainly expected a reaction to this Budget. If you go back and look at the speech I gave to the Sydney Institute a few weeks ago, I said I didn’t expect to be more popular after the Budget, but I did hope that Government would be better respected after the Budget and what we’ve done is we’ve been absolutely up-front with the Australian people. We have said that there will be tough decisions, it will be difficult, but this is for a purpose. This is to give us the long-term economic strength that will enable us to pay pensions, enable us to be a generous and compassionate society far into the future.

PRESENTER:

But on the issue of respect, Prime Minister, you don’t seem to have been able to get that from the public according to these public opinion polls. The majority of voters think the Budget is bad for the economy.

PRIME MINISTER:

Well look, let’s see what people’s long-term judgment is. The point I keep making is that we didn’t put this Budget together for the political convenience of the Budget. This is not about the standing of the Prime Minister; this is about the standing of our country and you know, we had a government here for six years, they were economic vandals. They turned a $20 billion surplus into $50 billion deficits, they turned $50 billion in the bank into a projected $667 billion worth of debt. We had a government for six years that was more interested in politics than policy, in spin than substance. We have got to deal with the mess that they created and that’s not going to be easy, but it’s got to be tackled. There is no alternative.

PRESENTER:

But looking back on how you delivered the Budget and the lead up to it, would you have done some things differently? I mean, it probably didn’t help that your Treasurer was photographed smoking cigars in the lead up to the Budget, did it?

PRIME MINISTER:

Oh look, I think the Australian people are more than capable of seeing beyond a couple of casual images to look at the substance and the substance is our country could not continue borrowing $1 billion every single month just to pay the interest on the borrowings. Now, we just couldn’t go on like this and we have a plan to fix the problem, Labor doesn’t. Our plan is the only plan to fix the problem and that’s why I’m confident that over time, however reluctantly, people will rally behind it.

PRESENTER:

It seems to be almost a unity ticket amongst conservative and what you might call left-wing commentators that you’re hitting low-income earners very hard. We had a caller, Trish – can we listen to Trish? This was from yesterday.

CALLER:

If you’re just paying $7 just to go to the doctor, I’m happy to do that, but it’s not just as simple as that because I was diagnosed with breast cancer and had to have it out last year. Now I could have a day there going to get my breast cancer done where I’d have the radiation, then I’d have to see the doctor and the nurse and I had to do that five days a week for five weeks. So can you imagine how much that costs?

PRESENTER:

She feels like she’s paying extra to carry the burden and yet we see increases in defence spending, for instance. Shouldn’t we be cutting in other areas than the areas that affect her?

PRIME MINISTER:

Look, obviously everyone’s circumstances are different, but it sounds to me like the lady who we’ve just listened to would be visiting an oncologist and these changes don’t impact on specialists, they’re about visits to the GP and to certain diagnosticians. So look, I’m not saying that this is going to be easy, I really am not saying that this is going to be easy and what happens when you make changes is that everyone who’s unhappy with a whole lot of things tends to focus in their unhappiness on the most recent changes, I mean that’s human nature and I accept that. But, the job of government is not to tell people what they want to hear; the job of government is to explain to people, patiently and carefully, exactly why we need to change and that’s what we’re doing.

PRESENTER:

With the Medicare issue though, that’s going to be opposed in the Senate we’ve heard by the numbers that are up there in the Upper House. Are you prepared to negotiate? Are you prepared to look, for instance, at some exemptions from this $7 from people who might be low-income earners or pensioners?

PRIME MINISTER:

Well, do we have exemptions on PBS co-payments? I mean, this GP co-payment is exactly the same principle as the Pharmaceutical Benefit Scheme co-payments which were introduced by the Labor Party I think in 1990 and have been with us ever since and basically, whatever drug you’re getting, if it’s on the PBS, there’s a standard co-payment regime. And the interesting thing is that it was Bob Hawke in fact who first introduced a co-payment for Medicare. So if it’s as bad as Bill Shorten says it is what does it say about Bob Hawke?

PRESENTER:

But to get it through the Senate if you’re faced with nothing or a compromise, are you prepared to compromise in any of these things to get your legislation through the Senate to keep that AAA credit rating?

PRIME MINISTER:

I’m very happy to sit down and talk respectfully to the Independent and minor party Senators, but the point I’m making is that it was once Labor policy to have a co-payment. It was an accepted Labor policy to have a co-payment on the PBS. Now, how can these things be everything that Bill Shorten says they are given that they were originally Labor Party policies…

PRESENTER:

Do you acknowledge you might have to horse trade on these things?

PRIME MINISTER:

... and we, the then Coalition, accepted them. And just on this issue of people being worse off, back in March a single pensioner received a $14 a fortnight increase. I think each member of a pensioner couple received a $10 a fortnight increase. These are pension increases that take place every six months and all these things continue. We will continue to have a strong social safety net under this Government with these Budget changes; it’s just that it will be sustainable in the future under us. If Labor’s borrow and spend policies stayed in place, sooner or later our country would have faced a financial and economic crisis and then really tough decisions would have had to have been made.

PRESENTER:

Prime Minister, just quickly, looking back over the last eight or nine days since the Budget was delivered. Wouldn’t you just be better off admitting that you broke several of those key election promises you made and then move on?

PRIME MINISTER:

Ok look, Garry, let me just remind everyone what I said pre-election: I said we’d stop the boats, we’d scrap the carbon tax, we’d build the roads of the 21st century and we’d get the Budget back under control.

PRESENTER:

You also said no changes to Medicare.

PRIME MINISTER:

Well I’m not sure that I did say that. I said I was a supporter of Medicare, I reckon I’ve been the best friend that Medicare’s ever had, but we absolutely were up-front with people that we would get the Budget under control, that the Schoolkids Bonus would go, that the Low Income Support Payment would go. And look, we were attacked uphill and down dale for all of these things...

PRESENTER:

But your own Treasurer has admitted that there are new taxes…

PRIME MINISTER:

… and the point I’ve made is yes, the 3 per cent of taxpayers earning more than $180,000 a year will pay the deficit levy. Yes, motorists will pay fuel excise indexation. It’s a tax that was introduced by the Labor Party, it was suspended by the Howard government in 2001, it’s back again. I accept all of that, but these are…

PRESENTER:

No changes to aged pensions?

PRIME MINISTER:

... and there are no changes to aged pensions in this term of Parliament and if you don’t like what we’ve proposed for 2017, well then there’s an election and you can vote accordingly. But the point is, to make all of our social service spending, to make all of our social safety nets sustainable, that’s what we’ve got to do. And in the end, I think the Australian people understand that you can’t spend what you haven’t got. You can’t endlessly sustain current spending on borrowed money because every dollar that government spends you’ve got to raise either through taxes today or taxes tomorrow. We have effectively been stealing from our children by spending money now that they are going to have to pay and it can’t go on, it mustn’t go on and it won’t go on under this Government.

PRESENTER:

There just seems to be a lot of anger out there among older people, particularly those on aged pensions. Have they not understood what you’ve put before them or are they justified in being angry?

PRIME MINISTER:

Well, as I said, there are no changes to pensions this side of an election. The only change to pensions after an election is that they’ll be increased by CPI rather than by Male Total Average Weekly Earnings. Now, they will continue to go up, they will simply go up at a marginally less fast rate in 2017 than they have over the last couple of decades.

PRESENTER:

But would you concede that these are the people who helped build the nation into what it is today and that’s why there’s so much anger?

PRIME MINISTER:

I absolutely accept that pensioners have built our country, and they’ve built our country by being frugal and prudent and unfortunately, under Labor over the last six years, government was anything but frugal or prudent – anything but frugal or prudent – and that’s why we’ve got to make these difficult changes. Difficult changes; I accept they’re difficult, in order to ensure that a strong social safety net is sustainable into the future.

PRESENTER:

Alright, Mr Abbott, I know we’ve run out of time. Thank you very much for your time today.

PRESENTER:

Thanks, Prime Minister.

PRIME MINISTER:

John and Garry, thanks for having me.

[ends]

Transcript - 23509