Transcript: 3AW Drive interview with Tom Elliott

2 March 2016

The Hon Alan Tudge MP

Minister for Human Services
Topics: 
Superannuation, Upcoming election, Welfare cheats
E&OE

TOM ELLIOTT:

Alan Tudge, good afternoon.

MINISTER TUDGE:

G’day Tom.

TOM ELLIOTT:

First, welfare rorts. I understand you are taking a tougher line on people who cheat the taxpayer. What are you going to do about it?

MINISTER TUDGE:

We are Tom. There are about 270,000 people out there who owe money to the taxpayer who are refusing to pay it back.

TOM ELLIOTT:

How much money? Are we talking five grand or 10 grand per person?

MINISTER TUDGE:

About $4,000 per person on average. But it all adds up and there is about $870 million which is owed by these people who know that they owe the government money but are just refusing to pay it.

TOM ELLIOTT:

So these are people who have in some way rorted the welfare system. There was a story running this morning about a woman claiming several widows’ pensions or something like that. They had been identified, the amount has been — well it is clear what it is — and is simply refusing to pay it back.

MINISTER TUDGE:

That is correct. Now, if you have been identified as receiving an overpayment or have defrauded the system and you are still on welfare then we will take a proportion of that welfare to get it back.

But if you have exited the welfare system, it is harder for us to recover the money. So we are putting in place a few things to make it easier for us to recover that money and create greater penalties on them to give it to us.

The first thing we are doing is putting an interest charge on that debt so that they can’t effectively have an interest free loan from the Government.

Second, we are getting rid of what is called the statute of limitations which means that if you have got debt at the moment and it was from six years ago, effectively it gets wiped off.

TOM ELLIOTT:

Does it?

MINISTER TUDGE:

It does. So we are getting rid of that.

TOM ELLIOTT:

So if you have rorted the system…

MINISTER TUDGE:

So if you have rorted the system and you wait six years and you haven’t paid it back, then you can get away with that. We are getting rid of that provision so that there is no statute of limitations on paying back that debt.

TOM ELLIOTT:

I am amazed that there was a statute of limitations. How much interest do you charge, by the way?

MINISTER TUDGE:

It will be nine per cent, which is the same as what the ATO charges. That will be charged if an individual who has a debt doesn’t enter into an agreement with us to pay it over a period of time.

Obviously we take into account their personal financial circumstances in that regard. But if they don’t cooperate, then the interest rate will apply.

TOM ELLIOTT:

Can I ask you, so you say these are people who have rorted the welfare system but who are now not receiving welfare — that is why you can’t take it out of their existing receipts?

MINISTER TUDGE:

Yep.

TOM ELLIOTT:

Okay, the Sheriff for example, Brendan Facey I think his name is, here in Victoria, he goes out all the time — him and his people — and they seize cars and break into houses and they do all sorts of things. Why don’t you just hand the debt over to the Sheriff to collect?

MINISTER TUDGE:

Sometimes where we know there is actual fraud we will of course inform the police as well and they will prosecute those individuals and they will get it back.

In our instance when it is welfare — sometimes it is welfare overpayments — and we may not be able to prove deliberate fraud, so there will be a bill given to them. They have to pay it back, but sometimes these people go dark as well and you can’t literally find them to get it back from them.

TOM ELLIOTT:

Where I live, I get letters all the time for people who used to live there, you know years and years and years ago. I ring up the various agencies and say they are not here, they are somewhere else. They just ignore me. They keep sending letters, I have never understood that.

MINISTER TUDGE:

That is exactly right and the Department says to me that some people go dark. They literally go off the grid. Now presumably they are surviving off cash payments somewhere and therefore it is hard to get hold of them or tackle them down through the tax system.

But I will just mention the third measure that we have introduced today, is to crack down on people who are leaving the country. So if you are leaving the country and you have got a debt, we may in fact prevent you from leaving the country.

You can’t go on a holiday if you’ve got a debt and you haven’t paid it back and entered into a repayment plan.

TOM ELLIOTT:

Do you think people, I mean, I know of someone who is much younger than me, who was in receipt of Centrelink payments or the dole, or whatever it is called now, and went on a three week holiday to Bali.

I just found it astonishing that you don’t have any work, you are receiving money from the Government, but you go away for three weeks to Bali. Should people be allowed to do that?

MINISTER TUDGE:

That is a tougher one obviously. The Newstart Allowance is not a lot of money and if you are just surviving on Newstart, then I don’t think you would be able to afford to go to Bali frankly.

This particular individual who is going on a holiday to Bali, presumably he has got work from somewhere else or has got cash from somewhere else. Maybe he isn’t declaring it to us to have enough money to do that trip to Bali.

Newstart is supposed to be there to help you out when you are on tough times. So that when you are out of a job, you are getting some sustenance, you can pay for your rent, your food, your clothing etc. It is not supposed to be there as a lifestyle choice as such...

TOM ELLIOTT:

Can I ask you…

MINISTER TUDGE:

…help you out before you get into a job again.

TOM ELLIOTT:

Do you think we have, collectively, an attitudinal problem with welfare? It seems to be that a lot of people just regard rorting the welfare system just like rorting the tax system — it is just a victimless crime. I see it as a taxpayer. I see it the same as stealing money from me.

MINISTER TUDGE:

There certainly are people who consider it like that and we are determined to crack down on that and we are putting more money into our compliance measures to try to crack down on it.

Each year, in fact, we are identifying more and more fraud and overpayments which we were then going out to try to recoup for the taxpayer. These are huge sums of money we are talking about.

TOM ELLIOTT:

That is almost 1 billion dollars.

MINISTER TUDGE:

Well it is a billion. That is just the billion that those people who owe debt and refuse to pay it back. There is actually about $3 billion in total of overpayments which have been made, sometimes purely because people forgot to update for example their income for that particular year...

TOM ELLIOTT:

Yeah, okay, can I ask you a couple of other things? The Age has run a line today saying that in the future we will not collectively be able to afford the pension as it currently is.

So if you’re my age, 48, in 20 years when I come to retire, the pension will be either less or you know, far fewer people will get it. Is that the future you see for the pension or are we going to have to ween ourselves off it?

MINISTER TUDGE:

In some respects, your generation Tom, and I am in your generation as well, by the time we get to pension age, we will have had the superannuation scheme in place for our entire working life.

So I think there is an expectation at least for our generation to be more reliant on the superannuation scheme and less reliant on the pension. At the moment if you are an elderly person, you may have only had super for a very small amount of time — if at all.

I think in the future it will be different. We do have a problem with the overall sustainability of welfare payments and pension payments. It is a third of the budget in total and still growing by about four per cent per annum, which is clearly too fast.

That is why we are doing everything we can to have these payments targeted, making sure there is integrity in the system and recovering debt when there are overpayments.

TOM ELLIOTT:

Finally, there has been a lot of debate recently about when the next Federal election could be held. It could be held as late as October. But the rumour coming out of Canberra is that it will be held in early July. Your comment please.

MINISTER TUDGE:

Your guess is as good as mine on that one actually.

TOM ELLIOTT:

No it is not, because I am not a Minister in the Government. You are.

MINISTER TUDGE:

At the end of the day, the decision of when the election is called is purely one for the Prime Minister.

TOM ELLIOTT:

Surely some of you must be talking to him about this.

MINISTER TUDGE:

We all have our views in terms of when it might be called and why it might be called at that particular time, but at the end of the day, it is a call for the Prime Minister. It will be in the second half of the year, is our expectation. That is what the Prime Minister has always been saying.

Sometime between July and October, which is not very many months away and then everybody will be going back to the polls.

TOM ELLIOTT:

Alan Tudge, thank you for your time.

MINISTER TUDGE:

Thanks so much Tom.

[ENDS]