7 May 2017
Transcript - #2017070, 2017

Interview with Weekend Today

Subjects: Budget 2017; schools funding; Labor’s medi-scare campaign; housing affordability.

LAURIE OAKES:

Treasurer, welcome to the program.

TREASURER:

Thanks Laurie, good to be with you again.

OAKES:

Now, it looks as though you've picked a fight with the Catholic church on the eve of the Budget.

TREASURER:

Not at all. What we've done, is we've said that we want all schools, right around the country, to be based on a funding standard that represents the needs in that school. Now, if you have a school, in the same community, with the same parents, the same needs of the children in those schools they should be funded the same way. You shouldn't get more money because there's one name on the school gate at that school and a different name on the school gate at the school next door. This is about trying to get us to a fair standard of supporting the needs of every single child in the country.

OAKES:

And yet you’ve had a couple of Bishops giving you a bashing. You've got Catholic education authorities in today's papers feeding out modelling that suggests that primary schools in Melbourne could increase their fees by $4,000 by 2023, in Sydney by $5,000 and they're blaming your education announcement from last week.

TREASURER:

What we're doing is we’re trying to get to a standard at the end of 10 years where everybody is on the same wicket. Some schools are starting from a higher point. Some schools are starting from a lower point. We're all trying to get to the same level. Now, there are some schools that are getting more support because of special deals that were done in the past. Now, there shouldn't be special deals. There should be one deal and it should be based on the needs of every single student. That's what we're putting forward. Others will make their case, as they can and as they should. But what we're saying to the Australian people is that every child in every school should be able to get the support they need not as a result of a special deal, but based on what they need.

OAKES:

The Catholic sector is making its case. It's making its case against you, they’re attacking you...

TREASURER:

And I don't agree with it.

OAKES:

What are you going to do about it? Do you fight them to the death or do you do a deal?

TREASURER:

I’m going to argue for fairness. Where there are transitional arrangements which the Minister has already said, where there are specific issues particularly with children with disabilities we'll work with the sector. But we can't walk away from the principle which says that every child should be based, their funding for their schooling should be based on a clear standard – and it should be fair for everyone. So, we're going to argue for fairness. Now, today, there was a letter that we received. That was from the Australian Christian Schools. They have some schools which are in that 24 list of schools. That list of 24. Which actually are going to have more of a struggle but they've said they back the Government's plan because it's fair. See, what we have to look at is the national interest for all children in all schools, we're increasing school funding by $18 billion over the next 10 years.

OAKES:

Do you expect a row at the Party meeting next week over this?

TREASURER:

The politics is not the issue. What the issue is, is funding of the schools...

OAKES:

Well, politics is the issue, in that Tony Abbott is stirring this along.

TREASURER:

That can be the issue for other people, but what we're focused on is supporting the schooling needs of every child in the country and making it fair. Our argument is fair, Laurie. If others want to argue about politics or special interests or special deals, they can do that. We're arguing for fairness and more funding for schools.

OAKES:

If there is a row in the Party Room on Budget day, it won't help you sell the Budget.

TREASURER:

I will never be distracted, and nor will the Prime Minister on ensuring we focus on fairness for funding in schools. It's the right deal. It's a fairer deal. Frankly, it's a deal that should have been done some time ago as Nick Greiner pointed out. The fact that we've stepped up to do that I think is a credit to the Government, a credit to the Minister and a credit to the Prime Minister. We are pleased to have David Gonski on-board working with us to ensure we spend that money well.

OAKES:

Budget specifics, you did a deal earlier in the year with Nick Xenophon to get your company tax measures through the Senate. What he wanted was one off energy payments for pensioners. Will they be in the Budget?

TREASURER:

They will be. All of those payments, that $75 for a single payment, $125 for a couple payment. They will all be paid by the 30th of June of this year.

OAKES:

This year?

TREASURER:

That will be for aged pensioners, disability support pensioners, single parent payments, as well as veterans and their partners.

OAKES:

That's specifically because of increasing electricity prices.

TREASURER:

It’s there to support, going into this winter, electricity prices. That was the arrangement. That will all be paid before the 30th of June this year.

OAKES:

Did that stop you doing other things in the Budget you would have preferred to do?

TREASURER:

No, that will be paid out of this year, which means that next year's Budget will be starting without that as part of the schedule.

OAKES:

Now, Medicare, you've announced your schools and education policies ahead of the Budget. No health announcement. Are you going to try and neutralise health as an issue, as you have done with schools or tried to do with schools?

TREASURER:

What the Health Minister has been very busy doing since coming into the job, is he's been working with all the sectors. He's been working with the clinicians, he's been working with the medicine sector, the pharmacists and of course, with the doctors as well. And we've been working hard on ensuring that we can provide the support in this Budget for a healthy Australia. I'll have more to say about that on Budget night of course. But what we understand Laurie, this Budget is all about making the right choices. Because, I've said a few times, we think there are better days ahead that are coming. We're seeing changes in the global economy which are very encouraging. Within that, the choices you have to make are about growing your economy but they're also about ensuring the services that Australians rely on. And Medicare and the PBS these are critical services. So, we've been doing lot of work on that area.

OAKES:

You almost lost an election because of Labor's medi-scare campaign.

TREASURER:

We all know what that campaign was...

OAKES:

There was a receptive audience, wasn’t there? Why is that? What can you do about it?

TREASURER:

Wages growth has been very modest to put it diplomatically. Many Australians, hardworking Australians, haven't had a pay rise for a long time. When your pay is not going up you're far more sensitive, rightly so, to services like Medicare. You're also sensitive to things like energy prices. You're also sensitive to things like the cost of childcare. We're acting across all of those issues to put downward pressure on the rising costs of living. Because we understand that families, households, individuals are under a lot of stress because they just haven't seen their wages going up.

OAKES:

Will it be specific health measures, for example we read that you are going to stop the freeze on rebates for GP visits – is that in the Budget?

TREASURER:

Well, the Budget is on Tuesday. It's not today.

OAKES:

You announced quite a lot. There have been daily drops.

TREASURER:

We'll be announcing measures in the health area on Budget night.

OAKES:

What about Westpac Chief Economist Bill Evans’ speculation you might extend the Medicare levy surcharge for high incomes earners who have private insurance?

TREASURER:

I've seen lots of speculation over many months, Laurie, and the journalists and the commentators and economists and others, all of their questions will be put to rest on Tuesday night.

OAKES:

But you’re saying that low wages growth made the electorates susceptible to scares about services. What are you going to do to increase wages growth?

TREASURER:

We’re going to grow the economy. That's always been our focus. The first point of last year's Budget, every Budget we've delivered, has been about growing the economy. That's why we have the Enterprise Tax Plan. That's why we've supported small business. We've increased the small business threshold from $2 million to $10 million. That's twice what Ken Henry recommended. That's an extra hundred-thousand businesses that now are paying a lower rate of tax, they have access to the instant asset write-off, which means they can write off in one tax year capital expenditure, plant and equipment, up to $20,000, they can do their GST on a cash basis. And they get access to other pool depreciation provisions to write off their bigger purchases and combine them all together. That's what we've been doing for small business. We've seen 160,000 full time jobs in the last six month of data. This is very encouraging. As I said, when you look around the global economy, we're seeing an emerging and clear consensus that things are improving. We have ensured that Australia is well placed to grow into that global growth. Whether it's on our trade deals, whether it's what we've done in innovation and science and the tax system for new start-up companies. These are the things we've been doing, because we know there are better days coming and we want to secure them for Australians.

OAKES:

In the last Budget, and the last election, you had the mantra of jobs and growth. It's what it was all about this time last year, and yet we read in the Andrew Robb report to the Liberal Party, on why you did so badly in the election, that jobs and growth was seen as outcomes not a clear plan with a clear narrative. Will this Budget give us a clear plan and a clear narrative?

TREASURER:

It will focus on jobs about growth as well, Laurie. It will do all those things...

OAKES:

Will it answer that Robb criticism?

TREASURER:

I'm interested in addressing the needs of hard working Australians who are making the choices they have to make every day. They're the people I'm going to address on Tuesday night. I'm not addressing critics. I'm not addressing journalists for that matter. I'm not addressing economists and ideologues and academics. I'm focused on Australian's needs as is our entire Government, the Prime Minister and I, on ensuring we make the right choices to secure the better days that are coming to them.

OAKES:

Aren’t you also focused on burning, to use a phrase from the Financial Review, burning the 2014 Budget and undoing the damage that did to you politically?

TREASURER:

I think what people will see is that the Government has a very clear understanding of the stresses that many Australian families are facing. We've got parts of this country, Laurie, I commissioned a review by the Productivity Commission and it showed that 20 per cent of our regions were doing it really tough. The good news is that 80 per cent had seen an increase in employment. But there are parts of our country, both in our cities and in rural and regional areas, that have really been hit by the end of the mining investment boom, globalisation, technological change. They have gone through a very difficult transition. We're very aware of the pain that they have been feeling. I know on families themselves, economic hardship can break families apart. And that is just terrible.

OAKES:

But what about the 2014 Budget? That clearly damaged the Government. Isn't your job to make people forget that in this Budget?

TREASURER:

My job, Laurie, is to make sure people understand that the Government is focused on their needs. Totally focused on what they need to get ahead in a world that is improving globally but there are still challenges. I mean, our economy has grown at the top of the advanced economy pack. But it's done so against a pretty strong headwind and a lot of people haven’t felt it.

OAKES:

But given you're reversing so much that was the in that 2014 Budget, why won’t you admit there were mistakes there?

TREASURER:

Because that's politics Laurie, that’s politics.

OAKES:

You're a politician.

TREASURER:

That’s politics. I'm not interested in that, I’m interested in ensuring...

OAKES:

Yes, you are.

TREASURER:

I'm interested in ensuring that the Budget is focused on the needs that Australians need addressed in this Budget.

OAKES:

Ok. One thing they need addressed is housing affordability. You've been criticised for raising this subject. People say the Federal Government can't do anything about it if they won't touch negative gearing and capital gains concessions. So, can you do anything about it? Did you make a mistake in building expectations?

TREASURER:

Of course not. I don't resile from it for a second. If you are trying to save to buy a home, if you are on a housing waiting list, if you are homeless, if you are paying 50 per cent more of your income in rent, housing is a big issue to you. That mean it's a big issue to me and the Prime Minister. I don't agree with the cynics that say the Commonwealth Government can't make a difference in this area. I think it can. I also don't agree with the cynical opportunists who say all you have to do is change one tax and everybody can buy a house wherever they want. I don’t think that’s the right approach. The approach we’ll be taking in the Budget is comprehensive. It will work with states and territories. It will address everything from the needs of those who don't even have a roof over their head to those who are trying to buy one to put over their head. It will even deal with those, who later in life, are looking to change their own housing arrangements. You need a comprehensive plan. You can't solve housing affordability, but you can do things which reduce the pressure. I think Australians expect governments to do that. I don't think that they expect us to shirk these issues because they're too politically hard or someone will re-characterise it or criticise me politically for it. I'm focused on their needs. I'm not focused on the chorus of commentators.

OAKES:

Where is money coming from? If you are reversing Labor policies in education, concessions in health, doing something about housing affordability, where is the money going to come from?

TREASURER:

That will all be set out on Tuesday night, Laurie. We'll be talking about that again on Tuesday night and we can cover that in some detail.

OAKES:

Will anyone feel pain or is everyone going to love you?

TREASURER:

You've got to pay for what you spend. All of our Budgets as a Coalition have always met any additions in expenditure with budget improvements otherwise. We've got $25 billion worth of budget improvement measures through since the last Budget since the last election. At the last election people didn't think that would happen…

OAKES:

You also have $10 billion worth of things from the 2014 Budget you can't get through. Are you now wiping them off the board?

TREASURER:

Again, that's a question for Tuesday night. Not for Sunday morning. We'll have that interview on Tuesday night. What's important is that you ensure that you get Budget improvement measures through, that the Government lives within its means. That's how you’re fair to future taxpayers. It's also how you’re fair to Australians today because you need to put down the pressure on cost of living. You need to ensure that you're guaranteeing the essential services they rely on and you’re growing the economy. The principles that will underline all of that are principles of fairness, principles of opportunity and principles of security. These are the things that are driving us as we focus on the Budget for Tuesday night.

OAKES:

People must be a bit puzzled. We've got a Liberal Treasurer who wants higher wages growth. A Liberal Treasurer who wants to build airports, the Government to build airports, a Liberal Treasurer who wants people to have no pain in this Budget. What's happened? Have you turned into a Labor Treasurer?

TREASURER:

I wouldn't describe that's what a Labor Treasurer is. Labor Treasurers focus on special deals for everybody around the country. What I'm focused on is pragmatically dealing with the problems, the issues and the pressures in our economy and the things facing ordinary Australians every day. Laurie, I just focus on the problems that are there to be solved. I'm not bound by the ideology and the theorists and all of these sorts of things. The Prime Minister and I have a very practical job. We're not there to give homilies or lectures or things like this. We're there to deal with problems, reduce pressures for Australians, because that's what they elected us to do. If there's a problem there Laurie, the Prime Minister and I are going to roll our sleeves up and we're going to try and solve it.

OAKES:

Well, we'll see what you do about that on Tuesday night. Thank you.

TREASURER:

Thanks a lot Laurie, good to be with you.