PATRICIA KARVELAS, HOST: The Federal Budget is just as much a political document as it is economic. The Greens say the $4 billion dollar surplus is political, while the Opposition says the win isn't Labor's to claim. But the key question is whether the Government's second Budget will quell or stimulate inflation and whether it does enough to help the most vulnerable. Anthony Albanese is the Prime Minister and he joined me a short time ago.
Prime Minister, welcome.
ANTHONY ALBANESE, PRIME MINISTER: Good to be with you, Patricia.
KARVELAS: Good to have you in the studio. It is exciting to eyeball each other. You're giving people on a range of welfare payments $2.85 more a day. How is that amount, it's less than a price of a loaf of bread, going to stop people being left behind?
PRIME MINISTER: We wanted to take pressure off families whilst we didn't put pressure on inflation. So, that's why we have targeted relief. But we have this as a package that supports Australians across the board. And we make no apologies for the fact that some of the most vulnerable Australians are people we're providing assistance for in this Budget.
KARVELAS: Cassandra Goldie told me it's a poverty payment. Do you think it's a poverty payment?
PRIME MINISTER: Well, it is a payment to assist people that we are providing extra support for, whether it is $40 additional for JobSeeker, whether it's $176.90 additional for those who missed out on the single parenting payment, or whether it's across the board the support we're giving, with cheaper child care, with cheaper medicines, across the board support to build a stronger economy, whilst once again, producing a projected surplus so that we're not putting pressure on inflation.
KARVELAS: The $40 won't come into effect until late September. That's four months away. That's a long time to make vulnerable people wait, right?
PRIME MINISTER: We are doing what we can, when we can, which is what we said we would do.
KARVELAS: Couldn't you do it earlier?
PRIME MINISTER: We're providing that support for people, along with a range of other measures in this Budget.
KARVELAS: Inflation is at seven per cent. And it's the dragon that you've got to slay. I mean, that's the Treasurer's constant language. And inflation on essential items like food is even higher, of course. Why did you decide that giving $2.85 a day would be sufficient? Was it that you felt like you couldn't afford any more? Were you being warned about inflationary impacts?
PRIME MINISTER: Well, we're dealing with a global economic challenge of inflation. So, what we did was to provide support to take pressure off people, as well as, though, always being conscious that it's no good doing that whilst adding pressure to inflation, which is why we haven't done that, which is why we've produced $40 billion of savings across the two budgets, which is why we have put 87 per cent of the revenue gains have gone towards the bottom line. This is a responsible Budget, which at the same time looks after people.
KARVELAS: Was it also a case that if you went any higher of the $40 a fortnight that you thought that might inflame inflation, or was it just the price tag attached to this?
PRIME MINISTER: Well, we balanced up the needs of the economy, as well as the needs of people. And we came to the decision.
KARVELAS: So, it was about inflation?
PRIME MINISTER: Well, you don't make decisions based upon one thing. You look at the overall Budget, what is it that the economy needs? And what this Government needed was a responsible Budget that made savings, that delivered a stronger economy, that laid those foundations for people, whilst at the same time providing support for those most in need to take pressure off them.
KARVELAS: Let's talk about the single parenting payment. You said this week that this is an issue that's close to your heart. And we know that story about your own life. And you also claimed that your Budget will lighten the load for single parents. But while you're expanding eligibility for the payment, you haven't increased the rate. Why not?
PRIME MINISTER: We are expanding eligibility for the payment. The payment, like other payments, of course, are indexed in the normal way.
KARVELAS: The base rate is not going up.
PRIME MINISTER: The payments are indexed in the normal way. But you can't say, Patricia, in a Budget in which we are providing $176.90, I think is the figure, for single parents whose child might be today between the age of eight and 14, that makes an enormous difference to them. We did listen to people. And we've responded. And it will make a real difference to women in particular, but also their children.
KARVELAS: Do you think there's a case for increasing the base rate, perhaps, down the track?
PRIME MINISTER: Look, Patricia, you can't do everything in every budget. And if I did that, you would be asking me questions about inflation, you'd be asking me questions about whether the deficit was too large. As it is, what we've done is produce a projected surplus. We've got the balance right, providing support, doing, I think, very significant changes, of which the single parenting payment is something that I'm very proud of. It's something that I've spoken about doing. And last night, we delivered it.
KARVELAS: Is the job done on JobSeeker? Or do you see more reform needed here to bring it up, even further down the track?
PRIME MINISTER: The job of reform is never done, Patricia. What we do as a Labor Government is focus on what we can do for people. But we focus as well on doing it in a really practical way. I think one of the things that we need to examine, for example, with people who are on JobSeeker, is how we improve employment services, to get those long term unemployed into work. Quite clearly, when you have an unemployment rate of 3.5 per cent but you have a whole lot of people who are just stuck in unemployment, then what you need to do is to focus on how is it that the system can be reformed so that we provide those people with employment opportunities? Because that's the key.
KARVELAS: That's a very good point you make, actually. And the Opposition has raised this issue of, well, if we've got record low unemployment, and we've got job vacancies and a desperation for workers, where's the disconnect? And how are you going to fix it, Prime Minister? Because there is a disconnect.
PRIME MINISTER: We are having a review at the moment into employment services. The former Government had a 'set and forget' approach to reform. They were there for nine long years. Nine long years of no reform, just looking after their mates, spending money, as they did in the last Budget they handed down just a year ago with $0 in savings, not looking at the needs of the Australian economy. They were always focused on the politics.
KARVELAS: But you do think there is a lot more work and heavy lifting to do to actually get some of these people who are stuck on the unemployment benefit into those jobs?
PRIME MINISTER: We want to provide support for them. That's why we have a committee.
KARVELAS: Should it all be carrot or should there be a stick as well?
PRIME MINISTER: Well, that's why we have a committee looking at how is it that we can reform that area. And one of the things that's defined my Government is that we do examine, through the Women's Economic Taskforce, you get a report, then you respond. The Reserve Bank review, you get a report, and then you respond. You look at what the needs of the economy are, what the needs of the whole society and the policy spectrum are going forward. And then you respond. We have so much in place already. But of course, there's always more to do. We're just getting started.
KARVELAS: Prime Minister, the Budget tips $20 billion more into the economy. How can you be sure this doesn't make the Reserve Bank's task harder?
PRIME MINISTER: We've got $40 billion of savings. And if you compare what we've done with the revenue gains, 87 per cent to pay down debt, to reduce those interest payments, to take pressure off the economy, compared with 40 per cent under the former Government, and just 30 per cent under the Howard Government. So, they had in last year's Budget, if you want to look at the alternatives, look at what the last Morrison Budget did, brought down, which had a whole range of cash injected into the economy, which added to inflationary pressures, but didn't address any reform, as well as leaving these budget black holes where funding just ended on June 30.
KARVELAS: Prime Minister, the stage three tax counts, the dollar amount wasn't in the Budget.
PRIME MINISTER: That is because it's not a measure.
KARVELAS: But it was in October's Budget.
PRIME MINISTER: That's because it's not a measure.
KARVELAS: Why was it in the October Budget?
PRIME MINISTER: Well, that's a question for the Treasury. But it's included, of course, it's not a new measure. It was legislated a long time ago.
KARVELAS: Is it something you don't want to talk about too much and not wanting to spruik because the juxtaposition between the amount people will get from that cut compared to poor people, it's quite different, isn't it?
PRIME MINISTER: Not at all.
KARVELAS: Well it is a big difference.
PRIME MINISTER: We didn't give any consideration to it. It has been legislated. We haven't changed our position.
KARVELAS: Are you worried it might be inflationary?
PRIME MINISTER: We haven't changed our position.
KARVELAS: Should you assess whether it's inflationary?
PRIME MINISTER: We have not changed our position, Patricia. It's something that was legislated some time ago. It wasn't a part of our consideration in this Budget.
KARVELAS: A little thing I noticed that I really would love to tease out with you, I know we're short on time, but this $160 million over four years for more electoral staff for parliamentarians. You cut from the Morrison Government's levels, the staffing allocation. Why have you revised this decision?
PRIME MINISTER: Because this is the right thing. What the Morrison Government did was, unbeknown to anyone, you had two people sitting next to each other, the Member for Bennelong would have had four staff and the Member for North Sydney next door have double that, eight staff. Guess what? They got the same number of constituents, the same number of pressures to deal with, which is what electorate staff are for. So, one of the things that has happened, though, there used to be 80,000 people in the electorate when I was first elected. Mike Freelander has almost 150,000 people. So, it's one added pressure which is there, because there hasn't been an increase in the size on the number of electorates. So, for some people, it's almost doubled.
KARVELAS: Is it in the wake of the Sally Rugg court case?
PRIME MINISTER: No.
KARVELAS: Well, the Treasurer said last night to David Speers that a recent court case had something to do with it.
PRIME MINISTER: It is about the number of constituents. And secondly, it's about the nature of the work. Previously, you would get letters in the mail when I was first elected. Now, you have emails, you have social media, you have so much pressure on electorate staff. And that is across the board. And one of the things that court case was about, of course, was pressure on staff of Members of Parliament. So, that is why the Treasurer made that comment. But that pressure is there across the board, independents, Labor, Liberal, National, and this is across the board. It is not singling anyone out for any favours. And this is necessary because of that pressure.
KARVELAS: Prime Minister, what do you say to criticism that you're not bold enough, that you are too incremental in your approach, and you're not going for big structural reform?
PRIME MINISTER: Well, I went to an election saying I wanted a better future. I said that we would be governed by the philosophy of 'No one left behind'. This is a Budget that doesn't leave people behind. But no one held back as well. That we aspire to a better future as well. This Budget is perfectly consistent with that. My aim is to lead a long term Labor Government that creates a better future. And last night's Budget was the next step in that.
KARVELAS: Prime Minister, thank you so much for coming into the studio.
PRIME MINISTER: Thanks very much, Patricia.