LEON COMPTON:
Tony Abbott is Prime Minister of Australia. Prime Minister, good morning to you.
PRIME MINISTER:
Leon, nice to be with you.
LEON COMPTON:
Prime Minister, modelling from the University of Canberra says the poorest 20 per cent of Australian households will be paying way more out of this Budget than the richest 20 per cent to try and deal with the deficit – the deficit problem – you talk about. Was that your intention when designing the Budget?
PRIME MINISTER:
No, and the modelling in question is Labor Party NATSEM modelling. It is not pure NATSEM modelling as I understand it. It’s based on assumptions which the Labor Party has fed into it, but look it is a tough Budget. There is no doubt about that, Leon. It had to be tough- regrettably - because of the debt and deficit disaster that the former Labor government in Canberra saddled us with. This Government did not create the problem, but this Government will shoulder the responsibility for fixing it.
We just can’t go on borrowing a billion dollars every single month to pay the interest on the borrowing. So, that is why this Budget had to be tough.
LEON COMPTON:
Many people might agree with that position but questions about whether or not it is pensioners, it is the unemployed, it is the middle and low income families of Australia that should be doing most of the lifting in order to repair that position.
PRIME MINISTER:
This is a Budget which is striving to be fair. High income earners, earning over $180,000 a year will pay the deficit levy. We’ve got members of parliament who have a pay freeze and we have got everyone facing fuel excise indexation. So, everyone is going to do his or her bit.
In terms of pensioners the pension went up – the single pension- went up by about $14 a fortnight in March. It will go up by a comparable amount again in September and every March and every September the pension will go up. The only difference in respect to the pension itself is that come 2017 it will be indexed by the Consumer Price Index rather than by male total weekly earnings.
LEON COMPTON:
And ultimately that means it will fall in real terms. You point to the fact that people over $180,000 a year will be paying this levy. I mean for $200,000 a year wage earners that will amount to $400 a year in total and that will only last for three years. Is that sharing the pain compared to what somebody who might be raising a family on a low income would be contributing?
PRIME MINISTER:
Just to get back to pensions for a second, Leon. They won’t fall in real terms because real term is inflation adjusted. They will be maintained in real terms. They will not rise in accordance with male total average weekly earnings. They will rise in accordance with CPI so they will be maintained in real terms. Now, in terms of the deficit levy it will impact on people earning over $180,000 on someone earning half a million a year – such as the prime minister. That means a $6,500 a year tax increase. Now, I am not complaining. I think that is perfectly reasonable but I don’t think you can say that people earning a high income are getting off scot-free.
LEON COMPTON:
I don’t say this, it is the University of Canberra that says that relatively they are, and I know that you question those figures – so, let’s look at the Australian Council of Social Services who say exactly the same thing. That people on low and middle incomes will carry the overwhelming burden of repairing the federal Budget. I would like to move on for a moment, the youth unemployment rate in Tasmania is the highest in the country. What do you think the impact of cutting the dole to most people under 30 will be on the 17 per cent youth unemployed in Tasmania?
PRIME MINISTER:
Well we want to say to people who are leaving school that the best way to start your adult life is in a job or improving your credentials, it is not on social security. If you are a work-capable person you should be either earning or learning, working or studying and improving your credentials once you have left school. That is, I think, a very sensible change that this Budget is bringing in.
LEON COMPTON:
You went to an election campaign in Tasmania, we spoke about this a number of times slamming your predecessors for the lack of jobs in this state. Your Liberal counterparts in Tasmania did effectively the same thing. Now, only months later you are saying the problem isn’t the lack of jobs for young people it’s the fact that they are not going out and finding work.
PRIME MINISTER:
We want to increase jobs as well as provide more incentives for people to take the jobs that are there. You see the abolition of the carbon tax will certainly take a significant burden off businesses. You might remember that we don’t support the forest lock-ups of the former government nor does the new Tasmanian Liberal Government and that will help.
The fact is that we want Tasmania, Leon, to be an economy as well as a national park. We want it to be a good place to work as well as a fantastic place to live and a fantastic place to visit. This is all very important and if we are going in the long term to get taxes down - which will obviously boost business confidence- we have got to get our spending down in the short term. While it is a Budget for saving, it is also a Budget for building and one of the things that I’ll be doing in Tasmania today is confirming the $26 million investment in the Brooker Highway and Glenorchy because that is going to be an important part of making it easier to get about your beautiful state.
LEON COMPTON:
I want to get back to the issue of the 17 per cent of youth unemployed and the fact that fairly shortly they will be denied access to welfare benefits unless they are in work or unless they are actually studying in the most instances. Do you acknowledge that this might be particularly brutal on the state with the highest youth unemployment?
PRIME MINISTER:
I think it is important to send a very strong message to our youngsters that the best way to start your life is not on social security. The best way to start your adult life is to have a job or if for whatever reason there is no job available, improve yourself so that the jobs that are available can best get taken.
LEON COMPTON:
You don’t think they get that at the moment?
PRIME MINISTER:
I think it is important that our institutional culture sends a very strong message that we expect people who are work-capable to be either working or preparing themselves for work.
LEON COMPTON:
On ABC local radio the Prime Minister is our guest this morning. Dr Graeme Alexander, a GP in Tasmania has put a question for you. He says Tasmania has the oldest, most diseased and most chronically ill people in Australia. In terms of your treatment of the health budget he asks, ‘why are you coming at healthcare with a wrecking ball?’
PRIME MINISTER:
I think that is a fairly pejorative phrase and what we are doing is no different from what the Hawke Government did in late 1991. It proposed, the Hawke Government proposed, a modest co-payment for visits to the doctor. At the same time the Hawke Government put on a modest co-payment for PBS drugs. Now, we don’t think it is fundamentally unfair to have a modest co-payment for PBS drugs and similarly I don’t think it is wrong to have a modest co-payment for a visit to the GP. Particularly, when all of the money from that is going into medical research. Our researchers are world class, Leon, and they are more than capable of coming up with the treatments and cures which are going to help us and indeed everyone far into the future.
LEON COMPTON:
People look at your approach to this and say you have decided to launch a $20 billion medical research fund and you have done it by placing a medical tax on people who can least afford to go to the doctor. It seems like a strange way to pay for a medical research fund.
PRIME MINISTER:
It is very important that we appreciate that there is in a sense no such thing as free health care. Health care does have a cost either to the patient or to the taxpayer or in some cases to a health fund. A modest co-payment - we think, Bob Hawke thought, the current Shadow Assistant Treasurer thinks- a modest co-payment is a fair enough thing under these circumstances.
LEON COMPTON:
A lot of people have criticised you for essentially lying about what your intentions as you led into to this Budget saying this isn’t the Party that was campaigning in the federal election of last year. Why didn’t you specifically for example in the last election campaign say that university fees would rise significantly if you were elected?
PRIME MINISTER:
I did say that we wanted to deregulate the universities. I said that the last institution that needs to have Big Brother government watching over everything it does is a university. So, we were quite upfront about our desire to see university deregulated.
On some of the other issues which have been raised in recent weeks, Leon, I have said till I was blue in the face through the election campaign that if you elected the Coalition; we’d stop the boats, we’d scrap the carbon tax, we would build the roads of the 21st century and we would get the Budget back under control. We have been saying up-hill and down-dale that Labor’s spending was out of control, that Labor was mortgaging the future and it was stealing from our children and grandchildren. That’s what we have said.
LEON COMPTON:
But people look at this and say concessions on superannuation, concessions on capital gains tax are massive losses to government running into the hundreds of billions of dollars. You haven’t touched them; you’ve touched pensioners, the unemployed, the low and middle income taxpayers or earners to make most of the savings out of this Budget. People can’t understand why you made the choices you have.
PRIME MINISTER:
But again, in all but a very few instances such as the school kids bonus, which we said was going to go pre-election and the low income support payment, which we said was going to go pre-election what we have done is we have slowed the rate of growth – we haven’t actually cut.
Under all the circumstances where we came from a situation now where we have got five workers for every retirement aged person to a situation in 2050 when we will have only three workers for every retirement aged person under these circumstances - it was absolutely essential that we rein in government spending and put some medium and long term changes in place.
LEON COMPTON:
Prime Minister, I’ll ask you a final question because we have seconds left until news, there will be many people in Tasmania who feel that this Budget is bad for them but particularly bad for the state – what would you say in response?
PRIME MINISTER:
I would say that the best thing we can do for Tasmania is revitalising the economy and that means lower taxes, lower regulation and an attitude that says ‘yes’ to business not ‘no’ to business.
That is fundamentally what Tasmanians will get from this national government and I am sure also from the new state government.
LEON COMPTON:
Good to talk to you this morning.
PRIME MINISTER:
Thank you, Leon.
[ends]