Senator the Hon Mathias Cormann
Minister for Finance
PAUL MURRAY: The Finance Minister is Mathias Cormann and he joins us now from Canberra. Senator, good evening.
MATHIAS CORMANN: Good evening Paul.
PAUL MURRAY: Put simply here, there are a lot of things we will get into in a second, but I want to ask about the mechanics of the Medical Research Fund and how it works. How long will it take to get to $20 billion?
MATHIAS CORMANN: All of the savings out of the Health portfolio that are in this Budget will go into this Medical Research Fund and we would expect that we would reach the $20 billion in capital in about six years.
PAUL MURRAY: Now, of the breakdown of the $7 payment is it correct that $5 automatically goes into the fund does $2 go to the doctor? Can you help the breakdown? $7 where does it go?
MATHIAS CORMANN: That's exactly right. The way you have just described it is exactly right.
PAUL MURRAY: Ok. There is a change though to some copayments and the idea of what areas will be included. Can you also confirm that we are not just talking about a copayment when it comes to seeing a GP. It is also $7 for a blood test, $7 for a specialist visit. What is included and not included in terms of our interactions with medicine that does and doesn't cost $7?
MATHIAS CORMANN: Well there is a co-payment of $7 for a range of health services. Principally GP visits and various other medical treatments and diagnostic tools. But the important point here is there is actually a limit to how often you have to pay the co-payment if you're in one of the concession card categories. Essentially after ten co-payments that is it. You no longer have to pay the co-payment.
PAUL MURRAY: So if I am in a concession card area, so how much money do I earn and less for the ten payment solution?
MATHIAS CORMANN: Well it really depends on a whole range different factors, but you will not pay more than $70 in co-payments towards any of the medical services that attract a co-payment.
PAUL MURRAY: Ok. And then by moving to a system where the compulsory $7, $5 for medical research and $2 goes to doctor, is this $2 on top of what doctors are already making? Or has there been a change to the amount of money the bulk billing system gives to each and every GP?
MATHIAS CORMANN: Well, we have made a range of changes, including changes to the Medicare Benefit Fee Schedule. Also we have made some changes to what used to be the no gap incentive scheme which will become the low gap incentive scheme. So there are a couple of changes in different directions. But fundamentally, what we are trying to achieve, is we are trying to make a world class health system sustainable for the future. We want to make sure that patients across Australia can continue to have access to affordable high quality health care into the future and health care that is affordable for the taxpayer as well. So this is a structural shift where we are taking money out of consumption and putting it into investment for the first six years as we build up this Medical Research Future Fund and then moving forward, we are able to put our health system on a more sustainable funding footing.
PAUL MURRAY: Alright, now in a second Janine will jump in, so be ready. But in the meantime though I wanted to ask you about the changes when it comes to roads. The fuel excise and the Treasurer did use, he didn't spell out L-A-W, law, but he pretty much did make it clear that the money raised from the extra fuel excise goes towards the $80 billion. Are you saying that we are going to open effectively, in common language a new bank account that is just for roads and that is protected by law?
MATHIAS CORMANN: Well what we've said and what the Treasurer has said is that we would be directing all of the funding from the increased revenue as a result of indexing the fuel excise into road infrastructure investment and in this Budget, we have already announced $50 billion worth of Federal investment in productivity enhancing economic infrastructure, which will leverage additional State and private sector investment for a total investment of about $125 billion. So the short answer to your question is yes, all of the increased revenue from reintroducing indexation of the fuel excise will go up into road infrastructure.
PAUL MURRAY: Now the Treasurer today, and in a couple of days, has been trying to build this narrative of 'if you look at it exclusively through the micro you might not like what you see. If you step back and look at the macro and things like medical research, like the roads funding, people are going to like the idea. You know as I do that many a Budget, both sides of politics, best part of the past 15 years, the Budget has always been what's in it for me? Do you think that people will actually look at what's in it for everyone else?
MATHIAS CORMANN: Well this is the conversation that we've been having with the Australian people for some time and which we will be having with the Australian people over the next few weeks and months. This is a Budget which is designed to build a better future and yes we are asking people to contribute to help build a stronger future for Australia. It is a Budget that does put a stop to the unsustainable spending growth trajectory that we have inherited from our predecessors, as we think we must because we just can't keep funding our consumption today through borrowings and imposing all of the repayments with interest on our children and grandchildren, reducing their opportunity as a result in the future. We can't do that.
JANINE PERRETT: Senator Cormann, Janine Perrett here. Just on that...interrupted
MATHIAS CORMANN: Hi Janine.
JANINE PERRETT: Hi. I just wanted to say on the issue of the deficit levy. Now, you quite wisely have not said, well certainly not in these projections, when you will return to surplus and you know more than anyone that the Treasury estimates can be wrong, other factors can play in like the collapse in the iron-ore price. Given that it's still open, in four years time, we are still going to have a small deficit, this deficit levy you said tonight was only for three years. Are you leaving yourself open, given that it was to pay off the deficit, are you leaving yourself open to extend it so that it continues until we are back in surplus?
MATHIAS CORMANN: No we are not. Let me just say right up front, unlike our predecessors we take responsibility for the revenue and expenditure estimates in the Budget. We have taken a very realistic view of what is likely to happen with revenue and spending and unlike the previous Government we have not done anything shifty with the numbers. We have not manipulated numbers by shifting revenue or expenditure from one year to the next. The figures that are there are realistic estimates and I guess what I would say is that we inherited $123 billion worth of projected deficits. We have brought that down to about $60 billion of deficits over the next four year forward estimates and if you look at the important point of what we have done, we have introduced a whole range of structural savings and structural reforms, which start low and slow and which build over time and which continue to build beyond the forward estimates. It is a very important point.
JANINE PERRETT: The simple question; is there a three year limit on the deficit levy or could it be extended if we are not back in surplus?
MATHIAS CORMANN: No, it could not be extended. There will be a sunset clause in the legislation so the 2 per cent effective increase in the top-marginal tax rate for people earning more than $180,000 will be prescribed in legislation as being in place for three years and it will automatically fall away at the end of those three years.
JANINE PERRETT: One more quick one I am going to sneak in. I notice that you have given a $10,000 bribe for businesses to employ people over 50, yet you have raised the pension age to 70. Isn't that an admission that it's going to be hard to employ a 50 year-old, so almost impossible, how much are you going to pay them to employ a 69 year-old?
MATHIAS CORMANN: The good news is that we do live longer and we do live longer and healthier then at the time when the pension age was set at 65 when anyone was expected to get to 65. We do now live much longer and with the ageing of the population and falling workforce participation, we do have to work longer than what we might have in the past in order to contribute. But having said that we do understand that there are some attitudinal issues across businesses and there are some issues that we need to address to ensure that businesses actually take on all those older Australians as part of their productive workforce. So really that measure, the Restart Measure which is in this Budget, is designed to help shift attitudes among business and help shift the culture with business when it comes to employing older Australians.
PAUL MURRAY: Last question for you Finance Minister. What do you think was harder putting together the Budget or selling it?
MATHIAS CORMANN: Obviously putting the Budget together was a lot of hard work. We very carefully assessed all the information and the options and we went out of our way to make judgements that we think are right and are for the right reasons which will strengthen Australia. From here on in, the job is obviously to sell it. It will be a marathon not a sprint Paul and we think it is very important that we get this right because this is the Budget that Australia needs.
PAUL MURRAY: Alright, 23 million people in the Country, you have met a few tonight, go and meet some more. See you later.
MATHIAS CORMANN: Thank you Paul.
PAUL MURRAY: There he is, the Finance Minister from Canberra, Mathias Cormann.