PRESENTER:
Thanks very much for joining us this morning.
PRIME MINISTER:
Thank you for having me.
PRESENTER:
Can I ask you first, Mr Abbott, you’ve been in politics for a long time, you worked hand-in-hand with John Howard for a very long time, you’ve seen polls come and go. But yesterday when you picked up the papers, be they News Corp or Fairfax, did you feel a bit knocked around?
PRIME MINISTER:
Well, I’ve been in politics long enough, David, to be unsurprised by polls. But in any event the point I keep making is that it’s not about me it’s about the Australian people and their long-term best interests and I didn’t come into politics for my own popularity, I came into this business to try to do the right thing by the people of Australia and I know it’s been a tough Budget, David. It has been a very tough Budget. It’s been the first tough Budget since 1996. We aren’t doing it because we wanted to do it, we’re doing it because we needed to do it and we’re doing it because the Australian people need to understand that we could not go on living the way we were, borrowing a billion dollars every single month just to pay the interest on our borrowings. Now, this was the debt and deficit disaster that Labor left us with. It had to change and thanks to this Government it now is changing.
PRESENTER:
We’ve been saying since last Tuesday that you’re facing a political battle on three fronts – one with the Senate, one with the states and one on ultimately the most important one with the voters. Just in order, with the Senate what’s your approach now? Do you sit down with the crossbenchers? Probably not much point sitting down with Labor, given they promised to sort of block everything last Thursday. Do you try to negotiate with the Senate or is a double dissolution option still alive?
PRIME MINISTER:
Well, we do talk respectfully to the Senate; we’re even prepared to accept Labor’s support on any measures, if it’s prepared to give it to it to us. But let’s just look at that for a second, David. Labor were vandals in government, they badly damaged our economic future and now they want to be vandals in opposition and the impact of their vandalism, we read on the front page of the Financial Review today is to put our AAA credit rating at risk and if that happens, the borrowing costs of the Australian Government goes up and if that happens, it costs even more to service the debt and instead of paying $12 billion a year, we start to pay even more. So, this is the price of Labor and unfortunately we’re still paying it because Bill Shorten doesn’t get it; he is in denial about the damage that the government in which he was a senior member has caused.
PRESENTER:
As I said then, I mean in his speech last Thursday, Mr Shorten basically did indicate Labor would block almost everything apart from the tax on high income earners. But you’ve got Clive Palmer sending all sorts of mixed signals, you’ve got the Greens in the same boat. Do you think Australia could go back to the polls this year?
PRIME MINISTER:
I think Australians want to see the Government get on with it and that’s certainly my determination and I’m happy to talk to everyone and anyone to try to get our measures through and I believe we will get our measures substantially through because we have a plan to deal with Labor’s debt and deficit disaster – no one else does, David. No one else does. I mean, the Labor Party’s plan is the ostrich plan – shove your head in the sand and think it’ll go away and the Greens just want to tax everyone more in the name of the environment, and some of the minor parties just want to pretend that there’s no such thing as a tough decision that has to be made.
PRESENTER:
Now, in terms of the states, we’ve got one of the most left-wing premiers here in South Australia who has formed a unity ticket with one of the most right-wing premiers in Australia, Campbell Newman up in Queensland. Are all of these premiers wrong about the impact that your Budget is going to have on services at the state level?
PRIME MINISTER:
Well, we all want to fix the federation and in the long-term, part of fixing the Budget is going to be fixing the federation and we were upfront about that before the election. We said there’d be a federation reform white paper and we also said, David, before the election that yes, we would honour the Rudd/Gillard deals on schools and hospitals for the first four years, but we weren’t going to be bound in the out years and in this Budget the first of the out years becomes the last of the forward estimates years and we’ve said that public schools and public hospitals funding will continue to increase it’s just that it will increase at a slower rate under us than the pie in the sky promises that the former government made. So, the premiers knew exactly what they were in store for before the election and we’ve been straight with them since.
PRESENTER:
And just before Jane jumps in with a few questions, Mr Abbott, when you talk about fixing the Commonwealth and the relationship with the states, should that include a discussion about whether we broaden the base or raise the rate of the GST?
PRIME MINISTER:
David, that is a matter for them. That is a matter for them. The states are the sole beneficiaries of the GST that was why the Howard Government brought it in: to give the states a substantial source of revenue to do the things that they needed to do. If they want to change the GST, that’s certainly something that they can put on the table as part of the federation white paper process. As far as I’m concerned, I have no plans to change the GST, I want taxes to be lower, simpler and fairer and in the end we need to have more efficient government; government that knows its limitations, a government that knows its place and that’s what I want to work towards.
PRESENTER:
Mr Prime Minister, Jane Reilly here now. Look, in hindsight why did you promise all those things prior to the election – things like no cuts to education, health and no changes to the pensions?
PRIME MINISTER:
Well, no changes to the pension – there are no changes to the pension in this term of Parliament so I think we’ve kept that commitment. No cuts to health – all of the savings in health are being reinvested in health so I think we’ve kept that commitment. And no cuts to education – we aren’t cutting education, we actually have put back into schools funding $1.2 billion that Labor took out in the pre-election fiscal outlook statement. So, Jane, I know a lot of people led by the Labor Party are running around saying broken promises, haven’t kept commitments – I think we have been fundamentally faithful to the commitments that we made to the people before the election and at the risk of boring you, I mean, I did say before the election that we would stop the boats, we would scrap the carbon tax, we would build the roads of the 21st century and we would get the Budget back under control and I think we are very faithfully honouring all of those commitments.
PRESENTER:
What about the tax on petrol and the increased tax on those earning over $180,000 a year?
PRIME MINISTER:
I absolutely accept these are tax increases, but I also put it to you and your listeners that overall the tax burden as a result of the decisions that this Government has made will be down by $5.7 billion. Yes, the three per cent of taxpayers earning over $180,000 a year will face a deficit levy for three years and yes motorists will face fuel excise indexation – a tax that Labor first brought in – and that will cost the average family 40 cents a week in the first year – and I’m not minimising this – it will hurt. Whenever you pay more it hurts, but I think it is important to keep these things in perspective.
PRESENTER:
We’ve all been told that we’re to all do the heavy lifting; that the age of entitlement is over. So why are you continuing to stick with the paid parental leave? I know a lot of stay at home mums and women my age who never got any support. Most women I know don’t like this idea.
PRIME MINISTER:
Well, that might be a generational thing, Jane, because if I talk to my daughters for instance they say that they want to have families, they want to have careers and why shouldn’t their paid parental leave be a workplace entitlement, in the same why that holiday pay and sick pay and long service leave is a workplace entitlement? Now I think it is a very important part of boosting participation, allowing all of our people to make the most of themselves to be economic contributors that we do have a fair dinkum paid parental leave scheme. We have scaled it back a little as a result of the need for a tough Budget. The cap is coming down to $100,000 which I think is a reasonable adjustment in all the circumstances, but I’d be very surprised if women under 40 don’t think that a paid parental leave scheme is part of justice for them and justice for families.
PRESENTER:
I suppose women feel that it discriminates against those women who are on lower incomes or those who already had one child and then don’t return to the workforce, they don’t get that money for the second or the third child. So it’s putting a different value on each pregnancy.
PRIME MINISTER:
Well no, it’s just accepting the fact that if you are in the workforce you get paid at your wage. I mean if a person on a high income goes on holiday he or she gets paid at his or her wage for the period of their holiday pay and if a person on low income goes on holiday likewise so it just accepts the reality that this is a workplace entitlement it’s not a welfare one and when you take paid parental leave you get paid at your wage. That’s the way it ought to be.
PRESENTER:
Mr Abbott, based on the feedback that we get from our listeners, I’ve got the sense that one of the most unpopular aspects of the Budget is the $7 co-payment for Medicare, particularly with a lot of older voters and a lot of young mums who are constantly taking their kids to the GP seem worried about it. Are there any areas of your Budget that you are prepared to revisit and would that be one of them?
PRIME MINISTER:
Well, I think a co-payment is very important and so did Bob Hawke – he brought one in. You might remember that the former Labor Government with the support of the then Coalition opposition brought in a modest co-payment for the PBS and they also brought in a co-payment for Medicare. Now, that became an issue in the fight between Bob Hawke and Paul Keating over the leadership and Paul Keating scrapped it when he became prime minister but it was actually good policy then and it remains good policy and that’s why we’ve brought it in. There is going to be a strong safety net. After 10 visits you go back to the standard bulkbilling arrangement, but this is no more wrong than the long-established practice of having a modest charge for people who go to the chemist and get their prescription drugs on the PBS.
PRESENTER:
Prime Minister, Tony Abbott thanks very much for joining us on the FiveAA breakfast show this morning.
PRIME MINISTER:
I really appreciate it. Thanks David, thanks Jane.
PRESENTER:
No worries. Thank you, Prime Minister.
[ends]