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Transcript: Sky News Live Newsday With Tom Connell

TOM CONNELL:

Our next guess on the program today is the Social Services Minister Paul Fletcher here in the studio with me. Thanks very much for your time. 

PAUL FLETCHER:

Good to be with you, Tom. 

TOM CONNELL:    

A bit to go through. First of all, this Newstart payment, or the payment for people on Newstart, this is the energy supplement - it was seemingly not included in the Budget, it’s going to be now. Was this an oversight?

PAUL FLETCHER:

Not at all. This energy assistance payment is designed to help people with the cost of their energy payments. So what we have announced is that some 5 million people will benefit from this; $75 for a single, $125 for a couple. And that will include a whole range of categories, so it includes aged pension, disability support pension, parenting payment and so on. And we’ve included all of the relevant payments, so anybody who’s receiving a pension payment or an allowance, or who is on an eligible Veteran’s Affairs payment. So, all of those will be included, because the reality is energy costs are affecting a wide group of people. 

TOM CONNELL:

So, is it going to people on Newstart as well?

PAUL FLETCHER:

Yes, it is. 

TOM CONNELL:

Was that included specifically in the Budget?

PAUL FLETCHER:

It's included in the bill that’s been introduced this morning, so …

TOM CONNELL:

[Talks over] The bill, but what was in the Budget [indistinct]?

PAUL FLETCHER:

… and it’s passed the House of Representatives, I might say - it now goes to the Senate. But can I also make this point, that this is a payment that will be made in 2018/19, so the current financial year. It'll be $360 million, is the amount of the payment, and that encompasses 5 million people. Of course, the surplus in ’19/’20 is $7.1 billion. So this is a payment of $360 million in ’18/’19, in ’19/’20. The surplus that Treasurer Frydenberg announced last night, $7.1 billion-

TOM CONNELL:

[Interrupts] Yeah, well ahead of expectations and it's clearly not going to imperil the surplus; I understand the point you're making. But the 360 amount, when this was first announced, I think it was going to cost 285. Did you have to add in Newstart since the Budget papers?

PAUL FLETCHER:

Look, we've taken a decision that we want this to apply to everybody who receives a pension, a benefit, an allowance, so it goes to about 5 million people. We have taken that decision because of the fact-

TOM CONNELL:

[Interrupts] Since the Budget?

PAUL FLETCHER:

We've taken the decision in recent days because of the fact that energy costs, you know, apply very broadly. But I would make the point: there is a basis for taking a different approach to those who are not likely to be re-entering the workforce - so those on age pension for example, and those who are expected to re-enter the workforce, such as people on Newstart. So that being said, where we’ve- the final decision we’ve reached is that we want it to apply to everybody, including those on Newstart. That's the decision we've taken. That’s in the legislation that’s gone into the Parliament this morning. It’s passed the House, [indistinct]

TOM CONNELL:

[Interrupts] Okay, so that’s the reality, but I’m just trying to clarify here. So, initially there was a thought: well, people on Newstart will be re-entering the workforce, or that's the hope. People on an age pension won't be, so they were left out. The decision was made: well, everyone needs the payments, so they were included in the past few days.

PAUL FLETCHER:

[Talks over] We've taken that decision. Everybody, 5 million people will benefit from this, $360 million in total cost to be paid in ’18/’19. And a $7.1 billion surplus in 2019/20 announced by Treasurer Frydenberg last night. That’ll be delivered because if you look at the track record of the Liberal National Coalition in government, when we say we're going to deliver promises- deliver surpluses, we deliver them. That's what we're very focused on. We've got that track record of economic credibility and budgetary management. And when Treasurer Frydenberg stood up last night and said back in black and back on track, that is a really important statement of what we're doing. And the Australian people can rely upon us to deliver the surplus. 

TOM CONNELL:

I'm sure we'll hear that saying. There's a bit of catchiness to it, I'll concede that. Presumably 2018/19, this financial year, we can take $80 million- or add that to the deficit?

PAUL FLETCHER: 

Can I make this point, that there are three points at which the numbers are estimated, determined, finalised. You've got MYEFO in December. You've got a Budget, which this year is in April. And then you've got Final Budget Outcome. And of course …

TOM CONNELL:

[Talks over] This will be added to the final Budget now?

PAUL FLETCHER:

… there’s still several months left to go. A whole range of things move up and down. 

TOM CONNELL:

But this will be added to that? 

PAUL FLETCHER:

Sure. But my point is, in the totality of a total spending of approaching $500 billion, this is a pretty minor ask. 

TOM CONNELL:

Did you go in to bat for it to make sure it was included?

PAUL FLETCHER:

Look, as Minister for Social Services, I always want to make the case on behalf of the Australians who I have responsibility for. And of course, we always weigh up competing considerations: cost, deliverability, what's the impact we're trying to address. So we've weighed up all of that. We've arrived at a decision; a decision’s been taken, reflected in the in the legislation that's gone through the House of Reps this morning. And I trust we'll go to the Senate later today. 

TOM CONNELL:

Well, there's the end result anyway; they're getting the payment. 

I want to talk about the NDIS. Can you confirm, is there an underspend of $1.6 billion for next financial year? Is that the amount?

PAUL FLETCHER:

Well, let's be very clear on this. With any demand driven program where the amount that you're paying out each year depends upon the total number of people you're supporting, you routinely make adjustments at MYEFO and at Budget. So what we've done in terms of the National Disability Insurance Scheme is that in the ’19/’20 Budget, we'll be spending $17.9 billion; that's what we've budgeted to spend next year. That's up from $13.3 billion in 18-19, and now in terms of the changes there we have made some adjustments for a somewhat lower number of participants than we expected …

TOM CONNELL:

[Talks over] Right, so is that …

PAUL FLETCHER:

… a year ago. 

TOM CONNELL:

[Talks over] I understand what …

PAUL FLETCHER:

That's the key driver. I might- I do …

TOM CONNELL:

[Talks over] Is that the underspend, 1.6 billion?

PAUL FLETCHER:

That's the net, because included in that is about 400 million extra that we're spending on a couple of things: administrative costs for the National Disability Insurance Agency and also Commonwealth programs where there are existing people being supported- existing people with disability being supported under various Commonwealth programs because we've adjusted down the assumptions as to the rate at which people will move across to NDIS. We need to then allocate more spending for the Commonwealth while they remain on our programs, but I make the point the bilateral estimates – that’s the estimates that have been reached between the Commonwealth and the states and territories –are that will be at 460,000 at full scheme across the country. We still expect to get to that. There’s been no change in that. We're somewhat behind where we thought we would be when the estimates were done, but we are very much continuing to roll out. Over 250,000 as at January this year and continuing to rise. 

TOM CONNELL:

Okay. Is there a four year figure for that underspend? 

PAUL FLETCHER:

We've made- well if you look at what happens over subsequent years, so in 20-21 we'll spend $22.2 billion; in 21-22 we'll spend $23.6 billion.  So, our focus …

TOM CONNELL:

[Interrupts] For the forecast, obviously the number of participants in there is behind the original figure. 

PAUL FLETCHER:

Yeah, there’s been no change. 

TOM CONNELL:

Is there a four-year …

PAUL FLETCHER:

There's been no material change beyond 19-20. 

TOM CONNELL:

Right, so that’s the only one right now, the 1.6?

PAUL FLETCHER:

Yes.

TOM CONNELL:

Speaking to advocacy groups, they're saying well you've got 1.6, why can't be spent on making sure the program does roll out more quickly, on things such as admin, because the scheme according to all reports is running behind? 

PAUL FLETCHER:

As I've just agreed with you, that the numbers in terms of the participants are a little behind where we thought. We're at about three-quarters of where we thought we'd be. We continue to expect that we'll get to the full scheme numbers of 460,000. Now over the weekend, I announced that next year we'll spend an extra $850 million within the NDIS on the prices that get paid for things like personal care attendants, physiotherapists, all the services …

TOM CONNELL:

[Indistinct] service companies because they were complaining they wouldn't- they weren't getting enough money, they might go broke, and that's why you stepped in and said …

PAUL FLETCHER:

We've done that to make sure that we have deep markets in the provision of services. And that's important, because the depth of those markets will encourage more people to come into the scheme. So it's all part of continuing the work we're doing across so many fronts to get as many people as possible into the scheme.

TOM CONNELL:

Okay. Can I ask finally on this particular scheme, when it comes to the NDIS the money that- the $1.6 billion. Does that just go to the surplus? Is it put aside somewhere in an account in any way? What happens to the 1.6 billion? 

PAUL FLETCHER:

Well, across the whole range of areas we're making adjustments up and down. So at the same time as we've made this adjustment on NDIS, can I make the point that there’s a $1.9 billion upward variation in what we're spending on public hospitals over the …

TOM CONNELL:

I understand that. But so this does go into general revenue essentially, this $1.6 billion? 

PAUL FLETCHER:

Indeed, as we continually make the variations to meet the requirements on the budget. What Australians can be confident of is that the NDIS is fully funded. The money is there. And when we run a strong budget with a surplus, they can be confident that we are able to fund the NDIS. That's why- that's one reason why as Minister of Social Services I care so much about getting a surplus. It's not because we want that as a trophy, it's because it allows me to be absolutely rock solid in my confidence that the money is there to serve the Australians who deserve to be supported under the National Disability Insurance Scheme, or of course people on age pension, Newstart, all of the other benefits. 

TOM CONNELL:

I want to ask you finally about the biggest saving in the Budget: this is $2.1 billion over five years for the single touch payroll tax.  This is for people on welfare payments, for example, to make sure they don't go over in a given year and have to pay back money. Now the concern is when you look, for example, at robo-debt that was meant to save $61 million over five years. It's cost money instead. 

PAUL FLETCHER:

So this is a really important change. It's about using technology to ensure that Australians on welfare have a better user experience, because …

TOM CONNELL:

[Interrupts] It sounds good, but I’m just trying to wonder if you're really going to get these savings? 

PAUL FLETCHER:

Yes, so we will. So what it will do is, first of all, we will now- people's welfare will be- people's income will be calculated based on the time they receive it, not the time that it was earned. That's a technical definition that's been in the Act that has caused some confusion. Secondly, through technology we'll be able to get real time reports from employers of payments that have been made to people. So a lot of people on Newstart or other benefits are receiving some payments from an employer and also eligible for a part payment from the government. That's where we get a lot of overlap and disconnect …

TOM CONNELL:

[Interrupts] They earn more money, the lag happens …

PAUL FLETCHER:

It’s the system- that's right, and …

TOM CONNELL:

[Talks over] I get that, but you understand(*) there’s some scepticism when it hasn't worked in the past?

PAUL FLETCHER:

No, the system is going to be much smoother because we're changing the legislative definition, that's part of it. But the big part of it is the technology that will now say we will know in real time whether somebody is entitled to a payment or not. People are not going to get into the difficulty that we've had in the past. 

TOM CONNELL:

[Interrupts] You learnt the lessons from robo-debt, basically.

PAUL FLETCHER:

It's a better, smoother user experience and customer experience for an Australian being [indistinct] …

TOM CONNELL:

[Talks over] A better way of getting their money than robo-debt, too. 

PAUL FLETCHER:

We want Australians to have the benefit of better customer service when they're dealing with government, as they expect that from their banks and their insurance companies. Technology is allowing that in business. We need to do this open government. 

TOM CONNELL:

Appreciate your time on a busy post-Budget day, Paul Fletcher, as we roll into the election as well. Thanks for your time. 

PAUL FLETCHER:

Thank you.