Budget – Interview with Paul Murray, 6PR

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More Help for Families
May 11, 2004
Mark Latham’€™s Budget reply, Reserve Bank board , children in detention centers – Doorstop Interview, Melbourne
May 13, 2004
More Help for Families
May 11, 2004
Mark Latham’€™s Budget reply, Reserve Bank board , children in detention centers – Doorstop Interview, Melbourne
May 13, 2004

Budget – Interview with Paul Murray, 6PR




Interview with Paul Murray


Wednesday, 12 May 2004
10.35 am



Good morning.


Good morning Paul, good to be with you.


Thanks Peter. Peter I wonder who is the biggest cynic here? You for such a

shameless pork barrel or the critics, who can only see the politics in this



Well, critics are paid to be critics but we have a duty to run a strong economy.

We have been doing that now for eight years and if you have a strong economy

and you have got more people in work then ever before as we now have, it is

an opportunity to improve incentives, incentives to families and incentives

for middle-income earners and I make no bones about supporting Australia’s

families Paul because this is the future of our country this is the fabric of

our society and if we can support Australia’s families and if we can afford

to do that we should be doing it, and that is what good government is all about.


But you are not supporting all families are you, you are just supporting some?


Well we are supporting all middle and low-income families. All middle and

low-income families are getting an additional $600 per child and, for some,

more than that and…


Well for the family payment you are, but not on the tax cuts. Labor says there

are 8.5 million families on low incomes, incomes below $52,000 a year who get

nothing from your tax cut.


Yes, well, there are not even 8.5 million families in Australia.


Well that is the figure Simon Crean put…


I know, I know. It is unbelievable isn’t it, there are not even 8.5

million families in Australia. He says there are 8.5 that have missed out, so

let me tell you there are 2.2 million families in Australia who are on low and

middle incomes.


…who get Family Benefit A.


And they get, every single one of them gets an increase, $600 per child,

if you have got two children $1,200, if you have got three $1,800 of benefit,

and for some where Mum is a part-time worker and up until now has been income

tested out of benefits, they will get additional benefits and the average Australian

family, that is a family on $50,000 with Mum in part-time work gets something

like $50 per week.


Let me just ask you about those two $600 family payments…




One comes just before the election, clearly that will make potential voters

happy and there is a prospect of one, just after the election, to give them

something to vote for. What dictated the timing of these two $600 payments?


The fact is we wanted to introduce it from the current financial year. So

the current financial year will finish on 30 June, so in respect of this year

a payment before the 30 June and when they reconcile their tax return they will

get it in respect of the next payment. So they could actually get $1,200 per

child depending on when they put their tax return in, in the next 12 months.


So when do you think it is likely most of the second $600 payment will be



Well most of those people tend, the financial year ends on 30 June, most people

tend to put in their tax return either in the September quarter or the December

quarter. Some do not have to put it in until March next year. It really depends

on your accountant as much as anything else, but I would say most in the September

or the December quarter.


Peter, strong emphasis here on hand outs to families. Aren’t you just

building a Liberal Party middle-class welfare state here? Families being the

ones who are now suckling on the government teat?


Well, when you say a hand out to families. It is a $600 increase in family

payments per child. Now you think of a family Paul. A family is rearing a child,

clothing a child, housing a child, feeding a child, educating a child, may have

a child in childcare, transporting a child here, there and everywhere. Now,

you are getting an additional $600 per child. I actually think families will

appreciate that. I would not call it a hand out. I would say it is a hand up

in balancing difficult child rearing and, for many mothers, working responsibilities

as well. I do not know how many mothers do it. They’re in the workforce,

they’re dropping kids off at school they are picking them up again, they’re

running them here, there and everywhere. They’re feeding and clothing

them and I do not think they would regard this as a hand out. I think they would

regard this as a bit of justice from the tax and family payment system.


I would have thought that Liberal philosophy was that people make a conscious

decision to have children and they should be able to afford them but that taxation

should be equitable right over the community and you have actually gone over

the taxation system now to give family benefit payments to people, but not give

tax cuts throughout the wage scales.


Well, Paul when we did the really big re-vamp of the tax scales, back in 2000

when the GST was coming in, we had a proposal to provide tax cuts across the

board for everybody and we cut the rate for low income earners. We cut a 20

per cent rate to 17 per cent and we cut a 34 per cent rate to 30 per cent, and

for middle-income earners they were supposed to get tax cuts too which were

defeated in the Senate and this is unfinished business. This should have been

done four years ago. What happened was that the tax cuts for middle-income earners

were defeated in the Senate four years ago and now what we are doing is we are

going back and we are saying in the context of additional family payments middle-income

earners should get their tax cuts. My view, it is actually probably four years

too late. It should have gone through four years ago and Paul, you know we are

talking about people here who are earning between, who are earning up to, up

to $60,000, $62,000 on the top tax rate in Australia. I do not think you are

rich on $62,500, I really don’t.


No. Look there are clearly (inaudible) are winners and as I said at the start

there is a lot to like about the Budget but I wonder about those people who

are missing out on the direct benefits of your healthy economy and I am talking

principally about pensioners and the unemployed; what’s in the Budget

for them?


Well all pensions will be increased. All pensions will be increased and not

only increased, by the way, according to the cost of living but increased in

line with the growth of wages. So pensioners get automatic increases twice a

year, and because wages have been growing so strongly the pension increases

have been running in front of prices in recent years, so there is plenty in

this for pensioners. Pensioners are getting increases as well. They are sharing

in the healthy economy because as the healthy economy delivers wage rises, pensioners,

pensions increase in line with those wage rises.


This Budget with its payments to families has the ability to pump a lot of

money into the economy very quickly. Don’t you run the danger here of

tempting the Reserve Bank to dampen down an economy if this heats it up to do

that with interest rate rises, and then the family payment you are giving out

will just go to pay off higher mortgages?


I do not think so Paul. Our home mortgage interest rates of around 7 per cent

are as low as they have been since Labor was in office and we have worked really

hard to keep those interest rates low. I have been Treasurer for eight years

and during that period interest rates have come down and stayed down and I think

we have learnt a bit about economic management over those years and what is

going to be important in relation to the interest rate outlook is keeping inflation

low. That is what we focus our interest rate policy on and this is not an inflationary



Peter are you aware of the criticisms this morning, or the commentary coming

from Pru Goward, womens’ adviser saying that the lump-sum payments to

families and I think also the maternity payment of $3,000 isn’t wise and

she would rather see this staggered so that families didn’t just splurge

that money?


Well at the moment you have a lump sum, a maternity allowance and a baby bonus.

What we are doing is we are rolling those two together and increasing it so

you already are having lump sums. I think it is better to pay it as a lump sum

because when you have a baby, as you and I know Paul, you have got to buy a

crib and you have got to buy a bassinette and you have got to have one of those

capsules in the back of your car and you have got to have the jump suits and

the baby bonnets and the baby bottle and the nappies. You know what it is like.

And it is a big time of cost, and when you take into account as well as that,

Mum is most probably coming out of the workforce, so you’re losing the

income and your incurring additional costs. I think it is helpful to have a

lump-sum payment at that time


Another criticism of your Budget is that it is shirks economic reform. Apart

from reducing the superannuation surcharge you really haven’t done anything

about the heavy tax regime on superannuation. When are you going to attend to



Well we are halving the superannuation surcharge and, Paul that has got to

get through the Senate…


Yes but that only affects top-end earners really doesn’t it?


Well, the contribution tax is 15 per cent but for some people 29.5 per cent,

and we are trying to reduce that to 22.5 per cent, so we are addressing that;

and for the low income earner we are introducing a whole new scheme whereby…have

you seen those ads on TV with the piggy bank where a chap puts a coin in and

the government matches it?


Yes indeed.


Well that has been dollar for dollar up until now and now we are saying to

people if you put a $1.00 in you will get a $1.50 contribution from the government,

so if you want to put $100 in you will get $150 if you are a low income earner

you can put $1000 in you will get $1500 into your superannuation and that will

be a very large incentive for superannuation.


Finally Peter I know we are on tight time here, why won’t you and the

Prime Minister come clean with Australians and give us a succession plan if

the Liberal Party wins this next election? Company boards for example demand

open succession plans why shouldn’t we get the same?


Well because we are concentrating on our jobs and we are trying to win the

next election.


People want to know who they’re voting for Peter.


Sure, the people of Australia will decide at the next election who is in government.

If they vote for the Liberal Party they will be returning the Howard Government

and if they vote for the Labor Party you will get Mr Latham. I think that is

a pretty clear choice.


You’re telling us that the Howard Government would be exactly the same

under Peter Costello as it would be under John Howard?


Well if John Howard is elected it will be a John Howard Government that is

the point I am making. But it is the voters that will decide these things. And

we do not take anything for granted here and I do not want to take economic

management for granted either. Paul, this is a really hard economy. This is

a $200 billion Budget. It is hard and it is tough and you can not just say well

bring in the inexperienced and the bad economic ideas such as they are of Latham

and Crean – that could be a real danger to this country.


Yes I know, but I think that people aren’t stupid and they realise that

John Howard is not going to stay on forever. They want to know whether they

are voting at this next election for four years of John Howard or one year of

John Howard or six months of John Howard, or what?


Well at the next election the Howard Government will be seeking to be returned

and I will be a big part of it and no one will be worker harder to get it returned

and to be part of it than I will. But before we focus on what is going to happen

after the next election, let’s just focus on getting this Budget through

the Parliament and lets go down to the election and let the people decide.


Well haven’t Labor made it clear? I thought it was pretty clear last

night they’re going to let it go right through.


But then they say, they, we reserve the right to amend and then they say,

sometimes they say we might, I do not know, for example have they said they

are going to pass our measures to cut superannuation surcharge? I do not know,

you see.


Yes there was a mention of fine detail I must say.


You know they always have let outs these guys. There is always a reason why

they can not be positive. They want to appear positive, and say yes we will

be positive and then they say no we have go to look at this area or the other

area and I just say this we want to pay that family payment before 30 June.

We want to cut taxes on 1 July. Let’s just get on with it and let the

Senate work for once to implement policies which will help families.


Thanks for talking with us today.


Good to be with you Paul.