National Disability Insurance Scheme; Schoolkids Bonus; Budget 2012-13; Carbon pricing; Craig Thomson; Global Financial Crisis; South Australian economy
HOST: Now you're coming to Adelaide later today, aren't you?
PM: Yes, I am Leon. I'm looking forward to it and I'm going to get the opportunity to talk to people about the National Disability Insurance Scheme and also talk about skills and job opportunities for people in South Australia.
HOST: Yeah, well on that, we've got the lowest fulltime job number right now and we'll get to that in a moment, but before we do, I think, I've got to ask you about this, are you concerned that someone like Rob Oakeshott is seriously considering pulling his support from the Government?
PM: Look, I believe the Government will deliver its budget in record time, just like we delivered last year's budget in record time and already this week we've delivered this first of our important budget measures, the Schoolkids Bonus, to get some money into the hands of families before the end of this financial year, to help them with the cost of the uniforms and the shoes and then that will be an ongoing part of the system. $410 for primary school students and $820 for secondary school students and we did that despite the fact that the Opposition voted against it and Mr Abbott didn't want families to have that money.
HOST: Okay, but of Rob Oakeshott threatening to withdraw his support from your Government because of Craig Thomson?
PM: Look, Leon, I am very confident the Government will be there, delivering this budget. We've got some big things to deliver, on top of the Schoolkids Bonus and one of those is increased family payments, which will be funded from the mining tax revenue.
So, $300 for families with one child, $600 for families with two or more children and what's remarkable is the day after voting against the Schoolkids Bonus, Mr Abbott is out today warning families that he wants to take that money away.
HOST: Well Prime Minister, the question still is, Rob Oakeshott has gone public questioning the due diligence of Craig Thomson's preselection, the fact that the New South Wales Labor Party has admitted paying his legal bills. Now you've sought in a sense to distance yourself from him, how distant can you be under those circumstances?
PM: Mr Thomson is no longer sitting with the Labor Party, he is suspended from the Labor Party, he is in the Parliament sitting on the crossbenches, and he will make a statement to the Parliament as he's announced in the next sitting fortnight.
Your question to me, Leon, was about the Government and getting on with the job and that's exactly what we're doing, having delivered this week a budget that brings the budget to surplus, which is good for the economy, gives us a buffer that we need and also gives the Reserve Bank the maximum room to move on interest rates. And then we've been very determined too, to deliver some money into the hands of families who are finding it hard to make ends meet and we've done that against the Opposition, Mr Abbott, who today is warning families that he wants to take family payment increases away.
HOST: SO you won't comment on Rob Oakeshott's comments?
PM: I've given you my answer Leon, you're asking me for my-
HOST: You've talked about the Government-
PM: Well, you asked me what's going to happen with the Government and I've given you my answer, which is the Government will be there.
HOST: Okay, so you're confident you'll stay in until the next election, which is late next year?
PM: Absolutely, the election's due in the second half of 2013 and it'll be held on the normal time.
HOST: There's something, I think, would be very handy to clarify Prime Minister, and that is that Labor has taken the class struggle concept to the electorate, where it talks about the rich have got to pay and you redistribute that to the poor, can you clarify your opinion as what level of income do you deem somebody rich?
PM: Look, there are clearly rich people in Australia, when people use the word rich, I think of people like Gina Rinehart, they're obviously rich, they're billionaires. For people who are doing jobs and trying to raise families, there are families in all different sorts of income positions and many of them find it very difficult to make ends meet and pay the bills and they worry about it, but as a government we've got to make choices about who we are going to give government money to to assist them. We've got to work out, out of limited resources, how we can best use those resources for the Australian people and as a Labor Government we unashamedly say our focus is on low- to middle-income earners.
HOST: Okay, so if you're a family earning a combined income of $150,000 you're deemed as rich or well-off. You're comfortable with that proposition being realistic?
PM: Look, I didn't use that word, Leon, and I didn't use it deliberately. People who are earning $150,000, $200,000, can find themselves under cost of living pressures, but they are in a different position from a family earning $40,000 or $50,000.
So when we make choices we've got to work out how to use government dollars to make the biggest difference for people who need our assistance the most, that's why the Schoolkids Bonus has gone to people on the family payment system, and why we also want to increase family payments and increasing family payments we've made a choice. We've said well, mining companies are really profitable at the moment, people like Gina Rinehart are doing pretty well, so we want to take some of the money from there and give it to low- and middle-income struggling families.
Mr Abbott is warning those families today he wants to take the family payments money off them and give it back to the mining companies and Gina Rinehart.
HOST: On that matter, what do you say to those who criticise your education payment, that they'll go out and spend it on something that's got nothing to do with education, like the pokies? What do you say to that?
PM: I just think this is an insult to a million families around the country. It's an insult to 100,000 families in South Australia. We've been paying an education tax refund to 1.3 million families, so it's been there, collect your receipts, put it in at tax time and what we found from that system is a million of those families aren't getting the refund at all, or aren't getting the full amount. And I've talked to people about that, I talked to a young mum yesterday who said ‘Look, we try and keep the receipts and then we mislay the receipts and then we find some of the receipts, but not all of receipts. It's just been very difficult for us.'
And then I talked to her and said ‘Well, using the money, what do the kids cost to send to school?' and she's talking about hundreds of hundreds and hundreds of dollars, that people pay every year to get the kids to school.
HOST: Prime Minister-
PM: This is $410 for a primary school student, $820 for a secondary school student. Leon, have you ever met a family who's paid less than that across a year to get their kids to school?
HOST: It's been more than that. Much more than that.
Now, look, our State Treasurer, Jack Snelling, has publicly stated that because receipts from the Federal Government are down, he's going to be forced into some very unpleasant decisions. Are you concerned that your payments about to flow through to a million battlers at least, will be evaporated by state charges?
PM: We don't, the Federal Government, we don't work out GST shares for states. We just don't. That is done independently of the Federal Government, under a system that dates from when Mr Howard was in office.
Now I'm not trying to criticise Mr Howard saying that, I'm just wanting to factually give you a picture of how the system works. So it's done independently from government.
GST revenues have taken some knocks, as have the Federal Government's revenues. We've taken huge knocks as a result of the global financial crisis, billions and billions of dollars no longer flowing through to us in revenue.
What do you have to do in those circumstances? Well, you need to make tough choices as Wayne Swan and I did for the Budget on Tuesday night, and Treasurers around the nation for state governments, including Mr Snelling, have to step up and do the same thing we've had to face.
But to give you a sense of the scale of this Leon, for next financial year, where we will bring the budget to surplus, revenues that we expected at budget time last year have gone backwards by almost $10 billion.
So we're going to get $10 billion less than we expected to and we've still made all of the tough choices to get the budget to surplus, to pay to families in South Australia, 100,000 of them, 170,000 kids, the new Schoolkids Bonus and to give families the benefits of new family payments, you do that by making hard decisions. We found in this budget, across the four years, $34 billion worth of savings and state treasurers need to get about the same kind of task.
HOST: How can the Treasurer's description of Australia as a prosperous nation be successful, in realistic now, when we've just talked about plummeting, you've just mentioned $10 billion of GST revenues that have come down and of course we've got these massive increases in utility charges?
PM: Well, Leon, I think we've got a really just understand what's going on in our economy. If you look at our economy compared with, you know, pick anywhere you want to in the world - the United States, the UK, France, Germany, you name it Leon - and compare with where our economy is. In the forthcoming financial year our economy will be growing at 3.25 per cent, unemployment will be comparatively low, our economy by the standards of the world has come out of the Global Financial Crisis strong and we should all be proud of that because we did it together. The Government did the right thing stimulating the economy, but working people did the right thing, trade unions, employers, many of them in South Australia, like the big car companies, worked to keep people on when it was really, really tough.
So, we've got a strong economy, but there are some flow throughs from the Global Financial Crisis and one of those flow throughs in that company tax is still down. Companies have been coming out of a loss making period and they're still taking the time to get their businesses right and return to a more profitable period and we're in a big resources boom, but that boom means that new mines are getting exploited and for a period of time they don't pay much tax, because they're building the mine.
So we don't have strong revenues yet, but we will see, over time, out of the strength of our economy. So that does mean that you need to make tough choices at this time. Economy's strong, but lots of families are sitting there saying ‘Well I'm not in the economic fast lane. Where's my share of this mining boom?' and that's why we've responded with the Schoolkids Bonus and increased family payment.
HOST: Okay, is there any room to move for the huge cost in utility charges - water, gas, electricity? Is there any room to move at all?
PM: Well these charges are not set by the Federal Government, Leon. So depending on what state you're in, sometimes they're set by state governments or state regulators, sometimes they're set by the private market, depending on which state you're in and who owns what.
For the Federal Government, what's our role? Well, our role is to support working families with cost of living pressures and we've added in this budget with the Schoolkids Bonus and the family payments for things that are at risk under Mr Abbott, and we've provided cost of living relief through a wide range of policies that are helping people.
Of course carbon pricing, is going to have an impact on electricity prices, around 10 per cent, we've always been completely upfront about that and people will get compensation to assist them through.
HOST: Well Prime Minister, now is the problem where there's more jitters in Europe, we've just talked about how we are interconnected with the rest of the world, whether we like it or not. Do you have any room to move at all financially if we have another Global Financial Crisis, or you've got a very modest surplus of a $1 billion, but that's not going to cut it if you need to put more money in the economy, is it?
PM: Well, our experts at Treasury, the same people who have advised governments in the past, have done the projections about what they think will happen in our economy, knowing what's happening in Europe, and they've said our economy will grow at 3.25 per cent in the coming year.
They're broadly the same estimates and outlooks and the Reserve Bank has and as the ones at the International Monetary Fund has. So, taking into account the circumstances in the world, the best expert advice the nation has is that our economy will be growing at 3.25 per cent.
HOST: Okay, one of the problems for South Australia, and no doubt this will come to you this afternoon when you visit here, Prime Minister, is the fact that we've got a big problem with full-time jobs, a lot of casual work out there and of course the definition of unemployment is that you have an hour's worth of work a week. Very few could ever survive on that, I'm sure you'd know and you would agree.
So what is your response to the fact that we desperately need more full-time jobs?
PM: I think we should - Leon, I'm acknowledging the problem that you're raising, about work. We always want people to have the opportunity for work, the opportunity to get a full-time job, a part-time job, what suits their family and the opportunity ultimately to go and get a better job too, to get new skills and know that over your working life you'll move from one job to another and you'll be going into better and better jobs.
We have, as a nation done well at that, given what's happened in the world, with the biggest meltdown since the Great Depression. For South Australia, the future, I believe is one that will build on your manufacturing base, which is one of the reasons why I'm so determined that we will see the submarine program benefit South Australia and I was very disturbed when Mr Hockey said ‘oh, forget all of that, forget about South Australian jobs, just go and buy them wholly assembled and done overseas.'
We want to build on your manufacturing base with the submarines. We've worked hard to support the car industry, because it's so important to South Australia.
HOST: What's your reaction about Ford? Now we've supported GMH, but Ford have taken a huge loss. If they come to you with cap in hand, what might you be prepared to do?
PM: Look, we've already worked to support Ford as well, so across our car industry - Holden, Ford, Toyota - as a Government we've worked with each of them.
And just future of South Australian jobs, Leon, you'll also see flow throughs from the mining industry, with Olympic Dam.
HOST: That's going to take a while to flow through though.
PM: It's going to take a while to flow through, but gee it's a big, big program for the future for South Australia. A huge generator of wealth and prosperity over time. And then South Australia's got all of the other great parts of its economy, whether it's food, whether it's wine, whether it's tourism.
HOST: Are you going to be making an announcement today on your visit here?
PM: I'm going to be talking about the budget to people and talking about the things we've spoken about in this interview, the Schoolkids Bonus, I want people to understand that they'll see some money in their bank accounts before 30 June and when it comes through that they know what it's for, how it's got there, that it's the Schoolkids Bonus coming through.
I want them to understand that the Schoolkids Bonus will be there over the years to support them under Labor and that they'll enjoy increased family payments under Labor.
I also want to talk to people about the big reforms in the Budget, like the National Disability Insurance Scheme.
HOST: I'd be remiss if I didn't ask you this final question Prime Minister and I'm not going to ask you to be a commentator, because you let people who are paid to do that do that, but does it occur to you that the carbon tax and the mining tax have got anything to do with the Government's poll stocks, or do you think there are other issues?
PM: Look, I think people are very anxious about carbon pricing, Leon, and I understand that. I mean we've seen the mother of all scare campaigns roll out over more than a year now, the mother of all scare campaigns. And many people have heard just horrifying stories about what's going to happen to jobs and what's going to happen to cost of living.
None of those horrifying stories are true, they're all monster stories made up by Mr Abbott to try and scare people. When people see carbon pricing come into effect on 1 July people will see increases in family payments, increases in pensions. If you earn less than $80,000 a year you will see a tax cut, that will be the way in which people, actually experience carbon pricing.
HOST: And just for the record, again I did as you about Rob Oakeshott in the beginning, who is having second thoughts. You're still confident that you'll be in government until the next election cycle which is the latter part of next year?
PM: Absolutely.
HOST: Alright, Prime Minister thank you for joining us.
PM: Thanks Leon.