TREASURER:
In just over a week’s time, in the Budget, what is important is that we make the right choices for Australians. Budgets are all about choices, just like budgets are choices in people’s household and family budgets, just like they are in a business or corporate budget. It’s all about making the choices and the choices we have to make are to ensure that Australia continues to grow our economy. That growth in our economy is what will provide the better wages and the more secure jobs, the better paying jobs and the more jobs that Australians need. It’s important because by ensuring we grow our economy, we’re able to guarantee the services that Australians are relying on. It’s been some time since many Australians have had a decent pay rise. Wage price growth has been modest – to put it diplomatically – and when your wages are tight, those services that you rely on become more and more important to you. It’s important for the Budget to deliver on that. It’s also important that when wages are tight, we understand that growing sense of frustration about rising costs of living. It’s important to put downward pressure on those rising costs of living. You can’t solve all of that, you can’t deal with all of that, no Government can, no individual level of government can. Governments have to take the actions they can take to put downward pressure on those rising costs of living. Governments always have to live within their means and that means continuing on our path of bringing the Budget back to balance. Not for some trophy on the shelf or some certificate on the wall but because when the Government lives within its means and the Government is better able to support Australians right around the country against potential economic shocks that can happen and to ensure that we can maintain sustainably the services and supports that they rely on. So over the next week, we’ll be here in Treasury finalising the Budget, working through the normal things that need to be done in the lead up to a Budget and next week, I’ll be looking forward to delivering a Budget for the Turnbull Government that ensures that we make the right choices so we can ensure that the times that are ahead of us – which are showing a greater improvement, particularly if you look around the global economy and you look at the improvements and the forecasts and the other conditions, whether it’s in Europe or whether it’s in the United States or other places – there is opportunity ahead for us. But we must be able to make the right choices to secure that opportunity.
QUESTION:
With those better times just ahead, Treasurer, can you foresee average Australians getting a decent pay rise in the near future?
TREASURER:
What I know is that you can’t get a pay rise in a business that’s going backwards and isn’t making a profit. And you can’t get a job in a business that isn’t open. And so, the key to ensuring that Australians can see their wages grow, they can see their incomes improve is to ensure that our economy continues to grow and the businesses that drive that growth, that actually underpin that growth are in a better position to share that growth with their workers.
QUESTION:
So when will they see that pay rise?
TREASURER:
Well, that’s the matter for the businesses that employ them, Mark, as you know. If people at Channel 7 want to get a pay rise, it depends on how well Channel 7 is doing, I’m sure. And that’s no different for any other business in the country. We’ve already passed the tax cuts for businesses that represent 6.5 million employees around the country. More than half the labour force is now employed in a business that will be getting the benefits of our Enterprise Tax Plan. For those workers to get those better wages, then their businesses that they work for must continue to grow and benefit from a growing economy.
QUESTION:
Treasurer, you’ve talked and written a lot about housing affordability in recent months, more recently you’ve talked a lot about infrastructure in this Budget. What is the central theme or point in this Budget?
TREASURER:
Thank you, James. I just refer you back to what I just said and that is that Budgets are about making the right choices to ensure that we can secure the opportunities that are now right there before us. We need to look forward into that future. I think we can do so with some real confidence but we can’t do it with complacency.
QUESTION:
But for mums and dads, Treasurer, what should they be looking for in this Budget? What’s the central thing? What will it do for them?
TREASURER:
Well, James, as I’ve just said, the Budget will be making the right choices to support the Australian economy so mums and dads can look forward for the businesses that they work for and support their incomes, that they’re in a better position to support them. But it’s about ensuring the services that they rely on and the cost pressures that they are facing. The Government will be addressing those issues in this Budget. You make mention of housing, I note today that the CoreLogic data showed that across all five capital cities, there was a negative outcome in the apartment market. Now, I mentioned that last week, I said that the apartment market had already begun to turn. We also saw in that data what was happening with home prices in Sydney as well and a flattening of what we’ve seen with growth. Now, I’ve been careful to say all along that you have to be so careful in how you engage in housing policy. It was the Labor Party that wanted to take a chainsaw to tax policy when it came to housing. Had they been able to do that then they would have been guaranteeing a hard landing on the housing market for Australian mums and dads – whether they be owner-occupiers or investors. We’ve been careful with our approach. We’ve been careful with the regulatory approach, using that scalpel, not Labor’s chainsaw, because we know that if you take that other approach, you’re at great risk of causing the sort of housing shock that would have real negative economic consequences on Australian families.
QUESTION:
Are you still looking to deliver a surplus in 2020-21?
TREASURER:
Those numbers will be updated next Tuesday. Tuesday week, you’ll have your answer.
QUESTION:
On Chris Richardson’s figures, are deficit figures about right?
TREASURER:
I couldn’t hear you.
QUESTION:
Are Chris Richardson’s deficit figures…
TREASURER:
The figures in the Budget will be outlined in the Budget. I don’t think you’d expect me to say anything else.
QUESTION:
When you spoke to the Financial Review and you’re quoted as saying this morning that it’s not long to go now. Not long to go where?
TREASURER:
I’m referring particularly to something that the Reserve Bank Governor, Phil Lowe, said a little while ago and I referred to it in my speech in Sydney last week. He made mention of the fact that we were 90 per cent of the way through that transition of the mining investment boom. Now, they have been some pretty hard years, where we have seen mining investment fall significantly in this country and that was followed up at the same time with a decline in the terms of trade and that means incomes in Australia have been hard to come by. Yes, we’ve grown. As an economy, we have shown extraordinary growth. We’ve been basically walking into the wind rather than having the wind at our backs but we’ve still been able to go forward. Now, what we’re seeing in the global economy is an outlook which has been quite pessimistic since the Global Financial Crisis, for the first time in a long time, they are starting to see better days – whether it’s in Europe or the United Kingdom or in North America or even North Asia – we continue to see good strong growth out of China, the ASEAN countries are performing well. Now, Australia is very well set up to take advantage of these opportunities but it depends on making, consistently, the right choices that grow the economy, that guarantee the services that Australians rely on, that put downward pressure on those cost of living pressures that are out there for families and households, and frankly, the cost pressures to businesses and to ensure that the Government lives within its means.
QUESTION:
Treasurer, given the CoreLogic report shows that some of the regulatory measures appear to be working, does there really need to be a housing affordability focus in this Budget if those prices, particularly in Sydney and Melbourne, are only starting to come down?
TREASURER:
Your question assumes that the only thing happening in the housing market and the only concerns that are there are for people trying to buy their first home. I don't think that's the right assumption to make. I know that so much of the commentary and the analysis of this issue focuses on house prices in Sydney. I'm just as concerned about someone on low incomes living in Hobart who can't afford their rent or in Adelaide, or Perth or Darwin or Townsville. We spend, as I said last week, almost $11 billion a year together with the state and territory governments in providing support for those who depend on social and affordable housing. I have been talking about the challenges they face. I'm not sure the commentary has reflected as much of that. Yes, it is incredibly frustrating, particularly for younger families trying to buy their first house. If you live in Sydney, it has been that way for generations. In many other cities, it is becoming the same sort of challenge. But I'm not just focused on that issue. I'm also focused on ensuring that the housing support is provided by Commonwealth and State Governments supports those for whom housing costs, their rental costs – 30 per cent of Australians' households are renting – that we are addressing those needs as well. As I said last week, if you don't have a roof over your head that you can rely on, every single other problem you have in life gets harder.
QUESTION:
Is tertiary education about to go up, Treasurer, in order to pay down debt in the Budget?
TREASURER:
I will leave those sorts of announcements to the Education Minister and to the Budget.
QUESTION:
The new measures in the Budget, what will be greater, the new spending in investment or the new savings?
TREASURER:
It is always the task of the Government to ensure that we live within our means and we get our spending under control. It is also important to the Budget that our savings measures are credible and deal with a sustainable cost going into the future. Our growth has ensured that, as a country, we have a PBS system, a Medicare system, our pharmaceuticals, particularly for older Australians are affordable, that we have an education system which Australians can rely on. All of this is supported by growth but also has to be done in a way that is sustainable and you’ve got to keep your costs under control and this Government will continue to do that as we have since we were first elected. But a Budget isn't an academic document. It's got to be a practical document. When you look around the world today in most developed countries, politics has changed a lot and governments have to focus on what can be practically achieved and not play to an academic cheer squad when it comes to the Budget. It’s got to be a practical document for Australians to ensure, as I said, that it puts pressure down on their costs of living and it guarantees the services they rely on lives within its means but above all drives the growth their standard of living depends on.
QUESTION:
Do you think university funding could be more efficient?
TREASURER:
What I do know is in the figures that were being released by the Education Minister today is the funding growth has been at 15 per cent, costs have been growing at 9.5 per cent and there is the effective profit equivalent of six per cent for these institutions but for businesses at large, it is at one per cent. I think those three figures tell you something about the capacity, I think, for the sector to deliver better value, even better value, for the students. Let's not forget, while taxpayers pay the majority of a student's education, students are also paying a significant proportion for their education under the HELP scheme. It is important that taxpayers and the students, that are paying down those debts and taking on those debts for their education, get a good deal. They get a good deal and a good education at an affordable cost from the higher education sector. Our interests and the students' interests are aligned. I represent the taxpayers, they represent their own accounts. And I want to make sure both of us get a good deal.
QUESTION:
When you say savings have to be credible, does that mean you have done – either or both of these things – cleared out zombie measures and recalibrated savings with an eye to what actually could be passed by the Senate?
TREASURER:
Again, measures will be outlined in the Budget on Tuesday week. The ratings agencies have been making this point now for some time and you will see that in the midyear statement we released last year, we made a very strong case which was accepted by the agencies that we had been making substantial progress on our savings task. Going back to Mark's question, $25 billion we have been able to pass and have implemented on our budget improvement measures since the last Budget. That's about two-thirds of what we were seeking to do. That was against the odds, I don't think people expected us to have achieved that much and had we taken our opponents' approach at the last election, then there would be a $25 billion extra bill on the Australian taxpayer as a result if we had gone the other way but we stuck to our plan and we have been able to, I think, implement the lion's share of those budget improvement measures. Going forward into this Budget, it is important the Budget is a credible document, it’s a practical document, it's a document that can be put forward with confidence to the Australian Parliament for support.
QUESTION:
Treasurer, is there an economic case that can be made for first home buyers to receive some kind of favourable tax incentive or treatment to help them get into their first home?
TREASURER:
Again, the measures will be in there next week, James. If you look across the housing market, and why is it important for first home buyers to be able to get into the market? A lot of people say, "There is nothing that should be done in that respect." But if you think about the housing market as a spectrum, when a first home buyer can't get into the housing market, where do you think they are? They're in the rental market or they’re staying at mum and dad's. If they're in the rental market, guess who they are competing with in that rental market? People on lower incomes where you have vacancy rates for rental stock in this country of around two per cent or less. That puts even more pressure on those for whom the private rental market that will be what they only ever know. My grandparents, all they ever knew on my father's side was renting a house in Sydney. Could never buy a house and they were around in the 40s, 50s and 30s in Australia. So it has been a long-term issue in Sydney. And then, those who taking up the private rental accommodation, that flows on to those and puts pressure on affordable housing stock because you have more people who can't afford it in the private rental market. Then again on social housing and on homelessness. When I have looked at this issue with Michael Sukkar, my colleagues and the Prime Minister, what we have been seeking to do is see how this works across the whole housing sector. I know it's a strong focus in Sydney and Melbourne but, frankly, that's not just the only issue. This has important implications right around the country but that's just one of many issues that I think are of great importance to Australians wherever they live. Those cost pressures when your wages haven't been rising as you experienced them before the GFC, that really does increase the strain and increased strain on families puts those families under pressure and sometimes it can make them crack and I hate to see families fall apart and I hate to see families fall apart because of economic and financial pressures. As I've been framing this Budget, I've had them very much in my mind. Thanks very much.