Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Budget 2011: Transcript of interview with Chris Uhlmann: The 7.30 Report: 11 May 2011: 2011-12 Budget; regional processing centre

Download PDFDownload PDF

Transcript of interview with Chris Uhlmann, The 7.30 Report

WED 11 MAY 2011

Prime Minister

Subject(s): 2011-12 Budget; Regional processing centre

HOST: Well, Prime Minister, what would happen if the price of commodities falls over the next couple of years?

PM: Well, Chris, we base the Budget on the best projections available to us from Treasury. We’ve made conservative assumptions about the price of commodities in this Budget, with the terms of trade slightly falling away during the duration of the four years that the Budget covers.

HOST: In the 2007 election, Kevin Rudd liked to say quite a lot, well, are you planning for the end of the mining boom? It was a question he was asking of the Howard government. Are you planning for the end of the mining boom?

PM: Well, certainly we believe that this mining boom, mining boom Mark II, will last for some period of time. This is a very special opportunity for our nation to make a difference, particularly to long-term disadvantage and getting more people into the workforce.

HOST: Now, one of our panellists, Sarah, says that freezing family benefits payments puts $2 billion back in the pockets of Government, but of course then takes $2 billion out of the pockets of families. Is that a fair comment?

PM: Well, I’m not sure what income level Sarah is on, but let’s be very clear here - family payments received by people are going up in the next financial year. If you are receiving a payment for your child now, that rate of payment will go up.

We have paused indexation of the income thresholds. That’s obviously affecting a limited number of people at the upper end. We needed to make some tough choices in this Budget because it was important to get the Budget back to surplus in 2012-13 as promised, and that’s about families and their cost of living, including the costs of raising children, because we didn’t want government to be adding to the inflationary pressures in the economy.

I’d also remind, too, there’s a special new payment for families with teenagers because there’s been an historic anomaly where the family payment system assumed a 16-year-old cost you less than a 15-year-old, and I think we all know that’s now right.

HOST: Back in 2007, you make much of kitchen table economics and cost of living arguments, rather than large economic arguments. Are you sorry that you did that now, because it seems that everyone believes that they deserve some sort of hand out from


PM: I think the two are connected, and their connected in people’s real, lived experience, and they’re connected in our minds, too.

I understand that families out there are under cost of living pressure; understand that people get utilities bills and they look at them and they wonder, you know, ‘how are we going to make all of this add up?’, so I get that there’s pressure out there on the shoulders of Australian families, but what we’re doing in this budget is saying to Australian families ‘our priority is keeping the economy strong.’ In order to do that we do need to bring the Budget back to surplus. That’s you know, about not adding to inflationary pressures which would worsen those cost of living pressures for Australian families, but it’s also about spreading opportunity, and families want an opportunity - get a job, get a training place, get a better job, see their young son get an apprenticeship, see their young daughter perhaps go on to university, see their younger children in a great school, see their baby in supported childcare if they need to, to return to work, and all of that’s in this Budget.

HOST: Is a family on $150,000 a year rich, because it seems that the means testing is settling about there?

PM: Well, what I would say is I understand families on $150,000 a year still feel cost of living pressures .We have to target government payments to people in the most need, but for the family on $150,000 a year, I mean, let’s be very clear, they’d continue to receive childcare tax rebate if they’ve got a child in childcare, and many families would. For those families, we’d be working with them to make sure that their children go to a great school. We’ve almost doubled the amount of money going into school education.

They, if they had an emergency medical situation, would be down at the local public hospital. We’re investing to make that public hospital better, and of course we don’t want to exacerbate their cost of living pressures by adding to inflationary pressures, and that’s what a Budget in surplus is about.

HOST: And the people on our panel are pleased about the spending on health, but they do note with things like mental health that some of this is back-end loaded, that a lot of the payments start coming in later years.

PM: Well, this is unashamedly a 10-year roadmap for mental health. What mental health stakeholders said very clearly to us is that they wanted a clear way forward. They didn’t want to be buffeted - you know, money this year then no money next year and then a changed program the year after. They wanted to get the settings right and build over a10-year period so we fundamentally improve our mental health system, and that’s what we’ve delivered with a $2.2 billion package.

HOST: But when we look at that figure, too, and this is something that Lindsay Tanner has brought up recently, that’s over five years, not four, which is the usual way that these things are measured, it includes $600 million of spending that’s already previously been announced, so aren’t there accountancy tricks in doing that just to get a big, headline number a the top?

PM: Well, there’s complete transparency about this in the Budget papers, and yes, we have amended a program that mental health professionals and people who best represent the community that relies on mental health services told us wasn’t working equitably, and particularly people in rural and regional Australia were finding it very hard to access, so we’ve made that program better. We’ve counted it in the $2.2 billion because it will be a better program.

HOST: When you look at the way that you’ve designed this and getting back to surplus in just a couple of year’s time, even though it’s a small surplus, have you been defined by what the Coalition says a good government is, a good economic manager is, that you have to have a surplus, because that’s not always the measure, is it?

PM: I must admit I don’t define myself by anything the Coalition says. If I did all I’d do is listen to relentless negativity all day, every day. We don’t listen-

HOST: -And yet it appears as though, with this desperation to get into even a small surplus.

PM: This is nothing to do with the Coalition’s critique. This is to do with my understanding the and the Government’s understanding about what will best keep our economy strong.

When we had the global financial crisis - you know, the biggest global economic challenge the world has faced since the Great Depression - it was the right thing to do to have a deficit, to have a debt, to keep supporting jobs, keep Australians in work .I’m glad we did that and we kept this country out of recession.

Now, as we’re moving up and the economy is coming to full capacity, the right thing to do is for government to reduce its footprint and not to add to inflationary pressures.

HOST: Over the next four years, the amount of money you’re going to spend on detention is going to go up by $2 billion. That’s one real growth area in the Budget. How much closer are you to a deal with Papua New Guinea?

PM: Well, we are continuing to have constructive discussions with PNG, and on the weekend that’s just passed I released my joint statement with the Prime Minister of Malaysia about an innovative transfer agreement working under the regional framework that was agreed by all countries in the region at the Bali process. So, we will continue to work on this. The Malaysian agreement that Prime Minister Najib and I have said we will enter is one that would take away from people smugglers the very product that they sell, which is a passage to Australia and entering into our processing system.

HOST: So, in that you’re admitting there are pull factors and that they have risen since you came to government, so doesn’t show that your first attempts at this were abject policy failures; that you contributed to a rise in the number of boat people?

PM: Well, I’m going to disappoint you, Chris, by not agreeing with the premise of your question. We believe that there are push factors around the world, things that get people on the move. Look at Sri Lanka. We were seeing numbers of people come from Sri Lanka in the aftermath of civil war. Now, of course, it’s stabilising and numbers have gone down, so people getting pushed by events around the world.

HOST: And they were being pulled by Australia?

PM: Well, I’m not agreeing with that. That might be your analysis, Chris, but it’s not mine.

HOST: So why the change of policy?

PM: Well, my analysis is we need to send a very strong signal to people smugglers and to the people that try to ply into boats and sell their product to that if a people smuggler says to you ‘I can get you to Australia, if you’re processed there you’ll get re-settled in Australia’, well, that’s not true, because there’s a risk, a real risk, that you’ll end up in Malaysia at the back of the queue.

HOST: Prime Minister, thank you

PM: Thank you.