RAFAEL EPSTEIN:I want to start Bruce Billson with you, the elevation if I can call it that of Richard Di Natale. I suppose he is just replacing Christine Milne as leader of the Greens. Especially around something like petrol indexation, excise indexation, any feeling or vibe that you might have a more willing partner in the Senate now?

MINISTER FOR SMALL BUSINESS, BRUCE BILLSON:Well let's hope so.

It was the Hawke Government that introduced indexation of fuel excise and when the funding was around not to require indexation the Howard Government removed it and we've sought to reintroduce it to help fund infrastructure, construction and road maintenance. It is something that we always thought the Greens would be interested in and -

EPSTEIN: There was some internal dissension around it, have you got any idea if they are now more friendly under Richard Di Natale?

BILLSON: Look it's too early to call, I haven't seen anything specific that points to a change of heart that would seem to more reflect the Green's general policy position but good luck to Richard and best wishes to Christine as well with whatever she does next. I've only had the pleasure of partnering Richard in a game of cricket where he bowled and I kept and we seemed to do all right together. Let's hope there is an opportunity to collaborate on policies of national interest.

EPSTEIN: Stephen Jones, I would like to ask you if you see a change and also a sub-question - are they a significant threat to the ALP vote? Because they would like to be, but do you think they will change significantly under Richard Di Natale?

SHADOW ASSISTANT MINISTER FOR HEALTH, STEPHEN JONES: Look, I couldn't say. We will work that out over the months and years ahead, best wishes to Christine Milne. She has been a fierce advocate for her party in the near 20 years she has been in Parliament and I look forward to having a constructive relationship with Richard. There will be things we agree on, there will be things we disagree on; we will see how they fall out over the coming months. In terms of the Greens as a political party, they campaign against Labor but they don't campaign against the Government. So we are disappointed about that, they are a left of centre party but they seem to spend all their time criticising us and not enough time criticising the Government. If I have a criticism of them, that is what it is. But we will look to see if we can strike a proper relationship and a productive relationship with Richard in his new role as the leader.

EPSTEIN: Okay, Bruce Billson, I would actually like to know something. Kevin Andrews, your senior Melbourne ministerial colleague, he put out a tweet and I just want to know whether you agree with him. I'm sure there a diversity of views within the Coalition as always. Kevin Andrews says: "Does it really matter who will lead the freedom hating Greens? They are anti-family and community destroying policies remain." Has he got a point? Anti-family and community destroying?

BILLSON: Well, I'm not sure what their policy position will be. I know they've certainly been an East-West Link destroying influence on the Labor Party in fact. It links up with what Stephen was saying, that in order to protect inner Melbourne seats from the surge of the Greens you saw Labor abandon a project that is really significant to our state and to our cities and -

EPSTEIN: I am glad you dodged it in some ways, because I -

BILLSON: Did you like that? I thought that was quite a deft move actually -

EPSTEIN: I'm curious about the East-West Link, let me tell you why. West Australia's upset at their upcoming GST redistribution so they are going to get a one-off $500 million road grant. I just want to have a listen to what the WA Premier said in response when the Prime Minister was in the west delivering that half billion.

[Excerpt of Western Australian Premier, Colin Barnett]

Key phrase there, Bruce Billson, from the WA Premier was level crossings. Labor has got some level crossings they wouldn't mind using the East-West funding for. What is the chance you think?

BILLSON: Well the East-West funding is for East-West and you would of seen no doubt with your researchers there that CityLink has just put out another alert telling motorists that there are delays back to the Bolte Bridge and all sorts of congestion in inner Melbourne and what we have always said -

ESPTEIN: I just wonder if with these level crossings in Perth, they are not too different to level crossings in Melbourne I imagine?

BILLSON: Well its a shovel-ready project we've got in Melbourne in East-West Link. We've also made it clear to the State Government that if under their decision to privatise public assets they want to take advantage of the asset privatisation incentive scheme that we are offering which provides more resources for whatever infrastructure projects a state government might choose and -

EPSTEIN: Different pile of money -

BILLSON: Well a different process as well and a different set of circumstances. Western Australia is faced with getting about one in three dollars back from the GST its citizens pay. That is a real pressure point on the federation. The states want to leave the formula that brought about that outcome largely in place but recognise that there is a need to deal with what a real pressure on the federation and the distribution of tax. We've stepped in to try and keep the federation healthy and try and target resources into productivity, jobs and growth supporting infrastructure activities. So different sets of circumstances, but the door is open through another avenue for the state of Victoria.

EPSTEIN: We will see. Stephen Jones, I'm not sure what the roads are like at your place and I'm not sure you are across the East-West issue. However, let me ask you as a political observer perhaps more than a participant, do you think the federal Government would pull money out or are they likely to eventually fund a Labor Government road project?

JONES: I think Tony Abbot has got to get over his pig-headed approach to funding urban rail. The problem with his position on Melbourne Metro is that he wants to give $3 billion to a project that the people of Victoria have said resoundingly that they don't want and -

EPSTEIN: But they are not going to change their position, so the question is do you think they should give it to another road or -

JONES: This is a project that Melbourne needs. He wants to put money into a project that hasn't even had a cost-benefit analysis process. We know that the Melbourne Metro project is one that stacks up, it is one that Melbourne needs and in fact Tony Abbot has said that we will only fund road projects, we are not going to fund these rail projects. Every transport planner in the country knows that you have to do both. It is not a question of doing one and not the other, you need to have both parts of the network working together. Frankly, Victoria and the rest of Australia needs the Commonwealth working in partnership, not at odds. So $3 billion for a project that Melbourne doesn't want versus a project that they do want and that the do need, the Commonwealth should come to the party.

EPSTEIN: I will get to your calls in a moment. Bruce Billson, I'm sure you want to spruik the tantalising glimpse you have given around quicker depreciation for small business. Let me ask you a Budget question, is this preparation for an early election? It looks like a very election-friendly document, next week's Budget.

BILLSON: No, it's a preparation - well not even preparation - it's a continuation of work that we are doing to not only repair the Budget mess we inherited but actually generate economic growth, economic opportunities, jobs and an improved future for our nation.

EPSTEIN: Budget emergency seems to have disappeared?

BILLSON: Well, because we have halved the debt and deficit trajectory that we inherited from Labor. So we have made good progress, but we have to stay focussed on that task. That is why new measures that will be announced on Tuesday have had to be funded from savings within the Budget. What we have clearly done is we've said families and in particular childcare is a priority. Jobs is a central focus and small business is crucial to achieving the kind of job opportunity and economic growth that we need. Frankly, we've got to recover the 519,000 jobs lost in small business under the previous Rudd-Gillard-Rudd Government. So there is plenty to be done and -

EPSTEIN: Senior Government people airing the idea with me of an early election, I'm not sure if it is feasible. But is it going to happen?

BILLSON: Well I don't want to get into your fireside chats Raf. All I can do is -

EPSTEIN: They are pretty cosy.

BILLSON: Are they? That is nice and I hope that the autumn weather adds to it. But what is constantly my focus is what we can do to energise enterprise. Get the conditions right, get the incentives in place, encourage small businesses who are huge job generators in our economy to take that next step and invest and grow, to recruit that extra one or two people. There are opportunities right across our country, not just in particular regions and that is why it's such a key focus of our work and our Budget preparation.

EPSTEIN: Stephen Jones, on next week's Budget - in government Labor was quite keen on means-testing money that comes from government. It looks like we are definitely going to get some sorts of means-test on the pension, we are definitely going to get some sort of means-test on the cost of childcare. They sound like policies that are very much something Labor could support.

JONES: Before I get to that, I do have to pull Bruce up on this nonsense that he is peddling that the Government is fixed the Budget problem. They have doubled it. They have doubled it by giving interest free loans to the Reserve Bank that they didn't ask for, they have doubled it by turning their back on revenue streams that they could otherwise be using for schools, for hospitals, for infrastructure. So let's not have this nonsense that last year we had a Budget emergency, we've fixed it and now we can do something different. They have put nothing in place which deals with those long term issues; in fact they have made them worse. When it comes to small business, well the proof is in the pudding and small business and consumers and investors around the country are voting with their feet. Confidence has never been worse, I hope that it turns around, I sincerely hope that it turns around -

EPSTEIN: On the politics, assets tests for a pension and for childcare - that is straight out of a Labor playbook. They are the things you can support, aren't they?

JONES: We say that we've got to look at retirement incomes as a whole not just look at the pension side of things but also look at the superannuation side of things. Which is why we have actually offered up to the Government Raf a proposition around changing the taxation rules for superannuation and -

EPSTEIN: Sure and I'm happy to ask questions about that, but we probably need both don't we? Both your proposal and the Governments proposal? You've got to tighten the top-end on both pensions and super?

JONES: Look in terms of the pension stuff, we aren't going to help the Government break their promises. They went to the last election with a clear set of promises that there would be no changes to pensions and we think they should be kept honest to that. If they have got some propositions that they want to take to the next election, let them put those propositions to the next election. We are simply not going to sit here and help them break their promises. We will help them with constructive alternatives and we put the superannuation taxation arrangements up as a $7 billion constructive alternative. We offer them up and we hope that they bring them in on Tuesday next week.

EPSTEIN: Bruce Billson, super changes? If you want you get your pension asset issue through if you accepted Labor's super idea. Do you agree at least in principle that we need to have a go at the top end of both?

BILLSON: Well in the spirit of Fight Club can I just deal with some of the things Stephen said first and then come to your question. I meant what we are faced with when we were elected was the Labor Party raided the Reserve Bank to pull special dividends out of it and make the Reserve Bank and its crucial role less secure than it needed to be at a time of global economic insecurity. In my own area, they didn't fund the ACCC properly; they were technically insolvent when we were elected. We have had to put money into those things because as they pursued a fiction of a Budget surplus they stopped funding key organisations and key institutions that are crucial to our future.

EPSTEIN: Do you agree that the deficit figures have increased nor decreased?

BILLSON: The debt and deficit trajectory has halved. That is why I am drawing the point out, the pathway that we were hardwired into under Labor of $667 billion of debt has been halved. There is more work that needs to be done, but we don't get a clean slate of documents that shows a Budget position starting from scratch. We inherit the legacy of the previous Government and then have to deal with that as -

EPSTEIN: You've made that point but do you back the idea that if you want to do something on pensions, you need to do something on super as well? That at the top-end of both, that you need to do both?

BILLSON: Well you've seen Scott Morrison make the point that if we are going to be more targeted, if we are going to make sure that income support through the pension system goes to those who need it then we can't at the same time diminish the capacity of people to fund their own retirement. Labor is talking about a proposition they floated when they were in government and then couldn't legislate and now they are dreaming up numbers that Stephen has stretched -

JONES: Are you seriously suggesting that somebody with $2 million in their superannuation account can't fund their own retirement? I mean, mate, I'll never have that amount of money in my super account and I -

BILLSON: Well I won't either!

JONES: I want to be able to fund my own retirement. I think that people out there who are drawing earnings of $75,000 or more from their superannuation can afford to pay the marginal tax rate. I don't think any Australian would think that that was unreasonable.

EPSTEIN: Bruce Billson and Stephen Jones, I need to press pause there because its time for a traffic update.

[Traffic update]

EPSTEIN: Both willing participants today, Stephen Jones from the ALP in the Illawarra and Bruce Billson from Frankston, he is also part of Tony Abbott's cabinet of course. Les has called from Yarraville, Les what did you want to ask?

CALLER: Question for Bruce, I mean Bruce I think you are going to be pretty busy over the next few years because you have successfully killed off a car industry and you are about to sink ship building in this country. All we will have left is small businesses! Because the economy is in so much trouble that we have not got interest rates at 50 year lows and you know that is indicative of an economy that has ground to a halt. The other point is that I have got a couple of old-stager Liberal mates and they are suggesting that Joe Hockey has got to be the worst Treasurer -

EPSTEIN: Les that is a lot of commentary, do you want to tie that down to one question?

CALLER: Firstly, I think that we have got the worst Treasurer since Billy McMahon so that is saying something.

EPSTEIN: Let me ask Bruce Billson about that, you have had a go at his Treasurer and his colleague twice. Bruce Billson, worst Treasurer in decades?

BILLSON: With all due respect and courtesy to Les' questions, if I may Raf the decisions around the car industry were made when Labor was in office. So let's get past this nonsense and fiction that somehow the Abbott Government had the influence over that. All could have stopped that decision so let's get past that fiction. In the area of shipbuilding, sadly under the previous Labor Government not one new ship was commissioned in the six years under Labor. Not one new ship constructed in our country, so what we are faced with is having to build up the ship building capacity in our country and provide some greater continuity so that there is an ongoing shipbuilding requirement. That we can make sure that it is competitive, world-class and can support our defence needs. Joe is doing an outstanding job after inheriting an absolute Budget mess. Labor thought that they were clever hardwiring in spending commitments that had no funding to support them and creating inter-generational theft to pass on today's bills on to our kids. It's a tough gig and if Les was looking for more nimbleness well we haven't had a lot to work with because we have inherited such a difficult Budget position that we are going to fix like Liberal -

EPSTEIN: Stephen Jones just a quick -

JONES: Just a quick injection of fact. Bruce may not be aware of the Australian Government shipbuilding programme, but there is something called an Air Warfare Destroyer that was being built and in fact the project has just concluded. They were building them out of Newcastle, in fact they are going to have to close that down because you have made a decision that Australia is not good enough to build our subs or our ships. I think that is what Les from Yarraville is getting to. That is a decision of your Government, we were building ships on our watch.

EPSTEIN: If I can gentlemen, Peter has called from Carlton.

CALLER: Costello in a speech recently stated that the Government should review super as [inaudible] savings into which it can dip its feet so to speak. But I wanted to float the idea that 20 or 30 years from now, not only will it be doing that but the idea of super for savings for retirement will be obsolete. Because I think that a lot of this money will be just taken by successive governments to pay down debt. One last point, if I told you at the time that they were hosting the Olympics that Greece would be bankrupt, it sounds silly. Now I would sound silly if I said that Greece won't go bankrupt. This is precisely what the Greek Government now is doing -

EPSTEIN: So you are saying that super is the wrong idea for the future Peter?

CALLER: No I think that it is a lovely idea, but I think that putting aside left or right. In the end when governments are faced with raising taxes or just taking money from super to pay down the debt that they subscribe us to, they will go for the latter option.

EPSTEIN: So hands off the super is I guess your point? Stephen Jones, are you risking making super obsolete if you start taxing the higher end?

JONES: Look far from it. We have one of the largest pools of retirement savings in the world, because of the foresight of people like Paul Keating in the 1980's. That is growing at over nine per cent a year and will continue to grow and Australians will be wealthier and better off in their retirement because of it. The issue for government is, if we are going to provide tax concessions which are the same as an expenditure in the area of superannuation should we give the majority of those tax concessions to very wealthy people who don't need government assistance to fund their own retirement -

EPSTEIN: But the proposed level is not indexed, is it? So you will hit more and more people over time?

JONES: Well, actually the proposition that we are putting, is that if you are earning over $300,000 a year than you pay more on your contributions. At the pension stage of your fund if you are earning over $75,000 a year annually from the investments you have in superannuation then you pay the marginal rate of tax. I think most Australians would be surprised -

EPSTEIN: You do catch more people over time?

JONES: Yes, you will catch more people over time. If it appears that this is not working as it is intended to then of course you look at those indexation rates. But the general proposition stands and it is right - if you have got over $2 million in your super account you are earning over $75,000 a year and you should pay the marginal rate of tax.

EPSTEIN: Okay gentlemen I need to leave it there, thank you.