Our strong Budget for a strong economy;
Prime Minister
LEIGH SALES: The Prime Minister joins me now from Canberra, Prime Minister thank you very much for being with us.
PRIME MINISTER: G’day Leigh.
SALES: When the Coalition was elected in 2013 it was on the back of promises to end Labor's debt and deficit nightmare and to rein in what you said was Labor's out of control spending. When we look at your record of six years in office, you've had deficits every year you've been in power, net debt when you were elected was 13.1 per cent of GDP and today it has grown to 18.5 per cent and Labor's spending during its term was on average just under 25 per cent of GDP. Yours is just over 25 per cent of GDP. Therefore on your own yardstick, haven't you failed to deliver what you promised?
PRIME MINISTER: No Leigh, we’re bringing down the first Budget surplus for next year and it's taken 12 years to get there. We have reined in -
SALES: Projected.
PRIME MINISTER: That’s what the Budget surplus is next year, that’s what the forecast Budget surplus is. That’s how Budgets are done, the year in advance. That is the first Budget surplus that has been announced in 12 years’ time, but allow me to answer the question. We've actually got expenditure under control, to the lowest rate of growth that we've seen of any government in more than 50 years. We've got taxes under control. We've got people off welfare and into work. That in turn has restored the Budget and we’re now in a position to take the Budget into surplus.
That's a significant achievement, but it's been done by the hard work of Australians, because our policy settings have been designed to support Australians to invest, to employ people and to work hard. When that happens, your economy strengthens and you’re able to bring the Budget back into a surplus position which is what we were able to announce last night.
SALES: What about my point on debt?
PRIME MINISTER: So no, I wouldn't agree with your rather negative view of our performance.
SALES: What about my point about the size of net debt?
PRIME MINISTER: When you're running deficits, obviously your debt continues to increase Leigh, that's why it's so important to get the Budget back into surplus. That's what we've been working hard to do for the last six years. We've got expenditure growth down to less than 2 per cent a year, that is significantly lower than where we inherited it. It was more than double that when we came to government. Gross debt was running at 33 per cent increases every year under the previous government. So you know, to turn this ship around has been an extraordinarily difficult task, but we've done that. Having achieved step one of getting us back to a Budget surplus, we now have to pay down that debt and we'll pay down that debt on net debt by around almost $50 billion over the next four years. We’ll eliminate it over the next 10 years, which is what the Howard Costello government were able to do.
Our side of politics gets rid of debt, that’s what we do.
SALES: Has the Coalition given up on cutting the company tax rate for large business? You were telling us a couple of years ago that our international competitiveness was being destroyed by the comparatively high company tax rate.
PRIME MINISTER: We're not taking that policy to the next election, no.
SALES: Why have you given up on that, given as I say, that you were making the point a couple of years ago that it desperately needed to be cut for all businesses?
PRIME MINISTER: Because I don't believe it's supported and I think one of the things we learnt through that process is that there's a lot of work to be done by large businesses in this country to regather the trust of the Australian people that would see them support such an initiative. So what we have done is focus on those businesses that actually employ more than half of all Australians in our labour force and that is businesses up to 50 million in turnover. Last night we announced further measures for them. Not only is their tax rate coming down to 25 per cent but the instants asset write-off will be available to all of those businesses and that instant asset write-off will go up to $30,000 for each and every item.
So we're backing in the small and family medium sized businesses that employ more than half of Australians who go to work every day. They're the ones who have been really driving employment growth in this country as well. We want to keep backing them in to grow our economy.
SALES: Let me ask you a question that I also asked Treasurer Frydenberg last night; isn't it a sign of policy failure of this government, that you're giving people a one-off payment to help with expenses, rather than at this point in the life of your government being able to say; "Look, we've put in place policies during the past six years that have consistently driven down your medical bills, consistently driven down your insurance premiums and consistently driven down your power bills?
PRIME MINISTER: What we've done over the last five and a half years is increased funding for hospitals by over 60 per cent. We've increased funding for schools, public schools, by over 60 per cent. We've increased funding for Medicare by 27 per cent and we have the highest rate of bulk billing the country has ever seen, in Medicare. So we've been making the investments in those essential services. But to go to your question on the one-off payment, the reason we're in a position to do that is because of our success over the last 12 months to bring the Budget in $10 billion better than I said it would be when I handed down that Budget just under a year ago. So it's the product of our Budget management, that we put ourselves in the position to be able to make this payment, which is passing the Parliament this evening. That will be in people's hands before the end of the year.
SALES: Last night when those payments were announced, or it was actually on the weekend, they weren't going to apply to people on Newstart. At the National Press Club today the Treasurer said that last night you, he and Mathias Cormann had a discussion and decided it would be appropriate to extend it. What changed your mind last night?
PRIME MINISTER: Well let’s deal with the whole measure. A couple of years ago we introduced pretty much exactly the same measure and it applied to pension payments. Now pension payments are permanent welfare support payments that go to a large number of people -
SALES: I understand that, but just what changed your mind last night?
PRIME MINISTER: Leigh, Leigh just allow me to finish the answer to the question. So that's the measure that we announced on Sunday, that previously received the support of the Parliament. Now, we're in a minority Parliament, we’re in a minority government situation and we announced that measure in the Budget, we announced it on the previous Sunday. There was a gathering support for that payment to be extended more broadly to other welfare recipients and I believed it was the pragmatic thing and the right thing to do, not to have some sort of political stoush in the Parliament. This had to be above politics.
SALES: Captain's call?
PRIME MINISTER: So I took the decision together with the Finance Minister and the Treasurer to extend that payment so it would simply pass the Parliament, as it did today without any fuss and without any trouble. I'm happy to do that.
I'm very pleased that as result of the decision that we've taken, people will have that little bit of extra help as they go into the end of this financial year. So Leigh, it was a practical call to ensure that people got the support that I was hoping that I could provide to them.
SALES: Prime Minister, just a final issue before you go. You used to appear very regularly on Ray Hadley's radio program, what is your reaction to the allegations that 730 has aired this evening regarding Mr Hadley's workplace conduct?
PRIME MINISTER: Well I haven't seen the report Leigh, so I’m just going to leave that to 2GB. I'm answerable for many things, but I'm not responsible for private broadcasters.
SALES: As a guest or subject of commentary on Mr Hadley's program, did you yourself ever feel bullied by him?
PRIME MINISTER: No, I'm not easy to intimidate, Leigh.
SALES: What do you say to the comments from Imre Salusinszky who is the former advisor to the New South Wales Premier Mike Baird, that conservative politicians have a tendency to cave on policy decisions due pressure of broadcasters like Ray Hadley?
PRIME MINISTER: I think it's rubbish.
SALES: You've never caved or changed your mind on anything due to pressure from commercial radio broadcasters, commercial television presenters?
PRIME MINISTER: No, not even the ABC.
SALES: PM, thank you very much for joining us. I look forward to talking to you on the election campaign.
PRIME MINISTER: Thanks, Leigh great to be with you.