19 January 2015
Transcript - #2015001, 2015

Interview with Neil Mitchell, Mornings with Neil Mitchell, 3AW

NEIL MITCHELL:

Federal Treasurer is on the line, Joe Hockey, good morning.

TREASURER:

Happy New Year Neil.

NEIL MITCHELL:

Thank you, well I hope it is. I mean you’ve got a few problems, haven’t you? I’ve even read that you’ve been at war with the Prime Minister. Is this right?

TREASURER:

No.

NEIL MITCHELL:

No?

TREASURER:

Don’t believe everything you read. It’s going to be a great year for Australia, it’s going to be a positive year for the economy. We finished strongly at the end of last year, Neil. The unemployment number that came out on Victoria just a week or so ago was very strong, a fall in the unemployment rate in Victoria from 6.8 to 6.5 per cent. I think, more importantly, more jobs were created in Victoria last year than in the whole of Australia the previous year, and it will get better.

NEIL MITCHELL:

As reported, did you oppose as “crazy” the $20 cut to GP rebates?

TREASURER:

I supported the decision, Neil. It’s gossip. One of my resolutions - and I have a number of good resolutions this year - is not to engage in discussion about gossip. Here I am, I’m not going to discuss it.

NEIL MITCHELL:

Let’s not discuss it – is it wrong?

TREASURER:

I’m not going to engage in discussion on gossip. We made a decision, a unanimous decision, we hear what the doctors are saying, we hear what the medical professionals are saying. Sussan Ley is going to be speaking with everyone concerned. We are going to make sure that Medicare is sustainable.

NEIL MITCHELL:

But Treasurer, it is chaotic government. You make a decision you say is right, you don’t consult and then you reverse it. I mean that is not good government. That is sloppy.

TREASURER:

Sometimes it is better to reverse a position than to continue with a position that is going to have bad ramifications.

NEIL MITCHELL:

How did you get the decision so wrong?

TREASURER:

I’ll leave it for others to comment on that. What we’ve got to do is look forward and focus on making sure that we can afford Medicare. It is a hugely important safety net for the community. It is a hugely important issue for families and this year is the year of jobs and families for the Commonwealth Government and that is what we are focussed on.

NEIL MITCHELL:

Do we have to accept that we are going to have to pay more, one way or another, to see the doctor?

TREASURER:

For those most vulnerable in the community and for children that will not be the case and we said that. But for those like you and me who can afford to make a contribution to the doctor we should. Over the New Year’s break my little boy broke his foot. This is not uncommon for families. He is five years of age. You take him to the hospital, go to see the specialist, get the x-rays, get the cast. The only contribution I made and I earn a lot of money as Treasurer was $40 cash to get a water proof cast. That was it and I think, can I make more of a contribution? Can I pay something towards the x-rays? Can I pay something towards the specialist? They said no. I think that is inherently wrong. I should be making a contribution. Even though I pay a lot of tax, even though I pay the Medicare Levy, that does not cover the growing cost of Medicare and that is what we have got to do.

NEIL MITCHELL:

What level though do you cut in where people start to pay? That has got to be debatable.

TREASURER:

Sussan Ley has consulted widely with the community and with medical professionals about it. There is great news on the horizon for Australia. They fact that we are living longer is great news. It is kind of remarkable that somewhere in the world today, it is highly probable, a child has been born who will live to be 150. That is a long time. They would have said 100 years ago that living to 80 or 90 was a long time. The question is how do we live with dignity. How do we ensure that we have good quality of life the whole way through? This is the conversation we are going to be having with the Australian people over the next few months. As the Intergenerational Report is released, which gives the 40 year horizon on Australia, we are going to engage in a deep conversation with the Australian people about this.

NEIL MITCHELL:

I want to go beyond the medical system as well, but will you look at increasing the Medicare Levy for higher income earners further?

TREASURER:

The Medicare Levy is actually increasing to help pay for the National Disability Insurance Scheme.

NEIL MITCHELL:

Will it increase further?

TREASURER:

We are certainly not inclined to do that. One of the challenges we have is that Australia now has high rates of tax – personal income tax - compared to some of our competition, particularly in the Asian region. We need to be mindful of the competition because human beings are mobile and we don’t want a gradual outflow of Australians to work overseas because of the lower tax rate. We’ve got to be competitive but we have also got to raise revenue that maintains our lifestyle. It is a difficult balancing act but we will get there because that’s what we do.

NEIL MITCHELL:

So what is more important, cutting corporate tax or personal tax?

TREASURER:

You’ve got to look at competition. I want to give families a bit of a break with cost of living. That’s certainly Tony Abbott’s view. There is a very strong wish to put more money into the pockets of Australians. It is their money. When Australians spend the first six months of the year working for the Government with tax rates nearly 50 cents in the dollar it is a disincentive. You’re working July, August, September, October, November, December just for the Government and then you start working for yourself and your own household income after that for another six months, it is a disincentive. We’ve got to bear that in mind. We’ve got to bear in mind that bracket creep is going to put middle income Australians into the second highest tax bracket over the next few years which is a disincentive for people to work and at the same time we’ve got to recognise that there is a lot of competition for corporate investment.

NEIL MITCHELL:

So what’s your priority, personal or corporate?

TREASURER:

Well it’s not either or, my priority is to make sure we raise the revenue that funds our quality of life and more importantly funds our future.

NEIL MITCHELL:

Is tax relief for families a possibility this year?

TREASURER:

We did have it last year.

NEIL MITCHELL:

But you’re talking about putting more money into families’ pockets - the theme for the year. Is there the possibly of tax relief for families this year?

TREASURER:

There is a scheduled tax cut that is still on the books to kick in this year and that is a change in the threshold that is a legacy from the carbon tax. It is also the case that we have seen a significant drop in petrol prices and that is going to have a big positive impact for families. In Melbourne alone petrol prices were seven cents less last week, I’m going off the official data not what people are seeing outside the service stations now, but last week it was 112 cents a litre, officially, the national average was 119 cents per litre. Obviously it has come down. That has been a very good helpful stimulus.

NEIL MITCHELL:

Some of the specific areas, will there be changes to superannuation?

TREASURER:

No. We said we are not changing superannuation before the next election and we are going to have a period of stability. We’re sticking to the period of stability.

NEIL MITCHELL:

Will there be changes to negative gearing?

TREASURER:

No, we have no plans to change negative gearing. We can go through the whole list.

NEIL MITCHELL:

I guess the GST is the big one and you’ve committed you won’t make changes before the election.

TREASURER:

The thing about the GST, it is a great issue to have a Summer debate about. The fact is we don’t want to see an increase in cost of living and we don’t want to be in a position where if there is going to be a change to the GST there is not unanimous agreement. You need bipartisan agreement and you need all the States to agree. The States receive every dollar of GST.

NEIL MITCHELL:

If you don’t get bipartisan agreement you won’t take it as a policy into the next election?

TREASURER:

In relation to GST it is our very strong view that you’ve got to have unanimous agreement. The challenge here Neil is, as I said, over the next few weeks and months we’re going to be discussing with the Australian people how we prepare for our future as a nation and as individuals. You’ve got to have a solution. You’ve got to have a plan. We do have a plan and we are prepared to improve that plan after further consultation with the Australian people. Doing nothing is not an option, it is not a plan.

NEIL MITCHELL:

You’re talking about tax relief, corporate and personal tax relief, you’ve thrown out some of the changes on Medicare, how do you get back to surplus?

TREASURER:

You have to proceed with difficult decisions if you want to get back to surplus. We need to reform higher education, you need further welfare reform, but it has got to be fair. It has to help those who are most vulnerable because ultimately it is better to help those most vulnerable with more than to just have a wide net where there are a huge number of people who get less. My strong view, and the strong view of the Government, is that you want those most deserving, those most in need, those most vulnerable, to get more. If you broaden the reach so that everyone gets a bit then it means that those most vulnerable get less.

NEIL MITCHELL:

So the rich are paying?

TREASURER:

It can’t be just the rich. It has to be everyone who can make a contribution does. The rich should pay, certainly, but it is not rich versus poor. It is about how we as a nation united can get ahead.

NEIL MITCHELL:

A couple of other quick questions. How are you going in talks with the $3 billion in Victoria for infrastructure spending? I thought we were close to a deal there with the new Labor government.

TREASURER:

We have been talking as you know. I am still hopeful that Premier Andrews will change his position on East-West. 7000 jobs, 600 people employed now. 600 people will be sacked now if East West does not proceed.

NEIL MITCHELL:

So it’s not close to a deal yet?

TREASURER:

Not that I’m aware of. We committed the money for the project and it’s not just about the 7000 jobs now, it is about improving the traffic flow, shortening the travel time across Melbourne and importantly helping to lift our economic activity as a nation. There are certain criteria that need to be fulfilled as part of any negotiation or discussion. The focus has to be on jobs and strengthening the economy.

NEIL MITCHELL:

Reports today about Chinese businessmen buying up a lot more in Australia. It has been described as quite a buying spree. Are you comfortable with that?

TREASURER:

We need foreign investment as a nation. We’re a big nation with a small population and the only way we’re going to build is if we have investment from others that creates jobs. The Americans are still by far the largest investors in Australia followed by the UK and a number of others before China. If they are creating jobs, if they’re employing people and building things to give us a better quality of life, we welcome that investment.

NEIL MITCHELL:

Just two quick final questions, any more policies that might need to be dumped?

TREASURER:

I hope not.

NEIL MITCHELL:

Well you have dumped enough. Don’t dump good policy. Even if it is tough to sell.

TREASURER:

That is why we are sticking with a range of policies that not only we took to the last election but the ones that are hugely important like the changes to education.

NEIL MITCHELL:

You’re in a bit of strife, aren’t you?

TREASURER:

No.

NEIL MITCHELL:

The Government is not in strife? What?

TREASURER:

You can make whatever comments you want, mate, I’m focused on my country. I am more positive about Australia than I have ever been. We are in a great position at the moment.

NEIL MITCHELL:

Yes, but are you positive about your Government?

TREASURER:

Everyone can comment Neil; I’m not going to get into idle comment. I’m focussed on delivering for the people who listen to your programme. That is the only reason I’m in this job. Seriously mate, if you listen to the gossip, if you listen to the commentary of which there is much...

NEIL MITCHELL:

We need leadership, not indecision.

TREASURER:

Let me tell you, we are providing strong leadership. In fighting the war on terror, we are providing strong leadership. In national security we are providing strong leadership. On the economy, despite the domestic challenges, we are delivering the jobs, and importantly it is going to get better this year.

NEIL MITCHELL:

I really appreciate your time. I look forward to speaking to you regularly. And how is your son’s foot?

TREASURER:

You know what surprised me about a five year old is how quickly they mend. He has recovered well and then the 8 year old thought she’d break hers. It’s good to be back to work Neil.

NEIL MITCHELL:

Good excuse for a lot of extra screen time, having a broken foot.

TREASURER:

Let me tell you, as a parent I think it is a really hot button issue - the one you have touched on about how much screen time your children have. What is important is where they get that screen time from, how you monitor it and these damn apps where children can download if you give them your password. One of my children is paying off a lot of money through chores around the house because they downloaded apps on a mobile device. He is taking out the garbage, washing the cars and a few other things as well.

NEIL MITCHELL:

Even with a broken foot?

TREASURER:

No, this is another one, but it is a big issue for families.

NEIL MITCHELL:

Thank you for your time. Joe Hockey, Federal Treasurer.