ABC RN Breakfast
E&OE
FRAN KELLY:
Minister, Good Morning.
MINISTER MORRISON:
Good Morning Fran.
KELLY:
So, are you planning to tighten the pension assets test?
MINISTER MORRISON:
Well we still haven’t had our final Cabinet meeting as yet, so I think that’s all a bit premature, but there’s been no secret about the fact that we’ve been in a conversation now for some months, which has been widely reported on, where I said clearly that the Government is not going to walk away from the fiscal challenge that we have, and there were measures that were in the Senate last year relating to the indexation of the pension which would have impacted on around four million Australians who were either on the pension or on pension linked payments. We’ve been in discussions with crossbenchers, stakeholders and others where alternatives which involves the eligibility to the pension, have been widely canvassed. So I don’t think there’s anything greatly surprising about the further reporting today, I mean those conversations have been taking place and were looking to ensure the pension is sustainable, that it lives on and that we address the fiscal challenge the country has. But at the end of the day the welfare system is there for people most in need, it’s there as a safety net, it’s not there as an incentive system; that’s what the tax system is for. It’s the Labor Party who wants to tax superannuation, not the Liberal Party, particularly the incomes of superannuants and I think that’s a fairly stark contrast that’s emerging.
KELLY:
Ok, so is it fair to say that you believe the current threshold, which is $1.15 million for couples, $775,500 for singles in terms of assets and eligibility cut off points for the pension, that that is too high? Can you tell us that?
MINISTER MORRISON:
Well changes were made back in 2007 when there was some $20 billion surplus, $40 billion in the bank, which halved the taper rates. So these things are fairly new to the system in terms of its longevity and the proposal was put forward by Nick Xenophon actually that there needed to be consideration of that as an alternative. But one alternative that we’re not considering is doing nothing, Fran. I mean the Labor Party thinks they can do nothing to ensure the sustainability of the age pension, in fact they don’t think there’s a problem that it’s growing at over six per cent a year and its $42 billion dollars and it’s going to grow to over $60 billion in the next ten years. We’re not going to walk away from that challenge but we’re going to do it in a way that’s fair, which is consultative and which is reasonable and which is measured.
KELLY:
And if you do change the assets test and I’m assuming you are going to, if just from reading between the lines of what you’re saying does mean all those people would also lose access to the Seniors Health Card?
MINISTER MORRISON:
No, I think in those scenarios and the discussions that are there, that the Government has no contemplation of anything that would see those who might otherwise be available for the Commonwealth Seniors Health Card to maintain that eligibility, which is important.
KELLY:
So they might lose the part pension but they stay with the health card?
MINISTER MORRISON:
Well that’s – I’ll let others speculate on these things. But in terms of the Commonwealth Seniors Health Card that has been an important part of supporting superannuants who have worked hard and saved for their own retirement. I think this is where the real distinction is, if we’re going to look at eligibility of the pension one thing that I don’t think you can fairly do is then take the sledge hammer to superannuants incomes which is what the Labor Party is proposing to do. That’s why we take great objection with the way that Chris Bowen has not only done that but decided to get into ordinary Australians who are using negative gearing to provide for their retirement incomes. I mean these are people working, investing, providing for their own future and Labor seems to think they’re the problem.
KELLY:
What about that other proposal you’ve talked about previously on this programme and other places when you said I think the current system has actually had some pretty severe penalties for people who might want to sell their family home and support themselves as they grow older. What plan have you come up with there, because if you do sell your home and you bank those assets and you do reduce the assets test for the eligibility for the pension then people will be hit by that, won’t they?
MINISTER MORRISON:
Well those on lower incomes and particularly on pension incomes are already in a position that were they to sell their family home and downsize then they could invest the proceeds in the difference of that and still be able to effectively draw down tax free income. So what you’re talking about there really relates to those on much higher incomes and I think that’s still a matter that needs to be considered in the context of a housing affordability plan and they’re really matters for the Treasurer, I don’t propose to traverse over those this morning. One thing I can assure you though is there is absolutely no, as I’ve assured you once before, the family home will not be in the assets test. The sorts of things that have been talked about now for months are about assets in addition to the family home as you rightly say the changes that were introduced in 2007 mean that today you can be a couple, you can have assets of over $1.15 million dollars and the family home and get a part pension.
KELLY:
And you don’t think that’s fair?
MINISTER MORRISON:
Well I’m just saying that’s a fact, and that was the result of effectively the changes that occurred back in 2007 and that’s what the implication of those changes are today. Now the Budget situation today is extremely different to what it was in 2007, thanks to the Labor Party, we no longer have a $20 billion surplus and we no longer have $40 billion in the bank.
KELLY:
Ok, the other implication, clear implication, of what you’re telling us today is the Government is planning to drop the plan announced in the last Budget to change the indexation plans for pensioners, to index the pension to CPI, that’s now gone?
MINISTER MORRISON:
Again, that’s been part of the conversation now for months and the Budget isn’t far away Fran, I’m not proposing to make any announcements on that today. Others are speculating, but the point here has been that something doesn’t come off the table unless something goes on. The government is not walking away from the fiscal challenge that we have we are leaning forward into this task continually, and we have got a credible path back to surplus. It’s going to take some time obviously, we all understand that because of the broader challenges that are there. But we’re committed to that, the Labor Party don’t believe they need to do anything in this area and that will just see prices and costs just continue to rise for the taxpayer. Eight out of ten income taxpayers go to work every single day and that’s necessary to pay the welfare bill of $150 billion in this country, we need to get it under control…
KELLY:
But Minister, it does seem to show that since you’ve come into this portfolio and had these conversations with the stakeholders, you’ve come to the conclusion that the plans to change the indexation rules for pensioners, to index pensions to CPI, is less fair then tightening the assets test. Is that – can I say that?
MINISTER MORRISON:
No I don’t think – what it think you can say Fran is we have worked through these conversations, the reason we’re having these conversations is because in the first place the Labor Party blocked billions of dollars in savings measures not just in this area but many other areas…
KELLY:
Minister, with respect, the reason we’re having this conversation is because the last Budget the Government changed the indexation rules for pensions or proposed to from 2017 after it promised it wouldn’t and there’s been an outcry about that.
MINISTER MORRISON:
Well Fran, first of all the promise related to no changes to pensions or superannuation in this term of Parliament and there has been no proposal to change anything in this term of Parliament, that’s what the promise was…
KELLY:
No, I’m talking about pensions.
MINISTER MORRISON:
…and the same on pensions. That was the promise in relation to pensions and that promise has been kept and will be kept. But on the issue of why we’re having this conversation the measures didn’t pass the Senate and so the Government is in a position where it has to look at measures and savings that it can more, potentially, successfully get measures through the Senate. That’s why I’ve been in conversations with stakeholders and that’s why I’ve been talking to crossbenchers and I’ve found those engagements very, very constructive. We’re working our way through this issue Fran, as I think Australians expect us to do. Yes, we’ve got a difficult job in the Senate, we all understand that, but that’s just something you have to address in a professional and constructive way.
KELLY:
And just finally Minister, on that topic about your difficult job in the Senate, because you will be required to get some of these changes through the Senate and changes to fund your childcare package too, which we haven’t even got to this morning. But the Coalition seems to have recovered somewhat in the latest Newspoll. It shows you within striking distance of Labor 52-48 two party preferred. Tony Abbott’s approval rating seems to have come up a bit too. On the weekend Laurie Oakes suggested there’s been some serious conversations about going to an early election, is it tempting?
MINISTER MORRISON:
I dismiss all that speculation but I think there definitely has been a strong improvement in the Government’s position since February of this year, and particularly for the Prime Minister. I think the real worry here is that in the Labor Party Bill Shorten has just been tanking and as he goes into a national conference where he’s facing all sorts or internal dramas I think the pressure is now very much on the Leader of the Opposition. He’s the one…
KELLY:
So that must make an early election tempting?
MINISTER MORRISON:
Well no, we were elected to go for 3 years Fran. We’ve got a lot of work to do, a lot more work to do. We came along way in our first Budget, we have got further distance to travel in this one and we have got measures to implement over the next 18 months or so. We’re getting on with the job of good government. I think that’s why you’ve seen the turnaround in the position where we’ve clearly been able to make I think some gains but just getting good initiatives. I mean on the weekend we announced the continuation of funding for universal access to preschool education, now that was an important measure; it wasn’t funded by the previous government on an ongoing way in the same way that their National Partnership Agreement on Homelessness wasn’t funded. Now we’ve had to make those investments but to do that we have had to make sure we make the savings in other places so we can afford it. We just don’t shovel money out the door Fran under this Government, like the previous one did, if we’re making investments then we make savings.
KELLY:
Scott Morrison thank you very much for joining us.
MINISTER MORRISON:
Thanks very much Fran.