Sky News PM Agenda with David Speers
E&OE
DAVID SPEERS: The Government, we know, wants to reign in budget spending. Its first attempt at reigning in the welfare part of the Budget hit a brick wall in the Senate. Today it’s produced a new look reform package targeting family payments. It’s now saying it will deliver roughly the same savings over time but there will be some families actually better off as a result. Joining me now is the Social Services Minister, Christian Porter. Thank you for your time this afternoon, Minister. The original package was going to save the Budget $3.8 billion. How much will this package save the Budget?
MINISTER PORTER: It’s commensurate. It depends how you measure it, whether it’s the fiscal or cash underlying. But –
DAVID SPEERS: Using the same measurement.
MINISTER PORTER: Using the same measurement, it saves about the same amount but it takes longer to save it.
DAVID SPEERS: So, over the four year Budget period, which is what the Budget is done on, what will it save?
MINISTER PORTER: Slightly less than $3.8 billion. I can give you the figure –
DAVID SPEERS: That’s what I’m after.
MINISTER PORTER: Well, I’ll get them out for you if you liken David. I think it’s about $3.769 from recollection
DAVID SPEERS: Over the four year forward estimate?
MINISTER PORTER: Yes. So the original measures would save around about $3.8 billion, these measures save about $2.4 billion but we’re also considering into that the fact that we had the family day care child stopping measures which were $940 million. So they’re part of the savings.
DAVID SPEERS: Now why do you include that because this was already announced wasn’t it as essentially an anti-fraud measure?
MINISTER PORTER: Yes, because we had taken the view that if we have had savings that we have been unable to pass for any variety of reasons then we have to offset those. So if you want, the elongated part of this package scoops back and includes those child swapping measures. So in answer to your question, I guess the best, the simplest way to put it is, the original FTB measures were $3.7 odd billion worth of saves, and these are $2.4 billion worth of saves.
DAVID SPEERS: Okay, because that’s the difference here. This one is $2.4 billion. It’s $1.4 billion less than the original package.
MINISTER PORTER: Now I have gone out and found other saves around the –
DAVID SPEERS: Well that’s great but I think there’s bipartisan support on that, but that’s not part of welfare reform necessarily, that day care fraud measure that you’ve already announced.
MINISTER PORTER: Well I think it’s very reformist.
DAVID SPEERS: But it’s not part of the changes to family payments.
MINISTER PORTER: No, but it is part of welfare reform though. But I accept that it’s not strictly part of the Family Tax Benefit system.
DAVID SPEERS: So when you then include what all of this is meant to pay for, the childcare changes that were announced in this year’s Budget, they cost $3.5 billion. $3.5 billion spending, $2.4 billion saving. Is what you’re doing actually going to leave the Budget better off or worse off?
MINISTER PORTER: Well when you consider that we’ve also found additional offsets that were never in the original 14-15 Budget around the child swapping measure, I think the answer is yes, that we are doing what we always said we would do, which is that if we lose a save, we will find commensurate savings and that’s what we’re trying to do. So look, I guess the fundamental answer to your question is, are we trying to get the same result through a different measure? Absolutely. Yes. That’s precisely what we’re trying to do.
DAVID SPEERS: Alright. Well then let’s look at the specific measures. Labor asked today – will grandparents raising a 15-year-old child be $2,500 a year worse off? Will they?
MINISTER PORTER: Well, that depends on their capacity to access childcare and re-enter the workforce.
DAVID SPEERS: I’m talking about a 15 year old.
MINISTER PORTER: A 15 year old child.
DAVID SPEERS: Yes.
MINISTER PORTER: Well, I think that the point that’s being made here by Labor – it’s a fair point – is that at the age of 13 the Family Tax Benefit B payment, which is in excess of $3,000 will end for everyone. Two cohorts will be re-compensated and that is single parents whose child turns 13 will end up with $1,000 a year. Grandparent carers will also end up with $1,000 a year.
DAVID SPEERS: But they lose that $3,000. So would the difference – which is about $2,500-
MINISTER PORTER: Well in isolation. But of course much of that money is being reinvested in two ways. Firstly it goes back to Family Tax Benefits A and increases the fortnightly payment by $10 a fortnight, which accumulates over the course of the year and you will find that most of those grandparent carer families or single parent families are also going to be recipients of Family Tax Benefit A.
DAVID SPEERS: They receive about $520 for that?
MINISTER PORTER: Yes – it mitigates –
DAVID SPEERS: But all up they are worse off?
MINISTER PORTER: Well again, it then depends upon their willingness and ability to re-enter the workforce and receive the benefits of the childcare package, which is the twin sister to this package if you like. That makes people –
DAVID SPEERS: But with teenage kids, they’re not going to be using child care. So, –
MINISTER PORTER: No, their parents will be, though. That’s the point. Right, so the money goes to the family, not for the purpose of the child, David, but for the purposes of the parent.
DAVID SPEERS: But the parents have teenage kids who are not using child care. I’m not talking about those who have got toddlers. Single parents or grandparents who’ve got kids, they’re the ones who miss out.
MINISTER PORTER: Yes but of course and the reason we’ve chosen that age of thirteen with respect to the Family Tax Benefit B is because that is the age, and we’d previous chosen six and after a full run of the negotiations, that was something we considered we simply couldn’t get through in terms of parliamentary passage. With respect though to that age of thirteen, that’s when a child or children are entering high school, when time is freed up if you’re in a single parent household, and you’ve got this ability and choice and you’re encouraged to join the workforce –
DAVID SPEERS: And that’s the philosophical point I want to get to here. Because these payments were brought in or increased by John Howard and it was part of showing some Liberal Party support for families to stay at home if that is their choice. Now you’re saying that choice should be go to work.
MINISTER PORTER: So you’re now talking about the end of year supplement payments –
DAVID SPEERS: [inaudible]
MINISTER PORTER: Family Tax Benefits entirely?
DAVID SPEERS: No, no – yes, entirely.
MINISTER PORTER: [inaudible]
DAVID SPEERS: Yeah, yeah, that’s right. Once you get to thirteen, a child gets to thirteen, once they’re a teenager in high school, they should be working. Is that what you’re saying?
MINISTER PORTER: Well, parents. Well I think that this is a measure that encourages them to make that choice for themselves. So in simple terms, we think this is a workforce participation measure and it is slightly different from the Howard approach. But the context, particularly say for instance with the supplement, that we are also phasing down, when the Howard Government made these decisions, well it was in constant and robust surplus. The reality, David, for us is that every spending increase year on year that we cannot avoid or restrain, we are borrowing to expend because we are in deficit.
DAVID SPEERS: It’s a different time.
MINISTER PORTER: Completely. And you know, would any Government always choose greater generosity? Perhaps, yes. But in the circumstances we think that this a situation which can be good for families as well as good for the taxpayers –
DAVID SPEERS: But the simple message is the Government believes once your children are teenagers you should be working – you should not be asking for taxpayer support.
MINISTER PORTER: Well you still will be receiving very significant taxpayer support in the form of Family Tax Benefit A, which is a fortnightly payment per child. But we are saying in your family, a single parent family or a dual parent family, when the child turns thirteen this additional payment in terms of Family Tax Benefit B, should rationally become limited at that point because we do have the ability, when the child reaches that age, to re-enter the workforce. Now the other thing is that, that is a positive measure for the family involved because all of the longitudinal studies show whether you are a single parent family or a dual parent family, mothers entering, re-entering or enhancing by terms of the number of hours, their participation in the workforce, is the way that families grow wealth and prosperity.
DAVID SPEERS: This is all paying – as I mentioned – for the childcare package. I know that’s not in your portfolio. Now when are we going to see that? When is that actually going to come before parliament?
MINISTER PORTER: In terms of legislation, well, we would very much like to get some form of sense of knowledge that we can pay for that package, the childcare package.
DAVID SPEERS: So you’d need to get this through?
MINISTER PORTER: Well not necessarily through, but some strong sense that this is possible because we have to be very clear that the reforms in childcare, and I take your point that the legislation has not been available but there is nevertheless a substantial amount of detail out with respect to that, certainly enough to make an assessment as to whether it should be supported or not. Most people have made that assessment and will support it. But we want to know that we’re able to pay for it and we had plan A, which again revolved around Family Tax Benefits. This is plan B, again, substantially around Family Tax Benefits, although modified I think. But again, we want to know that we are going to have support from the opposition and from the crossbench to pay for something, which it seems the opposition and crossbench want, which is very substantial reforms to childcare.
DAVID SPEERS: What about the changes to paid parental leave, the so-called double dipping on an employer and a government funded scheme? When are we going to see that?
MINISTER PORTER: So there’s two legacy items, I guess you could describe, that I have inherited. One is the paid parental leave issue, the other is the four week wait for the dole issue for under 25’s. Look, I’m having a look at both of those, I must say that my observation is totally the same as the Government’s and Scott Morrison’s. They’re not unreasonable measures in all the context, what you’ve got is a situation where about 20 per cent of the recipients of the 11,500 odd dollars of tax payer sponsored paid maternity leave, about 20 per cent of those people also get paid from their employer a generous amount larger than that, and so are able to accumulate the two amounts. Now if I ask myself the question – is that a good spend –
DAVID SPEERS: But you’ve heard what the business groups have said, if you can’t, if a worker can’t access the Government Scheme and the employer scheme, then they are just going to re-package the employer scheme.
MINISTER PORTER: Of course, of course.
DAVID SPEERS: [inaudible].
MINISTER PORTER: I don’t find that utterly persuasive I must say, because the two schemes that existed in parallel for some time –
DAVID SPEERS: These are the businesses, these are the ones that are going to do it, that’s what they are saying –
MINISTER PORTER: Well, I mean it may be in a business interest to say to Government, we’ll withdraw from the space, but that doesn’t mean that they will do so. But look, it may be that these are things that based on further negotiations there’s some tweaking that can occur, but they are far from unreasonable.
DAVID SPEERS: So you are over the change?
MINISTER PORTER: Well look, I said today you know the Marine Corp moto is adapt, improvise and overcome. We want to make proper appropriate savings, but you have to make them. We are dealing with some difficulties in terms of the structure of Parliament, but we’ll keep working through it.
DAVID SPEERS: Final one. Joe Hockey gave a valedictory speech in Parliament today, a really interesting speech. He said amongst other things we need co-payments in health, we need greater cost recovery in education, we need universal means testing in welfare. He was Treasurer until, what – four, five weeks ago? Do you agree with him?
MINISTER PORTER: Look I think that people are very liberal in terms of a valedictory speech. Look what I absolutely and firmly agree with Joe Hockey on now, what I agreed with him on when he was Treasurer, is that as a nation, we have to plot a credible, reliable path back to surplus and then once we’re there, we have to sustain proper and appropriate surpluses going forward. Now there are a variety of ways of doing that. When you’re in Parliament, you’re constrained by parliamentary reality with what passage of legislation you can move through. The reality in my area, you know – we’re a third of the budget, almost all of the payments – their indexations, their rates, their volumes, the way in which they’re administered – is covered by legislation. So if you want to change the nature of payments, you have to change legislation. So the instinct is correct, which is we must return to surplus.
DAVID SPEERS: Social Services Minister, Christian Porter, thank you for joining us.
MINISTER PORTER: Cheers.