4 August 2014
Transcript - #2014022, 2014

Interview with Rafael Epstein, 774 ABC Drive

PRESENTER, RAFAEL EPSTEIN:

Steve Ciobo. He’s the Parliamentary Secretary to the Treasurer, Joe Hockey, and he’s been good enough to give us some of his time today. Steve Ciobo, good afternoon.

CIOBO:

Good afternoon.

EPSTEIN:

You do have a problem around a real; whether or not the Budget is fair, don’t you? These are Treasury figures that show percentage wise, amount wise, poorer families lose more.

CIOBO:

I don’t think that we’ve got a problem. What I think the problem is that all Australians recognize, and I’ve go no doubt it’s the reason why people supported the Coalition in strong numbers at the last election, what’s unfair is to have a continuation of the system, a continuation of spending by government that sees us borrowing a billion dollars a month just to pay the interest on the debt that Labor accumulated.

What’s unfair is to continue spending money so that it’s the next generation; it’s Aussie kids who are going to be paying off the spending of today. That’s what’s unfair and that’s why we’ve got an economic plan to make sure that we start to live within our means. We recognize it’s a tough Budget, but it is a fair Budget. Everyone is making a contribution and that’s the only way as a nation we’re going to get it back on track.

EPSTEIN:

Is it fair if poor people pay a greater; or lose, I should say; lose a greater dollar amount? It’s a greater amount both in simple dollars and as a percentage of their income. Does that make the Budget fair?

CIOBO:

What we need to focus on here is what we’re doing to try to grow the pie for everybody. The simple fact is that the government has been spending too much money. Under Labor we saw the sixth biggest deficit in Australia’s history. As I said, we’re borrowing a billion dollars a month just to pay the interest on the debt that Labor left behind.

We’ve got to do something about the amount of money that we’re spending. Obviously if someone is dependent on taxpayer support, if someone is in net terms actually a beneficiary of taxpayer support and not making in net terms a contribution to Australia, then they’re going to feel changes more so than someone who isn’t reliant on taxpayer support.

EPSTEIN:

Is that why; let me go; I should double check. These are Treasury figures, but not released by Treasury, so they’re Freedom of Information figures. Are the simple figures correct? Does the Government dispute the 844 figure and the 517 figure for the higher income…

CIOBO:

These figures are meaningless because these figures don’t take into account the true payments and the true benefits that apply to people on lower incomes. For example, people on lower incomes get discounted access to childcare. People on lower incomes get additional support in a myriad of ways, none of which is taken into account in these figures. That’s the reason why these figures, frankly, are highly misleading.

EPSTEIN:

But you did say there that those who receive taxpayer benefits; and a lot of people under $36,000 are net recipients, I understand that; is that the argument? Because you’ve got this; it mimics the modeling. If you look just at how the Budget impacts on people; so putting aside those things that others on low income get, but if you look just at the Budget figures, those on a lower income lose more of the amount of money they can spend each week. Is the rationale for that because they are net recipients and not net contributors?

CIOBO:

No. The rationale for changes made in the Budget is to ask all Australians to pay their fair share and to make a contribution to getting Australia to live within its means. The same tables that were released under the Freedom of Information request also made it clear that, for example, the average income taxes that were paid by a high income family in the same year, that is 2016-17, would be just under $48,000.

This funds on average benefits, cash transfers, for nearly four low-income households. Let me say that again. Higher income families pay just under $48,000 in tax payments, which in turn funds nearly four lower income households.

EPSTEIN:

Isn’t this how a progressive tax system is supposed to work?

CIOBO:

Yes, but we’ve got to keep some perspective about what’s going on. We can’t keep jacking up taxes; jacking up taxes and asking for more and more and more taxation revenue. The problem is that we have too much government expenditure. This is the reason why as a nation; we’re starting to sink into so much debt and so much deficit.

What we’re trying to do is get everyone to make their contribution. That’s why, for example, high income earners are also paying the debt levy. That’s why, for example, we’ve made changes around family tax benefits. The fact is that across the economy everyone is being asked to make a contribution because we cannot allow a situation to continue where Aussie kids will have to pay off for decades spending that has been used in the last six years under Labor and that continues to be drawn down today.

EPSTEIN:

I suppose the people you really need to persuade are the crossbenchers. I wonder if you need to introduce other measures to make the Budget more palatable to them, because they; the crucial crossbenchers seem to believe that the Budget is unfair. Is the only way you get the Budget through is by introducing some other Budget measures?

People talk about the concessions on superannuation to those on higher incomes. Do you need something like that to make the Budget more attractive to the votes you need in the Senate?

CIOBO:

No. As a government, we’ve made it clear; in fact, we’re the only ones that have put forward a clear plan about how to get Australia to live within its means. It’s well and good for the Labor party, the Greens and some of the crossbenchers to say, oh well, we should just continue spending more money.

Take, for example, the mining tax. They want to see the continuation of over seventeen billion dollars of spending in relation to the mining tax, even though the mining tax itself only raised, for example, in this last quarter half of one percent of the forecast revenue. So it’s raised half of one percent of forecast revenue..

EPSTEIN:

About the price of a house…

CIOBO:

And yet they want to continue to spend seventeen billion dollars.

I realize that that’s popular, don’t get me wrong. We recognize that that’s the popular thing to do. We recognize it’s easy to keep telling people look, don’t worry, we’re going to continue these payments. There’s no need for there to be any belt tightening. There’s no need for anyone to make any sacrifice.

The problem with that approach is the ones who are making all the sacrifices are the next generation of Australians who are being mired in more and more debt, and it will literally take decades for them to start to repay this debt and the interest.

EPSTEIN:

You’re the Parliamentary Secretary to the Treasurer. You’ve been making these arguments since the Budget. You are going to have to throw the crossbenchers a bone and you are going to need to… I get lots of texts on this topic asking for other tax measures to hit those on higher incomes in some way. You are going to have to throw that sort of bone at the crossbenchers, aren’t you, to get the majority of the budget through the Senate?

CIOBO:

But this is the point; continuing to increase tax, continuing to ask people to pay more and more tax does not grow the pie. The more tax you ask people to pay, the more aggressive it is and the more that you actually dilute wealth in a country. It is not the correct approach. We cannot ask people to pay more and more tax.

The problem the Government has is that we are spending too much money. We need to address the spending side. We need to address the fact that Labor spent the sixth biggest; or ran the sixth biggest deficits in Australia’s history. They are the issues that need to be targeted and that’s what the Government is trying to do.

We are balancing that with some modest changes around tax; for example, high incomers paying the debt levy. We also, of course, wanted to put in place the fuel excise; but, low and behold, The Greens voted against the fuel excise on fossil fuels. No one would have anticipated that.

But we’ll continue have rational, calm conversations with the crossbench. We know that at the end of day; I believe fundamentally that the crossbench will recognize that it is inherently unfair; for all the discussion of fairness, it is inherently unfair to settle the next generation of Australians with debt to pay for spending today. That is grossly unfair.

EPSTEIN:

As I mentioned, Steve Ciobo is the Parliamentary Secretary to the Treasurer. One of the crossbenchers who actually met with the Treasurer on Friday, Senator Jackie Lambie; we’ll have a word with her in a moment. 1300-222-774 is the phone number. The text is 043-774-774.

Steve, Ciobo, our former ABC colleague, now Fairfax colleague, Latika Burke had a story yesterday that the paid parental leave scheme is on the back burner. Can you guarantee that the legislation for that, the Prime Minister’s signature policy; that that legislation will be seen by the Parliament before the end of the year? I think her report said it’s delayed until the next year.

CIOBO:

We have a scheduled start on that policy from the 1st of July next year. That remains the scheduled start. That remains the focus of the Government. We want a situation; we’re not apologetic about wanting a situation where we enable predominantly young Australian women to remain engaged with the workforce; to say to young Australian women if it’s good enough for you to receive replacement salary will you take holiday leave …

EPSTEIN:

I think the problem is the argument is not persuading the crossbench, so can you guarantee the legislation will be there before Christmas?

CIOBO:

Yes. As I said, we are focused on that scheme commencing on the 1st of July next year and nothing has changed in that regard.

EPSTEIN:

But that would need legislation before Christmas or you could do it in just a few months?

CIOBO:

I can’t possibly answer that question, but I’m saying to you that we want the scheme to start on the 1st of July next year and we’ve never changed from that.

EPSTEIN:

Okay. I appreciate your time. Thanks a lot.

CIOBO:

My pleasure.