LEIGH SALES: Prime Minister, thank you for your time.
PRIME MINISTER: Hi, Leigh. Good to be with you.
SALES: On your plan to extend the trial of welfare cards in Australia, you are a Liberal Government so your values are meant to be personal liberty, or one of them. Why not make it voluntary for people to sign up to income management if they feel they need some help instead of making it a compulsory nanny state kind of thing?
PRIME MINISTER: Well, I am all in favour of things that work, Leigh. And what we want to do is get people off welfare and into work and what we have found in the trials we have been doing so far is this has been helping people actually get into jobs and better manage their own affairs when they are under a lot of pressure. So I just want to do what works, Leigh. This has been working so we want to keep extending the trials. One of the key reasons it has been working is because it has been embraced by the communities where it has been put in place and that has been a key part of the process that we have followed in the trials that we have had. We have seen youth unemployment rates up in Wide Bay fall over 27 per cent down to around about 18 per cent. Now, when you are getting those sorts of results, it is worth continuing to pursue those sort of programs.
SALES: You say you want to back things that work. The Australian National Audit Office report into the trials so far said that, ‘The approach to monitoring and evaluation was inadequate. As a consequence, it is difficult to conclude whether there had been a reduction in social harm and whether the card was a lower cost welfare quarantining approach.’ So the Auditor-General seems to think that the evidence is out.
PRIME MINISTER: It seems like we can make some further improvements, but what we do know is that the people who are involved themselves in these communities have welcomed them and supported the plan. So I am happy to keep giving it a go, Leigh.
SALES: Sorry to interrupt, Prime Minister. What are you basing it on? Because I am basing it on the Australian National Audit Office report. I’m just wondering what you’re basing it on?
PRIME MINISTER: I am basing this on the survey of people who have actually participated which has been done as part of the trials and has been part of the evaluation process.
SALES: People on welfare sometimes already feel a sense of shame about that. Isn't making something like this mandatory instead of opt-in potentially contributing to that sense of shame?
PRIME MINISTER: No, I don't think it is. I don't think it show be characterised in those terms at all. I think it should be seen for what it is, and that is a genuine attempt to do things that help people in these situations, to help them better manage the resources they have and to ensure that there is food on the table for the people who depend on these payments that are going into these families and that they can get themselves into a position to deal with issues in their own lives and they can go and get… can find themselves in employment and be in even greater control of their own lives.
SALES: The Government is also proposing drug testing for some welfare recipients. Illicit drug use has doubled among men in their 50s and 60s in the past 20 or so years. Will the testing include people receiving welfare in the form of the aged pension?
PRIME MINISTER: No.
SALES: So what forms of welfare will be subject to this?
PRIME MINISTER: Newstart and Youth Allowance.
SALES: And why are those the forms of welfare that you want to make subject to it?
PRIME MINISTER: Because these are the areas where we are trying to get people off welfare and into jobs and one of the biggest inhibitors to them getting jobs is substance abuse. That is what has been showing up in the impediments to people being able to get over these sort of addictions and there is an opportunity when people are engaging with the Government, when they are coming for support in the form of Newstart and other programs, to help get them the support that they need. Now, part of this program - and it is being trialled in three areas - is $10 million to provide the facilities for the referral services to help people get off these drugs. We are trying to help people get off drugs and get into work and try innovative new ways of doing that. And I think it’s worth a try.
SALES: Is the proposal really about getting people off drugs and into jobs or is it about kicking them off welfare and saving the money from that?
PRIME MINISTER: I think that is a very unkind way to put it, Leigh. I mean, I am not going to doubt people's motives when it comes to programs like this. This is about helping people deal with a life-inhibiting addiction, that helps them get off that and find themselves in employment where they have more choices and a brighter future. Why would you question the motives?
SALES: If it is drugs, they can only be helped if they are then channelled into rehab services and things of that nature, you mentioned...
PRIME MINISTER: That is what it does.
SALES: You mentioned $10 million extra going to it, but we already know from people who work in the sector that the services are inadequate for the existing need, let alone channelling more people into it.
PRIME MINISTER: So you are suggesting that we shouldn't have referral services?
SALES: No, I am suggesting it will be under-resourced.
PRIME MINISTER: Let me take you through it. The reason we are putting $10 million into those three areas to support those referral services is to be able to be sure that when we engage people in those services that they are actually getting the right outcomes. This is a trial, Leigh. We are trying to work out if this can work. I am really puzzled by the level of opposition to the Government trying to tackle a problem of drug addiction for people who are not in work and helping them get over it with referral to proper services and funding those services in those trial areas and if that works, well, that gives us the opportunity to take that out more broadly. That seems like a good plan to me.
SALES: We have been talking a bit about Newstart. A single person on Newstart has to live off $277 a week. A federal politician gets an extra $288 per day in travel allowance when they have to go to Canberra. Is that having a fair go and getting a fair go?
PRIME MINISTER: Well, Leigh, when it comes to Newstart you know it goes up twice a year. It is a payment that is intended to support people between their employments and that is what it is designed to do. It is a payment that is made by taxpayers to help people in this situation. Now, what I want to ensure they do is they can get themselves back into work, but I also have big priorities on the Budget, Leigh. The big priorities on the Budget are to deal with in-home aged care places, to deal with youth suicide, to deal with the challenges that we have in the health system and the education system, which we have rapidly increased funding for. So we have got a lot of priorities on the Budget and my priority is more, frankly, in supporting increases in in-home aged care places than ramping up the welfare budget.
SALES: I understand that but when you’re looking at how the Government spends money, why is it fair to expect someone to live off $277 a week when at the same time you think it is fair that a politician should get $288 a day to help with travel costs associated with being in Canberra?
PRIME MINISTER: You are conflating two completely different things, Leigh. So I don't accept the comparison. What I do suggest is this though, the Government needs to support a welfare system that is sustainable. Newstart is there to help people. The dole is there to help people when they don't have a job and to get back on their feet. But I will tell you what I did do. I did increase the allowance that is paid to young people to help them actually go through the program of internships, which can get them into jobs. I increased that Newstart payment for young people participating in the Youth PaTH program. There are about 79,000 young people who have just done that. So it is not true to say that we haven't increased Newstart. I actually did increase it for young people who are part of a program to get themselves into a job.
SALES: Prime Minister...
PRIME MINISTER: And that program already has had some good initial results and that was something that we said we would try and we have given it a try and it is proving to be a good program.
SALES: Prime Minister, if we can turn to another subject. The Reserve Bank Governor Philip Lowe is concerned about the Australian economy and is trying to stimulate it by cutting interest rates. That puts money into the economy. But the Government is determined to deliver a surplus, which does the opposite, it keeps money out of the economy. Why are you intent on a fiscal policy that undercuts the country's monetary policy?
PRIME MINISTER: Well, I think that is an absurd proposition, Leigh. Fiscal policy and monetary policy are actually pulling in the right direction and they are pulling together. The Governor of the Reserve Bank...
SALES: They are pulling in opposite directions aren’t they?
PRIME MINISTER: No, Leigh, that is not how it works. And the Governor of the Reserve Bank is not calling on the Government to not have a surplus. That is a ridiculous suggestion. He is not suggesting that at all.
SALES: He wants people to spend money, he wants governments to spend money on infrastructure and so forth.
PRIME MINISTER: Yes.
SALES: Having a surplus means by its nature, you are spending less money.
PRIME MINISTER: No, what it means, Leigh, is that we are ensuring that we are paying down the debt that has been built up from excessive spending in previous years...
SALES: But the question is, is it the time to do that, is it the right time for the economy to do that?
PRIME MINISTER: Of course it is the right time to reduce the debt. It’s at $375 billion, it’ll come down by $50 billion off 2018-19 over the next four years. I mean, this is the first year we have been able to get the Government living back within its means, and this is the opportunity to store up resilience and resources for further down the track. Now, that has been the plan we have been working to now for many years, but let me be clear about what the Reserve Bank... I have been working with Philip, Dr Lowe now for the last four years as a Treasurer and as a Prime Minister. The two initiatives that he's been most supportive of have been the tax cuts that we legislated and we delivered in the first sitting week of the Parliament and, on top of, it has been the infrastructure spending, which in the last Budget we increased from $75 billion to just over $100 billion. And since the election I have sat down with every single Premier with big projects, and we have been bringing projects into this current fiscal year and that spending will be just shy of $10 billion in this year alone, and we are moving on a lot of the smaller projects - the car park projects and things like this - which are smaller in nature and are able to be taken up now in a way that doesn't deal with a lot of the difficulties that we have with cost pressures in the system as a result of the large amount of works that are underway.
SALES: Dr Lowe thinks that bosses should give their workers bigger pay rises. Do you agree?
PRIME MINISTER: We want to see wages increase but we want to see wages increase off increased productivity and we want people to earn more from what they do and to be able to earn more from what they do by being more valuable in the work they do. That is why skills development is so important, that’s why technology is so important and that’s why infrastructure investment is so important. It is why opening up export markets is so important because it boosts our capacity to earn more as a country.
SALES: But in simple language, should bosses give workers a pay rise? Are profits too high and wages too low?
PRIME MINISTER: Non-mining wages, the total wages bill in the non-mining sector, is running at the same level as the compensation of employees in the national accounts. They are running both at 5 per cent. Those were the figures that came out in the national accounts. So they are running at the same level.
SALES: Prime Minister, thanks very much for your time tonight.
PRIME MINISTER: Thanks a lot Leigh. Good to be with you.