HOLLY STEARNES, HOST: The Prime Minister has been out this morning spruiking his Medicare package. It's Medicare, Medicare, Medicare this morning. Joining me now to discuss is Assistant Trade Minister Tim Ayres. Tim, good morning. All sounds pretty good, but how are you going to pay for it?

SENATOR TIM AYRES, ASSISTANT MINISTER FOR A FUTURE MADE IN AUSTRALIA AND TRADE: Well, this is a government that has turned Liberal debt into Labor surpluses. We've demonstrated with two back-to-back surpluses, a $200 billion turnaround in the nation's finances, that we are the strongest party on fiscal management and these surpluses are not delivered because of their own virtue. They delivered in order to create the room to do initiatives like this that are in the national interest or in the interests of hard-working Australians. This Medicare announcement, very important for the cost of living, but it's about protecting and enlarging and making real the promise of Medicare for Australians. It's only Labor that can be trusted on Medicare and only Labor that can be trusted to manage the nation's finances in the interests of Australian people.

HOST: Ok, but it sounds good, but what's the plan to pay for it? Where's the detail?

SENATOR AYRES: Well, there's certainly the substantial part of this has already been provisioned for in the budget. We'll continue to manage the budget in the way that we have to date, that is focusing on sensible savings where they can be made, structuring our approach so that we create room for additional Defence spending, additional spending on services, cost of living and in this case Medicare. Peter Dutton's only response to this is to cut and cut and cut. His announcement about getting stuck into 36,000 public servants - most of whom are delivering services to ordinary Australians in regional areas. He wants to sort of caricature these people in a pretty unpleasant sort of way, frankly. But they are the people who've got rid of the queue that the Morrison-Dutton government allowed to happen for our veterans where 45,000 veterans were unable to get their claims assessed. It was a national disgrace. These are the people in Services Australia. I was there in Port Macquarie just a few months ago where scores of people are being employed working for the people of the North Coast in NSW, delivering services to families, to pensioners, to people who want to get into aged care. Now all of that kind of work that ordinary Australians need to get through life, get access to government services and deal with the cost of living pressures. Peter Dutton's only answer is to cut and cut and cut an additional $600 billion of spending on a nuclear program that won't work, that will put up the price of electricity and cause even more savage cuts to real services that real Australians need.

HOST: I mean, you say that you can't cut and cut and cut, but you can't spend and spend and spend either. The money has to come from somewhere and ultimately that's the back pockets of Australians.

SENATOR AYRES: Well, the proof's in the pudding, isn't it? You know, we have delivered back-to-back surpluses, we've turned liberal debt into Labor surpluses, and we've extended cost of living relief to every Australian, including tax cuts for every Australian so that Australians are not only earning more but they're keeping more of what they earn. Because the Albanese government is focused on their interest on cost of living relief, on good jobs. In my area of activity, on making sure that we're building our manufacturing sector to build Australia's future. Peter Dutton's only answer is cuts and hot talk. It is a movie that Australians have seen before. Liberals talking big about these issues before an election and then immediately after the election they rat on their promises and they cut and they cut and they cut. That's what Tony Abbott and Peter Dutton did in health. $50 billion worth of cuts to public hospitals that hurt ordinary Australians, particularly in the regions. A proposal for a GP tax that would have broken Medicare and a six-year freeze on Medicare rebates that put the system under enormous strain, creating a mess that it's taken us all of this time just to clean up. We're investing in the system. We're for Medicare. We established it, we built it. Only Labor can be trusted on these questions.

HOST: Okay, Tim, is just if we look at the facts here, your government has put all this investment into Medicare but where is the funding going to come from? The 100% renewable scheme that your government's planning. I mean, the Coalition's energy plan has been costed at 44% less.

SENATOR AYRES: Well, that's not a fair dinkum account of what's going on here. We are rolling out the lowest cost—

HOST: But where is that funding going to come from for the renewables plan?

SENATOR AYRES: If you allow me to finish, that is renewables backed by gas and storage. That is the cheapest system. The cheapest system. $122 billion there. The point about our plan is its public sector planning crowding in private sector investment. Peter Dutton's plan is a $600 billion. $600 billion nuclear plan. That'll take too long. Deliver power sometime in the mid-2040s at best. It'll cost too much, it'll drive electricity prices up, it'll cause an investment freeze in new generation capability just when we need it now. And it's catastrophic for Australian manufacturing. The plan is predicated, its core assumption is a reduction in industrial electricity use. That means that aluminium and steel and all of these other industries are forced offshore. That's their record in government too, by the way, it was characters like Andrew Constance who wants to come back into Parliament—

HOST: I just want to interrupt you there, Tim, because I just feel like I'm not getting an answer to the question here. Coalition aside, let's leave them there. Where is the funding going to come from for the 100% renewables scheme that your government is planning if so much money is going into Medicare?

SENATOR AYRES: Well, number one, it's not 100% renewables. I know you keep saying that, but it's renewables plus storage plus gas for peaking purposes. It is provisioned for. It is in the budget. We have made savings in the budget. We have turned a Liberal debt. Remember we came into government with a trillion dollars in debt from the Liberals and nothing to show for it in terms of infrastructure or capability. And we are directing spending to areas of important national priority. Cheaper electricity and an electricity system that's fit for modern times. Additional commitments in areas like Defence that are required to secure our future and areas like Medicare that every Australian needs. It's a core part of us being Australian. It's provisioned for. We've demonstrated over the course of the last three years that it's only Labor that can deliver surpluses. It's only Labor that manages the economy and the interests of ordinary Australians and it's only the Labor Party that can be trusted on these core economic principles.

HOST: Ok, we do have to wrap things up.

SENATOR AYRES: The Liberals have only got one answer - massive cuts, massive cuts.

HOST: Ok. We do have to wrap things up. I just want to get your thoughts on something quickly. I mean, the polls don't look good this week. Is your government out of touch with the Australian people?

SENATOR AYRES: Well, we are absolutely focused every day of the last more than two and a half years on the interests of ordinary Australians. We have we inherited an economy with rising inflation, with falling real wages. And what we have done is we have ended up in a position after a lot of hard work, I have to tell you, where inflation is low, where unemployment is also low. So, more Australians are in work, real wages are rising and the tax system has been altered. So, there have been tax cuts for every single Australian and we've extended cost of living relief across the economy so that Australians are earning more and keeping more of what they earn. See, we think the government is about the public interest. You know, Mr. Dutton and Mr. Morrison spent their time in government making government about the partisan interest. And indeed, revelations this week make it pretty clear for Mr. Dutton at least about his own interest, his own interest, where are the public interest unashamedly for that?

HOST: Ok. Well, the polls are spelling a bit of a different story, though, but we will see, of course, in a couple of months. Thank you as always for your time, Tim Ayres. I appreciate our discussions as always. We'll catch up with you soon.

SENATOR AYRES: Thanks very much. See you later.