ABC Illawarra – 30 May, 2014

PRESENTER: Joining us in the studio on a trip to Wollongong to do some interesting work with the House of Hope is Kevin Andrews, Minister for Social Services. Good morning, how you going?

MINISTER ANDREWS: Good morning Nick, great to be back in the Illawarra.

PRESENTER: What’s happening with the House of Hope?

MINISTER ANDREWS: This is a great service food bank service, a service which offers people who are in more difficult circumstances opportunity to get fresh food. It’s a great community service, the organisations including the churches involved is helping not only to provide food for people who need it but helping to build community as well.

PRESENTER: Is there a Work for the Dole component that you’re interested in as well?

MINISTER ANDREWS: No, no I came here as you know a year or so ago and I visited then and I promised them if we were in government and I had the opportunity to come back I’d come back and visit them so this is fulfilling a promise and just seeing what sort of work they’re doing in the community. Wherever I go around Australia I try to drop in on local organisations, whether it’s a service like this or an aged care home or whatever because I believe for someone in my position it’s very easy to get filtered messages through the bureaucracy, public servants do a great job but messages get filtered. So the more I can spend some time with the people actually providing the services on the ground around Australia, the better the sense I get about whether our policies are having sort of the practical outcomes we want.

PRESENTER: Okay let’s talk a little bit about your role as Minister for Social Services especially the cuts in the Budget. You’re legally trained, you’ve got a Masters in law, and you’d probably agree there’s no such thing as a perfect legal system but on balance most people would say it’s better to let a few guilty people go free than to convict the innocent, would you agree with that?

MINISTER ANDREWS: That’s been the underlying principle of the English Common Law which we’ve had in Australia you know for a very long period of time.

PRESENTER: Okay would you agree there is no such thing as a perfect welfare system but is it on balance better to have a few people who don’t deserve it get support from the Government then to punish those people who are innocent?

MINISTER ANDREWS: Well that’s one way of looking at it; the way I would look at it is this. We have probably the most progressive tax and welfare system in the world. For people who are on high incomes, if you’re earning $150,000 a year or more you’ll be paying about a third of that in income tax you’ll be getting virtually no benefits from the Government. If you’re on something like the minimum wage, about $30,000 a year, you’ll be getting probably about equivalent of that by way of family payments which are tax free. I think that sort of system which we’ve had in Australia for a long time is a very good system, and it’s a very progressive system.

PRESENTER: Okay but what I’m talking about is this six month waiting period where we’ve got this blanket period where people can basically get no support from the government and are going to have to go crawling back to their families or to ask for charity even if there are no jobs to be had. Why are we punishing all of those people just to catch a few of the bad?

MINISTER ANDREWS: That’s an incorrect characterisation of it. It’s not a work or starve provision it’s an earn or learn provision, that is if people are in a job, well that’s good, but if they’re young and they’re not in a job and they’re capable of working, and I’ll come to the exemptions, then we think that the important thing is they get into the training that they get into the job. Why? Because we know that if a person is on welfare at the age of about 35 there is a very high proportion of those who were on welfare at the age of their late teens early twenties. So if we can’t break that cycle then many of those people end up on welfare for all of their lives, but the exemptions; if you can’t work 30 hours a week, that is if you can’t work more than six hours a day, which is virtually full-time work, or if you are a parent or a principle carer, where maybe a relationship has broken up, if you’re a disability employment service participant, if you are a part-time apprentice, or if you are a stream three and four job seeker, that is somebody who’s got much greater needs. If you are any of those categories you don’t fall into this. So this is aimed specifically at people under the age of 30 who are capable of working full-time.

PRESENTER: Okay we’ve just had 100 or more workers lose their job at Wongawilli Coal Mine about 6am yesterday morning, told to pack up their stuff and go. It’s not just miners it’s support staff and all the rest of it. Imagine you’re 29 years old and you’re in that situation what do you do?

MINISTER ANDREWS: Well if you’re 29 in that situation then the six months, and you have been working there for whatever number of years, then the six months won’t apply to you because you will get a month’s reduction in the six months for every year that you’ve been in work and pro-rated for part-time. So if you’re a 29 year old and has been working out there for nine years then the six months doesn’t apply to you, in the meantime….

PRESENTER: What about if you’ve just come out of university and you’re applying for jobs and no ones, you just got some sort of a degree maybe, maybe it’s in philosophy maybe it’s in something else. Have you got six months of hanging on your parents’ coat tails rather than being an independent person?

MINISTER ANDREWS: They are the very people we’re aiming this policy at, to be frank. We’re not apologising for it we’re saying if young people don’t get into work or don’t get into training then that penalty applies to them but there’s an easy way out of this, the easy way out of this if you can’t get a job go and get the training that will get you a job. Otherwise take a job which is available, many young people work part time. I remember, it was a few decades ago now, I started working part-time, I did jobs that weren’t what I particularly aimed to do in life, in fact I took work on a voluntary basis for three or four weeks which lead to that same employer then getting me a job. So there are options here, we’ve expanded….

PRESENTER: Are you saying everyone who wants a job will get a job in Australia regardless of the unemployment rate?

MINISTER ANDREWS: Well there’s a lot of jobs available in Australia. I’ve given the example that was expressed to me just a week or so ago of Northern Tasmania and I know that’s not the Illawarra but it’s an example. There the farmers, the horticulturalists can’t find workers they’re bringing in backpackers and seasonal workers and yet this is a part of Australia which has a high youth unemployment rate so there’s a total disconnect in parts of Australia between jobs, crying out for them, and people with high unemployment rates, so you know we’ve got to try and get those two things together in a better way than what we’re doing. I’ve just been in New Zealand for a few days looking at their welfare system which is much tougher than we’ve got in Australia. If you go into the equivalent of Centrelink in New Zealand they say that’s good go away and get your resume prepared if you haven’t, go to a work seminar symposium, come back in a month’s time and then we’ll have a look at it. You don’t get any payments whatsoever for a month it doesn’t matter who you are in NZ so that’s a much tougher system than what we’ve got here. But the interesting thing here is that 40 per cent of people never come back, that is 40 per cent of people go out and actually get a job.

PRESENTER: What about pensions we have seen some changes to pensions, here’s Tony Abbott talking on SBS just before the election:

ABBOTT: I trust everyone actually listened to what Joe Hockey has said last week and again this week. No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.

PRESENTER: Now you have changed the pension, why have you had to do that? You’ve changed the indexation of the pension and regardless of what it is that’s the promise…

MINISTER: We’ve changed indexation and there’s been changes to indexation made often.

PRESENTER: But it’s a change…

MINISTER: The previous Labor Party changed the indexation to family tax payments.

PRESENTER: I mean again it’s a case of Tony Abbott saying one thing and doing another are you comfortable with that?

MINISTER: No I disagree with that. If you’re getting the pension…

PRESENTER: It says no changes to pensions and you’ve changed the pension, could it be any simpler Minister?

MINISTER: Let me explain Nick. We haven’t changed the payment that people get (inaudible), if you’re on the pension you will continue to get the pension.

In fact under us in March the pensions went up between about $10 and $15 a week (* a fortnight) depending on whether you’re a single or a member of a couple. In September, in four months’ time, the pensions will go up again as they will in March and September next year. What we have said we will do in the future from 2017 onwards is change the indexation of the pension from MTAWE to CPI. But you know the interesting thing is…

PRESENTER: You just used the word change and you told me you haven’t changed anything…

MINISTER: The interesting thing is that in the March increase in the pension it actually went up by CPI. CPI is a measure of consumer price index it is the general measure of the change, or the changes in the cost of living and that’s what we’re going to make all payments on the CPI rather than a whole range of different payments. We’re not the first government to do this as I said the Labor Party did it to Family Tax Benefits.

PRESENTER: Well let me give you a quote here, I mean I’ve spoken to a few organisations over the last day or so including The welfare rights network, some family services etcetera who say some of these changes to welfare, especially the six month waiting period, inevitably lead to homelessness and possibly even crime. Prepared to spend with one part of the Budget to save with the other part of the Budget because you’re going to have to spend on homeless services by the sound of it.

MINISTER ANDREWS: Well we do spend a lot on homelessness services, we in fact rolled over $115 million to homeless services for the states, we’re going to spend the next six months having a good look at housing overall because there is a shortage of dwellings in Australia. So we’re going to have a look at all of that, but we’ve extended the funding for homelessness, from what the previous Government did, they’d rolled it over for a year, we’ve rolled it over for yet another year so we can have a good look at how we provide these services. Homelessness is a problem, everybody in Australia can see that, admit that and we’re trying to do what we can, working with groups like the local ones that you describe.

PRESENTER: You say you don’t want to get filtered messages through the bureaucracy, are you getting the message that people are appalled by this budget?

MINISTER ANDREWS Look, I don’t think they are, let’s go back to the basics.

PRESENTER: You don’t get that message?

MINISTER ANDREWS: The basics are, we inherited a total financial mess, a debt racing towards $25,000 for every man, woman and child in Australia. It’s totally unsustainable; we have to do something about it.

PRESENTER: America is unsustainable, Japan is unsustainable, but Australia – we’re probably the top three of the OECD countries.

MINISTER ANDREWS: But an entirely different situation. We are borrowing, I think it’s some $40 billion, from overseas countries, we are in a totally different economic situation to many of those countries, but frankly, do we want to be in the situation that America is in, or some of the European countries? No, we don’t, but we’re on a trajectory that will take us there if we don’t do something about it.

Now we’ve got a plan, we’re the only party that’s got a plan, we’ve put it there, that will get us back in the black over the next four years, that will then start to allow us to pay down the debt, and if you can do that then you can afford more things, but if you have an unsustainable financial situation for the Commonwealth then you can’t sustain the social services into the future.

PRESENTER: Well you heard Tony Abbott’s pre-election promises, every one of which, many people say, have been broken and people say you’ve been elected fraudulently. Here’s Tony Abbott talking to our colleague Jon Faine.

ABBOTT: If we do win the election we immediately say we got it all wrong we’ve now got to do all these different things, we will instantly be just as bad as the current government has been.

That’s Tony Abbott saying we’re not going to discover a giant black hole, we’re going to do what we said and…

MINISTER ANDREWS: Well, Tony Abbott promised four things before the election. We’d stop the boats, we’d fix the Commonwealth Budget being amongst them and that’s the primary thing we have to do.

PRESENTER: So this is core promises and non-core promises do we need an asterisk next to them saying ‘subject to conditions’?

MINISTER ANDREWS: No no, now come back to what you said. We said that we weren’t going to cut the Pension. We’re not cutting the Pension. People are getting Pension increases. So that’s going to continue into the future.

PRESENTER: Veronica is on the line, good morning Veronica

VERONICA: Good morning Nick. I’ve just been listening to the Minister and to say that they’re not cutting pensions is an absolute lie. What he’s not talking about is the agreement between the Federal Government and the States which has allowed concession payments to pensioners on land and water rates, electricity, bus fares, travel, all of those things. The loss of those will see a direct cut to the income of aged pensioners for one, and I don’t know about the rest. I’m an age pensioner and that’s what I’m staring down and how that man can sit or stand there and say they haven’t broken promises, that they aren’t doing this, that pensioners will not receive a cut in their income. I really don’t know Nick and I think you’re doing a great job in your interview and I’d love to hear his answer.

PRESENTER: Well The Minister is with us so I’ll get him to respond.

MINISTER ANDREWS: Well Veronica, two things. Firstly, the Commonwealth concessions which the Commonwealth Government provides will continue to be provided in full. Secondly, the things you’re talking about like concessions for rates, transport, are provided by state governments, in your case New South Wales. The Commonwealth contribution to that has been about 10 per cent overall and what the concessions are vary from state to state; they’re determined by the states. What we’re saying is that they are State responsibilities and the state will continue to provide them. I think what you will find is the states will continue to provide those concessions, but the states will be paying for them, as they should be, rather than the Commonwealth, as for pensions, they will continue to rise.

PRESENTER: Greg is on the line now, G’day Greg.

GREG: G’day how are you going?


GREG: I’m just wondering if someone is required to go into training, where are they going to go to get training and how are they going to pay for it?

MINISTER ANDREWS: Well there’s a whole range of training courses available. If you look at this area, you’ve got University of Wollongong, you’ve got TAFE colleges, you’ve got VET courses etcetera.

GREG: But we don’t have the money to pay for the course.

MINISTER ANDREWS: Well what we’re doing is actually, we’re expanding the HELP, the FEE-HELP for students to Diplomas and other range of courses and programs that doesn’t exist at the present time. On top of that, we’re providing a $20,000 loan for young people to take on an apprenticeship and if they get that apprenticeship and they finish it, they’ll only have to pay $16,000 of that back and for that range of programs where FEE HELP is available, a greater range of programs and people won’t start to repay their loan until they’re earning at least $50,000 a year. This by any standards around the world is one of the most generous provisions of training assistance for young people and we’re proud to have been able to expand it.

PRESENTER: Right, thank you Greg. Minister could you stay with us for just a minute, Nick McLaren has got some news headlines for us, Nick:

[cuts to news update]

PRESENTER: Thanks very much Nick, you’re with Nick Rheinburger here at 97.3 ABC Illawarra, and Kevin Andrews, Minister for Social Services is with us in the studio, he’s going off to the House of Hope Food Barn in about half an hour from now, but he’s with us for another ten minutes or so.

And Narelle Clay is with Southern Youth and Family Services and wants to have a chat to us, good morning.

NARELLE: Good morning, how are you?

MINISTER ANDREWS: Good morning Narelle

PRESENTER: You’re with the Minister

NARELLE: Thanks Minister I’m glad you’re in Wollongong I wish you could have come and seen our youth foyer. Thank you for extending the NPAH Agreement and we were thrilled with that announcement, my concern is about what are you going to do if the NSW Government does not extend the funding to the existing services which is your intention.

MINISTER ANDREWS: Well, for listeners, Narelle, NPAH is the national agreement that the Commonwealth provides funding for homelessness services around Australia and as I’ve said, we’ve extended that nationally with an injection for the year of $115 million.

That’s also contributed to, by, under the agreement with the states, so the expectation that we have is that NSW will continue to match the funding which the Commonwealth has provided because that’s the terms of the agreement with the Commonwealth, we’re obviously in negotiations with all the states at the moment but the indications I’ve had from my departmental officials is that the states also see the importance of this funding for homelessness and will continue the funding.

PRESENTER: Right, thank you Narelle, and Brian’s on the line for us now Brian

BRIAN: Nick how you going mate?

PRESENTER: Going well, what’s on your mind?

BRIAN: You mentioned something before when you were talking to the Minister, you said how could you compare Australia’s financial predicament to America etcetera. The reason Australia is in this position is because people in Parliament make decisions that other people don’t like. If we want to end up like America then let’s just keep handing out freebies to people who don’t want to do anything about it. We need to make these decisions, we need to cut our welfare and if we need to cut the money we send overseas to other countries welfare and we need to look after ourselves first.

PRESENTER: Right Brian, thanks for your call.


PRESENTER: A supporter there Minister Andrews, we have a question from Steve and he says if you’re under 30 and a seasonal fruit picker annually, you might only get three months’ work, but you have to wait six months to get the dole

MINISTER ANDREWS: We understand the situation of seasonal workers and I’m just working through the detail of that at the moment, but if somebody is a genuine seasonal worker, then the way in which we will write the legislation will take into account that situation. We understand in many industries, not just in the horticultural or fruit industry, there are seasonal workers, there are even seasonal workers in some parts of the resource industry around Australia so we understand that’s an important aspect of the way in which people are employed and we are seeking to ensure that that’s protected in the legislation.

PRESENTER: Okay there’s been some interesting news about Clive Palmer and Malcolm Turnbull having dinner during the week, does it show that Clive Palmer and the Prime Minister aren’t negotiating successfully over the Budget measures?

MINISTER ANDREWS: Oh, look, Mr Palmer’s a colourful identity I think would be the way I would put it. Obviously, it’s not a secret meeting if you go to one of the most popular restaurants in Canberra, then you can be assured that within about ten minutes of sitting down, most of the political establishment in Canberra will know you’re there. Look, Mr Palmer has an important role in the Senate in the future. He and his Party will be required to make decisions for the national wellbeing, we will obviously put our legislation into the Parliament, it will go through the House, obviously, We will take it to the Senate and we will be asking all the Senators, regardless of their political party or affiliation, to look to what’s the national interest in this regard.

As I said, Mr Palmer’s a colourful character, but in the end, he, like all of us, has to make some decisions about what the future prosperity of this country is in the national interest and that’s the basis upon which we’ll discuss things with him.

PRESENTER: You can probably predict what the Labor Party are going to do, what the Greens are going to do, Are you satisfied with the way the Palmer United Party are planning to settle on their policy position?

MINISTER ANDREWS: Nick, I’ve been in this job for 23 years now, and one thing I’ve come to learn is you can’t predict things, necessarily, there’s a degree of posturing that sometimes occurs, but then when it comes to the crunch, people have to face up to, well, what are the alternatives? Now, we’ve got a plan, people can have a discussion as we’re discussing about that plan and aspects of it, but at the end, there’s got to be a plan, there’s got to be a way forward for the country and that will be the basis of any discussion that we have.

PRESENTER: What would you say is the contract between someone who is getting welfare and the Government?

MINISTER ANDREWS: To take the responsibility to do what they can where they’re capable of doing it. Now that will depend on the nature of the welfare. If the person is on a Disability Support Pension, by definition, it’s been judged that that person is not capable of working, but if somebody is particularly young and able bodied, we’re not punishing people for not having work, but what we’re saying is well, what’s your mutual obligation or responsibility and that is either to try and find work or to do the training, get the skills that will get you work in the future, because if you don’t do that, your prospect of staying on welfare for a long period of time are very high and that’s not good for the individual, their families or their community.

PRESENTER: Pauline has given us a call, g’day Pauline.

PAULINE: G’day. I’d just like to say that the pension is indexed isn’t it, and it goes up twice a year?

MINISTER ANDREWS: It’s indexed and it goes up twice a year Pauline.

PAULINE: Yeah, well you’re putting a tax on the fuel, so the fuel is going to go up isn’t it?

MINISTER ANDREWS: There is a fuel excise that will cost, on our calculations, an average family about 40c a week.

PAULINE: Okay well that 40c, um it doesn’t, on food, it will go up, just about everything petrol, food everything that is transported is going to go up but our pensions aren’t going to meet that same amount. So we’re going to still be really down on the pension, if you know what I mean.

MINISTER ANDREWS: Now, Pauline, you know that’s what the indexation does, the indexation at Consumer Price Index. The Consumer Price Index is the measurement of a bucket, if you like, of household goods and services and so the CPI measures how much they go up.

So if food goes up, if various other things go up, that’s counted into the CPI and that’s how we arrive at the increase in the Pension and the most recent increase in the Pension, between about $10 and $15 a week (* a fortnight), depending on whether you’re a single or a member of a couple, reflected the CPI increase over the previous six months up until March of this year. In these six months, when we come to September, there will be a measure of how much cost of living has gone up and that will be reflected in the increase in the Pension in September.

PAULINE: Yes so even like water rates, rates. I mean we just barely get by now, we’re lucky we own our own home we don’t have to pay rent but on the pension as we are now we only just get by on what we get, we don’t spend on anything else, we just have our basic, um the only extras we’ve got is the account for the internet, that’s all the extras we’ve got.

MINISTER ANDREWS: Yes, I appreciate that Pauline. Look, I know that lots of people in the country are doing it tough. We’re not doing these things because you know they’re necessarily popular, we’re doing it and taking hard decisions and a lot of people see this as hard decisions, because our view is that we’ve got to make sure that this country remains sustainable in terms of its welfare into the future. In addition to the Pension going up, the Pensioner supplement will also continue and that will go up each year.

PRESENTER: Thank you Pauline. Peter’s on the line for us now. Peter?

PETER: Yeah g’day how are you?

PRESENTER: Good mate.

PETER: Look my question is sort of regarding the GP co-payment. I’ve been talking to friends that work in the medical industry, it’s actually going to be an administrative nightmare for them because that will increase their workload and they are going to be chasing money. The big thing, the way I look at it is, it only targets people who are sick. I go to the GP probably once or twice a year, I don’t go very often, yet the way I look at it is sort of an increase in the Medicare levy instead. I would actually pay more as a contribution to this medical research fund than I would under the GP co-payment and I can afford to do that it’s okay. The more you earn the more you contribute, whereas under the co-payment the sicker you are the more you pay which is pretty much irrespective of your income level.

PRESENTER: Interesting point Peter.

MINISTER ANDREWS: This is about a balance and how you fund these things Peter. The background is the Medicare costs in ten years have gone from $8 billion to $20 billion and that trajectory is upwards so we have to be able to afford to pay for this. Secondly as you say with the Medicare levy, then the more income you have the more you pay by way of the levy, so that’s a progressive tax rate as it is, but thirdly, we also know that the number of times, on average, that a person visits the doctor has increased quite substantially. Back when the Labor Party were attempting to introduce a co-payment under Bob Hawke and Brian Howe, the average number of visits to the doctor was about four.

PRESENTER: Are we getting sicker or is it supply and demand, we’ve made them much cheaper so you’re more likely to go or what?

MINISTER ANDREWS: I think people go to the doctor for a variety of reasons, as the caller Peter said. He goes maybe once a year when there’s a need to do that, there are other people who’ve got episodic, chronic illnesses or you know, kids that come along, there’s different stages of your life, I suspect you visit the doctor more…

PRESENTER; The point is you’re punishing the sickest rather than the richest…

MINISTER ANDREWS: No, well bulk billing still remains in place, there’s a limit in terms of the number of these things. The doctor, in the end, can still decide what the payment is, we haven’t got a National Health System like in the UK where all these things are set in concrete, so we think that this is a reasonable balance, there is still the Medicare levy, but, as the Labor Party a decade ago decided and Peter Beattie wanted to do, more recently in Queensland, a co-payment is a useful way of actually ensuring that people who are going to the doctor genuinely want to go to the doctor, but at the same time, we’re putting this money into what will be the biggest medical research fund in the world.

PRESENTER: I know you’ve got to get off to your next appointment but thank you very much for being with us and talking calls.

MINISTER ANDREWS: My pleasure Nick.

PRESENTER: Kevin Andrews with us here at 97.3 ABC Illawarra.


*Correction issued