GEOFF HUTCHISON: This morning, I want to hear your budget reaction, are you a pensioner, or a small business owner, perhaps someone on unemployment benefits, disappointed the dole won't be going up? Perhaps you're terrified by the growing debt burden, or completely underwhelmed, because so much of this has been leaked out already? The number's 1300 222 720, send a text to 1992 2720. But now, having delivered the budget, the Government has to sell it. Lindsay Tanner is the Federal Finance Minister, good morning to you.
LINDSAY TANNER: Good morning, Geoff.
GEOFF HUTCHISON: Mr Tanner, we were told it would be a tough budget, that people would have to pay a price. Haven't you just hit us with a wet lettuce?
LINDSAY TANNER: Oh look, I think these things are in the eye of the beholder, Geoff, and I think there'll be a lot of people out there who wouldn't agree with that assessment, there are some pretty hard decisions here about family payments, about superannuation tax concessions, and of course the age of the pension and private health insurance rebate. There are a variety of things there that are all about trying to get the budget back into a sustainable position in the medium term. We've had a huge loss in our revenue, we can afford to have deficits for a short period of time, and we need to, in order to sustain growth and jobs, against the global recession. But there are some pretty tough decisions in this budget.
GEOFF HUTCHISON: Can you tell me what they are?
LINDSAY TANNER: Well, first and most obviously, increasing the pension age to 67 progressively, you've got the freeze on the upper limits for family payments, and various other payments, which means that there'll be people at the upper end of the scale who start to see reductions in their payments over time. The indexation method for Family Tax Benefit A which was previously linked to average weekly earnings, will now be linked to the CPI, which means that gradually, over time, the increase that occurs in those payments, will be lower than it otherwise would have been. There's a new system with respect to the private health insurance rebate, it'll be a structure at the upper end of the income scale, so that very high income earners wouldn't get the rebate, and people in that upper middle, will have a lower level of rebate, and also an increased penalty, if they don't take our private health insurance. They're just some of the significant savings measures that are in the budget, and we'll cop political flack about them, don't have any doubt about that.
GEOFF HUTCHISON: The best a lot of people are saying about it in today's analysis is that it appears hopeful, that all those decisions on debt and spending, have been based on Australia bouncing out of this recession, with growth rates of 4.5 per cent. Why are you so hopeful, when other people are so anxious about debt levels and deficits, that they worry are unsustainable, and might be there, for future generations to have to deal with?
LINDSAY TANNER: Well, it's very clear that the debt that's been projected is entirely sustainable, and in fact it is still amongst the lowest in the developed world, and way, way below the developed world average, so it's expected to peak at around 13 per cent of GDP, about 13 per cent of our total economy, whereas the developed world average is heading to around 80 per cent, so it's still a very, very modest debt level. Ratings agencies have already come out and indicated that they've got no great qualms about the Australian Government's balance sheet, and financial projections, that's a very positive sign, a very important endorsement. So I certainly don't accept the claims that these are unsustainable debt levels, they are unavoidable. The alternative would be to massively cut into spending and hike taxes in a way that would hugely add to the current economic problems, would throw thousands and thousands of more people out of work, and would see lots more businesses fail.
GEOFF HUTCHISON: And not something you would contemplate 15 months out from another election, because that is the argument, that it's been framed with the next election in mind?
LINDSAY TANNER: Well, not something I'd contemplate, full stop, Geoff, I'd have to say, that ultimately, when you're the Government you're responsible for the wider circumstances in which people live their lives, and the economic circumstances of course are fundamental to that, so we're very conscious of the fact that unemployment's projected to rise by several hundred thousand, it's projected to peak at over eight per cent, that's a very serious thing. And the argument that somehow we should be cutting back, and therefore allowing unemployment to rise much higher, far more businesses to go broke, I just think is unconscionable. That's the kind of positioning that ultimately created the Great Depression in the 1930s, we reject it, we think the borrowing's responsible, and we think it's unavoidable, and we've got a strategy to get the budget back into surplus.
GEOFF HUTCHISON: Thank you for talking to me this morning.
LINDSAY TANNER: Thank you very much.
GEOFF HUTCHISON: Lindsay Tanner is the Federal Finance Minister.
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| Media Contact: | Website: |
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| Nardia Dazkiw - 0418 144 690 | www.financeminister.gov.au |
