KARL STEFANOVIC:
We’re joined now by the Prime Minister Tony Abbott. PM, good morning to you.
PRIME MINISTER:
Good morning, Karl.
KARL STEFANOVIC:
When did things get so good?
PRIME MINISTER:
Well, this is a Budget that is designed to encourage the small businesses of our country to have a go, but as well as doing that, as well as having a very big tax cut to small business which is the jobs-creating part of our economy, there is a credible path back to surplus because we came into office promising to get the Budget back under control and that is what we believe we are doing.
KARL STEFANOVIC:
You also came into power as a somewhat of an economic prophet of doom. Now, you have seen the light all of sudden – it’s some transition.
PRIME MINISTER:
Well, the difference is now you have a government which is keeping spending under tight control. The former government was spending like drunken sailors. They were spending at a rate of 3.6 per cent a year. We are spending at a rate of 1.5 per cent per year.
KARL STEFANOVIC:
Our spending is the same as when we went through the GFC or just slightly lower – that is still a lot of spending.
PRIME MINISTER:
What we are doing, Karl, is getting the deficit down every year. It comes down in absolute numbers and it comes down as a percentage of GDP. There is essentially a half a percent of GDP improvement in the Budget bottom line every year.
KARL STEFANOVIC:
But still the spending is astronomical?
PRIME MINISTER:
It’s coming down, that’s the point, Karl. It is coming down by half a percent of GDP every year and at the same time we are incentivising small business to do what it does best: to invest, to employ, to innovate, and to grow a more dynamic economy for a happier and more cohesive society.
KARL STEFANOVIC:
The difficulty here, I think, is for the people to stomach the transition, to analyse the transition from last year to this year, from the message last year to suddenly things are rosier and much more bright. It’s a tough one to take, isn’t it?
PRIME MINISTER:
We always had to make some tough decisions. We made some very tough decisions last year and this year’s Budget is building on last year’s Budget and it is building for next year’s Budget. In every one of our Budgets we want to be able to cut taxes. Last year, we abolished the carbon tax and the mining tax. This year, we are very dramatically cutting tax on small business because they are the creative part of our economy. They are the ones who are going to create the jobs of the future because more jobs means more prosperity for everyone.
KARL STEFANOVIC:
But you think and you expect and you anticipate, that Australia will buy what you are selling now in terms of that transition?
PRIME MINISTER:
I think Australians naturally want to have a go. I think we understand in the marrow of our bones that the only way we can deliver a fair go for everyone is if the creative people in our country are prepared to have a go and that is what this Budget is designed to do: encourage people to have a go.
KARL STEFANOVIC:
You are resting, from what I can tell, on some very positive attitudes with some very big assumptions, that the economy not only plods along but picks up pace and records very, very strong growth until 2018 and beyond that. Terry McCrann writes that just won't happen.
PRIME MINISTER:
Well, I'm not so sure about that. These are the best estimates, the best projections of the Treasury, and they are based on quite conservative assumptions about the iron ore price. So, I am very confident that we can get job creation up because we are putting money into small business, we are backing the small business people of Australia, not just with rhetoric, but with real policy and with real incentives to get out there, to invest and employ.
KARL STEFANOVIC:
The problem is believability is your biggest problem at the moment.
PRIME MINISTER:
I just missed you there Karl, I'm sorry.
KARL STEFANOVIC:
The problem is believability is your biggest problem at the moment.
PRIME MINISTER:
Well, Karl, we have done exactly what we said we would do: we said we would stop the boats and we have; we said we would get the Budget back under control – that is what we are doing; we said we would scrap the carbon tax and the mining tax – we have done that as well. So, this is a Government which is doing its best to keep faith with the Australian people and I think the Budget is the latest instalment in our plan for jobs, growth and opportunity.
KARL STEFANOVIC:
The small business plan looks like a good one from what we can tell so far. You run the risk, though, of a sugar hit.
PRIME MINISTER:
I don't think that's true because I think that the small businesses of Australia will be quite responsible in what they do. They are not going to over extend themselves because, in the end, small business understands that if you go out and borrow, you do have to repay. That is something which, unfortunately, the Labor Party never really did understand.
KARL STEFANOVIC:
The issue might very well be that people go out and get new cars but their business isn't going well. We might end up with a nation of shopkeepers.
PRIME MINISTER:
Well, I'm not against shopkeepers, Karl. I think that the shopkeepers of Australia are serving our community and you shouldn't be too down on them, if I may say so!
KARL STEFANOVIC:
I'm not being down on shopkeepers in general but if their business isn't working, then they are not selling anything. They have got a nice car but nothing to show for it.
PRIME MINISTER:
But if we have the small businesses of Australia investing and employing, that will boost economic activity and that's good for everyone.
KARL STEFANOVIC:
We hope so. The PM, you will have to go to the next election having broken a significant promise and that is to the women of Australia. You promised them the world in regards to paid parental leave and you have delivered nothing for them.
PRIME MINISTER:
Well, Karl, as you know, I am a big believer in paid parental leave. I copped quite a bit of political flak on this issue. I've listened, I've learned, and I've acted, because the message that came back to me loud and clear, from right across Australia, was that if we had to prioritise, we should prioritise better childcare – and that is exactly what this Budget does. It gives low and middle income families with childcare expenses an extra $30 a week on average.
KARL STEFANOVIC:
It is a hell of a turn-around from what you promised.
PRIME MINISTER:
Well, I accept that. But the message loud and clear from the families of Australia was that their priority was childcare and that's what we have delivered in this Budget. What I like to think we have delivered in this budget is a Jobs for Families reform.
KARL STEFANOVIC:
At the very least, you probably owe them an apology, don't you?
PRIME MINISTER:
Well, I am doing, Karl, what I think is best; what the Government thinks is best in all the circumstances. We have made careful judgments here, and in a situation where Labor did run up massive debt and deficit, we do have to prioritise and this is what the families of Australia told us was their priority.
KARL STEFANOVIC:
As Minister for Women, are you sorry?
PRIME MINISTER:
Well, again, I think I'm obliged to respond to what the people of Australia are telling me and they said that their priority was childcare.
KARL STEFANOVIC:
Ok, Joe Hockey, does he keep his job now?
PRIME MINISTER:
Well, he's been doing a splendid job, Karl. He's always been doing a good job as far as I'm concerned. Like all of us in this business, he cops a bit of criticism from time to time but it was a magnificent effort last night and I'm confident that Joe is going to be one of the very great Treasurers of our country.
KARL STEFANOVIC:
So he does keep his job though for the moment?
PRIME MINISTER:
Well, in the end, Karl, I know you want it to be all about us...
KARL STEFANOVIC:
No, I just want you to confirm that he keeps his job.
PRIME MINISTER:
…but it’s not all about us. It is all about the people of Australia. That's what it is about. It is about doing the right thing by the people of Australia. It is about encouraging people to have a go. So that everyone can get the fair go that all Australians yearn for.
KARL STEFANOVIC:
But Joe does keep his job though, doesn't he?
PRIME MINISTER:
Of course he does.
KARL STEFANOVIC:
That's all we needed.
PRIME MINISTER:
But this was never an issue. This was never an issue, Karl!
KARL STEFANOVIC:
Do you know what, this Budget, it is going down pretty well at the moment, it looks like it has been well received apart from some of those figures that we have pointed out and the assumptions. It looks and smells like we are going to an election. Are we going to an election?
PRIME MINISTER:
About the middle of next year, Karl, which is about three years. This government always planned to run full term. That is what the people of Australia elected us to do: to govern the country as best we could, to deliver on our commitments as best we could, for a full three years.
KARL STEFANOVIC:
Good on you, PM. It's a busy day. Thanks for your time. It looks like a nice day, too.
PRIME MINISTER:
Thank you so much, Karl. Thank you.
[ends]