Transcript of Interview on ABC Radio 702 (Sydney) - 23 October 2012
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23 October 2012
Adam Spencer: But of course the big story in federal politics yesterday was the release of the MYEFO, a sort of little update on where the Budget's going, some trimming back by the Labor Government to try and maintain its targeted surplus, in particular a change to the way the health rebate will be calculated.
Tanya Plibersek is the federal Health Minister and the Member for Sydney. She joins us now. Minister, thanks for your time.
Tanya Plibersek: Hello, Adam.
Adam Spencer: Essentially the rebate for people who receive it is going to grow at CPI rate not at the rate at which premiums increase and premiums always pretty much increase faster than the CPI, don't they, so you're clawing money back that way?
Tanya Plibersek: Well, premiums have been rising faster than CPI but I think we're very keen to work with the insurance industry to see if we can continue to reduce the rate of growth in health insurance costs.
Adam Spencer: But people in your position have been keen to do that for a long time and there's never been any real indication of it happening, has there?
Tanya Plibersek: No, that's right and we do expect that there will be a slight slowing in the rate of growth in the private health insurance rebate but you've got to remember this is actually now one of the fastest-growing areas. Health expenditure is growing at around 6.8 per cent per annum. It will soon, by around 2022, cost around $8 billion a year which is - in fact, it's already costing us about as much as it costs for everyone to go to the doctor through Medicare.
So it was important to reduce it as an area of health expenditure because it's not, you know, it's not a frontline service, it's not paying the wages of doctors and nurses. It's a contribution to the cost of health insurance.
Adam Spencer: In fact, your government's already put a means test in on the rebate as well. Some people are asking, as does Greg on the SMS this morning, private should mean private not paid for or supported by the public. The rebates are welfare for people who don't need welfare. Is it time to re-examine whether the private health insurance rebate is needed at all?
Tanya Plibersek: No, I think it's important to have a balance. We are keen as a government to see people still using private health insurance. We've got a mixed system in Australia and have had for many years where the private and public systems work well together and so we're keen to encourage people still to have private health insurance. We just have to be sensible about what proportion of our health budget we spend on that.
Adam Spencer: Adrian's a doctor from Penrith. What would you like to put on the agenda, Adrian?
Caller Adrian: Thanks, Adam. Look, private health insurance is means-tested but the thing that isn't means-tested is Medicare itself and the Productivity Commission called for co-payment for medical services. Isn't this the only way to make it sustainable?
Adam Spencer: I'll put that to the Minister. Should Medicare itself be means-tested? Should people who are particularly affluent be getting the same Medicare benefits as everyone else in the community?
Tanya Plibersek: I think there's a very strong attachment in Australia to our universal health system and we've got an absolute commitment to keeping it.
A lot of people do still contribute on top of Medicare to their health expenses as well so when people say that we've got free health care, we do have freely accessible health care but people make a contribution in many different ways including by buying private health insurance.
Adam Spencer: Another big macro move is this move from quarterly to monthly taxation of large companies and then the size of those companies will reduce over time and more companies will be dragged in too. Doesn't that just triple the compliance work and create bureaucracy for organisations? It brings money into the federal government coffers but isn't that just increasing red tape for business having to do their accounts every single month, Minister?
Tanya Plibersek: We're giving businesses, the largest ones are getting 14 months to get used to that change and smaller businesses will get or medium-sized businesses get another year on top of that and the smaller ones get another year on top of that.
Adam Spencer: But regardless, once it happens, if you've got to do your accounts every month you're employing a flotilla of people just to keep giving monthly updates, aren't you?
Tanya Plibersek: Adam, I think you know that businesses do their accounts every month anyway. They're having to account for their GST monthly, they're having to pay their wages weekly or fortnightly so of course it will take a little bit of readjustment but I certainly think it's within their capacity to do it.
Adam Spencer: More generally, Minister, given the state of the Australian economy, we have interest rates lower than ever under the Liberal government and this was one of their flagship promises, that they'd always beat you on interest rates, lower than ever before.
Australian GDP growth has outstripped the developed world massively over the last four years. Unemployment is in the low five per cents, the rest of the world, most places would give anything for those sort of numbers. There are no western economies predicting surpluses in the next few years. Why is this government obsessed with hitting a surplus and constantly clawing back money out of federal expenditure just to hit a wafer-thin surplus?
Tanya Plibersek: One of the reasons that we've got the great interest rates record that you're talking about is because we have shown fiscal discipline and I think it's important to continue to do so. You're talking about our strong economy. Growth is at trend. We've got low unemployment. That's exactly the time that you do pay down debt.
We invested a lot in keeping Australians working and job creation during the global financial crisis and now we've got to return the Budget to surplus so that we continue to have the flexibility and the room to make decisions like that in the future.
Adam Spencer: But no…
Tanya Plibersek: And now's a good time to do it because we are growing strongly.
Adam Spencer: No one's suggesting we should start running deficits of $20 billion or anything like that but since you've promised we'll be in surplus and you're talking about hitting a surplus of one billion dollars, every time there are major economic shocks around the world the Government seems to have to panic and redraw the Budget to continue to maintain this.
If you were o turn in a deficit of half a billion dollars or something, that's not going to bankrupt the economy but you're ripping half a billion dollars out of university research, delaying trade centres, these sort of short-sighted policies just to make sure next year you can promise you've made a surplus of comparatively a few cents.
You seem to have painted yourself, naively, in to a corner where now absolutely everything has to be done to return if necessary the smallest of possible surpluses because you promised to do so.
Tanya Plibersek: The reason that our economy is so well-regarded internationally is because we've shown this discipline and, Adam, most of these areas, including private health insurance, are continuing to grow. What we're talking about is the rate of growth.
You mentioned higher education research. We have increased higher education research by 40 per cent since we came to government and investment in research will continue to grow. It's about the rate of growth and the speed of growth and one of the reasons that our economy is seen as a safe haven around the world, why people are continuing to invest in Australia and so on is because they see the discipline that we've applied to ourselves.
And I guess the other thing I'd say is a billion dollars might not sound much to you but I think most people understand that a billion dollars is a lot of money and it's a small amount compared to the total of the federal Budget but a billion dollars is a billion dollars, at the end of the day.
We've had to go through a very difficult and disciplined process of finding about $16 billion worth of savings. We've, in the mid-year economic forecast, accounted for around $6 billion of extra spending and that includes my kids' dental program, it includes a number of other health measures and other spending across the government including an increase in the humanitarian intake that has come out of the review into refugees done by Paris Aristotle and others.
If you want to be able to spend on those good things, then you have to kind of cut your cloth to fit your values and by reducing expenditure or reducing the rate of growth of the private health insurance rebate and some of these other measures, it means we're able to continue to afford the great things that we want to invest in as a Labor government.
Adam Spencer: Do you think the economy is uniformly strong in Australia or do you agree with people who say there are areas of strength and areas of genuine softness, genuine areas where the economy could be really struggling and, if so, is this the time to be cutting back significantly government expenditure?
Tanya Plibersek: Look, I think at a macro level our economy is the best in the world. All of those headline indicators that you describe earlier - inflation, government debt, unemployment - all of those are very, very strong.
That doesn't mean that every Australian is benefiting from that strength and part of our spending investment, part of the investment into early childhood education and the Gonski reforms that will make every school in Australia a better school, part of that is ensuring that all Australians benefit from the economic and mineral resources that we have as a nation that really belong to all of us.
Adam Spencer: Is the promise, if we do hit the surplus next year, to keep the Budget in surplus for the foreseeable few years after that, in which case where is the money for Gonski going to come from? Where is the $7 billion a year that's needed for the National Disability Insurance Scheme going to go if the world economic conditions remain flat, without other swingeing cuts to the Budget?
Tanya Plibersek: We expect the surplus to grow each year and to be about $6 billion at the end of the forward estimates and we are in a growing economy. We had a pretty significant dip in resource prices between the last Budget and now but those resource prices are returning so we are confident that the economy will continue to grow and grow well.
We've got a huge investment pipeline, companies that are planning to or have started to invest in new resources, infrastructure and so on, so the medium term economic outlook for Australia is a good one. It'll improve even more if the world economy starts to improve faster but we have been very fortunate in Australia and of course it's required some discipline and some cuts and cuts are never popular or easy but that's meant that we really are the standout economy in the world. There's no other country that you'd prefer to be in, if you were basing it on economic circumstances.
Adam Spencer: Minister, thank you very much for your time this morning.
Tanya Plibersek: It's a pleasure, Adam, thank you.
Adam Spencer: Tanya Plibersek there, the federal Health Minister and Member for Sydney.
Ends
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