Address to the National Press Club – Question and Answer
E&OE
QUESTION:
Thank you for your speech. Disability advocate Craig Wallace warned the Government not to cherry pick the recommendations of the report. How do you reduce the welfare bill without targeting the most vulnerable in our society, without making them worse off?
MINISTER MORRISON:
I think that’s what my whole speech was about, Matt. I think the point I was trying to make is that you need to have a systemic change over a decade, over a generation, and what Patrick talked about today in the media was that if we start now you can do it incrementally and you can take people with you as you change the system over time. The great risk is if we don’t start it now then you have to do an off the edge of the cliff reform down the track and I can guarantee you if that’s the case you won’t be able to find anyone who’s better off. I was talking to a student the other day who was raising a range of issues with me about the Budget and I said, “You do realise that when you get to 65 if we keep spending the way we are, you won’t have an aged pension. There won’t be one,” and I want to make sure that never happens.
QUESTION:
Just out of your speech, it raises quite a few issues. One is how do you actually convince people to work until they’re 68 or 69? I know I don’t want to work when I’m 68. Is it a carrot approach or is it a stick approach? Do we have to look at death duties?
MINISTER MORRISON:
No. No, no.
QUESTION:
And also, just – you seem to be trying to get more women into the workforce. Are you saying now that we’re at a point where Australia can no longer afford for women to stay home and look after their kids?
MINISTER MORRISON:
No, I’m not saying that. I’m not saying that. I said that was a matter of choice for Australian families. Sadly, there are many Australian families who don’t have that choice of whether they want to stay home and look after the kids or go back it work. It is just not a choice they get to make, it is a necessity to stay on two incomes. That’s one of the things I think our child care changes are going to have to address. More broadly, encouraging people to work longer I think is very much in the area of encouragement but there are carrots and sticks in these things. I think the best incentive for someone to work longer is it’s in their best interests and to have the conversation which helps them realise that. The pension, as I said, is not a lavish payment and there are ways to ensure that you can supplement your income and not be on such a restricted payment in your older years and that involves working longer when you can. Joe has the great chart which shows what the average life expectancy was when the aged pension was introduced and there wasn’t a great expectation they would have had to spend a lot because it was higher than the average life expectancy. That’s changed and we need to change culturally in how we approach older years if we want to get the opportunities that I think the nation can have from an aging boom.
QUESTION:
I just wondered, looking at your various areas of interest, the biggest spending area is in the aged pension; I wonder – and this follows a bit from Sid’s question – do we actually have to change people’s expectation or thoughts about the aged pension? We do have this problem if you like, in this context that people see the aged pension as their right because they’ve been paying taxes their life. But do we need to send a different message in that longer term sense about what people’s expectation should be about the role of the pension in their retirement incomes?
MINISTER MORRISON:
I think you’re right generationally. When I left school not that long ago, I hope, but when I left school it was the Hawke-Keating Government who told me I would have to provide for my superannuation and there was going to be a life-long work of me doing that and for my generation that’s the deal for us. When I approach the age of whatever the pension age is then, I’m proposing it should be 70, the Labor Party doesn’t agree with me but that’s what we’re proposing, then at that time, if one needed to be on a pension it would be because of some reason that someone was unable to put themselves in a position of providing for their retirement income. There would have to be some element of disadvantage. But for the current generation, and I think this is one of the issues with this debate, it seems to be the view that the raising of the pension age applies to people who are currently in their 60s. That’s a nonsense. That’s just part of the scare campaign against pensioners the opposition is running. It comes in in 2035 so I think there is an intergenerational shift about what our expectations are of the system and for those who are on it now, that’s right, that was the deal they had when they left school with the Government and we’re honouring that deal but for future generations, I think the deal changes.
QUESTION:
Minister, thanks for the speech. In having that frank kitchen-table discussion with Australia about fostering that appetite for change, do we also need to be frank in saying, for example, with the childcare payments and the restructuring you’re looking at, that some families are going to have to be worse off because they can be responsible for themselves? And on the Newstart allowance, there’s talk about simplifying payments for the whole scheme but I’m interested to know could you – if you were a single man, which clearly you’re not, could you survive off that payment of $36 a day?
MINISTER MORRISON:
To address your first question, how much can be further invested in child care is a function of one simple thing and that is to what extent, with the parliament, preferably with the opposition and those discussions have begun, we can come to an understanding which can agree to how you fund that type of additional investment and so, no, I don’t accept that it necessarily leads to the consequence you’ve mentioned. That will be a function of who’s prepared to come to the table when it comes to saves in the Budget to ensure we can invest more. I would like to get to a position where we had a genuine agreement, a deal. I’m not talking about them agreeing to support this or that. That’s the current system. If we’re able to come to a genuine sense of agreement on that, that’s great. If we’re not, then obviously I will have to address matters with the cross-benchers concurrently which is certainly the Government’s intention. So where we get to is a simple question of how you fund it and how you fund it can change how that line is drawn that you saw in the Productivity Commission report. Now on the Newstart allowance, the way it is provided to people will depend very much on their circumstances. It isn’t just about whether they are looking for work but it also depends on whether they’re learning as well, it depends whether they’re at home or out of home. There is a range of different payments. One of the reasons we have this chart which shows the programmatic specificity I said before is because it’s trying to deal with all of those various specific instances and adequacy is always going to be an issue and that’s why I would prefer that we take an approach which ensures we can help people get into that job sooner and we do see for many young men they tend to get into jobs sometimes quickly and there are others who don’t and that takes a much longer time to work through those issues and that throws up a whole different set of policy challenges which particularly fall into the employment portfolio space but one we obviously have to be part of.
QUESTION:
Just following on from what you’ve just said there, can I ask a simple question, are you still going to go ahead with the plan to require under 30s to wait 6 months before they can access the dole? Is that still going ahead or is that scrapped?
MINISTER MORRISON:
Every measure that’s on the table in the Senate remains on the table. I want to be really clear about that and if someone wants me to take one of those measures off I have to put something else on because the rules are the same for other members of parliament as they are for the Government. The Budget needs repair. The Budget needs savings and the opposition’s approach of what I’ve described on many occasions as unfunded empathy, going around and identifying with every problem, not having one solution to it even though it is the year of the idea, and being able to put forward funding proposals that match that, well, that’s what the price of an engagement in a national policy debate is. You’ve got to come forward with proposals and ideas. So if something’s coming off the table, then something is going on the table. I am open for business when it comes to all of those measures but people need to bring something to the table.
QUESTION:
One of the issues that both the Productivity Commission and McClure report pick up on is the impact of high effective marginal tax rates on people as they make that transition from welfare to work. I wonder what your thoughts are on it, can we actually have welfare reform without having tax reform and given the Government’s got its tax reform White Paper due soon, do we need to look at both those pieces of the puzzle? Is this a long-term sort of thing that the two – tax and welfare reform – need to go together?
MINISTER MORRISON:
There’s the issue of tax rates themselves but also the issues of family tax benefit payments as well which feed into this and family parenting payments and there’s a raft of measures that sit around that. What you would have noticed from the Productivity Commission is that even on the changes they were proposing in terms of how child care support was provided, it did flatten for particular age groups or for particular family types, those marginal tax rates. So, yes, you can do something in each area and that can have an impact on that, you can do it in all areas and obviously have an impact on that but the area I’m most focused on right now is on how we deliver the child care element of that package and that is where I think you can make changes which influence those marginal incentives, if you like, to work that extra day, to work that extra two days, to go back to work at all. That’s where I think you can make a bigger difference than we are now.
QUESTION:
You talked about the need to upgrade the quality of political debate. What specifically needs to happen in terms of the way politicians behave and interact with each other for that to happen? And how much responsibility can the Coalition take here for the current state of play?
MINISTER MORRISON:
Right now I am seeking to make changes to child care and I have invited the Opposition to be part of that process and we’re engaged in those discussions. How those discussions will go I really don’t know. If we want to stay in the sort of political combative space on that then I don’t think much will be achieved and I suppose I’ve laid down the arms on that to see what sort of approach we can get to. I think that’s important because I think, as was achieved with the NDIS, as was achieved – as Senator Fifield knows – in the area of aged care reforms, the aged care reforms were quite controversial but they’ve been supported by the Coalition when we were in Opposition and implemented in Government as a Coalition Government so I think there have been real examples, particularly in this area, where I think most Australians are completely disinterested in the ideology and they want to get a fairer deal from the tax dollar they’re spending into this and for those who are getting the benefit it’s really making a difference to the choices that they need to make. So that’s the approach we are taking. How others make decisions on that, well that’s up to them. I’d also add this comment and it’s the point I tried to make in my speech, if we’re going to take an ‘are you better off or worse off in the next five minutes approach’ to every single policy announcement, I’m not sure what people think that does to improve the quality of debates and policy reforms that are important over a generation.
QUESTION:
Under some of the proposals we’ve been talking about today we could see a shift for some people from the Disability Support Pension to unemployment benefits. My question to you is would that mean that they go and join the jobless queue then and what would happen to our unemployment rate and how would the Government deal with that?
MINISTER MORRISON:
I don’t share the premise of your question. I don’t think it does necessarily leads to that outcome. There are many different ways you can structure these arrangements and obviously the Government will be thinking about all of those as we move towards the Budget if we’re seeking to make changes in those areas. I just simply wouldn’t leap to that conclusion as to that’s how people would respond. What is troubling about the Disability Support Pension, the DSP, is that it’s a set and forget payment which basically tells someone who’s on it that you basically can’t work, that this is a permanent situation for you and effectively we’re isolating you from the economy and I think that’s a terrible thing for a welfare system to say to someone and there are people, particularly those with mental illnesses, for whom that condition will not rule them out at all times from participation in the workforce and people will come in and out of the workforce in relation to their condition and the trouble I have with the DSP as it currently is it’s so final, it’s so terribly final and so limiting and so condemning on people who I know, through my own experience, want to be participating in the economy and to be basically shut away on a DSP I don’t think is the message that we want to send as Australians because I think they can make an enormous contribution.
QUESTION:
When you talk about female workforce participation you talk about child care but for five years the Coalition, or at least the Prime Minister, had a focus on paid parental leave and his generous paid parental leave scheme. How damaging was it that he clung to that policy for five years before eventually ditching it this month and should the levy that was going to partially fund that now be directed to supporting child care?
MINISTER MORRISON:
I’m very pleased to hear that you like the change we’ve made to focus on childcare rather than the PPL. I’m sure the Saturday Paper will acknowledge that and herald it all around the country in the way that you always so kindly do. But when it comes to the levy I’ve made it very clear that the PPL levy is not portable and if there is going to be a levy to fund the sort of things we may wish to do in partnership with the opposition and other parties, then an argument would have to be made specifically and separately for that and so at the moment that is a question of various funding mechanisms and options and that is part of the debate going forward.
QUESTION:
I just want to go back to Maria’s question about people on the Disability Support Pension. You spoke briefly about the need to increase the supply of jobs but as you know, particularly for people with a disability, often there are just not the jobs out there for people with certain types of disability, many people with an intellectual disability the jobs they used to do in large government departments, large corporations, have just tried up and replaced with machines. What can we do to grow that supply of jobs?
MINISTER MORRISON:
Well I think part of it is in how you work with employers and I know that is something Senator Fifield is working with the sector on, but equally the system does have to recognise that there will be some for whom the DSP will be their lifeline over the course of their lives. That is the spectrum of a need you have to address with that system. I think we have to be careful about being so finite in this area of disability. There are some people of a mild disability, of temporary disability, of permanent disability, for some who can move into work, for some who the sort of work they used to do because of the nature of their disability is drying up and what are the new opportunities. One of the areas I understand and I am happy to be corrected on this from the employment services side of things and specific employment services that are provided to those with disabilities is that they can get some very good outcomes but that comes from working with the individual, it comes from working with the employer and having I think a very bespoke approach to each and every need. I think Patrick has referred to that in his report, he has highlighted that and I particularly acknowledge that in areas of mental illness that this is an area that we can go further.
QUESTION:
Minister you said earlier that something has to come onto the table for something to come off. One of the recommendations of the McClure review is to kick off under 22s off welfare. So are you going to replace that measure with the quarantining, the unpopular budget measure about quarantining welfare for under 30s?
MINISTER MORRISON:
That was a bundle of assumptions. The point I made at the outset is this a report to government not from. As a result we’ll look through all these matters and where there are things we may wish to introduce in the budget we’ll follow the normal processes of how we consider that. My comment was in reference to those who are saying in the Parliament that they want those measures off the table. Well I’m saying to them bring forward a proposal for what would replace it which would make us able to deal with the problem of youth unemployment more effectively and if it involves an investment then bring forward the saves that will do that. The rules are the same for the opposition as they are for the Government. They cannot be given a leave pass to just run around and make all sorts of vague statements expressing this empathy without being able to fund the solution that addresses it and that’s my point.
QUESTION:
At moments like this it is a chance for the public too to try and understand what the Government’s really talking about and your excellent speech didn’t really go to the specifics. So can I ask you in terms of this report and the five new pillars of payments being considered can you explain to me so I can understand because frankly I’m a bit confused, for young people, just picking one area, what are you suggesting that Australia needs to look at in terms of what access they would have to particular payments if they’re not working under 22, not studying? What is the actual plan and can you explain it in a way we can understand?
MINISTER MORRISON:
Well I’m not making a proposal today and I think that’s the point. Patrick has made a range of proposals today about how the system could be simpler in the future and I’ve said that I think that’s a very worthy goal to work with, incrementally, over a decade, over a generation and that process needs to start now about how you frame that up and where you start. So all I’ve sought to do today, I think, is to lay out the ground work, if you like. One of the things often that the Government is criticised for is they rush too much too quickly to the solution without actually engaging in a broader conversation with the Australian people about what it is we’re trying to fix and what we’re trying to solve and that’s what I’ve endeavoured to do today.
QUESTION:
I wanted to ask you a little bit about the incentivisation of employers here. The McClure rightly points out ways in which individuals can go back to work, particularly individuals who have some complex needs. Is there a need for carrots and sticks when it comes to employers to employ some of these people who have been overlooked particularly in a very high market of unemployment?
MINISTER MORRISON:
Well, I’m not going to get in the habit of commenting on the portfolio areas of my colleagues and I’m sure when Minister Abetz is here or in other forums you can pursue those matters directly with him. What I’m saying is there needs to be a link between how we run the welfare system and that the welfare system itself is not becoming an obstacle in where it connects with the job services program. We need to get what we’re doing right on our side of that line is what I’m arguing and there’s a range of things that Patrick has outlined in his report that I think take us to a much better place on that. Now the specifics of how the employment services set of policies is run that’s rightly a matter for Minister Abetz and so I will leave those matters with him.
QUESTION:
You’ve spoken about this being a long-term process of reform, you’ve also talked about the need to eventually reduce the percentage of the budget that we spend on welfare and yet a lot of these measures seem to me to be quite expensive if people aren’t going to be worse off, if we’re going to spend a lot more on a new IT system. Are you prepared to spend more on welfare initially before you start to see a reduction in spending?
MINISTER MORRISON:
It’s a fair question but if you look at some of the changes that were made to the DSP going back under the Howard Government, and you looked at the way things were grandfathered over time and how the reforms, many of which Patrick recommended at the time, were transitioned in, it meant that immediately you were seeing saves on the flow of people into the system. Now there were about 100,000 extra I should say that went into the DSP under the previous government. We’re seeing that taper off now and we’ve introduced new changes in the DSP system, the requirement to go to a government doctor and things like that which are affecting the inflow into the system. Now that’s why you need to transition these things over time. In child care it’s going to be similar. People have made decisions about how they were going to work and raise their kids based on the system they currently understand and turning that on its head overnight is not something I think families can deal with easily or quickly. So we need to be very careful about how these sorts of changes are staged in and that’s why I make the strong appeal – let’s start the journey to the sort of system Patrick’s talking about now because if you leave it too late the opportunity to set the pace of that change and the impact that it then has on families in particular but right across the broad space of people who depend on these payments, well, it gets far more difficult and far more damaging.
QUESTION:
Mr McClure’s report found that there were 55 supplementary payments that ‘some remain long after their rationale has passed’. Can you identify anything specifically, any of these supplementary payments that may have run past their expiry date?
MINISTER MORRISON:
When you go across the broad scheme of payments it’s very frankly difficult to keep them very current in the way you look at them because they are addressing often quite specific things at particular points in time and sometimes they’ve morphed into an occasional payment, into a permanent payment and then they’ve turned into an actual income support payment over time. I think the system has to be quite dynamic and it needs a bit of housecleaning as you move through and I’m pretty sure that’s what Patrick is suggesting. But I’m not about to frankly here and now go into running speculation on individual payments or things of that nature because that’s not my purpose today. My purpose is to set out where I think the context is for framing not just this budget but frankly the next 10 when it comes from Welfare.
QUESTION:
There’s been recent comment by professional women that the reallocation of child care subsidies from them to less well-off women as recommended by the Productivity Commission is unfair and contrary to your Government’s position of encouraging people to take more highly paid positions. Do you agree with this sentiment and will you recommend that child care is tax deductible for highly paid women?
MINISTER MORRISON:
We’ve got a Productivity Commission report and I assume that’s a criticism of the Productivity Commission’s view on how these arrangements should be put in place and the Government has not yet finalised its approach and when we do that then people will be free to make what judgments they will, whether it’s fair or anything else. The measure that I’m most focused on in this is what is actually going to be a system that delivers on the purpose for the payment? Now the purpose for the payment is to help families stay in work and get in work after they’ve had kids. That’s what my focus is. Others can draw whatever analysis or commentary on whatever other benchmarks they want to set for this. My benchmark is I want to do something which ensures I’m focussing on measures and levers that can influence the kitchen table conversation for those who are most likely to be affected by that. Now the Commission made the point that as people’s incomes go up, that the economic issues around the choice of child care and so on are still present but they’re not as omnipresent as they are for a family who has no choice and if they want to maintain the quality of life for their family then they need those two incomes and if you’re a single mum then you absolutely need that one income and I’m saying that’s where my focus has been directed by the Productivity Commission report.
QUESTION:
I’m very excited about the revelation in your speech that ageing isn’t terminal. It is for most of us. I hope you can share some tips with us later on. You say that there’s this modern policy malaise where people don’t want to make hard decisions and yet in recent weeks when you were faced with the option of discussing the family home and the pension you were quick to rule it out and you were quick to rule out death duties today, and you have even ruled out changing the taper rate. What are you going to do about the ballooning aged pension bill other than simply say to people we’d like you to keep working?
MINISTER MORRISON:
Well, when it comes to the matters that you’ve just raised there, it really is a question, I think, for the Government of being trying to encourage a cultural shift. I think all that’s true, Sam, and that’s where we do need to focus a lot of attention. But let me go to this issue of the family home in the assets pension test. It’s a dumb idea for this reason. It’s a dumb idea because Valuer Generals find it hard enough to work out what the unimproved value of land is to set rates in every metropolitan, non-metropolitan area of the country. How on earth do you think they’re going to go around working out what the actual commercial capital value of everybody’s home and work it into the system? It’s just a dumb idea and it’s a dumb idea because you can’t implement it and that’s one of the reasons why I was so quick to rule it out, Sam, because I just don’t think it’s a very practical thing to do. What I am keen to start a conversation about though is how we can better look at the way the system encourages people to free up the capital that they have. Often people say well how much saves will that deliver to the welfare budget. Well there are two advantages out of this. It can deliver saves to the welfare budget but more importantly it can help older Australians as they age to have a better quality of life. It can help the economy by opening up a new stream of capital that can fuel future jobs and growth. I think those things are as important as saves in the budget and the number one, responsibility, I think, currently of the policy objectives of the Government is to grow the economy and I think measures in this area can help us do that.