ABC 7.30
E&OE
LEIGH SALES:
Minister, I’ll go through some specific areas, including child care, in a moment. But firstly, I just want to ask, because you’re relatively new to the portfolio, do you have an overarching philosophy that’s driving your approach to reform in this very broad and important area that really affects a lot of people’s lives? What are your first principles, if you like?
MINISTER MORRISON:
The best form of welfare is a job, Leigh. And I think that was demonstrated particularly from 1996 to 2007 where we saw the percentage of people of working age who were receiving payments drop dramatically, and at the same time we saw the percentage of people who are working increase at the same time. So, yes, you need a lot of system reform and there’s been some excellent suggestions put forward by Patrick McClure once again today, but the thing that most changes this, both for the taxpayer, but particularly for the family and the individual, is we need to do everything we can to help people work as much as they can.
SALES:
The former Prime Minister John Howard had a view of this area that could be summed up as mutual obligation. Is that how you see it?
MINISTER MORRISON:
I see it as the best form of welfare is a job. That’s how I see it. And I think it’s important that you need to respect those who need our support and – but you also need to respect those who pay for that support. And it is a balance. It is, if you like, a contract between the taxpayer and the beneficiary and both have to be respected in the way we run the system.
SALES:
Will you have a carrot or stick approach to getting more people into work?
MINISTER MORRISON:
It’s not either-or, Leigh. It is about using all the measures at your disposal to ensure that you’re getting people into a position where they can work and are able to work and that has to mesh with the Government’s broader economic policies to ensure that the jobs are there for people to go into. But round the kitchen tables, you want people to be not having as many obstacles that might be preventing them to go back to work because of the myriad systems of payments and what is frankly quite a labyrinth.
SALES:
In an interview published today, the new head of the Treasury Department John Fraser said that a 23-year stretch of economic growth had led people to come to expect more and more from government. Do leaders and people in positions like yours have to say to people, “Look, you need to expect less from government going forward and take more personal responsibility for things like your own health care, your child care, your retirement”?
MINISTER MORRISON:
Well welfare should be based on need, not entitlement and it should be always looking to see that we’re spending what we are spending on those who need it most and where those who can take up care for their own responsibilities, then they should be taking that up. And as a society, not just as a government, that is something that we should be encouraging. We’re spending $150 billion a year. Eight out of every 10 taxpayers, income taxpayers are required to pay for the welfare bill. That’s a lot of taxpayers going to work just to pay for the welfare.
SALES:
When you talk about something like that, it gives people – or some people take it as what you’re going to be looking at is cutting what people currently get and taking away some of what they currently receive.
MINISTER MORRISON:
Well I don’t know why they would say that and I’m not sure why that is the suggestion. What Patrick McClure has done in the report he’s outlined today I think is provided once again a very excellent roadmap as how you can transition a system that is enormously complex to one that is much simpler, to one that is much easier to engage with and one that at the end of the day is designed to get people in work. And the other thing I think we have to be very careful of, Leigh, is as we engage these important discussions, these conversations, we can’t just look at: how will people be better off and worse off in the next five minutes? We’ve got to look at what the next generation will be faced with and will they be better off, will they be worse off? We have inherited an incredible safety net from those who came before us. I want to ensure that those come after us get at least as good a safety net as we’re enjoying right now.
SALES:
In your speech today you said that Australia should find sensible ways to unlock the capital that senior Australians have tied up. Is what you’re saying there that you want people to sell the family home to better provide for themselves in their retirement?
MINISTER MORRISON:
Well what I’m saying, Leigh, is we’ve got an ageing population, which is not uncommon in the developed world. This is not a terminal condition for the country, which I think sometimes it’s presented as. I like to look at this as an ageing boom, not an ageing bust. And one of the ways – well two of the ways I outlined today that we can best harness that is 1.) encouraging people to work longer when they’re healthier and able to do so, and secondly, looking at their own capital and how they can unlock that capital and the Government needs to think about how they can allow that to happen without the sort of penalties that may be restricting them now to ensure that they can continue to be, that is, the Baby Boomers, the super consumers they always have been, which is good for our economy.
SALES:
Do you have a specific recommendation as to how you would want to see some of those disincentives removed?
MINISTER MORRISON:
Well, I’m having a conversation about that at the moment, Leigh. We’re working through those details. I think the issues are being appropriately raised and I’m looking forward to the feedback that comes. We’re meeting with many stakeholders, but I’m keen to hear from people as they’re approaching retirement age or maybe past that age now about what they think is the best way to remove some of those impediments. Now, we have some views about that, but I’m very keen to hear what the views are more generally. We’re talking about an issue that needs to be addressed and I think it’s time we did.
SALES:
People don’t like to burn through their capital though because they want to have something to pass onto their children and they like the security of having that sitting there for them?
MINISTER MORRISON:
Well, what I also want to ensure they have is a quality of life as they grow older and I want them to be able to bequeath a welfare system to the country which is good for the next generation of Australians. I mean, people who are finishing university now, when they hit retirement age, if we keep going the way we are going, there won’t an aged pension. It won’t be: will it be less? Will it be tapered differently? Will it have a different assets test? It just won’t be there. And I don’t think it’s fair to future generations for us to not consider the cost, benefit and negative of the sorts of policies we’re pursuing at the moment.
SALES:
Just on child care, the Productivity Commission’s own figures reveal that if the proposed changes were adopted, the impact on female workforce participation would still be minimal, adding about 1.2 per cent of women to the ranks of the employed. Is it even worth the trouble then of making the changes?
MINISTER MORRISON:
Well, the system is very complex. The system I think has an inflationary impact on the prices for all families. The system is not closely linked to the whole activity of earning or learning and encouraging that process. So I think all of those changes are good. I’d also correct something that was in your earlier report. The Government has not ruled out investing more in this area. In fact, what we will have to invest over the next four years is from $7 billion now going up to around about $11 billion because of the way that the costs are changing. So we’re open to investing more, but you’ve got to be able to fund those changes and that’s why I’ve engaged the Opposition to see if they are prepared to do more than just say more should be spent and whether they’re prepared to tell us how they think that can be funded.
SALES:
In that story that we just had, John Daley from the Grattan Institute pointed out that you also have to make some tax changes. Now, I know that that’s in the Treasurer’s bailiwick, but is that a point that you are making to him?
MINISTER MORRISON:
Well we’re working through the vast array of payments, whether it’s Family Tax Benefit or it’s taxation measures themselves. But I don’t think it’s true to say that you can’t make a good and big difference in simply how you structure the child care payment arrangements as it currently stands. The Productivity Commission report says that modestly, based on an extra expenditure of around $200 million a year. Now, if we want to go further than that, we can, but only if you can fund it. There needs to be, I think, an agreement within the Parliament about how we can make this happen, as there has been on the National Disability Insurance Scheme and of course the aged care reforms that the Coalition government – the Coalition supported when we were in opposition and now implementing in government.
SALES:
I have about an hour worth of material I could go through in this area, minister. We’ll have to do it another time. We’re out of time now. Thank you very much.
MINISTER MORRISON:
Thanks very much, Leigh. Good to be with you.