Australian Government coat of arms

Prime Minister of Australia

The Hon Tony Abbott MP

Joint Press Conference, Hobart

Thursday, 22 May 2014

Prime Minister

Subjects:

Brooker Highway upgrade; the Government’s commitment to building the roads of the 21st century; Budget 2014.

E&OE

PRIME MINISTER:

It’s great to be here in Tasmania, good to be here in Hobart with the Premier to confirm that the Commonwealth Government will fund the Brooker Highway upgrade to relieve some of the very serious traffic congestion that that part of Hobart gets.

We’ve just had a Commonwealth Budget. Obviously it’s been a tough Budget – a necessarily tough Budget – because Australia could not go on living beyond its means. While this is a Budget for saving, it’s also a Budget for building. I want to be known as the infrastructure Prime Minister. Infrastructure is important right around Australia, including here in Hobart. That's why, as part of the Budget, there was a clear commitment to this $26 million of Commonwealth money towards, overall, a $32 million upgrade of the Brooker Highway here in Hobart.

So, it’s great to be here with the Premier and I might ask him to support these observations.

PREMIER HODGMAN:

Thank you and I welcome the Prime Minister to Tasmania and I welcome the Federal Government's contribution to building Tasmania’s infrastructure. Our road networks are critical for boosting Tasmania's economic productivity as is Tasmania's primary airport, the Hobart International Airport, which will also be the beneficiary of a significant Federal Government commitment to extend the runway and that will open up even greater logistical capacity out of Tasmania's peak airport.

I am very pleased to have the Prime Minister here in Tasmania to obviously continue our ongoing discussions. I acknowledge the Federal Government has a significant commitment to fixing the nation's Budget. We have a significant job to do here in Tasmania also having inherited from a former Labor-Green government very difficult fiscal circumstances.

I welcome and acknowledge the Federal Government's commitment to Tasmania, to helping grow our economy. The establishment of an economic advisory council that will allow the state of Tasmania to actively lobby on behalf Tasmania's business interests to make this state truly open for business and to get on with creating jobs in Tasmania is work that I look forward to continuing cooperatively with the Federal Government.

PRIME MINISTER:

Thanks Premier. Ok, any questions?

QUESTION:

Premier, $26 million coming in for the highway, $27 million going out, according to you, for hospital funding. Have you been talking to the Prime Minister about that?

PREMIER HODGMAN:

Yeah look, of course, and as I say, it’s the Prime Minister's job to deal with the affairs of the nation; it’s my job to deal with the interests of Tasmania and I will do that very strongly. I will always fight for this state and for putting Tasmania's interests first. We are in the process of ongoing discussions about not only the ramifications of the Federal Budget, how we can fix Tasmania's budget as well, but importantly also so that Tasmanians get those services, important services, that they deserve. That work is ongoing, not just between the Prime Minister and myself, but also very importantly between the Federal Health Minister and my Health Minister.

PRIME MINISTER:

Just on the subject of the Subacute Beds National Partnership Agreement, it’s important for people to understand that this is a Labor cut. This is a national partnership agreement which the Labor Party began and the Labor Party failed to fund in the Pre-Election Fiscal Outlook statement. So, it is a Labor cut. I can understand why the premiers are anxious about it and with every state, particularly here with Tasmania, the health ministers are talking to each other to try to manage the transition.

QUESTION:

But you’re not changing it PM – you’re not changing it.

PRIME MINISTER:

Well, we inherited a debt and deficit disaster from the Labor Party. Just to give you an idea of the scale of the debt and deficit disaster that we inherited, this country, at the federal level, is currently borrowing $1 billion every single month just to pay the interest on the borrowings. We’re borrowing to pay interest on interest. That's effectively the situation that we are in and as anyone who has ever had a credit card problem knows, if you are borrowing on one credit card to pay the interest on the other credit card, you're stuffed.

Now, this is the difficulty that our country faces. We could not go on like this. We’ve had to make some very tough decisions and it’s in that context that we did not ourselves renew that particular national partnership agreement which the former Labor government had itself failed to renew.

QUESTION:

Well the state government says that will lead to the closure of some hospital wards. Are you saying that's an inevitable outcome now?

PRIME MINISTER:

No, I’m not. I'm saying that the health ministers are talking about managing this transition because the last thing that anyone wants to do is to put the squeeze on a hospital system under pressure – last thing anyone wants to do is that. But, people need to know that when a former government runs down the nation's finances, there are difficult decisions that need to be made because we cannot go on spending money we don't have. We cannot go on stealing from our children and grandchildren to fund services for us. We just can't go on like this. But, we will do our best to manage the transition because, as I said, the last thing we want to do is to cause difficulties in the Tasmanian hospital system.

QUESTION:

So will there be some short-term assistance in the meantime during that transition phase?

PRIME MINISTER:

I’m not going to go into the details because that's really a matter for the respective health ministers to discuss. One way or another, we do have to make savings. We do have to make savings and this was a saving that the Labor Party had made, not a saving that we made, the Coalition. But nevertheless, we will manage the system to try to ensure that, as far as is humanly possible, it is not frontline services that bear the brunt.

QUESTION:

Prime Minister, are you regretting yesterday's wink?

PRIME MINISTER:

Look, I obviously have already been asked about that on national television this morning and I think I've dealt with it but, yes.

QUESTION:

Can I ask about GST? Do you remain committed to no change in the GST particularly here for Tasmanians?

PRIME MINISTER:

Absolutely. We have no plans to change the GST. The GST is a tax which goes to the states. It's long established, it’s well established and the Commonwealth is not intending to change it.

QUESTION:

Prime Minister, the youth unemployment rate in Tasmania is about 17 per cent. Do you think the changes to welfare will inevitably mean young Tasmanian have to go interstate for work?

PRIME MINISTER:

If people have to move for work, that's not the worst outcome in the world. It is obviously better if you can get work near your home, that's obviously better. But for hundreds and hundreds of years people have been moving in order to better their life. People came to Tasmania in order to better their lives. So, I don't think we should be necessarily heartbroken just because some people choose to move. What I want to do overall, in conjunction with Will and the new Government, is to ensure that Tasmania has a stronger overall economy. I want Tasmania to be a great place for people to work as well as a great place for people to live and a great place for people to visit.

QUESTION:

Prime Minister, sorry, just with regards to yesterday's wink, we are hearing from the Greens today that they want you to stand down as Minister for Women. Would you consider that?

PRIME MINISTER:

No.

QUESTION:

Prime Minister, you’ve also committed $400 million to the Midland Highway over ten years – is that enough to duplicate the entire highway?

PRIME MINISTER:

It will certainly make a pretty big difference. I hope it will. In the end, this is the kind of thing we will be working in partnership with the Tasmanian Government to achieve. It is our objective to get the highway duplicated the whole way between Hobart and Launceston and that $400 million is going to make an enormous contribution towards that.

QUESTION:

Are you talking to the state about them also making a significant financial contribution to that?

PRIME MINISTER:

Well, I am not talking to them about it at this instant. It is a commitment that is there from us. It is a commitment that we will absolutely honour because if you want a strong economy into the future, you have got to ensure that you have the infrastructure that will enable it to happen. As I kept saying, this is a Budget of building as well as of saving. This is a Budget that shifts spending from short-term consumption into long-term investment. Everything about this Budget is designed to make our economy stronger in the long run. So, we rein back in short-term spending, we build up long-term spending, we try to ensure that there are more incentives to work, there’s more incentives to participate in the economy. We are deregulating the universities because we know what kind of a contribution they can make. We are putting the savings in health into the medical research fund because this is where Australia is truly world class. Sport, resources and medical research are three areas where we are probably absolutely as good as anyone in the world and better than just about anyone in the world. So, as I say, this is a Budget for building as well as a Budget for saving.

QUESTION:

Given some of the cuts to the state public hospital system, did you consider giving the proceeds of the GP co-payment to the states to help them make up some of the cuts?

PRIME MINISTER:

Thank you for raising this issue of so-called cuts because when it comes to public hospitals, Commonwealth public hospital spending increases by 9 per cent.  Let me repeat that – by 9 per cent in each of the first three years. Then in year four, it increases by 6 per cent. So, this idea that a 9 per cent a year increase for three years and then a 6 per cent increase in the fourth year and beyond, this idea that somehow this is grounds for saying that we have got to increase the GST just doesn't add up.

QUESTION:

Tasmanians also lag behind the rest of the nation when it comes to education. We saw the protest out the front this morning. What's your message to Tasmanian kids and parents?

PRIME MINISTER:

Again, this idea there have somehow been cuts is wrong. School funding increases every single year. Overall, there is a 3 per cent real increase to education funding across all aspects of the Commonwealth Budget. School funding dramatically increases for three years and then it increases at a slightly less fast rate in year four. So I respect the sincerity of the people out the front. They obviously want the best for their kids and for their community schools, we all want the best, but getting better schools is not just about money. Yes, money is important but if we want better schools as well as strong funding, we need to have more principal autonomy, more parental involvement, we need better teachers, better teaching and we need stronger curricula. So there are all of these elements to better schools and the Commonwealth working with the states wants to focus on all of them.

QUESTION:

The people out the front though and David Gonski said that five and six needs to happen in terms of the years of funding. Will you move on that?

PRIME MINISTER:

Well I just want to stress that we are continuing to increase funding, it’s just that we’re not continuing to increase at the rate of the former government's promises. They were always pie in the sky promises because they were never affordable. One of the reasons why we are so focused on building a stronger economy is because only a stronger economy can sustain for the long term the kind of increased spending on schools and hospitals that in a different and better world all of us would like. So, no, I'm certainly not committing to a permanent massive increase at the same level as the former Government because it’s those sorts of pie in the sky promises which got us into this problem in the first place.

QUESTION:

Yesterday you said university students who were beginning their degrees next year would not be affected by changes you plan for higher education, but those changes came into effect on May 14 the day after the Budget. How did you get that wrong? Why aren't you across the key details?

PRIME MINISTER:

Well in the end, it is up to the universities to determine precisely who will be impacted and how from the beginning of 2016, but people who are at university now will finish their degree on the same basis that they started it.

QUESTION:

We are hearing from the AMA today people are already going to the doctor less because of concerns over the GP tax. That must worry you?

PRIME MINISTER:

Well, I obviously want to see people get the best possible health services and I am confident that the Budget changes are quite consistent with an ongoing strong and dynamic, affordable and accessible Medicare system. Let's not forget that there’s already a modest co-payment for people accessing Pharmaceutical Benefits Scheme drugs and that's been in place for about a quarter of a century. Let's not forget also that there has been a co-payment in the past. It wasn't John Howard who gave us the co-payment it was actually Bob Hawke who gave us the co-payment.  If it’s alright for the Hawke government to bring a co-payment in, if it is alright for the current Shadow Assistant Treasurer in the Federal Opposition to support a co-payment, why isn't it alright for this Government to bring it in in the Budget?

QUESTION:

Prime Minister, just on the question of whether or not health changes are a cut, they’ve been described as a cut by the State Government. They say they’re going to be $1.7 billion worse off over the next 10 years because of the changes to that national partnership agreement, how do you suggest the state governments manage that?

PRIME MINISTER:

Well again, there’s a world of difference between a slower growth in funding and actually taking away funding which is already there. I just think there are fundamental differences between the two situations and obviously if funding is growing at a slower rate, at any point in the future, you can say well we would have had X rather than Y. But the point I make is that every year, under this Government, public hospital funding will grow. It will be a 9 per cent increase each year for the first three years, then it will be 6 per cent in year four and comparable increases subsequently. Now these are very large increases, very large increases and I think that this is a very, very big investment by the Commonwealth Government in public hospital services.

[ends]