Welfare measures laid out in the Federal Budget

Program:

Lateline

Interviewer:

Emma Alberici

EMMA ALBERICI:

Christian Porter is the Federal Minister for Social Services and he joins me now from Canberra. Christian Porter, many thanks for your time.

CHRISTIAN PORTER:

Pleasure.

EMMA ALBERICI:

Bill Shorten's spot on, isn't he, when he says this budget isn't very fair at its core. Multimillionaires and multinationals will pay less; everyone else pays more.

CHRISTIAN PORTER:

I look at fairness, certainly, through the lens of the NDIS – I'm the Minister responsible for it. I think what he's done tonight is a terrible disappointment for 460,000 Australians who want to see the NDIS fully funded, because they would be the needy Australians who would be the beneficiaries. And look what he's done, right? So he says there's is no funding gap at all for the NDIS, but he will also increase the Medicare levy for a portion – 3.4 million Australians who earn over $87,000.

I think two questions flow from that. One, why do you need to raise money to fill a funding gap you say doesn't exist? And, two, and most disappointingly of all, what he has suggested will not raise enough money to fully fund the NDIS. So we've got 460,000 Australians who will be depending on these services come 2020 when they are all transitioned in, and they are yet to have that funding fully secured. We could have done that tonight with a simply agreement to the 0.5 per cent increase in the Medicare levy across the board.

EMMA ALBERICI:

On the 5 per cent bank tax; Bill Shorten put the Government on notice that if the banks do pass 1 cent of the tax on to customers then Malcolm Turnbull and Scott Morrison have got to go.

CHRISTIAN PORTER:

It's absurd. We think that that as a revenue measure is a fair revenue measure. It raises 1.5 a year out of what are very large profits from the five institutions to whom it would apply. Our view is they should absolutely not in any circumstances hand on those costs. There is no reason for them to do that. The customers would take that view as well.

EMMA ALBERICI:

Let me just pick you up on that ...

CHRISTIAN PORTER:

… but I think most Australians would think that's a very fair and reasonable way to raise revenue.

EMMA ALBERICI:

Yeah, but just because you say they shouldn't doesn't mean they are going to give you any comfort on that score. And I think your Government's being entirely inconsistent here. If you say that giving a tax cut to big business is necessarily a good thing for the economy, then it follows doesn't it that putting up taxes for the country's five biggest businesses has the opposite effect, that it hurts jobs and growth, right?

CHRISTIAN PORTER:

Well you're talking about a situation 10 years hence. I mean, I listened to the introduction. I think that Bill Shorten was absolutely explicit; he is going to reverse the tax relief that we have legislated for 3.2 million small businesses who employ 6.5 million Australians.

EMMA ALBERICI:

[Talks over] Can I just draw you back to the question? I don't want to run out of time and miss the question, so let me draw you back to it. If you say giving businesses a tax cut trickles down and has a positive effect on the economy, doesn't it follow that putting taxes up for the biggest businesses – five of them – will have the opposite effect? That it will hurt jobs and growth?

CHRISTIAN PORTER:

They are unique big businesses. And that phrase that you've used, we've never used. What we say is that this ...

EMMA ALBERICI:

[Interrupts] What phrase are you specifically talking about?

CHRISTIAN PORTER:

One that you know well.

EMMA ALBERICI:

Trickle-down economics?

CHRISTIAN PORTER:

Yes.

EMMA ALBERICI:

Well what do you call it? If you give a tax cut to businesses and you then say that is your policy for jobs and growth, then you're expecting that those businesses will invest in more jobs and more investment. It follows, doesn't it, that if you give them a tax hike that the opposite happens. They will have to get rid of staff and not invest as much.

CHRISTIAN PORTER:

Yes, but the proposition you're putting is that we haven't had very significant achievements in giving tax relief to small business. So 3.2 million small businesses employing over 6 million Australians, all of them with turnover of less than 50 million, right now they have legislated tax relief. And that will help them be competitive, it will help them grow, it will help them employ more people.

EMMA ALBERICI:

So if it's all about small businesses, why are you continuing with this $65 billion worth of tax cuts for the biggest?

CHRISTIAN PORTER:

Well that is a process over 10 years that will allow Australian businesses to be internationally competitive and we cannot let ourselves have a situation develop where we have a company tax rate that looks twice that, say, of the tax rate of the United States. And that leaves us …

EMMA ALBERICI:

[Talks over] And yet, you are putting up taxes by 5 per cent to five of our biggest companies. It's inconsistent, right?

CHRISTIAN PORTER:

No. What we have done is we have reduced taxes – we have legislated for that – for businesses with a turnover of less than 50 million. We also, of course, have a plan in the longer run, over 10 years, to extend that tax relief to larger businesses. At the same time, right now, we have applied to levy to a small group of businesses, who are in a very set of unique circumstances in the Australian economy.

EMMA ALBERICI:

Now your portfolio, welfare, it's the single biggest expenditure item in the Budget so of course you want to contain costs. But drug testing 5000 people before handing over their payments? What's that about?

CHRISTIAN PORTER:

Well that's part of a much broader welfare reform and suite of measures that we have delivered in this Budget. We are simplifying the working-age payment system, turning seven payments into one new job seeker payment, we are making consistent and coherent and fair by re-drafting the mutual obligations to prepare for and search for work. And we are redesigning from the ground up a compliance regime which frankly at the moment is not working. I mean, not a single …

EMMA ALBERICI:

[Interrupts] So take us back to the drug testing.

CHRISTIAN PORTER:

Well, that is a part of this wider reform. What we have noted inside the system that exists at the moment, is that there are a range of people who are able to either excuse themselves or use reasonable excuses and exemptions out of the obligation to prepare for and search for work, because of a problem with drugs and alcohol. And we are going to re-draft those exemptions and excuse provisions so that someone – to be excused – has to be doing something about their problem.

EMMA ALBERICI:

[Talks over] Sorry the interrupt you, but we've had Jack Heath of Sane Australia today saying that you haven't stopped and thought about this very well because part of the reason they're on drugs and alcohol is they have an underlying mental illness in many cases and that you're compounding their problems by denying them welfare cheques.

CHRISTIAN PORTER:

Well the purpose of the trial for drug testing recipients will be that if you test positive there will be income management through a cashless debit card. But if you test positive on the second occasion, then we will supply the medical professionals – through the Department of Human Services – to assess, to develop a plan so that you can tackle the problem that is causing your inability to find and maintain work.

Now, the alternative is what we have at the moment where we have astonishing levels of use of drugs like ice in known places in Australia, which are clearly creating huge barriers to employment, and yet nothing positive is being done. What we want the try and do is identify people who have this difficulty, this challenge …

EMMA ALBERICI:

[Interrupts] I'm sorry, Minister, to interrupt you, but unfortunately I have to leave it there because we are going to be cut off the network. So I'm terribly sorry. Thank you, we'll continue the conversation at another time.

CHRISTIAN PORTER:

No problems. Thank you.