Transcript of interview with David Spears, Sky News
WED 09 MAY 2012
Subject(s): Budget 2012-13; Schoolkids Bonus; Foreign Aid; Craig Thomson; Fair Work Australia
HOST: Prime Minister, welcome. The centrepiece of this Budget is a $5 billion boost for families. Is this really about winning back the Labor heartland worried about the carbon tax?
PM: It’s about getting money to families, because they’re under pressure and we want to assist them. The money that’s going to families is going in two ways, through the Schoolkids Bonus, so that’s a better way of helping people with the cost of getting the kids to school than the Education Tax Refund and it will mean that people will see some money before 30 June, and then in January and June each year after afterwards.
HOST: That’s the point – before the carbon tax comes in, they’re getting a hit of cash. How much of this is about easing those concerns?
PM: It is about getting families money in a better way. I’d remind you that the Ken Henry tax review recommended changing the Education Tax Refund. We created the Education Tax Refund to help families with the costs of getting the kids to school and what we now know, because the system’s operated for a few years, is of the 1.3 million families eligible, a million of them aren’t getting their entitlement at all, or aren’t getting it in full, because it’s just proving too hard for people get the receipts, or maybe they don’t know about it, or maybe if you get an accountant to do your tax return you make the claim, but if you struggle through the tax pack yourself you don’t.
So we want to do it in a fairer way, to make sure people get the money and that is what is prompting-
HOST: But I also remember at the last election Tony Abbott wanted to extend that Education Tax Rebate to cover private school fees and you were critical of that at the time. Now there’s no strings attached, parents can spend it on whatever they like.
PM: Well, we wanted to be clear about the purposes of the funds and Mr Abbott was talking about that at the last election. Though isn’t it a little bit odd, David, that at the last election a Labor idea – helping people with the cost of getting the kids to school, was one Mr Abbott wanted to build on. But now he wants to take his reckless negativity and stop families getting money that they need before the end of this financial year, I mean that’s his approach.
How can he wreck something as needed as getting more money into a family’s budget?
HOST: His criticism is that it’s just a cash splash, he may have alternative ideas on this.
PM: Mr Abbott’s got to get off Sydney’s north shore and go and talk to some real families and get himself in the real world.
David, have you ever met anyone – you’re a man who knows a lot of people with young kids – have you ever met anyone who said to you ‘I’ve sent my kid to primary school all of this year and I’ve spent less than $410 doing it.’ Have you ever met anybody who’s said that to you?
No, you’ve met lots of people here in Canberra and around the nation, who have talked to you about the thousands that it costs them to get the kids to school and how they worry about paying for the excursions.
So let’s not have any of this nonsense that somehow the money isn’t going to support families who are paying for their kid’s education. People do spend more than that.
HOST: But I’ve also met a lot of people who are concerned about the plight of the school system, public schools in particular, and you’ve talked a lot about this over the years. This year the Gonski Review, which you launched, the call for a $5 billion increase in school funding, why couldn’t you put this $2 billion, instead of just into the hands or the pockets of parents, target it to the school system?
PM: Because we’re capable of doing more than one thing at a time. We’ve almost doubled the amount of money going to school education – almost doubled.
There are things happening in our schools today, as a result of our reform programs that never happened in the past. No one in the former Howard Government, of which Mr Abbott was a part, ever bothered themselves to think about disadvantaged kids and their education.
We have made a huge difference – national curriculum, quality teaching, more money into disadvantaged schools, the transparency of MySchool, the capital of Building the Education Revolution, the computers, the trade training centres, and that work will go on.
But at the same time as that work goes on we can help families in a practical way as they puzzle over whether or not they can afford to pay for the school excursion for their child.
That’s why we want to get this money to them and Mr Abbott is so negative, so negative and so destructive. He wants parents who would need that money in their family budget, from having it, and he’s got this ridiculous argument about cash splash.
Well, you know, $410 for a primary school student, $820 for a secondary school student, everybody who knows anything about families knows that getting the kids to school costs more than that. What we’re trying to do it give a bit of help along the way.
HOST: Prime Minister, business are doing it tough at the moment. Now these are the wealth generators, the job generators in our economy, they’re struggling many of them with the high dollar, the carbon tax is coming in as well. Now they’re not they’re not going to get the company tax cut you promised either. There’s not a lot of them in this Budget, is there?
PM: Well there are things for them in this Budget, but on the company tax cuts specifically, I do want to deliver a company tax cut. I wanted to use the proceeds of the Minerals Resource Rent Tax to deliver it and it became abundantly clear that the legislation wasn’t going to get through the Parliament, once again a cost of Mr Abbott’s negativity, he always wants to say no, so something that you would have though the Liberal Party always believed in – reducing company tax – he said no.
HOST: Just on that. If it was part – really part – of the mining tax package, why didn’t you attach it to the legislation, like you did with some of the other mining tax goodies, the superannuation increase. Why wasn’t this demanded as part of the overall legislation, deliver a company tax cut?
PM: I don’t know what difference you would have thought that was going to make, David, if we’re in a Parliament-
HOST: It would have meant the Greens and independents have to vote either for, or against, the whole thing, the mining tax and the company tax cut.
PM: I think you’re wishing away some practical things like the ability of people in the Parliament to move amendments to legislation to delete sections. So I don’t think you can really say that would have made any difference.
The process isn’t what’s mattered here. It’s not the process, it’s the outcome and the outcome is Mr Abbott is so negative that even though the Liberal Party’s always believed in reduced company tax, he’s said no.
Well, I’ve accepted we won’t be able to get the company tax legislation through the Parliament, but I still want to reduce company tax, which is why we will keep working with the Business Tax Working Group.
You would have noticed that in this Budget some of the savings that have been talked about in that group haven’t been taken. They are available for the business community to work with us, to get a consensus package, a revenue neutral package, which means we do business tax in a better way and we cut the company tax rate.
HOST: So it has to be revenue neutral?
PM: Yes, it does.
HOST: Okay, so it’ll have to be-
PM: And that’s always been clear in the Business Tax Working Group work.
HOST: Alright, so if they’re going to take a company tax cut, they’ll have to give something as well, whether it’s-
PM: And that’s always been clear, revenue neutral, that that is a productive way forward for businesses who want to see us achieve a company tax cut and I want to see us achieve a company tax cut.
So I couldn’t do it this way, I’m going to look and try and find another way to do it, and in the mean time I’m not going to let Mr Abbott’s negativity stop me spreading the benefits of the mining boom around the nation, so families are going to benefit.
But you did say in your question there’s not much for business in this Budget can I just very quickly pick you up on that. Businesses from 1 July, small businesses will see the benefit of the $6,500 instant asset write off. That’s in part been funded from the Minerals Resource Rent Tax. You buy new equipment in your business and reduce your taxable income as you do so.
And they’re going to see the benefits the loss carry-back arrangements-
HOST: Only 110,000 businesses will, according to your figures, will access that. 770,000 would have got the company tax cut.
PM: Well, we’ve looked at the eligible population and we think 110,000 will access it, but they will be businesses that are trying to change as our economy changes, because of the high Australian Dollar.
And can I just say too, retail’s had problems because of the cautious consumer, so what we do to support families flows through into, you know, exchanges at the checkout in businesses, so that’s good for business too.
HOST: Can I turn to the budget bottom line. For this current year that we’re in, the forecast originally was a $22-$23 billion deficit; it’s now blown out to $44 billion. For the coming financial year you’ve forecast a narrow surplus at $1.5 billion. How confident can we be that that’s really going to be achieved? Will you do whatever it takes to protect that surplus, even if conditions worsen?
PM: Well we certainly will protect the surplus and to give you an idea of how much we’re prepared to protect the surplus, in the forthcoming financial year 12-13, where we’ve budgeted a $1.5 billion surplus. In the last Budget til now, revenues for that financial year have gone down by almost $10 billion.
So even with revenues going down, we’ve worked to find the savings to protect the surplus, that’s how determined we are.
That’s part of a savings package across this Budget of $34 billion. That builds on top of $100 billion of savings in the past, $11.5 billion at the mid-year update.
HOST: And you’ll go further if you have to, with more spending cuts, tax increases if you have to?
PM: We are determined to deliver a surplus now. I don’t want you to set hares running, the Budget is there and it’s there for all to see-
HOST: That you’re committed to this.
PM: We’re committed – well, proof of the pudding, we had people – including Mr Abbott and others, chanting at us for months and months and months ‘It’ll never happen, never happen, won’t be in the Budget, won’t be in the Budget.’
There it is, in the Budget. And now, of course, they turn their negativity in a different direction.
What really should be said, is that this is a remarkable achievement for the Australian nation, so quickly after the global financial crisis and in days where there’s still some global economic uncertainty.
As a nation we should be proud of this, just the same way we should be proud of our track record of working together during the global financial crisis to keep people in jobs.
HOST: A couple of others just quickly. On foreign aid, we’ve apparently got a world leading economy that we’re not going ahead with the promised increase in foreign aid as scheduled. Does that mean our bid for the UN Security Council seat is dead in the water?
PM: Well keep pursuing our bid for the UN Security Council, but I think we need to be a bit clear about, people are wandering around saying cuts to foreign aid. Well I’d invite you to get out the Budget papers and you’ll see foreign aid going like that, across the Budget papers-
HOST: It would have gone a lot more, it would have gone $3 billion more.
PM: Every year, every year, more money spent on foreign aid than the year before. Every year. So foreign aid expenditure is going to continue to go up.
HOST: Just not as much as you promised.
PM: We’ve moved the end goal of the Millennium Development Goals by one year. But let’s be clear, I mean compared with when we came to office, foreign aid is already $2 billion more. It’ll be $2.6 billion more, it’s going to keep going up.
So we are a nation generous be the standards of the world, we can hold out heads up high. We’re already number ten for generosity in the OECD and we’re moving to number six.
HOST: And just finally Prime Minister, away from the Budget, the ongoing saga around Craig Thomson. Tony Windsor and Rob Oakeshott, the independent MPs, are now saying they’re really concerned about this and considering their options when it comes to Craig Thomson’s presence in Parliament. Does that worry you.
PM: Well look, we’re getting on with the job of delivering the budget and I’m very confident that we will deliver the budget legislation.
On Mr Thomson, I made a decision that Mr Thomson should sit on the crossbench and he is now doing that, he is no longer participating in the Labor Party.
HOST: But his vote is still propping up the Government, it’s crucial to keeping you in power. Should he be in Parliament?
PM: Well we’ve, I’ll just remind of the following things. We’ve never in the nation’s history, in a Parliament, excluded someone from voting because they are the subject of allegations that they deny. Mr Abbott has never applied that standard to himself, indeed in this Parliament, the one we’re sitting in right now, since the 2010 election he has accepted a vote from someone who was charged with, and subsequently found guilty of, theft and assault.
So you know, let’s be clear, this is a standard Mr Abbott has never believed in in the past and he’s on the track record of quotes, of statements in the past, how much he doesn’t believe in this and how much people should be given the benefit of the presumption of innocence. And this is political convenience-
HOST: But Craig Thomson has been found by the independent umpire. You kept telling us just wait for the independent umpire, Fair Work Australia, to make a ruling. It’s now found he did spend union members money inappropriately, including on escort services. What more do you need?
PM: Well there’s a few issues here. For me the appropriate decision was for Mr Thomson to no longer participate in the Labor Party and that-
HOST: Well he says that was his decision.
PM: Well, certainly I made that decision and spoke to Mr Thomson. So that decision’s been done, Mr Thomson no longer sits with the Party in the Parliament and that is appropriate.
Then, of course, you’re asking me about Fair Work Australia and its inquiry. As a Labor person, as someone who’s worked all of their adult life in promoting fairness and decency in workplaces, I don’t want to see $1 from a working person misused by a trade union, not $1.
HOST: Were you appalled by what you read in that report?
PM: Of course I’m deeply, deeply disturbed by it. I don’t want to see workers money misused. We’ve got a trade union movement that is overwhelmingly decent, hardworking, professional, doing the right thing by their members.
But to the extent that $1 has ever been misused, then that is a great wrong and should not have happened. For Mr Thomson he continues to deny these allegations, the process will now move to giving him a day in court, he is entitled to that day in court.
For the Parliament, David, are we really going to move to a system where someone who can get a majority on the floor can kick out another member and stop them voting, because they are the subject of allegations that they deny?
I mean, can you imagine, in this Parliament in the past, when we had majority government, sometimes with very big majorities, for example the Howard Government after the 1996 election, are you really saying we should have a system that the then Howard Government with its big majority should have been able to suspend or expel 20 or 30 Labor Members? Is that where we’re going?
Well, it doesn’t work, it’s not right. It can’t possibly happen like that. Members are elected to the Parliament, there are proper processes for dealing with allegations and those processes should go through to their end.
And Mr Abbott should knock off the hypocrisy of trying to apply to us a standard that he has never applied to himself.
HOST: Prime Minister, thank you.
PM: Thank you.