11 February 2015
Transcript - #2015020, 2015

Interview with Neil Mitchell, 3AW Mornings

NEIL MITCHELL:

Joe Hockey, good morning.

TREASURER:

Morning, Neil.

NEIL MITCHELL:

You’ve gone from rooster to feather duster in a very short time, why?

TREASURER:

Well, I think that is a bit unfair. Whether I was a rooster or a feather duster, I think I am still doing my job.

NEIL MITCHELL:

Are you in trouble?

TREASURER:

No, I am not in trouble and I think what we have got to do is focus on what’s important for the nation. That’s what we are doing.

NEIL MITCHELL:

Yeah but who is Treasurer is important and the speculation is there that you’re not long-term?

TREASURER:

That’s gossip. I don’t respond to gossip. I am keeping my New Years’ resolution, Neil, which I shared with you in the first interview of the year that I wasn’t going to respond to gossip and I am not responding to gossip.

NEIL MITCHELL:

Well, this wouldn’t be gossip; have you asked the Prime Minister for a guarantee of your position?

TREASURER:

No.

NEIL MITCHELL:

What if he wanted you to go? What would you do?

TREASURER:

I have got my job. I am doing my job. That’s not going to change. It is not about me, Neil, it’s about what we are doing for the country and we have got a significant announcement today in relation to foreign investment. We are getting on with the job of running the country; creating jobs, strengthening the economy. There are some good signs; we have got to do more on the Budget.

NEIL MITCHELL:

But part of, obviously, of a Treasurer’s role is to instil confidence and that goes to stability, which is why your future is important – in economic terms, your future’s important.

TREASURER:

I am the Treasurer, I will be the Treasurer and I am going to continue to do the Treasurer’s role.

NEIL MITCHELL:

You will be the Treasurer long-term?

TREASURER:

I am doing my job. Neil. I’m not…

NEIL MITCHELL:

But it is important to people; it is important to the Business Council, it is important to industry.

TREASURER:

The job we have to do is here and now and I am doing it.

NEIL MITCHELL:

Yes I understand that; will you do it long-term?

TREASURER:

I am continuing to do the job. I hope to do it long-term. Of course I do, but that’s in the hands of the Australian people.

NEIL MITCHELL:

And the Prime Minister?

TREASURER:

In the hands of many people. We are doing the job.

NEIL MITCHELL:

Would you [inaudible] the speculation that Malcolm Turnbull was sounded out to takeover in December [inaudible] be very nice.

TREASURER:

I don’t respond to that gossip.

NEIL MITCHELL:

Does it irritate you?

TREASURER:

You know, all the static, I am ignoring. I have got a job to do.

NEIL MITCHELL:

The perception is you have lost public support – that you were very popular and thought to be competent and now the public support isn’t there, which is one of the reasons when everyone was talking about leadership contenders, you weren’t one. Why has that happened?

TREASURER:

I am doing my job, Neil.

NEIL MITCHELL:

And that’s not popular?

TREASURER:

You know, someone has to make the right calls for Australia. We are doing that. We have to live within our means. We can’t continue to have to borrow $100 million a day just to pay our daily bills as a government, that cannot continue. Yet, at the same time, despite trying to get the Budget under control, despite our attempts to try and fix the mess we inherited, we are still doing enough in the economy to see the creation of 600 jobs on average a day – three times higher than Labor. We’ve seen economic growth, which helps to create jobs run much higher than it did under Labor, and we are seeing confidence start to come back that delivers more job opportunities. We have signed free-trade agreements, we got rid of the Carbon Tax, we got rid of the Mining Tax, we have made a number of structural adjustments in the Budget, which means we are starting to get the deficits down despite some headwinds. We are doing all of that despite, despite, the challenges in a Labor-controlled Senate.

NEIL MITCHELL:

So, why is the Government on the nose? Why would it be decimated in an election?

TREASURER:

It is a hard time to govern, Neil, and you have to make the right decisions.

NEIL MITCHELL:

But the hard decisions might be made but they’re not getting in – not put in place.

TREASURER:

Well, they are. Eighty percent of our Budget is in place.

NEIL MITCHELL:

What was the hardest thing that got through? What was the hardest measure?

TREASURER:

The Carbon Tax – getting rid of the Carbon Tax, getting rid of the Mining Tax; that was a big negotiation.

NEIL MITCHELL:

[Inaudible]

TREASURER:

Last night, little reported, we got a $1.4 billion saving through on R&D that Labor proposed before the election and then voted against yesterday, and all because of politics. Labor cost $300 million, which is the equivalent - $300 million, Bill Shorten’s games cost the Budget – which is the equivalent of building six new schools. It is the equivalent of building about 42 kilometres of new road.

NEIL MITCHELL:

Peter Costello, who I think you admire as a former Treasurer…

TREASURER:

Yeah, absolutely…

NEIL MITCHELL:

You are aware that he said, ‘if you lose your focus, lose your will, if you don’t continue with a tough approach, it will break the country’. Is that true?

TREASURER:

Yeah.

NEIL MITCHELL:

Break the country?

TREASURER:

Well, if we don’t continue to reduce government expenditure, we will never get back to surplus. We will never be able to pay our bills; we will never be able to live within our means.

NEIL MITCHELL:

We will break the country?

TREASURER:

If you can’t live within your means for a long period of time, sooner or later you run out of other people’s money. That is, you borrow money to pay your day-to-day bills – currently, we are borrowing $100 million a day just to pay our daily bills as a government. I am trying to get those expenses down and if you increase taxes, that starts to cost people jobs. So, you know, you have got to get the balance right. That’s what we are trying to do.

NEIL MITCHELL:

You increases taxes or cut spending, you hurt people…

TREASURER:

We are trying to do it without having that sort of impact but I think it is fundamentally unfair for us to have a lifestyle today that our children will never have. I think that is unfair. Now, there has been lots of commentary about fairness. It is fundamentally unfair for us to borrow from our children to pay for our lifestyle today.

NEIL MITCHELL:

Is the – you’ve talked about the age of entitlement, is it over?

TREASURER:

It has to be. We have no choice.

NEIL MITCHELL:

But how? How do you do that in a political climate where, you know, the opinion polls turn down, there’s talk of changing leaders, where the public as we saw in Queensland, doesn’t cop tough medicine. The people don’t seem to be willing to cop it.

TREASURER:

We have to engage in a deeper conversation with the Australian people and we are going to be doing that over the next few weeks. That deeper conversation is going to be about how we meet head on the challenges of the future. How we all engage in delivering the solutions because we should celebrate the fact, as I talked to you before, about the fact that we are living longer – what does that mean for our health system? What does it mean for our education system? What does it mean for our aged-care system? And the world is changing, Neil. I mean, it is changing quite rapidly and that is dislocating for a lot of Australians. I mean, the things that are traditionally regulated by government, such as everything from television licenses through to taxi licenses, from banking licenses right through to the supply of energy and so, that is all being disrupted by the changing world environment, by new technology that’s immediate – in your hand in the form of a mobile phone, or by new services that are provided over the internet. What we have got to do is prepare Australia for that future.

NEIL MITCHELL:

So, this conversation is going to convince people what – that there has to be a tough Budget in May?

TREASURER:

I think it’ll help the Australian people to understand the challenges that are being – that need to be addressed by a government in partnership with the people.

NEIL MITCHELL:

Has this Government got the will for a politically-tough Budget, given the Prime Minister seems to be on six months’ notice if he doesn’t lift his game, and you, and not responding to gossip, but your position looks a little bit shaky; has the Government got the political will to be tough?

TREASURER:

We’ve got the political will to do what is right for the nation. We knew, we knew…

NEIL MITCHELL:

Has your backbench got that?

TREASURER:

Neil, we knew what we were doing last year was going to be unpopular but we have to do what is right for our country. I mean, this is not a popularity game, even though this building is fully-occupied with polls and commentary and gossip. We have to do what is right for Australia’s future and there is no easy solution. If I could pull down from heaven a magic solution that fixed the Budget, that made the Australian economy stronger without any contribution from anyone in Australia, I would do it, but everything in life that is worth having, you have to work hard for, and the Australian people know that, the Australian people know that. Too many people in this building are playing too much politics and not enough focusing on policy. I want them to play policy; I want them to get involved. Now, that is a call to arms. I have – people suggest that we should get the Opposition and get together at a Summit. I have been to the Opposition, I have walked over to their offices and I have said, ‘how can you help us? How can we work together to address the mess that was left behind by the previous Government’, and they said, ‘forget it, we’re not interested – doesn’t work for us.’

NEIL MITCHELL:

Is your own backbench willing to work with you?

TREASURER:

Absolutely, absolutely…

NEIL MITCHELL:

It is a call to arms to them too, isn’t it?

TREASURER:

And yesterday in the Party Room, there was a massive ovation for one of my colleagues who is on the backbench, who actually pointed out that we have a solemn duty to the Australian people to strengthen the economy and to live within our means. That is in the DNA of the Liberal Party. Now, that’s hard and there is hard work that is before us collectively and for the nation, but we will get there because Australia is a great nation – we will get there.

NEIL MITCHELL:

Have your colleagues got the ticker for it? That’s what it comes down to.

TREASURER:

I hope everyone has the ticker for it.

NEIL MITCHELL:

Who is going to pay?

TREASURER:

Everyone has to contribute, Neil. I mean, if we all contribute, if we all make a contribution now, we can have a better quality of life in the future. Now, let me give you an example: in relation to health and paying to visit a doctor, we have specifically excluded pensioners, anyone that holds a healthcare card, we excluded children. So, it comes down to people like you and me actually making a contribution when we go to visit the doctor – a co-payment, if you like. Now, I don’t think that’s unfair. I think it is unfair for an everyday worker in Melbourne – a cleaner at night, to pay for you and me to go to the doctor. I think that’s unfair. What I think is fair is that we make a contribution to go to the doctor; that’s fair. And in relation to higher education, I think it is fair that someone that never goes to university contributes 50 per cent of a university course cost as opposed to 60 per cent; I think that’s fair – or fairer, but you know, these are the things that need to come into play.

NEIL MITCHELL:

Is it fair that families on perhaps $300,000 a year are getting $7,500 subsidy for childcare – is that fair?

TREASURER:

It is a reasonable question but forget that it is a subsidy for childcare, reflect on the fact that we need people to go to work and it is almost impossible to live in the middle of Melbourne today on one income and pay a mortgage [inaudible].

NEIL MITCHELL:

[Inaudible] $300,000 and you get $7,500 in government handout.

TREASURER:

It comes down to, you know – about participation in work, and childcare is vitally important…

NEIL MITCHELL:

So is childcare on the table?

TREASURER:

Childcare is something we are addressing as part of our families package.

NEIL MITCHELL:

Childcare cuts on the table?

TREASURER:

Childcare is – it needs to be reformulated so that it can actually be delivered on a sustainable basis but be more flexible and more accommodating for the needs of women.

NEIL MITCHELL:

What about pensioners – pensioners living in $2 million houses collecting a pension, is that fair?

TREASURER:

I think people that have worked all their lives who rely on the pension for income are perfectly entitled to the pension and they should get and they will get continued increases in the pension under us.

NEIL MITCHELL:

Regardless of their asset?

TREASURER:

The government has taken a view that the value of a home should not be counted as part of the asset test for the pension.

NEIL MITCHELL:

And that is not under review?

TREASURER:

No.

NEIL MITCHELL:

Will it be?

TREASURER:

Well, no, I am not speculating on it.

NEIL MITCHELL:

Scott Morrison says we need incremental change. He said that yesterday in an interview. Is that right? Do we need incremental change or do we have to be more dramatic than that?

TREASURER:

You know, we have to fix the problems we have. I mean, change is more rapid today in people’s lives than it ever has been – that is the nature of the new world. I think it vitally important that we continue to do what we need to do to meet head on the challenges. We’re seeing some continuing disruptions in the world economy. The stronger we are, the more we do now, the better able we are to head off any challenges in the future.

NEIL MITCHELL:

Is it correct that we could be looking at a deficit of $56 billion?

TREASURER:

Look, I only just heard that as I was walking in from a commentator.

NEIL MITCHELL:

You didn’t say that?

TREASURER:

No, I didn’t say that.

NEIL MITCHELL:

But we are looking at a continuing deficit?

TREASURER:

Well, if we do not reduce our expenditure – if we do not reduce government spending, we will never live within our means.

NEIL MITCHELL:

Have you set a target for when you want to get back into surplus?

TREASURER:

We have been working towards a medium-term date. I have never specified a date because I can’t control external forces and I am certainly not going down the path of Wayne Swan who used it as a benchmark for economic success.

NEIL MITCHELL:

Is small business going to get a tax cut?

TREASURER:

Yes.

NEIL MITCHELL:

How much?

TREASURER:

Wait and see.

NEIL MITCHELL:

Will that be in the Budget?

TREASURER:

Yeah.

NEIL MITCHELL:

Or before?

TREASURER:

Might be before, we’ll see.

NEIL MITCHELL:

Is bigger business going to get a tax cut?

TREASURER:

Bigger business will not be paying any more tax than they are paying today.

NEIL MITCHELL:

They’ll be paying less?

TREASURER:

Big business will not be paying any more tax than they are paying today.

NEIL MITCHELL:

Small businesses get a tax cut; you’re going to have to fund it somewhere, aren’t you?

TREASURER:

Well, small business is the engine room of growth and job creation in Australia. I mean, last year we saw the highest number of startup businesses in Australian history – more than 200,000 new businesses started up…

NEIL MITCHELL:

You still have to pay for it.

TREASURER:

Big business is in good shape, but we want to do more for small business. Now Neil, I come from a small business family. I grew up in a small business family. That family business paid for my school education, helped to pay for my university fees and my expenses when I was at university – it paid for my brothers’ and sister. You know, these businesses are the heart and soul of the community. We have got to do more to help them because they are going to be the employers of the future and remarkably – I mean, you know, you think of the absolutely incredible change we have seen in the world in the last decade where companies come along that you’ve never heard of before and all of a sudden they’re multi-billion dollar companies employing tens of thousands of people and the traditional brands and traditional companies are completely remodeled to cope with this changing environment. I want to see the next Goggle or the next Atlassian or the next YouTube or whatever it might be, come from Australia. And it can come from Australia because we are smart people, we are capable, we have got all the tools, we have got tremendous energy, and what we are going to do is look at how we can facilitate that new growth.

NEIL MITCHELL:

I know you need to get away. I would just like to play something Clive Palmer had to say on ABC television this morning, saying you can’t get the Budget savings through the Senate because he will fight them. This is what he said:

Well, Joe Hockey is a nice guy but his ideas are completely wrong. He is listening to Treasury advice 'cause he doesn’t know anything about economics and you can’t have a Treasurer that doesn’t know anything about economics. He doesn’t know how demand’s important to drive the domestic economy, create employment and create real wealth. The Prime Minister said he would listen; if he’s really listening, people don’t want these cuts. We live in a democracy, goodbye Joe Hockey.

Reaction?

TREASURER:

I didn’t quite hear all of it but Clive Palmer’s argument is you should borrow more.

NEIL MITCHELL:

He says you don’t understand economics.

TREASURER:

Oh, is that right. Well…

NEIL MITCHELL:

And we don’t need cuts.

TREASURER:

Yeah, there you go. He wants to borrow more money. He doesn’t have to repay it back, but the Australian people do; that’s the challenge. I mean, you know, Mr Palmer has his views; people can form a view about him. I say emphatically, if we do not live within our means, we are going to pay a very heavy price in the future for that.

NEIL MITCHELL:

If you blink, does the country go broke?

TREASURER:

If we blink then we are leaving our children with a lesser quality of life than that which we have had and I will not do that.

NEIL MITCHELL:

Thank you for coming in. Ford – reports Ford might be closing early; have you heard anything about that?

TREASURER:

No, I haven’t, Neil. We are still rolling out the package that was announced to support the regions – North Melbourne and Geelong, and I haven’t heard any more about that.

NEIL MITCHELL:

And finally, parochial, are you going to do a deal with Victoria on infrastructure? I mean, if nobody is taking the money…

TREASURER:

I just cannot believe, in the marrow of my bones, I just cannot believe that the Victorian Government is about to pay $1.2 billion of taxpayers’ money in compensation to builders for a road that is not being built that would have cost $1.5 billion.

NEIL MITCHELL:

Thank you for coming in. Are you sure you are enjoying this job?

TREASURER:

You know, it’s an incredible privilege, Neil. I mean, it’s an incredible privilege. There’s been lots of great and heavy tasks that I have had in my life; this is an immense privilege. You know, as Teddy Roosevelt said, ‘you can’t worry about the critics’. You have got to be in there doing the heavy lifting, and man, I am determined to do the heavy lifting for my country.

NEIL MITCHELL:

Are you enjoying it?

TREASURER:

I am doing the heavy lifting for my country and I enjoy the privilege and the honor and I am going to keep going because that’s what people say to me on the streets, ‘keep going, Joe’, and I am keeping going.

NEIL MITCHELL:

No blinking.

TREASURER:

No blinking.

NEIL MITCHELL:

Thank you for your time.

TREASURER:

Good on you. Thanks Neil.