ABC 891

E&OE TRANSCRIPT
Interview – ABC 891 Adelaide with Matthew Abraham, David Bevan and Mark Butler
Wednesday 6 May 2015

SUBJECT: Budget 2015

MATTHEW ABRAHAM: Welcome to the programme, Minister.

CHRISTOPHER PYNE: Good morning Matthew and David and Mark.

MATTHEW ABRAHAM: Mark Butler, Labor MP for Port Adelaide and Opposition environment and climate spokesman and the man who wants to be president of the ALP, welcome to the programme, Mark Butler.

MARK BUTLER: Good morning gentlemen.

MATTHEW ABRAHAM: Christopher Pyne, the signals we’re now getting is that there are going to be a lot of sweeteners in this budget and every day there’s been a story in The Australian, I think, the Federal Budget will offer higher payments to more than 120,000 retirees and ensure thousands more can keep a valuable concession card. Is this the Government now running up the white flag in the face of what was looking like a pasting at the next poll and abandoning serious budget reform?

CHRISTOPHER PYNE: No, not at all, it will be a prudent budget as all budgets should be, but much of the heavy lifting in terms of reducing debt and deficit and getting the Government back on more of an even keel after six years of profligate spending by Labor was done in last year’s budget. The Intergenerational Report shows over the course of the next 35 years we will reduce what would have been Labor’s debt and deficit by half so we’ve actually made a big dent in the future debt and deficit because of last year’s budget.

MATTHEW ABRAHAM: So that job’s fixed, despite the fact Joe Hockey sat in this very studio only a week or so ago and said ‘You try and get anything through the Senate with those people running it’?

CHRISTOPHER PYNE: There’s always more to be done but the truth is the budget did last year, some of it - much of it - went through, about 300 out of 400 measures went through and we have reduced Labor’s debt and deficit by half so next Tuesday’s budget, while it will be prudent, it will be also important to help strengthen the economy, create jobs and support families.

MATTHEW ABRAHAM: Can you just explain, what was the total target of savings that went to the Senate and what came out in other words, what did you achieve?

CHRISTOPHER PYNE: I can’t tell you what the total was but the $28 billion was blocked by Labor and the Greens and the crossbenchers including $5 billion of their own savings which they’d proposed in government which was kind of bizarre by the Labor Party but the effect of what we have managed to achieve in terms of not creating new spending measures –

MATTHEW ABRAHAM: So you know what they blocked but you don’t know what you got through.

CHRISTOPHER PYNE: Well, Matthew, I don’t keep a running total in my head of the things that went through and the things that didn’t. I focus on Education - I can tell you what went through on Education but I can’t tell you about the entire budget, no, I don't think your listeners would think that was unreasonable.

DAVID BEVAN: OK but the story from the government after hearing for the story for the last year that the Budget is bogged down in the Senate the new story we’re going to get is ‘No, we were actually very successful and things aren’t looking that bad’

CHRISTOPHER PYNE: No, that’s not what I said last year and it’s not what I’m saying this year, I think you’re trying to create a new story here, the reality is…

DAVID BEVAN: I’m just trying to work out which story we’ve got now.

CHRISTOPHER PYNE: The truth is that we got 300 out of 400 measures through the Senate. Would we have liked to have got 400 out of 400? Yes. Did Labor block $28 billion of savings, of which $5 billion were their own? Yes. However, have the measures that we’ve got through reduced the debt and deficit according to the Intergenerational Report by half over the next 35 years? The answer to that is also yes, the truth is we are making great progress.

MATTHEW ABRAHAM: It is an interesting phenomenon that the only time politicians usually answer yes or no is when they pose their own questions as you just have so well done. Mark Butler, Labor MP for Port Adelaide, is the Federal Labor Party now going to block any of these measures, particularly what will appear to be some very attractive carrots being dangled out for well over 100,000 retirees and people who want to hang on to the concession card?

MARK BUTLER: Well, am I grateful for the opportunity to respond? Yes. That must be about the 18^th framing of the budget message that I’ve heard from a Senior Government Minister over the last couple of weeks. The truth is that the Government cannot decide, cannot agree, between themselves, quite what the message about the next budget is going to be and the reason for that is they’re still playing political catch-up on the disastrous budget from last year. I think all of the communities find that very difficult to keep up with quite what the Government’s plans for next week are. We’ve seen a string of balloons floated – particularly by Scott Morrison – about what he might or might not do in childcare, what measures he might drop in relation to the aged pension and what new things he might bring in but he’s very careful to say they haven’t yet been agreed by the Cabinet so it is very difficult for the Opposition or anyone in the community for that matter to express a view about these things because they are all hypothetical and speculation…

DAVID BEVAN: So what do you say as a Labor MP will be the hot spots, who are you predicting will be the winners and the losers and I’m thinking about pensioners and I’m thinking about young families?

MARK BUTLER: The Government has committed, it would appear, to its cuts to family payments and Scott Morrison is trying to link those cuts to family payments to his childcare package. Now the modelling agency NATSEM says that the cuts to family payments for a single income family on $65,000 with an eight year old and a 14 year old would amount to over $6,000 per year so these are really substantial cuts to the household budgets of low to middle income families and they’re still on the books. We are blocking them in the Senate, we will continue to block them if the Government maintains them so that is one group in the community that is very much going to be a loser under this Government’s budget.

MATTHEW ABRAHAM: The Australian’s David Crowe sums up, maybe as a snapshot of the two positions this morning, “While Labor will increase taxes on those who earn $75,000 or more from their super funds in retirement, the Government will stop paying the part-pension to those who hold more than $820,000 in private assets in addition to their family home and each side is seeking to avoid any impact on those with low incomes. Is that a fair summary?

MARK BUTLER: Well, we don't know what the Government’s going to do in relation to the aged pension … we’ve been very clear about ours, we’ve released costings.

MATTHEW ABRAHAM: $75,000 is the new rich, is it?

MARK BUTLER: We had this discussion when Chris Bowen released this policy, it is a 15% tax on earnings above $75,000…

CHRISTOPHER PYNE: A new tax?

MARK BUTLER: [inaudible] … will be completely tax free, dollars earned above that, so you need to have a nest egg of probably $1.5 million or more, earnings above that would be subject to a very modest tax rate of 15% but quite what the government’s going to do about the aged pension we don't know. They’re indicating they might drop the plans to cut the indexation of the pension and if they do that that would remove perhaps the worst aspect of last year’s budget but they still apparently want to increase the eligibility age to 70 years of age which will be the highest pension age in the OECD so it’s very unclear at the moment, it would appear that there’s still discussions going on within Cabinet about what Scott Morrison will get away with and what he won’t get away with [inaudible] and can’t be expected to respond to a whole bunch of speculation.

DAVID BEVAN: Christopher Pyne, there will be people who will be worried listening to these conversations. What assurances can you give pensioners and self-funded retirees that they won’t be worse off in a week’s time?

CHRISTOPHER PYNE: We’ll have the budget on Tuesday and everybody will be able to see exactly what the Government’s proposing to do. I can tell you and I can tell everybody out there listening, we will definitely not gouge self-funded retirees – like Labor wants to do by introducing a 15% new tax on super - which is Labor’s proposal, because our view is that those people who have managed to save for their own retirement, through superannuation, and paying tax on the way into that, shouldn’t then be taxed on the way out. Now Labor sees other people’s super as their money and I can tell everybody who is listening we will not impose a 15% Super tax on self-funded retirees.

MATTHEW ABRAHAM: But will you change the pension because Tony Abbott promised not to?

CHRISTOPHER PYNE: Well I think you’ll see on Tuesday the final position that the Government has on the pension; there’s been speculation about tightening of the assets test and I think it will depend…

MATTHEW ABRAHAM: To honour his promise he’d have to not touch it at all, it would just be a no go area, correct?

CHRISTOPHER PYNE: It will be interesting to see if Labor believes that the assets test shouldn’t be changed whatsoever. I think that it would be fascinating to see if they want to block any measures around that.

MATTHEW ABRAHAM: I don't think that was the question, Chris Pyne?

CHRISTOPHER PYNE: You haven’t asked me about my own area, in education we’ve announced $843m of new funding for preschool, for 15 hours a week of preschool, which is good news so rather than focussing on what we don’t know until next Tuesday, I would love to tell you what we do know, which I announced on Sunday.

DAVID BEVAN: Is Mark Butler right, that a single income family on $65,000 with two kids will face cuts of about $6,000?

CHRISTOPHER PYNE: No he’s not right because NATSEM have been discredited in many respects over the last 12 months since last year’s budget, they’re an organisation at the University of Canberra and I think they need to seriously look at their work that they’re doing because they also came up with ludicrous proposals for fee increases for university fees based on a doubling of current fees and then adding 20% or 30%, they didn’t have any basis to these positions at all.

MATTHEW ABRAHAM: Mark Butler?

MARK BUTLER: That’s extraordinary: I’ve never heard a Government Minister question the integrity of NATSEM.

CHRISTOPHER PYNE: NATSEM’s, NATSEM’s —

MARK BUTLER: Let me have a go, Chris. NATSEM is recognised as the most significant economic modelling agency in the country, it’s been doing the key modelling, particularly for household incomes, for many, many years. To impugn their integrity or their capacity to model…

CHRISTOPHER PYNE: It’s not their integrity, it’s their capacity.

MARK BUTLER: …is just extraordinary.

CHRISTOPHER PYNE: They got it wrong on universities.

MARK BUTLER: Talk about attacking the messenger.

CHRISTOPHER PYNE: NATSEM got it completely wrong on university fees and their modelling for the university fees is embarrassingly bad so unless they get their work right they should be criticised for it.

MARK BUTLER: Well I’d be very interested to see the Government’s modelling on the impact of the cuts to family payments on a $65,000 single-income family with a primary school and a high school student so I’d be absolutely gobsmacked.

CHRISTOPHER PYNE: There have been no cuts at all.

MARK BUTLER: Scott Morrison has been making them conditional on any improve to childcare.

MATTHEW ABRAHAM: And we’ll know next week and we’ll talk to you after the budget. Mark Butler, Labor MP for Port Adelaide, thank you Mark Butler.

MARK BUTLER: Thank you gentlemen.

MATTHEW ABRAHAM: And Chris Pyne, Liberal MP for Sturt, and Education Minister, thank you Christopher Pyne.

CHRISTOPHER PYNE: It’s a pleasure, thank you.

[ends]