SUBJECT/S: Budget 2017; banks levy; welfare changes; Liberals’ cuts to education; Mark Latham

ASHLEIGH GILLON: Hello again it's Budget day - in less than three hours Scott Morrison will be on his feet in the House of Representatives delivering his Budget speech and all will be revealed.

To have a look at what we already know and some of the politics surrounding this, joining us now live from Canberra is Labor MP Tim Hammond and Liberal Senator Jane Hume. Good to see you both, thanks for your time.

Senator let's start with you; there are these reports around of a levy on the big four banks to help fund a compensation scheme for victims of misconduct. Now, Senator, I know you're on the Senate Economics Committee; you've spent much of this year looking at the conduct of the banks. How can the Government take this sort of measure without worrying that the banks could pass on some of that cost to customers?

SENATOR JANE HUME: Well this Government has been looking at a number of issues with regards to the banking sector and we're currently commissioning the Productivity Commission into a review on how the banks can better service their customers. But that's on top of also having the big four banks appear in front of Parliament four times a year and a number of additional inquiries that are going on through the Senate as we speak.

GILLON: So again, though, Jane Hume, if this levy does go ahead as we understand it will, you're on Sky News, could the Government, if it took that sort of measure, which we're expecting to be confirmed in a couple of hours, could that actually work without customers, mum and dad investors, being hurt in the process?

HUME: Well I don't want to speculate on exactly what it is we might see in the Budget in the next couple of hours - I think that all will be revealed at 7:30 and we'll get a better understanding then about what exactly the implications of any measure might be.

GILLON: Tim could this be a way to wedge Labor? Would it take the sting out of the attack we've heard from Labor and the suggestion from Labor that the Coalition has been in bed with the banks, and not willing to stand up to them?

TIM HAMMOND MP, SHADOW MINISTER FOR CONSUMER AFFAIRS: Good afternoon, Ashleigh and also to Jane. Look, not at all. The more and more I read of what to expect tonight the more and more this is shaping up to what I call a 'Reverse Robin Hood' Budget, where money will be taken from the poor and given to the rich. And this smokescreen about a potential bank levy is a terrific example about how the devil really is in the detail. I mean let's peel that back and have a bit of a look at what's actually going on here. Firstly it does nothing to address the fact that we are still looking at a $50 billion tax cut for businesses at the expense of mums and dads. Secondly, $7 billion of that proposed tax cut goes to the big banks. Thirdly, if this measure or this levy is put in place...

GILLON: Sure I understand, but if this levy goes ahead as I understand it it's $6 billion that it'd raise over four years so that sort of cuts that down doesn't it?

HAMMOND: Not if you look at the ultimate result of this proposed tax cut to big business because, again, the sting is in the tail. There is absolutely nothing about any of this which would indicate that the ones who would otherwise have to fork out for this are the mums and dads by the banks simply passing on the cost of doing business for this levy to them. What it fundamentally underpins is something that Labor has been crying out for - and resonated by the community - for a very long time now, and that is fix this with a Royal Commission.

GILLON: Okay so you don't suggest that Labor would be keen to support this concept of a levy on the big banks when you know it would be going to this fund for people who have been victims of misconduct of the banks? Surely that's something that Labor would be cheering on?

HAMMOND: Well, look, let's talk about victims. And what we hear in relation to mums and dads who are constantly stung by the banks - who are making record profits - where's their assurance that this $6 billion is simply not going to be passed on by way of extra fees and charges, which mums and dads are going to have to pay anyway? I can't see anything in this proposed announcement that is likely to give us any comfort at all that the mums and dads who are investing their hard-earned funds with these banks will actually be protected.

GILLON: Let's look at some of the other changes we're expecting. We're expecting some pretty major welfare changes. Jane Hume we've heard today a story in the Daily Telegraph suggesting that the Government's going to introduce a demerit point system for welfare recipients who don't turn up for job interviews or Work-for-the-Dole appointments. We've heard Government ministers speaking a bit about changes in this space over the last couple of weeks. Mr Turnbull keeps talking about fairness in this Budget. Do you think this sort of carrot and stick approach is fair, and will it work? Is this not perhaps a bit too harsh, some of the measures being reported on today?

HUME: Well, Ash, I think what we'll see in this Budget is a message of fairness, a message of opportunity and a message of security. Again, I'm not going to speculate on what the measures may be that are announced in the Budget this evening. But I will say that the Coalition supports the understanding that welfare is a social compact, that welfare is not government money, it's taxpayer money. There is an understanding that people who receive welfare will actively look for work.

GILLON: Tim what's your view on this? We know that this is something that Labor's been looking at as well over the years - how to tackle this problem without introducing too-harsh a measure in terms of those job seekers who would then get their payments suspended.

HAMMOND: Yeah still lots of unanswered questions around whether the rubber of this proposal actually hits the road. Firstly, how much is the proposed system actually going to cost? Secondly what sort of benefit will it really deliver when we are talking about those vulnerable in society who are marginalised and who do require that level of support. But again it kind of goes back to this theme of where is the money coming from and who is it really going to benefit? Another great example of a 'Reverse Robin Hood'. So let's just wait and see how it goes, but I would really like to think that what is not going to come out from this Budget is those who are vulnerable in our society being targeted even further.

GILLON: Well let's look at a policy where we do have all the details. The education minister Simon Birmingham of course released the schools policy and school funding reforms last week. We have seen today that in the Party Room the former Prime Minister, Tony Abbott, along with the backbencher Kevin Andrews, stood up to criticise this plan. Zed Seselja, your colleague in the Senate, Jane Hume, he also expressed some concerns at a meeting of parents and other stakeholders in Canberra last night. Jane Hume are you concerned that the Government may need to bend its model for this funding to appease the Catholic schools in particular who are being so vocal in their criticism?

HUME: Well, look, this, the Gonski 2.0 is in fact an extraordinarily fair and transparent model. It provides an additional $18.6 billion in funding and all schools will benefit from that increase in funding. There are some schools that are coming off a higher base and their growth in funding will not increase as fast as those government schools or some independent schools. But overall the policy has actually been met with considerable acclaim from a number of different stakeholders and interest groups and certainly it will provide clarity, and fairness, and transparency to schools, to school groups and to parents and students.

GILLON: We did see the Gonski 2.0 'hitlist' as it's been released today it showed that along with the 24 independent schools there's also 27 Catholic schools, particularly in the ACT, that are in line for funding cuts over the next four years if this funding formula is strictly applied. I'm keen to know, though, Jane Hume, do you think that there should be any modifications, any bending of that formula, especially when it does come to those schools in the ACT?

HUME: Well the most important part of this policy is consistency across the states and consistency across the country. My understanding is that the ATC(sic) was one part of the 27 different deals, different funding models that had been in place, that had distortive effects. So those schools will be affected but on the whole the vast majority of schools will benefit greatly from the $18.6 billion in increased funding.

GILLON: Tim Hammond we keep hearing from Labor over and over again that this represents a $22 billion cut to school funding. Is that line of attack really fair for Labor to make? I know last week on PM Agenda David Speers put the question to Tanya Plibersek, will Labor commit to keeping $22 billion extra there for school funding if Bill Shorten the next Prime Minister and she certainly couldn't commit to that. So is that attack line really a bit hollow from Labor?

HAMMOND: Ashley, our community quite rightly expects an Opposition that constantly puts forward an alternative view, and alternative policies, and presents themselves as an alternative choice for Government.

GILLON: Sure, but...

HAMMOND: We've done that very very consistently leading up to the election, making it very clear that Labor would commit to fully implementing Gonski at a cost of over $30 billion. Now what we're seeing here, in terms of presenting an alternative view, is that $22 billion of Labor's proposal is being ripped out, under these announcements, to the ire of not just us - you don't just have to take our word for it - but look at what the educators have to say. The educators are incredibly well versed and across the detail in this sphere. The Catholic educators have made it very clear that what we're going to see here as a result of these announcements are increased school fees, again hurting everyday mums and dads. What we're not seeing here is a consistent commitment from the Government in relation to properly funding kids and giving them the education that they deserve.

GILLON: Tim Hammond just finally, and this is a topic that I'm just going to ask you about this afternoon, Mark Latham, him switching over to the Liberal Democrats. Is this a big loss for Labor?

HAMMOND: Wow! No, I would not describe that as a 'big loss' whatsoever! I couldn't endorse the words of Chris Bowen on the doors this morning enough: what we're seeing here, really sadly, is someone who once played a role in the Labor Party and, to quote a line from Gotye, now he's just somebody that we used to know. So relevance deprivation syndrome writ large here - we'll get on with our job.

GILLON: Tim Hammond, Jane Hume, good to see you, thank you for joining us when we still have so many details of the Budget to be revealed in just a couple of hours. Appreciate your time with us this afternoon.

HUME: Thanks Ash.

HAMMOND: Thank you.