The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

15 May 2012

Doorstop Interview

Joint doorstop interview with
Chris Hayes MP,
Federal Member for Fowler

Sydney

SUBJECTS: Spreading the benefits of the boom to small business, business tax relief in the Budget, Newspoll, pricing carbon pollution, Greece, climate change, ACTU conference

TREASURER:

Businesses like this are the lifeblood of our economy and I wanted to come out here this morning to talk about some very important measures in the Budget which are spreading the benefits of the boom right around our country to small businesses but also to households.  There are some important tax measures in the Budget which will support small businesses right around our economy, in particular our new initiative called Loss Carryback which will enable businesses to have the confidence to invest and to restructure. 

Also another very important measure called the instant asset write off.  The $6500 instant asset write-off will be available for 2.7 million small businesses in the country and that will encourage them to invest in new equipment.  New equipment like this system here in this factory, because here the firm is making equipment for restaurants, in particular the stoves you see and all of the other equipment which will be purchased by other small businesses.  So the $6500 Instant Asset Write-off will provide the incentive for many small businesses to purchase the type of equipment that you see being made here in this firm.  They've got a real comparative advantage in the market because they're Australian owned, they're here in western Sydney, they provide fantastic backup and service, so all of those companies around the country wanting to purchase this equipment can be confident that they can the backup service from a business like this. 

So Loss Carry-back and the Instant Asset Write-off strengthens the whole business supply chain and that's why these tax initiatives are so important in the Budget and through these initiatives we can spread the benefits of the mining boom right through to tens of thousands of other small businesses right around the country.  That's going to be of big benefit to a business like this which has been around for 101 years and is going to be around for a long time to come. 

It's great to see the enthusiasm with all of the staff here this morning.  I've talked to a number of the staff about what a great business this is, and what we've got to do to make sure we've got a strong economy for the future is to provide the tax policies which encourage companies to invest, to purchase products, so we can have a strong economy.  Over to you.

JOURNALIST:

Do these measures help ease the pain of corporate Australia who lost having a reduction in corporate tax?

TREASURER:

Well, these measures will cost something like $4 billion over the forward estimates.  That's $4 billion worth of benefits to small business right across our economy.  So they are quite substantial measures, but of course the Government did want to provide a cut in the company tax rate.  Both Mr Abbott and the Greens said no.  We had no chance of getting that through the Parliament so we proceeded with Loss Carry-back.  That's a $700 million initiative over the forward estimates, plus the instant asset write-off, but we stand ready to work with the business community to put in place further tax reforms.  We will work with them if we can get them through the Parliament and if we can find the savings within the overall business tax envelope.

JOURNALIST:

You're offering the  New South Wales Chamber of Commerce today an olive branch, you're saying that the cut in the company tax is still on the agenda?

TREASURER:

Most certainly, I've said that from the very beginning.  The fact is that if business has some frustration in this area they ought to take it out on Mr Abbott because it's Mr Abbott who has knocked back.  He said he would not vote for a cut in the company tax rate and indeed Mr Abbott wants to put the company tax rate up, which I think is a very big challenge for a lot of businesses out there right across Australia.

JOURNALIST:

If it's on the agenda, when and how will you fund it?

TREASURER:

Well, what we've done is put in place a Business Tax Working Group which produced the report that recommended Loss Carry-back and we put that in the Budget.  We will work with the Business Tax Working Group, the business community as a whole, to see whether other savings can be found in the business tax system to fund a cut in the company tax rate.  We stand ready to do that.  We think it's important for the future of the country.  The reason we put in place Loss Carry-back, the reason we put in place the Instant Asset Write-off is precisely to encourage investment in small businesses around the country because they're the life blood of our business community. 

JOURNALIST:

Another issue, the polls have bounced today for Labor.  What do you …(inaudible)?

TREASURER:

Well, I'm not really too concerned about opinion polls.  This is a battler's Budget, it's not about the opinion polls.  The most important numbers in this Budget are the unemployment rate and particularly the level we reached last week of 4.9 per cent.  What is going into investment.  The fact that the Budget is coming back to surplus.  They're the numbers that I worry about. 

The most important thing about the Budget is we've come back to surplus; that means the Reserve Bank has flexibility when it comes to interest rates; that helps us build up a buffer against global uncertainties in the international economy.  But most importantly we've made room to spread the benefits of the mining boom right around the country, first of all to households on low and middle incomes and secondly to small businesses through the measures I've been talking about today.

JOURNALIST:

(Inaudible)

TREASURER:

Well, certainly the carbon price which will start on 1 July, there's been a lot of scare mongering about its impact but the fact is it's not going to have the impact that Mr Abbott and many others have been claiming and in terms of a small price impact that flows from the carbon price there will be assistance provided to households to assist with that just as there has been assistance provided to trade exposed businesses as well.  There's been a lot of fear mongering in this area.  It is not justified.  This is going to be a very big reform for the future of the country.  It will make us much more efficient in our use of energy and in the 21st century, countries which are powered by cleaner energy will be those that succeed.

JOURNALIST:

Christine Milne on radio this morning said that really Labor should have said that the family bonuses were compensation for the carbon tax.  Should you have been more clear about that when you made the announcement?

TREASURER:

No the Schoolkids Bonus that we have put in place is a restructure of an existing policy called the Education Tax Refund.  We understand that when families are putting their kids through school they need the money when they're meeting the expenses.  They need the money when they're buying the calculator.  They need the money when they're buying the school jumper, not sort of six months or nine months later when they submit receipts.  So we decided to restructure this benefit to make sure it was in the hands of parents precisely when they needed it. 

So we've also put in place increases in Family Tax Benefit which will start from 1 July next year as a way of spreading the benefits of the boom right around the country.  Apparently that's now opposed by Mr Abbott, just like the Schoolkids Bonus is opposed by Mr Abbott.  What we're in favour of is helping Australians share in the benefits of the mining boom, that's really important that every Australian has a stake in our future prosperity and the benefits that flow from the mining boom and that's what the Budget has been all about.  It's a Budget for battlers, not about polls.

JOURNALIST:

Can I ask about another issue?  What are you most worried about, Greece?

TREASURER:

Well, I think everybody is acutely aware that there's going to be a long and painful adjustment in Europe and that's going to take some time.  Now, what we should consider as we sit here in Australia is that we are in far better nick than just about any other developed economy anywhere in the world, Europe, or anywhere else.  Think about it for a moment.  We've got an economy which is growing around trend.  We've got national unemployment at 4.9 per cent.  We've got solid consumption.  We've got contained inflation and we've got a huge investment pipeline in our country.  These are really strong economic fundamentals for Australia.

Now of course not everybody is in the fast lane of the mining boom in Australia.  Some parts of our economy are weaker than others.  That's why in the Budget we've taken these measures for both small business and for households to spread the benefits of the boom more evenly around our country so all Australians can share in the benefits of the boom and comfortable in the knowledge that we came through the global recession in better nick than any other developed economy in the world and that is one of the reasons why we are now in a position to take steps to further spread the benefits of this boom right around Australia.

JOURNALIST:

Just on another issue.  Western Sydney were told yesterday that this area is going to be struck down by climate change quite badly.  What's your take on that? (Inaudible)

TREASURER:

Well, dangerous climate change has an impact not just on the environment but on the economy.  The Labor Government has moved to put in place a carbon price.  [Climate change] has a pretty big impact on our society and our future living standards.  Dealing with it in the way in which we are dealing with it will mean that we can make an adjustment to it gradually and just as we have in the past put in place big reforms that have protected our economy from events like the events occurring in Greece, we're moving ahead and doing this to secure the future of our economy and our environment particularly in places like western Sydney.

JOURNALIST:

Just quickly, one question, ACTU conference today.  They're calling for better entitlements for casual workers.  What do you think of that?

TREASURER:

Well, I respect the role that the union movement plays in our economy and in our society.  I want everybody in our economy to share fairly in the benefits of our wealth.  We want prosperous businesses; we want workers that are in good jobs with good pay.  We've got to have a strong economy for that to happen and we've got to have a fair system of industrial relations which means that when people go to work and earn a living they get treated fairly and from what I've seen around this plant here, that's exactly what happens here.  Workers that are happy and satisfied in their jobs, businesses which are growing and producing more employment, that's what Australia is all about for me.  That's why I regard Australia as the land of the fair go and why I want to keep it that way.

JOURNALIST:

(Inaudible)?

TREASURER:

Well, I haven't seen any of the detail from the congress but I'll evaluate that when I see it.  Thanks very much.