Prime Minister, welcome to 7:30.
ANTHONY ALBANESE, PRIME MINISTER: Good evening.
FERGUSON: Now, the opposition is going to vote your tax cuts through. Does that tell you that you got the politics right on this issue?
PRIME MINISTER: What that tells me is that they're not fair dinkum. We made a difficult decision, but it was the right decision done at the right time, and all for the right reasons. And that is why we put forward a policy that will mean a tax cut for every Australian, and eighty-four per cent of Australians will get a higher tax cut. It shows that they were disingenuous with all of their complaining, because if they were fair dinkum, they'd not only vote against it, they'd do what Sussan Ley said they would do, which is to absolutely roll it back.
FERGUSON: But let's be clear about this. There had to be political considerations before you would make such a bold move, especially for your Prime Ministership. You accept that don't you?
PRIME MINISTER: We were focused very much on the outcome. How do you have an impact on cost of living, particularly for low and middle income earners, I spoke about that on this program in December, whilst not putting pressure on inflation? So when you work through what was available to us, you had $106 billion over the forward estimates, pool of money there. And what we've done is in a revenue neutral way, reallocate that in a way that's good for middle Australia, but also doesn't leave people behind. But it's also good for our national economy, because what it will do in boosting Labor supply by some 930,000 hours a week.
FERGUSON: I accept that, but I want to stay with the political question for the moment, because here we are in a political place. At the end of last year you were going through a rough stage, you'd had a number of policy reversals, most importantly the Voice. So looking at that period of time and looking at where we are now, you accept that what you've done is also a politically astute move?
PRIME MINISTER: Well, some of the, I'll leave that up to the commentators such as yourself.
FERGUSON: But you don't have to absent that politics from it, do you?
PRIME MINISTER: We were very much focused on the impact on people. And we know that people are doing it tough out there. And over summer, I'm someone who doesn't just walk in controlled environments, I go through shopping centres, I talk to people in pubs at different events that I'm at. And I also keep engaged with the people I grew up with. And what I knew is that low and middle income earners did need more support on top of the cost of living relief that we'd done last year. A lot of that was targeted at people, particularly on low incomes. How do you provide that support for middle income earners without having an impact on inflation? This was the right way.
FERGUSON: Well, let's talk about what it means in relation to you. Because as you say, you understood there's something going on, you understand there's a cost of living crisis, you say you're talking to people, you're getting feedback from them. So if circumstances change, are you prepared to break other promises that you make?
PRIME MINISTER: Look, it was a very big call that we made, Sarah. But this was, of course, legislation put in place five years ago. Prior to the pandemic, prior to the two wars, prior to that long tail that occurred with the pandemic. You remember at the time, the then Reserve Bank Governor was saying that interest rates would stay at 0.1 per cent. Now there have been thirteen increases. And what you can't do if you know that you are going in the wrong direction is just stubbornly stay on the same road. So it was a very big call, but it was absolutely the right call. And the idea that politically, it was driven by that, of course, when we announced it, there were many of the commentators just a week ago were saying very different things, were saying this was the wrong political call. I think though, that if you do what's right, that you know will do the right thing and have the right impact, then the politics sometimes look after themselves.
FERGUSON: That's the case, but I'm asking you about your perspective about other pledges that you might make. We're in a complicated world with changes taking place. We've been through a raging global inflation burst. So what I want to understand is where does that leave your perspective on your political commitments as a Prime Minister?
PRIME MINISTER: Well if you look, Sarah, at what we've done during this term, let's go through and all of the things that we said we would do - cheaper childcare, tick; the aged care reform, tick; fifteen per cent pay increase for aged care workers. We have done -
FERGUSON: Forgive me Prime Minister, it's a list that you've given and I understand it's important, the public has heard that list.
PRIME MINISTER: We have done all of the things that we said we would do.
FERGUSON: And now you've done something you said you wouldn't do.
PRIME MINISTER: On this issue, and we've explained why. We've explained the extraordinary circumstances which were there, and we didn't come to this decision easily. I understood that we were changing our position. I went to the National Press Club, we didn't do it on a Friday afternoon at six o'clock. I went to the National Press Club, we went through our proper processes. ERC, Cabinet, Ministry and a full Caucus meeting to make sure that everyone knew exactly what we were proposing and why we were proposing it.
FERGUSON: That's interesting. Let me ask you a question about that, because we had some testimony from Treasury yesterday talking about how this idea came about, that it was an idea that began in Treasury, not in the office of Jim Chalmers or indeed in your office. Is that correct, that the impetus came from them and not from you or the Treasurer?
PRIME MINISTER: Yes it is right. And one of the things that I've done Sarah, is to restore the faith in the Public Service, and I want them to use their full capacity. So I've had three meetings now with the Secretaries of every Department. And what I say to them is, 'we want your ideas, we want you not just to be everything to be done as under the Morrison government', indeed, we had everything done in the Prime Minister's office. Which was also, of course, the Treasurer and the Health Minister in that farcical situation. I want ideas to come up. They knew, of course, we've been for a year looking at what are the cost of living measures that we can take to make a difference? Treasury did work on this. We got the final Treasury documents just on the weekend before the ERC Cabinet meetings and before those processes.
FERGUSON: So when you said on the 15th of January that the Government's position hasn't changed, was that just a reflection of the facts on that day? A way not to let on that you were looking at changes then?
PRIME MINISTER: No, well it was a fact. But then I was pretty upfront in December, I said we were looking at ways for cost of living pressures to be relieved.
FERGUSON: But you've never not ruled out changing the Stage Three Tax Cuts until the moment came when you changed your commitment.
PRIME MINISTER: Well that's when we changed our position.
FERGUSON: So the evolution of that thinking - that's a quote from you on January the 15th - so at that point on that day, is that an honest answer to the question that the Government's position hadn't changed?
PRIME MINISTER: Yes it is. Well we hadn't changed our position until the Cabinet did. And I run a proper Cabinet Government, where Ministers are encouraged to be in charge of their portfolios, where we treat the Public Service with respect, where we get better outcomes as a result of using the full capacity of not just the elected politicians, but also the Public Service. But also engaging through the structures that we've set up to get the private sector, to get civil society, to get those inputs. That's why we did the Jobs and Skills Summit. I want an inclusive Government that creates change and takes the community with us on that journey of change.
FERGUSON: Alright, let me take you to some of the critiques that came out when you announced this, from the BCA, but also from Teal members in Parliament, various experts on tax in particular. And that is this question: why do you only tinker with tax when you could go for a tax summit and real reform?
PRIME MINISTER: Well what you've got to do, Sarah, is to take the community with you. We made commitments at the last election. We changed, have changed our position on the income tax cuts, we did it through, not an easy way, we knew this would be very much contested. And that occurred, you will recall it, only a week ago, that Sussan Ley was saying that they would fight it, that they, before they'd even seen it, and that they'd roll it back. So we'll wait and see what the Coalition come up with. But we are focused very much on managing the economy. And if you look at where we'll be, where we are now, but where we'll be in the second half of this year. We will have real wages increasing, we will have produced a tax cut for every Australian but overwhelmingly benefitting middle Australia, but not leaving people behind. We'll continue to have economic growth, we've got productivity growing for the first time in a while. We have our cost of living measures aimed at providing assistance - the increases in JobSeeker and the other measures that we've done. We will be in a position, which is to say we are strong managers of the economy, and that foundation is built on of course, the first budget surplus in fifteen years.
FERGUSON: It also has to be built on something else, which is trust. So to come back to that idea - we are talking about you changing in changed circumstances. So I want to go back and ask you to reflect on that question. What does that mean about other commitments you have made, or may make?
PRIME MINISTER: Well look at what I have done, Sarah, which is to tick off the commitments that I've made one by one in a diligent way. On this issue I've changed my position. I'm not saying 'oh, well, it's the same amount of tax cuts so we're just tinkering', we're saying it's a change of position on what we said we would do. And this is why we are doing it. Australians can trust me to be prepared to have the strength to take the right decisions that are needed.
FERGUSON: Now when you say strength, isn't strength in this argument really tackling bracket creep. You ended up in a situation where your tax cuts are revenue neutral, but you haven't tackled the issue of bracket creep. Isn't that what real courage in this situation would've looked like?
PRIME MINISTER: No, we have tackled bracket creep. Bracket creep doesn't mean you have a flat tax rate. I mean, that's essentially the Coalition, the end point of what they are saying -
FERGUSON: It's true that people will be either the same or better off, but you haven't actually tackled bracket creep have you?
PRIME MINISTER: No, if you look at the average tax rates in the Treasury documents that were put out, for the first seven deciles, it will be lower, lower the average tax rate, which is what bracket creep addresses. So this is a better addressing of bracket creep, than the original stage three proposals, that help people at the very high end, you know, every politician will still get four and a half thousand dollars. Now that is something that is important to them. But I'll tell you what, for the dismissing that we have seen from the Coalition about the smaller increases, the doubling of the tax benefit for people on average wages, just shows how out of touch they are with the people who were the heroes of the pandemic - the cleaners, the teachers, the truck drivers, the aged care workers, the childcare workers, the people who kept us going. And what this will do is benefit them and every dollar will make a difference.
FERGUSON: So when Treasury came to you with this idea, did they put other ideas on the table for you or only this?
PRIME MINISTER: Well, I don't talk about all the ideas that Treasury have, of course, because we have ongoing processes with the Budget and I want frank and fearless advice from the Public Service. But overwhelmingly what Treasury identified, was this was overwhelmingly the single biggest thing you could do. Because if you look at a range of possibilities, the one off payments or provision of assistance they all they all added -
FERGUSON: All potentially inflationary. But at the same time, this is obviously, it's a big decision. It's a big decision because it reflects on your Prime Ministership. Did you have to be persuaded by the Treasurer to go down this path?
PRIME MINISTER: Not at all, we've been working really closely. And one of the things I'm really proud about my Government, and if you have a look at the response that you've seen over the last week, this isn't an academic, this is a real time exercise in discipline and unity. And that's what you've seen. And it contrasts with the chaos and dysfunction, demonstrated best by the Nemesis program, that continues - all these people are still on Peter Dutton's frontbench. They hate each other. They're dysfunctional. And that's why we've seen the chaos in their response to what is a very sensible proposal that we've put forward, that Jim Chalmers introduced into the parliament today.
FERGUSON: At the end of last year, as I said before, you had suffered a number of reverses, as I noted, particularly the Voice referendum. Do you now feel that with this, you have got your mojo back?
PRIME MINISTER: I never lost it, Sarah.
FERGUSON: It's not what the polls said.
PRIME MINISTER: Well, actually, they were ahead. We're ahead. We haven't lost, to go back to Nemesis, we haven't lost a NewsPoll since I've been Prime Minister. If you go back and look at the cycle, in the middle of the cycle, the term historically, I was here during John Howard's years, he was always behind, at various points in between each cycle, as have governments been historically. My Government has been very focused, very focused going forward. We were disappointed with the Voice result. We accepted the outcome but it was a disappointment because it was something that I firmly believe would have been in the interests of reconciliation.
FERGUSON: And have you given a clear message to Indigenous leaders, to Indigenous people in Australia where you're going next?
PRIME MINISTER: Yes, that very clearly, what the Voice was about, of course, that wasn't -
FERGUSON: Just stick with that question, have you given them a clear message about where you're going next?
PRIME MINISTER: Well, that's the point. We're on the same page, because the Voice was never the end. The end wasn't to create a committee for people to chat. The Voice was about having a voice to close the gap on education, on health, on housing, on life expectancy, on incarceration rates, on all of those measures. So what we are doing is continuing to work on those measures, the priority, with the Closing the Gap statement that will come down in a short period of time - it's very much on employment. How do we take the CDP Program, which is essentially a work for the dole program and make it real, so it creates real jobs with real skills for Indigenous Australians.
FERGUSON: So if I were to ask a series of Indigenous leaders on this program over the next few days whether they feel like they've got a clear message on where you're going, they'll answer yes?
PRIME MINISTER: Well, that's up to them, it's not up to me to speak for them. Now, it's up to them to have their own voice and they certainly do that. But I'll make this point - there isn't one Indigenous leader who I have engaged with, or indeed, Indigenous people who were supportive of the Voice, and overwhelmingly they voted for the Voice, who has said it was a wrong thing to accept the invitation, the request, to put it to the Australian people. We did that, we weren't successful. I know that that was a source of great disappointment for so many Indigenous Australians. And, of course, in recent days, we've lost one of the greatest Australians in Doctor Lowitja O'Donoghue.
FERGUSON: Do you still hold yourself responsible for the failure of the Referendum?
PRIME MINISTER: I accept as Prime Minister I put forward, I accepted the invitation and I put it forward. And as Prime Minister, I accept what happens on my watch. But I think that doesn't, it wasn't a vote against reconciliation. It was a vote against a particular model, and some of that was about the way that that was demonstrated to the public, of course, a considerable fear campaign about what was a non-binding advisory committee. But we accept the outcome and we continue to look for other ways to achieve the same result. And the objective is, how do we bring about reconciliation? How do we close the gap? How do we create opportunities for our First Nations people in a way that is worthy of the great privilege that you and I have of living on this great continent, with the oldest continuous culture on Earth.
FERGUSON: This we can certainly agree on. You didn't get much trouble in Question Time today, so thank you for coming to have a debate.
PRIME MINISTER: I'm still waiting for a single question. Thank you very much.
FERGUSON: We'll see what happens. Thank you very much indeed, Prime Minister.
PRIME MINISTER: Thanks Sarah.
