CHRIS UHLMANN:
Treasurer, good morning.
TREASURER:
Good morning, Chris.
CHRIS UHLMANN:
Joe Hockey, apart from lifting the tax on the rich, can you name another major Budget saving that's gotten through?
TREASURER:
Well, a number of them are still to be properly debated in the Senate and there are still a number to actually be introduced into the House of Representatives. As I've said before, this is a marathon, it's not a sprint. A lot of our initiatives actually come into play over a number of years so we're dealing with all these things in a methodical, careful manner. We're not going to be spooked into the commentary about day to day crises. We actually deal with things in a methodical manner.
CHRIS UHLMANN:
Well, you say methodical and careful, but of course, the Senate is saying no to almost everything that you've proposed by way of savings?
TREASURER:
Well, naturally enough everyone has an opinion on individual initiatives but Chris, you know, one of the advantages of having been in politics for nearly two decades as I have been, as Tony Abbott has been, as a number of our team have been, is that we've seen things before and the initial position people hold can sometimes be open to negotiation. Now, I say to the Labor Party and to the Greens, if you instinct is to say no immediately and to stick with that, you are dealing yourself out of having an influence on public policy. Because if the immediate reaction is no, with no opportunity to open discussions in relation to the matters, then there are other alternatives that we can take.
CHRIS UHLMANN:
But have you ever before seen a situation where we've gotten to July where the Government hasn't got any of its major planks from the Budget through the Senate?
TREASURER:
Well, the fact is that there are a number of initiatives that do not need legislation. The biggest savings measure in the Budget was a reduction in foreign aid and obviously that does not require legislation now. If the Senate chooses to block savings initiatives, then we need to look at other savings initiatives that may not require legislation and I would ask the Greens and the Labor Party – who between them hold 35 votes on the floor of the Senate – to understand that there are alternatives for a government. We are going to fix the Budget. That's what we promised the Australian people because we want to create greater prosperity and more jobs in the Australian economy.
CHRIS UHLMANN:
So are you threatening retribution; that you'll cut harder and deeper into government programs that you don't have to legislate for?
TREASURER:
It's not retribution. We have no choice but to fix the Budget now because if the Budget is not fixed now, and if choices made by other political parties are so flawed that they undermine our ability to fix the Budget, then the pain for the Australian people into the future for fixing the Budget will be far greater and we will not allow that to happen.
CHRIS UHLMANN:
So, if you can't find these savings through legislation, you'll look for them elsewhere. Where would you look?
TREASURER:
We must, we must. Well, I'm not going to speculate on it because there are still a number of initiatives that need to go before the Senate. We are open to discussions as any reasonable government would be, but we are not going to step away from the fact that the Budget needs to be repaired.
CHRIS UHLMANN:
Well, just looking at one area, the Mining Tax. Now, if you axe that this week there are $13 billion worth of payments that were attached to that – $13 billion. That's about half of what we spend on defence every year. Where would you find that in the Government's coffers?
TREASURER:
Well, this is one of the challenges that may occur, and I think it's something that a lot of the Senators need to think carefully about because we've gone, not just to one election, but to two elections promising to abolish the Mining Tax and the associated expenditure and you cannot have expenditure associated with a tax that raises no money. You can't do that. You've got to live within your means and the Mining Tax is a great example where the previous Labor Government promised everything against a tax that raised no money and therefore you end up borrowing from future generations.
CHRIS UHLMANN:
I can't help thinking though that this does sound like a threat to the Senate, ‘you pass what we've got or we'll find something else that will be worse.’
TREASURER:
Well, we've got to deal with reality Chris, and that is that the Budget must be repaired and even the Financial System Inquiry – the Murray Inquiry Draft Report yesterday identified that there is a cost to the financial system, there is a cost to Australian borrowers from banks associated with governments running significant deficits. It reduces our ability to respond to crises on behalf of the Australian people. We are determined to fix the Budget and we would hope that the Senate would be a partner in that process.
CHRIS UHLMANN:
Just looking at the Murray report yesterday, its key philosophical point would appear to be that disclosure is not enough, that more regulation is needed and yet at the moment we're seeing when it comes to financial planning laws that you are trying to roll back protections that the Labor Party put in place.
TREASURER:
Well, the protections the Labor Party put in place were simply a mess, as reflected in the fact that Bill Shorten himself amended the regulations on 16 occasions and made a complete hash of the legislation. We want better regulation not more regulation. The Labor Party's view is the more red tape you pile up, the better the outcome for consumers. Well, that's plainly wrong. It is much better to have better regulation and our initiatives reduce the red tape associated with financial advice by $200 million a year. I see that as a good saving for consumers and at the same time they're getting better regulation.
CHRIS UHLMANN:
How would you rate the job the corporate watchdog, the Australian Securities and Investments Commission did in policing fraud at the Commonwealth Bank investment arm?
TREASURER:
Well, it is of course some years ago and there is a lot of responsibility that needs to be handed around. I, obviously( inaudible) have been speaking to ASIC and Mathias Cormann as acting Assistant Treasurer has been speaking with ASIC. We'll continue to work through some of the issues, but ultimately this is a failure by the Commonwealth Bank and the Commonwealth Bank needs to fix it and they are.
CHRIS UHLMANN:
And a failure by the regulator?
TREASURER:
Well, at the time obviously, they did but I mean a number of these events occurred up to six years ago, so we've got to understand how we can do things better and we're ready to step up to the plate on that.
CHRIS UHLMANN:
And should we trust the Commonwealth Bank to heal itself?
TREASURER:
Well, I think there is enough independent scrutiny and obviously there's been some exceptional scrutiny from the media which is very good, which has helped to raise the issue and helped to force some redress.
CHRIS UHLMANN:
Now what are you planning for Qantas? You are partially easing the foreign ownership restrictions?
TREASURER:
Well, I think it is important to try and get Qantas onto the same playing field as its competitors. Again, the Senate chose not to back our legislation in this case, but an alternative was proposed by the Labor Party and we're prepared to accept that to give some stability to the rules governing the ownership of Qantas and I'm confident that will pass today.
CHRIS UHLMANN:
And is it your expectation that Qantas will drop its ticket prices if the Carbon Tax is cut?
TREASURER:
Well, Qantas said that they were absorbing it for that moment as Virgin were, but ultimately businesses can absorb the impact of the Carbon Tax in some cases for a short period of time, but it's never sustainable. At the end of the day a business passes it onto consumers.
CHRIS UHLMANN:
The big news of course this year is the G20 which comes to Brisbane in November. You've been talking to Finance Ministers, you've asked them to aim for a 2 per cent growth rate. They seem to be balking at that?
TREASURER:
Well, there has been some discussion and certainly in the days ahead I'm speaking with many of my fellow Finance Ministers around the world. If we can drive stronger economic growth, we can create more jobs and in Sydney we had a declaration that we wanted to increase global growth by 2 per cent which adds at least 20 million new jobs to the world. Australia is playing its role. Our Budget is part of that, getting rid of the Carbon Tax and the Mining Tax is part of our equation so we're doing some heavy lifting domestically, but others around the world need to help us. Some countries like China and increasingly Germany have been very supportive of our goals, but there's more to be done.
CHRIS UHLMANN:
Alright, finally Rupert Murdoch told a 50th anniversary bash for The Australian last night that Australia should throw open its doors to immigration and of course we do, but are you a big Australia man?
TREASURER:
Of course I'm a big Australia man. I believe in a bigger, stronger, more robust nation. I, in my case, you know, I'm the son of a migrant to Australia and proudly so and migration has been one of the great phases of Australian development. Noel Pearson identified three great phases in the history of Australia and Rupert Murdoch and Noel Pearson and the Prime Minister gave outstanding speeches. It was an extraordinary event and The Australian newspaper is a magnificent publication. I don't always agree with it of course but you wouldn't expect that but it is, you know, we should be proud of our great institutions and I think The Australian is one of them.
CHRIS UHLMANN:
Alas, I wasn't invited but Joe Hockey, thank you.
TREASURER: Thank you.