2GB – The Alan Jones Breakfast Show
E&OE
ALAN JONES: …Now, I’ve told you before, this is the bloke to watch. He was outstanding yesterday in Question Time. He can explain complex things in a simple way that the public can understand. He’s talented, he’s modest, he’s articulate. And he has no difficulty with even the most difficult of portfolios, and he’s certainly got that. He is the Minister for Social Services, and at long last, this week, the welfare card legislation has been passed in the Senate. This is the instrument that will replace cash in the welfare system. Now, it’s only being trialled, but the card will be fitted with technology – we’ve talked about this before on air – enabling it to block certain purchases and cash withdrawals; mainly aimed at gambling and alcohol. In other words, it won’t be able to be used to buy alcohol or to withdraw cash at a casino. The Greens, to their discredit, have opposed this from day one. Labor eventually got themselves over the line but Aboriginal elders – as I’ve told you before – from the Ceduna community in South Australia, one of the proposed trial sites, are 100 per cent behind this welfare card. Can you believe that the hospitalisation assault rate in Ceduna is 68 times the national average? The town’s sobering up centre had 4,667 admissions last year from a population of only 4,000. This is the minefield that Christian Porter has to navigate. You’ll remember the Commission of Audit told us last year that within a decade the cost of sustaining the age pension in its current form will reach $72 billion a year; twice the spending of any other area in the budget. Christian Porter’s predecessor, Scott Morrison, made the very simple point that of the 10.1 million Australian income tax payers, 8 million pay so that we can fund the $150 billion welfare bill that the country carries. In other words, of 10.1 million taxpayers, everything paid by 8 million goes towards paying the welfare bill. We’re kidding ourselves, aren’t we? If we keep going the way we are, the welfare bill will eventually exceed all personal income tax collected. The Chris Bowens of this world, of course, don’t understand that, they just understand debt and tax. 800,000 Australians in this country are on a Disability Support Pension – 800,000. More than 2,000 a week apply for it, $16 billion a year. So, if Christian Porter’s going to wind back this entitlement mentality, he knows he’s going to have to tackle some of the very, very big ticket items – it’s a hell of a job. I’ll tell you something, this bloke’s equal to it – he’s on the line. Christian Porter, good morning.
MINISTER PORTER: Good morning, Alan. How are you?
ALAN JONES: Very well, thank you. Look, this is a monumental task; it’s a frightening statistic, isn’t it – that 10.1 million taxpayers, but everything paid by 8 million is needed to pay the welfare bill?
MINISTER PORTER: Well, yes, and you noted that the welfare bill is actually $154 billion a year, which is 35 per cent of the budget. I mean, it is an extraordinary amount of money, and even simple things that we have had for a long time such as Family Tax Benefits – in excess of $20 billion a year – and the problems, unfortunately, are everywhere. Yesterday I moved a piece of legislation through parliament, one of the very few that we got Labor agreement for, and it was to get rid of some spending which was sort of hangover spending for a small cash amount associated with the Carbon Tax, which, of course, was repealed. And that spending would have given Australians $2.5 million, and it cost $19 million to administer. So, we got rid of it. And these sorts of problems exist everywhere. I am glad, Alan, you mentioned the healthy welfare card. That is a revolutionary step that Australia has taken yesterday.
ALAN JONES: So, you got Labor over the line there?
MINISTER PORTER: We did. I must say that first of all, the assistant minister Alan Tudge, who has been the architect of the card…
ALAN JONES: Yes, we talked to him…
MINISTER PORTER: …he has done an amazing thing. Few people, in any time in parliament, would be able to claim to have done something as revolutionary as this. But, as you pointed out, the leaders of the community of Ceduna, they were in parliament, they want this to happen. They know that is the new approach that has to be trialled so that they can have a change to their circumstances. The Greens refused to meet with them in Parliament House, simply refused to meet with them, which I think is a very sad choice for the sort of self-proclaimed party of inclusion.
ALAN JONES: Yeah, you’re quite right. Look, you’re talking about big-ticket stuff. I mean, the Productivity Commission has found that there are about 600,000 families where there is no working parent – 600,000. Now, on the big-ticket items, we spend a fortune on childcare. Now, the subsidies: the Productivity Commission has found that under the proposed changes to childcare, there would only be a small increase in the size of the workforce – 25,000 – that’s what they’ve said. Now, the subsidies are $7 billion. If the subsidies of $7 billion are only going to get 25,000 people into part-time work, I make that at about $300,000 a job. It’s a hell of a cost, these subsidies?
MINISTER PORTER: Well, I mean, I think that childcare and the way in which the structure and system works does work very well, and one of the things that we’ve found over decades – and it is a slow build of a system, but it’s an important system – is that it provides the financial architecture for mothers to return to work or find work for the first time. That’s whether they’re single parent families or whether they’re mum and families.
ALAN JONES: But the Productivity Commission said this isn’t happening?
MINISTER PORTER: Yeah, I think the Productivity Commission on that is not entirely correct, I must say, and when you look at the longitudinal data over several decades, it’s a much, much better story. But…
ALAN JONES: Just stop there for one minute, I will say to my listeners, this bloke’s been in this portfolio for five minutes, for five minutes, and you’ve done a hell of a job getting on top of all of this, I’ve got to say. Just on that, childcare, when you talk about the architecture, should, though, childcare be going people where both parents earn $250,000 or more?
MINISTER PORTER: Well, I think one of the parts of the welfare system that now needs to be looked at with enormous scrutiny is where welfare is applied to what are essentially – what most Australians would consider – sort of high-middle or high-income earners.
ALAN JONES: Absolutely.
MINISTER PORTER: And the reforms that my predecessor, Scott Morrison, put in place do have pretty serious caps on people on those high incomes with the amount of subsidy they can receive, and it is far more generous for people at the lower income end. But, of course, those reforms that Scott Morrison has tried to put in place, and that are awaiting passage in legislation, are fully paid for by changes to Family Tax Benefits, but you have to pay for these things.
ALAN JONES: There’s going to have to be some bad news, isn’t there? I mean, one writer said recently “voters think it’s Valentine’s Day every day and want politicians to wine and dine them and send them chocolates and flowers, when what they really need is a no-frills meat and three veg fiscal meal, that’s what’s wrong with the budget”. Now, you’ve got to give us the meat and three veg?
MINISTER PORTER: Well, ultimately, I look at every spending decision or savings decision and ask this simple question; is it worth borrowing money from overseas to fund this expenditure? Because when you are in deficit…
ALAN JONES: Correct.
MINISTER PORTER: …that is the situation. So, if there is a spending increase in welfare that we cannot avoid, then I think the people – all Australians, taxpayers are…
ALAN JONES: That’s where you’ve got to explain it.
MINISTER PORTER: Yeah, they need to understand it, that money is being…
ALAN JONES: Well, they’ll understand if you explain, won’t they?
MINISTER PORTER: Well, I hope so.
ALAN JONES: But, see, if you’re on 35,000 bucks – here’s another big-ticket item – $45 billion a year in superannuation tax concessions. If you’re on $35,000 and you stick some money into super, you’ll only pay 15 cents, but you were paying 19 cents anyway, so your concession is 4 cents in the dollar. But if you’re on over $180,000, which you are, 180,000 bucks, and you stick the money in, you get a concession of 30 cents in the dollar. Now, why should wealthy people, a) get any concession at all, or b) get a concession that is many multiples greater than the bloke in Struggle Street?
MINISTER PORTER: Well, I think there are two issues here. I mean, you pointed out one of them very crisply and, of course, Scott Morrison – the new Treasurer – has not ruled anything in or out in this respect, and we’ve got a Tax White Paper process under way, so nothing is ruled in or out. But the second issue is, of course, we have to ensure that people have good incentives to amass sufficient super that they take pressure off drawdowns the pension. Because, you’d know that over time, the pension costs that we will face will be massive.
ALAN JONES: Quite, but Christian, on that issue, you know forward estimates say that in spite of all the subsidies for superannuation, 80 per cent of Australians will still be getting an age pension years down the track – 80 per cent.
MINISTER PORTER: Of course, but that doesn’t delimit the importance of the superannuation system, that is about demographics. When I was born in 1970, there were about seven working Australians to every one pensioner, today it’s around five and a half for every one pensioner, in the not too distant future it will be two and a half working Australians for ever one pensioner, and that’s just the demographic reality that we face as a nation. So, you both have to ensure that people over the next few decades amass greater and greater super, so they put less and less pressure on the pension. But of course, yes, you’re right – you have to look at the ways in which that super is amassed. And, look, as Scott Morrison, the new Treasurer, said – nothing is on or off the table, but we’re going through a process…
ALAN JONES: Good on you, what I want on the table is these poor people – and I’ve talked to you off air about this – the disabled people. I mean, as you know, the Federal Court handed down this judgment in 2012 calling for this formula, the Business Services Wage Assessment Tool, it’s a complicated term, used by sheltered workshops, they’re called disability enterprises – that it was discriminatory, in other words, the inference being, well, sheltered workshops, already on slim margins, have got to pay disabled workers more. That would put the sheltered workshops out of business; it would put the disabled out of work. That court decision applied to only a few disabled workers. But there are these so-called disability advocates – who are not advocates for the disabled at all, but think they are – they then want the Federal Court decision to be applied to all disability workers. The Federal Government sought an exemption from it until August 31. That’s run out. The Administrative Appeals Tribunal rules a request for a further exemption is invalid. What are we going to do about disability enterprises and these disabled people in work, are they going to be put out of work by virtue of the fact that they’ll be told they have to be paid more?
MINISTER PORTER: Yeah, look, you’ve given a good description of the situation – a court case brought; it was proposed to the benefit of disabled people, it does not help them terribly much, I must say. 65 per cent of what they call Australian Disability Enterprises have now moved off that wage payment system, that BSWAT tool that you were talking about, and they are finding it difficult, because the reality is that it now means that they are paying more than they were before. We’re monitoring that situation, we’d already allocated – in the not too distant past – $141 million to try and alleviate during this transition period. Unfortunately, the ADEs are going to have to move to a different wages tool, we’re going to have to monitor it. There is a little bit of…
ALAN JONES: Can you guarantee, though, that people won’t lose their jobs? These people need to feel valued, they need a place to go, they need the social interaction.
MINISTER PORTER: I think that disability enterprises are an incredibly important part of the landscape, as Minister I’ll be doing everything I can to ensure that they survive.
ALAN JONES: We’ve got to go, you’ve got to go, we’ll talk a lot.
MINISTER PORTER: Thank you very much, Alan.
ALAN JONES: Thanks for your time. There he is, Christian Porter, the Federal Minister for Social Services.