Transcript by The Hon Jenny Macklin MP

ACT election, NSW by-elections, Carers Week, Economic Security Strategy, unemployment, self funded retirees

Program: Channel Nine, Sydney


LO: Jenny Macklin, welcome to the program.

JM: Thanks very much Laurie.

LO: Well there is another terrible day for Labor at the polls yesterday, massive anti-Labor swings in New South Wales that saw one state seat lost, big swings against Labor in the ACT as well, with the government here, the Labor government here now likely to be forced into coalition with the Greens, what has gone wrong?

JM: Well there is a very strong message from these bi-elections in New South Wales and the election in the ACT, saying to those Labor governments that they really do need to lift their game, they need to listen to what the electorates are saying and I think what they are saying to those governments is that they expect, the people expect governments to take very decisive action particularly in these very difficult economic times. And that is exactly what you are seeing from the Prime Minister this week. He has recognised that it is very, very important to be ahead of events taking place in the rest of the world, to take decisive action that is necessary for our economy and for our families and we hope that as a result of that we are not going to see the sorts of declines in economic growth that we are seeing in other parts of the world.

LO: So you believe that when the Labor brand is trashed at state or territory level it is not going to effect the Federal government?

JM: I think what we are seeing in New South Wales and the ACT is very particular state and territory circumstances. And what you are seeing at the national level is a Prime Minister determined to act and determined to act strongly in the interests of families, in the interest of pensioners and carers to make sure that they get the support that they need but also so that we boost economic growth. We know that if families are going to continue to be able to improve and maintain their standard of living that we need economic growth in this country and that is why the Prime Minister took such decisive action this week.

LO: Well, just before we talk about that, it’s the start of Carers Week, I’m wearing my Carers Week lapel badge. There is a report, new research coming out today on the financial stress being faced by carers. Can you tell us about that?

JM: Yes, this is new research that has been done by the National Centre of Economic Modelling in Canberra that shows that women who are responsible for a child with a disability is likely to have between a quarter and half less capacity to earn a decent standard of living, over her working life. And this really demonstrates why it is so important for us to understand that, to be able to provide the sort of support that carers need. Tomorrow the Prime Minister is going to launch Carers Week and really the message, I think from all of us, from you, from me, from all of us as individuals, is to say thank you to all of those carers who do such an extraordinary job caring for the people that they love, whether it’s a child, whether it’s an elderly relative and to really, if I can just say personally, a big thank you to everybody for the enormous work that they do.

LO: Well, according to this information, the value of carer services to the economy is more than $30 billion a year and yet though, they suffer terrible financial stress. For example, a woman aged 30 caring for a child with a disability is only going to earn $100,000 over her whole working life and will end up with a super account of $ 25,000. I mean, is saying thank you enough?

JM: No, it’s not enough and that’s why just this week we did extend increased financial support to carers. You would be aware that for those who are on the carer payment, if you’re a single person, you will be receiving an increase of $1,400; if you’re a couple, $2,100 and for those who are on the carer allowance, they will be receiving an extra $1,000 for each of the eligible people that they’re caring for. Now, we know that that’s not all that needs to be done. Money is important, as this report shows, but the other really essential area that carers talk to us about all the time is the need for adequate respite so that they can get a break. We have agreed with the states and territories to expand the number of respite places, but this is an area which we know we need to constantly be working on because carers need the extra financial support that we’ve just given them, but they also need time for a break.

LO: And all this depends on the state of the economy, so let’s talk about the anti-recession package. How confident are you that it will prevent Australia following other countries into recession?

JM: Well, that’s why we wanted to act so quickly. We didn’t want to wait until we saw how bad things are in the rest of the world and see things get progressively worse here. We could see, from the material that was coming from the International Monetary Fund that we needed to act quickly to encourage economic growth in this country. So that is why the Prime Minister made the decision that he did. He wanted to make sure that we got out early, and it is a very substantial package – $10.4 billion made up of increased payments to pensioners, to carers, to veterans and of course also to families, and a substantial boost to the first home owner’s grant as well.

LO: Well the whole point is that is the assumption that the people who will receive these benefits will spend the money and kick the economy along, but what if they save it or what if they use it to pay off debt?

JM: Well, as we know, certainly in the case of pensioners and families, they are under significant financial pressure. We know that, we’ve wanted to give them some increased financial support. We thought about the best way of doing that to both provide that extra support to pensioners and carers and families, and how to do it in a way that would also stimulate the economy. And the best way to do that is to provide a decent lump sum, so that’s exactly what we’ve done. $1400 if you’re a single pensioner or $1,000 for each eligible child. This lump sum, particularly just before Christmas, will, I think, for many, many families and for many pensioners, make Christmas that much brighter. Certainly the pensioners that I’ve spoken to over the last few days have said to me they know how they’re going to spend this money. We’ve got jobs around the house that they haven’t been able to afford. They want to get those jobs done, whether it’s fixing the roof or getting other things done, buying a washing machine that they haven’t been able to afford, getting their car fixed, buying that extra Christmas present for the grandkids, so that’s the sort of thing that they’re saying to me.

LO: But Australian families are carrying a lot of debt, aren’t they? I mean, do you really advise people to spend rather than save in this unpredictable economic climate?

JM: Well, of course, families know what’s best for their own family, but what I’m hearing from families and especially from pensioners who have really had to tighten their belts over the last 10-15 years, they know that they’ve got things that they need to get done, and certainly from the people I’ve spoken to, that’s exactly what they’re going to do.

LO: Is it possible that this package won’t be enough, that further measures will be necessary? For example, bringing forward the tax cuts?

JM: Well, we don’t have any plans to bring forward the tax cuts. You would be aware that in this year’s Budget we delivered $7 billion worth of tax cuts for this year and there is another almost $10 billion in the pipeline for next year. So those tax cuts are already in train. The Prime Minister has just announced $10.4 billion of an economic stimulus package, mostly going to pensioners, carers, veterans and of course families, so we’ll certainly be watching the whole economic situation very, very carefully. The Prime Minister has said that if more needs to be done, more will be done, but we’ve just taken very decisive action which we think will certainly head us in the right direction.

LO: As well as being in charge of housing, families, pensioners, carers, you’re also in charge of benefits for the unemployed, aren’t you? How much do you expect that art of your job …

JM: No, I’m not, actually, but …

LO: Well, how much do you think unemployment will rise as a result of this recessionary threat? Is it a serious possibility?

JM: Well, we certainly are concerned about any possible rises in unemployment. Julia Gillard has made comment in that regard in the Parliament. We will be releasing the mid-year economic forecasts within the month and so we’ll have the official figures from the Treasury available to all of us very shortly. So we’ll have those official figures to see what’s likely to happen with unemployment. But given what’s happening around the world, we, of course, are likely to see a softening in employment. That’s of major concern to us and that’s why the Prime Minister took the decisive action that he did. We want to see sustained economic growth in this country. That’s why we’ve allocated such a substantial increase in spending of $10.4 billion to make sure that we can sustain the economic growth.

LO: You are obviously relieved that you are not in charge of the unemployed, but you are in charge of housing and a big part of the anti-recession package was a boost to the first home buyer’s scheme, yet Melbourne’s property market yesterday suffered its worse day in 4 years. Does that mean that the boost you had hoped for has not come through?

JM: Well, I hear from the housing industry Association overnight that they’ve had the biggest increase in interest from new home buyers that they’ve seen for a long time, and that’s very good news. We certainly want to see new home buyers out there in the housing market getting into their first home. Of course, we want to support young families who want to be able to buy their first home, but we also want to encourage them to get into the housing market now and that’s why we’ve decided to increase the first home owner’s grant for a period of time, just until the end of June next year, to really encourage people to get into their first home right now. It will be good for the families and it also will be good for the economy.

LO: The Prime Minister is going on television tonight to advise people on how to mind their money in the current crisis, so let’s pre-empt him. What do you think is the safest thing for people to do with their savings at the moment – shares, real estate, put it in the bank, put it under the mattress?

JM: It’s not for me to give that sort of financial advice, Laurie. What I would say to people is that of course they all be very careful in making sure that they look after their families, but as I said to you before, what families and pensioners are saying to me is that they will use this extra money that the Government is giving them in a lump sum. It will be delivered in early December. They are certainly saying to me that they’re going to use it in ways that will help do some of the things that they haven’t been able to afford to do before, and that will be good for their families, good for pensioners and good for the economy.

LO: What do you say and what does the PM say to retired people, or people who are about to retire, who are watching their super funds dwindle?

JM: Well, that’s one of the reasons that, for those who are already retired, that we decided to extend this lump sum payment to people who are self funded retirees, who are on the Commonwealth seniors’ health card. They will receive the same increases that we’re providing to pensioners and veterans and carers, so if you are a single person receiving a Commonwealth Seniors Health Card, you too, will receive $1,400 and if you’re a couple, $2,100. We do understand that these are very volatile times for people who are watching their superannuation savings, and we wanted to particularly provide that support for people who are already retired, self funded retirees.

LO: Clearly a lot of people who intended – that their super would see them through retirement are now going to have to rely on the pension or part-pension, do you have any estimates of how many will be affected in that way and how much it will cost the Budget?

JM: We don’t have estimates yet. You can understand that these are tumultuous times in the global financial system that have come upon the world very, very quickly, and so we’ll have to wait just a little while to get those figures, but I would say to any self-funded retiree who is concerned about their circumstances, particularly about the impact of the assets test, that they contact Centrelink and get a re-assessment if they feel that they may be entitled to some part of the pension that they haven’t been entitled to before.

LO: Minister, we thank you.