Household assistance package

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VIRGINIA TRIOLI: …… millions of Australians out of pocket. To tell us more about the compensation measures, Jenny Macklin is the Minister for Families, Housing, Community Services and Indigenous Affairs, and she joins us now. Jenny Macklin, good morning, thanks for joining us.

JENNY MACKLIN: Good to be here.

VIRGINIA TRIOLI: In fact it’s an important part of the package to talk about this morning, the tax reforms and the welfare to work elements that you’ve built into the package there. There’s a disincentive there for people not to be in work. You get more under this package if you actually take on a job. It’s an element of social engineering isn’t it?

JENNY MACKLIN: Well, it’s one of those really positive changes that is part of the announcement the Prime Minister and the Treasurer made yesterday. It is about increasing the tax free thresholds so that for around a million Australians they will get more in their pockets every week up to around $18,000 a year. So that’s a really positive measure. We do want to encourage people into the workforce and to encourage people to do that bit of extra work to make it worthwhile for them. And so this is a very significant tax reform as well as of course benefiting particularly those on low to modest incomes.

VIRGINIA TRIOLI: But what are the job creation strategies or the retraining programs that you have to have in place at the same time if this is just not to be a financial punishment for say mothers who want to return to work after their child is one or two, but can’t?

JENNY MACKLIN: That’s very true. And you’d be aware that in the Budget we made some very significant announcements about skills, and particularly focussed in on those regions of Australia where we know we do have far too many families, mums and dads, not working, and so we are really providing additional assistance to those parents to help them get back into the workforce. So if you combine the changes that we’re making for those parents in those difficult areas of Australia, where we know unemployment is too high, with this tax change, there really is a positive message to those Australians who aren’t working, it’s really worth your while.

WALEED ALY: It’s an intriguing decision though that you’ve made to couple up this with the carbon tax because you’re describing this as tax reform. Surely the time to do this was in response to the Henry Review rather than introduce a whole new tax regime that’s going to cost $4 billion more than you raise through the carbon tax, and mean the scheme’s no longer budget neutral?

JENNY MACKLIN: Well that of course is for a range of reasons, not just because of the tax changes and I understand you’ll have Penny Wong on later so you can talk to her about the budgetary issues. But this is important tax reform, you’re right. It was signalled in the Henry Tax Review that improving the tax free threshold in this way was a good idea. Good for individuals and good for families because it means they’ll be able to keep more of what they earn every week, and of course it means they also don’t have to do a tax return at the end of the year which I think a lot of people will be very happy about.

VIRGINIA TRIOLI: The Opposition are saying that your figures can’t be trusted and the modelling was actually struck on a different price per tonne for carbon anyway which casted out over some of the figures and the projections. But in addition to that you’re over-compensating some, some families and some people. It smacks of a desperate need to schmooze the electorate to over-compensate. Why do that?

JENNY MACKLIN: I think this is a really important part of what we’re doing. It’s recognising that for some people, particularly pensioners. Think of a pensioner who is going to be using more than the average electricity every week, somebody who’s home every day who’s going to have to have the heater on all day to keep warm. We want to make sure that that pensioner is well looked after, that they’re not going to be worse off as a result of this change. That’s why we’ve provided this 20% buffer and it is a really important part of our package. And I would say that is the difficulty with Mr Abbott’s proposals, he’s really leaving pensioners out altogether, not recognising that they too of course, have been under financial pressure and I do think that this will help them.

WALEED ALY: Sure, but the question is really one of over-compensation?

JENNY MACKLIN: Well it is because we’re recognising that for many of those people they might use more than the average person uses in electricity and so we do want to, as you call it, over-compensate or provide a buffer so that they’re not worse off.

VIRGINIA TRIOLI: Jenny Macklin, we’ll leave it there. Thanks very much for joining us this morning.

JENNY MACKLIN: Thank you.