2GB - The Chris Smith Afternoon Show

E&OE

CHRIS SMITH: Thanks for your time Minister.

MINISTER PORTER: Yeah, good morning.

CHRIS SMITH: I have to say those figures are alarming particularly in the context of seeing that the budget is in strife.

MINISTER PORTER: Well, I think we are grinding our way back to surplus so we’re taking a responsible approach. But part of grinding our way back to surplus has to be to ensure that we’ve expenditure restraint in what is the effectively the largest single area of expenditure, which is welfare, and as you know is about $154 billion a year, so over 4 years, in excess of $600 billion dollars. And what we are proposing in this mid-year economic review is to be more stringent with a range of measures that we know can and do work and also introduce more measures to recoup some of the debt that is outstanding, and identify debt where people haven’t necessarily done the right thing. And when you consider that is about $2 billion dollars’ worth of savings over 4 years, $2 billion out of $600 billion dollars’ worth of savings we think this is reasonable, certainly very achievable, and a very good way to return a dividend to the taxpayer, that we can spend elsewhere on more productive matters.

CHRIS SMITH: I mean unsurprisingly, I’ve heard the welfare lobby groups say today that such a small proportion of people won’t make much difference.

MINISTER PORTER: Well, I mean I will allow it to your listeners to judge whether or not we should go out and make the effort to recoup $2 billion dollars’ worth of payments that shouldn’t have been made in the first place from individuals, over the course of 4 years, when we are spending $600 billion dollars. I think most Australians would consider that to be quite rationale, quite reasonable, quite a good way to make savings. And of course every dollar that you save here is a dollar that you have available in other areas, such as the Pharmaceutical Benefits Scheme or other very worthwhile expenditures.

CHRIS SMITH: I don’t think there is much doubt what they’ll think, and particularly not just those figures that you’re talking about. It is also the fact of just setting that line about what’s right or wrong and what is acceptable behaviour.

MINISTER PORTER: Well I think so. Part of what we’re doing, we’re doing three things by way of explanation for your listeners. We’re identifying debts that we have previously been unable to identify and we’re engaging in a whole range of more stringent compliance measures to bring in existing debts, but also we’re being more thorough in terms of the means testing of a range of payments.  I can give you just one example if you like, I mean, we will apply a general interest charge to debts of former recipients of social services payments. So people who had previously received welfare and who had, for one of a number of reasons, been over paid, but later got a job and moved out of the welfare system, we’ve found that debt has been growing at alarming rates and not being repaid anywhere near fast enough. And we just think we haven’t had the proper incentives in place to make sure that people do the right thing and pay that back. So we’re doing what I think is completely reasonable, and something that has never been done before, we’re simply saying to people, and people will soon get a letter, if you have an outstanding debt because you were over paid welfare benefits and you’ve now got a job, please enter into a reasonable time to pay arrangement, if you don’t we will be putting an interest charge, a general interest charge, on that debt. Otherwise, people were ending up with what were basically interest free loans from the Government where there wasn’t anywhere near enough effort being made to repay the loan.

CHRIS SMITH: Do you think we have a cultural problem in this country? I mean that Productivity Commission report has come out with statistics that four out of every ten Australian homes are living tax free and that 32% of families pay no income tax or rely on welfare. Isn’t that a cultural problem?

MINISTER PORTER: I think that what happens is because we are a very generous welfare society that even a very small number of people who decline to repay debts or who underestimate their income whether meaningfully or unwittingly but then fail to repay the debt - because we are such a generous welfare nation it only takes a very small proportion of people to not do the right thing for it to have a very serious economic impact. And look one of things that we’ve said in trying to wind back and restrain the growth in certain areas so that they are at sustainable levels, is that people who have been overpaid should be under requirement to repay the money.

CHRIS SMITH: Fair enough and before I let you go the other important strain, I guess, of what we’ve been hearing in the last 24 hours is to do with the paid parental leave scheme. So that’s something where initially the double dipping thing - there was going to be a harsh crackdown on that, but you are now saying you are going to be revisiting that policy?

MINISTER PORTER: Yeah look we’ve having a very good look at that and we’re anticipating some results, we hope, in our negotiation with the crossbench about that policy. One thing we are announcing right at the moment is that there has been a very strange problem that we are going to fix now, which goes like this: You have to work up to a certain point before you are able to apply for paid paternity leave. And then there are a range of professions that women have been involved in where there is a certain level of danger which requires them to, in effect, to leave the workforce earlier than they might otherwise like to do. Jockeys was a very good example, people involved in the mining industry - so women in what had been often male dominated industries were finding they had to leave the workforce probably earlier than they would under normal circumstances because of occupational health and safety reasons. So this was meaning that they couldn’t then successfully apply for PPL. So look we’re fixing that problem. That’s a problem that should have been fixed much earlier, but at least it is being fixed now. So that represents a really big shift for a range of women who have a child but are engaged in professions that have generally speaking been male dominated.

CHRIS SMITH: Yeah, have a risk to it. Okay thanks very much for that update – much appreciated.

MINISTER PORTER: No problem. Cheers.

CHRIS SMITH: Christian Porter is the Social Services Minister.