DAVID BEVAN: Good morning Lindsay Tanner.
LINDSAY TANNER: Good morning David and Matthew.
DAVID BEVAN: And thank you for making yourself available.
LINDSAY TANNER: My pleasure.
DAVID BEVAN: Ian has called from Urrbrae. Good morning Ian.
CALLER IAN: Good morning gentlemen.
DAVID BEVAN: Your question.
CALLER IAN: My question is - it's very nice to hear all this infrastructure being done with the roads in the city and, and the tramways, and the railways, and one thing and another - but, my question is, has there been any money put aside to duplicate the Dukes Highway from Tailem Bend to the border, and to duplicate the Adelaide Melbourne railway line which is long long long long overdue?
LINDSAY TANNER: The short answer is no Ian, and the, keep in mind that the bulk of these things remain the responsibility of State Governments. There's still a very significant Federal Government involvement. And the projects that we, the big projects we are providing funding for are things that are proposed by State Governments; they're then assessed by Infrastructure Australia - an independent arms length body - for the merits of the project, and we then have proposed funding for them. So, most of these things still remain primarily State Government responsibilities.
DAVID BEVAN: We had the State Treasurer in our studio earlier today, and we asked him about the money for the extension of the O-Bahn into the city. And he wasn't too sure which of the routes it would actually take. But, are you saying that the Federal Government has handed money over for a specific project which has been approved by the infrastructure fund?
LINDSAY TANNER: That actual project is, is outside the Infrastructure Australia process. We've got some smaller amounts of infrastructure spending, including stuff at the local government level, which is outside the, the huge project Infrastructure Australia kind of funding. And, I must confess, I don't know anything about the specific route that's proposed. I have travelled on the O-Bahn quite some time ago, and I can't tell you about the specific route. I presume that that's been the subject of some discussion between the State Government. I suspect the State Transport Minister probably has a more detailed understanding of it.
DAVID BEVAN: Peter Nolan is with the Civil Contractors Federation - as we talk to Lindsay Tanner in this first part of the Soapbox. Good morning Peter.
PETER NOLAN: Good morning.
DAVID BEVAN: A question for Lindsay Tanner.
PETER NOLAN: Yes. Good morning minister.
LINDSAY TANNER: Morning Peter.
PETER NOLAN: The Civil Contractors Federation builds the infrastructure that you've recently announced -and congratulations and well done for increase for the infrastructure spend in South Australia. It's a fantastic result for South Australia. Our concern is, has been an ongoing one about the skills shortages in the industry, and a capacity to train people to deliver that increase in spend. And, I guess we're very disappointed to find out this morning that our application, through the Education Infrastructure Fund, was unsuccessful. And, we applied to increase the capacity of training in South Australia for the civil infrastructure industry. Disappointingly, we haven't got that funding through, and our concern now is having the capacity in South Australia to build these projects.
DAVID BEVAN: Okay. Lindsay Tanner?
LINDSAY TANNER: Look, I, I can't comment about your specific application Peter I'm afraid, because, you know, obviously I didn't deal directly with all of the individual applications. So, you know, I'm sorry that it hasn't been successful. I think the more realistic state of play, certainly as we head into the balance of this year, and maybe the early part of next year will be that, although there are probably still going to be some specific instances of skill shortages in odd area, we are facing a significant reduction in private sector activity in the civil contracting area. A lot of projects being put on hold, because of the global financial crisis and the reduction of economic activity. And so…
MATTHEW ABRAHAM: Because that's the whole rationale behind spending, spending this infrastructure money, otherwise these people will be out of work.
LINDSAY TANNER: That's right. Well, it's a very important element of it, and it's not the only element, because it's also about building for the future and improved productivity and jobs in the longer term. But certainly, our broad expectation is that what this increased infrastructure spending will do will be to soak up the slack that is starting to emerge as a result of declining private sector activity. Now I, we have put some additional resources into apprenticeship training, and there's more productivity places, a lot more productivity places into the wider TAFE and training institutions that will be of some benefit. But, I think that the skill shortages problem that we've had big time in recent times is about to diminish fairly dramatically.
MATTHEW ABRAHAM: Now Lindsay Tanner, we have a text here from one of our listeners - Matt - wanting to know about what, why have you changed the co-contributions to superannuation; and what have you done there?
LINDSAY TANNER: What we've done is pulled it back from $1500 if you put in $1,000, to $1,000 for $1,000 for three years. Then it goes back up to 1,250, and then it goes finally back up - two years after that - to 1,500. The basic rationale is that we've had to make significant cuts to benefits across a range of things, particularly into the medium-term because of the huge loss of revenue that the budget suffered. So that's, that's the primary rationale. But, in this case, the Treasury data shows that when the Howard Government increased the amount from $1,000 to $1,500 it didn't have much impact on participation. So, the idea is to encourage people, particularly people on lower incomes, to save, and to put money into superannuation. They originally had it at 1,000. They put it up to 1,500. It didn't really make much difference to the number of people contributing. The other factor too is that there's a pretty significant proportion of people who are contributing who are the low-income spouses of high-income earners. So it helps a lot of low-income earners, but it also benefits high-income households too.
MATTHEW ABRAHAM: Sarah from Campbelltown. Hello Sarah.
CALLER SARAH: Hello there boys. Hello Mr Tanner.
LINDSAY TANNER: Sarah.
CALLER SARAH: We have spent a sleepless night. We are a couple retired in our late sixties on a combined super of 32 and a half thousand. We receive a part-pension each of 258 per fortnight. And we want to know how this budget will affect us. We notice in the paper it says, for existing pensioners who would now face a payment reduction because of the new income test, a transitional safety net will apply that the government says will essentially ensure that they're not worse off. The safety net will ensure that current payment rates for part-pensioners are maintained in real terms. Does this mean that our super will not change? Like, for people that are already on a superannuation pension?
LINDSAY TANNER: Ah yes. Yes. That's, that's correct. So that in the position you're in, because you're already on the part-pension, this is, has been what's effectively grandfathered, so that the new arrangements in effect apply, apply to new entrants to the pension.
CALLER SARAH: Right. The other thing I would like to mention is that we are actually on the highest medical benefit with Mutual Community. It costs us $160 a fortnight. This is our biggest expense, apart from food, and if our pension was going to be fiddled with, we would have had to pull out of that and put ourselves into the government health system, the public hospitals system. We have had the most dreadful night.
DAVID BEVAN: Okay, but, Sarah, what Lindsay Tanner is telling you that you won't lose a cent. Is that right, Lindsay Tanner?
LINDSAY TANNER: Yes, that's right. That the - for people who are already in the system, already on the part pension, the income testing arrangements remain the same.
DAVID BEVAN: Okay.
MATTHEW ABRAHAM: So, Sarah, I hope you have a better night's sleep tonight. Now, Lindsay Tanner, the - you've also made changes, so rather than scrap things, you've sort of, I suppose, done the classic thing you bring in some sort of cut off limits and so on. The Medicare, the private health levy, effectively, you've - the changes to that, can you explain that and also the penalties if people think, well it's not going to be worth going into private health if I am on a certain income level, I'll just go on Medicare you going to try and stop them doing that or create a disincentive for that as well?
LINDSAY TANNER: There's a new structure being introduced so there are several tiers to it, essentially at the upper income end which is that for people between $75,000 and $120,000 a year, if they're single, or $150,000 or up to $240,000 for a couple, the arrangements, in a sense, phase out the assistance, the private health insurance rebate, so it goes down to 20 per cent then 10 per cent then zero, if you're a single, over $120,000 or if you're a couple over $240,000. And, at the same time, the Medicare levy surcharge which is a tax surcharge if you don't have private health insurance and you're up at the higher income earner end, has been essentially spread out to reflect that so there's a bit of a - the two are put together at the higher income end.
MATTHEW ABRAHAM: So the Medicare levy surcharge will be increased…
LINDSAY TANNER: Increased for some people…
MATTHEW ABRAHAM: …if you opt out of private health insurance…
LINDSAY TANNER: That's right.
MATTHEW ABRAHAM: …at a certain income level. Okay.
LINDSAY TANNER: That's right and we expect the treasury modelling suggests that the impact of these two things together will have only a very tiny impact on the total number of people in private health insurance we…
DAVID BEVAN: So, when does the Medicare surcharge, that extra hit, when does that kick in for singles and for couples?
LINDSAY TANNER: It kicks in at $75,000 per annum, so it starts out at one per cent so, I'll stick with singles because couples you just double everything. It starts at one per cent for people, singles earning $75,000 a year and increases to 1.25 per cent if you go beyond $90,000 a year and it's 1.5 per cent for $120,000 a year and, as I said, it's double, the same rates apply for whether it's couple so it's $150,000 through to $240,000.
MATTHEW ABRAHAM: Right, okay. Because the Labor government, while it had to support it for the election, has never really liked subsidising private health insurance in any way, has it, I mean, ideologically, you've - but you know, this is quite an opportunity for you to start chopping away at it?
LINDSAY TANNER: Look, I think we've accepted that the world has changed and I think also one of the things that haven't been reported that, I am very essentially(*) involved in, is that we are driving some significant reforms to the role of private health insurance. Medibank Private has gradually been changing its approach and is trying to become more of a proactive improver of health outcomes through running programs, assisting people with chronic diseases and stuff like that, rather than just a passive insurer that just takes your premiums and pays your claims. So, I think the world has changed and we accept that private health insurance has a very important part in the overall system. There has been a need for reform, we've initiated a couple of reforms but I think we're in a different world and so many people rely on the rebate as part of their family budget.
MATTHEW ABRAHAM: Let's go to Murray Bridge, good morning, Margaret.
CALLER MARGARET: Good morning, boys, and Mr Tanner. How are you today?
LINDSAY TANNER: Good morning, Margaret.
CALLER MARGARET: I've just been reading doing(*) the seniors extra thing and they were going to get extra into our pension and then down the bottom it says pension supplements including GST allowances for pharmaceutical, telephones and utilities will form one supplement paid fortnightly. Now, do these come into effect, will these, at least, come into effect and be deducted from the $32.49?
LINDSAY TANNER: No, no, not at all. In fact, what happens is that, and we're dealing with the single pensioner here, what happens is that there'll be $30 paid on the actual base rate of the pension and the existing additional payments, which are the GST supplement, the telephone allowance, utilities allowance and so on will be wrapt up into a single payment called the supplement and on top of that there'll be an additional $2.49. So, for the ordinary full pension, single pensioner, the increase is $32.49.
MATTHEW ABRAHAM: Now, look, thanks Margaret, from Murray Bridge, doing your homework there. And Paul from Flinders Park will have to be our last caller for Lindsay Tanner, our soapbox will continue to roll through, as always, until midday but, good morning, Paul.
CALLER PAUL: Good morning, Matt and David and Minister Tanner, how are you today?
LINDSAY TANNER: Morning, Paul, good thanks.
CALLER PAUL: Couple of points, I'll be very brief. One is the previous government was attempting to encourage older people to stay in the workforce and that was announced in the budget that you'd like to see people, you know stay and being encouraged to work in the workforce and, I think, we're looking at, what, 67 years of age in 2023, is that right?
LINDSAY TANNER: That's correct.
CALLER PAUL: Something to that effect, yes. And there'd be a, sort of, great deal if increase there. But I believe, and I am 63, and recently went into my own business and finding it very difficult to get sickness and accident insurance and that's always been the case. I was in business before.
MATTHEW ABRAHAM: Okay, now Paul, you'll have to get to the point.
DAVID BEVAN: Got to get to the point, Paul, the minister's about to go.
CALLER PAUL: Okay, well, how can we help people that are going to stay in the workforce if you're encouraging them without insurance?
MATTHEW ABRAHAM: Good point.
LINDSAY TANNER: Paul, you actually do raise a good point, Paul, and it's something that I haven't given consideration to before, but clearly people in business don't have the same kind of cover against these risks as somebody who's an employee and it's something that I haven't encountered previously but I will give some thought to it and that is the problems of getting the accident insurance and income insurance cover when, obviously, you've moved into a higher risk part of the population. I don't know a great deal about it but it is a good point and as we get - become older as a population and this is just starting to hit Australia, I think that urgency of keeping people more active, more in the workforce, will start to increase. So, it's a point worth exploring, I will do so.
MATTHEW ABRAHAM: Lindsay Tanner, thank you.
LINDSAY TANNER: Thank you very much, gents, I appreciate it.
- ENDS -
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