Transcript by The Hon Christian Porter MP

ABC 720 interview with Jane Marwick

Program: ABC 720


JANE MARWICK: Minister for Social Services, Member for Pearce, Christian Porter – good afternoon.

MINISTER PORTER: Jane. Good to be here.

JANE MARWICK: We just had the “Reboot Your Life” promo there, people are giving up all sorts of things for Spring. How do you keep yourself fit and healthy and well with all the travel now over to Canberra?

MINISTER PORTER: I go running for stress reduction, which means I do a lot of running.

JANE MARWICK: Ever from journalists?

MINISTER PORTER: No, no, not usually.

Often they’re waiting at the end of the run, to sort of catch you when you’re looking your absolute worst.

JANE MARWICK: Yeah, to get you on the news. Look, a couple of issues before we get into your speech – Australian Priority Investment Approach to Welfare – that was the speech that you delivered to the National Press Club.

Couple of big issues today, the banking enquiry; Labor is still saying a Royal Commission is necessary, if you listen to what these bankers are saying, this is the very reason we need a Royal Commission.

What’s your response?

MINISTER PORTER: I spent many years as a prosecutor before politics, and something that springs immediately to my mind, I don’t know if you remember it, many West Australians would, but the Royal Commission into the Finance Brokers Scheme…


MINISTER PORTER: And I ended up with quite a few of the prosecutions at the end of the day. But the experience I had, and I think it was a bitter experience for the people involved, was they were expecting some kind of closure or outcome, and let me tell you, it went on for years. The people who had suffered at the hands of the finance brokers had briefs handed over to the police, briefs got handed up to the DPP and ultimately, my recollection is there wasn’t a single successful, ultimate prosecution of that.

No-one got a dollar back, and no-one got any sense of justice or satisfaction from eventual prosecutions in the courts.

My concern, and it’s a very close analogue to what we’re talking about now, is in the banking sector, albeit I’d suggest maybe under the finance broker scandals there were more silver bullets and stronger cases in fact there than there are here.

A Royal Commission is long, it’s expensive, it doesn’t get anyone a dollar a back. The chances of it resulting in successful prosecutions that haven’t already been able to manifest on the evidence, in my view, is very low based on what we’ve seen in similar circumstances.

I earnestly think from experience in this area, it is not the answer. We’ve done a lot of things, particularly with respect to ASIC, and strengthening it both in terms of its mandate but in the money that goes to it and that I think is a larger part of the solution here.

JANE MARWICK: One of the other issues, Minister Simon Birmingham has said that repair of the VET Fee Help system is impossible, so he announced yesterday that it’s to be axed. I think, the figures that I saw today, $325 million in 2012, $2.9 billion in 2015, the obvious question is why has it taken so long to address this vast overspend?

MINISTER PORTER: The nature of the problem. If you unlatch the gate a leave it open and the bulls get out into the paddock, that takes a matter of seconds, and getting them back in takes a lot of time and effort.

As you pointed out, our government has bought in 20 individual reforms to try and fix them structure that Labor created in 2012…

JANE MARWICK: But your government did sign off on it. The Coalition did agree with it in 2012.

MINISTER PORTER: The plan was Labor’s, the reason why this happens, the reason why we got diplomas for fashion styling, and advanced diplomas of therapeutic arts and counselling and diplomas of energy healing, for all your listeners out there, this is scandalous. The money went out the door as loans to students, that then went into the pockets of dodgy providers, they provided these ridiculous courses, more often than not they weren’t completed. So money went down the drain to the tune of, in the billions…

JANE MARWICK: Billions of dollars.

MINISTER PORTER: The reason that this happened is in 2012 the Labor Party made a critical error, and that was they de-linked diplomas of this nature to tertiary education. It had always been the case before that, that a certified diploma and these types of studies had to be able to be counted towards a university course ultimately, and that was what gave you the quality control. And as soon as that was de-linked you got all of these dodgy courses and dodgy providers, we did our best to fix it under the existing framework, but ultimately we accept we had to scrap it and start again.

And that means that every provider has to get re-register and go through another, and new, process and we start with a clean slate from scratch.

JANE MARWICK: Do you think though that it is a tremendous waste of money?

We’ve had all kinds of rorts; we’ve spoken to people who’ve signed up to dodgy colleges. There’s been a lot of heartache too, but do you think there are faults on both sides in passing those changes and not seeing the problems that could eventuate?

MINISTER PORTER: Well, if you create the system you are responsible for the creation of the system. And Labor created a terrible system here. We’ve been trying to fix it for a while, and ultimately we’ve had to scrap it.

Now some people may take the view that we should have scrapped it earlier – but we have tried very hard to fix up what was an ungodly mess that was left in 2012.

And I say that the fundamental problem is as soon as you de-linked these courses and the providers, the necessity that their course could be counted towards a university course, you, as I said, open the door and the bulls get out in the paddock and it was very hard to wrangle them back in.

JANE MARWICK: You delivered your speech, the Australian Priority Investment Approach to Welfare on the 20 September. Some people lauded it and said ‘what a breath of fresh air, finally someone addressing these issues’. Others have been deeply critical.

Let’s just look at some of the key questions in it, and I guess one of the one questions that I took away from it is, what is the purpose of welfare?

MINISTER PORTER: I think that’s the fundamental question. That was one of my starting points a year ago when I took on the job of Social Services Minister.

I don’t want to be over critical here, but my counterpart, the shadow minister Jenny Macklin, said the purpose of welfare is to keep people out of poverty. And I think that’s really illustrative and instructive, because of course that has to be a part of what the welfare system aims to achieve. But a more important part, and a primary part is that the welfare system has to not only be based around assistance, but also around aspiration.

The reason that you’re providing welfare is to, fundamentally over time, improve the life of the recipient. There will be people in the system for whom welfare will be received and there can never be a mutual obligation to search for and maintain employment. Say for instance, in areas of the Disability Support Pension, there’s not the capability of the recipient to the welfare to undertake and maintain employment.

But in a whole range of other areas, if we can transition people through the assistance of the welfare system out of the welfare system and into employment and self-reliance, that is the better measure of fundamentally improving the life of a person in the welfare system.

JANE MARWICK: You talk a lot in your speech about mutual obligation. To people who didn’t hear the speech, what are your ideas about mutual obligations? What does that mean to you?

MINISTER PORTER: People, again, talk about some kind of unfettered right to welfare. And that’s not a perfectly accurate depiction of what happens in the welfare system.

So if I use the example of a very successful recent policy, was the example of linking the requirement, the obligation, to vaccinate your child against smallpox and measles and other diseases, and you have to do that before you are able to get welfare subsidies in the form of childcare or indeed Family Tax Benefits.

Now the response to that has been overwhelmingly successful. So we dropped well below what the doctors call ‘herd immunity’, and we’re now bringing it right back up to that 95 per cent mark that keeps all of our children safe at childcare, in primary schools and so forth.

Now that proceeded as a policy on the principle that there’s no unfettered right to welfare. Welfare is a system of mutual obligations, so there’s one example. The primary mutual obligation in, or should be, in major parts of the welfare is the obligation to prepare for employment, to search for employment and then to accept fair and reasonable employment and maintain it and stay out of the system.

JANE MARWICK: How many people are long-term unemployed?

MINISTER PORTER: So there are about 770,000 people on the NewStart system. Depending on how you define unemployed long-term, a rough picture I can give your listeners is that about a third of those people move off quite quickly; about a third take a little bit longer to move off; and about a third end up in there for long periods of time, measuring in the years.

So of course, what you want to do is have a system where the design and the architecture and the rules around mutual obligations encourage that third that move off quickly, as a group of people to grow. And to move more people off into employment and self-reliance more quickly. But of course there are people who have personally individual barriers to employment, and they’re the sort of things we’re trying to address through our Try Test Learn Fund.

JANE MARWICK: Try Test Learn, we’ll get to that, and we’re going to take some calls – 1300 222 720 – we’re going to talk to Brian, he wants to talk about the NDIS. My guest in the studio is the Minister for Social Services, Member for Pearce, Christian Porter.

Just one more thing before we go to a break, you said 400,000 people with working age payments have no mutual obligation to search for work, what is a working age payment?

MINISTER PORTER: A working age payment is, as it sounds, it’s a payment that is applied to someone who is otherwise a capable Australian who is capable of work and inside working age.

So the pension is not a working age payment. NewStart is a working age payment, a single parent payment is a working age payment. We’ve identified over the last several years a group, not a huge group, but a group inside the Disability Support Pension who previously had no obligation to search for work, but we’ve identified that notwithstanding they have a disability, but there are abilities there and capabilities to do even modest amounts of work. So those sort of things we count as working age payments.

JANE MARWICK: Going to the phones now. Brian has been waiting very patiently. Brian good afternoon and welcome.

BRIAN: Thank you Jane, and good afternoon Minister.

MINISTER PORTER: Brian, how are you?

BRIAN: Well thanks. I follow the NDIS very, very closely, and quarterly reports. Now the last quarterly report comes out with the public stat that in operating expenses ratio is 24.7 per cent, which to my way of thinking is very high. Now $2.4 billion has been expended so far, and with a ratio of 24.7 per cent, I’ve been trying to ascertain what that amount is in dollar terms from the NDIS, and Julie Bishop is trying to intercede on my behalf. Now I haven’t been able to get that amount in dollar terms, and I was just wondering if you have a ballpark figure?

MINISTER PORTER: Well I’m glad to know that someone else out there is reading the quarterly reports of the NDIS Brian, so well done. I don’t have it in front of me, but that is a figure of 24.7 per cent of what, can I just ask?

BRIAN: Good question. That’s what I’ve been seeking the answer for.

MINISTER PORTER: I can have a look into that for you. There are quite technical definitions of accounting and actuarial analysis so maybe if I have a look at that for you Brian and we’ll get your details and I’ll try and find an answer.

JANE MARWICK: Thank you Brian for waiting so patiently.

Now, I’ve got a question from a student who wanted me to ask you this. How are we expected to do difficult degrees with $289 a fortnight, plus work at least a day a week. Now this student put it to me that it might be worth considering, and I know you’re doing Try Test and Learn, and we’ll talk about that, would it be worth looking at how difficult a degree is and making payments commensurate with that for instance?

Medical students will tell you that they have no time to do any part-time work. You’ve done a law degree…

MINISTER PORTER: I worked part-time.

JANE MARWICK: Yeah, but you might know that was more difficult than the Arts degree. Have you done an Arts degree?

MINISTER PORTER: I did an Arts degree. I think you’re on dangerous ground telling Arts students that they don’t do as much work as law students.

JANE MARWICK: I’ve done an Arts degree, I know…

MINISTER PORTER: I understand the point, but to be honest a law student or a medical student who says ‘I should get more under Austudy because I’m required to study harder than the person studying the degree in engineering or indeed someone at TAFE doing mechanics” – I must say I don’t buy into that.

I think that all degrees and tertiary qualifications have their demands. The Austudy amount is meant to be able to supplement you as an income support during that period. It’s not ungenerous, but of course it’s not overly generous as is often the case in the welfare system.

Going back to the earlier conversation, I think the real question here is, as Simon Birmingham the Education Minister has noted, that failures in 2012 to design the system of VET – Vocational Education and Employment Training – properly meant that you have all these diplomas of fashion styling.

Now the test around what you get Austudy for are not perfectly aligned with the tests around what you can get a VET loan for. So now that Simon has made these changes, the questions begs whether or not anyone who persists in doing their diploma in energy healing, should maybe be getting Austudy? Now that’s a valid question, I think, that arises now out of this next run of reform that Simon Birmingham…

JANE MARWICK: Didn’t he say it would be grandfathered until the end of 2017?

MINISTER PORTER: That’s correct, but of course it still raises the question that people who might not get a VET loan to do their diploma of energy healing, and still wish to persist with that degree, I think it raises the question whether that type of degree or diploma should attract Austudy. But that’s something that we’ll have to look into in terms of how we align post these reforms the Education Minister has brought in.

JANE MARWICK: I get the sense having listened to your speech and read through it again that you arrived in your portfolio, looked at it and went, no-one’s looked at this for a really long time, and you were going through it very methodically. Were there some things that truly surprised you when you looked at it?

MINISTER PORTER: There were, although to be fair to Kevin Andrews and Scott Morrison who held the position before me, the research that we did, the data analysis was basically started under their watches, and we spent $33 million putting this data system together so we can get a better understanding of what’s going on inside the system.

But yeah look, we had some instinctive understanding about intergenerational welfare, and how it was passed on by parents who are on welfare to their children. But when you look at some of the things that we’ve discovered through this data analysis, and I’ll give you one example for instance. We looked at a relatively small group of 4,370 young parents, so parents under 18, generally single, general of course mums so about 77 per cent of them were single. What this research showed us, using all of the data we’ve collected over the last 15 years and putting it through the same sort of actuarial analysis that insurance companies use, building a data platform we can predict that going forward for that group of 4,300-odd people – in each year over the next 70 years a minimum of 40 per cent of that 4,000-odd people will be in the welfare.

So what that indicates is that a minimum of 40 per cent of those, in effect, move from the single parent payment, to NewStart, to some other payment and then to the pension. And 12 per cent of that group will never leave the welfare system. So move continuously from the single parent payment to NewStart onto the pension and literally don’t experience all of the things that you and I and many people experience through work.

JANE MARWICK: So take aside how much that costs – how much does that cost? What were the projected costs of that?

MINISTER PORTER: I recall, I don’t want to give you, it’s in the billions. I think it’s about $2.4 billion, from recollection. But that’s the lifetime cost of that 4,370. But the point that we’ve been trying to make is that, the sustainability of the system in terms of the finances is important, but going back to your question about what is the welfare system for? The primary goal has to be to ensure that that 4,370 young mums effectively, lead a much better life than what we know will be the life they will have if nothing changes.

And so our Try Test Learn Fund is about $96 million where we go out to the non-government sector, not-for-profits, individuals who have experience in delivering services to this group on the ground and say well what do you say should be done in terms of service delivery and expenditure and extra focus on this group to ensure that we get much better results for them going forward? And that we have greater movement into the workforce, greater self-reliance, And ultimately the end goal is that we want as many of the 4,370 young mums out of the welfare system, in due course, as possible because whilst work is not the perfect proxy for the perfect life, it represents structure, self-worth, community contribution, dignity and ultimately the ability to build assets and wealth for yourself that make for much better lives than those where you’re simply on welfare from 18 or earlier through to your ultimate death on the pension.

JANE MARWICK: And this has been has been the argument from both sides of politics, I remember Julia Gillard talking about the value of work. She really talked a lot about the value of work.

Let’s go to the lines – Greg, hello.

GREG: Hello, how are you.

Ok, I’d like to know why, I have a 20 year old son who we tried to get him, he was quite ill during his school period, to get through year 12 because of his illness. And we went to Centrelink to try and get some assistance to get firstly some sort of financial help. That was a no-go because we earn too much money, that’s fine. I then tried to get them to assist us to get him work, and the excuse that was given to us was, he didn’t have year 12, so therefore they couldn’t help him.

I would like to know why we have a federal welfare system that doesn’t help? It doesn’t help at all. We found it quite obstructive, quite difficult for us to get any information as parents, I might add he doesn’t live with us, he lives independently, and that was another aspect I couldn’t understand either.

We have a child who is born in this country who has parents who have never-ever been on welfare who have paid their taxes, my whole family has and I have a system, a federal system that offers absolutely no help.

MINISTER PORTER: First of all, I’m sorry to hear that you encountered those difficult circumstances with your son’s illness, and not knowing all of the details it’s a little bit hard to comment in the perfectly specific.

But generally speaking, the way that the welfare system will operate is that if you are studying and you come from a family, or have an income that meets the requirements, and as you say these are income tested, like most welfare, than you will receive monetary assistance to study. If you are not studying and are of working age than you are in effect unemployed and you are able to, through the NewStart system, receive assistance. But I find it very surprising that, if your son was receiving youth allowance or NewStart, because they were of working aged and unemployed…

GREG: Can I just say something here?

JANE MARWICK: Go one Greg, go on.

GREG: I would just like to know why that youth allowance comes in only when you’re 22? That’s what we were told.

JANE MARWICK: A lot of people have asked that, yeah.

GREG: Financial assistance until he was 22. Now, who came up with that number?

JANE MARWICK: Ok Greg, I’ll let the Minister answer

MINISTER PORTER: Again, what we’re trying to do through the welfare system is ensure that people either in work, or preparing for work and so the assistance is either directed towards your study or preparation for work or its assisted if that the age, and some age had to be chosen for youth allowance for instance. If you’re of that age than you’re looking for work, and if you can’t find work you get monetary assistance whilst you’re in the preparation and search period.

So, I think perhaps what might be, I’m very happy to try and get as much actual detail. It’s very difficult in a complicated system to comment without knowing the detail, I’m very happy to get that detail off air and look into this individual matter for your Greg, specifically.

JANE MARWICK: And we have Greg’s number, so Greg rest assured we’ll pass that on to the Minister. And a lot of people are asking questions, and other emails says my son’s 21, he doesn’t live with me at home, he’s trying to get a job, he has done some study he’s not eligible for support because of my wage, which is just a small public service wage, Centrelink calculated he’d receive $20 a week, so I’m the one supporting him.

MINISTER PORTER: You have to have income and assets test inside a welfare system because it is always a system that allocates necessarily limited funds, and for every person who comes from a family that is of means of one type there will be a person who comes from a family who’s needs are greater, and that is just a simple matter that it has always been the case, whether it is a Liberal or a Labor government, whatever, that there have been income and assets tests around welfare payments.

JANE MARWICK: At 21, he’s an adult isn’t he?

MINISTER PORTER: Well yes, however there are measurements about the type of support that needs to come from families. And the reality is that the first call for support is usually by children upon their families, or even young adults upon their families.

Now what’s being suggested is that if a family has the means to support their child during that period would prefer not to and would prefer the taxpayer to do it, than that’s just an easy choice to make, but it’s not, and that’s why these rules have been in place for many, many years to try and make sure that welfare is a system of resort to those who have the greatest need.

JANE MARWICK: Grace is in Applecross- hello Grace.

GRACE: Hi folks.

My point is in support of medical students. Like the Minister, I’ve done a law degree and there is no comparison between the workload on law students and the workload on medical students…

JANE MARWICK: I reckon you’ve raised…that’s where I was trying to go with that Grace. I hear that a lot.

GRACE: My workload was contact hours 13. Thirteen hours a week when I did my law degree, and then I would do study on top of that. But medical students that I lived with at college, that were doing 40 hours of contact every week and having to study on top of that, and they were studying until midnight every day. It was a very heavy load and I just don’t think it’s fair for those of us who’ve done the law degree, like Minister Porter, to make assumptions about medicine students.

JANE MARWICK: Well I don’t know, in defence Grace before I take you back to the Minister, I don’t know that the Minister’s made assumptions, and it’s a system that’s been in place for a long time. But because everything is being reviewed, it was my question initially Grace, I just wondered whether or not there are special cases. Minister you can respond to that.

MINISTER PORTER: I mean obviously for people who’ve had experience inside tertiary education, contact hours differ quite variably between degrees and it’s often the case, for instance, science degrees with high requirements to be in labs that their contact hours are not at all dissimilar to the type of contact hours you have in a medical degree, and indeed engineering is quite similar.

So it does depend on the degree, the number of contact hours. But often high level tertiary degrees with somewhat lower contact hours have a very large expectation for reading hours outside.

Look, I think that it is a very difficult thing to grade levels of Austudy based on perceptions of how hard students in different, but all of them equally difficult, courses are working.

JANE MARWICK: Slippery slope I can see there.

Samantha from Clarkson, hello.

SAMANTHA: Hi Jane, how are you going?

JANE MARWICK: Well thanks, you’re on the line to the Minister, off you go.

SAMANTHA: I’d just like have you clarify, my daughter finished year 12 this year and has gone on to university. She’s not eligible for any support from the government while she studies, and we also no longer receive any family allowance for her. How is that actually fair, if they’re still students and there’s no support given to them as students by the government, that the parents are expected to support them, but we don’t get any assistance either?

MINISTER PORTER: Well you know it depends on family income. So there are income tests around, family income tests around, payments like Austudy, so it would be dependent on family income.

The fact that a family has lost a Family Tax Benefit is simply because, as you note, the child would turn a certain age – in this case 18 – the Family Tax Benefit is for the raising of children. The frank answer to your question is that it sounds like your family income is above the income test that’s applicable to trigger Austudy.

JANE MARWICK: Samantha – thank you.

I’m just going to get Danny and Kath questions to air.

Danny, good afternoon and welcome.

DANNY: G’day, thank you for taking my call Minister.

My question is, firstly I’d like to thank the Minister taking his actions on trying to sort it out, but I would like to know, as they are tinkering with the social services benefits to certain people in the society, what is the view of the Minister for the benefits that Ministers and ex-ministers are getting? Are they going to be looking in to cutting that or is that not going to be talked about?

JANE MARWICK: So politicians entitlements – ok Minister, answer away.

MINISTER PORTER: So, there was an undertaking from Tony Abbott when he was Prime Minister to have a root and branch review about the way that work-related expenses for Members of Parliament are treated and calculated, and the rules around them.

I understand that the changes that were subsequent to that review will be coming later this year. But look there are requirements for everyone to act reasonably in circumstances. Whether or not you’re receiving something because you’re unemployed, or whether or not you’re receiving a work related expense because you’re a civil servant, or because you’re a Member for Parliament.

But there have been a lot of changes in this area, and a lot of people out there still think there’s some pension scheme for politicians – there’s not. That went a long time ago so new entrants to Parliament, like myself, certainly don’t have any access to anything like that.

These things like the Gold Card travel, gone. And so it should’ve gone; it was a relic.

So there have been a lot of changes in that regard. Certainly the emails that I’ve seen doing the rounds criticising work-related expense of politicians, often get things quite wrong about what’s still available and what’s been gotten rid of, if I can put it that way.

JANE MARWICK: Alright, and just very, very quickly because we are right out of time Kath is Maidavale, hello Kath.

KATH: Hello, thanks for taking my call.

I just want to make a very quick point. The common denominator between last people’s points where they were talking about children that live out of the home; the fact that the means test and the child is above the age of 18…having gone through that myself, if I could’ve bought that child back into the home, I could’ve been able to support it much better without the financial strain that it cost. But because of the situation where the child didn’t want to come back to the house, and because of the age of 18 I could not force them, so I was trying to sustain them, and sustain the rest of the family on a very stretched budget, but no influence into what the child was doing because they were over 18, and I think that’s where some of the public frustration comes because there’s a gap there that nobody seems to be able to fill in the social services role.

JANE MARWICK: Thanks Kath. Minister, will we take that as a comment? Do you want to comment on what Kath had to say?

MINISTER PORTER: It’s turned into a bit of a Centrelink hotline today.

JANE MARWICK: It has indeed.

MINISTER PORTER: Look, I mean I understand the issue, but obviously the flipside to that is, whilst we’re trying to make sure that we have reasonable monies available to fund things like the NDIS, we’re talking about whether or not we should be effectively underwriting a decision to live or not live at home for a 19 year old. And of course that ultimately becomes a question of priorities.

But I would just say that these rules around students and family asset and income test for students have been in place for a very long period of time, and every government has maintained them.

JANE MARWICK: And I think one of the interesting things that was in your speech was that today we spend $160 billion a year on welfare, that’s 80 per cent of all income tax.

MINISTER PORTER: Correct, and that’s growing at six per cent.

We need to make sure that what we’re not doing here is allowing that growth to be so large that we’re borrowing to fund it, because all that means is that the next generation of young people who become taxpayers, are going to end up having to pay for the welfare system of their time and all the money we’re borrowing now, I mean it all has to be paid back by the next generation at high taxes.

So if we’re more and more generous now, that simply means that we’re pushing the can down the road for the next generation to pay for their welfare system AND for ours today, and that is not fair.

JANE MARWICK: So many more things to talk about, but we’re way out of time.

I just want to say, because I hear from you all the time – the self-employed.

The self-employed say small business has got a lobby group, other people have got their own lobby groups, the public sectors got a lobby group – we, self-employed people, we just look after ourselves – a word for the self-employed?

MINISTER PORTER: We obviously value your enormous contribution.

And when we have this fairness debate around welfare, of course self-employed and personal income tax earners, they are paying a lot of tax to make sure that we can maintain a generous and fair welfare system, so well done and thanks.

JANE MARWICK: Christian Porter, thank you for your time.

MINISTER PORTER: Thank you very much Jane, cheers.