KIERAN GILBERT:
With us now, the Prime Minister Malcolm Turnbull.
Mr Turnbull thank you for your time, a busy morning for you. The banks, according to some chatter around the markets, they’re already talking about lifting the mortgage rates from 14 to 15 basis points to recover the levy. Is that a bit rich? What do you say to them for that?
PRIME MINISTER:
That would be really excessive. But let’s see how they react. They don’t need to pass this on. They’re very profitable and the ACCC will be watching them very, very carefully indeed. It’s a competitive market. There are other banks that are not caught by the levy and of course there will be plenty of opportunities for people to go elsewhere if the banks do choose to raise mortgage rates. But the ACCC will be monitoring it very, very carefully.
KIERAN GILBERT:
Have they brought it on themselves? The levy?
PRIME MINISTER:
Well look I wouldn’t put it that way, I mean the fact of the matter is that levies of this kind are common right around the developed world. These big banks in particular benefit from the implicit support of the government. You know they are, as they say, too big to fail. That obviously gives them an advantage in terms of fund raising.
We’ve decided – and again this is not original because many other countries have similar arrangements, Europe in particular – that’s it’s fair that they make a contribution via this levy. Of course that enables us to help bring the budget back into balance.
KIERAN GILBERT:
Is it like a super profits tax to an extent?
PRIME MINISTER:
No, no.
KIERAN GILBERT:
Or is it paying for the guarantee guarantee that the government basically provides the big banks? As you say, too big to fail.
PRIME MINISTER:
It recognises the fact of that implicit support that government provides.
KIERAN GILBERT:
And if they did move within 24, 48 hours, is that just reaffirming people’s doubts about the banks and their behavior?
PRIME MINISTER:
Well it would be very, I think it would be unwise for them to do that. There’s obviously a lot of concern about the conduct of banks. Leaving aside the levy, in the Budget there is a comprehensive banking reform package. As you know we’re establishing a one-stop-shop, a Financial Complaints Authority, to deal with small business and consumer complaints, whether it’s against banks or indeed other financial institutions and a very rigorous regime relating to the registration and employment of senior bank executives, so that if they do the wrong thing, if they allow wrongdoing to go on, if they don’t address it, then they may find themselves deregistered and unable to work in the industry.
KIERAN GILBERT:
Anna Bligh says it’s a threat to the, it could be a threat to the stability of the banking sector.
PRIME MINISTER:
That’s nonsense. That’s nonsense. I mean in so many other countries in the world there are levies of this kind. In the UK, not only do they have a levy, but they also have to pay additional company tax, a higher rate of company tax. So the fact is that she is the lobbyist for the banks, right? She’s not the Premier of Queensland anymore.
KIERAN GILBERT:
It helps neutralise the call for a royal commission though, doesn’t it?
PRIME MINISTER:
Well look, the royal commission idea was always a waste of money. My objection to the royal commission was not that I thought there was nothing wrong with the banking sector. My objection to it was that it would take years, cost hundreds of millions of dollars, half a billion dollars or something of that order, and it would make a bunch of recommendations which you could write now. Because we know what the problems are.
You have a royal commission when you don’t know what’s happened and you want to find out. We know what’s gone wrong with the banks and the reform measures that are in the Budget are the type of measures that a royal commission would recommend. So we’re getting on with it. Rather than wasting money on lawyers and years and years of delay, we’re making the tough decisions, the reforms, right now. That’s what I promised and that’s what I’m doing.
KIERAN GILBERT:
On the Medicare levy, Julia Gillard when she introduced a 0.5 per cent increase to the levy back in 2013, in the Parliament she described it as: ‘a sliver of an average earners weekly pay packet.’ Would you put it the same way?
PRIME MINISTER:
No I wouldn’t put it that way. Obviously it’s 0.5 per cent for people of their income for people that are paying it. You know, it is 0.5 per cent and for many Australian families that will be, they will feel it. They will absolutely feel it but there is a benefit. Because what we are doing is delivering a fully funded National Disability Insurance Scheme, which Julia Gillard did not deliver.
So rather than saying to parents with a disabled child, in a couple of years’ time: “I’m sorry, the cupboard is bare. We don’t have the funds to support the NDIS anymore,” what we’re doing is looking all Australians in the eye and saying: “We all benefit from this National Disability Insurance Scheme.”
This is literally an insurance scheme. The premium is now 1 per cent of the 2.5 percent of the Medicare Levy. We all pay it and what that means is, we’re all covered. So I think this is just, it’s fair, it’s responsible.
KIERAN GILBERT:
Does it reflect your confidence as Prime Minister in the NDIS? There have been all sorts of claims it’s running overtime, over budget and so on. But those claims have been in large part repudiated by those in the sector, do you have confidence in the NDIS and where it is at?
PRIME MINISTER:
Well I do, but there are obviously issues with implementation and there will always be. It’s a big scheme and it’s going to cover over 600, 000 people when it’s fully you know rolled out by 2019. Which is why the levy comes in in 2019, but it’s clearly going to require very close management and attention to detail, all of those things.
You know Christian Porter is you know paying the closest attention to it, he is the Minister, but it is always going something that needs to be well run.
KIERAN GILBERT:
The Tories in Great Britain have said they’re not going to balance the books on the back of the poor. David Cameron said words to that effect and yet another budget another cut to foreign aid from the Coalition?
PRIME MINISTER:
Well we froze it, it is frozen for a couple of years. But the important thing is that we are a substantial foreign aid donor. The important thing is to make the dollars that we spend on foreign aid spent effectively.
You know there’s a lot of people that measure the value of foreign aid, you know the virtue of foreign aid by reference to the dollars. We’re more focused on ensuring that we get the right outcomes and that we get the right outcomes in terms of improved governance and in terms of improved amenity in the countries that we’re providing aid to.
KIERAN GILBERT:
The critics including some former, or one of your former staff members and former chief of staff to Tony Abbott, Peta Credlin says she said, I think, which side of the chamber right now they’re both Labor governments? Both high tax, high spend governments. What do you say to the suggestion that you haven’t done enough to rein in spending?
PRIME MINISTER:
Well we’ve done frankly, a lot more and even since the last election we’ve achieved $20 billion, now actually over $25 billion of total savings. We’ve achieved that through the Senate, so we have achieved a lot of savings. But there are a number of measures that we cannot get passed by the Senate and you know, at some point you have to confront reality. I think confronting reality is a very important thing for everyone to do, particularly in politics. You have to recognise that if you cannot legislate savings through the Senate than you have to find other ways of bringing the budget back into balance.
KIERAN GILBERT:
So this is plan B?
PRIME MINISTER:
This is a fair and responsible Budget. It’s setting us up for the future. It’s making the investments in infrastructure, $75 billion in road and rail alone. It’s making, providing the incentives to business, reducing company tax – first for the small and medium sized businesses as you know - and of course by bringing the budget back into balance and doing so credibly.
You’ve just had Chris Richardson here saying what a good budget it is. You’ve had Moody’s affirming our AAA rating. So the experts are saying: “Yes, this is a responsible budget.”
Now what is the hallmark of Liberal National governments? It’s responsible economic management. This is a responsible budget and it’s delivering a strong surplus in 20/21 and it is a more rapid progression to balance and surplus than even we forecast in the budget last year.
KIERAN GILBERT:
A couple of quick issues just before you go, I know you have got a busy morning.
On housing affordability there was, expectations were quite high. This savings mechanism through superannuation, does it go as far as you need to, to try and alleviate some of the pressures? Particularly in Sydney and Melbourne, for people trying to get in?
PRIME MINISTER:
Well it’s only one part, the housing package is a very big one and it provides support for first homebuyers and the savings package and you know, assistance there. It also unlocks supply in a very physical way. For example, in Melbourne, with that big defence site at Maribyrnong which we will open up for housing, that will be over 6,000 homes will be able to be built there. That is big, you know it is within ten kilometres of the Melbourne CBD. We are also working with state and local governments to ensure that they liberalise zoning and change zoning requirements to enable more housing to be built. That’s been the big blocker in Sydney in particular.
KIERAN GILBERT:
Yeah.
PRIME MINISTER:
And of course Scott has provided considerable incentives for the development of more affordable housing. So you know, and of course, providing of real incentive and indeed a tax, if foreign owners of residential property do not either occupy or rent it. So that’s just to get around this problem of overseas buyers buying apartments and then just locking them up and leaving them vacant for years.
So it is a big, well-thought-out package and that is why all the housing sector, you know, industry groups have praised it. They’ve seen it as being very well researched, very well thought through and addressing the real challenges.
KIERAN GILBERT:
Last question and it relates to the unemployed and the many, you would think, assume, would have drug issues. Is it fair?
PRIME MINISTER:
Yes.
KIERAN GILBERT:
To do this? Because-
PRIME MINISTER:
It’s not only fair but it’s actually-
KIERAN GILBERT:
They’re in a very tough spot, to put that added pressure on them?
PRIME MINISTER:
Yes, but you see you’re helping them out. Look, if somebody has got an addiction to drugs and you love them, what do you want to do? You want them to get off it, don’t you?
KIERAN GILBERT:
It’s not that easy though is it?
PRIME MINISTER:
Well but hang on, this is the question. You want to help them get off drugs?
KIERAN GILBERT:
Of course.
PRIME MINISTER:
Of course you do. So what this does is it helps them. If they test positive, if they do have that dependency then they get the cashless debit card, they get management - cash management, income management is very important – and also will get the support, access to rehab to get them off the substance abuse. Because frankly, unless they do that, they can’t get a job and the best form of welfare, after all, is a job.
I mean all of our policies, we shouldn’t - the Labor Party very often misses the point here. The object of welfare is, as far as possible, is to provide a safety net to enable people to get back into the workforce. That is what we want to do. That’s Australians want to do and so addressing substance abuse is helping them. This is a very important positive step.
KIERAN GILBERT:
PM, appreciate it. Thanks.
PRIME MINISTER:
Great to be with you.
[ENDS]