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DATE: 2 February 2017

TITLE: Transcript Afternoons with Tom Elliott 3AW

TOPIC(S): Budget situation, parliamentarians work expenses

TOM ELLIOTT: As promised, our next guest is Special Minister of State and Minister Assisting the Prime Minister for Cabinet Senator Scott Ryan. Good afternoon.

SENATOR SCOTT RYAN: Good afternoon Tom.

ELLIOTT: First, the Government’s debt. I read with horror the other day that it is $476 billion and still climbing and fairly soon the Treasurer Scott Morrison is going to have to ask formal permission to lift the debt ceiling above$500 billion. When are you going to do something about this?

SENATOR RYAN: Well we have been doing something about it Tom. Every time we’ve brought down a budget, we’ve managed to slow down the rate of growth in Government debt and it’s actually growing a lot slower than it was …

ELLIOTT: But it’s still growing.

SENATOR RYAN: And that’s because we need to bring the budget back into balance. Remember, when we balance the budget, when we spend what we collect in taxes, that means we stop running up debt. We haven’t paid a cent of it off.

ELLIOTT: But wait a minute, the debt is still growing, we’re not even close to balancing.

SENATOR RYAN: And one of the reasons for that is that we need to get legislation through the Senate to actually bring the budget back into balance. There is $13-$14 billion in savings measures that we’ve announced and taken to an election, but the Labor Party and crossbenchers won’t let us get through the Senate.

ELLIOTT: So what are you going to do though? I mean I don’t think the crossbenchers are going to become nicer people anytime soon and I don’t think Bill Shorten is going to make your life any easier. I worry about this, because if your party, the Liberal Party, can’t do anything about our debt then no one will because Labor certainly won’t and the Greens won’t, so what’s going to change?

SENATOR RYAN: It worries me. We had some success last year, we got one bill through that actually did implement a lot of the savings measures that both Labor and the Coalition took to the election, but not all of them. We appeal to the national interest, as the Prime Minister and Treasurer constantly do. We are having success in the Senate, we have found since the election, the Senate has been easier to work with. We’ve legislated some pretty significant policy changes in workplaces relations and we’ve continued the work in balancing the budget. One of the other ways you balance the budget is not making unsupported spending promises, the way Labor had. Labor promised billions into health …

ELLIOTT: For all my sins, I’m a Carlton supporter and when Carlton’s season goes badly we start talking about not losing by quite as much …

SENATOR RYAN: I’m an Essendon supporter so I can’t talk.

ELLIOTT: … or some good individual performances on the field and there is always next year or the year after that. The reality is that even slowing down the rate at which the debt is going up, it is still going up.
There are all sorts of reasons, but you are the Government, you are part of the Government, is anything going to be done?

SENATOR RYAN: So we’ve forecast that we can bring the budget back in to surplus in three and a half years.

There is no silver bullet to this, this is one of the challenges Tom. There are a lot of people out there saying wave your magic wand and balance the budget. Every time we want to cut spending or reduce its rate of growth, it is actually someone who is going to be, usually, quite unhappy about it. Whether that’s the car industry we wouldn’t give the extra money, or the doctors who want their Medicare rates indexed at a higher rate. So it is difficult and it is a long grind that every single year, we make further steps to do it. That’s why we need the support of the Senate to pass legislation, whether that be ending an end-of-financial-year payment that’s a supplement or whether that be adding a bit of an extra waiting period to receiving government benefit, they can be hundreds of millions of dollars and every dollar counts.

ELLIOTT: So without the Senate suddenly going from a hostile place to a nice place, there is not much you can do, is that right?

SENATOR RYAN: No. It gets better every year, we’d like it to get better faster, but it gets better every year and it has been while we’re in office, not as fast as we’d like to, not as fast as I’d like.

ELLIOTT: No. I’m a simple person, I just look at where the debt is going and the debt has gone up every year since your Government has come to office so …

SENATOR RYAN: We inherited a budget that was spending $40 billion more than it was collecting and we are bringing it back so it gets to a balance where we are not borrowing money. We need legislation to do it.

ELLIOTT: But it hasn’t come back in. The annual deficit is headed towards $60 billion.

SENATOR RYAN: Look, I don’t think it’s going anywhere near that. Yes, the debt continues to increase by a diminishing amount, but we have put up a lot of measures that have been knocked back by the Senate so we try other measures, we take them to an election, we get agreement where we can and move on to seek further agreement.

ELLIOTT: All right, something on which many listeners would agree is that politicians’ perks are out of control.
Your colleague Sussan Ley recently had to resign as health minister because she’d been found, in my view, with her hand in the cookie jar, getting a lot taxpayer funded trips to the Gold Coast on new year’s eve, when it turns out she was buying a personal apartment and her partner apparently has a business up there. What are you going to do? Because one of the issues that, in my view, politicians have to have is the moral authority over us to tell the Australian people ‘we must have higher taxes and lower spending’, you’ve got to show a bit of that yourselves. Every time a politician is caught rorting his or her expenses, the rest of us just throw up our hands and say ‘why should we make a sacrifice when the people up in Canberra won’t do it?’ What are you going to do about that?

SENATOR RYAN: Well, absolutely Tom, agree entirely, particularly when we are making difficult budget decisions.

There are two things we’re doing: we are tightening the rules around travel and around MPs being able to claim a travel allowance for overnight stays and we are having stricter rules that don’t have as much grey where people can make mistakes. I will say that sometimes people are within the rules but it doesn’t meet community expectation …

ELLIOTT: Yeah, but the rules are grey …

SENATOR RYAN: … And we’re trying to bring those two together.

ELLIOTT: So are you going to change the rules?

SENATOR RYAN: Yes, we are bringing in a new set of rules around what constitutes, essentially, parliamentary business and there will be legislation brought forward in the next few months to do that.

ELLIOTT: At the moment though it seems to require the media to bang the drum on this – people like me and Herald Sun – find those things out and then make a song and dance about them before anybody does anything. Is it possible that someone like yourself might beat the drum inside the party room, say to your colleagues ‘look, just don’t do this, don’t rort your expenses’?

SENATOR RYAN: Don’t sell the media short, Tom. I actually think one of the things about media scrutiny is that it makes people behave. You have an eye towards, ‘is the public going to think this expenditure of money reasonable? Is flying interstate to go to that event, to have that meeting, is that a reasonable expenditure of scarce taxpayer dollars?’

One of the things we are doing is, we currently disclose everything every six months, we are going to move towards doing that every month. This changes culture. Knowing I could get a phone call from you and have to explain on air, ‘Scott, why did you fly to Sydney for that particular event?’

ELLIOTT: The thing is I run what I do for work as my own small business. For me to claim an expense, I’ve essentially got to get it through my accountant and then through the Australian Tax Office, and the Australian Tax Office is rather flinty eyed when it comes to such things. Why do I have to be subject to the very tough eye of the tax office and a politician does not?

SENATOR RYAN: It’s a bit more like, I used to work in the corporate sector in the pharmaceutical industry, when I was travelling for work, work would pay my airfare and put me up in a hotel for the night. It is a bit more akin to that then claiming a tax deduction.

ELLIOTT: But it’s not. I ran my own business for a long time and I can tell you, there was a budget for travel and you couldn’t exceed it, end of story, that’s it.

SENATOR RYAN: Unlike a lot of other countries of a similar size, in America, everyone – all the MPs, all the members of Congress – live in Washington. All the ministers live in Washington, so do their families. In Australia, our members, our ministers, they live in their home cities, it helps them stay in touch. I don’t think anyone would suggest we want all our politicians moving to Canberra and losing touch.
ELLIOTT: But I think there is a middle ground. The middle ground is you say to politicians of different levels, ‘here is your annual travel budget, you’ve got to do your job and manage your own travelling to and from your electorate as you see fit. Your annual budget is $50,000, that’s it, that’s all you can spend’.

SENATOR RYAN: We’ve looked at that, I’ve looked at that, for a number of areas, particularly around cars and it’s not possible. I’ve got people travelling from Burke to Canberra, I’ve got people travelling from Broome, people travelling from Bayswater. The country is simply too diverse with people coming from areas where airfares and costs of travel are so varying that the best way to have it is to say, ‘you’re allowed to fly here for work and we’re going to disclose it every month and you’re going to have to answer questions.’

ELLIOTT: Senator Scott Ryan is going to stick with us. We’re going to go to your calls in a moment. 96900693.



Senator Scott Ryan, the Special Minister of State is with us. Ian, you’re next, go ahead.

CALLER: Good afternoon Minister. Look, I know you’ve got a choice of two: raising taxes or cutting spending. Now in case you get a bubble in your cerebral processes regarding taxing the family home with capital gains tax, I want you to prick it right now because that would certainly be the worst thing you could possibly do. Now I know you’re floating the idea out there with that, so-called economic think-tank, but the economic think-tank are a group of absolute morons …

ELLIOTT: All right Ian, let’s give the Senator a chance to respond. I think Ian is referring to the Government’s annual tax expenditure statement. They’ve pointed out that if we tax gains on family homes, as per we do other assets, the Government would make an extra $27.5 billion a year. Would you consider that Senator?

SENATOR RYAN: No. It’s never, ever been considered by my side of politics and I can’t ever see it being considered in this country.

ELLIOTT: Why is the Treasury floating this idea then?

SENATOR RYAN: To be fair, the tax expenditure statement is a very technical document, and what it tries to do, imperfectly, is say if you didn’t say you didn’t tax something, how much money would we collect and it forgets that then people would change their behaviour.

ELLIOTT: What about the GST? When John Howard set up the GST 15, 16 years ago, we exempted fresh food, education, health and a whole lot of other things. They’ve also that added up and we could make the best part of $18 billion by not exempting them, would you consider that?

SENATOR RYAN: Now, we had to make some changes on food, remember, to get it through the Senate. It’s a lesson in practical compromise – it was better to get 90 per cent of what we took to the election than zero.

I’ve got to caution people on the idea of taxing health and education. The challenge with that is that you’re then saying to everyone who says, ‘look I’m going to pay for a non-government school or pay for private health insurance’, everyone who does that, remember, saves the government money, we would be taxing those people even more and that could drive more and more people out of non-government schools and private health insurance, which I don’t think is fair or a good idea.

ELLIOTT: Which is apparently already happening anyway.
Joel, go ahead.

CALLER: Hey everyone, just wanted to say something positive that our debt-to-GDP ratio is actually envied by a lot of the world and it is only 25 per cent, last time I looked, or something. If you expect houses to go up and double every 10 years, wouldn’t you expect the debt to double every 10 years?

ELLIOTT: That’s a bit different. For an individual’s debt, backed by an asset is one thing. Government’s best asset is all of us, as in they can tax us to pay off their debts.

Something Senator, broadly speaking, would you favour reduced spending or higher taxes as a way of reigning in the budget deficit?

SENATOR RYAN: Reduced spending.

Government, under the previous Labor government, grew very quickly and we had all this legislated spending – whether it be on schools or the NDIS some of it quite worthy –but without a way to pay for it. The caller then, I forget the gentleman’s name, mentioned that we have a relatively low debt-to-GDP ratio. Well just because your neighbour is in more debt than you doesn’t mean you’re ok, and that also fails to take into account that our state governments, some of them have debts, so do our local governments.

ELLIOTT: Eric Abetz, your Senate colleague, said the other day that you’ve appointed, over the past year or so, 4000 new public servants in Canberra. Is that true?

SENATOR RYAN: I did look into that after I heard it on your program, Tom. He was comparing a different report. If you compare the promise we made – to take public service numbers to where they were when John Howard was in office – we are still at that number. There was a temporary spike in a different way to count because there were temporary workers to deal with the Census and election so there hasn’t been the big increase in public servants that that report claimed.

ELLIOTT: David, good afternoon.

CALLER: Yeah Tom, how are you? Simple thing, if I run a business at a loss, I won’t be in business. So what makes running the country any different?

Good question. So, most people, if they run a business or their household at a loss – that is, if they spend more than they bring in – they’re in trouble with the bank or with their family, why is government different?

SENATOR RYAN: That’s the $64,000 question. It was different before John Howard and Peter Costello came to office and made sure we had money in the bank and it’s different now and that’s why we’re trying to get back to a situation where we don’t spend more.

I think there is a real moral issue here. My kids are going to inherit the debt that I leave them. That’s not right. That’s what drives me in politics. In my eight and a half years here, we’ve gone from having money in the bank to having that 25 per cent of debt that that person mentioned.

ELLIOTT: One thing Peter Costello did was he sold off a lot of assets, for example, he privatised Telstra, the chunk of the Commonwealth Bank that hadn’t been sold was sold. Are there any other assets or businesses like that the Government could sell?

SENATOR RYAN: The Commonwealth, the federal government , doesn’t own big things like the Victorian government used to, electricity generators, gas, so Telstra – Telecom Australia as it used to be – was the last big asset, there are no more large assets like that.

ELLIOTT: Could you sell off the NBN once it is finished?

SENATOR RYAN: That is something that has been forecast but it’s probably substantial numbers of years away, I think by 2020, or it could be the start of 2021.

ELLIOTT: Well I’ll look forward to that, I don’t have the NBN.

SENATOR RYAN: We’re connecting more people every month than Labor did in six months.

ELLIOTT: Paul, good afternoon.

CALLER: I just wanted to pick the minister up on his statement that it’s impossible to allocate travel budgets to politicians. I work in the corporate sector and I remotely manage people. I have to travel in order to manage their performance, but I travel in a metropolitan region, I get much less of a budget than some of my colleagues who travel from regional centres or country locations. I don’t see why it would be impossible to allocate a travel budget to those who work in Broome as opposed to those who work in Sydney?

ELLIOTT: This is the thing Senator Ryan. When I used to run my business I used to a do mix of interstate and overseas travel and I had, at the start of each year, every six months, I had to say ‘right-o, here are the trips I have planned. Here are the reasons I think they would be valuable to the business to go. And roughly how much it was cost’. I was judged on my ability to work to that budget. Again, why is it so much harder for a politician?

SENATOR RYAN: Because, to be honest, the work of a politician, we expect different things of politicians than we do of business people. For example, we’ve got to seat like Mark Coulton’s seat, which is half of NSW. He has three different offices. You’ve got the seat in western Queensland, Maranoa, which is a good portion of Queensland.

ELLIOTT: How much of Sussan Ley’s seat is on the Gold Coast?

SENATOR RYAN: I’ll let that one slide, but she is right along the bottom of the Murray. You might have a natural disaster, a drought, we expect our politicians to be accessible to the community and I can tell you, having looked at this, even on something like a car lease, where some people do 100,000 kilometres a year and some will do 10,000 kilometres a year because they’re in inner-urban areas. The better way to have it is you can use the money to travel for A, B, C and D very strictly defined and we are going to publish it every month so that everyone can look at it and if you misuse it, you’ll get in trouble. That is a big driver of changed behaviour.

ELLIOTT: Very quickly, I know you’ve got a young child starting school tomorrow for the first day. How are the plans for that going?

SENATOR RYAN: Hopefully, if Qantas is on time tonight, I’ll be home after he is in bed tonight, but I’ll be able to walk him to school tomorrow.

ELLIOTT: Fabulous stuff, Senator Scott Ryan, thank you for joining us.



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