CHRIS UHLMANN:
Tony Abbott is the Prime Minister, welcome to AM.
PRIME MINISTER:
G’day Chris.
CHRIS UHLMANN:
Now, many people this morning, Prime Minister, will have a crack at describing your Budget. How would you describe it?
PRIME MINISTER:
Well, you can trust us to do the right thing by the country. That is the ultimate bond which should exist between citizens and their leaders. Can you trust them to do the right thing by the country and the answer based on last night's Budget is yes, the people of Australia can trust us not to do the right thing to save our own skins as politicians but to do the right thing for the country in difficult circumstances because let's never forget, Chris, that thanks to the former Labor government we were paying our nation's mortgage on the credit card. It had to stop and it has stopped.
CHRIS UHLMANN:
Sure, but you said the biggest deficit, in fact, was the trust deficit before the last election and you told people that there would be no new taxes. Do you think that people who voted for you expected that there would be a hike in the fuel excise?
PRIME MINISTER:
Well let's be very up-front about this, Chris. The deficit levy applies to people on the top marginal rate of tax, that's less than 3 per cent of taxpayers. The fuel excise indexation will cost the average family 40 cents a week in year one. Now, I know they won't like it, I don't like it but again, set against that we're abolishing the carbon tax and what that means is that overall the burden of taxation drops by $5.7 billion over this forward estimate period.
CHRIS UHLMANN:
Do you think people will see that as a lawyer's argument – that the burden of taxation shifts and isn't the fuel excise a tax that goes up and up and up?
PRIME MINISTER:
Well, it's something which we were used to for 20-odd years. It was brought in by the Hawke Government. It was eventually suspended indefinitely by the Howard Government. Look, there will be a lot of people Chris who will be disappointed and yes there will be howls of broken promises from a Labor Party that made breaking promises an art form. But in the end the most fundamental commitment that I made was to get the Budget back under control. We have to do that for our children and our grandchildren’s sake and we have done it.
CHRIS UHLMANN:
Should you though be measured by your own words? Would you have accepted that answer from Julia Gillard?
PRIME MINISTER:
Let's never forget that what we did last night is not to save the skin of the Government; it's to help this nation in the long-term. We were elected, Chris, not to make easy decisions, we were elected to make tough decisions and not everyone is going to like them. But it's interesting that today all of the argument against this Budget is a political argument. There's no economic argument against this Budget.
CHRIS UHLMANN:
But just on this, though, did you break trust with the people? You say the Labor Party will make this claim, have you broken promises in this Budget?
PRIME MINISTER:
I think we've fundamentally kept faith with the people. I think we have fundamentally kept faith with the people.
CHRIS UHLMANN:
No new taxes, no cuts to benefits.
PRIME MINISTER:
As I've said I’ve been very up-front. The deficit levy will hit the top 3 per cent of taxpayers and the fuel excise indexation will cost the average family 40 cents a week in year one. Now, I accept that, I absolutely accept that these are things that people won't like; but set against that the carbon tax goes, that's $550 a year benefit for the average household and the overall tax burden as a result of this Government's decisions is down by $5.7 billion.
CHRIS UHLMANN:
If you're on a fixed income you understand that putting up charges for doctors, for example, by making them pay $7 to go to the doctor is going to be something some people will find hard to bear?
PRIME MINISTER:
I absolutely accept that, Chris, I absolutely accept this and that's why in this Budget people like me will pay $6,500 a year more in tax. People like me will get a pay freeze and politicians will lose the infamous gold card – the gold pass that flew retired government ministers to Airlie Beach and elsewhere on holidays. So, that all goes because we've got to be in this together, it's got to be fair and I believe this is a fundamentally fair Budget.
CHRIS UHLMANN:
And someone on Newstart who may have to wait 6 months to get it, has $36 a day and may have to make a decision about whether or not they go to the doctor. I'm don’t think they worry too much about whether or not a politician has a gold card.
PRIME MINISTER:
But the interesting thing is that what we are determined to ensure is that our kids get the best possible start in life and if you are a young person you should be earning or learning and as a result of these changes that we've made it's much easier to learn. Much easier to learn with our $20,000 trade support loans, our HECS type $20,000 trade support loans and fee help or HECS, as we used to call it, is now available not just for degree courses but for all courses that are offered by approved higher education institutions.
CHRIS UHLMANN:
What do you do if you are 27 years old, lose your job, can’t get another one for six months and can’t get payments in the meantime?
PRIME MINISTER:
If you have a work history you won't have to wait the full 6 months but if you are a young person and you lose your job, you should be learning if you're not earning.
And look, this is frankly the most compassionate thing we can do for our young people is ensure that if they're not earning, they're learning. That’s what…
CHRIS UHLMANN:
Even though the business community is saying this one’s tough?
PRIME MINISTER:
Well, it's right because we want to change the mindset and the culture of our young people and I think that's a good thing to do, not a bad thing to do.
CHRIS UHLMANN:
You said you'd match education spending dollar for dollar and you're taking $30 billion out of funding to the states over a decade, you're also taking $50 billion out of hospitals over a decade. Mike Baird, this morning, the Premier of NSW, said this is a massive cost shifting exercise?
PRIME MINISTER:
Well we think the states should take more responsibility for their public hospitals and for their public schools and we make no apologies for wanting the states to be grown up adult governments that take responsibility for the programmes that are theirs, for the institutions that they run. They should be grown up adult governments just as the Commonwealth should be a grown up adult government and I hope that we made a giant step forward to being grown up adult governments last night.
CHRIS UHLMANN:
And where will they get the cash from? Do you need to lift the rate of the GST?
PRIME MINISTER:
Look, that's not something that the Commonwealth is planning. Obviously, we've got a tax reform white paper, we've got a federation white paper coming up in the next 18 months or so. The States are perfectly entitled to argue for change, if that's what they want. But each level of government should be sovereign in its own sphere. States run public hospitals. States run public schools. Over time they should bear a larger share of funding them.
CHRIS UHLMANN:
But if you are punting more costs down to them where do they get the money to fund that?
PRIME MINISTER:
That's a matter that we are very happy to discuss with them.
CHRIS UHLMANN:
And the GST?
PRIME MINISTER:
In the months and years to come, we've got a process in place that will enable all these matters to be discussed if the states wish to raise it.
CHRIS UHLMANN:
Are you open to raising the GST, if they do raise it and remembering, of course, this is a Commonwealth law and the tax office collects this money so you have a huge stake in it?
PRIME MINISTER:
But we are not touching the GST without the unanimous agreement of the states because let's face it…
CHRIS UHLMANN:
And if they come to you before the next election and say Prime Minister, we need more money?
PRIME MINISTER:
That's a hypothetical, Chris, and let's see what they decide to do.
CHRIS UHLMANN:
Just looking at Newstart again, how difficult do you think it's going to be to get this programme to work whether people earn or learn? It's easy to say, hard to do?
PRIME MINISTER:
But we've got to try to break the welfare mind set. The last thing we should be doing is saying to a kid who is leaving school, ‘go onto welfare’. That's the last thing we should be doing. And it will be the last thing that we're doing instead of the first thing that we're doing, which is what happened under the former government.
CHRIS UHLMANN:
Is it a mindset though or is it sometimes the circumstances that people find themselves in? Unemployment is rising – youth unemployment is high in many parts of the country?
PRIME MINISTER:
I accept that and that is precisely why, that is precisely why, we should do things differently in the future.
CHRIS UHLMANN:
On your medical research fund – it is a future fund – what about those people who will be losing dental services right now to pay for that?
PRIME MINISTER:
We're still investing something like $2.5 billion in dental services and look, if you don't mind a bit of ancient history from me, Chris, I was the person who was Health Minister – admittedly in a very different fiscal context – who brought in the Medicare dental plans which gave people up to $4,250 of Medicare funded dental work. Of course the former Labor Government hated anything that smacked of the private profession doing people with support from Medicare. They much preferred, dare I say it, socialised medicine. So, it went. We are continuing to support dentistry to the tune of some $2.5 billion under this Budget.
CHRIS UHLMANN:
You were a Minister in the Howard Government, were those years too profligate in hindsight? You’re unwinding many of those programmes.
PRIME MINISTER:
Well, the interesting thing, Chris, is that the Howard Government brought down a very tough Budget in 1996 and what that Budget did, it established the economic credibility and the political toughness of that government. It set that government up for 11 pretty good years which now seem like a lost golden era of prosperity. If we are going to recover that golden age of prosperity we've got to make some tough decisions now and that's what this Government has done.
CHRIS UHLMANN:
Sure, finally this morning though, you've said many times that you don't apologise for things. Do you think you should apologise for those promises that you had to break in order, in your mind, to fix this Budget?
PRIME MINISTER:
Well, I will let the Australian people pass judgment and it's not for me to pass judgment on myself. It's for me to give the best possible account that I can of what the Government has done. People like yourself, Chris, will pass judgment. The Labor Party will be squawking all day in the Parliament – all complaint and no solutions – as you'd expect from the people who put us in this position. I will let the Australian people pass their judgment at the next election and I know that what they want is a government that isn't worried about its own political welfare but is worried about their long-term economic welfare.
CHRIS UHLMANN:
Prime Minister, Tony Abbott, thank you.
PRIME MINISTER:
Thank you, Chris.
[ends]