Sky Agenda with David Lipson
DAVID LIPSON: Minister Andrews thank you for your time. Patrick McClure says that he will propose a simpler architecture for the welfare system that will see fewer payments and supplements, is that something the Government would support?
MINISTER ANDREWS: The current welfare system is extremely complex, there are dozens of payments, allowances and supplements and this is the result of ad-hoc decisions over years and decades and a much simpler system would be for the benefit of everybody, including people who are actually the beneficiaries of the system.
DAVID LIPSON: Your critics though say simplifying welfare is code for cuts. Can you guarantee that any simplification won’t see a reduction in the overall payments for welfare?
MINISTER ANDREWS: The object of this exercise is to look at whether or not we can actually have a more simple and efficient system. This is not about looking for cuts in the process; it’s about just seeing whether we can have a simple system. That itself of course would save money for the Government and probably for other people as well but the object of this is can this system be more simple than what we’ve got at the present time.
DAVID LIPSON: Sure you’re seeking efficiencies and everyone understands that, but can you guarantee that the overall funding envelope won’t be reduced as a result of any simplification?
MINISTER ANDREWS: Well what I’m saying is we’re not about reducing the funding. In fact with an ageing population the reality is if you look at the figures that came out of the Commission of Audit, is that welfare services, age pensions and the like are all going to actually cost much more in the future than they do now, and that’s simply because we’re going to have a larger, older population and there will be more requirement for a variety of social services for that cohort of the population.
DAVID LIPSON: Again, and just to pin you down on this you say that you’re not about reducing welfare payments but that’s not a guarantee that it won’t happen?
MINISTER ANDREWS: Look I understand the Opposition want to make mischief about this, in reality they should wait and see what Mr McClure and the reference group report to the government, what recommendations they make. But if you look at what we’ve asked them to do, we’ve basically asked them to look at making the system much more efficient and simple, have a look at the investment model, for example, that is operating in New Zealand and whether that would get better outcomes in terms of people getting into work but still providing an adequate safety net in Australia.
DAVID LIPSON: The budget included $230 million into an emergency welfare fund for people who are really in dire financial straits, is that an admission that more people will fall through the cracks as a result of this budget?
MINISTER ANDREWS: Well we’re on about having a proper safety net within the system. Some of the emergency relief funds are under pressure at the present time, organisations like the Salvation Army and others do a wonderful job in this regard and it’s quite appropriate to have an adequate safety net and emergency relief is part of that adequate safety net.
DAVID LIPSON: But you would hope that the safety net kicks in before people are in desperate need of food and emergency assistance wouldn’t you?
MINISTER ANDREWS: Well we do have safety nets in before that if you look at, for example, the provisions in relation to young people under 30 what we’re saying there is that if you’re not in a job we want you to be training to get a job, if you’re training to get a job there’s a whole range of government assistance available whether it’s Youth Allowance or Austudy or ABSTUDY that people can qualify for, we’re expanding the range of FEE-HELP that’s available for courses for young people. So there is very considerable government assistance being provided, but what we’re saying for young people is, our expectation is if you’re capable of working full-time then you should be either working or you should be training to get a job in the future.
DAVID LIPSON: One of the big problems that a lot of people have with the budget is that they feel the low and middle income earners in Australia are doing the heavy lifting and that those on higher incomes have got off fairly easily, and the example that Bill Shorten points to today is that a single parent earning $55,000 will lose about 10.5 per cent of their disposable income, whereas someone earning half a million dollars a year will only lose three per cent through the temporary levy on their income tax. What do you say to those claims?
MINISTER ANDREWS: Well that’s totally misconstrued; let me take a couple of examples. If you have somebody on about $30,000 which is around about the minimum wage in Australia and they have children, again depending on the configuration and number of children, they will be receiving up to another $30,000 tax-free by way of family and government payments, and that doesn’t include childcare it doesn’t include rent assistance, for example, if they qualify for that.
Somebody on about the average wage in Australia, about $60,000, will be receiving usually in the order of about $10,000, maybe more, depending on the number of children that they’ve got. Whereas somebody on $150,000 will be paying $50,000 approximately in tax in receipt of no government benefits and now they are going to pay another levy on top of that. So when the full picture is looked at, that is you look at the tax that is paid and the welfare benefits which are received, Australia has still got one of the most progressive tax and welfare systems in the world and Mr Shortens criticism is simply misplaced.
DAVID LIPSON: So do you feel then that the playing field in terms of welfare and taxation is tilted too far in favour of low and middle income earners and against the wealthier?
MINISTER ANDREWS: No, I’m simply pointing out that when you talk about the wealthy you’ve also have to take into account two things. One is if you’re on more than $150,000 a year you won’t be getting government benefits, and secondly you’ll be paying about a third of your income by way of taxation. Somebody on $30,000 a year, on the minimum wage, will be getting depending on the number of children, but can be getting tax-free as much again from the government as they’re earning, and that doesn’t include the whole range of benefits which may be available to them.
DAVID LIPSON: There is though a significant adjustment in this budget that does see lower and middle income earners contribute more, even on a per capita basis than the wealthier Australians. Doesn’t that indicate that there must be a feeling in the government that the playing field needs to be recalibrated?
MINISTER ANDREWS: No, we’re maintaining a progressive tax and welfare system in Australia. I mean the reality is, as I recall the figures, about 10 per cent of Australians pay about 45 per cent of the tax. For many people in Australia when you take into account the tax they pay and the benefits they receive they don’t actually make any net contribution to the government. So that’s a fair system, it’s a progressive system, we’re committed to that as a Coalition in Government and will remain committed to that progressive system in the future.
DAVID LIPSON: Why then do you feel that so many Australians reckon that the budget was unfair?
MINISTER ADNREWS: Well when I’m out talking to people, I’m in Brisbane at the moment. Yesterday I was out in the southern suburbs of Brisbane in the Logan area. I talked to retirees and pensioners, I talked to welfare groups and various other family and community agencies, and when you have a discussion about these things and you remind people that we inherited a financial mess, galloping towards a $670 billion debt to the Commonwealth, that we’re paying a million dollars in interest a month, and then put it in that context and say well we’ve got to do something and we’ve got a plan to address it, and people I find understand what we’re trying to do.
DAVID LIPSON: Just on the Medicare co-payment, the COAG Reform Council says that one in four people in disadvantaged areas put off a visit to the dentist because of costs, whereas just six per cent of people put off a visit to their GP because of costs. Now GPs have bulk billing, dentists don’t. Once you introduce a $7 co-payment, but that’s not going to help those figures when it comes to GP visits, is it?
MINISTER ANDREWS: Well what we’re seeing in relation to Medicare is an increase of expenditure from I think it’s about $8b to $20b just over the space of a decade. We’ve seen the number of visits on average that people make to the doctor increase substantially in Australia, but the reality is that bulk billing has been retained and doctors are quite entitled to bulk bill as they do now as they have done in the past.
DAVID LIPSON: But do you accept that more people will put off visits to their GP as a result of the co-payment?
MINISTER ANDREWS: Look I think we should wait and see what the outcome is, anybody can speculate about these things at the moment, but the reality is that people are visiting more people than in the past. In 1991 when Bob Hawke and Brian Howe wanted to introduce a co-payment of $3.50 that was because people were visiting the doctor on average four times and as a I recall Mr Hawke or Mr Howe said then that was something that needed to be addressed. So if it was good enough for the Labor Party back in 1991, then surely it should be good enough today.
DAVID LIPSON: Kevin Andrews we’ll have to leave it there. Thanks for your time.
MINISTER ANDREWS: Thanks David.