TONY EASTLEY: The Senate has punched a $2 billion hole in the Federal Government's budget with the rejection of the legislation to means test private health insurance. The Opposition says the bill would have jacked up the prices of premiums for those who had insurance. The Government is also looking at the possibility the Senate may move to change the paid parental leave scheme. To discuss the Government's money troubles, the Finance Minister Lindsay Tanner joins AM. He's speaking to chief political correspondent Lyndal Curtis.
LYNDAL CURTIS: Lindsay Tanner, welcome to AM.
LINDSAY TANNER: Morning Lyndal.
LYNDAL CURTIS: The Senate's punched a $2 billion hole in your budget, how are you going to fill it?
LINDSAY TANNER: Well we're going to continue to press the issue. Tony Abbott and the Liberal Party are blocking almost all the Government's major initiatives in the Senate these days, whether it's climate change, private health insurance...
LYNDAL CURTIS: But this was a broken promise by you wasn't it?
LINDSAY TANNER: We faced a huge budget problem as a result of the global financial crisis. We have to repair the damage to the budget and we have to get the budget back into surplus as quickly as possible and Mr Abbott keeps saying that that's what needs to occur and in fact he'd do it faster yet he's punched a huge hole in our savings initiatives that are designed to get the budget back into surplus quickly.
LYNDAL CURTIS: But you're not going to get the private health insurance through. You haven't got the senators you need onside. That means, doesn't it, that you have to fill that hole from somewhere else?
LINDSAY TANNER: What it means is that we will have to try again and we obviously - in the forth coming budget, have to reconfigure the numbers. It doesn't mean we give up it means that we'll keep pressing on this issue and other issues. What Tony Abbott's doing is demanding that ordinary working people on incomes of $50,000, $60,000 a year pay taxes to subsidise the private health insurance of people like him, and people like me, people who are earning several hundred thousand dollars a year. That's what he's effectively arguing for. Now we're happy to let him stand up and be tested in the court of public opinion about that proposition.
LYNDAL CURTIS: Does that mean taking it to an election?
LINDSAY TANNER: It will obviously be an issue that's going to be at the forefront of any election if the Liberal Party doesn't change its stance. Its priorities are all wrong. It's there to represent the interests of wealthy people and not the interest of ordinary working people. It's our job to fix the budget problem that the global financial crisis has given us. It's our job to get the budget back into surplus and it's our job to ensure that the pain of that is distributed fairly and doesn't full unduly on people on lower and middle incomes.
LYNDAL CURTIS: It's also the Government's job though to negotiate with the senators. The Senate's knocked back private health, it's knocked back emissions trading, it's likely to knock back the youth allowance and make changes to your paid parental leave. At what point do you have to acknowledge there are flaws in your strategy?
LINDSAY TANNER: Well I think the list you've just read out is an incomplete Lyndal, you could add a few things like dental reform and electoral reform to that list and all that does demonstrate is that under Tony Abbott, the Liberal Party is now getting even more obstructive, using its power in the Senate to block the major initiative of the Government, including initiatives that are designed to fix the budget problem that they talk about and they suggest that the Government's not doing enough to deal with.
LYNDAL CURTIS: But you can get the numbers you need in the Senate without relying on the Opposition, at what point do you have to say our Senate strategy isn't working; we have to negotiate better with the Greens and the independents?
LINDSAY TANNER: Lyndal, we're not pursuing a Senate strategy, we're pursuing a governing strategy. We're the Government, it's our responsibility to look after the interests of working people in this country, to look after Australia's national interest, to ensure that we get a strong budget position, to ensure that we govern for the whole nation and then pursue those issues through the Parliament. That's what we're doing. That's what we're doing with private health insurance, that's what we're doing with climate change, that's what we're doing with the youth allowance reforms and so the list goes on. So we are going to continue to push our agenda to fix the budget problem, to get the budget back into surplus and to ensure that the pain of the tough decisions that are involved in that is borne by those who can bear it most, people on incomes like mine.
LYNDAL CURTIS: But this - does the Prime Minister have to get more involved in negotiations in the Senate? He didn't negotiate on the CPRS with senators. As far as I'm aware he didn't negotiate on private health insurance. He's had very few meetings with the Greens leader or Nick Xenophon, does he need to be more involved?
LINDSAY TANNER: Look, these negotiations are invariably dealt with by the minister directly involved and that's reasonable because often there are very obscure points of detail involved especially if you're dealing with some of the minor party senators and you need to have the person who's actually handling the issue deal with the negotiations. The Prime Minister obviously will talk to other people from other parties from time to time, that's ultimately a matter from him but in terms of getting things through the Parliament, that's the job of the individual minister. I'm involved with one of these issues at the moment that's going to a Senate Committee. It's not in quite the same league as some of the issues we've talked about but it's my job with that issue the Commonwealth Superannuation Administration arrangements, it's my job to get that through the parliament, my job to negotiate with people in minor parties in order to get it through the Senate.
LYNDAL CURTIS: Are you prepared to make your paid parental leave scheme more generous in the light of the backing that Tony Abbott's scheme has gotten from the Greens and Nick Xenophon?
LINDSAY TANNER: We're going to stick to our proposals. It's always easy for people who do not have the responsibility for managing the nation's finances to promise everybody more money. The minor parties do that all the time. The independent senators are always happy to posture to the gallery to promise anybody and everybody more money. We're the ones who've got to make the books balance and we're confronted with an obstructionist Opposition that is committed to tearing apart our budget while at the same time attacking us for not getting the budget back into surplus quick enough. Their hypocrisy is going to be on full display for the Australian people to see.
LYNDAL CURTIS: If we can go to the issue of health, the Prime Minister says the health policy is fully funded but in the out years you have to find $15 billion to plug the gap between how much the GST grows and the higher costs of health. There are no plans to do that so how is it fully funded?
LINDSAY TANNER: Well in fact there is a plan to do that Lyndal and it's embedded in our proposals and that is the benefits of reform. If you introduce case mix funding around Australia, you get rid of the waste and duplication that is currently embedded in Australia's health system...
LYNDAL CURTIS: So that's where the $15 billion will come from?
LINDSAY TANNER: That will produce very substantial savings in the long term. It won't produce savings overnight but what we've done is ensure that we've got a scheme that's fully funded in the first four years and that the growing cost that is going to be there no matter what any government does, the growing cost can be offset by the benefits of reforming longer term. That's the structure of our scheme and that's why the states should sign up to it.
LYNDAL CURTIS: Finally, are we going to see Ken Henry's report on taxation before the budget?
LINDSAY TANNER: I'm not in a position to comment about when we will be releasing Doctor Henry's report. Obviously....
LYNDAL CURTIS: So it might be after the budget?
LINDSAY TANNER: I'm not going to speculate about when it may be but obviously we're looking at that very closely. It's a very detailed complex report, a lot of intersecting issues and of course now that we've got the Liberal Party blocking everything in the Senate, that makes things even more complicated because we've got uncertainty for business, uncertainty for consumers, uncertainty for workers and it makes it harder for the Government to be able to chart a course forward for the Australian economy and the Australian budget.
LYNDAL CURTIS: Lindsay Tanner thank you for your time.
LINDSAY TANNER: Thanks very much.
TONY EASTLEY: The Finance Minister Lindsay Tanner with Lyndal Curtis.
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