ABC AM Agenda
E&OE
MICHAEL BRISSENDEN: Scott Morrison is the Social Services Minister and he joins me now. Scott Morrison, this is your second attempt at reforming pensions – what are the changes and is this one going to fly?
MINISTER MORRISON: Well, you’ve outlined the changes well, Michael. This is about ensuring the pension has fairer access and a more sustainable future for the pension. And that is being done by increasing the amount of assets someone can have at the lower level which will mean 170,000 pensioners will have a higher pension of around $30 a fortnight and that includes 50,000 pensioners who will go onto a full pension. At the other end though, we currently have the system where you can own your family home as a couple and have more than $1 million in assets and still draw down on a part pension. Now, that will cease in January of 2017 when these come into effect, so there’ll be no changes to pension in this term of Parliament. And that will mean that those over $823,000 who are couples and own their own home, they will not get a part pension anymore and there are coinciding changes for the other non-homeowners or singles and couples as well.
BRISSENDEN: So, you’re effectively determining that someone who owns their own home and has investments of more than $823,000 – that you’re effectively saying that they’re pretty wealthy?
MINISTER MORRISON: Well, they’re a self-funded retiree over that level and fully self-funding retirees at that level and we want to encourage people to be self-funding retirees and we want to do that through the tax system not through the pension system. Labor wants to tax people on their superannuation. We don’t want to do that. They want to get rid of negative gearing incentives for people who are providing for their future. We don’t want to do that. We want to encourage people to be self-sufficient, but we want the welfare system to the focused on those in greatest need and in the pension system that’s with those with low or modest assets.
BRISSENDEN: Ok, this hasn’t really addressed the problem of the pension burden growing over time as effectively as changing the indexation measures though, has it?
MINISTER MORRISON: Well, it’s $2.5 billion in saving over the budget and forward estimates which is actually greater than the savings that we are having on the other measure. Over the longer term – you’re right – it doesn’t hit the same mark but this is a compromise, this is something we’ve been working on now for some time with crossbenchers and with stakeholders and trying to come up with a fairer, more sustainable pension for the future and we believe we’ve done that. That doesn’t mean they’re all winners and that there are no losers – that’s not the case. With any difficult change, you’ve got to make these hard decisions and this is what the Government is doing.
BRISSENDEN: Of course, you were forced to drag to the compromise by the refusal of the Senate to pass this is last year’s budget. The lesson from that surely is that you failed to bring the Senate and arguably the broader public with you – do you think you’ve done that this time?
MINISTER MORRISON: What we’re doing is listening and consulting with the sector and with the crossbenchers to come up with a new way forward. What we’re not doing though is just downing tools and walking away from the fiscal task as we discussed earlier in the week. Now, Labor’s plan is just to walk away and do nothing. They don’t think there is a budget issue to be addressed in the country and to the extent they do, they think they should tax superannuants more. Well, we don’t agree with that approach.
BRISSENDEN: But have you had any discussions with the crossbench? I note this morning that Richard Di Natale says that he’s open to talk – do you think a new Greens leadership might change things?
MINISTER MORRISON: What we’re effectively doing here with this change is reversing a measure that was put in place in late 2007 by the Howard/Costello government, which changed the $3 taper rate as it’s known to a $1.50 taper rate and we’re just reversing that change. Now, when that was done back in 2007, the Greens actually opposed what was changed. So, I would think to be consistent that they would be supporting a measure like this one. But I haven’t had any discussions with the Greens on this. I’ve been talking to other crossbench senators and I’ve found those discussions very encouraging.
BRISSENDEN: So, you think you do have the support for this then?
MINISTER MORRISON: I don’t count any votes in the Senate until they’re actually voted on, but I think this is a sensible, common sense, modest measure which deals with having fairer access to a more sustainable pension – and that’s what we’re trying to do.
BRISSENDEN: How did it happen that people on defined benefit Commonwealth super schemes, some taking home as much as $120,000 a year were also able to claim part pensions?
MINISTER MORRISON: What they have been doing, there are around 48,000 people in this category and I should stress this isn’t in retail type funds AMP, AXA, that sort of thing or in some smaller APRA funds. This is in the larger usually state based fund and in big corporate funds as well. And what they are able to do is reduce the amount of income that is assessed for the pensions test under the income test because they’re claiming that a portion of what they’re receiving in income is basically just drawing down on their contributions made while they’re in employment. Now, that’s not how those schemes worked. Now, we’re going to close that loophole and that will deliver some $470 million for the budget over the forward estimates as well.
BRISSENDEN: Ok. On the budget more broadly, obviously this is going to be an incredibly important budget for your Government. More particularly I would imagine for Joe Hockey. I assume you’ve seen the column by Nikki Savva in The Australian this morning where she writes that Scott Buchholz was compelled to deliver a message to Tony Abbott from the colleagues that if the budget tanks Joe Hockey would have to go?
MINISTER MORRISON: I don’t get engaged with any of that sort of scuttlebutt and nonsense. I’m not focused on that and frankly the Government isn’t either. Every budget’s important, Michael. Every single budget’s important and under Labor we had budgets that basically were the equivalent of fiscal arson.
BRISSENDEN: You haven’t got much political capital left though after the last one, do you?
MINISTER MORRISON: Last year’s budget was a tough budget, but what it did do is it halved the trajectory of Labor’s debt over the next 30-40 years and that’s been an important start and there’s a lot more work to do and that’s what we’re focused on. I’ll let others focus on scuttlebutt and gossip but I’m sure on the premium current affairs radio programmes such as yours, Michael, you wouldn’t indulge that sort of stuff.
BRISSENDEN: Ok, Scott Morrison, thank you very much for joining us.
MINISTER MORRISON: Thanks, Michael.
(ENDS)