Sky News with Chris Kenny

E&OE

CHRIS KENNY: Lots on the news agenda today to take up with the Social Services Minister Christian Porter. He joins us live now from Perth. Thanks for joining Viewpoint, Christian.

MINISTER PORTER: Pleasure, Chris.

CHRIS KENNY: Look I want to come to your portfolio areas in a moment. But first up what we heard from Hizb ut-Tahrir today. You saw the story earlier – they’ve had their annual meeting in the Sydney suburbs today. You’re aware of this organisation, they’re banned in some parts of the world. But here they are in Australia, essentially demanding the right to have Muslim families not sign up to Australian secular and democratic values. How do you think the federal government should tackle this problem? Should Hizb ut-Tahrir be outlawed or if not how are you going to counter them in public debate?

MINISTER PORTER: Well, Chris, I guess the first point is that, as you’d be aware, having an organisation declared under the relevant legislation in Australia at law is a very process- and evidence-driven regime. And that would have to run independently, fairly and in a manner of good process. If and when that ever did occur, that would be a matter for a sound process. With respect to the vision that you played, I guess one of the great Australian values is freedom of speech but of course not all free speech is intelligent or helpful or particularly well informed. And I must say the sort of comments that we had there, whilst any individual is free to make them, they are unhelpful, divisive and I might say fundamentally they very ill-informed. And one of the things that we’ve seen and learnt over the last several years about the recruitment process by organisations who seek to recruit notably young men to do terrible things is that they put in the mind of the people they seek to recruit this notion that there is widespread prejudice amongst Australians against Muslim Australians. And the truth –

CHRIS KENNY: Is that playing up victimhood? They play the victim card very strongly and that’s was what was happening in part at least today.

MINISTER PORTER: And that’s why I think that those comments are unhelpful but particularly ill-informed. Because the absolute fact is that that level of prejudice simply does not exist in Australia and it has to be manufactured in the minds of the people that terrorist organisations seek to recruit. So I find those types of terribly ill-informed comments immensely unhelpful. Of course people are free to make those comments and put those views but they are terribly ill-informed.

CHRIS KENNY: Okay switching to your portfolio area, social services – an enormous amount of government expenditure handed out to people in need, of course, as well as others, people would argue. Do you agree with Joe Hockey’s hypothesis? The argument that he put forward some years ago and that drove the first half of this coalition government at least, and that is the age of entitlement should come to an end.

MINISTER PORTER: Well whatever language he used, one of the first things that I did as minister was sit down and interrogate the data about the way in which the social services budget has grown over the last decade, so not merely the last six years under the Rudd-Gillard-Rudd Labor government but also in the several last years of the Howard Government. In every single category of the very large spend in social services, the growth is, in any rational observation, unsustainable if it were to go on the way it’s gone on over the last ten years. In all areas, things like the disability support pension and a range of other payments – and there’s many of them in the portfolio – they are growing at a rate greater than the ability of the tax base to sustain them. So looking at that type of data which is just unequivocal, I think the job for any rational minister and any rational government and certainly the approach that we’ve taken since we came to government is that you must restrain the growth and the expenditure. The only way that you can maintain a generous welfare system with a very solid safety net is to ensure that there is sustainability so that our expenditure today doesn’t come at the expense of future Australians to be able to offer a similarly generous system.

CHRIS KENNY: Now that’s a very rational argument, as you say it’s driven by the numbers. We can’t afford to keep growing government expenditure the way we have been. What about from a philosophical point of view? Do you think the government has become too intrusive? We have got too much government in this country and too much reliance from people in terms of government cheques; too much of a sense of entitlement to the expectations of government being too high. Do you think it’s time to have a serious debate and policy reform agenda in this country, state and federal, that is aimed at delivering smaller government, more self-reliance and more personal responsibility?

MINISTER PORTER: Well, I mean depending on how you define smaller, if you look at the percentage of Australia’s expenditure as a percentage of GDP it’s very important to keep that restrained and we inherited levels of expenditure as a percentage of GDP that we haven’t seen for many decades in Australia –

CHRIS KENNY: We’ve still got spending though as a percentage of GDP – it’s something like 26 percent – in other words, post-GFC stimulus levels.

MINISTER PORTER: And a very high priority of this Government is to get it under that 26 percent mark and it shouldn’t be over that 26 percent mark. Look, in my portfolio, before you get to notions of high ideology or philosophy, the fact is that the present level of expenditure in almost every category is unsustainable because it’s all tracking well above inflation. And that’s so whether or not you break it down on per capita basis or whether you look at it as percentage of the working age population. It’s just been growing at rates which compromise our future ability to maintain a generous system. So there just has to be, as a matter of rational fact, restraint. Patrick McClure, who was commissioned in the very early days of the Coalition government to look in to the social services and welfare system, said not merely is it growing at rates we wouldn’t expect but it is unbelievably complicated. There are twenty different categories of payment and inside those twenty categories of payment there were when we inherited government 55 different sub-categories of payment. It is an excruciatingly complicated system.

CHRIS KENNY: Yeah, I’ve been through it and there is a website where you can go in and click in all your data to find out what payments you might be eligible for. We’re sort of begging people to put in their data to find out where they can line up for a government programme – that’s the kind of mentality we have.

MINISTER PORTER: Well, I mean you describe it as a mentality – and that’s one way of describing it – but in actual fact if you were a person in need with the multiplicity of payments that have just been layered decade after decade on top of each other, if you are a person in genuine need it is actually difficult inside the system to work out what payment it is that you should properly be entitled to. So the system is overwhelmingly complicated and of course part of a reform agenda has to be in terms of simplifying those 55 different sub-payments and the twenty payment category types. So, for instance in childcare, the reforms that Scott Morrison introduced in this year’s budget were about turning three complicated subsidies which had an inflationary impact across the board in childcare into a system where there is one simple, simply understood subsidy – indeed, a more generous subsidy in respect of what had previously been offered – but also one which because of its hourly rate caps inculcates a system which is less inflationary than one that we’re seeking to replace. So part of all of the reforms have been trying to simplify the system.

CHRIS KENNY: But those changes haven’t got through the Parliament and your changes to Family payments as well are linked to them. You’ve got some changes, some cuts on the table. Now, they’re going to see some people in some single income households lose out on payments for their children once they hit 13 years of age already people are opposing that. How are you going to ensure that you can deliver these savings? And are they designed and trying to force people back into the workforce by reducing those payments to them?

MINISTER PORTER: They’re designed to do two things – first of all make the system simpler. So we are trying to get rid of what have become end-of-year supplements, for both Family Tax Benefit stream A and B. And these supplements were devised under the Howard government in 2004 when, I might add, there was a predicted and realised very large surplus. But they were also designed to help families pay for debts that they had accumulated at the end of the year because they had either underestimated or underreported their income –

CHRIS KENNY: But you are trying to cut them back now. What convinces you that you are going to get it through the Senate because people are going to complain you are taking money away from families?

MINISTER PORTER: Well, as you point out it is always easier to sell families getting more money or any individual getting more money, than it is trying to convince people they should get slightly less, even if – as is the case here – a great deal of it is being reinvested back into the childcare system where families will on average be $30 a week better off, $1500 a year better off. But what we say is that there is a better application of the money to families to help with childcare in terms of a more generous and simplified subsidy.

CHRIS KENNY: But we still don’t have the detail on the childcare. This is the trouble we have got your side of the equation we’re waiting to see exactly what is proposed in childcare. Kate Ellis was out there today saying that some families in the upper end are going to miss out on childcare subsidies.

MINISTER PORTER: I think Simon Birmingham commented today that the detail of the childcare package in terms of the legislation is very near to imminent. He’s finalising that and so that will be known soon. But of course the basic mechanics in some detail about the childcare package have been known for some time. Three complicated subsidies get transformed into one. Families between $65,000 and $170,000 find themselves $30 better a week, $1500 better off a year. It’s a structural design that takes the inflationary processes that were built into the system we’re trying to replace, out – so that we can expect more dampened growth in terms of the prices of childcare into the future. You’re right though, there is a clear link I mean if you are to improve childcare if families are going to be $1500 better off a year for childcare that simply has to be paid for. The way that we are paying for it is this proposition: that end-of-year subsidies to family tax benefit that were designed to pay for debts that were arising as they were in 2004 and which we think with technology will be very substantially decreased into the future, that end of year supplement which was complicated which was a payment that’s no longer fit for purpose, should be banked and much of the savings spent to provide for better childcare. It’s also the case, as you point out, Chris, that we’ve proposed that Family Tax benefit B – except for some small subcategories who will be compensated – end when a child turns 13. And again that is in parallel with the more generous package and better package on childcare designed to put families in a position where they are not only encouraged but enabled to re-enter the workforce and where workforce participation we would expect grows.

CHRIS KENNY: Bottom line is you’ve got to try and take money away from people and we’ve seen what the senate will do to these changes in the past, so we’ll wait and see what happens in the future. We are running out of time I need to get onto the GST though. Do you agree with the proposition, no-one is going to rule anything in or out, we get that, but do you agree to the proposition that it would be an absolute mistake if there were to be an increase in the GST if it raised any more revenue overall. In other words, whatever reforms there are they need to be revenue neutral. Because as the government has told us time and time again, it has a spending problem not a revenue problem. And the way out of this is not for state or federal governments just to suck in more revenue.

MINISTER PORTER: So as you’ve pointed out, nothing has been ruled in or out, a whole range of things are being considered, the GST is part of that mix of things being considered. But I guess one thing that you’d be fairly safe ruling out. The Coalition Government under Malcolm Turnbull is not interested in increasing the tax burden on Australians. As you point out, what the GST offers is an avenue to switch yourself out of a whole range of taxes. The Henry Tax Review noted that there are 125-odd taxes in Australia and about 10 of them collect 90 percent of the revenue. Which means you have got 115 taxes out there – state and federal – many of them inefficient state taxes –

CHRIS KENNY: Sure, so this would be worth doing if you could get rid of payroll tax, if you get rid of stamp duty on real estate transactions and the like, that’s the sort of trade-off that you’d be looking at and think would deliver a boost to the economy?

MINISTER PORTER: Well, as you say, this is not an agenda about increasing the tax burden on Australians. What we are looking at and why all things are on the table is the ultimate outcome has to be a simpler tax system a more efficient tax system and one that generates comparable revenue to the one that preceded it.

CHRIS KENNY: Simpler, fairer, lower – you are starting to sound like Tony Abbott there, a three word slogan there!

MINISTER PORTER: It’s a good three word slogan!

CHRIS KENNY: It’s a fine aim, but just to go back a couple of questions back you said one thing you could almost rule out or almost guarantee is that the Turnbull government wouldn’t be looking at increasing the revenue burden or the tax take overall. Could you give us a clearer undertaking there? Through all these reforms that this is what the government will not be doing, and that is increasing the overall tax take.

MINISTER PORTER: Well let me put it to you this way, Chris. The reason why everything is being looked at is because the scale of the problem that we are dealing with is very substantial. So next year the median income earner in Australia will find themselves in the second highest tax bracket. Now, we are looking at all options to provide scope for government to ensure that that outcome is mitigated against and alleviated because that would be a very unwelcome outcome for those Australians who are working hard, to find themselves in the second top tax bracket. Now, the reason why everything is being looked at is because we want a system that eases the burden on Australians and in particular personal income taxpayers who because of bracket creep are finding themselves very quickly in a situation which in the long run is unsustainable.

CHRIS KENNY: Christian Porter, thanks very much for your time – appreciate you joining us from Perth.

MINISTER PORTER: Pleasure Chris, cheers.