2GB Breakfast Show with Alan Jones
Subjects: Priority Invest Approach
ALAN JONES: Christian Porter, good morning.
MINISTER PORTER: Good morning Alan, how are you?
ALAN JONES: An outstanding, absolutely outstanding speech, but of course it disappears into the ether after a couple of days. We could talk for hours.
I just thought – I mean there are many things I would like to talk to you about – but I just thought we’d address this morning, and hope we can talk again, some of the theoretical points that you made in the speech.
One of the problems, and you stated – and it needs to be stated over and over again, and I quote your words – Labor has embedded future structural spending, which was substantially in excess of realistically deliverable revenue. That’s a big problem isn’t it? The mining tax – they spent billions of dollars before they got one cent from the mining tax.
MINISTER PORTER: Well, indeed – in fact they allocated for things like the Schoolkids bonus, which was simply an add-on welfare payment on top of the system, and of course we came to government saying that was unaffordable. They criticised us for saying it was unaffordable for two years and then when push came to shove, agreed with us that it was unaffordable.
So, look I think even they, at certain edges, deal in the world rationality and limited resources, which is where we actually are in Australia.
But it has been a very difficult process – and the report that we put out two weeks ago, there’s something I think which is very clear and based on common sense which is when you have limited resources, and there are financial strains in the system, you have to make sure you get the best value from every single dollar of welfare that’s transmitted from taxpayers to recipients.
ALAN JONES: There are people listening to you who are working, and working people pay income, that’s why it’s income tax, it’s a tax on their income, and you made the point. So we raise $196 billion, and there are people jumpy and angry about that, they say you’ve got your hand in our pocket and it’s too much, and yet you made the clear point, which I’ve made many times, but 80 per cent of that goes straight to welfare – $160 billion a year.
And you made the point, so without doing something, that bill will go from $160 billion in 10 years to $277 billion.
MINISTER PORTER: Indeed, and I think one of the other points we made two weeks ago was that when Labor first embedded a whole range of spending that was unfunded into the Australian Budget, they’d reached the point where they were spending more than 100 per cent of the total income tax take into the welfare system, and that was clearly not sustainable.
ALAN JONES: So the growth rate of the welfare spend was double the growth rate of revenue?
MINISTER PORTER: In essence, yes. So when people talk about the welfare spend now, the budget is $160 billion, and that’s growing at around about 6 per cent a year, with all of the very difficult decisions the Government’s had to make to try and have the system become sustainable.
ALAN JONES: You made the point, a lot of this is being paid with borrowed money. So I keep saying, the interest is about $40 million a day.
Now you made the point, which is terrifying, but to mums and dads out there, Christian Porter said this – the way we’re going our children, these are his words, will quote ‘pay for the welfare system of their own time in the future and retrospectively pay for the welfare system of our time’ – how fair is this?
MINISTER PORTER: That is the single great unfairness inside this fairness debate, and of course we’ve had this fairness debate for three years, and we as the government have maintained that it’s fair to get ourselves back into surplus, because that’s the only way you guarantee you’re not borrowing money that has to be paid back by future generations to meet your costs today.
Unfortunately that’s the situation that we inherited in 2013, and we’re working very hard to get out of. It also means you have to be utterly efficient with every dollar that you spend…
ALAN JONES: Well that’s the point that you made. Then the next point is, when you said – more spending is no guarantee that key groups have had their lives improved in any material ongoing or significant way. And there are too many instances where spending is failing to produce substantial improvement to Australian lives. Money down the drain.
MINISTER PORTER: Well, money not spent as well as should be. So the report that we generated is based on $33 million we’ve spent on developing a data system, which for the first time ever will really tell us what’s going on inside the welfare system.
I’ll just use one example Alan, we’ve identified 4,370 young parents under 18 and inside that group, a minimum of 40 per cent of those 4000-odd people will be inside the welfare system in any given year over the next 70 years.
So, that is a remarkable failure…
ALAN JONES: Just saying that again – 4,370 young parents. Can you believe this, in the welfare system getting parental payment…
MINISTER PORTER: 40 per cent of them will be in the system each year for the next 70 years.
ALAN JONES: never mind about that – 77 per cent of them are single?
MINISTER PORTER: Correct.
ALAN JONES: What? And then you say, 1,580 continuously you’ve predicted will continuously receive parenting payment for 13 years, all have at least two children, two thirds have four children or more. Don’t we just say, look you can have one child if you’re on welfare, but after that you’re on your own?
MINISTER PORTER: Well I don’t know whether that’s precisely the answer…
ALAN JONES: But why shouldn’t it be the answer? Why do people have children knowing that some poor coot out there’s going to pick up the tab?
MINISTER PORTER: Well I think what we have to do here is look at ways in which you have transitioning of parents back in to the workforce and the difficulty that we have is that there are too many people inside the system who aren’t subject to proper or appropriate mutual obligations…
ALAN JONES: I want to come back to my point Christian, come on, you’re a toughy, I want to come back to my point, if you have a child on welfare that’s fine, we pick up that tab. But you’re on welfare, you can’t afford children.
So why then do we say, oh well have two, three, four, five, six, seven of them by four different fathers and the tax payer will keep providing you with a parenting payment.
Seventy-seven per cent of these people, 4,370 young parents according to your speech, 77 per cent of them are single.
The tax payer listening to you says, well hang on, I’m prepared to say you made a mistake, you’ve had a child, you can’t afford the child, but if you keep on having them I’m not prepared to put my hand in my pocket for you.
MINISTER PORTER: Well and, when you look at this group which we have been in great detail, 80 per cent of these 4370 in this under 18 category of parenthood themselves had a parent who was drawing the same welfare payment during their own upbringing.
I don’t think the answer is, as you suggest, because the interest of the children have to be held firmly in mind, but of course what we have to do is…
ALAN JONES: But they’ll keep having children Christian if they know there’s money. John Howard gave them $5000 for having a children, I couldn’t believe it.
MINISTER PORTER: Yes, I recall that. But one of the things that you can do inside the system is ensure that there are appropriate mutual obligations, so that it’s not an endless option, and that at some point there’s a reasonable requirement that capable people return to the workforce, and prepare for it.
ALAN JONES: I agree, but your speech said, young people enter the welfare system and remain inside it for their entire lives, recipients can receive more in welfare, I mean there will be people mutinying this morning listening to this. Recipients can receive more in welfare than the minimum wage without being subject to ongoing obligations to become work ready.
MINISTER PORTER: Indeed, so we found, we have a very complicated system, I mean we’ve got 16 different types of working age payments, if you can believe that – 16. And for each of those different working age payments, attach a range of different rules, access requirements and criteria and what they call ‘income free areas’- the amount you can earn before you lose a dollar of welfare – and what they call taper rates. It’s immensely complicated.
Inside that system…
ALAN JONES: The politicians made it complicated – you lot made it complicated.
MINISTER PORTER: Indeed, but the present mob is going to try and uncomplicated it and make it a better working system. Inside that system we’ve identified 400,000 recipients of welfare payments who are otherwise capable Australians, full of potential, particularly potential for the workplace, but inside the present, complicated and unduly unhelpful system, they don’t have mutual obligations of any real…
ALAN JONES: But just coming back to that 400,000 in that speech, and this is staggering, this is what I said is depressing, Christian Porter said in the speech, 400,000 Australians on student payments in the last financial year, $3.3 billion of your money, but then – this is the point – their data tells him, the Minister, that over the next 60 years, close to 30 per cent – that’s 120,000 – who receives payment today will be in the welfare system for the never-never.
MINISTER PORTER: And that was a very surprising result, I think, for anyone who is looking at this data. Of course, naturally you would expect that the young Australians that we’re paying to study are going to have some of the better outcomes in this system, but there’s clearly a group inside that group who are really struggling to transition to employment.
And the system, in itself, is not structured in the way that we would think best fit to ensure that people have appropriate mutual obligations to transition into employment.
ALAN JONES: But Christian, one of the reasons it’s not structured properly, is that the philosophy under it, we’re not blunt enough, we’re all too soft.
I mean, you’re looking for ideas. You’ve got this $96 million Try Test and Learn Fund, and you’re looking for ideas, well can I give you one idea?
The people listening to you say, pretty simply, no one has an automatic entitlement to believe they can put their hand in someone else’s pocket. When are we going to get that message over?
MINISTER PORTER: I think this is the point isn’t it? That the system is about mutual entitlements. So when we have spoken about mutual obligations, say for instance No Jab No Pay, which said that you have a mutual obligation to vaccinate your children before you’re able to receive a certain amount of Family Tax Benefit.
The opponents to that system, which has been incredibly successful by the way, said that you are somehow tampering with an unfettered right to receive a welfare payment…
ALAN JONES: Now can I interrupt you here, I’ve got to go to the news, are you free tomorrow morning at this time? This is a very critical debate, are you free at this time tomorrow?
MINISTER PORTER: Very happy to come back, and we’ll do part two tomorrow.
ALAN JONES: Part two tomorrow.
Christian Porter, the Minister for spending your money.