ABC AM Programme
E&OE
MICHAEL BRISSENDEN:
Minister Morrison, welcome to the programme.
MINISTER MORRISON:
Good morning, Michael.
BRISSENDEN:
So, you’ve dumped plans to adjust the indexation of pensions and instead will bring in a tighter assets test. At the moment, a couple with $1.15 million in assets can still claim the pension. Where will the new threshold sit?
MINISTER MORRISON:
Well, these are still speculative reports and the Budget’s, as you say, just a week away and all of these matters will be made clear by the time of the Budget. What’s important, though, is that we’ve been in discussion now for months and months and I’ve said all along that if a measure was to come off the table like CPI indexation for the pension then new measures would have to go on and they’re exactly the discussions we’ve been in and the issues of eligibility have been widely canvassed with stakeholders, including with my own backbench colleagues and the crossbenchers as well and I think that has been a very constructive and engaging process. So, it is true to say that following the changes to the pension taper rates in 2007 when there was a $20 billion surplus and $40 billion in the bank, that they were changed and halved and that added to the cost of the pension by about $1 billion a year. So, these are measures that have been part of those discussions, but we will make further announcements on those when the matters have been finalised.
BRISSENDEN:
Ok, but broadly, where do you think the threshold should sit? Do you think it’s about right or are there going to be some big changes?
MINISTER MORRISON:
If you are not going to make changes to the indexation arrangements, some four million Australians are affected by the indexation of pensions and if you’re going to not proceed with that, then obviously you need to go forward with something. The Government is leaning forward into the task of the Budget just as we always have been. You face different headwinds on that task from time to time, they can present in the Senate, they can present in the iron ore price, they can present in any other numbers of ways, but we still need to lean forward and that’s why, whether it’s on childcare whether we want to invest more, we are going to offset that with savings and if we are considering taking off measures that were in last year’s Budget, then we will replace them with new measures. Now, the Opposition aren’t proposing to do that, they’re just proposing to spend more and tax more. They want to tax superannuants more on the income they earn.
BRISSENDEN:
Well that’s almost an assets test in itself in a way isn’t it?
MINISTER MORRISON:
Well no it’s not, Michael, and I think this is a clear difference. We don’t think someone holding…
BRISSENDEN:
But it’s targeting wealthy Australians and getting them to pay more tax.
MINISTER MORRISON:
…on to their own money that they have earned is the same as saying to someone well, government payments of the pension which is for a safety net, that’s equivalent. I don’t think it is equivalent. A welfare payment…
BRISSENDEN:
But that’s just asking wealthier people to contribute more.
MINISTER MORRISON:
No, but a welfare payment is not the same as taxing people more. They’re not the same thing and I think this is a big demarcation in this debate. The Government can’t run around and the Opposition can’t run around thinking they have some entitlement to money that people have earned. I mean, tax is something that people pay as part of a society and it’s been around a long time, but payments are made under the welfare system to support people in genuine need. The welfare system is not an incentive system, it’s a safety net system, and I don’t think we should confuse the two, but the Labor Party clearly do.
BRISSENDEN:
Ok. Well look, we don’t want to get bogged down in the superannuation discussion again. Childcare for instance is another area that’s in the news this morning. Now, a combined income of over $160,000 you’re proposing, according to these reports, that you’ll still get a 50 per cent rebate. Now, I’d suggest that’s pretty generous.
MINISTER MORRISON:
What this measure will be about when it’s announced – and again, these are more speculative reports – is it’s about workforce participation. I’ve always said that…
BRISSENDEN:
But we know speculative reports that come out a week before the Budget are true. They’re pretty accurate.
MINISTER MORRISON:
…the measure of these policies that we’re doing in childcare is about workforce participation. We don’t consider it a welfare payment. We consider it an employment participation payment and therefore I think there’s a very different test. Now, the Productivity Commission, when they put forward their recommendations, they were constrained because they were trying to keep it within a particular budget envelope. Now, we’re saying we’re prepared to invest more in this area for workforce outcomes, participation outcomes, economic growth outcomes and to do that we’ve got offsetting savings which we have had on the table for some time. Now, the Opposition aren’t interested again in making savings, they’re only interested in putting up new taxes, and I think again that draws the distinction between the Opposition and the Government.
BRISSENDEN:
Ok. Will anyone who’s receiving the childcare rebate at the moment be worse off?
MINISTER MORRISON:
Well, again, the measure hasn’t been announced yet, Michael, it’s not far away, but what we are focussing on is ensuring that people can stay in work, be in work, get in work. That’s why we’re doing this. This is not an income support payment, it’s not a pension, it’s not welfare, it’s about making sure that families can stay in work so they can have the choices that they want for their families.
BRISSENDEN:
Ok. It’s all contingent on getting other savings measures through the Senate, isn’t it?
MINISTER MORRISON:
Correct.
BRISSENDEN:
These measures have already been rejected. What makes you think you can get them through now?
MINISTER MORRISON:
I think what we’re proposing is a strong investment in workforce participation for families which gives families choices and we’re not saying that the taxpayer should have to pay more for that, we’re just saying…
BRISSENDEN:
No, I understand.
MINISTER MORRISON:
…and that is our argument and I think that is a convincing argument and it’s an argument I’m prepared to have and a position I’m prepared to put forward as is the Government. So, the Government has to wash its face with its expenditure. You just can’t go around spending more and not having offsetting savings and that’s the discipline that we have in this Budget and that’s why I say very strongly we are continuing to lean forward into the Budget task.
BRISSENDEN:
Ok. This comes at a time when obviously everyone’s barking about the need to find savings. Deloitte yesterday predicting the Budget deficit next year would be around $45 billion, deficits as far as the eye can see. Has the body politic failed, as Chris Richardson suggests?
MINISTER MORRISON:
You have to deal with the situation that’s in front of you, whether it’s the iron ore price or the Senate or any of these things. They’re not complaints, they’re just facts and you have to deal with them, but what you can deal with is how much you’re spending and how much you can continue to constrain expenditure. Now, in Social Services, what we’re seeking to do is ensure we spend the money better. There is some growth that is built into the forward estimates by weight of population and things of that nature and that’s just a fact. So, it means we need to constrain eligibility where we can and we need to make better investments where we can for better outcomes. $150 billion a year is a lot of money to be spending in the welfare area. That’s eight out of 10 income taxpayers required to pay that in income tax to support that level of expenditure and we need to spend it better and that’s what we’re proposing to do in this Budget.
BRISSENDEN:
Ok. Scott Morrison, thanks very much for joining us.
MINISTER MORRISON:
Thanks a lot, Michael.