ABC 702

E&OE TRANSCRIPT
ABC 702 Drive Program - Richard Glover, Wendy Machin
19 May 2014

SUBJECTS: Budget 2014, higher education

RICHARD GLOVER: Monday political forum now. Cassandra Goldie is the CEO of the Australian Council of Social Service, essentially represents the welfare sector in Australia, Wendy Machin is the president of the NRMA, she represents the petrol heads and…

WENDY MACHIN: I do not.

RICHARD GLOVER: …caravaners among us [laughs].

WENDY MACHIN: We're your saviour. All the time. I bet you're happy to see our guys turn up when you break down.

RICHARD GLOVER: Don't get feisty so early. And Christopher Pyne's the Federal Minister for Education; he joins us from our Adelaide studio. It's good - good afternoon.

CHRISTOPHER PYNE: Good afternoon Richard.

RICHARD GLOVER: We haven't got gangs of q and a protesters for you today, but you know.

CHRISTOPHER PYNE: What happened to you?

WENDY MACHIN: We'll see what we can do.

RICHARD GLOVER: We'll see what we can rustle up. Now the Budget has obviously delivered a big drop in the polls for the Government, with Labor now the preferred government, but the Prime Minister says it was difficult work done for the country's good. Was the Budget brave and necessary or misguided and mean? Christopher Pyne.

CHRISTOPHER PYNE: Well, I think the answer to that is that it was brave and necessary and I think the answer is that if we wanted to be popular we wouldn't have made the difficult decisions that need to be made to get the country back on track. There was never going to be an easy way out of the debt and deficit disaster left to us by Labor. The test of this Budget is, is it a reasonable response to the challenges presented to the Government and is this what the people expected when they voted to throw out the previous government? And I think the answer to that is it is fair to everyone, it is right for the country and it's exactly what the public would have expected, knowing that they inherited - we inherited significant challenges from the previous government.

RICHARD GLOVER: Didn't Mr Abbott though really look us in the eyes, he did it in a very sincere and direct way, he almost sort of looked down the camera and said to the Australian people there will be no new taxes, there'll be no cuts to this and that, there'll be no surprises? He said with some sort of passion about look we want to be a grown up government. He really put his credibility on the line didn't he?

CHRISTOPHER PYNE: And Richard a grown up government does make the difficult decisions that are necessary to get the country back on track. And while I'm not going to argue the fine print about what was said before the election or not, he didn't actually ever say there'll be no new taxes, he said there'll be no unnecessary taxes and he did say that we would get the Budget under control, along with protecting our borders, building the infrastructure of the 21st century and abolishing the carbon tax and that's exactly what we are attempting to do. And the real test I suppose for the Australian people is do they really want a government that will fix the problem or do they want the champion of complacency and excess, which is Bill Shorten, responding to every complaint and having the Government lose the will to fix the Budget? And I think that's why we're acting like adults, because we're fixing the Budget, which Labor would never have even attempted to do.

RICHARD GLOVER: Now obviously I want to get into a lot of the detail. University students, youth unemployment, hospitals et cetera, GST et cetera, but let's just on the sort of big view before we drill down into the Budget. Cassandra Goldie is it necessary or misguided?

CASSANDRA GOLDIE: Well look, we were really hoping the Government would be brave. We'd agreed with the Treasurer when he first started talking about the age of entitlement question mark and the future that we face. We don't think we've got the Budget crisis now, but we certainly think that if we didn't do some hard work into the future we would be in a problem where we'd certainly be heading where some of the European countries have gone. But the big areas of growth, if we just look at the spending side, was in our retirement income system, hospitals, not some of the welfare payments that have actually been really savagely targeted in this Budget and also the revenue challenge. You know, we've had a real drop off in revenue and we haven't seen any serious work done in this Budget on that front. The deficit levy, you know, was a sort of - well it's temporary; it doesn't tackle any of the tax minimisation arrangements. Of course a lot of people structure their arrangements through their self-managed super funds et cetera so they're not exposed to that in the same way. So the really - I think there was clearly a divisive approach to some of this. Obviously we're going to talk about the approach to youth unemployment, but, you know, hard crack down on young people and yet a great scheme in terms of investing up to 10,000 for older workers who are locked out of the labour market. And this is where I go why would we be taking such a differential approach? And the numbers speak for themselves in terms of relative impact. I mean at the higher end of income you really got off very lightly, in fact barely nothing, but at the lower income scale where we know we've got a rise in child poverty already, single parent families are really going to suffer under this Budget.

RICHARD GLOVER: How important is the lying issue or the misguiding issue in all of this? Some people say well look, you know, this is the nature of modern elections. Journalists asks these very kind of narrow questions, the politician is forced to respond and that's - so it means that in every election we've had since the war there's been somebody who's said something and they've had to change it later. Is it a big deal or not a big deal?

CASSANDRA GOLDIE: Well look, I'm less concerned about, you know, the gotcha moment on a particular line said in the shadow of an election, but I am - I do have a question mark over when we - if we want to have trust in good government process we want to see serious reviews, we want to see a decent policy, which is developed in collaboration with those affected and others. So the welfare review, which is the one that we had thought would drive reforms on the welfare system, the first phase of that nobody's seen and yet we've got a whole raft of changes done on welfare in the Budget context. And of course I'm just watching this area of tax reform, looks like we've got a bit of a setup going here potentially and hopefully Chris will talk a bit about it in terms of the way in which the Government's approach funding to the states and you know, if you have a scepticism it's like we're almost starting to do the tax reform process now when we haven't even got started on a decent white paper process, which is - you know, people wax lyrical about the old times, you know, the sort of the Howard, Hawke eras. If you look back at how good government policy was done, you had a process and you had changes foreshadowed, there was lead time, there was hot public debate and then it got rolled into a budgetary process and we're now doing this behind closed doors and oh, we weren't expecting that.

RICHARD GLOVER: Okay. We'll come to the GST in a second, but an overview from Wendy Machin of this Budget.

WENDY MACHIN: Well look, I think Richard there were a lot of people surprised at the toughness of it and some of the measures in it, they were unexpected up until the last few days I suppose. Things like the medical research fund that was kind of an interesting one and a strange inconsistency if you want to draw parallels between that and say the view tax. So on the one hand we are going to establish and enormous $20 billion research fund, which I think a lot of people would welcome and use the payments to the doctors to be part of funding that. On the other hand we're going to whack up petrol, but we're only going to out one cent of that, which is the increase, into a fund. So we don't want to dedicate our petrol funds to roads, which was the reason for bringing in that tax, but we will put doctor payments towards this health fund down the track. So different messages.

RICHARD GLOVER: When you say whack up petrol, that s misleading in the sense that most taxes rise in relationship to inflation. Once you freeze the indexation of anything you're effectively, in real economic terms, reducing the tax every year.

WENDY MACHIN: Yeah sure. I know that's the line.

RICHARD GLOVER: That's all that's been happening is it's been reducing and that's an unreasonable thing to expect isn't it?

WENDY MACHIN: Well, I don't think motorists see it that way. I mean they are very sensitive to fuel prices; they go up all the time. So you've got the oil companies playing games with us by bringing it up and down, a cycle that people have never understood. People in the bush don't get the advantage of that so they'll pay more for their petrol, they don't have public transports and they've got longer distances. The tax was meant to go to roads and over the 10 or 12 years since they stopped indexing it it's generated about $176 billion for the Federal Government. Now of that about 30 per cent's actually gone back into roads and land transport.

RICHARD GLOVER: You're saying to Christopher - Christopher, Wendy's happy with the tax as long as…

WENDY MACHIN: [Indistinct].

RICHARD GLOVER: …as long as you spend it on roads.

CHRISTOPHER PYNE: Well, Wendy knows that the excise on petrol hasn't increased - has not increased for 12 years. So effectively every six months there has been a cut of taxation for the consumer and she would also know that in this Budget there are tens of billions of dollars set aside for the biggest infrastructure spend on roads and ports and product productive infrastructure in Australia's history. So while I listen to Cassandra and I hear what she says about the importance of process and looking after those in our community who are least able to change their spending patterns, I must say I think Wendy knows that there needed to be an increase in the excise on petrol when it's been 12 years since the last one.

WENDY MACHIN: Don't make assumptions….

CHRISTOPHER PYNE: And we are spending…

WENDY MACHIN: …about my thinking Chris.

CHRISTOPHER PYNE: Well, we're spending tens of billions of dollars Wendy, on infrastructure in this Budget and you know it.

WENDY MACHIN: Yeah and that's good. That's good.

CHRISTOPHER PYNE: So I don't think that - I think that the motorists can afford to pay 40 cents - 40 cents more a week in petrol - in their taxation.

WENDY MACHIN: No, that's not my point and I was interrupted. If I could just finish what I was going to say.

CHRISTOPHER PYNE: I didn't interrupt you, Richard interrupted you.

WENDY MACHIN: No, Richard did. That was rude of him.

RICHARD GLOVER: Sorry.

WENDY MACHIN: But if I can finish it. We haven't said that we - well we're not happy about the process. So no one actually came and talked to the seven million members represented by the car clubs about this idea. If they had we mightn't have had the argument that we are having at the moment. But my point is that motorists have paid a lot of tax over the 12 years since that tax was frozen and it's gone everywhere else. So they've cross-subsidised to a large extent a whole range of other government services. Only about 30 per cent of what they've paid in tax has come back to roads. So if the increase goes ahead, and it looks like it will, we'd like a better guarantee that more than one cent in the next rise will come back to roads.

RICHARD GLOVER: Cassandra Goldie, Wendy Machin and Christopher Pyne are here. Christopher you addressed some of the points Wendy made. Cassandra was saying how weird it is to have this quite generous funding to encourage people to hire older people. As an older person, very happy to see that myself.

CHRISTOPHER PYNE: [Laughs].

RICHARD GLOVER: But can you really explain to me with the youth unemployed, they're not allowed to apply for six months, then they get on work for the dole, maybe that's fair enough for six months, after that they're on their own again for six months. How are they meant to live if they happen to be in a situation where they can't move in with their folks for various reasons, their folks are dead or in retirement homes or the family don't get on or whatever.

CASSANDRA GOLDIE: Or they don't have any money.

RICHARD GLOVER: Or the family themselves don't have any money. What are they - how are they meant to feed themselves?

CHRISTOPHER PYNE: Well, Richard the first thing is that the only benefit that they will be denied is the Newstart. They will still have their rental assistance, their family tax benefit part A if they are paying any kind of tax whatsoever, if they have a good working record they will get credit for that and the six months will be reduced. What we're trying to do - and of course if they're a parent they're automatically exempted. What we're trying to do is stop the cycle of intergenerational unemployment. We want young people to be either learning or earning and that's one of the reasons in my portfolio where we've massively expanded the number of places at university through pathways courses, through diplomas and associate degrees, 80,000 more students will benefit from that and we're expanding the apprenticeship scheme by having these trade support loan programs so that they can borrow up to $20,000 from the taxpayer and pay it back later in life in the same way as higher education students can, to give a whole lot more opportunities for learning or earning.

RICHARD GLOVER: I really ask this question really genuinely, I'm not trying to make a political point, how do - what do they eat during this second - during the six months in which they're getting know assistance, given that they don't have parents that can help them?

CHRISTOPHER PYNE: Well, Richard and I'm trying to answer it genuinely as well. And I do believe that the - as Franklin Roosevelt said, the test of our progress is not whether we add more to the abundance of those that have much, but whether we provide enough to those that have little and I can assure you that if there are people who cannot eat, because they can't get - they have no income, neither the Government nor the community will let those people down, but we don't want to go to the most apocalyptic scenario. The vast majority of people that we are trying to assist are people that we don't want to get into a cycle of lifetime unemployment. We want them to be either earning or learning and that's why we're providing a whole range of options for them to be able to go back to study or take up an apprenticeship or get the support that they need, but not simply being able to rely on falling back on the Newstart allowance, especially if they're under 30 years old.

RICHARD GLOVER: Cassandra, we do want people to be encouraged to work, maybe this is a way to do it.

CASSANDRA GOLDIE: Oh look of course. I mean we've been - we've tried to work with the Labor Government to get something serious done on the participation agenda, as it's called, and we've certainly been talking very actively with this Government about what we believed would work in helping to give young people particularly, those who have never had a job, a chance to get into paid work. It's the biggest worry for young people, the surveys all show it. Young people are out there worried about getting a job. That is the biggest concern for them. I cannot see how cutting people off from having the very basics will do anything other than further distress them, further turn them into being homeless and this idea that somehow at the moment young people are not doing anything in getting income support and having a cruisey time, it's just not accurate and, with respect, I think the Minister knows this. We are already - if you're a young person you're already required to be education training, there's a raft of obligations that you have to meet in order - including applying for jobs up to 10 jobs a fortnight. The most depressing stories we're hearing, and a lot of it's going on in social media now, is for young people, they apply over and over and over and over again, they never hear back from any employers at all and they get told if they get a look in, we can't employ you because you haven't got any experience. So what we had been saying to the Government was, similar to what they've done with older workers, provide for paid work experience program. Business agreed it would work where you provide the income support as a subsidy to an employer, they give that young person a break, they get into a real job, they get the experience of being in the workplace, the education and training wraps around the job, so it's a real job. I think one of the things we all want to make sure is that the training and education money works. The last thing we want is young people to survive going on course that go nowhere. There's a marketplace of certificates out there and we all want to see where what - where the training dollar's going and I just think this is far too savage and I don't think it's the kind of country we want to create, where we've got young people for years potentially, you know, without anything behind them. They're doing a lot and we need to do more.

RICHARD GLOVER: Wendy Machin.

WENDY MACHIN: Yeah, it's interesting. I've got three young kids so two of them are at uni and about to go into the workforce and one's finishing school so this is a really hot topic around our dining table. It's quite interesting how it has galvanised discussion right through the ages from 17 year old up to a 70 year old and I guess, you know, our family and a lot of our friends understand the longer term problem and the need to deal with those structural issues as we age and so on and so on. So we really I think all want the Government to get on and do that but there was perhaps a failure to explain it seems. You know, a lot of people are asking the question you're asking Richard, which is not a political one it's more this just seems unusual - odd it's going to impact a lot of people. How will it actually work? I guess the other one is the older workers, you know, in future will have to work until they're 70 and that's fine with me as a white collar worker I'll probably be happy to do that but I wonder about blue collar workers, people who are in manual work, what the opportunities I see in there. I mean, I'm not quite sure, it's just a general question.

CASSANDRA GOLDIE: Bearing in mind, nobody will challenge the data around the number of jobs that are available If you are out looking for work now, there is nowhere - we've got 114,000 young people out looking for paid work or on income support and overall we've got over 450,000 people out looking for paid work and we don't have anywhere near those kinds of jobs available right now. So we completely agree with the Government on this, our big challenge is opening up the job opportunities and that's not the jobs of the past, it's the jobs of the future. I'd have loved to see in this Budget some support for young people including families who are currently on welfare. They've got great ideas. How do we get behind them to use their creativity, the start-up capital, the investment to give young people the opportunity to create work rather than work for the dole which is an expensive scheme and we believe it only stigmatises young people. If you're an employer, who are you going to employ, an older worker with 10,000 on the table to take you in or a young person on work for the dole? And I don't think we want to pitch our generations against each other like that.

RICHARD GLOVER: Monday Political Forum, Cassandra Goldie from ACOSS, Wendy Machin from the NRMA and Christopher Pyne who's in our Adelaide studios, the Minister for Education of course. It's ten to six. I'll check the Sydney traffic in a second. First though Christopher, Wendy mentioned her adult children going to university, that's the other part of this and, really, your portfolio baby. The two changes really allowing universities to charge more fees if they want to and second of all the higher interest rates on the fees that are being charged under the scheme, under the HECS scheme. Will that put, people particularly, you know, maybe from less wealthy households, off the idea of going to university?

CHRISTOPHER PYNE: No, it won't. It definitely won't and can I also say that they are not then main features of the higher education reforms and Cassandra talked earlier about process and I can say that in higher education I spent six or seven weeks getting speeches talking to the sector, writing opinion articles for the newspapers, establishing a debate around higher education reform and the two most important features of this reform are spreading opportunity to more students by extending the demand driven system to sub-bachelor courses like diplomas and associate degrees that are typically used as pathways for students from low SCS backgrounds into university. We're going to expand those so that 80,000 more students will get an opportunity to go to university. Secondly we're going to allow the private providers of higher education to access the Commonwealth Grant scheme to put more competition into the market to keep pushing the prices down rather than up and give more young people an opportunity to get an education. There's no - all the research, Richard, indicates that while students don't like paying fees back later in life after they earn $50,000 a year, it does not deter them from going to university and has no difference whether they are low SCS or high SCS because the students make the decision that they will earn 75 per cent more over their lifetime if they go to university than if they don't and right now…

RICHARD GLOVER: Yeah but that's all true, but what when Sydney University decides to charge, you know, hundreds of thousands of dollars for their law course?

CHRISTOPHER PYNE: Well, they won't. They won't be doing that because the market won't allow them to do that and nobody's even suggesting that that will happen because nobody will go to that law school. If somebody wants- if Sydney University tries to charge that amount of money, they won't have any students because the consumer can go and get a law degree at Macquarie or UNSW or UWS or all sorts of other places in Sydney or they can move to Melbourne or Brisbane or do whatever they like that's the whole point about the consumer being king…

RICHARD GLOVER: It will introduce more of a class system into higher education because…

CHRISTOPHER PYNE: [Speaking over] No it will not, it's not possible…

RICHARD GLOVER: …flash families go to Sydney University, poorer families go to other institutions.

CHRISTOPHER PYNE: Well no, that's not right because whether you are a student from a low SCS background or a student from a high SCS background, you will both be able to borrow every single dollar up front from the Australian taxpayer and pay it back on exactly the same conditions when you earn over $50,000 a year and that is why it is a very equitable system in Australia, one which we do not wish to change. But can I say also that any extra revenue that the universities gain we are going to require them to have the largest Commonwealth Scholarship scheme in Australia's history so the smartest kid will be able to go to the best university of their choice and get a scholarship or a bursary. This is a massive expansion of equity in Australia and the current students who are protesting against it are essentially saying that they want to slam the door behind them and have all the benefits to themselves and not allow future students their same opportunities that they've had to earn 75 per cent more than those people that [indistinct].

RICHARD GLOVER: And Cassandra it is true that the system does require the universities who charge more to set up these scholarships, that's a plus isn't it?

CASSANDRA GOLDIE: Look, there's - the big concerns out of this package on higher education for us are the way in which we are changing the marketplace, there's no question about that. And I think inevitably we will see a hierarchy of educational opportunities. There's no doubt about that…

RICHARD GLOVER: But Christopher says that anyone can borrow the money…

           

CASSANDRA GOLDIE: …but - and that's the second problem. So what we've done here with the HECS scheme is that we are going to make it more expensive by changing the rate of repayment and lowering the threshold by which you have to pay back. Now if you're a young person and you're looking into your future you are making those decisions about how long do I give up being out earning something, how long will I carry a debt for my life, before I can even start to save, maybe for getting a little bit of equity to buy a house and all that flows into those decisions you make at the time and if it doesn't flow in then it will certainly flow into the decisions that you make over the life course, including having kids, if you can ever get secure housing and bear in mind, the costs of education for somebody are not just the fees it's also, if you're from a low income family you're going to be on your own covering your other costs, your housing costs, everything. All this gets factored in and because of what we've seen around the changes on other fronts, what I've said to the Government is that in some of these households we're talking perfect storm here and if you don't do the detailed analysis of how all these changes will impact I think we will see further shifts in inequality between those that have money in their back pocket that can pay the money up front on their fees…

RICHARD GLOVER: They're not allowed to pay their money up front…

CASSANDRA GOLDIE: …and in terms of reducing your debt. So this arrangement is, I think, deeply inequitable if we're not careful.

RICHARD GLOVER: Wendy Machin.

WENDY MACHIN: Look just quickly, I guess it's what are you trying to achieve? And I guess the answer is we want people to get university educations and it's fair I think to say that if you do get a university education your earning capacity is generally higher than those that don't, so I think there is an equity issue there in saying if you're going to go to uni you should pay that back down the track, not that I think a lot never actually gets paid off. I think in terms of the scholarships, I think that's fair, I don't know where the Government sits on means testing a lot of these things. It seems to me that people who can afford to pay probably should and those that can't should get assistance but sometimes those lines seem to get blurred and education to me seems case and point.

RICHARD GLOVER: It's three minutes to six. Casandra Goldie, Wendy Machin and Christopher Pyne.

           

[Unrelated Items - News headlines]

RICHARD GLOVER: Two minutes to news time, the death of the great Jack Brabham today in Summerhill reported today, somehow the people who were sporting heroes I think during your childhood seem to loom larger than anyone since. Who was the figure that loomed large when you were growing up and why did you find them impressive, Wendy?

WENDY MACHIN: Oh Richard, I'm a tennis nut. I'm a tennis tragic from way back and I can remember as a little kid sitting up at midnight in the freezing cold in June to watch Evonne Goolagong play in the Wimbledon final and I've done that ever since and I'm just happy now that we have Fox and all those others so I can watch more tennis all the time.

RICHARD GLOVER: All the time, but that was the one that started you off...

WENDY MACHIN: Yeah.

RICHARD GLOVER: Christopher Pyne what about you?

CHRISTOPHER PYNE: Well, it's very funny that Wendy would say that because I like the sporting greats that overcame extraordinary disadvantage and there's no doubt at all that Evonne Goolagong, now Cawley, overcame extraordinary disadvantage to win the Wimbledon final, twice with an enormous gap between the two. But there are other sporting heroes that I liked, this might shock your listeners but Sunil Gavaskar was a very famous opening batsman for Australia, in fact it's called the Border-Gavaskar Cup that we play India. Why I liked Sunil Gavaskar was because he wasn't a very big person and yet he took on all of those greats from the '70s and '80s, the great fast bowlers like Dennis Lillee and Tommo(*) et cetera and never flinched in the face of their extraordinary bowling so I used to look at him and think he was a very courageous fellow and I was particularly fond of him. And the other great South Australian sporting person of course was Barry Robran, who's probably the greatest footballer ever produced in Australian history.

RICHARD GLOVER: There you go, always ends with a South Australian. Cassandra, what about you?

CASSANDRA GOLDIE: Oh look, I'm going to have to just come out here. I'm a - ballet was my thing so Margot Fonteyn and Nureyev so I, you know [laughs]…

RICHARD GLOVER: Fonteyn and Nureyev, oh well athletic….

WENDY MACHIN: That's very athletic.

RICHARD GLOVER: …very athletic.

CASSANDRA GOLDIE: And a bit of Dauble(*) and Dean(*).

RICHARD GLOVER: Dauble(*) and Dean(*).

CASSANDRA GOLDIE: There you go.

RICHARD GLOVER: Throw them in. Thank you to Christopher Pyne in Adelaide. Thanks Christopher.

CHRISTOPHER PYNE: Pleasure.

RICHARD GLOVER: With me in Sydney Cassandra Goldie and Wendy Machin. You have a great night.

 

[ENDS]