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Transcript of interview with John Mackenzie: 4CA 846, AM: 13 June 2014: G20 meeting; the Budget; Paid Parental Scheme and Northern Queensland



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Hon. J.B. HOCKEY Treasurer

4CA 846 AM WITH JOHN MACKENZIE CAIRNS FRIDAY, 13 JUNE 2014

E&OE…………………….

JOHN MACKENZIE:

Joe Hockey, good morning.

TREASURER:

Morning sir, how are you?

JOHN MACKENZIE:

Tell me about today’s visit to the north? I mean, you have been front and centre the last few days across, getting across Australia selling the Budget but why specifically here, why today?

TREASURER:

Well, I want to check up on the facilities for the G20 when the Finance Ministers and Central Bank Governors come here to Cairns in September. It will be a very big event for Cairns. It is a very big event for Australia because at that meeting, I am hoping that we are going to lay down our plans for 20 million new jobs around the world, for massive new infrastructure investment around the world and that we are going to lay down our plans - our global plans to strengthen the global economy and open up trade.

JOHN MACKENZIE:

Now Joe, while I’ve got you obviously we’ve got to look at the Budget measures. You’ve made a couple of statements the other day that made people sit up and think, particularly stating that over a month a year the average Australian is working, basically, to provide the funds needed for those on welfare. Just expand on that for a moment; what sort of response have you had across the nation to that kind of statement?

TREASURER:

Well, a lot of people, they see welfare as a cheque from the Government. Whereas really, it comes out of the pocket of your next door neighbour, your family, your friends and welfare is not free, it comes at a cost. And it is by far the largest area of expenditure by the Federal Government. We spend more on welfare than we spend on healthcare, on Medicare or pharmaceutical benefits. We spend more on welfare than we spend on the education of our children or the defence of our nation. We spend more on welfare and on that, I just want people to be aware of that and what we’re trying to do in our Budget, is make sure that those most vulnerable and those most needy get the most help and those people who have the capacity for themselves, actually do more for themselves.

JOHN MACKENZIE:

Now, I want to just take you to a story here in the media today, ‘Patients will have to pay up to $1000 up-front to get medical imaging’, like cat scans, MRIs and X-rays as a result of a Budget nasty. The doctors fear it could delay diagnosis and even after a Medicare rebate for scans, patients could face out of pocket costs of more than $160. Now you would know of course this story, it is out of the media everywhere. What’s your response to that one?

TREASURER:

Well, I haven’t seen that story specifically but I would say to you, there’s a lot of misleading scare-mongering going around at the moment. There is a hell of a lot of it. I mean - for example - let’s talk about the Medicare co-payment; we are asking Australians to pay $7 when they go to visit the doctor. If they are a pensioner or a child under the age of 16, they only have to pay it for the first ten visits and some people would say oh that’s outrageous - $7. Five dollars of that goes to a medical research fund that may well find the cures for mental health issues or Alzheimer’s or Dementia and if we invest in that, we can improve our quality of life. The other $2 goes to the doctor and that doctor has the discretion not to charge someone who is most in need and they can still bulkbill. So, there is an appropriate safety net. Now, people might say that co-contribution - that co-payment, that’s outrageous because health is meant to be free. Well, for a pensioner, they have to pay $6 for the first 60 scripts they get from a doctor each year. So, pensioners pay $360 now, $360 for their scripts from the doctor, but they, in some cases, are paying nothing to go and see the doctor and we are asking them to pay a maximum $70. And at the same time, ensuring that all the increases associated with the Carbon Tax continue to flow through to pensioners, including the Clean Energy Supplement. The pension will continue to rise, contrary to scare campaign, it continues to rise. Every six months it will increase by inflation. And at the moment, inflation is higher than any other indicator for increases in the pension. So, it will continue to rise and will always rise.

JOHN MACKENZIE:

Joe, the other one too interesting in the last 24 hours or so, I notice that Ron Boswell is digging his heels in on this Paid Parental Scheme. You’re insisting the scheme will start next year. What level of support have you got, well firstly within your own Coalition - I believe it’s probably better to say, how many doubters, how many doubting Thomas’ are there on your side of politics let alone the Opposition?

TREASURER:

Well, I think, without passing comment on Ros Boswell or anyone else, there is a lot of misinformation that is being malevolently spread by the Labor Party, in relation to the Paid Parental Leave Scheme. Let me start, the first thing is, a small business person currently often can’t afford to pay parental leave and therefore Labor introduced a scheme that pays the minimum wage. But the minimum wage - it is always a mum that goes off to have the child obviously, it also applies to some fathers involved in paternity leave but it’s the mums. And the mums actually take a financial haircut under the existing scheme when they have a child and go on parental leave. They don’t get superannuation, which has a big effect on them later in life, and they don’t have replacement wages and yet the bills keep coming in. The bills aren’t discounted when you have a child, the bills are still there. And all the medical research says, the best period or length of time for a mum to spend with a newborn child is six months. So, the days when people can choose to stay at home are pretty much over because of the cost of living in Australia today and particularly the cost of the mortgage. But, what we’ve said is, we need mums to be able to have the right to come back to work, we need mums to want to come back to work. Our Paid Parental Leave Scheme replaces their existing salaries. Now, 98 per cent of women eligible to have children are earning less than $100,000 a year; they are going to have replacement salaries. Anyone over that, they’re not going to have a replacement salary, they are going to have to cope with what is offered, which is maximum of that amount. So, the fact is, small business doesn’t pay a dollar, big business pays the bills and at the moment, a small business, be it a newsagent, or a chemist or anyone else, when an employee goes off to have children, they don’t get anything, or they might get the minimum wage now. Under our scheme, they get replacement wages, just as they do in the public service, just as they do in big business.

JOHN MACKENZIE:

I have got to take you to a much more pressing issue now. In fact, it is the issue of north Queensland at the moment. It is almost life and death for a lot of people up here. Have you looked at your insurance premiums for your Tablelands recently?

TREASURER:

Yes I have, I have.

JOHN MACKENZIE:

Well, how much have yours gone up?

TREASURER:

Well, without disclosing what I pay, a lot.

JOHN MACKENZIE:

Well, we all do. We all talk openly about what we have to pay. Let me give you, this is a couple of couple of last days. This is Phillip Yorkies yesterday: now he was paying $2,600; it has now just gone to $10,300 for his duplex. Here is another one: this was John at Manunda, $480 has become $5,300. Brett Mollat, Chamber of Commerce and Industry Queensland, he heads it up. A business he had there, 2500 per cent. Pearl up about Wangett: $364 has become $3000. I can go on and on, that’s just the last couple of days. Our economy can’t cope with this, our businesses are going broke because people who have that discretionary spend, no longer have it. This is just targeting the people north of the Tropic of Capricorn and we have got to get help, and we’ve got to get help now.

TREASURER:

Well Macka, I hear you. I have, I have had similar increase in the cost of my insurance on the (inaudible) in the Tablelands - in fact a bit more, a bit more. And you know, I have been hit twice by cyclones up there and in one case, you know the insurance company wouldn’t cover everything. So, you wonder what you are getting for what you actually pay but that’s a whole other story. It is not about me, it’s about what everyone has to contribute, and you are absolutely right. And that is one of the reasons why, the acting Assistant Treasurer, Mathias Cormann has put out a paper, which he is asking everyone for feedback on, particularly the insurance industry. And we have said we want to go down the path of looking at an aggregator, which provides greater information in relation to insurance…

JOHN MACKENZIE:

Are you convinced that will work? I have an insurance expert that says it will do absolutely nothing.

TREASURER:

Well, part of it is, you have to get more competition into the marketplace as well. And one of the things that he is in investigating at the moment is, why there isn’t enough competition, why there isn’t enough competition. Partly, it is because in my view, there has been a cornering in the market, particularly in relation to body corporate insurance, by one or two players, and when they get a majority of the market, they go and massively increase the premiums. Part of it is the cost of re-insurance as well, which we are currently investigating. This is something Warren Entsch has been belting me around the chops on for months and

months and months and in fact, years, and I am feeling it acutely myself, so I understand that. We are trying to do everything we can. And it is a damn complicated area but I understand where people are coming from.

JOHN MACKENZIE:

Well, it is three years, Joe. I mean fair dinkum; it is over three years now.

TREASURER:

Well, we have been in Government less than a year.

JOHN MACKENZIE:

No I know, I realise that but I need you to understand the urgency of it up here. You are not living here every day. I am copping it day after day, people going broke or having to leave town or whatever. It is destroying our economy; I have got to get that across to you. Now, at three years we’ve been waiting and admittedly that is not entirely your fault but we can’t cop any more platitudes. We can’t cop anymore inquiries, investigations, discussion papers, we’ve got to have help. I said to the Premier the other day, ‘help us, we are Queenslanders, we are bleeding’. Nobody is listening and to his credit he said, ‘I will take it up with the Federal Government, I’ll take it up with my personal friend, Tony Abbott’. At least, at least we are starting to get the message through, Joe we can’t wait any longer for things that might work, we have got to get something that will work. Can I put you in touch, I am, the bloke to talk to you, and he has been in insurance all his life, he has got an option, he says will bring relief and bring it quickly. The Premier himself came back from Auckland and gave us details of what they do in New Zealand, which is obviously hit by earthquakes regularly. They have a system whereby people aren’t bled mercilessly by these greedy companies. So, can I get him to get in touch with you and you have a discussion with him?

TREASURER:

Yeah, yeah what’s his name?

JOHN MACKENZIE:

His name is Phill Stace. Phill, Phillip Stace. I will get him to talk with you; in fact, I will put him in touch, if you don’t mind, with Lucy from your office, she’s listening on the other line at the moment. Lucy, it is Phill Stace and I need you to have a look at this, because we can’t wait another three years, another bloody year. If you knew how this economy is bleeding, you would know what I am talking about.

TREASURER:

Well, I hear you Macka and I do know how it is working, I do. So, mate we need, it is meant to be an open and competitive market and there is a market failure in relation to insurance in north Queensland.

JOHN MACKENZIE:

Doesn’t that trigger urgent response from your Budget, the fact that it is a market failure?

TREASURER:

Yeah well, and that’s one of the reasons why we are trying to work out how to step in, how to act, how to react. I mean, it is not an easy solution here but…

JOHN MACKENZIE:

But we’ve got to find one.

TREASURER:

I can’t emphasise enough that I am focused on it. It is just, I have got my acting Assistant Treasurer, Mathias Cormann, who is also the Finance Minister, working through this.

JOHN MACKENZIE:

Joe, send him up here, Joe, send him up here. Send him in to the talk show so at least then we know, he knows what he is talking about.

TREASURER:

I will ask him.

JOHN MACKENZIE:

Wonderful.

TREASURER:

I will certainly ask him.

JOHN MACKENZIE:

Well, you are his boss, you can send him.

TREASURER:

I am no one’s boss.

JOHN MACKENZIE:

Will you give us a 100 per cent commitment that you will do everything you possibly can from this moment onwards on this emergency, this crisis of ours?

TREASURER:

Well, I am absolutely committed to it, Macka. If there was a silver bullet, it would have been fired. Let me promise you.

JOHN MACKENZIE:

Well, I’ll tell you what, if it was Sydney or Melbourne copping this, then it would have been fixed in three months otherwise you would face a revolution.

TREASURER:

Well, no, because let me tell you, when HIH fell over and it closed down the building industry in Sydney and Melbourne, it took, you know, ages to get it back up and running. I mean, insurance is an unbelievably complicated area and it is one of the things that I have laid down as one of our key goals, is to try and have a fairer, more competitive insurance industry in Australia. It is no - you know, the hardest thing about is, when you have to take out insurance; when the government orders you to take out insurance like body corporate insurance. I mean, people can choose not to insure, or they can choose to under-insure and ultimately that is bad for the insurance companies and that helps to drive prices in a different direction. But when the government forces you by law, and Campbell Newman forces body corporates to undertake insurance, just as he forces, you know, the people driving cars have to take compulsory third party insurance. So, when the government forces you to have insurance, that actually gives the insurance companies an opportunity to gauge the market and I never ever, you know, that’s one of the things we have got to argue about.

JOHN MACKENZIE:

Do I get a 100 per cent commitment from you, that you will do everything you possibly can from today onwards to help us out? We are in a hell of a bind up here.

TREASURER:

Absolutely.

JOHN MACKENZIE:

Joe, thanks for talking to me today.

TREASURER:

Okay, no worries Macka.

[END]