5 March 2015
Transcript - #2015041, 2015

Interview with Leigh Sales, 7.30 Report, ABC

LEIGH SALES:

The Treasurer Joe Hockey joined me tonight from Canberra. Treasurer, thank you very much for coming in.

TREASURER:

Great to be with you, Leigh.

LEIGH SALES:

The Intergenerational Report predicts that Australia’s population will grow from about 24 million today to 40 million by 2055. We already know that Australians are bothered by things like traffic and overcrowding and stretched hospitals and schools. That population growth represents another four Sydneys worth of people. Where are they all going to go?

TREASURER:

Well, this is the point: this is why governments need to build the infrastructure that’s going to make our cities liveable in the 21st century. In the last Budget, I announced the equivalent of eight new Snowy Mountain Schemes in infrastructure over the next decade. That’s going to go some way to addressing the challenge but obviously state governments have a huge role to play. In New South Wales, they’re recycling assets to build new roads, new rail and new infrastructure, and well, in Victoria, sadly the Victorian Government's tearing up East West but I really hope they come up with plans for new infrastructure.

LEIGH SALES:

Doesn’t this show that Kevin Rudd was right a few years ago when he said that we’re going to be living in a big Australia?

TREASURER:

We are not foreseeing any massive increase in our population rate, and what we’re seeing is that the nation’s getting bigger but it’s been…

LEIGH SALES:

And that’s a good thing?

TREASURER:

Yeah, well we’re going in the right direction and we have been, well, since 1788, we’ve been growing. Some countries like Japan have falling populations, which creates massive social problems and it also means that there may not be enough workers out there to sustain the lifestyle that old Japanese people expect. So, we’ve got to deal with these issues. We want to deal with the future.

LEIGH SALES:

One of the things that most concerns Australians already is housing affordability and availability. If we’re going to be almost doubling our population over the next 40 or so years, how does the Abbott Government intend to start relieving those pressures today?

TREASURER:

We have seen over the last 12 months a massive increase in the amount of dwelling construction in New South Wales – it’s about 20 per cent increase year on year. So, the housing stock is being built at the moment. More work needs to be done. There needs to be even more land released from state governments.

LEIGH SALES:

It’s not driving down the prices though so far, is it?

TREASURER:

It isn’t yeah. This is a point – this a very reasonable point and it’s part of the discussion that we want out of the Intergenerational Report. It is exactly that. How can we afford the future? How are our children going to be able to afford the future?

LEIGH SALES:

But these questions aren’t anything new. We’ve been talking about this stuff for quite a long time. So, why do we need to have more discussion?

TREASURER:

Well, because the demographic change’s faster now than it’s been in the past, and thank God we’ve had massive breakthroughs in medical research; we’ve had massive breakthroughs in technology that means we’re living longer. Importantly, we’ve got to be able to pay for our future. We’ve got to live within our means. So, this opens up a new debate that we are asking all Australians to participate in because all wisdom and knowledge doesn’t come through the air conditioning in this building, it comes from the community, it comes from the leadership of the government, but it’s got to be a partnership for the future.

LEIGH SALES:

When you say, ‘participating in the debate’, you’re going to be hosting some town hall meetings around the country over the coming weeks to discuss these matters. Will they be open to just any regular punters who want to show up?

TREASURER:

Of course, of course…

LEIGH SALES:

Okay, so it won’t be just an invitation only thing for a friendly crowd?

TREASURER:

No, no, no, it’s – well, we’ll be doing lots of interviews like this on 7.30. We’ll be doing a lot of communication. It’s not just Joe Hockey or Tony Abbott or any single Minister. Everyone needs to engage in this debate.

LEIGH SALES:

When you talk about people working until age 70 and beyond, do you accept that for many people it’s not practical to work to that age? If you’re a cleaner or a hairdresser or a manual worker, you’re flat out making it to 60 let alone 70?

TREASURER:

Absolutely right, and this is about choice. It is about giving people a choice to continue to work if that’s what they choose to do. It’s not about mandating it at all and what we want to do is to be able to look forward and say, ‘well, how can we change the attitudes of employers towards older workers? How can we make workplaces more flexible to accommodate mums that might want to come back into the workforce?’ We have to change the attitudes of employers. We may need to change government legislation. We also need to think about reversing the life-cycle. I mean, there’s still a paradigm where it’s expected that people will study when they’re young, work during their middle years and retire when they’re older. Well, people might be coming in now into the workforce on many different occasions in many different ways during the course of their longer lives.

LEIGH SALES:

When you talk about choice though, choice is something that is more available to people who are wealthier though because if you’re somebody on a lower-income, you haven’t been able to put away as many of your savings as you might like to because you’ve had to spend them to afford your kids and your food and all the rest of it. So, therefore you’re probably more likely to be reliant on the aged pension.  So, your choices become more limited.

TREASURER:

Well, that’s the case now. If people are relying on the age pension or they’re relying on a disability pension, they have more limited choice than people that have their own wealth. Having said that, having said that, we’ve got to deal with these issues to make sure that those most vulnerable in the community are protected and supported but also that those that want to keep working or continue to engage in the workplace can do so in a flexible manner.

LEIGH SALES:

Did you support the Government’s decision to take the Medicare co-payment off the table?

TREASURER:

I accept all the Government’s decisions…

LEIGH SALES:

Did you support it though?

TREASURER:

I always – you know – I always support Government’s decisions…

LEIGH SALES:

Because the reason I ask is that I interviewed you just a couple of weeks ago and you said that the Government had to persist with reforming Medicare; that we have no choice. ‘I think it’s unfair that when I go to visit a doctor, I should have to make a contribution – you, myself, the Prime Minister, Bill Shorten, we have the capacity to contribute something when we go to visit a doctor.

TREASURER:

Well, I haven’t changed my position. We do have the capacity to contribute. I think it is fundamentally unfair that people on higher incomes get free healthcare…

LEIGH SALES:

They pay a lot of tax.

TREASURER:

Absolutely right, and if you continue to receive free healthcare when you’re on a higher income, you’re going to end up paying a lot more tax…

LEIGH SALES:

But you say you still support the principle, yet you’ve walked away from reforming Medicare?

TREASURER:

No, that’s not right, because Sussan Ley has been speaking with medical professionals about this. I think the doctors know, in particular, that we have to have a sustainable health system and the growth in healthcare costs are very significant into the future, not just because we have a population that’s living longer, which is terrific, but also because every piece of new technology in health seems to cost a lot more than the previous technology, which is at odds with other areas of endeavour in the community. So, we’ve got to make sure that we can have the very best health system, but importantly, that we can pay for it, so those most vulnerable actually get the healthcare they need.

LEIGH SALES:

In the past few days, the Government’s dropped the Medicare co-payment, it’s reversed course on a plan to freeze defence pay; isn’t the message you’re sending to independent Senators: if you hold us to ransom, we will buckle on core policies?

TREASURER:

No, not at all. For example, we didn’t freeze defence pay. We never suggested freezing defence pay. It was a question of how much we could afford to increase defence pay. We’ve increased it from 1.5 per cent to two per cent…

LEIGH SALES:

But you did shift your position on your policy on that?

TREASURER:

Yeah, well because we understand that there are changing circumstances at the moment, which are self-evident, with greater tensions in the Middle East and a number of other factors but the second key point is this, Leigh, we are asking the Labor Party, the Greens, the independents, to join with us in helping to address the challenges of the future. We are being very genuine in saying, ‘let’s all work together’, and the invitation is out there to the Labor Party, in particular, because, you know, if there’s a change of government tomorrow, whoever’s in government is going to face the very same challenges that I outlined today in the Intergenerational Report. So, someone’s going to have to make that decision, and it’s best that it be a bipartisan approach and we are prepared to sit down with our political opponents and try and work through these issues so that Australia can have a better future.

LEIGH SALES:

You’ve had a bad 18 months in office; some well publicised broken promises, various reversals of course, do you acknowledge that that has created a trust deficit?

TREASURER:

I don’t accept that it’s been a bad 18 months. We’ve stopped the boats, we’ve got children out of detention centres, we got rid of the Carbon Tax, we’ve lowered the household cost of living – there’s no argument about that. We got rid of the Mining Tax. We’ve abolished 17,000 pages of government regulation. We’ve got the Budget on a reasonable trajectory back to surplus…

LEIGH SALES:

So, you’re a good government; the public should be a bit more grateful – is that what you’re saying?

TREASURER:

No, no, no, I’m not saying that but they’ve been hard decisions and at times unpopular decisions…

LEIGH SALES:

So, you don’t think there’s been any breach of trust with the public?

TREASURER:

Well, the greatest trust that an electorate places in its government is to protect the electorate and one of the greatest challenges we’ve had over the last 18 months, is dealing with some major national security issues, as well as economic security issues and I think we’ve done a good job. We can always do better and the electorate is a harsh marker – appropriately so. We want to be our best, Leigh. We’re trying our best. We want to be our best and we want to work closely in partnership with the community.

LEIGH SALES:

Treasurer, thank you very much for joining me tonight.

TREASURER:

Thanks very much, Leigh.