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Transcript of interview with Neil Mitchell: 3AW: 27 May 2015: GST on tampons and sanitary pads; living away from home allowance; pension system; Medical Research Future Fund; Khaled Sharrouf family; and marriage equality



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HON J.B. HOCKEY Treasurer

TRANSCRIPT 3AW - NEIL MITCHELL WEDNESDAY, 27 MAY 2015

E&OE…………………….

NEIL MITCHELL:

He’s on the line, the Federal Treasurer Joe Hockey, good morning.

TREASURER:

Good morning Neil.

NEIL MITCHELL:

Have you got a target on your back at the moment? Everything is going wrong.

TREASURER:

Well, I don’t accept that. I think the Budget’s going well, the economy’s improving. We’re seeing some good boosts in consumer and business confidence. We’ve got some job growth.

NEIL MITCHELL:

What about this tampon tax as it’s described? It seemed to me that the Prime Minister sort of slapped you down pretty quickly after you said it’d be reviewed?

TREASURER:

Well, no. The fact is that this has been around since the GST was introduced and when the Democrats negotiated changes, they omitted sanitary products and therefore GST applied to sanitary products. For some time now there’s been a push on in this regard and obviously I said well, if you feel that strongly about it we’re happy to take it to the states and if the states want to reduce their GST by the equivalent amount of the money they’d received from GST on sanitary products, then so be it.

NEIL MITCHELL:

What’s your view? Is it unfair?

TREASURER:

Well, I think clearly they’re a health product and a necessary and vital health product. My view is it does sound unfair that GST applies in that area but does not apply to condoms and a range of other, not dissimilar products. I’m perfectly happy to put it to the states, we’ll give the states the numbers on it and go from there.

NEIL MITCHELL:

It’s interesting though, some of the commentators, the Financial Review in particular, saying well hang on you don’t want a review of the GST, you don’t want to look at the bigger issues, but you’ll look at a side issue like this. What’s the answer to that?

TREASURER:

Well, that’s just sideline heckling. It’s not an accurate reflection of what’s going on. We actually have a taxation discussion paper out there at the moment and during the course of that taxation discussion paper we’ll still obviously have changes in the tax system. On Budget night I introduced legislation that was agreed with the states that would apply the GST to intangibles sold over the internet from overseas, like Netflix and a range of others. So I introduced that on Budget night and there weren’t too many critics about that.

NEIL MITCHELL:

The other thing - at times you must feel a bit embattled, you got a real going-over about the issue of using your living away from home allowance to pay, effectively pay rental to your wife? Is that a bit unfair?

TREASURER:

Look, I mean this is the sort of rubbish that is rolled out from time to time by the critics and the haters. It is something that is applied in politics - well for as long as I can remember. That is, if you’re living away from home you’re paid an allowance. So, some people pay it to

Mr Hilton at the Hilton chain, or Mr Accor at the Accor chain, or they pay it to whoever they rent a house from, or they pay it in a mortgage which is what I did. You know, it’s no different. You still have to live, in my case, over 180 days away from home.

NEIL MITCHELL:

Are both sides doing it?

TREASURER:

Yeah, of course, they’ve been doing it for years. People want stability if they’re here for years instead of moving from rental house to rental house, or hotel room to hotel room. They’re looking for somewhere permanent to put their toothbrush.

NEIL MITCHELL:

I accept that everybody does it, but is it a good look when we’re attacking the age of entitlement that allowances are used effectively to build your own wealth by buying a property that increases in value?

TREASURER:

Well, maybe it doesn’t increase in value. Maybe it decreases in value. In a lot of other countries like New Zealand, they actually provide senior members of the government with housing. In Australia they used to provide the Treasurer with a house, the RG Casey building. But not so, because they provide the Prime Minister with a home.

NEIL MITCHELL:

So is it a good look for the taxpayer to [inaudible]?

TREASURER:

Well, that’s up to the taxpayer. But if you’re living away from your family for 180 days a year, there wouldn’t be many businesses that don’t pay for accommodation to live away from your family.

NEIL MITCHELL:

Another issue that’s come up is a question you were asked which was about retirement. The question was why shouldn’t I, if I’m going to retire, spend what money I’ve got on a big gee-whiz house and take the pension? In other words, qualify for the pension by spending the money. What’s the answer to that?

TREASURER:

Well, that was certainly never the intention of the superannuation system. There are concessional taxation arrangements for superannuation and it’s expected that people will use their superannuation to fund a quality of life, a decent quality of life when they go into retirement. If they don’t have a pool of superannuation then they’re entitled to the pension. Under our system we’re increasing the eligibility for the full pension. But at the same time, if people have $1.1 million of liquid assets in addition to their home, our view is that you still get the healthcare card but we can’t continue to give you the pension.

NEIL MITCHELL:

So do you think people will rort it in this way though? Well not rort, it’s not rorting, it’s not rorting, but getting around it.

TREASURER:

I don’t think it’s getting around it. Look, I think people - there have been rules put in place, people have complied with the rules. The question is whether the system is sustainable in its current form, where around 80 per cent of people over the age of 65 receives a full or part pension. In 30, 40, 50 years, the number of people who are entitled to the pension basically are the same proportion, despite all the superannuation that’s collected.

NEIL MITCHELL:

Now you’re about to give a speech on the Medical Research Future Fund. One thing that baffles me, wasn’t the co-payment going to be used to pay this? How are you going to fund it?

TREASURER:

Well it was going to be part of the contribution, but the savings that we made in Health from last year’s Budget onwards would be transferred into the fund. Those savings would build the fund up to $20 billion by 2020. The first distribution from the fund will occur this year, $10 million in additional medical research funding. Over the next four years it will be $400 million in additional medical research funding. This is a huge piece of medical infrastructure that is going to be additional, stable funding for the medical researchers of Australia. Now, Victoria is the home of Australian medical research and it’s about 15 per cent of all applications for medical research to the NH and MRC that are actually approved for funding. So what we’re doing is, we’re dramatically increasing the amount of money that is available for medical research. It can find the cures, it can find the cures for the diseases we have.

NEIL MITCHELL:

I think it gets broad support, no question about that, but how are you going to fund it without the co-payment?

TREASURER:

Well, there are other savings in health. There are other savings in health that we are appropriating into this and the funding profile stays the same. So, the money is going in and there are other savings that we have implemented in health…

NEIL MITCHELL:

So are the states funding that indirectly? Are they losing money that goes into this?

TREASURER:

Are the states losing money, well the states…

NEIL MITCHELL:

The states are screaming they’re not getting enough money for hospitals.

TREASURER:

Well, yeah, but I mean part of that is, yeah of course. The savings we make in health generally are going into the fund. But bear this in mind. This fund is always going to have $20 billion in it. It’s going to be managed by the Future Fund. It’s the interest on the fund each year, the returns, that are then given to medical research.

NEIL MITCHELL:

But the states are saying that they’re losing money which will come out of primary care. Which means instead of going to primary care it’s going to research?

TREASURER:

Well it won’t come out of primary care. It’s not coming out of primary care. I mean primary care is provided by Medicare funded doctors and Medicare is run by the Commonwealth Government, it’s still being run. What happened was, the Labor Party had a commitment to bonus payments on health, bonus payments to hospitals. We said we’d honour that for the first four years but after that those bonus payments weren’t funded, and they weren’t. But we are still increasing our real spending on health by six per cent over the next four years. So

our spending on health not only increases with inflation, but it’s a real increase of six per cent over the next four years. So, what we’re doing is we’re being prudent, where we can save money we’re putting it into a fund. That fund can never be spent but the return on the investments associated with that fund will go back into the health system in medical research.

NEIL MITCHELL:

Just a couple of other quick things if I may. Have you caught up with this Khaled Sharrouf, the ISIS man, his family wants to come back to Australia, that’s five kids. Now it’s not a matter of him coming back but his wife and children. Now it’s public they must, their lives must be at risk. Do you think we should be compassionate towards the children coming back?

TREASURER:

Look these matters are always dealt with on a case by case basis as a rule, as a rule. If people go over to fight for Daesh, we don’t want them back. That’s the starting point. Now I’m not going to comment on the specific case, you’d need to speak to the Attorney-General. But I’d just say this, this threat is real. Whether people come back or whether they don’t, it’s going to be an ongoing threat…

NEIL MITCHELL:

Well yeah, but that doesn’t apply to kids.

TREASURER:

Well, I mean look at the arrest in Melbourne the other day of a young - effectively a child.

NEIL MITCHELL:

Well yeah, but some of these are seven and eight year old kids.

TREASURER:

Yeah, well I know that and this shows you just how challenging the problem is. It is a real challenge, it is a real challenge.

NEIL MITCHELL:

Finally, gay marriage. You’ve changed your view on this? You’re going to support marriage equality?

TREASURER:

No I haven’t changed my view on it Neil.

NEIL MITCHELL:

So you’re opposed to it?

TREASURER:

I am, you know - for a whole lot of different reasons. But I understand it’s an issue that does divide the community, I think we’ve got to handle this very carefully. But, my views haven’t changed.

NEIL MITCHELL:

Do you think it will get through the Parliament?

TREASURER:

Look, I don’t know, I don’t know. It will go through a process where it comes to our Party Room, there’s proper consideration of it. Our Party Room will form a view, I’m sure the Labor Party’s Party Room will be the same and the matter will be dealt with in the usual way in the Parliament. The Parliament’s at its best when it carefully considers issues. On a lot of social policy issues there’s been careful consideration over the years…

NEIL MITCHELL:

There’s also been conscience votes though.

TREASURER:

There have been conscience votes and you know, I don’t know what will happen here, because the Liberal Party has a Party Room view about marriage being between a man and a woman so that Party Room view would need to change to facilitate a conscience vote. But we’ll wait and see what comes before the Parliament.

NEIL MITCHELL:

So do you support a conscience vote?

TREASURER:

I will leave that to my colleagues, I’ll share that first with my colleagues. But it is a difficult issue. On the one hand, I mean my generation have lots of friends and gay friends that do want to get married, which is understandable. Then we’ve got others in our generation, and in my case my parents, that have a very strong view that marriage is between a man and a women. So it is a balancing act.

NEIL MITCHELL:

Good to talk to you, thank you for your time. Are you sure you haven’t got a target on your back? You sure you’re happy and getting along…

TREASURER:

[laughter] Anyone who’s Treasurer has a bit of a target there but look, you know, my focus is on doing the right thing for Australia Neil and I feel pretty pumped about it.

NEIL MITCHELL:

Thank you for your time.

TREASURER:

Thank you.