Doorstop Interview

National Press Club

Canberra

Monday, 24 July 2006

11.10 am

SUBJECTS: Census, childcare, workforce participation and flexibility

TREASURER:

Well the Census is coming on the 8^th of August and I urge every Australian to participate. This is absolutely essential for all sorts of things in our society. For government to set the houses and the seats in the various houses in Parliament, for universities, for health, it is important for business. Every five years we get a fix on the Australian population and this year it is going to be on the 8^th of August and I ask all Australians to cooperate.

JOURNALIST:

Treasurer, you point out the, in your speech the importance of making it more attractive and easier for women to have more babies, that being the case why is it that things like for instance childcare, why isn’t childcare able to salary sacrificed regardless of the location? Why should it have to be co-located for women to get that benefit?

TREASURER:

Well we have got more assistance for childcare than we have ever had before. We have the childcare benefit and we have just introduced a 30 per cent tax rebate which is payable from the 1^st of July and this enables you to get 30 per cent of your out-of-pocket back which for most women is tax deductibility, full tax deductibility. And I think it is important to see how that system works because it has only started to pay from the 1^st of July and I think it will be of enormous benefit.

JOURNALIST:

Would you consider widening that tax deductibility though to centres that aren’t within the building which you work?

TREASURER:

You don’t have to have the centre in the building in which you work to get the 30 per cent childcare tax rebate. The 30 per cent childcare tax rebate is available to all women for the amount they are out of pocket for childcare. Now, what that means is if you are on a top marginal tax rate of 30 per cent which most women are, most Australians are but certainly most women are, that is full tax deductibility.

JOURNALIST:

But are there additional tax breaks for people who actually have a childcare centre, who are lucky enough to have a childcare centre in the building in which they work?

TREASURER:

No, no, there is a fringe benefits tax but you see, this is point I am making, that you can’t do better than full tax deductibility and most women in fact are on a 30 per cent tax rate and are getting full tax deductibility. You could only do better than that if you happen to be on a higher marginal tax rate of which a very small number of women are and in fact for most women who aren’t even on, who are on 30 per cent and some lower, the 30 per cent rebate is in fact more tax effective.

JOURNALIST:

How important do you think paid maternity leave is in making up a woman’s mind about whether to have a kid?

TREASURER:

I think maternity leave is very important. I think in particular the ability to come back into the workforce after you have had a child is a great encouragement to women and of course one of the reasons why we introduced the Baby Bonus was effectively to cover some of the loss of income when women go out of the workforce and of course some of the expenses.

JOURNALIST:

Treasurer, ‘demography is destiny’ as you said, one side of the equation is the birth rate, the other side is workforce participation, would you still encourage all workers to work longer rather than shorter, think of working beyond 65 say?

TREASURER:

Well I have led the charge in Australia, for people to stay in the workforce longer. We have a superannuation preservation age of 55 and one of the points I have been making to people is stay in the workforce beyond 55. We have so many people that take their superannuation at 55 and go. In the last Budget I introduced tax changes to give you a big tax incentive after 60 to remain in the workforce until you are 60, after which point you can be free of taxes on your retirement benefits and I would encourage people to maintain a connection with the workforce, even if it is only part-time, for as long as they can.

JOURNALIST:

(inaudible) you are nominating the replacement level fertility rate of 2.1 that you mentioned in your speech as a kind of target for policy in Australia?

TREASURER:

Look, I would be overjoyed if we could get the fertility rate back to 2.1. We have made inroads, we are one of the few countries in the developed world which has stopped the decline. People internationally are now talking about the Australian experience. But I don’t want to overstate this. We stopped the decline at 1.73 and we have got it to 1.80. That is good. What is good is it didn’t fall lower than 1.73. Could we ever get it back to 2.1? Well, I would love to see it but it is a very, very tall order. Let’s just see if we can stabilise the decline and turn it back up and it will be a great thing for our country. This is not a problem just for Australia, this is a problem for every developed economy in the world. I gave you examples of Italy, of Japan, of Russia, but I could give you many, many more and there does appear to be a measure of success in Australia that makes us one of the more successful countries in dealing with this problem. Whether we can be more ambitious, well, I hope we can.

JOURNALIST:

If workplace flexibility is as important as you say it is, what policy changes in the years ahead do you think the Government could look to to improve workplace flexibility or has the Government done all that it reasonably can?

TREASURER:

Well I think flexibility is the key, flexibility in hours, flexibility in location, flexibility in relation to leave, I think one of the things in the future that is going to become more common is people working from home and I think a lot of women will find that attractive but you have got to have flexibility so that people can agree on this. Work has changed. Once upon a time you went into one occupation, you stayed in it for the whole of your life, you worked Monday to Friday, you worked set hours, that is all over. People are going to have different careers, work on different dates at different times and I hope in different locations, particularly homes.

JOURNALIST:

Treasurer, (inaudible) fathers, you said fathers…

TREASURER:

Last question.

JOURNALIST:

…you think should be doing more…

TREASURER:

Yes.

JOURNALIST:

…is that not what is occurring at the moment? Like what should (inaudible) doing more.

TREASURER:

Well I think fathers are probably doing better but I think the mothers of Australia will tell you there is room for improvement, that dads can take more responsibility in relation to children and minding them and I do speak from personal experience as there is room for the dads of Australia to improve, maybe not you Matt, but certainly in my case.

JOURNALIST:

Treasurer, (inaudible) trying to get employers to overcome this resistance to providing more flexibility, would the Government even consider more regulation to encourage that to happen?

TREASURER:

You know, I don’t know that more regulation necessarily leads to higher flexibility. My view is generally speaking with less regulation you get more flexibility and this is the point I would make. 50 per cent of our population is women, more than 50 per cent, they are probably more highly educated than men. Employers need these women and in order to find these women they are going to have to be more flexible and I would argue that it is very much in the interests of employers to work on flexibility. Thank you.