Sky News Australian Agenda Mark Butler, Minister for Mental Health and Ageing 18 November 2012

Interview with Mark Butler Australian Agenda program, 18 November 2012

Peter van Onselen: We're joined now out of Adelaide by the Minister for Mental Health and Ageing Mark Butler. Mr Butler, welcome to the program.

Mark Butler: Good morning, Peter, good morning, Paul.

Peter van Onselen: Can I just ask you off the top about the royal commission that Paul Kelly's just been editorialising on. We've got in terms of Government initiatives, I suppose, the NDIS, we've got various other initiatives including a response to Gonski, is the royal commission just another example of an announcement of something that the Government is doing that will no way be complete by the time the tenure of this Government is finished?

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Mark Butler: Well, that's a bit of speculation. I mean, there's no way it will be complete by the time of the next election and it may still be going by the time of the election after that. Here in South Australia we had a similar enquiry for a state that really is only 7% or 8% of the population and that enquiry went for three years in the middle part of the last decade. I think we all understand that this is going to be a long enquiry but I think it's a terribly important enquiry. The question of institutional child abuse and the institutional responses to child sex abuse have been bubbling along now for many, many years and I think what we have discovered is that states doing their own enquiries, institutions doing their own internal enquiries, haven't dealt with this issue sufficiently. A national royal commission, as Paul says, but hopefully with significant state cooperation, I think is the only way that we're going to make real progress on this question as a nation.

Peter van Onselen: But, minister, Paul Kelly's point is a fair one, isn't it, about the terms of reference. This idea that it will either be too broad and therefore drag on forever or it might be too narrow and therefore not sort of seize the moment that people are achieving that is a fair concern, isn't it?

Mark Butler: It's a fair statement that there are two options here and both of them have consequences. I think what we learned in South Australia is that a broad enquiry which allows people if they want to come to the enquiry and have their say very significantly lances the boil of concerns that particularly victims and their families have had that this issue has been covered up for far too long. So this is a job of work that Nicola Roxon the Attorney-General is doing now, particularly talking to her state and territory

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colleagues. But I think we understand from experience that an enquiry that really gets to the bottom of this and convinces families and victims of child sex abuse that they have been able to have their say will be a long one.

Paul Kelly: I think from that answer, minister, you've indicated that you would like to see a broadbased enquiry. If that in fact is correct can I just ask to what extent will the enquiry deal with Commonwealth institutions such as child abuse in detention centres, and to what extent will it deal with indigenous child abuse?

Mark Butler: I think these are issues that Nicola Roxon the Attorney-General is still working through so it's best that those questions be directed to her. I think we have made it clear, the Prime Minister has made it clear, that this is a focus on institutional responses to child sex abuse and allegations of child sex abuse in its broader sense.

Paul Kelly: Can I just ask again about the states. You just referred to the role of the states and the importance for the states to cooperate. Can I just ask therefore isn't it important to go the whole way and have this royal commission established in fact as a joint Commonwealth-State royal commission?

Mark Butler:

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Well that is a possibility, a legal possibility, and something that has precedent. Again Nicola Roxon is talking to her state and territory colleagues about the role that they will play, I think the initial responses from premieres Baillieu and O'Farrell, both which jurisdictions have an enquiry underway, was very encouraging. So I think the work that they are going to do between now and the end of the year hopefully will lead to the maximum amount of cooperation between the jurisdictions that are possible. Now whether that leads to a joint royal commission or something of another nature by way of cooperation I think we'll see over coming weeks.

Peter van Onselen: On the National Disability Insurance Scheme it was announced a few months back to some fanfare. Some commentators, myself included, were critical of the lack of detail about funding mechanisms beyond the trial stage. There have been reports more recently that the possible funding of this might be blowing out by literally billions of dollars. Can I ask you this, is it reasonable to say that the only way that the Government can take true credit for implementing an NDIS is if you do in the coming years come up with a way of genuinely affording the full scheme as opposed to simply funding a trial?

Mark Butler: Well, I think it's important to state at the outset though how far we've come very quickly. We only received the Productivity Commission report last year and this year we've been working with states and territories, which have traditionally been the drivers of disability services, to get to the point where we now have a number of trials running across the country significantly funded by the Commonwealth across a range of different areas for very young children, for other children and for adults. So we have come an extraordinary long way. I think we have been very clear, Penny Wong, Wayne

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Swan and others have been very clear that in the lead-in to next year's budget we'll have more to say about funding mechanisms. So this is a very big project. It's a project of a similar size and status and level of complexity, frankly, of things like Medicare and we've gone in with our eyes wide open that we know that this is a very substantial funding commitment by the nation and we are working very hard with our state and territory colleagues to make sure that we finalise that detail as soon as possible. We've been clear that the next budget we see as the timeline for that finalisation and we are working very hard over the coming months to get that.

Peter van Onselen: I guess my point though is in terms of the need to have detail which are hopefully forthcoming in terms of full funding into the future is that there's no shared arrangements yet in terms how funding will be divvied up between the states and the Commonwealth. At the moment we have reports like that of Nick Greiner in terms of the GST talking about erosion of possible funding bases for the states. If they're going to be on the line for the NDIS, particularly one that according to recent reports might be costing more than was originally anticipated by the Productivity Commission, then it's all-important, isn't it, that if the Labor Party in the next 10 or 20 or 30 years wants to hold up the introduction of the NDIS as something like it holds up bringing in something like Medicare, then it really does need to find that funding.

Mark Butler: That's right. It's got to be a sustainable system and the very high expectations out in the community about this changing the lives of hundreds of thousands of people living with particularly serious disability and their families. So we are under no illusions about the levels of expectation and under no illusions that this is a very substantial funding commitment by the Commonwealth in particular, but also by states which is why our

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ministers, Minister Macklin and our financial ministers are working so hard on finalising those details in the coming months.

Paul Kelly: On that point, minister, you stress all the time that this is a very substantial funding commitment. Given that on the Government's own figures the budget will be on a very thin surplus, if that, over the next few years how is this enormous scheme going to be funded without either some form of taxation increase or very significant spending cuts?

Mark Butler: Well you're not going to be able to get me to outline the details of our funding commitments around this today, Paul. As I have said Minister Wong, the Treasury, the Treasurer, Minister Macklin are working very hard on this and we've made clear that in the lead-in to or at the budget next year, so over coming months, we will put on the table our proposals for the funding of the NDIS.

Peter van Onselen: Can I ask you in your portfolio area of mental health there is a pretty large bag of money that's being put into the mental health area. Some mental health experts that I've spoken to have expressed some concern that despite the money being there it's not going out the door fast enough since it's been announced. How do you respond to that?

Mark Butler:

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Well it depends on what you define as fast enough. I mean the money is going out the door, to use your terminology, Peter, in accordance with the budget we handed down last year. Some of the programs that we funded in last year's record mental health reform package are very innovative, they're very new, and they took a while to design. For example the Partners in Recovery Program, the largest amount of money in the package, is focused on giving very coordinated support to the most severely and chronically unwell in the community. Now that is a completely revolutionary approach and it's taken some time to work with the sector and work with clinicians and others to design that program and it's now out for application by organisations, in particular Medicare local regions. So we're doing this in a way that reflects, I guess, the type of program we've funded. A number of the programs we were able to start scaling up pretty much immediately because they were proven and tested programs and it was just about providing more money to them.

Peter van Onselen: Can I jump in and ask, sorry, because the way that this has been raised with me is that there has been some concern, I guess, that with the tightening fiscal situation that if the money isn't going out the door quick enough there's a risk of some programs having money clawed back by a Treasury pretty keen to get the surplus. Can you rule that out categorically that we won't see any of that happening between now and the next budget?

Mark Butler: We've just had the mid-year budget review and it was a review process where everything was, I can assure you, raked over with a fine tooth comb by Treasury and Finance, and still the mental health reform package, the aged care reform package came through unscathed because across the Government we see this as such a critical

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piece of social policy reform that's been long overdue. We are committed to implementing those reform packages.

Paul Kelly: Can I just ask you about ageing. At what point do we really hit a fiscal crunch when it comes to the ageing of the population given that this will hurt the revenue base and build up the outlay side of the budget. How long before we really have to confront this challenge?

Mark Butler: Well there's no fiscal cliff-type moment as we’re confronting the US, Paul, as you know, this is a slow burn. What we've found though is that the first experience of it really came last year as the first of the baby boomers started to turn 65. It's less than 10 years ago that we had about 50,000 people in Australia turn 65 every year - 50,000. Last year it was closer to 140,000, and in coming years it's going to hover around 120,000 or 130,000 reaching pension eligibility age every year. Last year for the first time we had more Australians reaching that pension age than were reaching working age. So without immigration and without continuing workforce participation by people in their 60s we would have a real struggle growing our workforce. So it's something that has started, and you're right, the revenue implications and the spending implications of the retirement of the baby boomer generation are very, very substantial. But they are things that we've been planning for for some time. Our fiscal strategy as a Government for example at capping real spending at 2% per year once GDP growth is at or above trend defers, the Treasury tells, us defers the structural deficit because of the revenue and spending implications of ageing by a full decade from about 2020 to about 2030. We have a range of other things that we've been doing, like means testing the private health insurance rebate on the spending side, like extending the pension

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eligibility age to 67 on the spending side, which will mean that we are so much better a position than really any other developed country in the world in dealing with this very significant demographic shift.

Paul Kelly: Sure, but if it's that significant isn't the reality here in the long term, given what the average lifespan is now, that we have to further lift the pension age eligibility? I mean isn't that the reality here?

Mark Butler: Well we haven't even really started the shift from 65 to 67.

Paul Kelly: I know, but we have to go further, surely.

Mark Butler: Well I think we've taken the view that the shift from 65 to 67 is appropriate, it's about the same age that you'll see other western countries shifting their pension age to as well at the moment. But this is going to be a very significant issue for federal governments for the next three or four decades dealing with these revenue issues and these spending issues.

Peter van Onselen:

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Minister, how can you say it's appropriate if when the pension age of 65 came in life expectancy was roughly 65, now life expectancy has blown out to about 85 or so and you're putting the pension age up by only two years.

Mark Butler: Yes, but there are a whole range of different issues as well. To a very significant degree retirement is supported by home ownership. Increasingly retirement is supported also by a person's own superannuation and that will only increase into the future. So we think we've got this balance right, we think we're also able at the same time because of the savings through the increase to 67 we are able to deliver the largest ever increase to the pension just to maximise the degree to which people in a longer retirement, as you point out, are going to have financial security.

Peter van Onselen: Minister, you're a South Australian MP for the Labor Party. The seat of Boothby is the most marginal Coalition seat courtesy of the redistribution that was put in place, do you guys think you can really win that? Of course if the Government can't pick up seats at the next election as a minority government no matter how much closer it gets in the polls it obviously won't be able to retain government.

Mark Butler: Well, we're going to give it a red hot go. We've got a great candidate who ran a campaign last time and it's not just the redistribution, the redistribution shaved 0.4% or something off Andrew Southcott's margin. The reason why we're that close is a very good campaign last time by a very good candidate. So we're going to give it a red hot go. We already do pretty well in South Australia, we hold a majority of the lower house
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seats here in South Australia, but we think Boothby is a seat that we could pick up if we continue to run a good campaign there.

Peter van Onselen: Mark Butler, Minister For Mental Health and Ageing we appreciate you joining us on Australian Agenda, thanks for your company.

Mark Butler: Thank you very much.

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Mark Butler

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