The Federal Budget and how it will impact welfare recipients

Program:

RN Drive

Interviewer:

Patricia Karvelas

PATRICIA KARVELAS:

So $15 billion extra dollars – that's the updated cost of the Government's company tax plan. The more expensive end of the scheme is starting later, so it'll cost more than the $50 billion the Government had originally planned – if it even gets past the Senate that is, of course; only the lower amount was passed by the Senate. And if you take illegal drugs and claim welfare the Government is coming after you. Having an addiction will no longer be an excuse for not finding a job. To talk about this and, well, lots of things, the Minister for Social Services Christian Porter joins me in the studio here in Parliament House.

Welcome back to RN Drive.

CHRISTIAN PORTER:

Good to be here.

PATRICIA KARVELAS:

I'll put your microphone on.

CHRISTIAN PORTER:

Well, then I'll say good to be here, yes.

PATRICIA KARVELAS:

Good, good. There's an extra year in the Government's company tax plan; it's an extra $15 billion to $65 billion. You've now handed Labor an extra up to $16 billion to spend.

CHRISTIAN PORTER:

Well, we think it's incredibly important to make our companies competitive. So obviously, as you noted in your intro, half of that policy has been legislated for and, over the medium term, which is a period of 10 years, that means that companies get back around about $29.8 billion of their own money, and we say that that allows them to grow, to employ, and it makes them internationally competitive, and we want to be able to do that in due course for all companies. So what Labor forego by not supporting that policy is they forego the opportunity to make our companies in Australia internationally competitive. And as the Prime Minister noted today, how are we going to prosper as a nation if we end up with a company tax rate twice that of the United States? I mean, where do you think companies are going to prefer to set up and do business and prefer to set up and employ? So it's a very important policy. To simply look at it in terms of how you could alternatively – in inverted commas – spend the money as Labor does says a lot about them, because they're not interested in growing jobs.

PATRICIA KARVELAS:

$65 billion is a huge hit to the Budget bottom line. I mean, it's much higher than we thought with the $50 billion and you're also increasing taxes for every single Australian with a Medicare levy hike, which you say will go to the NDIS. Well, why does that even need to happen? Why wouldn't you pay for it by stopping these cuts?

CHRISTIAN PORTER:

You say it's a very large amount of money – of course, that's a measure over 10 years. As to the increase of 0.5 per cent in the Medicare levy, we think that it is time to simply end the uncertainty around how the NDIS will be funded. The fact is that we inherited a very substantial funding gap that starts in about 2020 when the NDIS becomes fully operational, and we think the best way to fill that gap is a contribution – a fair contribution, a contribution that's progressive and people who earn more make more of a contribution – but a contribution from all the people who pay the Medicare levy because all Australians ultimately are going to benefit from having a fully operational, fully funded NDIS. I mean, we're talking about 460,000 Australians in 2020 who will benefit from the NDIS, and we met – the Prime Minister and I – some of them today, and any one of us could have a catastrophic accident or, heaven forbid, you know someone who does. But the fact is that the NDIS is for all Australians, so having a finalisation to how it's funded is fair, it's reasonable, and I think it'll be generally supported very well in the public.

PATRICIA KARVELAS:

You're removing the exemption from the activity test given to people who have drug addictions. These people will now have to show they're addressing the problem for welfare to continue. This will affect, by your own estimates, about 11,000 people.

CHRISTIAN PORTER:

It's probably slightly more than that, actually.

PATRICIA KARVELAS:

How many?

CHRISTIAN PORTER:

Well, there's two things here. There's an exemption, so people can have like a 13 week break from doing anything – turning up to a job interview, things of that nature – and there's about 11,000 instances where that occurs. There's also an excuse for provision, so people who aren't exempted for a 13 week period can use at the moment drug and alcohol consumption as an excuse for not turning up to something like a job interview. What we're proposing is that those exemptions and excuses are amended so that you can use drug and alcohol problems as a basis for an exemption or as an excuse, but only if you can also demonstrate that you're taking reasonable steps to address your substance abuse problem.

PATRICIA KARVELAS:

What sort of reasonable steps?

CHRISTIAN PORTER:

Well, that would depend on the circumstances, but obviously we're talking about recovery, rehabilitation, counselling. That would depend on the particular problem, and of course we take into account the availability of those services. But what we're saying here is that to have - and you know, about 1500 people a year use that excuse. So 11,000 people, 1500 people a year get out of their mutual obligations and are effectively left to their own devices, when we absolutely know that they've got a drug or alcohol problem which is preventing them from getting a job.

PATRICIA KARVELAS:

Okay, sure. Why is there no extra money in the Budget for drug and alcohol counselling services or rehab services with the many new people that will be entering the system?

CHRISTIAN PORTER:

Well, keep in mind the Government expended an enormous amount of money over the last several years through the Ice National Action Strategy, and we've also distributed a lot of money to Primary Health Networks for precisely these things – drug and alcohol programs for recovery and treatment. So we believe that the treatment is available. In most instances …

PATRICIA KARVELAS:

[Interrupts] Will it all be publically funded? Because these services are, generally speaking, running at capacity and have long waiting lists. How is it actually going to be effective if people can't get into the services? How will you make sure that these people won't be in long waiting lists?

CHRISTIAN PORTER:

Well, particularly with the trial on drug testing, we'll obviously be looking at locations where there is availability. The only area where there is some limitations on availability is sometimes there are availability issues with what's known as in-residence rehabilitation. But in most instances, like the greatest majority of cases where a treatment plan is devised by a medical professional, counselling in the largest percentage is the first port of call in terms of recovery and rehabilitation.

PATRICIA KARVELAS:

So just to be clear, you're going to rely on existing services? There's no new money for new rehab in this plan?

CHRISTIAN PORTER:

Well, as I said, over the last several years we have put hundreds of millions of dollars into this area and we are sufficiently …

PATRICIA KARVELAS:

[Interrupts] So no new money for rehab.

CHRISTIAN PORTER:

Well, there was new money last year and that continues over the relevant period, but we are sufficiently confident that there will be enough places available in what is a range of treatments. It's not just residential rehabilitation; it's things like counselling, assessment, pharmacological treatments. We're very sure that there's enough treatments available to cope with this change of the rules.

PATRICIA KARVELAS:

Five thousand people will be randomly drug tested. How much is this program going to cost the taxpayer?

CHRISTIAN PORTER:

Look, that's a commercial in confidence matter at the moment.

PATRICIA KARVELAS:

Why is it commercial in confidence?

CHRISTIAN PORTER:

Well, let me explain why: Because we will contract out the drug testing to a third-party private provider who's specialist and expert in these matters, and of course in normal contractual negotiations you don't let people know how much you have to spend because you don't want people, in effect, tendering and bidding up to the total amount.

PATRICIA KARVELAS:

So the taxpayer isn't entitled to know how much …

CHRISTIAN PORTER:

[Interrupts] Well, in due course that will be known, but not at this point.

PATRICIA KARVELAS:

Cannabis stays in your system longer than any other harder drugs, like ice. Does that mean you just end up targeting cannabis users? I mean, does that mean that ice gets missed sometimes?

CHRISTIAN PORTER:

Well, you're right, different types of drugs stay in your system for different periods, and also different types of drug tests have a greater scope in which they can pick up drug use. So the saliva test is the shortest period of time, right up to a hair follicle test which can detect drugs for days, sometimes month depending on the nature of the test. So we'll be looking at a combination of different types of testing and, of course, people will have an obligation to turn up to a test when they're requested to do so.

PATRICIA KARVELAS:

Those people who test positive will be put on a cashless welfare card. The current Cashless Debit Card Trials cost about 10,000 a person. Will that be the cost here as well?

CHRISTIAN PORTER:

We are finding with the cashless debit card, that the costs come down as the scale goes up, and it is of course a technology that's in its infancy, so we'll be expecting that we'll be able to drive those costs per person down.

PATRICIA KARVELAS:

Okay, so by how much? You must have the answers?

CHRISTIAN PORTER:

Well, I don't have that to hand.

PATRICIA KARVELAS:

So at this stage will it start at 10,000 a person probably?

CHRISTIAN PORTER:

Well, two things. First of all, the cashless debit card will be the centrepiece of income management for people who test positive to a first test, but there are other ways in which we might also utilise income management. Of course, in the Northern Territory there's forms of income management which in effect place money in different accounts for different purposes – rent and so forth. So we'll use a combination of things, but what's important here is that …

PATRICIA KARVELAS:

[Interrupts] Is that to drive costs down? Because you can use the …

CHRISTIAN PORTER:

[Interrupts] Well, we're trying to do it obviously in the most cost effective way possible.

PATRICIA KARVELAS:

So which other ways? You might not use the cashless welfare card if it costs too much.

CHRISTIAN PORTER:

No, no, the cashless debit card will be the central point of income management for people who test positive on a first occasion. A person who tests positive on a second occasion, the requirement will be that they will come in for a full assessment by a medical professional in the service of DHS – the Department of Human Services – and a treatment plan will be devised. And the expectation is that the person, to continue to receive their welfare, will undertake that treatment plan and do something about their issue.

PATRICIA KARVELAS:

If you're just tuning in, my guest here in Canberra where RN is broadcasting from – the Drive program that is RN Drive – Social Services Minister Christian Porter. And our number if you want to text in is 0418226576. There's also social media; you can also use the hashtag #RNDrive.

You've announced two new sites for the Cashless Debit Card Trial starting on 1 September this year. The original trials were supposed to be at three sites but you only got agreement for two sites – Ceduna and East Kimberley. Can you guarantee that you'll get agreement for the two new sites promised in the Budget to be up and running on 1 September given the issues around this?

CHRISTIAN PORTER:

We're very confident about that. Alan Tudge …

PATRICIA KARVELAS:

[Interrupts] You can guarantee that it'll happen on 1 September?

CHRISTIAN PORTER:

There's no perfect guarantees, but we're very confident that that starting date will be met. So Alan Tudge, the Human Services Minister, conducts the first two trials and we'll obviously operationally be in charge of the next two locations. He's been in a process of community consultation and negotiation with potential sites. I understand that there's a great level of enthusiasm. In fact, one of the reasons why we're determined to have another two locations is because we are now having communities come to us, as the Government, requesting that they be able to avail themselves of this program because the results in places like Ceduna have been very positive.

PATRICIA KARVELAS:

Are you happy about the cost, though? I mean, the cost is very high.

CHRISTIAN PORTER:

Well, it is the very earliest stages, and of course the cost of the technology is higher at the early stages when you don't have volumes. The cost will absolutely come down over time.

PATRICIA KARVELAS:

But you can't tell me when?

CHRISTIAN PORTER:

No, well, over time – and it depends on how you …

PATRICIA KARVELAS:

[Interrupts] What sort of time? Time – what time?

CHRISTIAN PORTER:

So, for instance, in Ceduna and the Kimberley we have very small populations that are subject to the first two trials. As you have volume, what all of the organisations that use this technology and that offer this technology – and Indue is the organisation that we're dealing with at the moment – what they tell us is that scale is what allows you to bring costs down.

PATRICIA KARVELAS:

Mathias Cormann, the Finance Minister, last night said that the Coalition's axing its zombie measures meant this: Regrettably, we had to make these judgements, but that certainly wasn't our first preference. Do you agree those zombie welfare cuts were preferable to raising taxes?

CHRISTIAN PORTER:

Well, I think that in all the circumstances they were largely reasonable efforts to make savings and, yes, there were $13 billion worth of those savings. Equally, Patricia, there were $25 billion worth of savings that we have made since 2016 at the last election – $100 billion worth of savings since the Coalition Government was elected in 2013. Now, not every person will love every one of those savings, but in all of the circumstances when you are spending more than you are earning as a government and you are trying to drive yourself back into a situation of surplus – which we will successfully do and we're showing that path – then you have to make savings, and they're very challenging, and they're very difficult, and they're often not terribly popular. But amongst that group of savings I think were fair and reasonable measures, but of course we made a practical decision.

PATRICIA KARVELAS:

It's practical though; your heart is with the zombie cuts?

CHRISTIAN PORTER:

Well, we made enormous efforts to save in the Budget, to help that drive back to surplus. We'd reached a bit of a limit with that group and it was clear that, just as a matter of practical reality, we weren't going to get them through the Senate. And so to do things like funding the NDIS, as we've discussed earlier on, we had to look at other options, and the option that we've chosen is a 0.5 per cent increase in the Medicare levy.

PATRICIA KARVELAS:

Just a final question, and I know it's a very tabloid question, but I think it's relevant given the focus on drugs: Have you taken drugs?

CHRISTIAN PORTER:

You're the first person today to ask.

PATRICIA KARVELAS:

Well, how can I not?

CHRISTIAN PORTER:

Indeed. Well, when I was first state attorney-general I got asked this within the first week of becoming attorney-general, so I'm on the record as saying that I did try marijuana as a very young youth, but that was it.

PATRICIA KARVELAS:

That's it?

CHRISTIAN PORTER:

Yes.

PATRICIA KARVELAS:

Only marijuana?

CHRISTIAN PORTER:

That's it.

PATRICIA KARVELAS:

Did you inhale?

CHRISTIAN PORTER:

I think I might well have, but it was a long, long time ago.

PATRICIA KARVELAS:

Christian Porter, thanks for coming in.

CHRISTIAN PORTER:

Thank you, Patricia.

PATRICIA KARVELAS:

That is the Social Services Minister Christian Porter who, you know, did inhale.