3AW with Neil Mitchell
E&OE
NEIL MITCHELL:
On the line in our Canberra studio the Minister for Social Services Scott Morrison, good morning.
MINISTER MORRISON:
G’day Neil.
MITCHELL:
How much are we talking about here, how much money would millionaire retirees be getting in welfare all up?
MINISTER MORRISON:
Well there is a NATSEM report out today which canvasses a range of figures and I can’t confirm those one way or the other but the age pension costs over $42 billion a year and so the sorts of entitlements and payments that are made to people with assets of that sort of size particularly the family home is quite small relative to the overall bill. So in one sense if you are looking to try and get the overall cost of the age pension under control over the next 20 to 30 years then you need a much bigger plan than what has been talked about there. Let me make it perfectly clear, the government is not considering including the family home in the assets test for the age pension. You talked earlier on your programme I think for some of the good reasons why doing that is not such a good idea. There are all sorts of anomalies that come up in all of that. The only party that has ever put a tax on the family home was the NSW Labor government when they put the land tax on the family home and they eventually had to abolish it. Interestingly I believe, I think Chris Bowen was an adviser to that government.
MITCHELL:
Financial Review reports that you have raised the possibility with some of the seniors groups, is that right?
MINISTER MORRISON:
No they have raised it with me and that is not strange, that is not uncommon. I have been consulting with a broad range of groups in this new portfolio from the aged and the disability sector through to the childcare sector to families and others as you would expect me to do. I encourage people to raise issues with me and just because they raise them with me that doesn’t mean they become government policy. Some important points are raised around this issue, I mean I don’t want to force people to sell their family home but I don’t think they should be penalised for wanting to sell the family home either. I think the current system actually has some pretty severe penalties for people who might want to sell their family home of their own volition and support themselves more as they grow older. We are all living older and we are living healthier older. That means we can work longer and we need to support ourselves for longer.
MITCHELL:
What do you mean penalties? If I am on the pension I’m getting – and I live in a $3 million or a $2 million house and I sell that house and I invest $2 million I will lose the pension won’t I?
MINISTER MORRISON:
Yes.
MITCHELL:
Are you saying that is a bad thing?
MINISTER MORRISON:
I am saying it is a big penalty for someone who might want to downsize and get out of something which is asset rich for them but frankly cash poor. The costs of maintaining a lot of these larger properties can be very expensive whether it is on rates or other things and if they might want to downsize if they were to do that they can do a lot to diminish their incomes. So the system is actually penalising people for wanting to make what might be very rational choices.
MITCHELL:
Would you put that up for discussion that if you are a pensioner with an impressive asset in the family home and you sell it to downsize even though you are making cash you don’t get penalised, you don’t lose part of your pension?
MINISTER MORRISON:
I think that is a good debate that is all I am saying at the moment, Neil. I think that’s a good debate. I think that raises another series of options that can be canvassed in the community and I think you have got to take the community with you. The point is we are living longer, we are living healthier longer and when the age pension was introduced 100 years ago or so it was introduced at a level which was higher than the average life expectancy.
MITCHELL:
But if we are going along that track where you can sell the house but you are not penalised for having the cash invested then you are not gaining anything in terms of the welfare bill any more than you are than a person living in the house.
MINISTER MORRISON:
Well you have taken the argument to the extreme there, Neil, and I wouldn’t necessarily concur with taking the argument to the extreme. All I am simply saying is at present there is a lot of capital which is tied up in homes and various other things and the system currently penalises people who might want to try and free that up. I think that is a legitimate debate to have, I’d be interested in people’s views on that but you have got to take people with you on these sort of changes that you have to look at as the population ages. I don’t think you go around forcing people to sell their family homes for the reasons that you have rightly identified.
MITCHELL:
I agree but if you go down the path you are talking about there how do you save money off your welfare bill?
MINISTER MORRISON:
It is not just about that Neil. If you can achieve that as well as part of the same package then good and that is what we should try and do but equally it is about enabling Australians to be able to have a better quality of life as they grow older. If they can lean more and more on their own resources for a better quality of life – because no one pretends that the age pension is a lavish payment, it’s not. It is a difficult payment to live on and to move it – yesterday we announced that we were increasing for the part-pensioners an average $3.20 per fortnight. Now that is costing the taxpayer $200 million. The slightest movement in these payments can cost an enormous amount. So if we can help people have a better quality of life by better accessing their own resources then that strikes me as a good thing for Australians and if you can end up saving the taxpayer in the process then that is a win-win.
MITCHELL:
Would you ever look at death duties again?
MINISTER MORRISON:
No.
MITCHELL:
Good, good. What is your biggest problem? You have got $146 billion in welfare spending, 35 per cent of total budget, you are one of the key people in this whole argument, is the biggest problem we are facing here is it the pensions, welfare for the rich as the headlines say, is it middle class welfare, is it the age of entitlement, is it childcare, is it the dole, was is it?
MINISTER MORRISON:
Well one thing I know it is not is you shouldn’t let class politics and envy politics drive your policies. I don’t think the assets test should be driven by real estate envy or anything like that. What we need to do in the welfare space as a portfolio is we have got to get better value for the money that we are spending and it is growing – it is one of the fastest areas of growth in Commonwealth expenditure. If anyone says to me that we are spending $150 billion the best way we possibly can to target the people who need it most well I wouldn’t believe them and my job is to ensure that we are getting better value and better targeting and better outcomes for the money that we are spending. Whether that is young people who we need to get into a job and need to ensure the system encourages that and doesn’t encourage them to sit at home. We need to get families particularly after they have had children, that shouldn’t be a sentence to be on welfare for life. We need to have a system with child care which enables them to get back to work and for older Australians it is encouraging them to simply work longer, particularly women. Women are already increasing their labourforce participation in the 55-64 year old age groups and we need to just encourage them and potentially remove disincentives to continue in work and I will tell you one group of people who would be pretty happy about that and that will be the grandkids at Christmas.
MITCHELL:
Just back to the childcare issue is there – we are talking about fairness and pensioners, is it fair that a couple on perhaps $350 grand a year get a $7,500 childcare rebate?
MINISTER MORRISON:
Well they are the issues we are working through and it is all about what gets people back into the workforce. The rebate isn’t means tested, that is a position which has been supported by both sides of politics now for some time. When the rebate was increased by the previous government from 30 per cent to 50 per cent it just didn’t move the dial in terms of getting particularly people on middle to lower incomes back into the workforce after they had had children. I think with all of these payments there has got to be accountability for them. They are there to do a particular job just not to rain money from the sky and it is important that they do the job and that is what I am attempting to do in this portfolio is put very clear expectations on why we are making these payments and to let that guide policy not the sort of envy politics that we have got around this debate on occasions or frankly the hypocrisy of the Labor party who are running around with unfunded empathy, empathising with everybody’s problems and funding not one solution let alone coming up with one.
MITCHELL:
It would seem on what you are saying there that the child care rebate is not working, is not doing what it is supposed to.
MINISTER MORRISON:
Well that is why we are going through the process now of putting forward a new package in child care and I have invited the opposition to be part of that and had some good initial exchanges with Kate Ellis on that and I look forward to seeing where that goes. The rules for them on engaging this debate are the same for us and that is it has to deliver on the outcome of helping young families in particular to get back into the workforce to support their families.
MITCHELL:
And it is not delivering that?
MINISTER MORRISON:
Well I don’t think it is in the way it can. We are spending $7 billion on that, mind you that is only half of what we spend in our annual interest bill because of Labor’s debt but nevertheless $7 billion and it has to get a good outcome and if they are going to come to the table well they have to bring funding options to the table as to how they might achieve what they would propose.
MITCHELL:
In a very general sense, just finally, are wealthier middle class people – Australians who don’t need it are Australians who don’t need it ripping off the welfare system?
MINISTER MORRISON:
Well there are all sorts of people ripping off the welfare system and that’s why we need a tough cop on the beat.
MITCHELL:
Yeah but we concentrate on the dole bludger don’t we. What about that middle or upper middle welfare, is that a rip off?
MINISTER MORRISON:
Well I would say this Neil, we should all only take from the system what is absolutely necessary because I believe that is what the taxpayers pay for. There are a lot of advocates for who receive benefits and that is fair enough. There are a lot of people in this country who need our help. In this portfolio I want to be the taxpayers advocate, they are paying for a welfare system that is supposed to help those most in need, I want to make sure those most in need get that help and others who are able to support themselves should be.
MITCHELL:
Thank you, oh just quickly; Malcolm Turnbull put a bit of a knife into the Prime Minister last night didn’t he?
MINISTER MORRISON:
I don’t think so. I don’t think so Neil, Malcolm is always entertaining on those programmes. I tell you what I appreciated though he made some very good points on my old portfolio, I mean we have got children out of detention 90 per cent of them out and we are not finished yet and that is because we stopped the boats. Something Labor couldn’t do, wouldn’t do, didn’t have the stomach to do, and we have got the outcomes both on humanitarian terms, people aren’t dying at sea, we have saved the taxpayer and we are getting the kids out and I think that is a good outcome.
MITCHELL:
And with your experience very seriously do you see any hope for Andrew Chan and Myuran Sukumaran? Is there anything else we can do?
MINISTER MORRISON:
We just need to continue to do everything we have been, we have got to pray and we have got to hope and I think there always is hope but this is terribly, terribly distressing for the country and I thought the point Malcolm made last night was very wise on this. This is an opportunity for Indonesia to show how big it is, to recognise the real change in these young men’s lives and they will continue to serve a very long sentence as they know they should but if there was ever a case that deserved clemency that could demonstrate the big heartedness of the Indonesian government then I think this is such a case.
MITCHELL:
Thank you so much for your time.
MINISTER MORRISON:
Thanks Neil, good to be with you.