Transcript SKY News – Showdown with Peter Van Onselen - 7 August 2012
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7 August 2012
E & OE Only
Peter Van Onselen: I'm joined now out of Brisbane - not his home state of South Australia - by the Mental Health and Ageing Minister, Mark Butler. Mr Butler, thanks very much for your company.
Mark Butler: G'day, Peter.
Peter Van Onselen: Can I just ask, straight off the bat, we'll go to the polls first before we move into portfolio issues. You must be absolutely rapt, five point increase in the primary vote. It looks like the Government's on absolute fire now.
Mark Butler: Well, I'd be fibbing if we didn't prefer it when the polls went up by five per cent than going the other way but this is one poll. You really need to string a bunch of these together for people to start to see a genuine change in people's attitude towards federal politics but what gives me greater heart, I think, is some of the qualitative evidence that we've seen in the last few weeks, questions asking people about their attitude, particularly to the carbon pricing regime.
We've seen really significant changes, I think in our favour and against the Tony Abbott fear campaign, only some weeks since its introduction and that clearly has been the principal issue at the heart of federal politics for the last several months so if that qualitative change in people's attitudes towards the lived experiences, I think we've said, of the carbon pricing regime continues in the direction we've seen over the last couple of weeks, then I think we'll become very competitive.
Peter Van Onselen: But you make the point that you think that you really need to string a few of these together. Am I right in thinking that you're basically saying that for the Prime Minister to really be able to justify that she's been doing a good job, she needs to string together a few of these, this isn't enough on its own?
Mark Butler: I think what we've seen is these polls jump about a bit. They're published fortnightly so you don't have to wait very long for another one but certainly this is a very significant jump, five per cent, well outside the margin of error and, as I said, I'm very happy to put it in my pocket and go to work tomorrow.
But what gives me greater heart, I think, than one poll is the qualitative evidence that shows that people are starting to see through the fear campaign that Tony Abbott's been running very hard on over the last 12 to 18 months.
Peter Van Onselen: But it's interesting because - I mean, we'll move on from this in a moment but it's interesting because you're putting it down to that qualitative change in the face of the fear campaign about the carbon tax. A lot of commentators and certainly people on Twitter are making the point that Labor's gone better in the polls when Julia Gillard's on holiday and when people are focused on the Olympics. What do you say to that?
Mark Butler: Well, look, some people will say anything to try and detract from, I think, the qualitative evidence which is showing that people - people's minds are changing about the central public policy and political issue that's been on the agenda now for many, many months and, yes, there's been the Olympics for a couple of weeks and, yes, we've won a couple of gold medals but, you know, I think if there's some serious analysis about what's happening in public opinion around federal politics, you'll see that it's really about attitudes towards the carbon pricing regime.
Peter Van Onselen: All right. Fair enough. In your portfolio area you're the Minister in charge of ageing. Why are you cutting $500 million out of the aged care Budget for the 2012-2013 financial year?
Mark Butler: This is just a fiction. If you look at the Budget papers, the area that is the subject of some of this commentary, the area of residential care subsidies, the funding that goes to support the care needs of people, not power prices and food and the other things that go to running an aged care facility, the Budget this year is several hundred million dollars higher than it was last year - It's several hundred million dollars higher than it was projected to be in 2012-2013, before the mid-year Budget review in December.
So the idea that there's a $500 million cut to aged care subsidies - and I've seen commentary particularly in Western Australia about this today - is simply a sheer fiction.
There has been a change to the way in which we fund those care subsidies, one that has been on the books now since December, to deal with a very significant Budget blowout in this area which saw the government have to put in an extra $2.3 billion in that mid-year review, in December 2011, because of the way in which the new funding instrument that we introduced in 2008 had started to trend.
Peter Van Onselen: But that said, though, that is still the equivalent of you then clawing back - maybe I could put it that way - $500 million that otherwise was going to go into the Budget because you don't like or you don't think that you can tolerate fiscally the money going in the way it is projected to do?
Mark Butler: It's not a question of like or tolerate. When we introduced this instrument in 2008 it was clearly understood by the sector and by the Government and by Treasury, who put the money in the Budget, that for three or four years there would be very significant growth, catch-up growth, if you like, to reflect the fact that the old instrument that - that underpinned funding to aged care simply hadn't kept up with the needs of the aged care sector. So what you saw over those four years was, on top of indexation, about 6.5 per cent per year growth per resident. So in four years we saw a 30 per cent, in real terms, 30 per cent growth per resident because of the introduction of the changes we made in 2008.
But it was always understood by the sector in 2008 and reflected in the Budget papers, that after that four-year period of catch-up funding, if you like, that growth in residential care subsidies would return to their historical rates of about 2.7 per cent plus indexation per resident.
Now, we discovered last year that that wasn't happening and as we put together a group, including the organisations involved in some activity today in Western Australia, providers, consumer organisations and clinical experts, we put together that group in December to discover better what was happening to the funding instrument so that it wasn't returning to the growth that had been expected, in agreement with the sector in 2008, so they're the changes we've had to make.
In doing that we've still had to introduce $2.3 billion in December into this area that wasn't there last year. So, frankly, the idea…
Peter Van Onselen: But can I jump in on that, though?
Mark Butler: …of a cut is sheer fiction.
Peter Van Onselen: Look, I accept that at one level but isn't this a case of what goes around comes around? Because one of the things that the Labor Party in government have been very keen to do is pin Tony Abbott down as having cut a billion dollars out of the health Budget when he was health minister but it was similar to this. It was simply that there was a billion dollars less in terms of the overall increases that had been projected which were pulled out of it.
Now, that is a similar scenario here: more money going in but just a slight reduction in that increase over time, very similar to the $500 million reduction in the increase over time that you're talking about.
Mark Butler: It's quite different. In 2004 which is when the one billion dollars did come out, from my recollection, while Tony Abbott was health minister, there was a clear decision to reduce the indexation arrangements to the hospital system which resulted in the hospital system around the country receiving one billion dollars less.
Now, what we did in December was introduce an additional $2.3 billion over forward estimates, over four years, $2.3 billion that was not in the Budget before November or December last year so really, using that analogy, we've added $2.3 billion to the aged care Budget where Tony Abbott and Peter Costello took a billion dollars out of the hospitals Budget at the stroke of a pen.
Peter Van Onselen: Can you understand voter cynicism though, that it just so happens that the 2013 financial year is the return to surplus year and that that $500 million figure that is getting bandied about is pretty close to half that surplus figure? Can you understand why voters might look at this and be a little bit cynical when they see these commentaries?
Mark Butler: Well, look, I do understand that but I have put it on the providers. I flew to Perth last week to meet with the organisations that have been undertaking this activity, just in Western Australia I might particularly add, and I've asked them: show me the papers which say that there's a $500 million cut.
If you look at the comparison between 2012-13 and 2011-2012 or the comparison between what was projected for 2012-13 last year and what we're actually paying after putting the extra money in, in December, it's quite clear there is an increase of several hundred million dollars this year, and there'll be another increase of several hundred million dollars next year.
Peter Van Onselen: I wonder if I could get a comment from you about a US professor, Robert Reich, who was quoted in an article in The Australian, I believe, in relation to his prediction that with baby boomer retirements the ageing of the population globally is a bigger threat, a bigger challenge if you'd rather put it that way, than anything else, quite frankly, including the eurozone crisis, the GFC before it, and so forth. Are you of the view that, firstly, globally, that's true, and, secondly, what about here in Australia?
Mark Butler: Well, the first thing I'd say is I never use the word, threat, or burden, or problem around ageing. This - the position we face and that Robert Reich talked about is a product of having added 25 years to life expectancy over the last 100, and this is a wonderful thing. Something the World Health Organization describes as one of humanity's greatest triumphs. It's an opportunity for people who live longer to enjoy life, particularly after they've finished the busiest years of their life at work and raising families. But there's no question - and we've been quite clear about this, that there are challenges.
First of all, there's the challenge of making those extra 25 years good years, not years in which people are unhealthy, inactive and isolated, but…
Peter Van Onselen: Well - and can I just jump in on that…
Mark Butler: … years in which they remain connected.
Peter Van Onselen: And on that, I mean, we've seen the situation, you - your Government is planning in the years ahead to have the pension age go up, that's true. But the pension age used to be commensurate to or even slightly higher than the average life expectancy. And as you point out, life expectancy now well exceeds that pension age by decades. I mean, don't we need to, perhaps, see even more effort put into raising the pension age to be able to make it fiscally sustainable for us all to be living longer, which, as you say, is a problem that we all want to have.
Mark Butler: Mmm. As I was beginning to say, I mean, there are challenges associated with the Budget in the - particularly, the medium to long term here in Australia, and our changes to the pension age we think are a balanced approach to that. Our fiscal strategy of capping new spending at 2 per cent per year will delay the structural deficit, the move to a structural deficit because of the revenue and spending implications of ageing by a full decade, the Treasury tells us in its latest intergenerational report.
So, there's not one silver bullet to deal with the fiscal consequences of this. But I do say, in response to your question, that Australia is confronted by this a little more slowly than other countries, largely because we've still got a better birth rate than most western countries, a much higher birth rate than, say, the Mediterranean countries and Japan.
Peter Van Onselen: Mmm.
Mark Butler: But also, we have a strong immigration policy. So, the process of ageing is happening more slowly here than elsewhere.
For example, in Japan, a quarter of the population is already over 65. We won't get to that position for another four decades.
So look, I agree with Robert Reich, I think this is the most profound social and economic shift that we've seen in our lifetimes, and it's going to dominate federal politics, in particular, for the next three decades.
Peter Van Onselen: And you'd hope to be around maybe not for three decades, but for at least some of that time as one of the younger members of the Cabinet. I mean, did you - do you think - in some of what you were saying there, do you, sort of, concur with this idea that, perhaps, a big Australia is a solution through immigration to the idea of an ageing population and the problems that that might entail?
Mark Butler: Well look, I think an immigration policy needs to balance the long-term view about what the country's going to look like. And, obviously, the short-term needs that emerge in a country with a vibrant economy like ours. So, look, I'll leave that commentary to other ministers who have direct responsibility for this. But, quite clearly, the fact that we are a country that continues to welcome migrants means that the ageing of our population is happening more slowly than those countries, notably Japan, that doesn't and never has had a strong immigration policy.
Peter Van Onselen: On the National Disability Insurance Scheme, I'm interested in, I guess, firstly, how it affects your portfolio areas, but I'm interested as well in whether or not you think it's important that the Government sooner, rather than later, tell us how it plans to fund the thing long-term. Because I've said this before, in a sense, I compared having trials without having funding mechanisms in place is the equivalent to taking a car for a test drive when you haven't yet sorted out the finance. How much longer do you think we have to wait before we know exactly how this additional seven and a half billion dollar impost on the Budget will be funded?
Mark Butler: Well, I'll deal with that first, and then come to my portfolio areas. This is an extraordinarily complex and major reform that I think is a once-in-a-generation opportunity of the type that Medicare was 30 years or so ago. And look, it's not going to be a simple straightforward matter to work through some of that funding design.
You also need to ensure that it's sequenced properly. For example, there's significant work going on between our Government, the relevant state governments and, also, the disability sector about eligibility issues. And, you know, we need to make sure we're on the same page around eligibility before we start working through cost impacts and the like.
So, look, I agree that these are substantial and legitimate questions the community is asking, but I think the work that Minister Macklin, particularly, is doing with her state counterparts, along with all of the treasurers, is going to come up with those questions in the appropriate timeframe.
Peter Van Onselen: But doesn't it get people's hopes up if we're going down the path of trials, or at least too far down the path of trials if the funding hasn't yet been sorted out. And this is particularly pertinent if - if we've got - already we saw the other week significant disagreements before finally having an agreement over how to fund the trials. That is only going to be writ large isn't it when we talk about many billions of dollars, rather than tens of millions of dollars as was the case for trial?
Mark Butler: Well look, that's right, and there may well be further disagreements between the Commonwealth and state premiers about this, because they are substantial questions involving substantial money.
But look, I think the sequencing of this is right. We need to deal with the funding question while we're also dealing with the eligibility question.
Contrary to what you've said, Peter, I think there's a legitimate question to ask about whether you can have a funding debate when people don't really understand what the design of the scheme is going to be and what it's going to deliver to the hundreds of thousands of families who live with a profound and enduring disability.
So, reasonable people can disagree on the sequencing of this. I think Minister Macklin's got it right.
Peter Van Onselen: But then, equally, you talk about the design of it, and it's a fair point as well, isn't it, what Colin Barnett said on this issue when he refused to come on board. He likes the design out of Western Australia. He made the point that if you were fair dinkum about having a trial that was based around testing design principles, you would have different designs within the trial. Whereas, in fact, we've got trials going on which are all pretty well the same design.
Mark Butler: Well they're dealing with quite different cohorts. So, for example, in my state of South Australia where that government is trialling the operation of a scheme on 0 to 14 year olds, say, with significant representation of people dealing with spectrum disorder issues.
In other parts of the country, there are different age cohorts and population cohorts. So, I don't agree with the Western Australian Premier about that. I think the trials have a level of diversity that will give us a really good insight into the way in which this insurance scheme is going to operate.
But can I say that I do think that our view as a government is that this is a national priority. It's not something that Western Australia should do over here and in other states should do over there. I mean, what's happening up here in Queensland, I think, shows that the waxing and waning of particular state governments means that this is far too important an issue to leave it at a state level. The community wants a national solution to this, and that's what our Government's committed to.
Peter Van Onselen: All right, Mark Butler, we're out of time. We appreciate you joining us on this episode of Showdown. Thanks very much for your company.
Mark Butler: Thanks Peter.
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