JON FAINE:
Tony Abbott is the Prime Minister of Australia. Mr Abbott, good morning to you.
PRIME MINISTER:
`Morning, Jon.
JON FAINE:
Thank you for joining us. Is it political cowardice to duck the issue of GST reform on your part?
PRIME MINISTER:
Well, let’s get to the GST but you mentioned in your introduction, Jon, that there were lots of Ministers out selling the message and there are a lot of Ministers out today and all week selling the message. We believe in this Budget. We believe in this Budget. We want the Australian people to believe in this Budget. We don’t necessarily expect them to like it, but we want them to understand it and we want them to understand that if our country is to be strong in the future we've got to take the tough decisions now to tackle Labor's debt and deficit disaster.
JON FAINE:
Our country is strong now. By any measure, our country enjoys one of the strongest, most robust, most resilient economies in the entire world, so what on Earth are you doing talking down the Australian economy and its prospects?
PRIME MINISTER:
Well, Jon, we were heading in the wrong direction under Labor…
JON FAINE:
Slowly and gradually, but not with any of the panic that you're trying to create.
PRIME MINISTER:
But that's the point. You've got to turn it around and…
JON FAINE:
Turn it around slowly is the answer.
PRIME MINISTER:
And interestingly, interestingly, in four years’ time we've taken Labor's projected $30 billion deficit to under $3 billion. So, this is not a drastic turnaround but it is a very strong medium and long-term shift.
JON FAINE:
It's a drastic turnaround for those who are being asked to pick up the pieces; for the pensioners, for the disability pensioners and aged pensioners, for those who are going to have to pay every time they take the kids to the doctor, for people who are paying more for fuel – they all think it's pretty drastic.
PRIME MINISTER:
Well let's look at pensions. There are no changes to pensions in this term of Parliament. All that happens is that from the end of 2017, indexation of pensions will be at CPI rather than at male total average weekly earnings. But pensions will keep going up. In March, the single pension went up by just over $14 a fortnight. It will go up again by comparable amount in September and so on. Pensions will keep going up under the Coalition. As for the disability pension…
JON FAINE:
Do you mind if I interrupt? I don't want to go through these one by one. I want to go back to my initial question – the GST in particular. You don't strike me as one who lacks political courage.
PRIME MINISTER:
Well, thank you for that Jon. I appreciate that compliment…
JON FAINE:
Yet this is an act of political cowardice.
PRIME MINISTER:
This Budget is an act of political courage. It's also an act of political necessity because there is no alternative.
JON FAINE:
But to say to the premiers – as Joe Hockey and you have both been doing – to say, ‘well it’s up to you if you want to change the GST,’ that's not showing leadership and that's not showing that you in fact are prepared to stand up for what is the subtext of what you're saying which is ‘I want you guys to do the dirty work for me’.
PRIME MINISTER:
Well, Jon, let's look at the factors which have caused the premiers to be unhappy. Let's look at hospital spending. Under the Coalition, for the first three years hospital spending will go up by 9 per cent. In year four it will go up by about 6 per cent. Now…
JON FAINE:
That's just hospital spending. The whole health system you're ripping out tens of billions of dollars.
PRIME MINISTER:
Well, no, but as far as the states are concerned it's the hospital spending that they're worried about, that…
JON FAINE:
You're cherry picking figures here, Prime Minister, with respect.
PRIME MINISTER:
…well, let me finish. So, the hospital spending goes up 9 per cent in three years and it goes up 6 per cent or thereabouts in year four. Spending is increasing. Now, I…
JON FAINE:
That's not what the premiers or health ministers of every state and territory are saying.
PRIME MINISTER:
…I don't think we necessarily need to leap to the conclusion just because spending is going up 6 per cent rather than 9 per cent that we have to increase the GST. I think that's a pretty odd conclusion.
JON FAINE:
Where else does the money come from?
PRIME MINISTER:
Well, what about looking at government generally, Commonwealth and state Government, and trying to be more efficient? We cannot assume that the answer to every problem is more tax. That's what Labor did. Labor's answer to every problem was to borrow and then to tax. I think the first answer to a problem is to try to figure out a) is it really a problem and b) if it is really a problem, how can we be more efficient?
JON FAINE:
Where are the efficiencies going to come from in particular in those states that have already gone through hard times, Tasmania and South Australia? Victoria's economy is not as strong as it used to be. All the states other than maybe Western Australia are saying there is no way we can handle these cuts without massive impact on services or an increase in the GST. So, if you are indeed showing leadership, you would show a path through this instead of saying well, it's up to you people.
PRIME MINISTER:
But Jon, let's get back to the fundamentals. Hospital spending is going up by 9 per cent in the first three years and some 6 per cent in the 4th year. Why do we suddenly need to raise the GST because spending is going up by 6 per cent rather than 9 per cent?
JON FAINE:
That's only hospital funding. Again, Prime Minister, you're cherry-picking figures.
PRIME MINISTER:
Ok, well let's look at school funding…
JON FAINE:
The premiers aren't making up this stuff.
PRIME MINISTER:
…well, it's true, it's true that pre-election we said that we would be bound by the Rudd/Gillard promises for the first four years but we wouldn't be bound by them for years 5, 6 and beyond. So, all we're doing in the Budget is implementing what we said before the election. What we are doing is increasing spending every year, just not as fast as the Rudd/Gillard said because, frankly, that was a pie in the sky promise with borrowed money that was never sustainable and it shouldn’t ever have been believable.
JON FAINE:
Speaking of pie in the sky and people saying things, on 30 August last year – just before we went to the polls – you sat in that exact same chair with me and this is what you told me about precisely this topic.
PRIME MINISTER:
If we do win the election and we immediately say, ‘oh, we got it all wrong, we've now got to do all these different things,’ we will instantly be just as bad as the current government has been and I just refuse to be like that.
JON FAINE:
And that was you on 30 August last year.
PRIME MINISTER:
And Jon, on schools and hospitals we were absolutely upfront before the election and we are simply doing now what we said we would do before the election.
JON FAINE:
I'm sorry, with respect, Prime Minister – you're not. You're doing precisely what you said you wouldn't do and we just played you, your voice, back to you that proves precisely that point.
PRIME MINISTER:
But if you go back before the election we were attacked up hill and down dale by the Labor Party for not committing to the school and hospital funding beyond the forward estimates. Now, what's happened is that the first of the out-years has now come into the forward estimates. So, we have been absolutely faithful to what we said pre-election.
JON FAINE:
Nearly 70 per cent opposition to the Budget. Can you come back from here?
PRIME MINISTER:
Well, I certainly intend to and my job is not to curry popularity. My job is to do what's right for our country and look, if I have to take a hit for the country's sake, I'm happy to do it.
JON FAINE:
But if it continues, if you can't turn this around in the next couple of months, as you head towards a Victorian state election there will be an impact. I'm sure Dr Napthine has quietly and persuasively made that point to you.
PRIME MINISTER:
I've had a lot of conversations with the Premier, as you’d imagine, Jon – all of them cordial, some of them, yes, fairly blunt.
JON FAINE:
If they lose office they will in part blame you, won't they?
PRIME MINISTER:
I don't believe they will lose because they are a good government. They are committed to the East West Link. It's absolutely necessary to solve Melbourne's traffic nightmare and we are helping them with the East West Link. In fact, this is one of the absolute fundamental distinctions between the Victorian Coalition Government and the Victorian Labor Opposition. We believe in building roads and they don't.
JON FAINE:
We will get to calls in just a moment. Students have indicated their intention to protest in Geelong today. You've cancelled your visit, but vice-chancellors are also protesting and this morning we've heard on the radio this morning already that the vice-chancellors are saying that your plans for university fee overhauls have to be deferred. There are students making decisions in a few months to start courses and they don't know what the fees will be for the courses they're about to start. That's not fair, is it?
PRIME MINISTER:
Well, the fees for next year will be whatever the unis say, but…
JON FAINE:
No, but they're starting courses that will go into years 2 and 3 into fees they don't know what they will be.
PRIME MINISTER:
Our changes will be from the beginning of 2016 because we appreciate that a lot of planning has already been done for 2015.
JON FAINE:
No, but students will be embarking on courses and enrolling in courses where fees will apply in years 3 or 4 and they don't know what those fees will be.
PRIME MINISTER:
If you start a course under one system, you will finish it under that system.
JON FAINE:
So the fees will start…
PRIME MINISTER:
That’s correct.
JON FAINE:
…in 2016, and only for…
PRIME MINISTER:
For the students who start in that year, that's right.
JON FAINE:
Even still they're saying it's too rushed, it's too fast, it should be done more slowly.
PRIME MINISTER:
Well, it's possible they haven't quite cottoned on to that fact. If you are studying now, your conditions of study won't change. If you start next year, your conditions of study won't change. It's only for those who start when these changes kick in in 2016 that we'll have the different conditions applying to them.
JON FAINE:
One more from me, the medical costs, the $7 co-payment is not going to deal with the ever-growing cost of the healthcare system – it's going to a medical research fund. So, in fact you're putting up the cost of the medical system to pay for something else.
PRIME MINISTER:
Except the treatments and cures which the medical research will give us will ultimately bring down the cost and increase the effectiveness of our health system…
JON FAINE:
Which the research fund might one day give us in the meantime we're going to be paying and paying and paying.
PRIME MINISTER:
Look, there's quite a quick translation from the bench to the bedside as things are at the moment. It may be a matter of just a few years to get treatments.
JON FAINE:
You're a former health minister, you know that's not right and preventative is way better – way, way better. We know that going and seeing a doctor and having early intervention is the best way of restraining growth of cost.
PRIME MINISTER:
I am a former health minister, Jon, and I know that the reason why we live longer and better today than even a generation ago is because of the work that our researchers do and it's very, very important for the long-term health of our health system, not just here but right around the world, that these world-class Australian researchers get more support.
JON FAINE:
What's plan B with the Senate?
PRIME MINISTER:
Well, plan B is to keep on with plan A, because…
JON FAINE:
There is no plan B?
PRIME MINISTER:
Well, I expect the Senate to respect the work of the Government.
JON FAINE:
Well, they’ve already said they don’t so you can forget that.
PRIME MINISTER:
That’s their first word but I doubt it will be their last word. Every Government that has faced a potentially hostile Senate has found a way of getting most of its legislative agenda through.
JON FAINE:
That’s what I am asking. What’s your way? What’s plan B?
PRIME MINISTER:
We will sit down and we will talk to them.
JON FAINE:
So, what are you going to do?
PRIME MINISTER:
Well, we’ll sit down and we will talk to them…
JON FAINE:
What will you say?
PRIME MINISTER:
I will say, look, there are a lot of merits in this and this is what they are. They will get us out of Labor’s debt and deficit disaster. If you have a better idea – tell us what it is.
JON FAINE:
Will you look at what they offer?
PRIME MINISTER:
There’s only one plan. There is only one plan, Jon, to tackle Labor’s debt and deficit disaster – and it is ours. Labor’s plan is to pretend there is no disaster and to keep borrowing and spending.
JON FAINE:
There is no disaster. There are challenges. Australia has economic challenges but they are in no ones’ world – other than maybe yours and the IPAs – are they called disaster.
PRIME MINISTER:
You cannot go on borrowing a billion dollars a month just to pay the interest on the interest, you just can’t do that, Jon – it’s absolutely impossible, and, ok, if you’ve got plenty of assets your credit card problem may not send you bankrupt straight away but if you don’t fix it – if you don’t fix it you’ve got a problem and you’re right, no one is excused from paying the bills.
JON FAINE:
Stella from Geelong, you’re through first to the Prime Minister. Good morning, Stella.
CALLER:
Good morning Jon and Mr Abbott.
PRIME MINISTER:
Good morning, Stella.
CALLER:
I have been a Liberal voter since I was 18 and I accept that, if you need to do a harsh Budget. What I cannot accept is myself and other intelligent voters being condescended to by a politician who won’t answer a straight question. For example, you won’t answer the question why did you do something that you promised you wouldn’t do. We listen to you ducking around questions and taking opportunities to put your view ahead instead of answering questions and it makes us doubt your credibility and it makes us feel like you are treating us like idiots.
PRIME MINISTER:
Well, Stella, that is the last thing I want to do. Which particular issue do you want to raise with me?
JON FAINE:
Well, for example we won’t have a new tax and when we talk about the debt levy you say a levy is not a tax. Now, that is treating us like fools.
PRIME MINISTER:
Well, I obviously accept that a levy is something that you pay out of your pocket to the Government. I accept that. I am not going to quibble about calling it a tax – if you would prefer to call it a tax that’s fine.
JON FAINE:
Are you going to call it a tax now?
PRIME MINISTER:
Well, I always said that the paid parental leave levy was in effect a tax. I have always said that.
JON FAINE:
But would you agree that in your Budget you have introduced new taxes?
PRIME MINISTER:
I agree that the fuel excise indexation is restoring an old form of tax.
JON FAINE:
Is it a tax?
PRIME MINISTER:
Excise is a tax – there is no doubt about that.
JON FAINE:
So, you have introduced a tax?
PRIME MINISTER:
We have restored something that was there before.
JON FAINE:
Can Tony Abbott say yes, we’ve introduced a new tax. This is exactly your point isn’t it, Stella? You want to hear Tony Abbott ‘fess up?
CALLER:
Yes, I don’t want him to play games with words, just come out and be honest.
PRIME MINISTER:
Well, Stella, yes we have increased fuel indexation – fuel excise – by restoring indexation. I absolutely accept that.
JON FAINE:
Can you say yes that’s a tax?
PRIME MINISTER:
While we are on the point let me absolutely ‘fess up to the fact that we have increased the top marginal rate of tax by two cents in the dollar by three years. So, yes Stella we have done that, but the top marginal rate of tax applies to the people earning over $180,000 and that is about 3 per cent of the total population of taxpayers.
JON FAINE:
So, Stella you have done a better job than I have but the consequences of your investigations and your interrogation Stella is, Tony Abbott, you said there would be lower taxes and now you are conceding that they are going up.
PRIME MINISTER:
No, I am conceding that some taxes are going up – I absolutely concede that. I have never pretended otherwise but the total tax burden will decrease by $5.7 billion over the forward estimates as a result of decisions by this government.
JON FAINE:
Stella, I don’t know what career you have got but if you ever need a second one you should go into interviewing – well done.
CALLER:
Thank you.
JON FAINE:
Thank you. Eamon in Port Melbourne, good morning.
CALLER:
Good morning, thank you very much for taking my call Prime Minister, I am very nervous.
PRIME MINISTER:
Me too, Eamon! This is a tough grilling by the public!
CALLER:
I would like to speak about payments, the $7 co-payments. A lot of the people who go to the doctor don’t use bulk billing because they can afford to pay. The people that do use bulk billing are the ones who can’t afford it. I think it is a really mean thing to do. I am a proud Australian, I have been lucky enough to travel overseas and we are the envy of the world in a lot of our ways, the way we look after our people. I don’t think you are looking after our people here. Taxes – fine. Put the fuel excise up – everyone pays that. But this is purely picking on people who can afford it and who are needy.
PRIME MINISTER:
Well, Eamon, was Bob Hawke picking on people?
CALLER:
Well, you are going for the neediest, the easiest to get the minimal amount of return - $7 is going to get taken up in administration. It’s not going to raise a lot of extra money when it has got to be administrated.
PRIME MINISTER:
Well, is it picking on people to make them pay $5 or $6 to pay the prescription at the chemist?
CALLER:
Ok, I take that back it’s not…picking on people you have taken that phrase – ok. I just feel that there are people that can pay and they do pay for the doctor. The people who go to bulk bill are because they need to go to bulk billing because they don’t have a lot of extra money to afford things.
PRIME MINISTER:
Ok, look, Eamon, I am sorry to be cross-examining you but are 80 per cent of the people who go to the doctor needy?
CALLER:
Well, if they are going to the doctor of course they are. The point of going to the doctor is to look after people that’s the fundamental…that’s the great thing about being an Australian we can go to the doctor, we look after our own.
PRIME MINISTER:
But Eamon, 80 per cent of visits to the GP are bulk billed and I don’t think that you would say that 80 per cent of the people who are going to the doctor or even 50 per cent of people who are going to the doctor are necessarily incapable of making a modest contribution. Now, I am not saying people are going to like paying $7 where currently they don’t get charged. I am not saying people will like that. Of course people will dislike it just as we’d much prefer to get our medicines for free rather than having to pay a co-payment, but this is an important reform. It is important to have some modest price signals in the system. There will be a strong safety net and once anyone has had ten co-payments in a calendar year it will go to the standard bulk-billing arrangement.
JON FAINE:
Gloria in Warburton. Good morning Gloria you are talking to Tony Abbott the Prime Minister.
CALLER:
Hiya.
PRIME MINISTER:
Hi Gloria.
CALLER:
Mr Abbott, I would like to ask you if you would like your mother or your grandmother to be in my situation. I am a 67 year old pensioner, three chronic incurable medical conditions – two life-threatening. I just survive on about $400 a fortnight after I pay my rent and I work on an adult sex line to make ends meet. Now, that’s the only way I can do it. I’ve worked out and my maths isn’t crash hot that it’s going to cost me at least an extra $850 a year with the increases in medical visits and medication. I’m on a number of different medications that may probably increase as my conditions deteriorate. What do you suggest I cut out Mr Abbott – food, electricity, firewood, Christmas/birthday presents to my grandchildren or should we all just die and get out of your way?
PRIME MINISTER:
Well Gloria, I absolutely understand that you’re doing it tough – I absolutely understand…
CALLER:
You don’t give a stuff though, do you?
JON FAINE:
Keep it nice. Gloria, keep it nice. It’s the Prime Minister you’re speaking to.
CALLER:
No, I don’t feel very nice about you Mr Abbott and why should I?
PRIME MINISTER:
Well Gloria, what I want to do is get rid of the carbon tax, but you will keep the compensation that the former Labor government gave you to pay for the carbon tax. So, even if you spend $70 going to the doctor, even if you pay an extra 80 cents per prescription, almost certainly in pure cash terms, Gloria, you will be somewhat better off. Now, I’m not saying that you’re on easy street, I’d never say that. Obviously you’re doing it tough. But let’s look at the reality here. The safety net kicks in after ten visits to the doctor – that’s after $70 and yes there’s an 80 cent increase in the pensioner co-payment, but you would’ve had an extra couple of hundred dollars a year as a result of your carbon tax compensation and we want to take that carbon tax off you.
JON FAINE:
Gloria, thanks for your call and Rhiannon in Thornbury is a small business owner.
Morning, Rhiannon.
CALLER:
Morning, Mr Abbott.
PRIME MINISTER:
Thanks, Rhiannon.
CALLER:
I’m supposed to be part of your natural constituency. For the last couple of years I’ve been predicting that your fear mongering about our economic state is going to trash my small business and therefore put at jeopardy the employees that I have and my own income. This morning I wake up to find that our recent consumer confidence figures have dropped dramatically as a direct result, a direct response to your Budget. I’m absolutely ropeable that as somebody that should be able to rely on Liberal government to support my income, my lifestyle, I’m not able to do that. I’m not needy. I haven’t been directly affected in anyway by the Budget. I feel sorry for those that have – deeply sorry. But personally, I’ll be fine unless my business goes to ground and then what am I supposed to do?
JON FAINE:
Can we turn it to a question for the Prime Minister Rhiannon?
CALLER:
Well my question is why is your political agenda coming before our economy and why are you lying to everybody and scaring people and even top economists across the world are contradicting what you’re saying about our economy at the moment?
PRIME MINISTER:
Well, Rhiannon, I’m not saying that the Australian economy is fundamentally weak. It’s not fundamentally weak, the Australian economy…
JON FAINE:
You used words like disaster; you’ve used them again this morning.
PRIME MINISTER:
We certainly had a debt and deficit disaster facing us, no doubt about that, but now things are looking up thanks to this Budget. You see, we had a fire and the Budget is the fire brigade and sure sometimes the fire brigade knocks over a few fences in order to put out the fire, but if you’ve got a fire you’ve got to put it out.
JON FAINE:
We also have alarms and people call the fire brigade when there’s no real reason, Prime Minister.
PRIME MINISTER:
And as you said, Jon, and as every economist accepts, Australia did have to turn around its budget situation. We did have to turn around our budget situation…
JON FAINE:
You can do that with a few burn-offs in the off-season in order to reduce fuel and make sure you don’t attract bushfires in the season.
PRIME MINISTER:
As a result of this Budget, we have turned around. We will turn around our fiscal situation and look I’m not doing this to be popular, I’m doing this…
JON FAINE:
Well that’s clear, that’s very clear.
PRIME MINISTER:
And, Jon, let’s be fair dinkum about this. I mean, would I be putting at risk the popularity of the Government if I didn’t think that this was absolutely necessary?
JON FAINE:
Well the answer to that is yes because you’re driven – according to many commentators – you’re driven by ideology rather than prudence and so you’re saying well we’ve got an opportunity, we’ve got our hands on the levers so let’s go hard, let’s go fast and we reckon we can sell it better and we’ll turn it around, they’ve got short memories and they won’t remember next time we go to the polls.
PRIME MINISTER:
Well, pre-election, I was supposed to be some kind of old-fashioned DLP pseudo-socialist. It’s only subsequent to the election that I’m supposedly of a different ilk. But look, no politician wilfully and wantonly puts himself or herself at risk unless it’s absolutely necessary for the long term welfare of the country. I mean, I’m perfectly prepared to take a hit on my popularity but I would only do it because I’m convinced it’s necessary for our countries long-term strength.
JON FAINE:
Are you prepared to revisit any of the major policies announced in the Budget and rethink them given the tsunami of opposition, even from what are normally strong supporters of the sorts of policies the Liberal Party implement?
PRIME MINISTER:
Look, these are good policies. There are very good reasons for all of them, very good reasons for all of them and the interesting thing, contrary to your last caller, is that almost no one has attacked this Budget on economic grounds other than in some cases to say we haven’t brought the country back to surplus quickly enough. The attacks have all been on political grounds: your popularity is down, you’ve upset this group, you may have…
JON FAINE:
No, you’ve upset every group; across the board you’ve upset people including Liberal premiers who are your own strongest supporters.
PRIME MINISTER:
And we have only taken these big political risks because we think it is absolutely necessary for the long term strength of our country.
JON FAINE:
Your standing in the polls is now at the level where other recent prime ministers have been knocked off or rolled.
PRIME MINISTER:
And, look, this is one of those things that I just have to accept. I just have to accept that it is more important to get the policy right than it is to play for popularity. One of the reasons why the former government, Jon, made such a mess of things was because it was more interested in the politics than the economics. It was more interested in spin than substance…
JON FAINE:
I think there are people on your side wishing you were more interested in politics at the moment.
PRIME MINISTER:
Well, I am interested in getting it right for our country. I am interested in getting it right for our country. Please, what is the alternative plan to tackle Labor’s debt and deficit disaster? Labor is in denial. We’ve got the plan. It’s the only one.
JON FAINE:
Prime Minister, thank you.
[ends]