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Transcript of interview with Keith Conlon: 5AA with Keith Conlon: 6 October 2011: tax free threshold; Tax Forum; Newstart Allowance; Future Jobs Forum; carbon price; Clean energy future

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Subjects: Tax free threshold; Tax Forum; Newstart Allowance; Future Jobs Forum; Carbon price; Clean energy future

HOST: Prime Minister Julia Gillard, thanks very much for waiting. Good morning.

PM: Good morning.

HOST: Perhaps the best news for, particularly for people on low incomes, part time earners, is that there will be a raising of the tax free threshold after yesterday’s and the day before’s discussions. Can you confirm that you will look at raising that or you will raise it?

PM: Certainly. What will happen on 1 July next year is the tax free threshold will triple, will go from $6,000 to $18,200. That means there will one million people not in the tax system. They are not paying tax. When they look at their pay packet and say how much has the tax man taken the answer will be nothing. We want to go the rest of the way and put the tax free threshold up to $21,000 and we’ve said that will be our first priority for personal tax reform.

HOST: When will that happen do you think?

PM: Well we obviously need to manage the budget carefully but we will get right up to $18,200 on 1 July next year and then, in the context of making sure we manage the budget well, our top priority will be getting the rest of the way to $21,000. So people don’t have to wait to see the big jump from $6,000 to $18,200, that will happen on 1 July next year.

HOST: There is a lot of agreement round the table from all sides of politics and economics yesterday that the Newstart, the job allowance, is just far too low. People in their 40s and 50s who are out of work can’t live on it, that’s a stress on the budget but can you fix it?

PM: I think the best thing we can do is focus on creating new jobs, so people get the opportunities they want, people don’t want a life on Newstart, they want a job and so today we’ve moved from the Tax Forum to the Future Jobs Forum. Now we live in a country that has come out of the global financial crisis strong and we should be proud of the economy that we have created together, compared with

countries like the United States we have low unemployment. But we’re also living in a huge period of economic change, it’s got great opportunities, we live in the growing region of the world - Asia, we live in the section of the world where the middle class is growing by leaps and bounds. By the end of the decade we’re going to see 1.2 billion more people in the middle classes of Asia and they’ll want to buy things like great quality wine from South Australia, they’ll want to buy good manufactured goods from Australia, high quality ones. They’ll want to be tourists to our country, they’ll want banking services, legal services, so this is full of opportunities for us, but there are also challenges for growth in mining which South Australia is looking to share in. The growth in mining is keeping our Australian dollar very strong and high, that’s putting pressure on other parts of the economy like manufacturing and so that’s why we’ve got the Future Jobs Forum today.

HOST: We want to come back to that Prime Minister, but still on the question of Newstart, it is agreed by everybody it is too low to live on, can you fix it, will you fix it?

PM: My focus is on job creation.

HOST: So you’re not going to fix it?

PM: Well, all I can say to you is I think the best thing I can do for someone on Newstart is to get them a job.

HOST: Well that’s not much satisfaction to the thousands of people who haven’t got one now. And they’re not going to get one of those fancy jobs, we’re talking about, you know, manufacturing is, we know, under pressure and people simply cannot get those low skill jobs now. Is there no sense after yesterday that you have to do something for them?

PM: Well I think we’ve got to be a bit careful about what we mean by jobs growth and economic growth. I do want to see us being a country that’s got a high skill, high wage, clean technology, clean technology and the best of new technology like the NBN as our future. You know, we do want to see those clean energy jobs, but I think you would be making an error to think that they are only jobs for people in a particular occupation. I mean I want to see growth in jobs right around the country. We know we’ve got growth now in mining and in construction, some very traditional jobs and traditional trades including unskilled or semi-skilled labour that is in demand. We do have pressures in other parts of the economy and we want to be working with manufacturing, with tourism, with other parts of the economy so we are being as competitive as we can now and making the best of today’s opportunities and also building for that future where the Asian century will create so much new demand for the things that we can make and sell.

HOST: This is, I guess, a question about both sides of the question, the tax side and the jobs side. One of the things that came out of the Tax Forum was that we do face an increasing welfare and family payments crisis as one speaker put it. Do we get out of jail there by growing the economy rapidly and if that’s the answer what do we do? How do we get there?

PM: Well I certainly wouldn’t adopt that language but of course it’s true that we need to make sure our economy is strong, so together through the tax system we can fund the kind of services that make us a great Australian society. I mean Australians do want to know that the hospital is going to be there for them if they need health services, they do want to know if they age or their parents age, that there are options and choices for them.

I want to make sure we’re doing better for people with disability than we’ve done in the past which is why I’m very committed to a National Disability Insurance Scheme. That does mean we’ve got to have economic growth, prosperity, productivity - the Tax Forum focused on that in this time of economic change and the Future Jobs Forum will focus on it too.

We’re not coming to these forums as if the starter’s gun has just fired, we’ve been working on these things every day of government - a focus on jobs, a focus on supporting jobs today, a focus on what are the jobs of the future, that’s why we’re rolling out the NBN, why we’re so focused on clean technology, why we’re so focused on skills. But these events have given us an opportunity to look at what’s been achieved and to talk about how we can build on it.

HOST: Prime Minister, a listener question on a slightly different tack. How can MPs grant themselves a substantial pay rise when the average Aussie is struggling to more than ever to make ends meet?

PM: We’ve changed the system so that MPs don’t have a role in deciding what MPs get paid. That’s independently of MPs by the Remuneration Tribunal. I think that’s appropriate, that we don’t adjudicate on our own salaries or benefits.

HOST: There’s another question that comes up about the issues of trying to get more money into the till, what will happen on 1 July next year, how do you fund this new tax free threshold, carbon tax?

PM: Yes, that is how we are funding it so it’s part of assisting people with the less than one cent in a dollar flow through impact of asking the big polluters to pay for putting carbon pollution into our atmosphere and thereby reducing the amount of carbon pollution. So the tax free threshold is associated with carbon pricing but so are the clean energy jobs of the future, making sure that we are a country that is getting in on what is happening around the world as the globe moves to cleaner energy sources and I do note, I’m talking about that here in Australia

today on the phone to you in South Oz, Malcolm Turnbull was talking about those clean energy job opportunities last night at a lecture that he gave overseas.

So in fact, people on both sides of politics are recognising this clean energy future and Malcolm Turnbull is a well known supporter of putting a price on carbon as the only way to realise that clean energy future.

HOST: Prime Minister, thanks very much for your time this morning.

PM: Thank you.