KOCH: Kevin Rudd, good morning to you.
PM: Good morning Kochie.
KOCH: The Reserve, this report says the banks have added an extra quarter of a percent, particularly to home loan borrowers and small business customers. Can you do anything about it?
PM: First thing is the Reserve Bank is right. The banks have been gouging. That's the bottom line here.
What are the practical things that we have been doing and we can do more about? One is that for the smaller non-bank lenders, what we've been doing throughout the financial crisis is provide them with a continuing source of credit, some $16 billion worth, to keep them afloat as competition opposed to the banks.
KOCH: Yeah.
PM: That has been very important, because we were very worried that some of those smaller lenders would, frankly, go to the wall during the crisis. So that's one thing. The second is, this year there'll come into being a whole new bunch of credit laws, tough credit laws, which will enable the regulators to crack down on gouging, across the financial sector. And this will be an important change for the year ahead.
KOCH: So not only banks, but superannuation funds, the whole lot. Could they go to the banks and say guys, no, you're not putting up your rate?
PM: Well, on the operation of the laws, you know we have independent courts and their independent processes, but the regulators will now have new powers to step in.
Of course, there's one third thing as well, which is, right now, the best thing customers can do is actually walk with their feet, and we have brought in bank switching arrangements which enable you to do that without huge walls of resistance now from the banks. As you know, they can often make it really hard by saying 'well if you exit, you've got these fees to pay, that fee to pay'- we've now made that much easier. And they have a legal obligation to make it possible for you to pull your money out of that bank.
KOCH: Excellent. Okay, we might follow that up with details of where people- of websites people can go to, to find out how to do it. Alright, let's get in to our viewer questions. Rachel Murphy is from Darwin, Rachel, you have the ear of the Prime Minister. What do you want to ask him?
PM: Hi Rachel.
MURPHY: Good morning Kochie, good morning Mr Rudd. My question to you is, why minor dental is not subsidised by Medicare?
PM: Okay, good question about dental care. Have you got kids yourself, Rachel?
MURPHY: Yeah, two.
PM: Okay, how old are they?
MURPHY: Three and five.
PM: Okay. Well, here is one thing we've done for when they get a little bit older. For the first time, we have implemented- delivering on a commitment we gave before the election- what's called a teen dental program, which means that from the ages of 13 to 18, we'll provide up to $150 a year for eligible families, usually those on under about $120,000 a year to get a teen dental check-up. That's because, as you know, kids' teeth change a lot in those years, we want to make sure that we're acting preventatively as early as possible.
But as for littlies like that, I wish I had something additional to say to you, but I don't, other than our continued support for private health insurance in these circumstances as well, and there is a rebate which is offered.
KOCH: Okay.
MURPHY: I do know that the children get it through the schooling, but, just like, adults, you know, like getting- why is it that when you go to the doctors you get a rebate from Medicare, whereas dental you don't get anything from a check-up to a clean? I know that major dental would be quite expensive for them to subsidise, but what about just a preventative measure for adults as well?
PM: Well that preventative measure we've brought in is the first one in Australia's history, and that copes with kids who are teenagers, 13 to 18. We've currently expended some hundreds of millions of dollars on that, and from memory, I think we've- in the first two years of its operation- we've provided, well, nearly one million services across Australia. You raise the point about littlies. Frankly, there's a limit to how far the budget can go on these things.
One other thing we're trying to do on dental, though, is to reintroduce a Commonwealth dental scheme for older Australians who are waiting now on public dental waiting lists, and that is currently being blocked in the Senate.
I wish I could say I could fix all these problems. We can't. One of the proposals put forward to make a system like Denticare come into existence would cost, on their estimates, some $4 billion a year- that's a lot of money. We're trying to do this step by step. When they get to 13, I can do something for you. Right now, it's private health insurance, and what you can get through the schools.
KOCH: Alright Rachel, thanks for that. Now next is Evan Kourambas from Melbourne, Evan, go ahead.
KOURAMBAS: Good morning Prime Minister. My question is about your recent announcement on your intentions to take over funding and operational control of our public hospitals. And furthermore, you announced that if you couldn't get this through Parliament, you're prepared to take it to a referendum. My question is, if state Governments are not capable of running hospitals- number one, what are they capable of running, and secondly, should the referendum question be do we actually need state Government?
PM: That's a good provocative question for this time of morning, Evan. Thank you for asking it.
KOURAMBAS: Thank you.
PM: You know something, for our proposal on health and hospitals, it is big, and it affects, frankly, mums and dads and families right across the country. What we are saying is, a national health and hospitals network, funded nationally, run locally, and for the first time the Australian Government taking dominant funding responsibility for the public hospital system.
Now to the core part of your question, which is why are we doing this with the States given their other responsibilities, here is the key fact. Right now, if we don't make any changes, the health budgets of the states and territories will swamp every other thing that they've got to do within the next twenty or thirty years.
In fact, here in New South Wales where I am at the moment, the Premier told me not long ago that in about 25 years time, their state budget would not have a dollar to spend beyond health and hospitals in terms of the revenues that they themselves raise. We've got to fix this system. And part of the reason we are stepping in, which goes to the other part of your question, is so that we can free up some of the funding for the states and territories to attend to things like transport, infrastructure, schools, law and order, rather than just beating a path to our door for every problem known to man.
KOCH: But Evan's saying should we get rid of the States? Why don't you give us a vote on it?
PM: The key thing is to deal with the health and hospitals system, I think that's what people are worried about most. This is a vast country. For your viewers in Western Australia today, seriously, viewers in Western Australia, viewers in Queensland, a long way from Canberra, a long way from Sydney, and Melbourne where you are Evan, they have a slightly different view about the importance of the federation and state Governments having a continuing role. My job's to make sure they've got the money to do so. And if we don't fix health and hospitals, it's really bad for mums and dads out there, and it's really bad for the future of the ability of the states to fund other services.
I'm seeing Premier Keneally today in New South Wales. We're determined to get as much cooperation from the states and territories as possible to push this reform through.
KOCH: She's got the worst hospital system.
PM: It's not flash.
KOCH: They can't run a chook raffle. Alright, you've got some homework on superannuation for stay at home mums.
PM: Sorry, you caught me in mid-swig. The- I've been doing a bit of homework on the stay at home mums. Can I give you a few points on this one?
KOCH: Yeah, sure.
PM: Firstly- and this was from Naomi I think, no, from Sonia, I got this one- superannuation splitting.
The partner of a stay at home parent can split their concessional superannuation contributions with their spouse, okay. People need to be aware of that, so that the stay at home spouse can also accumulate their own superannuation fund that way. Secondly, the partner of a stay at home parent can get an offset of up to $540 of their end of year tax if they contribute to the superannuation on behalf-
KOCH: And that's the spouse contribution scheme.
PM: That's right.
KOCH: Which is pretty attractive.
PM: The third thing is, of course, stay at home parents can have their own non-concessional superannuation arrangements. They can actually build that up over time. And finally, if the stay at home parent does some paid work during the year, he or she may receive a superannuation contribution if they also contribute to their own super. So there are three or four specific things there, and again go to the Government's super website about those particular contributions. We make it a little easier for stay at home parents to accumulate their own superannuation.
KOCH: Terrific. Thank you for that, good to see you.
PM: Appreciate the time.