Maternity payment, pensions, airline pricing, GST and the States – Interview with Ray Hadley, 2GB

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March 31, 2005
Australia’s Financial Sector Assessment Program
April 4, 2005

Maternity payment, pensions, airline pricing, GST and the States – Interview with Ray Hadley, 2GB


Interview with Ray Hadley


Friday, 1 April 2005

10.30 am


SUBJECTS: Maternity payment, pensions, airline pricing, GST and the States


Treasurer good morning to you.


Good to be with you Ray.


I think that picture that has made about page 15 or 16 of The Daily Telegraph

is carried on the front page of the Herald Sun you and the babies.


Well as you know we announced in last years Budget a maternity payment for

new mums and it is just about nine months since we announced it and it appears

for the first time in 20 years that the birth rate may have gone up very slightly

so who knows, maybe it has had an effect Ray.


You are not taking credit for all of those children are you? That will put

you in conflict with one of your colleagues.


I can’t take responsibility for all of them but look, we have done, over

a long period of time had a falling birth rate and at the moment the number

of babies that are being born in Australia is not sufficient to replace the

population. To replace mum and dad so, this means that we are going to have

a much older population in the future, more older people, but not so many workers

to support them and so I have been talking about encouraging the fertility rate

to improve and helping with the cost of new mothers, we introduced this $3,000

payment in last years Budget. And who knows maybe it has had an effect.


Now one of the issues that has been raised over the past 72 hours is a crackdown

on welfare benefits and you raised that last night, there is a front page headline

about you want single mums back in the workforce when their children reach school

age and there is also talk about disability pensions. Are you suggesting that

too many people are abusing the system by being on disability pensions when

they should be in the workplace in some way, shape or form?


Well let me make, first of all nobody is talking about genuinely disabled people

being worse off. Let me make that entirely clear. But we have seen a fairly

significant increase in people on disability pensions. We have now got around

700,000 people on disability support pension. And the most common cause is muscular

skeletal pain, back pain. Now, it is hard to think that there are so many more

disable people with bad backs in our society today than there were say 10 years

ago or 20 years ago. But we have seen this real increase Ray, this very, very

substantial increase in people that are disabled. So what we have got to do

I think is we have got to protect genuinely disabled people obviously. But for

people who have got bad backs or maybe they claim disability pension because

their (inaudible) we need to encourage those sorts of people to look for work,

to get part-time work if they can and try and get back into the workforce.


How many people are we talking about as a total number who are on a disability

pension who have what used to be called Mediterranean back?


Well there are 700,000 people on the pension, they now call it muscular skeletal

condition I think Ray, I think that means bad back principally, and that is

the largest category, the largest single category in that 700,000.


On the other one, single mothers, I get quite a bit of email traffic and phone

calls here and I refer people to Centrelink saying look, we live here, there

is a young woman next door, four children, five children, she separated from

her partner/husband, but I know he is living back in the house. You know, that

means she is getting the single mothers pensions with the four or five children

included in it and then the partner/husband is still residing there in a marital

sense, he is on unemployment benefits and their net worth is better by somewhere

between $100 or $200 a week, that is what people tell me. Is there any way that

you can substantiate those claims or is there any way you can look at Centrelink

and say well there are many more people abusing the system than we know about?


Well these claims should be investigated. Nobody minds helping a person in

genuine need. I think the public rightly thinks, we are all paying taxes here

and why do they have to pay taxes for people who really could work, who really

could look after themselves. You have got admit that everybody’s pension

is just somebody else’s tax, that is where is comes from. And I don’t

think they mind paying taxes for genuine needy cases but we do have to encourage

those people who are capable of work, who are able bodied to try and look after

themselves. It is good for them incidentally, if it gets them into the workforce

than it is good for other taxpayers because other taxpayers can get some relief

as a consequence. And what I am saying here is that we should have a real work

ethic. There is the idea that you put someone on welfare and forget about them

until they go on to the aged pension, that is gone. We now need a work ethic

that people are entitled to benefits to see them through a hard time but they

have got to be encouraged to look for work if they are able bodied and able

to do it.


But permanently disabled people who are confined to wheelchairs or confined

to home for much of their life shouldn’t be concerned by what you are

talking about now?


No not in the slightest, not the genuinely disabled. But the reason the disability

pension is going up is not because the numbers of genuinely disabled is increasing

it is because people are claiming for bad back and also stress, this is the

other category that is really increasing under the disability support pension.

Now, you know, maybe if you are subject to stress Ray, maybe you have to come

out of the workforce and go on the pension for a while, but the object should

be to try and get you back into the workforce rather than just leave you there

for 10 or 20 or 30 or, you can go on the pension for 30 or 40 years. You see,

one of the problems we have, you would know about what happened at Macquarie

Fields in Sydney’s southwest, we have, and I take this back because I

am of that vintage when the Labor Government came to power in the early 1970s,

it was more attractive for young blokes my age leaving school to go on the dole

than actually go into work for $18 or $19 a week as a trainee or as an apprentice,

we now have second and third generation, second generation definitely and maybe

third generation, unemployed. Their father was unemployed, their mother was

unemployed, they are unemployed. They are having children, the likelihood is

they will be unemployed and they have never seen anybody in their family show

an example of what it is to get a job.


So how do you break that cycle if in fact Mum and Dad or Nan and Pop as they

are now, are unemployed, the boy or the girl are unemployed and they have children

who are likely to be the same. How do we break the cycle?


Well let me make this point first of all. Unemployment is the lowest it has

been in 30 years. That is you have got the best chance of getting a job now

than you have had for the last 30 years. And I think we have got to say to a

lot of these kids, look you know, the dole is not an entitlement that lasts

you for the whole of your life, if you want to go on the dole and can’t

find a job, fine, but we are going to ask you to go to interviews, we are going

to ask you to do training, we are going to ask you to go to work with a dole

project and if you don’t do these things then you can’t expect the

taxpayer to keep on paying you.


To another matter, I noticed that the backbencher Alby Schultz has switched

alliances to you as opposed to the Prime Minister. Would that make you more

nervous that Alby is jumping on board?


Look, Alby is a great character…


That is a good way of describing Alby, a character.


…he has been around for a long time as you know Ray, in the New South

Wales Parliament and also in the Commonwealth Parliament and he has got a lot

of support and you will always get a lot of colour and a lot of movement from

Alby and over the years I have enjoyed a lot of things that he has had to say.


What about the Prime Minister raising the spectre of maybe going beyond the

next election, is that a surprise to those of you who know him well?


Look, I find Ray that people read all sorts of implications into these statements

and you know, you can do it on a daily basis so I don’t really comment

on all those things, he has got his position and that is it as far as I am concerned.


OK, just on another issue completely away from what we are talking about, I

get inundated with emails and phone calls from listeners, who feel they have

been mislead by airlines and I went to the ACCC and they directed me to you.

For instance my wife recently booked a fare with one of the airlines to the

Gold Coast and it was you know $29 and $79 return, so it you know, just on $100

or over $100. When she pressed the button to them pay for it, it turned out

to be $198. And then, it was Jetstar so she went to Virgin Blue who had a fare

of say $79 up and $86 back and the total charge was about $8 cheaper. And the

ACCC said to me, oh well, it is the Federal Government tightening up Trade Practices.

Do we need to do that and tell these airlines to stop telling people they can

fly for $29 and by the time you pay for it, it is close to $200?


Well you know, the point is whether or not they are misleading their customers

and if they are leading you to believe that they have got a fare that they don’t

have, they are misleading. I don’t know this particular case but from

what I have seen in the paper, you normally see this thing advertised and they

have a little asterisks don’t they and…


Yes but my eyesight is failing at 50 Treasurer and I am now wearing glasses

and I can’t read the asterisks or what it says at the bottom of it and

most people are in the same boat because it is so tiny you can’t read



Well I think that is what they try and do. They try and get you in with the

big headline and then down in the fine print they say, well that is not really

the case. Look, I think people can be mislead by that and the ACCC can stop

conduct if it is misleading and I think it has got plenty of power to do that.


Right to that States and how are we looking at the moment with the battle between

the Labor States and the Coalition Liberal Federal Government in relation to

the GST?


Well we have put to them what we think should happen. That is, as the GST has

risen, and it has risen more than anyone predicted, they have the capacity to

abolish the other taxes – the nine taxes. When the GST came in, we said

we would introduce the GST and it would abolish nine taxes. Now about four of

them have been abolished but the revenue has increased more than anyone expected

and we have laid down a programme for abolishing the remaining five and the

States said, oh it is all too hard, we would like to go away and consider it.

So we said alright you can go away and consider it, but you have got to remember,

at the end of the day the GST was introduced to abolish other taxes. As far

as we are concerned that is what it has got to do.


Have you been suggested of this mantra of the Premier in meetings about Sydney

is growing at 1,000 people a week and we need more money to accommodate these

people because they are attracted here? I think it is that he has been pounding

the desk of meetings about that with Andrew Refshauge.


You know, I hear him make the point, I have seen him make it in the media but…


The only reason I raise it is because this week the Bureau showed that in fact

that is a falsehood.




…that the population in New South Wales does increase by about 680 a

week but of the 680, 483 is taken up by the fact more are born than died. So

actually the number of people coming here either from other States or other

countries is around about 200 or so. It is not 1,000.


I am aware that the recent figures of the Bureau showed that most of the population

in fact wasn’t moving to Sydney…


It looks like they are going to Queensland where there is no exit tax on property

and of course stamp duty is much more affordable.


…absolutely. In fact Brisbane is growing much faster and as you say,

certainly if you wanted to be a property investor you would be cleverer to go

to Queensland because you don’t have to pay that exit tax.


So I would be right in saying on the GST, there has been no softening of your

attitude, or the Government’s attitude re the Labor States?


No Ray, you were around in 1998, I was around in 1998, I put this policy forward,

we said to Australia that the GST wouldn’t be a new tax, that the GST

would be introduced so that we could abolish other taxes. Now, the GST has been

introduced, some of those other taxes got abolished but all of them have to

be abolished. We didn’t say to the public, oh you will have the GST plus

the other taxes. We said, you will have the GST instead of the other taxes.

Now, the State are saying, we will have the GST, yes, that is nice, I like that

Mr Costello, thanks for that, yes, that is good, and we would like to keep the

existing taxes as well so you get taxed double. That is not the idea, it wasn’t

done for that reason.


How far will you go in relation to making the point? Will you withhold GST

revenue until they toe the line?


Well let’s see what happens, I hope this can all be fixed and by the

way, you know, the way they are going on, you would think that abolishing a

tax is like extracting a tooth. My view is that by abolishing the taxes they

are going to help the citizens of New South Wales, they are going to help business,

business will boom, so it is not as if this is some kind of painful extraction,

this actually will be a good thing for the economy, so I can’t actually

figure out why they consider it you know, such a painful business to be frank.

They have got the GST revenue, the GST is giving them more than ever before,

let’s go and abolish some other taxes, that would be great.


And finally let me say that I think the photo on the front page of the Herald

Sun and buried deep in The Telegraph with you and the babies will

follow you round like Kerry-Anne’s Macarena for years to come. It will

be published and published and re-published.


At least it will give the Macarena and the python off the papers.


Well exactly and they will spell your name correctly. Thanks for your time.


Thanks Ray, thanks for your time.