16 December 2015
Transcript - #201577, 2015

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Tony Jones, 3AW Mornings

SUBJECTS: Mid-Year Economic and Fiscal Outlook

JONES:

We are actually joined by the Assistant Treasurer, Kelly O’Dwyer. Good morning Minister.

MINISTER O’DWYER:

Good morning Tony. How are you?

JONES:

I’m very well. Thanks for joining us.

MINISTER O’DWYER:

Great pleasure.

JONES:

I thought we were going to miss you there for a while.

MINISTER O’DWYER:

We were actually calling your office earlier this morning to say we’d be very happy to come on so I’m afraid that message didn’t get through to you.

JONES:

No it didn’t but anyway, all is good now. Let’s hope it ends well as well. Why are you targeting those areas of welfare?

MINISTER O’DWYER:

What we have to do as a Government is we need to make sure that we are very responsible in our fiscal settings. We need to make sure, with the Mid-Year Economic and Fiscal Outlook that we released yesterday, that we narrow the deficits over time, we restrain our spending, but we do that in a way that continues to strengthen our economy and make sure that we can continue to have jobs growth. The Government is living within its means, unlike the previous Labor Government, when we have announced spending measures we have more than offset them and this budget update provides examples of that. What we also have done is we have looked at the spending we currently have at the moment and we’ve said can we do it better, can we make better spending decisions and we’ve got a couple of examples of that. You talked about diagnostic imagining and you’ve talked about pathology and there are some concerns that have been raised on your programme with others around what this might mean for patients. Can I give you just a bit of history around this, the Howard Government, at the time paid 100 per cent of the Medicare fee as a benefit and also provided incentives for bulk billing to GPs. This is something that they put into place at that particular time, so it was a bonus payment made to GPs so that they could target concession card holders, that they could target children under 16, to make sure that pensioners were getting access to those services at a bulk billing rate. The Gillard Government expanded those bonus payments to diagnostic imaging and pathology but they actually didn’t make it targeted, it applied absolutely to everyone. In the case of diagnostic imaging, we’re simply making a change here that is consistent with the arrangements that we currently have in place for GP services, which means it will continue to apply to pensioners, to those people who are on concession cards, to children under the age of 16, and it will mean that for those people, nothing changes but it’s more targeted which means that we can make some savings but in a very sensible and measured way.

JONES:

Ok so there’s going to be no change whatsoever so people will not have to put their hand in their pocket to pay for diagnostic services?

MINISTER O’DWYER:

For those people who are pensioners, who are on concession cards and who are children under the age of 16, it won’t make any difference.

JONES:

Ok, but what about people who aren’t on concession cards or they’re not a pensioner, or they’re not under 16 who are still doing it tough and you know, we’ve spoken to people who have relatives or who themselves are in hospital at the moment battling cancer, and it is going to be a cost to them.

MINISTER O’DWYER:

These arrangements were bonus payments to encourage bulk billing for those very targeted groups of people, people who are most in need. The Government always has to make decisions around how we determine how we spend the money that we have. There a lots of pressures in the health budget…

JONES:

Minister why do we target the sick?

MINISTER O’DWYER:

Well no, we’re not targeting the sick. What we’re doing is in creating some of those savings, they’re going back into the health system. And in fact, we have ever increasing pressures on our health budget. We need…

JONES:

Sorry to cut you off, do you concede that there will be some people worse off if these measures get through the Senate?

MINISTER O’DWYER:

What I would say to you is actually there will be a number of people who will be better off, because they will have access now to cancer drugs on the Pharmaceutical Benefits Scheme, which previously we haven’t been able to fund. $621 million of additional expenditure is now going to be spent on those drugs because we have been able to move around the money within the Health portfolio to make sure it is best targeted to service those people who are most in need.  Now, you don’t have a completely unlimited pot of money. This money is all coming from taxpayers…

JONES:

Yeah, I understand that.

MINISTER O’DWYER:

who are paying money to the Federal Government, to make sure that the Federal Government responsibly spends that money.

JONES:

I understand that Minister.

MINISTER O’DWYER:

The Federal Government has to be very careful in the way that we do that. The Labor Party think that you can simply increase spending exponentially, have it completely unfunded, increase debt, have huge debt that will never be able to be paid back.

JONES:

OK, you’re the ones pulling the purse strings at the moment.

MINISTER O’DWYER:

We say that we don’t want to be hiking up taxes, we want to be able to live within our means and we need to make sensible and prudent decisions around that, and that’s what we have done.

JONES:

Yeah, I know and as I’ve said you’re the ones pulling the purse strings at the moment, so let’s just not worry about the Labor Party for the moment. But I don’t have the budget for Arts for example in front of me, but are you touching the Arts at all? I don’t see anywhere where the Arts are being slashed.

MINISTER O’DWYER:

So, I mean, this is a Budget update. We will obviously announce a full Budget in May next year. And, now that we have delivered this update, I can tell you the Expenditure Review Committee will be hard at work, looking to preparing for the Budget in May and obviously all portfolios will be looked at, I mean there are a total of 348 budget measures of which we have just talked about 2 here out of a total of 400 with a positive impact on our budget bottom line that we will implement.

JONES:

Sure, but I guess these are the ones that are plucked out because they are the ones that resonate with everyday Australians. But what I can’t understand is… I just think it’s off limits, anything to do with welfare and health should be off limits from Budget cuts.

MINISTER O’DWYER:

Tony are you honestly saying to people that you’ve got a perfect system forever and you should never ever make any changes?

JONES:

No what I’m saying is, make changes but for the better, Minister.

MINISTER O’DWYER:

Well, that’s exactly what I am saying to you. I am saying that we’re going to have additional spending now on the Pharmaceutical Benefits Scheme that will provide drugs that haven’t been available to cancer patients.

JONES:

Yeah, and that’s terrific, a big tick for that but what about those who are going to have to pay for their blood tests out of their own pocket?

MINISTER O’DWYER:

So here’s what I would say, in relation to Pathology, there were bonus payments made to try and encourage additional bulk billing within this sector. Now, before the bonus payments were made, around about 86 per cent were bulk-billed and now it’s around 87 per cent. So we actually haven’t seen a serious material difference in the amount that is being paid. Those people who are out of pocket will still be covered by our Medicare Safety Net protections. I mean they are still going to be covered by that. We’re still paying 100 per cent of the Medicare fee. But what we’re saying is we’re not going to be paying those bonus payments where we’re not seeing material difference. We’re going to redirect that money to where it can do most good and in the Health portfolio we have huge pressures on our Budget, we have huge pressures to list new drugs. We want to be able to provide those drugs, people expect us to be able to provide those drugs and services and we need to make choices around that. And I think, frankly, these are very prudent measures and reasonable decisions.

JONES:

Yeah, you talk about pressures on the health budget, is that because there is significant waste in health?

MINISTER O’DWYER:

Well, the Health Minister is actually looking at whether or not the State Health Ministers can use their money more efficiently. We’re actually looking at that. I certainly know that in South Australia, the South Australian Health Minister has said, and his Department has said, there is 30 per cent wastage in health. Now, whether that figure is right, I don’t know.

JONES:

What’s your research telling you about Victoria?

MINISTER O’DWYER:

The Health Minister is actually looking at whether or not the State Health Ministers can use their money more efficiently – we are actually looking at that. I certainly know that in South Australia that the South Australian Health Minister has said - and his Department has said - that there is thirty per cent wastage in Health. Now, whether that figure was right, I don’t know. But –

JONES:

What’s your research telling you about Victoria?

MINISTER O’DWYER:

What we are doing, is we are looking at how we can do things better and more efficiently and how we can deliver better outcomes for patient care. That should really be the focus of the Government to make sure that every dollar that is spent is spent to deliver the best possible outcomes for patients and for their health.

JONES:

You talk about South Australia, but what about Victoria? Is there significant waste in the Victorian health system?

MINISTER O’DWYER:

I don’t have those figures in front of me but what I would say to you is, you never have a perfect system, you can always be improving and it is incumbent upon each Health Minister – not just the Commonwealth Health Minister - but each Health Minister as well to look at how they can do things better so that they can maximise the dollars that they have for the best possible patient care.

JONES:

Alright, well it’s one of those things, it’s always going to be a tough sell for you no matter what you do and unfortunately innocent people are always going to cop it in the neck and this doesn’t seem to be any different. I just hope that when the Budget comes down later in – or next year – that we look at areas like – and when I said the arts earlier, I’m not bagging the arts – but I think there’s areas in the arts that probably aren’t under the banner of necessities and I think foreign aid is something that needs to be looked at as well.

MINISTER O’DWYER:

We have made, Tony, very significant savings in foreign aid. Another example of where we’ve made some savings is through the Green Army program which is spending, which is good spending but we’ve capped it because we know we can make hundreds of millions in savings by capping the program so that can actually be directed to other areas. So we are actually making those decisions and if you have a look at all of those 348 Budget measures you can see that it is right across different portfolios. It’s very measured in its approach, but we will have a full Budget that we bring down in May which as I said will touch the whole of Government.

JONES:

Alright, good to talk to you. Have yourself a terrific Christmas. Where are you spending it?

MINISTER O’DWYER:

You too Tony. I am actually spending it mostly in Melbourne because my sister is coming back from overseas with her two little babies and I will be introducing my little baby to her which will be really lovely and then we are going to head across to Tasmania just for a couple of days.

JONES:

Fantastic, well it sounds like it’s going to be a noisy Christmas with three little-ys in the house.

MINISTER O’DWYER:

Indeed, it will be a lot of fun.

JONES:

Nice to talk to you.

MINISTER O’DWYER:

Thanks Tony.