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Current thoughts on repercussions of the Budget

MATTHEW ABRAHAM: It's been a lively week in the big house on the hill, especially in that normally placid Chamber, relatively speaking, the Senate. The Opposition Leader in that Chamber is also our regular fortnightly guest, Liberal Senator, Robert Hill. He's also the Opposition spokesperson on Defence.

Senator Hill, good morning. Now, I have to get to the bottom of this. I understand you ended up helping to dry up the dishes with Alexander Downer for the Green Senators, Chamarette and Margetts. What did you find in the tea leaves?

ROBERT HILL: You have an inside source, do you?

MATTHEW ABRAHAM: Well, it's only the 'Melba' column.

ROBERT HILL: I got the coffee. We had a useful discussion with them because, of course, the Democrats have pretty much locked themselves, now, into the Government's program. And the Greens become very important, in terms of - the Government, now, not only now needs the Democrats votes as well to get its taxes through but needs the Greens. Actually, this is the first time they need both minority parties to get a majority.

MATTHEW ABRAHAM: Now, of course, the Opposition's exploiting that. What are the ethics of that, I wonder, if you, in your quieter moments, think about forcing the Budget bottom line down, effectively, to two Senators who represent a very narrow view?

ROBERT HILL: When you say exploiting it, we've put down a firm position that we're opposed to four taxes which we believe the Government lied to the people about in the election, and what we're now trying to do is to persuade the Greens to support us in that objection because they are regressive and because the people were misled. So, I don't think that's exploitation, but certainly, if we're successful in doing that, there will be a small reduction in revenue - I think it's about 1.4 per cent - and the Government's going to have to consider other options in that regard, and one of the options we would say they should consider is expenditure.

MATTHEW ABRAHAM: You're quite happy though, to use the Greens to hurt the Government on this?

ROBERT HILL: Well, we want to defeat those taxes and if the Greens will vote with us that's, in our view, a good thing because we don't think they're in the national interest. We don't think they're in the interests particularly of lower-income earners who are going to suffer most as a result of them. So, if the Greens will come with us, and I don't know whether they will but they are certainly concerned about the regressive nature of these taxes, then we will be successful in our goal of defeating them.

MATTHEW ABRAHAM: Now, something we've followed, with great interest on this program, is the current issue of the day: the tax treatment of pensions and shares. Why did the Opposition originally support that?

ROBERT HILL: We were locked in by the so-called goodies in that particular package. As I recall it, I think - it's a long time ago now, it was last year - but, I think that they related to certain benefits for unemployed, expanding some of the work ... job schemes, as I recall. We had no option to split the Bill and therefore what we said is we would vote for it but we would institute an inquiry - you will remember that's when we expected to get into Government - we would institute an inquiry and we undertook that we wouldn't implement it without getting the results of that inquiry. Well, even though we didn't get into government, we went ahead with that inquiry through the Senate, and what's been evident is that it's not a sensible law. It's frightened the elderly - they've gone off and sold their shares. The result of that is reductions in national saving which is not in the national interest, and also it's not encouraging the elderly to be self-reliant. So, there's no doubt that it was a mistake to pass that law. We've opposed it and we're pleased that the Senate committee, and the work that we've done on it, has helped apply pressure on the Government to at least go part of the way towards a satisfactory resolution. But, when I say part of the way, it seems that they are still going to implement it for the future, so they haven't resolved the problem. They're still not encouraging the elderly to maintain their investments and we can't understand the logic in that.

MATTHEW ABRAHAM: Now, I wonder what the position is of people who ... I mean the Government took a very firm line on this. Con Sciacca was on this program saying: There won't be any back down, this is the way it's going to be. And he, effectively, advised people to sell their shares, if they had a problem, to live on. Now, what about those pensioners who have sold their shares, maybe taken a loss?

ROBERT HILL: Well, that's a good question. We asked the Minister, yesterday, what is the effect of that - have they considered the consequences of those who have acted as a result of, well, the law the Government imposed but also the statements that were made, repeatedly as you said - and there's no positive response to that. We intend to keep up the campaign, I might say. In the end, we hope that we will win totally and we hope that the Greens and the Democrats will support us on that.

MATTHEW ABRAHAM: I wonder if there would be any case for compensation?

ROBERT HILL: Well, in law I doubt it. I shouldn't advise on law on your program, should I?

MATTHEW ABRAHAM: Oh, I don't mind. You're a lawyer.

ROBERT HILL: But morally, I think the Government has misled the elderly in Australia. I hope they will be a political penalty for that, certainly. It's been incredible the way - I was going to say almost hundreds of thousands of senior citizens have joined together to defeat this piece of legislation. I think there's no doubt the Government underestimated the determination of - well, not only the determination but the capacity for the Australian elderly community to organise, and they've been very effective through their petitions and their protests. And of course, the Senate committee gave them a vehicle to make public this protest, so it's another example of where the Senate system is actually serving Australia well.

MATTHEW ABRAHAM: In a few minutes you're heading into another Senate committee, Defence Senate Estimates, what are you hunting for today? Is this the hunt for Red October?

ROBERT HILL: No, we're working through the whole defence package. Obviously, what we've been particularly concerned with is the reduction in personnel at the combat end. Our approach, you might remember from the last election, was that we believed there was fat in the bureaucracy and we would have preferred to have seen the cuts in the administration rather than in combat capacity. But every now and again you find something that really does strike you. One that hit me, because we're half way through this particular estimate, was the number, some thousands of service personnel whose families are getting supplement to the family allowances, and I just thought, as an Australian, there's something fundamentally wrong when pay levels, apparently, at the lower end of the armed forces, are in effect so low that the families need to be supplemented.

MATTHEW ABRAHAM: So, are we talking about a significant number here, in the Defence Forces? As you know, this is a Defence Force town in many areas.

ROBERT HILL: Thousands. So, that's something that struck me as amazing and which I will pursue further. I had been told it, whilst visiting various bases around Australia, but it's very hard to get hard figures. Well, now we're going down the burrow, I'll keep going down the burrow until we find just the extent of the problem, but it's just an example of when you're working through hours and hours of estimates suddenly something you come across that strikes you as unsatisfactory and as a result of that I hope that we'll now look carefully at the lower levels of pay in the armed services. That brings a certain political pressure to bear. It might flow through the Defence Force Remuneration Tribunal and hopefully of benefit to them because as I said, as an Australian, I feel somewhat embarrassed that our forces at the lower levels are having to supplement their incomes through supplements to the family allowance.

MATTHEW ABRAHAM: Okay. In Defence Estimates, if you find any missing submarine propellers, let us know.

ROBERT HILL: Given that one away. I must say the launch went very well last week, of the submarine, and it's not only a credit to Australian industry but it demonstrates what Australia can do at high levels of technology if you've got a well-motivated work force and a good plan, and the national co-operation, particularly between Australia and Sweden, has been a lesson for other industries. So, it's been a good, expensive, but a good project so far.

MATTHEW ABRAHAM: Okay. Just finally, Mabo and the Federal Government's response on this now, which is finally out for public viewing and political viewing - has that been greeted with some sort of relief, that you at least have a framework there?

ROBERT HILL: Well, I haven't had time to look at it in any depth at all really but my immediate worry is, again, that I think the only satisfactory solution to Mabo is a co-operative one between the States and the Commonwealth, and I fear that the Prime Minister is again going down the course that failed in Melbourne by in effect saying this is the way to go. And I heard one State Premier on the radio earlier this morning saying that it's still his view that another way is a better way to go. I would have thought that Mr Keating would have better served the interests of the nation by again drawing State Premiers together and sitting down and seeing if a co-operative plan could be evolved ...

MATTHEW ABRAHAM: Okay, Liberal Senator ...

ROBERT HILL: .... which all could agree.

MATTHEW ABRAHAM: Liberal Senator, Robert Hill, thank you.