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Hon. J.B.

HOCKEY
Treasurer
TRANSCRIPT 2GB WITH ALAN JONES
SYDNEY
FRIDAY, 2ND MAY 2014
E&OE.
ALAN JONES:
The Treasurer is here, good morning.
TREASURER:
Good morning, Alan.
ALAN JONES:
Ill share this point - we were talking off air there, and in light of everything youve had to
endure in the last couple of weeks putting this budget together you said that, listening to the
program this morning, Engelbert Humperdinck, sounded very good.
TREASURER:
Thats right; I grew up listening to Inkleburt Humpdidink every Sunday. My parents would
play it on the record player in those days and it just brought back a flood of memories as we
were driving in and I started singing it and the guy who drives me around in the hire car, he
said, you should be a singer. I said, well its looking like a pretty good option at the moment
actually.
ALAN JONES:
Absolutely.
TREASURER:
Ill end up singing in RSLs on Friday nights, anyway.
ALAN JONES:

Youve got to be able to still laugh havent you?


TREASURER:
You do Alan, it keeps the oxygen in your body.
ALAN JONES:
Before we get on to things like Budget. A question that I guess the nation wants to know, who
is paying for this Malaysian flight rescue operation?
TREASURER:
It is our search zone and we are there. Obviously we are in discussions with China and with
Malaysia and those discussions are ongoing. We think given how important it is and given
that Australians were on that plane, that we need to take the lead and it is our legal
responsibility.
ALAN JONES:
So there is an international obligation because the search is in our search zone for us to pick
up all the tab?
TREASURER:
Well, we are picking up the tab at the moment.
ALAN JONES:
Millions of dollars.
TREASURER:
We will work it out. I mean, we are being a good international citizen. Given the size of the
tragedy, we think now is not necessary to start trying to negotiate.
ALAN JONES:
But does it go on and on and on, do we just keep searching? Is there a time at which we say,
Look? You know, there is a new word in the vocabulary: closure. we want to have closure
with everything. I mean this cant go on for months and months and years and years.
TREASURER:

I think we have to find the plane; and why? Because for a start if there was any mechanical
failure, given there are a vast number of people flying on these planes every day, I think there
needs to be an understanding of what caused the problem. I mean, even if we find the plane,
I suspect we wont find out what the motive was because thats not going to be revealed by
anything I wouldnt have thought.
ALAN JONES:
But too bad if the plane is not in our search zone?
TREASURER:
Well, Ive got great confidence in our team but as a good global citizen I think we have got an
obligation to keep at it.
ALAN JONES:
The Commission of Audit - Im not going to go into that in any detail, other than to say to
you, I mean it is not a report by the Government its a report to the Government. You do
accept my concerns here that, and nor should it, but it doesnt bare any relationship to the
promises that you made. Nor the need, the political need to be re-elected. What are you
going to do with it?
TREASURER:
Well it has fed into our Budget deliberations. The first thing is, it confirms everything we
have been saying about the problems that we have inherited, that is what the report does.
ALAN JONES:
Basically it says that you will have to achieve a $60 billion reduction in annual spending by
2023 if you are going to get into surplus, $60 billion. Do you know where that will come
from? Youre not going to have a debt levy are you?
TREASURER:
Well, Alan
ALAN JONES:
Where did that come from, a debt levy?
TREASURER:

Ill just say to you, the Government spends money on people essentially under a certain
income level, in health and welfare services and so on. This deficit that we have inherited is
being borne by the whole country, we are going to all have to make a contribution. Now,
from our perspective the more people that contribute to fixing the problem, the less each
individual has to contribute and thats what we are very focussed on. Now, we are going to fix
the problem. What the Commission of Audit doesnt do is, it doesnt look at the whole
picture. It looked at the 15 biggest programs, which happen to be the fastest growing as well.
Most of them growing at more than the speed of the economy. So clearly, when you have a
spending program growing at faster than the economy it creates problems, structural
problems for you. But it doesnt look at the challenge that we have for growth and the Budget
is overwhelmingly going to focus on how we can grow the economy. How we can expand the
economy and at the same time we have got to deal with some of the issues that were raised
by the Commission.
ALAN JONES:
At the end of the day though, you know, you can get money from somewhere now, there were
two words, Ive tried to read all this, there are two words in one instance I cant find in here
and that is Climate Change and yet youve still got seven climate change agencies, 33
climate schemes in seven departments, they seem to be protected in all of this. But because
of all this nonsense about climate change and global warming we have a clean energy
regulator and we have got renewable energy certificates.
TREASURER:
Well they say, get rid of the Clean Energy Regulator, and we are.
ALAN JONES:
And the Renewable Energy Centre?
TREASURER:
And as for the
ALAN JONES:
You and I should be in the business of wind turbines because theyre subsidised. You say
were not going to chase SPC Ardmona and Toyota, and rightly so, down the road with a
cheque book. Why are we chasing Thai and Chinese wind turbine proprietors down the road
with subsidies of $400 000 a year for 75 years?

TREASURER:
Well, if I can be a little indulgent, I drive to Canberra to go to Parliament and so on, I drive
myself, and I must say I find those wind turbines around Lake George to be utterly offensive
and I think they are just a blight on the landscape.
ALAN JONES:
When are you going to knock them off?
TREASURER:
Well, we cant knock those ones off.
ALAN JONES:
You can knock the subsidies.
TREASURER:
Well theyre in the locked-in schemes and there is a certain contractual obligation, Im told,
associated with those things. But you will see in the Budget that we have addressed the
massive duplication that you have just talked about, the vast number of agencies that are
involved in doing the same thing. We are addressing that in the Budget. We have considered
that very carefully. And look, when I say, Alan, that we are seeing the end of the age of
entitlement that applies to business as much as it applies to each of us.
ALAN JONES:
Does it apply to politicians?
TREASURER:
Yes.
ALAN JONES:
The gold pass will go?
TREASURER:
I cant confirm where we are heading with that because that is a matter for the Budget, but I
hear what you say and we hear what you say.
ALAN JONES:

Parkinson, your Treasury Secretary, whom you were going to get rid of, forget that, thats
irrelevant, but supposing you get rid of him, to talk about the age of entitlement. As I said
earlier this morning, he would be on say $600-$700 000. These people are on twice your
salary, twice your salary, the Secretary of Treasury. But if he were to leave because you
moved him on and whatever, he takes with him a benefit. Now many of these people are on a
superannuation scheme called a Defined Benefit Scheme, which provides for them, a
multiple of final average salary. His final average salary would be approximately $700 000.
His multiple may well be 7, 6, 7, 8 times in a defined benefits scheme. How do you explain to
people out there that when he leaves he may well take with him a benefit of four point what
is six times $700 000, $4.2 million. 7 times $700 000, $4.4 million. We admitted that is
what the Future Fund was about, do people listening to you, talking about belt tightening,
how the hell do we reconcile that with these people walking away with millions of dollars?
TREASURER:
Well, youre right, Alan, and thats why the Defined Benefits Schemes have been closed.
ALAN JONES:
Well, theyre still available for these blokes.
TREASURER:
The problem is, that people have contributed over their working career to a certain
superannuation scheme. You can only close the scheme for new entrants going forward. You
cant retrospectively change.
ALAN JONES:
Quite, but thats why we are where we are today isnt it?
TREASURER:
Absolutely right, there are a range of things that need to be done. And a lot of them are
structural. I want to emphasise that. For example. Increasing the pension entitlement age to
70, we are intending for that to occur in 21 years time.
ALAN JONES:
If you read the papers here youd think it was going to happen tomorrow.
TREASURER:

Well thats right. In 21 years time, that is when you will be entitled to the pension when you
turn 70, right. The previous Government said 67 from 2023 increasing from 65 today. So,
you know, anyone who is entitled to the pension now is certainly not going to be effected. It
is hugely important that we have long term planning out of this Budget. And in having long
term planning we can address the long term issues. But in the short term we have got to have
an agenda for growth. Now we are going to spend money on infrastructure which is going to
help to drive the economy and we are going to focus on getting more Australians into work.
We dont just want people to work, we need Australians to work of all ages. You cant
assume that youre going to retire when you reach pension age.
ALAN JONES:
But you have got to be sure, politically, that youre not going to cop the pain without the
gain. Now, the Palmer United Party, Labor, and the Greens are not going to support a debt
levy. But whether we think it, people ringing here say, Ill tighten my belt, if thats what they
want, if its going to get us out of trouble: yes. But Palmer and the Greens and Labor are not
going to support a debt levy.
TREASURER:
Well we are not going to be intimidated by threats in the Senate. We need to lay down an
agenda that is going to grow the Australian economy and ensure that the Budget is
sustainable.
ALAN JONES:
Does that include a debt levy?
TREASURER:
We have to do what is right for the nation, Alan.
ALAN JONES:
Does that include a debt levy?
TREASURER:
I say to you again, I will do what is right for the nation, I am prepared to pay. I am sure
youre prepared to pay. Well, the only way we can pay, the only way people on incomes above
a certain level can contribute is through the tax system.
ALAN JONES:

But see you can draw from a debt levy the fact that we cannot get the money via savings so
we have got to then have a new tax, now the number of taxpayers earning $80 000 or more.
TREASURER:
Dont assume its $80 000.
ALAN JONES:
Sorry, it will be higher than that Im saying, but Im just taking $80 000. Its 10% of all tax
payers earn $80 000 or more of taxable income, they pay, 62% of all the income tax now.
TREASURER:
And we are going to go to the next election with a new tax agenda for the approval of the
Australian people that will ensure that we have a sustainable tax system. The Commission of
Audit looked only at expenditure and only in the 15 largest programs. So it is only a part of a
part of the total challenge. On the revenue side, we are going to have to have a new agenda in
taxation and the best way to lay out that agenda is to ensure that those that have the capacity
to pay, pay their fair share, but we have enough incentive in the system so that people can get
off welfare and go into work. This is a call to arms for the nation. We need everyone to
contribute to the heavy lifting in the short term but the long term benefits will flow to the
entire economy and the entire community.
ALAN JONES:
Right, so youve had the Remuneration Tribunal, Eric Abetz says, Look, hands up, it wasnt
us, this has been in the line for two years, and so again your Treasury Secretary gets an
increase from the Remuneration Tribunal effective July 1 of $42 000.
TREASURER:
We hear you on this, Alan, we hear you.
ALAN JONES:
Hes on $800 000. Does he need the other $42 000? Its our taxpayers money.
TREASURER:
I hear you. We hear you and I know these are the sorts of things that are very difficult in
politics because when you set up independent tribunals, because they say politicians and
public servants shouldnt set their pay, we set up the independent tribunals, then the
independent tribunals make a finding then everyone wants us to interfere.

ALAN JONES:
Yes but you said that, Tony Shepherd, its a report to Government not of Government. Some
tribunals report to you not by you, there are too many of these statutory authorities. For
example, we learnt yesterday that we are paying $100 million every year to thousands of
disability pensioners living overseas. Now a disability pension paid in Australian dollars to
someone in Croatia enables them to live in luxury. They are getting a pension, theyre living
overseas, theyre not contributing back into the economy, should that continue?
TREASURER:
Well this is definitely something we are looking at and when I read that report yesterday I
asked for some information on it.
ALAN JONES:
The seniors health card was established to help asset rich but cash poor farmers. Thats what
it was for in 1994. 33 000 people then, now 318 000. Do you have the capacity to root out
where people have got their hand out when theyre not entitled to it?
TREASURER:
You know what, Alan, in this entire review process that the Government has been involved
with, I have been stunned and I think Tony has been stunned at the failure of the previous
Government to update the infrastructure of Government. What does that mean? It means
Centrelink waiting times when I was there, Minister for Centrelink, were 6.5 mins. The
previous Government funded it at 17.5 minutes. Someone waiting on the phone for 17.5
mins, Someone rang Centrelink the other day and waited 82 minutes, a pensioner, 82
minutes to get through to Centrelink. Now, what weve found is not only are the systems
broken but the systems are unable to cope with change. They cant give us the information
we need to be able to fix the policies. So this been one of the great challenges in the Budget
process. I, on behalf of taxpayers, am going to have to spend more than $1 billion just fixing
the computers at Centrelink in due course. The system, the infrastructure of Government has
been smashed by the previous mob. These are some of the things we have to fix first.
ALAN JONES:
Why dont you go - we could talk forever, you have got a very difficult job. Im sure the bulk
of the electorate support you in what youre trying to do to repair what is unbelievable
damage.
TREASURER:

Well we are doing it for the community, this is the motivation.


ALAN JONES:
Thanks for your time.

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