ALAN JONES:
Good morning.
TREASURER:
Morning, Alan.
ALAN JONES:
Well done. Well done.
TREASURER:
Well, thank you, Alan. And it’s, you know, certainly not finished. The job’s halfway there, but we’re getting there and, importantly, we’re giving Australians a chance to have a go, which is what we’re really good at as a nation.
ALAN JONES:
Yes. Now, you’ve got to pass the pub test, so you’ve got to sell it. What are you going to sell?
TREASURER:
Well, the key point is we have a credible path back to surplus. We’re getting rid of the deficit. We’ve got a credible path to get rid of Labor’s debt, and, gee, they left us with a lot of it, but most significantly we’re giving small business and families a chance to have a go. For small business people, you can go out today, buy equipment up to the value – individual items up to $20,000 and write it off against your tax on the 1st of July. And, why? Because we want you to grow. We want you to grow your business.
So for a tradie, you can buy the tools you need to grow your business. You can buy a small car under $20,000. For people running coffee shops, you can buy coffee machines. For people running advanced manufacturing – a small advanced manufacturer – you can buy computers or machinery up to $20,000, each item. You can buy multiple items and we’re going to let you bring forward the deductibility of that item on the 1st of July because we know the biggest drivers of growth and innovation and jobs into the future are going to be Australia’s great small businesses.
ALAN JONES:
Can I just say to our listeners, there is a backdrop here which I ought to explain because it will be raised by many people. The backdrop to all of this is the history of those Labor Governments. Peter Costello in his final budget in 2007 left a surplus of – we’ll round out the figures - $20 billon. The first Rudd/Swan deficit was $27 billion. The second Rudd/Swan deficit was $54 billion. The third Rudd/Swan deficit was $47 billion. The fourth Swan/Gillard deficit: $43 billion. The final budget presented to the people by Wayne Swan and Labor said it would be a deficit of $18 billion.
When Joe Hockey then came in and presented that Budget this time last year it was $48 billion, $30 billion out. Now, against that the figures presented last night showed a deficit for the year which is yet finished – not to – yet to be finished, 30th of – 1st of July, 30th of June, of 41.1 and then that to reduce to 35 billion, 25 billion, 14 billion, six billion and 2019/20 surpluses. Now, against that your critics will say, well, look, you’ve got some very optimistic growth figures to sustain that – those sorts of figures you presented. How do you answer that?
TREASURER:
Well, it’s just not true. It’s just not true. For a start Australia is gaining great momentum domestically. We’ve got record low interest rates, which I know is hard for a lot of retirees that have their money in the bank, and pensioners, but we’ve got record low interest rates. We’ve got low electricity prices because we got rid of the damn carbon tax and, importantly, we’ve got excellent growth in our exports, and what we’re seeing is the rest of the world starting to pick up momentum and this is hugely important for Australia as an exporting nation. From everyone – from our beef producers right through to our advanced manufacturers we are going to lift our exports overseas and all of these factors are going to help to drive stronger economic growth.
ALAN JONES:
Could we just get a couple of no’s here because there were a lot of – a lot of agitation prior to this. The bank deposits tax – there’s not going to be a bank deposits tax?
TREASURER:
Alan, we’ve said we’re going to be looking at it. I’ll have more to say in the next few weeks. I know your views on it. I know your views on it, but we’ve got to – we’re going to consider it in response to David Murray’s inquiry.
ALAN JONES:
I beg your pardon? You’re not seriously going to tax people or think about taxing people who’ve saved money and put it away for themselves.
TREASURER:
No. We don’t want to – we don’t want to do that. Absolutely right.
ALAN JONES:
Well, that’s what a bank deposit tax is.
TREASURER:
Well, Labor put it in the budget.
ALAN JONES:
Yeah. But hang on. What about you?
TREASURER:
Well, what I’m going to do is respond to the inquiry. So the money that was being charged to the banks was for the government guarantee on bank deposits.
ALAN JONES:
Yeah.
TREASURER:
The government guarantee on bank deposits.
ALAN JONES:
I know what they said. I know what they’ve said.
TREASURER:
I think I’ve found a solution to this, Alan, but let me respond to the Murray inquiry in a proper form.
ALAN JONES:
All right. I mean, you ended last night by telling people to have a go…
TREASURER:
Absolutely.
ALAN JONES:
Well, these poor coots have had a go and they’ve put some away.
TREASURER:
Well, that’s why we’re not going to introduce a raft of…
ALAN JONES:
Well, they’re heroes.
TREASURER:
They are.
ALAN JONES:
They’re heroes. Well, don’t tax them.
TREASURER:
Well, that’s…
ALAN JONES:
Superannuation; don’t…
TREASURER:
Because we’re not going to hit people’s superannuation the way that Bill Shorten is, and we’re not going to hit them at all.
ALAN JONES:
So the answer to my question about a deposits tax is no?
TREASURER:
Alan, I’m not going to respond until I do it formally and properly in a considered way.
ALAN JONES:
Okay. So no superannuation tax hikes?
TREASURER:
No.
ALAN JONES:
And that 2 per cent levy on incomes over $180,000, which was a budget repair levy…
TREASURER:
It’s going on time.
ALAN JONES:
Right. So it’ll be here for two years.
TREASURER:
If I say it’s temporary, it’s temporary. We keep our word.
ALAN JONES:
Okay. And the proposal in last year’s budget re pension indexation?
TREASURER:
That’s gone.
ALAN JONES:
Right. So the pensions will be indexed to inflation or wages, whichever is the higher.
TREASURER:
Correct.
ALAN JONES:
The six month wait for the dole was meant to cut $3.9 billion from welfare spending. You’ve reduced that period to four weeks.
TREASURER:
We have.
ALAN JONES:
Okay. Now, the pensions – while I think many people agree with you, at the top end you’ve knocked off certain eligibility for a part pension so that if you’re a couple and you’ve got your own home, once you reach $823,000 you no longer are eligible for a part pension. Let me ask you this: in the current economic environment, if that particular person cashed out all of those assets, $823,000 worth of them, in the current climate, he’d struggle to get four per cent return, which means you’d basically have no access to a pension, but you’d only be getting about $32,000 a year anyway.
TREASURER:
Well, there is – it’s both an income test and an asset test, but, having said that, you know, this is one of the reasons why we don’t want to be in a position where you’re imposing a new tax on those savings, and you made the point before, but it’s also the case, as the Governor of the Reserve Bank pointed out quite recently, people who are retiring on asset income are facing lower returns over a period of time because interest rates are low and returns on investment are low around the world. So that has weighed heavily on my mind in response to Bill Shorten’s proposal to put a new tax on superannuation.
ALAN JONES:
Yeah. I don’t think anyone takes anything Bill Shorten says very seriously at all. I just think what people are saying is you and I can afford to provide for our own retirement. Why is it, therefore, that our money, which goes into super – yours and mine – is taxed at 15 cents in the dollar, whereas if we paid tax and didn’t put it into super we’d be taxed at 48? Do I need – do you and I need a 33 cent in the dollar incentive to save for our retirement?
TREASURER:
Well, Alan, the superannuation system has been a patchwork quilt of policies over, well, you know, nearly 20 years and every government comes in and tinkers with it and makes changes. I mean, my parents are in their late 80s and they never – they ran a small business. They could never even contemplate superannuation. And they rely on their investments and they pay full bottle tax on their investment income. And there are others who took advantage of the Keating laws and laws of previous governments…
ALAN JONES:
But you and I aren’t paying full bottle tax. We’re actually looking for the opportunity to pay less, which [inaudible] we get 15 cents in the dollar as opposed to 48.
TREASURER:
And this is about – this is about going forward into the future because, as you know, 80 per cent of Australians today over the age of 65 are on a pension, 80 per cent – or a part pension. That number is the same in 2050, even though there’s been significant superannuation [inaudible]…
ALAN JONES:
Yeah. When we’ll have $3 trillion worth of super. It’s got…
TREASURER:
Yeah. So what we’ve – we’ve got to get the balance right. But what we want now is to give people stability and certainty.
ALAN JONES:
Let’s come to childcare. And there is an argument. And we’re not arguing the other case here, just that people are on low incomes, they both have to go to work, 65,000 bucks, and you’re going to provide a childcare rebate to about 85 per cent of – is it 80 or 85 – 85 per cent of their childcare bills. And no one disagrees with that because I think Australians are very generous and charitable people and they say, “Yeah. We’ll give you a leg up.” But how do you justify saying to a family that’s got an income of $300,000 that they’re going to get a childcare subsidy? How do you justify that?
TREASURER:
Well, it’s around 50 per cent. But the key there, Alan, is we need everyone that wants to choose to work to be involved in work. And there are 165,000 parents that want to work more but have found childcare to be either too expensive or it wasn’t accessible. It certainly wasn’t flexible.
ALAN JONES:
Yeah. But they’re not the people on – they’re not the people with a $300,000 income.
TREASURER:
Well, it’s a household income. That’s a household income. And…
ALAN JONES:
Yeah. Household income, I know. But, you see, the Productivity Commission, you quoted last night.
TREASURER:
Yep.
ALAN JONES:
And Scott Morrison quotes it. Well, it has said that with all these subsidies – $7 billion dollars – we’ll only get 16,000 women back to work. Now, my maths say that means all those subsidies are equal to about $440,000 per job of the people who return. Holy hell.
TREASURER:
Well it’s also about…
ALAN JONES:
Well, that’s what the Productivity Commissioner said.
TREASURER:
Yeah. It’s also about maintaining the number of people in the workforce.
ALAN JONES:
But how do you justify $300,000 – people with $300,000 getting $10,000 per child childcare?
TREASURER:
Well I’ll explain that. I mean, you can have…
ALAN JONES:
They can pay their own.
TREASURER:
You can have a senior manager – a senior manager earning $250,000. So you can have a senior manager earning $250,000 and they’re married to a nurse who wants to go back to three or four days a week but because of childcare issues, isn’t able to do so…
ALAN JONES:
Well, I presume they share their money, don’t they?
TREASURER:
Well, not always.
ALAN JONES:
They’re married. They share their dough. Come on, Joe.
TREASURER:
My wife doesn’t share it with me.
ALAN JONES:
Come on. Come on. Just coming quickly – we’re running out of time and you’ve got to go.
TREASURER:
Yep.
ALAN JONES:
On infrastructure, $50 million last year and now you were talking last night about implementing all of that.
TREASURER:
Yep.
ALAN JONES:
I like the analogy. You talked about the fact that – what did you say about the Sydney Harbour Bridge?
TREASURER:
That’s the amount of iron ore we export to China each year would be enough each year, just each year, would be enough to build a Sydney Harbour Bridge from Sydney to Perth and back to Sydney again.
ALAN JONES:
Right. Now, there’s one word was omitted that – in all those words that you uttered last night, there was one three letter word that you didn’t use. And it’s spelled d-a-m. When are we going to – you talk about productivity; historically, the most productive industry in this country has been agriculture.
TREASURER:
Yep.
ALAN JONES:
Now, we’re sure – you talked about water.
TREASURER:
I talked about farmers last night, Alan.
ALAN JONES:
Yeah. But hang on.
TREASURER:
The fencing and a range of other things.
ALAN JONES:
When are you going to build a Hoover Dam?
TREASURER:
[inaudible].
ALAN JONES:
[inaudible] is in the middle of drought.
TREASURER:
Well, maybe not the Hoover Dam but…
ALAN JONES:
Well…
TREASURER:
… we’re going to have something to say in the next few weeks about dams.
ALAN JONES:
Right.
TREASURER:
But also don’t forget what I announced about northern Australia, Alan.
ALAN JONES:
Well, no one’s living there.
TREASURER:
The $5 billion infrastructure loan facility to get the big projects – the ports, the dams, the railways – get them built in partnership with the State Government [inaudible].
ALAN JONES:
Yeah. But if inland Australia isn’t growing anything like it is now, I mean, at the moment people are paying $1 million for a water licence and they’ve got no access to water.
TREASURER:
Yeah. I know.
ALAN JONES:
Wouldn’t you say simple – well, wouldn’t simple drought assistance say, “We’ll repatriate your water licence.” That’d take – that’d provide relief for these people.
TREASURER:
Well, yeah, I’d love to. Water licenses are a State issue.
ALAN JONES:
Yes. I know that.
TREASURER:
And up in Queensland…
ALAN JONES:
Well belt a few people up.
TREASURER:
Well, up in Queensland – I don’t want to talk about water licenses in Queensland. But it’s very frustrating what you have to go through just to maintain a water licence in Queensland, and the red tape you have to go through. And the amount of water that falls in northern Australia, in some places two metres a…
ALAN JONES:
We know all that. Harvest the stuff.
TREASURER:
Absolutely. I’m with you.
ALAN JONES:
It’s a national issue. Where are we – can you point to the map of Australia and tell me where and when you’re going to build a Hoover Dam?
TREASURER:
Well, we’re not going to build a Hoover Dam…
ALAN JONES:
Why?
TREASURER:
… because we don’t need something as big as the Hoover Dam.
ALAN JONES:
Why?
TREASURER:
Because there’s water everywhere up there.
ALAN JONES:
It’s not harvested. It’s running into the ocean.
TREASURER:
I couldn’t agree with you more, Alan.
ALAN JONES:
Well, you’re…
TREASURER:
And the Prime Minister will be releasing a northern Australia paper in the next few weeks with money in it.
ALAN JONES:
Okay.
TREASURER:
With money in it. And, you know, he announced the other day, $100 million for new roads for cattle routes. We’ve opened up that live cattle export trade again, thank God, in northern Australia. And we’ve got more to say, including the facility I announced last night.
ALAN JONES:
You might. But Indonesia are buying the farms and the cattle because they got fed up with what happened to them. So we’re building the roads so that Indonesians will be able to more easily export what they have bought from us. Just a quick one before you go because I’m obligated to say this to you. I mean, the budget you talked about for everybody and so on. What do you think about a 25 year old who graduated who’s got a HECS debt of $25,000, $28,000? They’re very bright. How the hell do they ever pay that back and pay their rent and afford a home and get married?
TREASURER:
Well, it is hard, Alan. I mean, but someone has to pay for that education.
ALAN JONES:
Well, but, you know, when you went to school, when I went to school, they said, “We’ll give you a Commonwealth scholarship. We’ll invest in the best. We’ll give a Commonwealth scholarship to go to university.” And the others went out and mowed lawns and poured petrol and served drinks in pubs and paid your own way. Better than saddling kids with these unconscionable debts.
TREASURER:
Well, they are concessional loans. They’re only paid when you reach a certain income level. Which I think…
ALAN JONES:
Yeah, $54,000.
TREASURER:
Yeah. And, you know, what we’re doing – announced last night – is we’re going to ensure that people that go overseas and work actually pay their debt as well.
ALAN JONES:
I know that. I know that.
TREASURER:
So that it’s fairer for others, Alan.
ALAN JONES:
But you’re talking about a deficit. We’ve got to go. But, I mean, your debt on HECS loans currently is $35 billion. It’s going to be $70 billion in two years. That’d wipe the whole show out. Look, good to talk to you and good luck in what you’ve done. I really liked the presentation last night. I thought you were involved and passionate. And I like that.
TREASURER:
Thank you, Alan.
ALAN JONES:
Well done. Treasurer Joe Hockey. It’s 7:30.