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Transcript of interview with Ray Hadley: 2GB: 12 December 2016: mid-year economic and fiscal outlook; social services; energy prices; Christmas; Bill English

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The Hon. Scott Morrison MP Treasurer



Subjects: Mid-Year Economic and Fiscal Outlook; social services; energy prices; Christmas; Bill English.

RAY HADLEY: Treasurer good morning.


HADLEY: Now, you’ve got the release of the mid-year Budget review next Monday. I won’t be here. Can we do it now? Just to get a flying start so I don’t have to read the papers on Tuesday.

TREASURER: Still not finalised yet. As you know the National Accounts came out last week, since we last met. There is still some additional data which we’re putting in at the moment. So it will be a busy week this week. We’ll be working all the way through but that will come out next Monday.

HADLEY: The wheeling and dealing in the Senate, has it made it more difficult for you, as far as the Budget bottom line is concerned? And I’m trying to think of, when I and think about all the wheeling and dealing, I think we sat here, what a month ago and said if you get four of the six through you’ll be doing well. What did you end up with? What was it? Three of the six?

TREASURER: More than that. We ended up getting backpackers through, the ROC through and the HELP debt issue through and of course the ABCC. So that’s four.

HADLEY: Four of the six.

TREASURER: And I’m not sure what the other two are that you might be referring to. But look we were very pleased that we were able to get as much through as we did, $21 billion in Budget improvement measures, both in savings and revenue. That all got through in the run up to Christmas. It was a very busy time. But what’s important going forward, and I said this last week, is that as a parliament I think we have to commit to getting these things under control. Getting the Budget under control. Not everything can be done on this transaction by transaction, and we’ll be looking to have a clear understanding going forward next year about how we work together. I mean the Labor Party doesn’t want to fix the Budget. They don’t want to do that. They’ve made that clear. They’re just on a wreck the join sort of mission at the moment. I think we can expect that for the next two years. But we have to keep the economy growing, we have to increase investment and we have to get the Budget back to balance, and that requires passing what’s almost $20 billion of other savings measures and improvement measures between now and the Budget.

HADLEY: There was news last week that the lunacy of the Kevin Rudd days with the GFC and what he did then, pink bats, which is a piddling amount of money compared to the BER, Building Education Revolution. So someone has all of the sudden has decided that wasn’t the right path to tread at that


particular time. That the unbridled spending of the Rudd Government puts us in the position I guess that we’re in today.

TREASURER: Treasury commissioned some work by a fella called Tony Makin, from up in Queensland at Griffith University, who looked at all of this, and said that basically, it was a waste of money. Now, they handed out cheques to 16,000 deceased people, as we know. The school hall rorts, and the fires in rooves and the terrible tragic deaths of those four young men. I mean, what the economy needs is strong conditions for investment. They need competitive taxes, they need less regulation, so they can get on and invest in their businesses and create the jobs. That’s the plan we’re pursuing. We are being frustrated at every turn by the Labor Party. Just thinking about infrastructure for example. They opposed the East West Link in Victoria, they’ve been working against the WestConnex here in New South Wales, there are still Labor MPs on the day we’re moving ahead after 50 years on the Western Sydney airport, there are still Labor MPs working against that project. In Western Australia they’re working against the Freightlink project. Infrastructure is incredibly important and we’ve got an opposition that just seems to want to put up the stop sign every single time when you want to take the economy forward.

HADLEY: How do you actually deal with the fact, it’s a bit like that recurring nightmare when there’s something happening that you’ve got no control over. You want to reign in the debt. But then it grows at a rate that’s alarming. The interest rate I’m talking about there. The amount of interest we pay on a daily basis, a weekly basis, a yearly basis. Then you look, oh my god can we ever get back to the other side of the ledger by 2021, or by 2030, or by 2050. It’s insurmountable.

TREASURER: They’re very real questions and they’re ones the Government is working through. We’ve been able to reduce the growth in expenditure in real terms, in real terms, from over 4 per cent, 4.2 exactly, down to 1.6 per cent. Now, that’s a big drop in the rate of growth in expenditure. Now that slows your debt, but getting the Budget back to balance, remains the challenge. It’s not an

end in itself. It means that, exactly as you say Ray, you’re not rocketing up the debt and asking future generations to pay for recurrent welfare payments today. By all means you can use your balance sheet and finance to build in infrastructure, and we’ve got $50 billion worth of projects out there right now. I just mentioned some of the ones we’re committed to. Up in Queensland for example we’ve got the Bruce Highway, we’ve got $6.7 billion going in there. The Gold Coast light rail project, the Toowoomba Second Range Crossing, the Ipswich Motorway. These are all important projects. So the Government is investing in infrastructure, but it is important that we get the recurrent spending under control so we’re not borrowing money just to push it out the door on welfare payments today.

HADLEY: Welfare. Labor doesn’t want to be economically responsible in relation to curbing the spending. But welfare, now I’ll just share this with you, an email from a listener. I won’t identify him or his son. He’s an ex police officer. Works as an investigator for insurance companies interviewing fraudulent claims. He’s been doing it for a number of years, he travels all over NSW. One of many in this occupation, usually ex coppers. My email says, the majority of people he interviews are from a particular ethnic background. The scams he uncovers you wouldn’t believe. You and I have spoken about that. He says, he then goes to Centrelink with the scams, and he says Centrelink do nothing. Now I’ll give you an example. People come from Africa for a better life. This is where we’re really naive in this country. These are really smart people who can do a really good job for this country. But they get involved in childcare, as we’ve seen in Canberra and particularly in Victoria. So they’re involved in childcare and they’re smart enough to see that we’re hopeless in the administration of our money, public money, so they think here’s a rort. I’ll just pretend that I’ve got 185 kids here and I don’t have any children here. So as a result of that, I mean what I’m saying to you is, it’s great that we have people coming into the country who are productive and smart. But it’s bad that we’re so dumb and naive that we have, they get here and say, geez you couldn’t do this back where we came from.


TREASURER: Well the child swapping arrangements which you’re referring to in childcare we introduced regulation, both this year and last year, to shut those sort of rorts down. We’ve been able to save 10s of millions, if not more than that, as a result of shutting those sort of rorts down. As we’ve talked about before, you shut one rort down, and then they work around it and go and find another one. Now, one of the ones we’re been trying to get pursued through the parliament for the last two years, I remember if put it as Social Services Minister in the 15/16 Budget with Treasurer Hockey at the time, and that was a four week waiting period for Youth Allowance other, which is the youth dole. Now, originally it was at six months in the 2014/15 Budget. That was unacceptable to the Senate so we took it back to just one month. So that means you can’t go from the school front gate, when you leave school, to the Centrelink front door. Now we have been trying to get that measure through for two years. The Labor Party, even at the election said, we will never allow people to have to wait four weeks and there are plenty of carve outs for people who can’t go home because of abuse issues or people who are vulnerable, we put the protections in place. So these are young people who can go, and they can work, they can stack shelves, they can pick fruit, they can do any number of things, and we’re saying if they knock back those jobs, and they’re not taking those jobs, then they shouldn’t be getting the dole. Now, Labor should support this. The crossbenchers should support this. I know Pauline supports it, but we need Nick Xenophon to support it. I know David Leyonhjelm would support it. So it’s important that we get support for those measures. We’re got $6 billion of welfare savings measures before the parliament right now. Labor are like that guy on the road-side where they are doing some roadworks, their only problem is they have always got the sign on stop. They have never got it on go when it comes to fixing the Budget and growing the economy.

HADLEY: Economically, I think the bloke on the side of the road is selling watermelons. He is buying them for a dollar and selling them for a dollar. And the bloke says you are not making any money. He says what are you going to do? He says, I will get a bigger truck. I mean it’s just, now that leads me from what you just said to the front page and continues on page 2, Sharri Markson, now working for the Telegraph. The Polygamist relationships. Now, I didn’t think your colleague, who is normally pretty quick at his feet, Mathias Cormann, covered himself in glory on Sky News yesterday. He basically said it is cheaper to do it this way, that’s what he said, he said if we paid them the single mother’s pension as opposed to whatever pension they pay as part…

TREASURER: Well, that would be a rort as well, if they were getting a single parents payment that would be a complete rort.

HADLEY: Thank you for pre-empting me because that is my very point. So, in other words you’re living in a relationship with a bloke and there are two or three of them there - females I am talking about - and we are talking about Muslims in that particular guise. So, if they were to get the unmarried mother’s pension or whatever it’s now called which is politically correct these days. You are no longer an unmarried mother you are something else - single mother’s pension or whatever. Well, if you get that and you are still living with the bloke, well, that is a rort as well.

TREASURER: The law and its implementation cannot condone Polygamy. We all know that. It’s against our values. It’s 100 per cent wrong. So, the extent that there needs to be changes here and I think from what we’ve heard we have got to look really closely at this. You don’t want to jump out of the frying pan and into the fire. You can’t have people claiming single parent benefits and they are supported. So, you have got to do both but…

HADLEY: Let me say…

TREASURER: Our rule is clear: Polygamy - not on, against our values, against our culture.

HADLEY: Ok, the vast majority of Muslims are hardworking, tax paying Australians - point one. Point two - in the western parts of Sydney and parts of Brisbane, this is an art form, an art form. A young couple together, they look at the best way to get a quid because neither of them works and they


have got six kids. You pretend you don’t live here anymore. We cohabitate in a housing commission house but I am the sole tenant and you get the single parent’s pension and I will get this other Centrelink payment. So it is not the domain of just people who are in polygamist relationships.

TREASURER: That’s true.

HADLEY: It’s the domain of people who won’t get off their arses and have a crack.

TREASURER: Ray, this is right. There are the cases you have referred to but there are other broader cases. The last financial year, we recovered $1.5 billion from our debt and compliance measures through the Department of Human Services. Alone just on fraud in these areas there was some $14.7 million that was able to be recovered. So, it is their job to go out there and police these things. Sometimes the crooks move quicker than the welfare cops in these cases. We have had a lot of success on welfare compliance but clearly these sorts of outcomes if we can get them in through an internship at first and then get them in to a proper job and having them there longer term and if people muck up on that program then they will deny themselves opportunities. So, whether it is getting young people into jobs with the youth PaTH Program or our four week waiting period for the dole. We are out there trying to make sure they get into work and it is not right that they shouldn’t be and we have got to keep trying to get stronger in these working age payments.

HADLEY: I feel a bit sorry for Josh Frydenberg. He is being portrayed by some people as going too far last week saying the Government would look at emission intensity schemes. There are reports today, in Andrew Bolt’s column that everyone in Cabinet knew exactly what was being enunciated and all of a sudden when people started jumping up and down in the one spot and we started playing the audio we had on this program of the Prime Minister saying that he supported one and then he didn’t support one. I am talking about a carbon tax. Things change. Did Frydenberg get hung out to dry by the Prime Minister and the rest of Cabinet or not?

TREASURER: The Cabinet, the Government has had no contemplation of an emissions intensity scheme.

HADLEY: Well, neither has Josh, apparently. So, someone must have told him to say it. He is an intelligent young bloke. You wouldn’t make it up.

TREASURER: Josh is and he is a hard working Minister and particularly in the area he is working to make it, reduce the cost pressures on both businesses and households through what he is doing in the gas sector and by that I mean particularly the regulation of pipelines, and how the gas is moved around. These are important reforms which will create more of a single energy market and have greater competition for how people can access gas and that will be a good thing for reducing the pressure on electricity prices and energy prices around the country. Let me be absolutely clear, as the Prime Minister has, the Government has absolutely no interest in things that push up the cost of power prices and that includes an ETS or a carbon tax by whatever name you want to call it.

HADLEY: Yes, but you can understand people being concerned when you hear:

PRIME MINISTER: We should be working towards a clean energy future and there are various ways of doing that.

QUESTION: And a price on carbon?

PRIME MINISTER: Yes, there should be a price on carbon but there are various ways of doing this. A tax is one, an emissions trading scheme is another, the Coalition’s policy of the Government spending money to put a price on carbon with tax payer’s dollars is another way and there are many other techniques.


HADLEY: To be fair that was 2011.

TREASURER: That was 2011.

HADLEY: But he has had an epiphany since then because he clearly said there should be a carbon tax.

TREASURER: Others have said that as well. I remember Tony Abbott saying it at one point.

HADLEY: But he is not the Prime Minister.

TREASURER: Yes, I know and that is what Malcolm said back in 2011 and I am aware of what other politicians have said at other times. What matters is what the Government policy is now and going forward and the Government’s policy is not to have one. Full stop.

HADLEY: Have a happy, holy and prosperous Christmas and New Year and I will see you back here on the 23rd of January, God willing.

TREASURER: I look forward to it, I think I will be away on that day Ray but I look forward to catching up. Can I thank your listeners too for the opportunity for us to get together? I appreciate the feedback I receive from your listeners Ray. I wish you a very Merry Christmas. I just noticed that Bill English has become the New Zealand Prime Minister. I know Bill quite well. He will be an outstanding Prime Minister very much in the John Key vein and that is an excellent choice and we will have an outstanding relationship with Bill. He is a very good bloke and he will have a great relationship with Australia. So, Merry Christmas, and if your listeners get the chance pop down to St Marys, I was there with my family last night, down at the forecourt of St Marys.

HADLEY: It’s on your social media page.

TREASURER: Yes, I went there with the family. We go there every year. We have done it ever since they started it. It is just tremendous and congratulations to the team there and I think PAYCE is the major sponsor who took over making sure this happens every year. It’s not done by the council or the Government it’s actually done privately. Take your family, you’ll really enjoy it. It’s quite spectacular.

HADLEY: You know what I love seeing as well, I am glad you mentioned it, the one in the CBD but when I travel Pennant Hill Road the Mormon Church on Pennant Hill Road they do the most magnificent Nativity scene every year.

TREASURER: All for nativity scenes, all for Merry Christmas, God bless your listeners…

HADLEY: No Happy Holidays here!

TREASURER: Have a great Christmas and enjoy the birth of our Lord.

HADLEY: Thank you very much. We’ll talk to you next year. That is the Treasurer Scott Morrison in the studio.


Further information: Julian Leembruggen 0400 813 253, Kate Williams 0429 584 675