MARIUS BENSON:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, Marius.
MARIUS BENSON:
There is a lot of talk about the Budget around this morning but there was another topic on a lot of people’s minds last night and again this morning in New South Wales and Queensland, in particular. Quite a game of football.
PRIME MINISTER:
Yes, it was and I managed to get away from the Minerals Council Dinner and talking about the Budget last night to see the second half of that great game. Look, it was a terrific outcome, a great warrior effort from New South Wales, but Queensland are very tough opponents and there are still two games to go.
MARIUS BENSON:
And I am sure you are wearing a blue tie today – you wear nothing else – but were Queensland to take the next two games would you wear a maroon one in honour for a day?
PRIME MINISTER:
Look, I am a creature of habit as you know, Marius, and I would be reluctant to break my tradition!
MARIUS BENSON:
Ok. I’ll leave the football there and move on to the Budget. Day 16 of the sales pitch – the Budget is now less liked than it was on day one on the evidence of the polls, and the salesmen – yourself and Joe Hockey – are less liked than you were on day one. There has been no warm welcome. The message from you that you have said that the Budget is tough but fair and it is necessary to clean up Labor’s debt and deficit mess – it has been the same chant for two weeks-plus. Is there anything new in the sales pitch today, Prime Minister?
PRIME MINISTER:
Well, it is a good Budget. It is the right Budget for these times, Marius – it really is. It’s a Budget for saving but it is a Budget for building as well: we have got the medical research fund, we have got the Commonwealth’s biggest ever infrastructure spend. So, it is not all tough stuff but nevertheless we do need to tackle the debt and deficit disaster which this country has inherited and the Government won’t shirk from that challenge. I absolutely understand that people have taken some time to acclimatise, if you like, to things like the Medicare co-payment, but if it is right to have a Pharmaceutical Benefits Scheme co-payment, how can it be desperately wrong to have a modest Medicare co-payment?
MARIUS BENSON:
Well, is an argument against that that you say it is a price signal people have to be reminded that Medicare isn’t free? Aren’t most people reminded of that every time they pay their Medicare levy?
PRIME MINISTER:
Well, the Medicare levy, as you know, Marius, covers a tiny fraction of total Medicare spending and as I said, if it is right and proper and moral and fair to say that every time you go to the chemist you will face a modest co-payment, why is it somehow unfair and immoral to say when you go to the doctor there will be a modest co-payment there as well?
MARIUS BENSON:
Pain is involved, as you say, but you say it isn’t pointless pain – there will be a pay-off with tax cuts to come specifically. Will that pay-off come before the next election?
PRIME MINISTER:
Well, let’s wait and see, Marius. Obviously, we want to get the Budget situation back under control as quickly as possible – that is our absolute objective. We want to get the Budget situation under control as quickly as possible and once we have got that back under control then I think all sorts of other things are possible. The fundamental point I make, Marius – again and again and again – is if we want to continue to live in a fair and decent society we can’t do it on borrowed money and that is the problem. The former Government was borrowing a billion dollars every single month just to pay the interest on the borrowings and that can’t continue.
MARIUS BENSON:
A point you were making last night was that this Budget is doing you no good politically so you cited that as evidence that it is obviously being done for other than political reasons. One of the most damaging things is the broken promises – that people perceive you as breaking promises. You said that you would bring lower taxes, no new taxes – you have increased taxes, you have introduced new taxes. Are you claiming there were no broken promises or do you concede that they were necessary?
PRIME MINISTER:
Well, Marius, what I said before the election until I was blue in the face was that we would stop the boats, we’d scrap the carbon tax, we’d bring the roads of the 21st century into being and we would get the Budget back under control. Now…
MARIUS BENSON:
But you were much more specific than that. You said, for example, you will get tax cuts without new taxes – those were your words.
PRIME MINISTER:
And that was in the context of the carbon tax debate where I said that you would keep the compensation including the tax cuts but you would lose the carbon tax. Look, Marius, I am not going to engage in a sort of detailed argument pleading the fine print. I will let people…
MARIUS BENSON:
But you are maintaining, aren’t you, that you have broken no promises?
PRIME MINISTER:
I am maintaining that we have done the right thing by our country. That is what I am maintaining. We have done the right thing by our country. We were elected to get the Budget back under control. Marius, we were saying up hill and down dale for six years that this was a government that had spending out of control. Now, if our critique of the former government was that they were spending like drunken sailors obviously we were going reign back spending in our first Budget.
MARIUS BENSON:
On lowering taxes, you have promised in the Budget to impose a cap on tax collection – the overall federal tax take at 23.9 per cent of gross domestic product.
PRIME MINISTER:
And it is important that over time we get taxes down and the thing that I am very pleased about is that in this Budget – as a result of the decisions that this Government has taken – the total tax burden decreases by $5.7 billion.
MARIUS BENSON:
But just on that 23.9 per cent – your own figure – if you achieve that you won’t have reduced taxes at all. The Australian federal government tax take as a percentage of Gross Domestic Product has been bobbling around 24 per cent since Gough Whitlam put it up from 19 per cent to 24 per cent four decades ago.
PRIME MINISTER:
Well, in the end, it’s what government spends which matters because what government spends has to be paid for – either with taxes today or taxes tomorrow and the taxes are greater tomorrow if the spending is unsustainable today because you’ve got to pay the interest…
MARIUS BENSON:
But can I clarify that point of if you’re promising 24 per cent of tax, you’re not lowering taxes?
PRIME MINISTER:
No, but the point I’m trying to make, Marius, is…
MARIUS BENSON:
Could I clarify that point, do you agree you’re not lowering taxes?
PRIME MINISTER:
…Taxes will be lower under this Government…
MARIUS BENSON:
Not if they’re 23.9 per cent of GDP.
PRIME MINISTER:
Marius, the point about the Budget is that we reduce the overall tax burden by $5.7 billion and every year spending comes down. Spending comes down every year as a percentage of GDP and the spending has to be paid for by taxes. So, if we want taxes to be lower, we’ve got to get the spending down. The spending is the critical thing. That’s the critical thing.
MARIUS BENSON:
There was a lot of toughness in the Budget, all would agree on that, but the question that some have raised is why did you hit low and mid-income earners so hard and not go for tax breaks that favour the best-off – superannuation tax breaks, negative gearing? Are they no-go areas for you?
PRIME MINISTER:
Well, Marius, we did make very specific promises before the election that there would be no changes – no unexpected adverse changes – to superannuation in this term of Parliament, and you’d be screaming blue murder about broken promises, Marius, if there had been any changes to superannuation in the Budget. In any event, given all the changes that were made by the former government – and hardly a six month period went by without changes under the former government – we thought that a period of stability was what our country needed.
MARIUS BENSON:
A couple of stories in the papers, just quickly to close if I could, Prime Minister, Christopher Pyne, the Education Minister, is telling the Fairfax papers this morning that he would be prepared to pursue student loan debts – HECS debts – to the grave. Do you support that?
PRIME MINISTER:
Well, I’m not sure that that’s what he did say to the Fairfax papers. I think they put something to him that was in a report from the Grattan Institute and he said something like he wasn’t necessarily against it in principle. But I want to make it absolutely crystal clear, this Government is not going to change the existing rules and the existing rules in respect of university debts, FEE-HELP debts, HECS debts are that they cease – they cease – on decease, as it were.
MARIUS BENSON:
Ok, so we can rule that out? They won’t be pursued to the grave?
PRIME MINISTER:
They will not be pursued, no.
MARIUS BENSON:
And just finally, a non-political question. Australia is very fat and getting fatter according to new information being published today – 63 per cent overweight or obese. You travel the land. You travel the land in a very lean way on your bicycle, often. Do you see a pudgy nation out there?
PRIME MINISTER:
Oh Marius, I think it’s a bit of a mixed story, isn’t it? I mean, there’s a lot of people that are doing things like taking up cycling and that’s obviously very good for them as long as they stay upright on the bike, but on the other hand, some people don’t exercise as much as they ought and probably don’t eat as well as they ought. So, look, it’s a mixed bag and I’m not going to become a kind of dietician to the nation. I’m just going to urge everyone to do what’s best for each individual’s health.
MARIUS BENSON:
Prime Minister, thanks very much for speaking with ABC News Radio this morning.
PRIME MINISTER:
It’s a pleasure, Marius.
[ends]