STEVE PRICE: Finance Minister Lindsay Tanner will have been in, I'm sure, a lot of long, long meetings over the structure of this budget. He's on the line. Morning to you, Minister.
LINDSAY TANNER: Good morning, Steve.
STEVE PRICE: The federal budget tomorrow night. It is obviously a budget framed in an election year. Does that mean there's going to be some goodies in it for us?
LINDSAY TANNER: Look, not really the kind of goodies that people have been accustomed to getting in election years, I'm afraid, Steve. Inevitably there'll be some things there that people will approve of and there might be some things people will disapprove of. But it's pretty much a no-frills budget because our primary focus is getting the budget back into surplus as quickly as we can after the huge hit it took in the global financial crisis.
STEVE PRICE: We had Paul Howes from the AWU on this morning backing your idea of a super profits tax on mining companies. He says they're crying wolf. Are they?
LINDSAY TANNER: Oh, inevitably they're fighting for their interests, Steve. It's one thing you get to know in politics pretty well, and I'm sure you've seen it in broadcasting, is that, as Paul Keating used to say, always put your money on self-interest; at least you know it's trying. So they're entitled to run the arguments on behalf of their companies and their shareholders, but ultimately the Australian people will be the judge. And what we're on about is just getting a fair share for the nation from what is ultimately the nation's mineral wealth.
STEVE PRICE: Julia Gillard, the Deputy Prime Minister, says the Government's had to make some tough decisions. She includes that tax on mining companies' profits as one of them. But she says that it is now up to Labor to explain those tough decisions. Do you agree with her?
LINDSAY TANNER: Oh, you've always got to explain things as best you can in politics, Steve. And sometimes you do it better than others, and sometimes you're dealing with stuff that is so inherently complicated that it's very hard to get across. That's just the nature of the game; it's the nature of modern society that it just seems to be getting more complex every year. But we're confident that Australian voters, that people generally, will understand what we're trying to do here, and that is to deliver long-term sustainable growth for our country. Whether it's building new infrastructure or improving our skills performance or getting a better dividend for the nation from our mineral wealth, they're all about one thing, and that's long-term sustainable growth.
STEVE PRICE: I'll get onto this idea of frequent flyer points in just a moment. The Opposition Treasury spokesman, Joe Hockey, today has said a disciplined budget is Rudd Government speak for higher taxes. Make sure you hang onto your wallet, he says.
LINDSAY TANNER: Yes, well, coming from a guy who was a cabinet minister in the highest taxing government in Australia's history, that's a bit rich. There's obviously been some changes on the tax front. The resource tax is one. But of course, what we're doing there is using the proceeds to cut other taxes. So you're going to see company tax go down to 28 per cent and an early introduction for small business. The amount that small businesses can write off immediately for tax purposes rather than having to depreciate over a number of years is going up from $1000 to $5000. So this is just kind of typical rhetoric from the Coalition that I wouldn't treat seriously.
STEVE PRICE: You won't be popular today. This scheme that you are to introduce where politicians and political staffers and I presume public servants are now not going to be able to accrue frequent flyer points, how are you going to make that work?
LINDSAY TANNER: Well, it's a global deal with Australia's major airlines and indeed some international airlines, Steve, and it fixes a problem that's been there for quite a long time, and that is that although the taxpayer foots the bill when I fly, when my staff fly or when my public servants in my department fly, the individual who's flying actually gets the frequent flyer points. And of course, it's actually very difficult to use your frequent flyer points for ordinary business purposes, and so what happens, of course, is that in some cases people unfortunately use them for private travel. In other cases they're just sitting there until eventually the person retires and they presumably can use them. Now, that's basically not a good use of taxpayers' money. So we've reached an overall agreement with the airlines that's about a lot more than just this issue. And one of the details of the agreement is that frequent flyer points simply will not accrue when I fly courtesy of the taxpayer. The savings involved, it's about…
STEVE PRICE: So you won't get any points at all from when?
LINDSAY TANNER: From 1 July this year and the savings that accrue, $160 million over four years reflect a lot more than just that one thing. It's basically an efficiency exercise because until now we've had 200 different government agencies all handling their own air travel arrangement separately and of course that means you don't get the benefit of collective buying and in a lot of cases you get inefficiencies and waste.
STEVE PRICE: The points that you have currently and according to a report this morning as the Victorian Labor - Victorian federal MP you've got the highest number of points, what happens to them?
LINDSAY TANNER: Look I think I accrued the highest number in the last financial year, I'm not sure whether I'd have the highest number of overall points to be honest I've got no idea. I've got a system in my office where I routinely ask for frequent flier points to be used every time a flight is booked and the vast majority of times I can't use them so I'm continuing to try and chip away at them. The problem is that typically you need to give 24 hours notice, on some flights they're not available or they're only available for a small number of seats and those seats have already been booked. Often Steve as I'm sure you know, I would change flights several times within hours of the actual booking because if I'm in a meeting in Sydney for example with the Prime Minister and my colleagues I won't know how long that meeting's going so that means it's very difficult to use and that's one of the reasons why I want to switch them off.
STEVE PRICE: One of the ideas here is that for short haul flights the staffers and the public servants, I presume not Cabinet Ministers would fly in economy.
LINDSAY TANNER: Look, this is one of the issues that's been bandied around. It is complicated by the fact that we have industrial agreements that actually specify or - employment contracts and industrial agreements specifying the mode of travel. I try and use Virgin as often as I can because that has premium economy which is of course not in the same league as business class. There are plenty of circumstances where I think business class is entirely justified by the way but the complication here is the fact that you've got pre-existing industrial agreements and literally contracts, employment contracts specifying these things.
STEVE PRICE: So what will happen - I'm a little unclear on this - what is the status of your existing points in the lead up to that 1 July cut off? Will people be able to use them as the current system's allowed them to, will they?
LINDSAY TANNER: That's correct yes. We haven't tried to make it retrospective and frankly I struggle to see how we could do that because the problem is that they do accrue to the individual and we're talking here about, you know, thousands and thousands of public servants, this is not just about politicians and staffers, I think it would be almost impossible to work out a way that you could actually do this retrospectively. We obviously put pressure on people to use them for work purposes. There's been quite a bit of media pressure as well…
STEVE PRICE: So you couldn't do it retrospectively because there are private points mixed up in business point is that what you're saying?
LINDSAY TANNER: Well that's one of the - exactly, that's one of the issues. The only time I've ever used frequent flyer points for my own personal travel I used frequent flyer points that I had accumulated as a result of a flight to London that I paid for out of my own pocket for example, you know, so inevitably there'll be lots of people out there who've got a mixture of taxpayer funded and privately funded frequent flyer points and unravelling that would just be I think virtually impossible.
STEVE PRICE: So the airlines are happy with this deal?
LINDSAY TANNER: Oh look I think they're happy that we've got an overall framework that will streamline the way that they do business with the Government so they will have some administrative savings inevitably as a result of it because you'll have a single structure through which things will flow but ultimately we're about getting the best deal for Australian taxpayers and the previous system and we have this across purchasing of things for Government right across the board, the previous system was grossly inefficient because it basically just said to the 200-odd government agencies go out and do your own thing and didn't try and get the value for money that you can get by having an overall framework and using your buying clout and also your capability to get better deals.
STEVE PRICE: Just finally, the Nielsen poll tody out matches the Newspoll from last week; the Prime Minister's approval rating's in free fall, 11 points down in Newspoll, 14 down in Nielsen. Is the Government in trouble?
LINDSAY TANNER: Oh all governments go through difficult patches Steve and you might recall there were times in election years where John Howard looked in big trouble but of course by the time…
STEVE PRICE: But the pollsters say this is the biggest single drop in personal popularity in the history of polling.
LINDSAY TANNER: Well look, we've had a couple of pretty difficult weeks, I don't think we pretend otherwise and there have been a number of issues out there that you would expect would hurt the Government's standing at least in the short term and possibly longer term. We've got to recover from that, obviously the budget's an important step but I've always been of the view that the way you win elections, the way you win political support is doing a good job and although inevitably in Government you're going to upset people, you're going to disappoint people and I think probably the main point about Kevin Rudd's popularity levels is that they have been at absolute record levels for a very long time and it was inevitable they were going to come down from there at some point. That's just the nature of politics. The more you make decisions the more you start upsetting people, you can't avoid it.
STEVE PRICE: What is this speculation about Julia Gillard taking over from Kevin Rudd?
LINDSAY TANNER: Oh look Steve I've lived through 11 and a half years of Opposition under John Howard and almost all of it had lots of media speculation about Peter Costello taking over from John Howard so there's always got to be this kind of thing. If it's not - it's got to be on one side or the other. Basically the media's got to have something to talk about and if there's not a leadership challenge brewing on the Opposition's side, and I think they've run out of them they've had so many, then they've got to start talking about the Government. So it's always going to be something of this kind. Every now and then it's true but a lot of the time it's just fodder for newspapers.
STEVE PRICE: Kevin Rudd's safe?
LINDSAY TANNER: Yes.
STEVE PRICE: Thanks for your time.
LINDSAY TANNER: Good to talk to you.
STEVE PRICE: Lindsay Tanner, Federal Finance Minister.
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