Treasurer Joe Hockey admits $7 Medicare co-payment is a tax on Q and A program

HE sat. And he squirmed. He called it a ‘payment’. He even said we could call it a ‘rabbit’. But Joe Hockey was finally forced to admit the $7 co-payment is a tax.

HE was laughed at and heckled by a sceptical Q and A audience in what John Howard described as “battlers” country, but Treasurer Joe Hockey stood by his controversial budget last night.

Yet it wasn’t without an effective admission the Abbott government broke its promise not to introduce new taxes without an election.

It didn’t take long to get to broken promises, with one audience member asking whether it is inevitable that politicians need to lie to get elected.

“Do you think that an Opposition that was truly truthful would ever win an election,” he asked Mr Hockey.

“No I don’t think you have to lie to get elected,” he replied, before the room broke out in laughter.

It descended into giggles again when he stood by claims no “direct promises” were broken in the budget.

Host Tony Jones interrupted issuing a warning to the audience.

“You’re here to listen. You’re here to ask questions. It’s not a good idea to heckle,” he said.

But the Penrith audience weren’t the only ones with the tough questions.

On the Medicare co-payment, Tony Jones grilled the Treasurer, asking: “This co-payment you’ve agreed is effectively a tax on people going to the doctor. Is that a broken promise since you said there would be no taxes without an election?”

“Well, I don’t accept — it’s a payment,” Hockey said. “You can call it a tax ... Given that of the $7, $2 goes to the doctor, I didn’t know doctors in that situation are receiving taxes, but your call. You want to call it a tax, you can call it anything you want, you can call it a rabbit.”

Mr Hockey also gave his strongest indication yet that a first-term Abbott government could change the age at which people could access their retirement savings.

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Prime Minister Tony Abbott promised before the election not to tinker with the superannuation system, but last night the Treasurer admitted: “It is on my mind, and it’s on Tony Abbott’s mind.”

The age at which people can access their nest eggs — known as the preservation age — depends on their date of birth.

For those born after June 30 1964, it’s 60.

Mr Hockey said there needed to be a national conversation about the “big issue” of retirement savings, and the government would have more to say about it further down the track.

When pressed on the issue, the treasurer confirmed changes could be made sooner rather than later to allow people time to prepare.

“I suspect it will be in this term, because I think what we’re trying to do is give people a long lead time,” Mr Hockey said.

The government announced in last week’s federal budget that eligibility for the age pension will be increased to 70 years by July 2035.

Originally published as Treasurer Joe Hockey admits $7 Medicare co-payment is a tax on Q and A program