Transcript of Joint Doorstop Interview



20 July 2015

Joint release with:

The Hon. Tony Abbott MP

Prime Minister

The Hon. Mike Baird MP

Premier of New South Wales

The Hon. Duncan Gay MLC

New South Wales Minister for Roads and Freight

Subjects: WestConnex Sod Turn—King Georges Road interchange upgrade; Reform of the Federation White Paper; COAG; Mick Fanning; Speaker.

Premier Baird: Another day in Sydney where we march towards tomorrow's Sydney. We've spoken about the significant infrastructure that we are undertaking. Well, important that it is underway. The only way you can do that is by doing the planning, getting the funding and getting on with it.

I'm so pleased to be here with the Prime Minister and the Federal Minister for Infrastructure, the Roads Minister and local Members. All the local Members know the difference that this will make to their communities as we complete the largest road project being undertaken across the country at the moment.

Now, the King Georges Road intersection is the biggest bottleneck believed to be in Sydney. Everyone who uses it—100,000 commuters—on a daily basis, their lives caught up at this intersection, whether it be on the M5 or they be on King Georges Road. Well, the important part as we start this project, this interchange will be fixed. And as we fix this, we are getting towards a WestConnex Motorway, both the M4, the M5 coming together to make a difference to people's lives. That's what this is all about.

So, I congratulate the team that have brought us to this stage. Obviously, the WestConnex team led by Dennis, Fulton Hogan and their expectation and expertise, a number of projects they're working on across this State. But it is so exciting today to be getting on with the job of fixing the M5, starting with this interchange which will make a huge difference, as we complete it by 2019, we know the difference it's going to make across this great city.

So, I will welcome the Prime Minister to make comments and then the respective Ministers.

Prime Minister: Thanks very much indeed, Mike.

It's great to be here with the Premier, it's great to be here with the New South Wales Roads Minister Duncan Gay and Jamie Briggs who's our Roads Minister in Canberra.

Really good to be part of this latest step forward in the WestConnex project, which is such an important part of improving the lives of Sydneysiders.

WestConnex will create 10,000 jobs, it will cut up to 40 minutes off literally hundreds of thousands of people's daily travel time. It will cut out 52 sets of traffic lights. It will take 3,000 trucks off Parramatta Road every day. So this is a really, really massive project, it's happening because of the determination of the New South Wales Government and the determination of the Commonwealth Government. It's happening with $1.5 billion of Commonwealth money and a $2 billion concessional loan. In fact, it's the $2 billion concessional loan which has enabled the M5 section of WestConnex to go ahead much more quickly than would otherwise be the case.

This is not just talk, these are not just plans, within a couple of weeks, work will be started on this site. This is a $130 million part of the overall project and it will, as the Premier has just said, make an enormous difference to everyone using King Georges Road.

Today, I probably should also thank the Premier for his leadership, not just in infrastructure matters but also in our federation. I welcome Premier Mike Baird's willingness to discuss revenue issues because obviously, if there is a problem with revenue, it can't just be the Commonwealth's responsibility to solve.

I want to say thank you to Mike. I should also say thank you to Premier Jay Wetherill of South Australia who, like Mike Baird, is prepared to talk about the things that really matter; does want to ensure that we have a constructive federation, not just a hyper-partisan federation. A federation in which leaders have the maturity to rise above short-term politics and to look at the big issues for our country.

We do have, as you know, a leaders' retreat on Wednesday followed by a COAG meeting on Thursday. I'm very encouraged by what I have seen from Premier Mike Baird. I'm very encouraged by what I have seen from Premier Jay Wetherill in South Australia. I think Australians should be hopeful that this generation of leaders is capable of addressing the big subjects, is capable of doing what's necessary to make our country work better with better schools, better hospitals, more efficient and more effective government for everyone.

Duncan Gay: Look, the great thing about this project, Prime Minister, is that we will be almost finished it before we were meant to start it—and that's because of that $2 billion loan that you gave it. It's allowed us to move 18 months earlier. So we wouldn't have been starting this project for another 18 months.

This is one of Sydney's worst pinch points. The work on this intersection will halve the time through this intersection and if you could do a project and halve the travel time, you're doing pretty well.

Yesterday, I drove back from my farm in the Southern Tablelands, out of the snow—three and a half hour trip—great roads, good time, traffic moved well, I sat at the speed limit for three hours till I got to this spot and I stopped. Out of all that travelling, this was the spot that stopped me.

Seven days a week, this is a problem to the people of Sydney and the people of New South Wales. There will be a lot of cheering when this one is finished and it's the start of the extra work that we're doing on the M5 section—the M5 East section—of WestConnex, which will be starting later in this year.

So, it's an exciting day. Prime Minister, thank you for that money. It's great working with you and Jamie and it's made it easier for Mike and I to get on to build the roads that Sydney needs for the future.

Assistant Infrastructure Minister: Thank you, Duncan and Premier and Prime Minister. Look, I can only reiterate what they've said. It is a pleasure to work with Mike Baird and Duncan Gay because they want to get on and build and that's why Sydney's Australia's infrastructure hotspot. Some $30 billion of projects either underway or about to begin here in Sydney, led by the Prime Minister and Premier Baird. We want the other States to catch up, because New South Wales is winning this state of origin quite handsomely.

This is also, I think, worth celebrating the innovation in the financing model that we're using here. This is the first ever concessional loan that the Federal Government has given to a State for a road project and it has meant that we're bringing this project forward. You're seeing the results today. Just like the discussion that Premier Baird has proposed on the GST, we have to have a discussion about how we're going to fund infrastructure throughout Australia because we need more infrastructure and the government's finances are tight.

So, this is a great example of governments working together to deliver not just jobs, but additional infrastructure, so our cities work better and our economy is more productive.

Question: Just on the GST—this is all part of the plan, isn't it? Having turned off the tap of federal health and education funding and forcing the States to come up with their own solutions?

Prime Minister: I'm just really pleased that Premier Mike Baird, along with Premier Jay Wetherill, are prepared to have a constructive, responsible discussion. It is a sign that this generation of leaders at both the State and national level are prepared to do what's necessary to make our country strong, not just for today but for tomorrow and for next year and the next decade. We can't assume that if there is a revenue problem, it's wholly and solely the Commonwealth's job to fix. That's why I welcome the readiness of Premiers Baird and Weatherill to be so constructive.

Question: On the nature of the GST, Mike Baird's proposal was that you broaden the tax rate but not the actual base and that you could have concessions for people under $100,000 in a household. Do you like that plan of Mikes?

Prime Minister: Well, this is something that obviously is going to be very thoroughly discussed, starting on Wednesday at the leaders' retreat and then we've got a long white paper process—both the federation reform white paper process and the tax reform white paper process. So, I don't think anything is going to be finalised in the next couple of days, although I know that people want the answer to everything immediately. I want to see the overall tax burden go down. I want to see lower, simpler, fairer taxes. But at the same time, I do want to see a more rational arrangement of finances and responsibilities between the Commonwealth and the States. So, again, a big thank you to Mike Baird. Congratulations to Premier Baird and Premier Weatherill for being prepared to enter into this process with decency and good faith, because that's what the public expect of their leaders.

Question: Prime Minister, do you think Australians are more accepting of the GST these days and that allows room to move on that particular tax for government?

Prime Minister: Well, I certainly think that people have got used to the GST over the last decade and a half. I'm not saying that people love it. People don't like taxes. I guess the only good tax is a tax that's about to be abolished. But I think people do accept the necessity of both the Commonwealth and the States having access to appropriate sources of revenue. Obviously, we want better services, we want more efficient government, we want more effective government and that's what the discussion this week will be all about.

Question: Is there a chance that it could backfire, though? I mean, if you push the burden back onto the States and they've failed to come up with national regime and then they all implement hodgepodge schemes themselves. Is there a chance they're not going to fix the funding they've now got?

Prime Minister: But plainly, any changes to the GST will be changes that happen on a national basis.

Question: But if it's not the GST—if it's a property tax for example, or other versions?

Prime Minister: Well, you're now inviting me to go into all sorts of highways and by-ways. What we've got today is a very sensible proposal from the New South Wales Premier, following on from sensible suggestions from the South Australian Premier—that matters ought to be open for discussion. That's what we're saying: that these things ought to be open for discussion. It ought to be possible to have a constructive, collegial conversation between the Commonwealth and the States, between, quite frankly, the Labor Party and the Coalition on these subjects to come up with something which is good for our country in the long run.

Question: Prime Minister, the Victorian government has come up with a proposal of its own to increase the Medicare levy to overcome the shortfall in health funding. Is that something that you think has merit?

Prime Minister: I think it's good that we're going to have a very full and frank discussion of all these things on Wednesday. I think it's good that the rule-in/rule-out business that we were seeing a bit of in previous weeks seems now to be giving way to a serious discussion. We're at the start of the discussion, not at the finish of a discussion. Obviously, we need to have sufficient revenue to pay for the services that the Australian people expect. But they also expect that those services be as efficiently and as effectively delivered as possible and they want the overall tax burden to be as low as possible and that's why this Government of mine is certainly absolutely committed to lowering the overall tax burden, to lower, simpler, fairer taxes and the most efficient possible service delivery mechanisms.

Question: Does 15 per cent sound about right to you, or not?

Prime Minister: Again, I'm just not going to speculate, but I certainly think it was a very constructive proposal from Premier Mike Baird. It's a sign that New South Wales, along with South Australia, are thinking seriously about what we need to do to have better schools, better hospitals, in the years to come and a more effective federation in the years to come.

Question: [inaudible] 100 per cent of exemptions, as suggested by one report today?

Prime Minister: Well, look, as I said, I know everyone wants the answers to everything immediately, but what we've got today is a very strong and constructive proposal from the New South Wales Government which will go into the mix for Wednesday and then it will go into the mix for the white paper processes that are under way. But there are two challenges here. The challenge is to have the most efficient and effective services and the challenge is to have the lowest, simplest, fairest tax system overall and I'm really pleased that Mike's been prepared to tackle both of those challenges.

Question: Premier, why are you attracted to more use of a regressive tax on consumption rather than a more progressive tax on income?

Premier Baird: Firstly, I want to say that this is the start of a discussion. We have a leaders' retreat this week but over coming weeks and months we have got an opportunity as a State and nation to look at the challenges we're facing and look at potential solutions to them. When you look at the numbers, they're incredible. The concept in terms of how we deal with health funding—and that's maintaining existing services—is the biggest challenge I believe we face here in this State and indeed across the country.

So, if you get to a position, rolling forward both budgets—Commonwealth and States—to 2030, when you get to that position on reasonably conservative assumptions you get to $45 billion worth of deficits. Of which $35 billion is health costs. So, the big challenge we face is how do we fund health costs because at the moment we haven't got the capacity to do it and really we need to get on with the job. The solution is one that will be discussed over coming weeks and months and all I'm doing is putting forward a proposal to be considered to start this discussion. In terms of the regressive nature, I understand the regressive nature in terms of the GST, which is why I would be proposing, in order to be fair, there must be compensation as in, those under $100,000, households under $100,000, wouldn't be paying this, they'd be compensated. That is the way you get away from the regressive nature and I think that importantly the South Australian Premier has identified that as a concern and this is a potential solution. But what is exciting, we now have an opportunity—a real opportunity—to consider as a nation the big challenge we're facing and how we solve it and really that's what we're asking, everyone to play a constructive role as we get on with it.

Question: What sort of compensation would be appropriate, are you talking about a rebate or tax relief?

Premier Baird: I mean, it's reasonably sophisticated now. Under the previous GST there was a capacity to pay compensation. The CPRS. There was modelling that's done. There's a range of measures. Effectively through indexation of pensions, through income tax payments as in effective reductions so there is a capacity to determine what the consumption is of a household and pay a compensation amount for it. Again we need to work through all of those solutions and again, I'm open to ideas that people put forward. What's not in dispute, if you listen to other Premiers, the Victorian Premier has acknowledged this, the South Australian Premier, we have a revenue challenge, and we all face that as a nation so the question is how we can fix it.

Question: Do you think you would be having this conversation if you didn't have your health funding cut?

Premier Baird: Well, as I said, it's bigger than that. And yes, part of the discussion will be the allocation between the federal government and state governments and my position is clear on that. But this is a bigger problem. I mean those $45 billion worth of deficits by 2030, that's beyond the state budgets and the Commonwealth budget and that's why we need to look at this with a very clear understanding of the size and the—well, the quantum of the challenge we're facing and that's why we need to do it.

Question: Mr Abbott, being a keen surfer—on another issue—what did you make of Mick Fanning's close call?

Prime Minister: Well, look, I saw the stills in the papers this morning and it's just terrifying to think that such a large shark could be so close to a surfing contest and I bet Mick Fanning is one hell of a relieved surfer. I think all of us, we go out into the waves and we love to see dolphin fins but if there's any doubt about what kind of a fin it is, it's pretty scary.

Question: Prime Minister, you've spoken about how the Speaker needs to uphold parliamentary standards. How does your Speaker uphold parliamentary standards when she misuses taxpayer money?

Prime Minister: Well, look, fair question, and let me deal with it. Bronwyn has admitted that this was an error of judgment—a serious error of judgment. She's repaid the money with a significant penalty. The matter is now being looked at by the Department of Finance, as is appropriate in these sorts of matters. I can really understand why people are unhappy about this. Frankly, I'm unhappy about it as well. But I would ask for people to keep a sense of proportion here. Let's face it, today we're talking about a $15 billion project that will transform the lives of Sydneysiders. We're talking on this very spot about a $130 million project that will mean that every user of King Georges Road has a better life on a daily basis. Thanks to Premier Baird and Premier Wetherill, we are now able to look forward to a constructive conversation about the future of our federation. So, as I said, I accept that people are very unhappy about this issue. They are entitled to be unhappy about this issue. Bronwyn is, I think, very, very contrite about this. I've had a couple of long conversations with her about it. I think all of us can learn this lesson, but my priority today is to get on with providing the best possible government for our country.

Question: If she is so contrite about this, why hasn't she apologised? Will you ask her to say sorry to the people of Australia?

Prime Minister: She has repaid the money with a penalty. As she said on the weekend, obviously she's sorry. Obviously, she's apologetic. She hasn't just said sorry; she has made amends and then some by paying back the money which was inappropriately spent, and by paying a penalty. So as I said, I can fully understand why people are disappointed, dismayed, I can fully understand this. All I can say is that despite this serious lapse of judgment, Bronwyn has a long and distinguished history as a servant of our country, as a servant of our Party, and she will learn a very salutary lesson—a very, very salutary lesson. She has certainly copped a justifiable hiding over the last few days for all of this, but we will all learn the lesson, and the fundamental lesson is we are expected to be focused absolutely on the people of Australia and their betterment. That's the lesson, to be focused absolutely and fundamentally on the people of Australia and their betterment, and nothing else.

Question: She has your confidence Prime Minister?

Prime Minister: Yes, she does. Obviously the action she was responsible for, with the helicopter, was out of line. It was out of line. But yes, she has been a strong Speaker, as I said she has been a good servant of our country and she has been a good servant of the Coalition and so she does have my confidence but like everyone who has done something like this inevitably for a period of time they are on probation.

Thanks so much.