Doorstop Interview

Melbourne

Wednesday, 27 June 2007

10.35 am

SUBJECTS: Census 2006, Indigenous emergency

JOURNALIST:

And the question was, in a couple of day’s time, 21 million Australians?

TREASURER:

It is a good thing.  In two days time the population of Australia will be 21 million.  That means that we are growing, both with natural increase and with immigration and I think we have got plenty of room to grow further.  A stronger country, a stronger population, a stronger economy, I think will lead to a better lifestyle.

JOURNALIST:

Treasurer, there are some concerns though aren’t there, with an ageing population?

TREASURER:

Yes.  What the Census shows is that our population is ageing.  People are living longer and there is an increase in the number of people of retirement age compared to those of working age.  What that means is that we are going to have to encourage people, if they want to, to stay in the workforce longer and also to encourage an increase in the number of children.  And I have previously encouraged Australians to think about enlarging their families.  There is evidence that the birth rate is picking up.  We have had the highest number of babies born in 2006 since 1971.  So people are heeding the call but there is still quite a way to go.

JOURNALIST:

So people are having one for the country?

TREASURER:

It looks like the birth rate is picking up – the second highest number of babies born on record.  Some parents are having one for Mum, one for Dad and one for the country and if you can do that, that is positive for our future. 

JOURNALIST:

Was there anything in there, in today’s Census that actually surprised you or shocked you?

TREASURER:

I think the fact that you see the way in which the birth rate is picking up is a very positive thing.  It shows you, I think, that there is a lot more economic security, that people are prepared to have children. And interestingly enough, although family sizes are much smaller than they were say, 10 or 20 years ago, houses are much bigger.  So we are living with smaller families and larger houses.  The other thing I guess that surprised me in today’s figures was that for the first time since 1911, the number of people in marriage slipped below 50 per cent and we have seen a rise in those particularly who have never married and I think that was probably unexpected. 

JOURNALIST:

What did you think of the change in the religious aspect of the country, where you have got an increase in the number of people who say they have no religion, a decrease in the traditional Protestant dominations but a sharp increase in Pentecostals?

TREASURER:

I think the results show that those people identifying themselves as Christian are not doing so as much out of habit as would have occurred in the past.  People are much more readily prepared to identify themselves as of no religion, and so as a result you are seeing a fall off in some of the mainstream Christian denominations.  But correspondingly, a strong rise in some of the newer denominations like Pentecostal which showed quite a significant increase – of course off a lower base but quite a significant increase.  So I don’t know that I would say it indicates a drop in religious belief.  I think it indicates a drop in identifying yourself as of religious belief. 

JOURNALIST:

We are wealthier, incomes are going up, however it seems that homes are more expensive as well, harder to buy.  What is happening there?

TREASURER:

Well what the statistics show, it says that in real terms, that is after adjusting for inflation, wages are increasing.  That is people are receiving more even after taking into account price rises on average.  And homes on average are dearer.  So it is quite possible that people are using increased wages to buy more expensive homes.  Interestingly enough, larger homes with smaller families.  But you would expect that because that is a sign of improving living standards.  I think if you went back to the Australia of 30 or 40 years ago, it was very common, even in middle class homes, for children to share bedrooms, sometimes multiple children in the one bedroom.  But now the norm seems to be in most Australian families, a bedroom per child, sometimes even more than one. 

JOURNALIST:

Is it a concern that fewer people own their own home than did 10 years ago?

TREASURER:

What these statistics show is you have got about a third of people who have paid off their home, a third of people who are buying a home and a third of people that are not buying a home.  Now, that third that have paid off their home, may well be borrowing against it.  You would have to do some more work but my suspicion is there is a lot of people that are unlocking equity in homes particularly amongst those older people who traditionally would have paid off their mortgage in its entirety. 

JOURNALIST:

But in terms of the great Australian dream of owning your own home, it appears there are less people now who have achieved that dream than that in the past?

TREASURER:

Well I think what the figures show is, particularly for families, nine out of ten Australian families are living in homes, free standing homes overwhelmingly.  So you might actually be seeing a bit of lifestyle change come into this – that you buy a home when you are having a family but there will be people who will move into flats after the children have left, downsizing.  And there might be other reasons for that too because one of the things that really did not surprise me about the Census is it shows that teenage children are not good at doing domestic housework. 

JOURNALIST:

I was surprised that three out of four of them are actually doing any (inaudible). Can I ask you about on the retirement age you referred to, do we need to re-think the notion of a retirement age, and what sort of age do you think you would retire at?

TREASURER:

Well, I think the way I would encourage people to look at it is with our superannuation reforms, it is going to be possible once you turn 60 to take a pension or indeed a lump sum tax free.  And I think people are going to think about after 60, taking a bit of their superannuation and maybe continuing on in the workforce at least on a part-time basis.  So that the working pattern will not be full-time work right up until a retirement age and then no work thereafter.  It will be full-time work during your peak income earning years.  Then a mix of retirement and part-time work which will allow people to do some kind of useful productive work well into their 60s.  You see, the second point I would make is this: the preservation age for superannuation is 55 and if you go back to the 80s, the big talk was early retirement, retirement at 55.  I don’t think retirement at 55 is going to be a thing of the future.  Life expectancy is mid-80s and you retire at 55, that is 30 years of retirement.  It is very hard to fill in 30 years of retirement.  So, I think people are going to see 60 more as the break with these superannuation changes and I think the working pattern is and I would encourage it to be, continuing work for at least on a part-time basis into your 60s.  Bear in mind, we are now looking at life expectancies well into our 80s, so you have still got another 20 years after that.

JOURNALIST:

Nevertheless, do you think it might come the time when you have one for the country and one for the grandparents? 

TREASURER:

Well grandparents are perfectly capable of doing it these days.

JOURNALIST:

Mr Costello, just moving onto another area, how long do you see the Commonwealth’s intervention of the Northern Territory lasting for and how long can it be financed for?

TREASURER:

Well it will last for as long as there is important work to be done.  The important thing is to get into the communities, to stop grog, to stop drugs, to stop pornography getting into the communities, to stop child abuse. And it will be necessary to have those mechanisms in place until the objectives are achieved. 

JOURNALIST:

And how long do you, what do you think the cost will be in dollar terms?

TREASURER:

Well of course it will be a very substantial cost because it is having people on the ground, it is having law enforcement area officers on the ground, it is having medical specialists on the ground and over a long period of time it will be a very substantial cost. 

JOURNALIST:

Will it be millions, billions?

TREASURER:

Well, you know, bear in mind this: that even today the Commonwealth is spending billions on Aboriginal welfare and this will be in addition to that.  So we are looking at very large sums of money.  But bear in mind it is not as if there has been no money spent to date.  There are billions spent already.  Unfortunately I don’t think it has been spent as wisely as we want it spent and that is why we have got to have this extra and additional effort.

JOURNALIST:

Are the gains clear and quantifiable, do you think with this exercise?

TREASURER:

Well the gains will be if communities are safe, if children are safe, young children can sleep safely at night in their communities and young people can grow up without sexual or other abuse.  They will be the gains. That is what we are looking for.  We are looking to protect the next generation and just to give them the chance to have the same opportunity as white kids do.  We wouldn’t tolerate this level of violence and sexual abuse in white suburbs in our major cities, we just wouldn’t tolerate it.  And there is no reason why we should tolerate it because it happens to be in Aboriginal communities in outback Australia. 

JOURNALIST:

Treasurer, are you…

TREASURER:

Last one.

JOURNALIST:

…the Grants Commission allocates all of this money to the Northern Territory on the basis that it costs so much money to provide services to outback Aboriginals and the Northern Territory Government takes the money and doesn’t provide the services?

TREASURER:

It is a very good point that you make.  The level of money distributed to the Northern Territory is far in excess of any other State or Territory.  And the reason why it is far in excess is when the needs of the Territory are assessed it has a component of people, Aboriginal people, who have vastly greater needs than any other group of Australians.  So in the distribution of income there is already a very, very large increase to the Territory to enable it to deal with Aboriginal housing, education and health.  And now the Commonwealth is coming in, in addition to that distribution.  That is why I say that the level of funds that have been committed is already very large and we are going in excess of that.  Now is not the time to get into analysis of who dropped the ball.  Now is the time to make sure we pick up the ball and we deal with the problem.  But you make a very, very good point; it is not as if this has gone unnoticed or unaddressed in a financial sense.  That has not been the problem.  I keep reading in the papers about this as a financial issue.  This is not a financial issue.  This is a law and order issue.  This is a health issue.  It has not been a lack of spending.  It has been a lack of ensuring that we get results from our spending.  Thanks.