RADIO ABC PERTH | DRIVE WITH GARY ADSHEAD
SUBJECT/S: Salmon; The Coalition voting against a tax cut; Labor delivering for Australians when it comes to the cost of living; Investing in Defence; More energy bill relief.
GARY ADSHEAD, HOST: Have a listen to this, because I have the Deputy Prime Minister standing by and of course the Defence Minister as well, I’m sure he’s caught this today but just in case he hasn’t – and caught, that’s a pretty good pun without even trying – this is the moment when a Senator in the Senate gets up to make a point about salmon farming. It’s Senator Sarah Hanson-Young and she has a prop with her.
[EXCERPT OF SENATOR HANSON-YOUNG]
ADSHEAD: I think that’s a first, but my next guest will know. It’s the Deputy Prime Minister and the Defence Minister Richard Marles. Thanks for joining us Minister.
RICHARD MARLES, DEPUTY PRIME MINISTER: Gary, how are you?
ADSHEAD: Have you ever seen a giant salmon waved around in any house of Parliament before?
MARLES: I’ve not, I’ve not. And I was, I think it was in question time, I mean obviously I’m in the House of Reps, but I was sitting next to Jim Chalmers, I sit next to Jim Chalmers and he showed me a photo of Senator Hanson‑Young with said fish. It’s certainly a first in my experience, put it that way.
ADSHEAD: I reckon you’re old enough though to remember the Godfather movie. Luca Brasi sleeps with the fishes.
MARLES: Indeed.
ADSHEAD: Alright, well look, I mean in amongst all of the serious stuff, sometimes we’ve got to have some light hearted conversation about what’s going on. But a budget was brought down last night, believe it or not, and it’s a budget that comes before an election. So, I mean the question for me is, is that $5 a week tax cut that people will receive next year a pre‑election sweetener or a real cost of living measure?
MARLES: Well, it’s a real cost of living measure and I mean, we’re not wanting to overstate it, it comes as part of a series of tax cuts that we’ve put in place since– well, over the last three years which in total will mean that when they’re all in place for an average income earner they’re $50 better off a week and that’s a substantial tax saving and that’s what we’re trying to do with the tax system. And even then it forms part of a broader suite of measures around cost of living which includes energy rebates, includes what we’ve done in relation to medicines, I mean we’ve reduced the maximum cost for a PBS medicine, or that will occur as part of the budget measure, down to $25. Now I mean the last time a PBS medicine cost $25 was back in 2004, the last time we had a maximum price at that level. All of these are really about acknowledging that there have been real challenges around cost of living as Australia has not been immune from what the world has seen in terms of global inflation. We wanted to try and manage things in a way where we are easing that pressure on people but also addressing the fundamental issue and that is getting inflation down, which we’ve been doing. And that’s also being done through prudent economic management. The budget bottom line under us is $207 billion better off than what we inherited from the Liberals. And that means that whereas inflation was 6.1% and going north when we came into government, it’s now 2.4% and going south.
ADSHEAD: Ok, well just quickly on that, doesn’t Treasury sort of suggest that there might be an uptick in inflation by next year, up back to 3%?
MARLES: Well, it is already within the 2-3% band and that, frankly, has happened faster than people imagined. It has meant that we’ve been able to see an interest rate cut from the Reserve Bank, but this has been a massive effort to get inflation down. That’s the fundamental root issue which needed to be addressed. We delivered two surplus budgets, something the Liberals never did, and that was by virtue of the prudent budget managing that we’ve done. And whilst this forecasts a deficit, it’s still less than what we inherited from the Liberals in this year. And in total, as I say, across the seven years that we’re responsible, so, it’s the three years that we’ve been in government plus the forward estimates, it’s a $207 billion difference. You know, over a decade that saves $60 billion worth of interest payments that the government would otherwise have to pay. But importantly, what it does is put downward pressure on inflation and that’s what we needed to address. The economy is starting to turn a corner in that respect. We’re seeing economic growth which is really heartening. We’ve been able to do this while keeping unemployment low and while seeing real wages grow. But along the way, it’s been really important to have cost of living measures there for people. We get that people are still doing it tough and the tax cut that we announced last night, it’s a part of that.
ADSHEAD: Ok, just on it, though, because the $17 billion that this costs for a $5 per person tax cut going forward, that’s all going towards the deficits you talk about. And structurally, the deficits are out to 10 years. Are you disappointed in that? That, you know, real reform seems very hard for governments to achieve now because of the pressures of the election cycle and the whole cost of living mantra which seems to be hanging around government’s neck.
MARLES: Well, it’s more than a cost of living mantra, it’s been a cost of living reality. And that’s what we have been seeking to address. And, you know, this is– I mean, the exercise of framing and delivering a budget is a matter of balance. You know, you do need to make fine decisions. If you go too far in one way or the other there is the prospect for real pain to be felt here, but I think we feel we’ve got the balance right in this sense that we’ve been able to put in place this cost of living measure amongst a suite of other cost of living measures, whilst at the same time over the course of this term of government, giving rise to the single biggest fiscal turnaround that there has been in a term of government. So, I mean, if you want to see it through the lens of what we’ve been able to do in terms of prudent economic management, in terms of finding savings and being able to improve the budget bottom line, we’ve done more work in relation to that over this three years than has ever occurred in a term of government before. But we’ve been able to do that in a way where we’ve also delivered real cost of living measures which I think do make a difference. And people can sneer at the tax cut, which is what we’ve seen the Liberals do. I mean, remarkably, we saw the Liberals in the House of Representatives today vote against a tax cut, vote against lower taxes. This is a Liberal party who is voting for higher taxes. I mean, frankly, Robert Menzies would be rolling in his grave and it probably is no wonder that Robert Menzies’ seat no longer sits in the Liberal pile. But that’s what’s going on here. And they can sneer at it, but it is an important contribution to helping people get through.
ADSHEAD: Can I ask you, on Defence, a billion dollars of the funding has been brought forward in the overall spend on Defence going out now for the next four years. Why is that? Why did you need to bring that billion dollars forward?
MARLES: Well, first of all, to just take one step back. We put $50 billion of additional money over the 10 years and going forward it will be $57 [billion] over the 10. As that rolls into the forward estimates, what that means is that over this forward estimates there’s an additional $10.6 billion of Defence spending relative to what we inherited when we came to government. So, it’s a significant increase. You’re right, we’ve re-profiled a billion of that to be more forward than was going to be the case prior to this budget. That is about needing to see the acceleration of spending to deliver a number of things, not least of which is the development of HMAS Stirling to be ready for the Submarine Rotational Force–West, which is due of course in 2027. And there’s a lot of measures that are focused on Western Australia, that being one, the development of the Henderson Defence Precinct being another. It’s really important that we are moving as quickly as we can. I mean part of this as well is seeing the fast acquisition of a new general purpose frigate in the Navy and we announced that more than a year ago. And as you know, whilst the first of those will be built overseas, the intention is for the majority of the build of that class to occur at Henderson in Perth as well. All of this requires money now and so the additional $10.6 [billion] that we’re seeing over the course of the forwards, being able to re‑profile a billion dollars in a more advanced way, all of that enables us to move forward in the timely way in which we need to, to make this happen and we need to make it happen and we will.
ADSHEAD: Just going back to cost of living for a second on the $150 electricity credit, for example. You know one of the criticisms that you’ve copped, and I know that it comes around usually when these sort of incentives are put in place or these rebates, but why can’t you just target the people that really do need it? Why should– and I’m not having a go specifically at Gina Reinhart, but I’m just plucking a billionaire out of the air, why can’t you sort that out?
MARLES: Because ultimately there becomes a question of efficiency in terms of how you deliver a payment. I mean, what matters is that we are in the most cost effective way getting this into the hands of people who need it. We can spend a whole lot of money means testing these things, which is in effect what would occur in terms of setting up the infrastructure where some people get the payments, some people don’t. At the end of the day, there are occasions on which if you want to have an impact and an immediate impact in terms of easing the cost of living, then this is the way you do it and you get that money out the door and you help people. And our judgement here, and sometimes you do mean test payments throughout the budget, there are a whole lot of means tested payments within it. But in relation to this, where we were trying to seek– give rise to very immediate assistance as people are experiencing the challenges of increased prices, this was the efficient way to do it and that’s the way in which we’ve been able to have the biggest, most immediate impact.
ADSHEAD: But you say it’s efficient, but it’s also unfair, isn’t it?
MARLES: Well, what we think is fair is not necessarily looking over your shoulder at others, but making sure you’ve got the money yourself and getting it into the hands of people quickly is what matters. It is right to means test a whole lot of payments which are in the budget and within our welfare system. And so it is the case that the whole– the pension, for example, has a whole lot of means testing around it. But this is a series of one off payments which we want to have an impact right now and to get into people’s hands, get into people’s pockets. And the quickest way to do that is to do it in the manner in which we have and it has made a difference to people. And you know, there is a point where, you know, you can get into means testing what is ultimately an amount of money measured in hundreds of dollars per person and you’ll end up spending more money on the process of means testing than on giving the money to the people in the first place.
ADSHEAD: Is it means testing though, or is it just aligning it to someone’s taxable income?
MARLES: No, well, that’s what means testing is. What I’m saying–
ADSHEAD: But that’s not hard to do, is it?
MARLES: There is definitely infrastructure associated in administering a means tested payment relative to having a flat payment. And as I say, it’s not that you want to just do a flat payment all the time. I mean, the tax system itself is a progressive tax system and that’s very important. But for a payment of this kind, which is measured in hundreds of dollars, which is in a relatively limited way, you want to be able to get this out the door as quickly as you can.
ADSHEAD: All right, well, I better let you go because there’s salmon on the table for dinner at Parliament later on, so go and get your fillet. Minister, thanks very much for joining us.
MARLES: No worries, thanks Gary.
ENDS