TREASURER:
Good morning. I think that people are seeing after Tuesday night the real fairness of the Budget which we’ve handed down. I think they see that it’s a responsible and fair path back to budget balance. They can see that the essential services that they rely on have been guaranteed in this Budget and we’re doing everything we possibly can to put downward pressure on the rising costs of living. It was a clear national economic plan – both in the Budget I handed down on Tuesday night and in the Budget I handed down last year – which charts the way forward for growth that supports more and better paid jobs, whether it’s our investments in nation building infrastructure, backing in small businesses, skilling Australians and indeed continuing on the path of the changes we announced last year, with lowering the corporate tax rate over the next 10 years to provide that incentive for investment in the country. Our defence industry plan, which is breaking ground literally, certainly in South Australia and all around the country where those projects are continuing. Our investment in science agenda and investing in this new research and these new and innovative industries which can drive our growth going forward. Growth supported by our export trade agreements, continuing to deliver right across the country. So, a clear national economic plan, a Government living within its means. A Government guaranteeing essential services like Medicare and schools support for children in every school around the country, all of it increasing over the next 10 years and over the next four years. But importantly it is all fully funded. Every cent of it is fully funded in the Budget I handed down on Tuesday night which shows the Budget returning to balance over the next few years into 2021-21 and indeed we will not be borrowing any more to pay for everyday expenditure in just over a year from now in 2018-19.
Alternatively tonight, when the Leader of the Opposition is walking around with massive holes in their fiscal position – the Budget position that they went to the last election with – he needs to be very clear with small business tonight. Is he going to increase their taxes if he is elected at the next election? He’s walking around saying that he’s got $50 billion for things that he says are in his spending plans. Well, over $20 billion of that has already been legislated through the Parliament to cut taxes for small and medium size businesses, and so he has to decide. Is he going to put up taxes on small business to fund his plans? Or is he going to do what is necessary and actually have plans that are funded – fully funded. Otherwise it’s just the same thing it always is – Labor promising more and more and higher spending, but not being able to pay for it and that’s just a cruel hoax, it’s a cruel hoax on Australians and Bill Shorten needs to end the cruel hoax when it comes to his unfunded promises.
QUESTION:
Treasurer, you mentioned the corporate tax cuts. Isn’t that another reason why the banks shouldn’t pass on the cost to the taxpayer?
TREASURER:
Well, I think that’s a good point, Laine. Over the next 10 years we’re looking to reduce the corporate tax rate for all companies in Australia to make them more competitive. It is not an unusual thing for banks to have a tax, a levy on their liabilities. These arrangements exist all over the world and it’s I think entirely reasonable and fair to have this structural change to how we tax this important sector. I want banks to be unquestionably strong, but I also want them to be unquestionably fair and I want them to be unquestionably competitive for consumers as well. The four major banks have taken up a much bigger space in our market over the last 12 years and particularly since the Global Financial Crisis. Our smaller and regional banks are growing and we need to make sure they’re competitive against the big banks as well so we can get more of a level playing field, which, at the end of the day, just means more choice for customers.
QUESTION:
Are you going to budge?
TREASURER:
This levy’s in, this tax is staying on the banks. This is a fair and reasonable tax on our banks, over $30 billion in pooled profits, and this is a $1.5 billion out of that more than $30 billion. I think that’s a very reasonable amount. I welcome the fact that yesterday, particularly I think it was CommBank and the ANZ Bank, took a breath and I think they issued a very measured statement yesterday, and I think it is important that they take a breath. Today, in Sydney, officials from Treasury will meet with our officials from the banks and work through the detail. And I think that’s important to do in a sober and considered way and that’s exactly what the Government’s doing and I would only encourage and be very surprised if the banks were to [inaudible].
QUESTION:
In 2014, we heard about lifters and leaners. Is it about time that the banks do the lifting?
TREASURER:
This Budget focuses on the challenges that are in front of us right now and those challenges are to guarantee the essentials – schools and hospitals, Medicare and importantly, the National Disability Insurance Scheme, to put downward pressure on the cost of living to ensure the Government lives within its means and to support the economy and to support more and better paid jobs. That’s what this Budget is doing. And it is a very fair and reasonable thing to do to have this structural change to the way we tax banks in this country to ensure that they make an ongoing contribution to all of those goals. Yes, importantly for Budget repair, but also funding the schools that we need, funding the guarantees that we put in place on Medicare, all of this is important and that’s why we’ve put the measure in place in the way we have.
QUESTION:
Other than telling the banks not to pass this cost on to their customers, is there anything the Government can do to ensure that customers aren’t going to be worse off?
TREASURER:
Well, first of all the banks will need to be completely transparent. I just make the point, banks face changes to their cost base all the time, all the time, and that ranges from what they do internationally with other banks, but equally it also in terms of their own overheads. Now, if they’re telling me each time their electricity bill goes up they’re whacking new taxes, and sorry whacking new fines, sorry fees, on their customers or putting up mortgage rates to deal with that, well they should be transparent about that too I suppose. But what we’re, what we’ll be doing is and what we have done is resourcing the ACCC to ensure that banks do not mislead their customers, they do not lie to their customers and they have to be very transparent about this. This is a very, very modest levy, in the grand scheme of the enormous level of both turnover, even at an operational level as opposed to all the turnover on the financial transactions, and in terms of the scale of the profits. I mean our banks are profitable. I think that’s a good thing. It’s much better than the alternative, there’s no doubt about that, that’s what actually makes our financial system strong. But our financial system also has to be fair and it has to be competitive and I think the combination of measures that we’ve put in place in the financial system, I think achieve all of these goals together.
QUESTION:
There’s a story in the Financial Review today that says homebuyers will have to pay GST on new homes rather than developers. What do you say in relation to that in terms of how it will affect housing affordability?
TREASURER:
Well, what we’ve done is we’ve continued to tighten up on the way that our tax system works and indeed for the GST and we’ve had a series of teams working away on ways we can improve the integrity of our tax system and in the Budget there are a range of measures which seek to do that. Now the GST, I mean there’s some $5 billion that this Government has been able to secure for additional GST in this Budget and over the forward estimates, both from what we’ve announced on Tuesday night and in recent Budgets. Now that’s all money that can go to schools, to hospitals, police services and the important services that state governments deliver. And so we’ve tightened up on the system. Our housing package that’s announced in this Budget puts downward pressure on the costs of housing in this country. Whether you’re trying to buy a first home or you’ve slept rough and you’re homeless. There’s some $375 million to make homelessness funding permanent in this country. It was previously on a year to year basis and I’m very pleased we’ve been able to bring that to an end. And that’s just one of the many important services that have been funded by the other measures, including the bank levy, so we can address those important needs. Thank you very much.