15 February 2017
Transcript - #2017016, 2017

Interview with Tom Elliott, 3AW

SUBJECTS: Labor's threat to the Budget; Turnbull Government delivering $3 billion boost to responsibly fund the NDIS

TOM ELLIOTT:

The Budget situation. I read in The Australian today that $13 billion of savings measures have been held up. Is that true?

TREASURER:

That's true, it's $13.2 billion. We made that clear in December of last year. We were able to get $22 billion through, after the election, and we had a very successful back half of last year, getting a lot of things through the Senate. But there remains $13.2 billion, and half of that is in a bill which is trying to get welfare spending further under control, and the Labor Party is saying no. They think we should continue to pay more and more out in welfare, and sending the bill to our kids.

ELLIOTT:

I spoke to Simon Birmingham your colleague about this a few days ago, so this is the so called Omnibus Bill that has changes to Family Tax Benefits, changes to child care subsidies, changes to quite a few other things?

TREASURER:

Changes to paid parental leave, it also deals with pension payments to people who choose to go and live overseas for six months and things like that. And just basically tightening things up. Since we've been elected we've realised around about $23 billion worth of savings in the welfare system, and that's all legislated, all administered, we've got about another six in this deal which we're continuing to pursue. Because when you're trying to bring the Budget back to balance, which we are, you can do it by getting your expenditure under control, which is our view, or you have to resort to revenue measures, which is taxes, or you send the bill to the kids, and say well they're going to have to pay a higher debt. Now, like in your own household budget or in a business, you will borrow from time to time, in something that will have value for many, many years to come. But if you're borrowing money to pay our welfare, which is here today and gone tomorrow, well, that's not terribly fair to send that bill to your kids.

ELLIOTT:

I agree, and I want to pursue that with you further in a moment. Now my understand was initially, South Australian Senator Nick Xenophon, who's formed the appropriately named – Team Nick Xenophon in the Federal Parliament, he was initially going to support the bill and then he changed his mind. Why did that happen?

TREASURER:

No, that's not fair to say that he initially supported the Bill and he was going to change his mind. He hadn't said he wasn't going to support the Bill which is often the case, but you will work with people for years, as we have with Nick's team, on this, and he ultimately decided not to support the Bill. We still remain hopeful that he'll support elements of it. But the only reason we have to talk to Nick Xenophon, or anyone else for that matter on the crossbench, is the Labor Party thinks we should be spending more and more on welfare. If they actually said to the Government, yes it's important we do this well we wouldn't have to talk to Nick Xenophon at all.

ELLIOTT:

Well, why does that surprise you?

TREASURER:

It doesn't.

ELLIOTT:

Okay, then you should be talking to Nick Xenophon, Derryn Hinch and Pauline Hanson.

TREASURER:

We do and have. They've formed the view they have. But the decisions they make, it has the consequence of forcing the government to spend more and more on welfare. But is it fair then to say to future generations, well we're going to have to increase the debt to pay for that?

ELLIOTT:

Just on that, and again, from the Australian newspaper, I saw this quote from you which caught my eye. It said, each child will owe $100,000 within three years. And then I read down, correct me if I'm wrong, government debt is heading towards 5 and then $600 billion in the next three years and, you're saying, if you divide that $600 billion dollars, which was where debt will be by 2020 if no changes are made, if you divide that by all the Australians that are aged under 18, it comes to $100,000 each. Correct?

TREASURER:

That's the workings I understand the article based that on.

ELLIOTT:

Ok, what does this mean? Obviously you're not going to be sending every child a bill in the mail, saying you owe us $100,000, please pay up by tomorrow or we'll send around the debt collectors. What does it mean?

TREASURER:

What it means is the cost of the interest bill for the government. The net interest payments every year, this year in 2016-17 are $12.4 billion. That's a very hefty bill. Remember at the time of the Howard/Costello Government leaving office there was no net interest payment bill, because there was no net debt. Now that bill is going to up in 19-20 to $14.7 billion and that's going to keep rising. As that keeps rising in the years ahead, that means people are paying taxes down the line, they are going to have to pay those taxes to pay for welfare benefits that people are receiving now.

ELLIOTT:

What are you going to do though? You presented the problem, the Senate is being obstructionist, we have known that for a long time. Debt is going up and up and up. You have a job that I would never want to have trying to deal with this as the Treasurer. What are you going to?

TREASURER:

From right now it is still within the Parliament's ability to avoid the outcome where these things are blocked. They still have weeks and weeks to think about this and form a view to support these measures. So that is what I am focussed on right now.

ELLIOTT:

When you go to talk to Nick Xenophon what does he want? What would he accept as the cost of him agreeing to your welfare cutting bill?

TREASURER:

That is very unclear after some years of asking that very question Tom, it is very unclear. Once governments decide to spend money out there on welfare and hand money out, it is very difficult to then make the decision, when the revenue isn't like it used to be, to go and say we can't afford that anymore.

ELLIOTT:

So, will you put up taxes?

TREASURER:

The only other options the government has is either debt or revenue measures. Now, as I said in the House today, in the Parliament today when I was asked about this, I have no desire to increase taxes or increase the debt. None whatsoever. That is why we have put this bill in the Parliament. So, right now Tom, my focus is doing everything I can to ensure that I avoid those sorts of options being even contemplated.

ELLIOTT:

For example you mention this Omnibus bill, if you get this through there are $13 billion of savings I am assuming over four years.

TREASURER:

And just so you know that bill alone which is $6 billion actually, that means we will not incur just over $25 billion of debt over the next ten years.

ELLIOTT:

Ok, but is there a bit of that that you might have to sacrifice to get a Nick Xenophon or a Pauline Hanson or someone else across the line?

TREASURER:

Well, thankfully Pauline has been supporting this bill but with the Xenophon Team we have already made a number of concessions. One of the things we are doing is we are taking what is an annual payment just after July which is paid to welfare recipients receiving the family tax benefits, sorry to labour this, but just for the purposes of explanation, this was originally introduced as a balancing payment. What I mean by that is you get your Family Tax Benefit payment every fortnight and you have to estimate what your income was. Now, if you got your estimate wrong and you owed the government money at the end of the year they established this supplement payment so they would just deduct it from that. So, it was a way of managing not having to put people in debt. Now, with today's technology by the time this would be introduced you won't have to use the income estimation method anymore. So, the purpose for this payment has become redundant. So, we're saying let's not have that anymore let's increase the fortnightly payment and we're saying do that by $20 a week. Let's take the saving of getting rid of that supplement and invest it so people can get affordable child care and the rest of it we can put aside in this special account for the National Disability Insurance Scheme where we are committed to that expenditure anyway. Now, if you can't support that, then I am at a loss to work out, well what sort of change would you support?

ELLIOTT:

You and me both Scott Morrison, the Federal Treasurer.

TREASURER:

That sounds pretty fair to me.

ELLIOTT:

It does, it does and Simon Birmingham explained it the other day and I, if it was me, I would vote in favour of it but then again I'm not…

TREASURER:

Get in the Senate Tom. Follow the lead of Derryn – there you go.

ELLIOTT:

Thank you very much. Scott Morrison, the Federal Treasurer.