PAUL MURRAY:
The Prime Minister joins us now. Good afternoon.
PRIME MINISTER:
Paul, good afternoon to you.
PAUL MURRAY:
Prime Minister, did you expect this level of opposition to your first Budget?
PRIME MINISTER:
Yes, because obviously we have had to tackle Labor’s debt and deficit disaster and that was never going to be easy. We have put forward a pretty good plan for getting us back on the path to sustainable surplus under this Budget. Instead of having a deficit of over $30 billion in 2017/18 it comes under $3 billion. We have made a whole lot of medium and long term changes which are going to ensure that our pensions and all the other things we value are sustainable for the long term.
PAUL MURRAY:
I want to get to the matters of substance in the Budget quickly but I think the listeners would require me to ask of you first of all to get the issue of what seems to be broken promises out of the way. Can you honestly put your hand on your heart as a God-fearing man and swear that you haven’t broken promises which you made in the election campaign?
PRIME MINISTER:
Well I certainly believe that we have been faithful to our pre-election commitments. At the risk of boring your listeners Paul I said until I was blue in the face before the election that we would stop the boats, we would scrap the carbon tax, we would build the roads of the 21st century and we would get the Budget back under control. Depending on the context or the audience I’d vary the order a bit, but they were the commitments that I made up-hill and down-dale and I think we are getting on with the job of keeping all of them.
PAUL MURRAY:
Why don’t you just admit that the deficit levy is a new tax and that’s a broken promise because you promised no new taxes?
PRIME MINISTER:
Well, we did go to the election with a Paid Parental Leave levy. I know this sounds like I am pleading the fine print…
PAUL MURRAY:
No, what about the deficit levy?
PRIME MINISTER:
We did go to the election with a paid parental leave levy and we did go to the election supporting the NDIS levy. So, it is hard to say that we promised no new taxes because there were two new taxes that were part of….
PAUL MURRAY:
Yeah, but you had taken the parental leave to the previous election as well. So, come on what about the deficit levy? Can you honestly put your hand on your heart and say that is not a new tax?
PRIME MINISTER:
I am not saying that it is not a new tax but what I am saying is that we haven’t broken any of our fundamental commitments. That is what I am saying. But you are absolutely right, Paul. The deficit levy which applies to people earning over $180,000 a year, that is about three per cent of tax payers and is an increase in tax – absolutely right.
PAUL MURRAY:
You helped destroy Julia Gillard’s political career over a lie – haven’t you brought this judgment on yourself?
PRIME MINISTER:
I appreciate that there are a lot of people running around saying that we have broken commitments. I believe that we have been faithful to the commitments we took to the election but look these things are in the judgment of the commentariat. Every voter will make his or her own judgment about whether this government has done a good job or a bad job; has been trustworthy or not. I am very comfortable with this. I think this is what our country needs now and I think it is faithful to the pre-election commitments we made.
PAUL MURRAY:
A number of financial analyses of the Budget find that the spending cuts fall disproportionally on those with the least capacity to pay for them, while the wealthy who don’t rely on welfare payments just get a temporary levy they can easily pay. What is your response to that?
PRIME MINISTER:
Well, again, it is the sort of response that we always expected. One of the reasons why I thought it was very important to have this deficit levy is so there would be an important fairness measure in the Budget. Inevitably government spending disproportionately benefits low and middle income earners and if you have got to squeeze government spending -as we have had to, to get the deficit under control - if you have got to squeeze government spending inevitably it is going to impact on the people who most immediately benefit from it. If everyone is going to play his or her part we need measures like the deficit levy.
PAUL MURRAY:
Yeah, but look, honestly, people like me can afford to pay the deficit levy quite easily. A single parent, for example, with the cuts that they will get cannot meet the cost of those cuts easily. Is this issue of the fair distribution of the pain rather than the dollars – between those who can pay and those who will struggle to pay – is it one you took into account in making the settings for this Budget?
PRIME MINISTER:
We were determined to make this Budget fair and I believe that we have achieved a measure of fairness but you use the word cuts Paul. Yes, there are some periodical payments – mostly annual or biennial payments – that we have scrapped because they were, to use our pre-election language ‘cash splashes with borrowed money’ but in terms of benefits with the exemption of Family Tax Benefit Part B…
PAUL MURRAY:
Yes, that was the one I was going to raise.
PRIME MINISTER:
In terms of benefits we haven’t cut benefits what we have done is we have slowed the rate of growth of benefits. I think that is a very important distinction.
PAUL MURRAY:
But Family Tax Benefit B will hit single parents.
PRIME MINISTER:
That’s true because we have reduced the main income threshold to $100,000 for the payment and that is because we do want to bear down on what some people call middle-class welfare. We have said that it will not be paid once the youngest child turns six, because while we are happy to support people’s choice – including people’s choice to stay at home with the kids – we think there are limits to what the taxpayer should be doing in this area given that we want a more productive economy and a more productive economy means higher participation in the workforce. Now, just one other point if I may Paul, even after our changes if you are a single-income family with one child under six you will continue to get almost $19,000 a year based on a $30,000 a year income. If you are a single income family with $90,000 in income and a child under six you will continue to get over $6,000 from the taxpayer. So, our system remains a generous system. It very much enshrines after the Budget both the fair-go principle and the have-a-go principle.
PAUL MURRAY:
You have taken lots of calls today from people who see themselves as victims of this Budget. I know you were confronted with that today. One of them in particular has been discussed all around the nation. Everyone else is interpreting your body language so let me ask you directly – what was that wink to Jon Faine all about?
PRIME MINISTER:
Well, it was a reaction to Jon, really. I mean Jon was… obviously it was an interesting call from someone who had an interesting story.
PAUL MURRAY:
She said she was a sex worker who had to do that work because she was finding life very tough.
PRIME MINISTER:
I think working on a call line, I think, was what she said.
PAUL MURRAY:
A sex call line. So, why did you wink?
PRIME MINISTER:
Jon was smiling at me and I responded to him.
PAUL MURRAY:
Ok, let me move on to matters of more substance. The $7 co-payment seems to be one of the issues in the Budget that has people most concerned. Is the amount, is it set in stone – both the amount and the people who will have to pay for it?
PRIME MINISTER:
Well, it is an important element in the Budget and if you think that this is fundamentally unfair…
PAUL MURRAY:
Is it set in stone because you sucking in a breath there suggests to me that it is not.
PRIME MINISTER:
It is a policy that we are taking forward. We are absolutely committed, absolutely committed, Paul to all of the measures that we announced on Budget night. There has been a lot of claims, particularly from the Labor Party, that there is something unfair about this. Is it fair and reasonable to charge people $5 or $6 even if they are pensioners for their PBS drugs? Why is it somehow grievously wrong to asked people to make a similar contribution when they go to the doctor?
PAUL MURRAY:
A family with three kids, if two of those kids are sick, will each of the ten visits of each of those children incur the $7 payment if they go to a bulk billing clinic?
PRIME MINISTER:
Yes, but if we’re talking about children under 16 once each of them has reached 10 visits in a calendar year the ordinary arrangements will resume, the current arrangements will resume and bulkbilling can continue.
PAUL MURRAY:
Yeah, but if mum and dad are also sick then that family is paying 40 times $7 in a year ‘cause the kids aren’t going to be paying for their own.
PRIME MINISTER:
Yes, that is quite an unusual situation and I think we could be reasonably confident in that in the situation where the family was going to the doctor as often as that, that the doctor would elect to continue to bulkbill even with the lower rebate.
PAUL MURRAY:
Are you still Medicare’s best friend? Because that’s how you described yourself last year.
PRIME MINISTER:
I believe so. I mean I accept, Paul, that other people will have other judgements, but I certainly believe so. All of the money the we are saving as a result of these changes will be invested in a medical research fund and it’s the research of today which produces the treatments and the cures of tomorrow and which is the reason – the fundamental reason – why we live so much longer and better now than we did just a generation ago.
PAUL MURRAY:
One last question Prime Minister, I know you’re on a tight schedule today. Westpac’s monthly consumer sentiment index came out today, it’s fallen by 6.8 per cent in the month. It’s at its lowest since August 2011. Is this evidence people don’t agree with what you’re doing and in fact are frightened by it?
PRIME MINISTER:
Well it’s evidence that if you bring down a tough Budget – a necessarily tough Budget – it does have a short term impact but I’m trying to build the long term strength of our country and what we cannot do – could not do – is continue the way we were under Labor with the debt and deficit disaster and borrowing a billion dollars. I mean let’s just focus on this fact, Paul, we are borrowing $1 billion every single month as a nation just to pay the interest on the borrowings. Now, that cannot go on. If you’ve got a credit card debt and you are borrowing on another credit card to pay off the first credit card you are stuffed. Now, in the end countries aren’t so different from families and businesses; you’ve got to pay your way in the world. You can only spend the money you’ve got. We were spending more than we had under Labor. Labor had no plan and has no plan to fix this problem. The only people with a plan is this Government. Now I accept that not everyone likes it. I accept that not everyone likes it, but my obligation is not to court popularity, my obligation as Prime Minister is to do what’s right for our country.
PAUL MURRAY:
Yeah, I understand the argument and I think we’re arguing about the medicine.
PRIME MINISTER:
Well, what’s the alternative? I mean Labor’s Budget Reply basically was all complaint – no solution. We have got Bill Shorten posing as Australia’s Whinger in Chief and Head of the National Complaint desk. Well, we’ve got to do better than that.
PAUL MURRAY:
Good to talk to you, thanks a lot.
PRIME MINISTER:
Thank you.
[ends]