ANDREW BOLT:
Thanks for your time Treasurer. Your Budget is tipped to be $24 billion dollars deeper in the red over the next four years, is that in the ball park?
TREASURER:
MYFEO will come down on the 19th of December Andrew, as I explained today. At that point we’ll also have the September National Accounts as well as some additional data on collections that comes through in early December. So the final outcome on that update will be presented in December. I’m not going to speculate on the figures today other than to reinforce one point that I think Chris has made very well, that is that revenues are impacted by Australians not earnings more. Whether earning more in terms of wages in additional hours or higher real wages, or companies earnings more. That’s why our enterprise tax plan is so important because that’s what enables businesses to actually give those workers more hours. Now, I don’t think the answer to dealing with what is highlighted today on revenue is the squeeze the tax lemon even harder. That’s what the Labor Party propose. What we took to the last election, and what we put in our Budget in May, was actually providing tax relief. Tax relief not just for companies, but we actually delivered tax relief to middle income, ordinary wage earning Australians as well. So we’re a Government that is actually cutting taxes, not increasing it on wage earnings.
BOLT:
I’m on board with tax cuts as a necessary stimulus. On board there. But the first half of your answer about the fact that you’ve got not much wage growth, not much profit, and the tax receipts therefore being a problem suggest to me that Chris Richardson is right, that you’re not getting the revenue you expected. Here’s the problem, for eight years in a row Treasury has over estimated how much you would get in taxes for the Government. This year would make it the ninth in a row, so why does it keep getting it wrong?
TREASURER:
Well you go back even further than that. It’s not an exact science. At the time when revenues were actually increasing, they were under estimating what that revenue was. We know that particularly during the Howard/Costello years we had successive years where the good news would come in just before every half year update in the Budget, that there was $20 billion and $30 billion more that we didn’t know was there. It’s not an exact science. The point of what you can control, and I think this is a point that you’ve made, what you can control is how much you spend. Now real growth in expenditure under our Government, under our forward estimates, is around 1.5 per cent. That compares so some 4.2 per cent under the previous Government and over 3 per cent during the stronger economic years with the revenues coming in under the Howard/Costello Government. So we’ve been able to cut the growth in expenditure which has enabled us to slow the growth in debt, and we’ve done that at a time when frankly the global economy continues to be in quite a funk. What that means is that wage growth is suppressed, inflation is low, trade growth around the world is slow, and this is a very different environment than we knew 15/20 years ago. The challenges aren’t shy but the progress we’re making even in these past few months…
BOLT:
No, no but the point is the growth is still there. Your growth in spending is still there. Look, hello you know I wasn’t silent on criticising Labor but it… yeah but it’s real growth and what I want to know is this, if Treasury keeps getting it wrong year round… I think it shouldn’t be as much as this when you’re not getting the revenues but here’s my point, if the Treasury…
TREASURER:
This is the lowest rate of growth in expenditure we’ve seen in decades.
BOLT:
Why don’t you say god dammit give me an answer?
TREASURER:
In my first MYEFO a year ago Andrew, we revised down the projections on growth in years three and four. They’d previously been put in there at about three-and-a-half per cent. Now I didn’t believe that was a realistic picture of what we saw going forward, and I’ve also been talking more recently about all this excitement people have had around commodity prices. Now our view is that we need to take a very sober and conservative view on that because I think if you were to assume that that will play out over the next four years, and you use that as some sort of salve for Budget repair I think would be very unwise. What you have to continue to do is pass the savings that we put before the parliament. Now we’ve got almost $15 billion specifically in payment savings measures that are before the parliament which still haven’t been passed. We also have over $5 billion in revenue measures which still need to pass. These are important measures that will bring the Budget back. Now we’ve already this year passed just over $6 billion of measures on…
BOLT:
Only a little bit, you’re saying $15 billion, you’re $100 billion down.
TREASURER:
And our rate of growth in expenditure Andrew is at one of the lowest levels we’ve seen in decades. Now, that is a good thing. We are slowing the growth in expenditure but that assumes that we’re able to get these measures passed through the parliament. As you know, that has been a challenge for this Government since we were first election in 2013. In the last six months, we have made more progress on that front than we have for some time. We were able to pass measures on social services savings that had been languishing in the parliament for three years. Now, it’s no easy task in the 45th parliament, let along the 44th parliament to be able to get savings measures through because the revenues that we used to see come in from all of those good years a decade ago, that’s gone. But the expenditure that was built up over a long period of time when expenditure was growing in real terms by more than three per cent and more than four per cent under the previous government, that’s all baked in. Now we’re trying to reverse that. We’ve had some success in doing that but we…
BOLT:
I don’t understand why you don’t do to Treasury and fire someone. I mean, they leave you in the (inaudible). If they keep saying every year, oh look Treasurer you’re going to get more money than you expect, I know I’m talking more about your predecessors but you too now, and it doesn’t happen, you wear all the embarrassment. How come no one has lost their job in Treasury?
TREASURER:
Parameters move from every update to every Budget. That’s been the case for decades Andrew, so that is not a new phenomenon. Previously they used to underestimate and in more recent times they have overestimated. But I mean, you tell me someone who has absolutely picked the iron ore price right for the last 20 years, and that person will be a millionaire, a billionaire in fact….
BOLT:
No but what I will tell you is almost every financial commentator at the Budget, almost every financial commentator at the Budget, I can rattle them off, Terry McCrann, Adam Creighton, Judith Sloan, whatever said that in the Budget you had over optimistic forecasts of growth, nominal growth, in the out years. That’s coming to roost, everyone knew it, somehow Treasury didn’t. I don’t understand it. Listen because my time’s limited, you’ve got to go off, we’ve got, you’re trying to cut spending, and that’s, I’m right on board.
TREASURER:
We are.
BOLT:
Some of the Government’s own political advisers are lobbying to turn down a pay deal covering 1,600 political workers. I don’t understand how we could employ that many, Greens and Labor staff included. Are you disappointed that your own team won’t take a haircut like everyone else?
TREASURER:
I will leave those measures to the public service and the Employment Minister who deals with that. What I do know we have done as a Government is we have been able to keep the number of public servants we have been able to take that back to 2007 levels. That is what we have achieved over the last four years. Now, I think that is quite a significant achievement and Mathias Cormann has really led the charge on making sure that we keep the overall size of the public service under control. In fact it has contracted as a public service but whether it is in that level of expenditure or it is in expenditure areas more generally then we have always got to be looking and driving home those savings. The only people standing in the way of savings passing the Parliament are the Labor Party. They are going to have a higher deficit on their figures of $16.8 billion and that is after they have reversed out the company tax cuts. So, that is what is on offer, a Government that is continuing to pursue, ever since we were elected in 2013 and passed the changes in leadership, pursuing getting expenditure under control. And we have got that down considerably on the growth where it was before but it is no easy task to keep it going but we will keep committed to that task. There will be another Budget next year, the MYEFO statement will provide a reconciliation of everything that has happened. One thing I won’t give the Parliament is I won’t let them off the hook thinking here is another area of savings we can pursue when they haven’t passed the ones which are already on the books. We need to pass the savings that are on these books.
BOLT:
It’s a challenge and you need to get crossbenchers etcetera and all of that and I know you have had some success here but I want to know with the Government behind in the poll, with this really big task, with only two weeks left of Parliamentary sitting, how come you have the Prime Minister not by your side helping you out here and it is of at a meeting in Peru which is actually useless because the ghost is not there at the feast. Donald Trump is not there, everyone is just talking waiting for him to start.
TREASURER:
The Prime Minister is always by my side on these things and I have no greater supporter in pursuing the savings and budget strategy threat we have in place. The Prime Minister is at a meeting of the APEC leaders with other APEC leaders Andrew, just like previous Prime Ministers have always attended and I think that it is an appropriate thing for a Prime Minister to be doing.
BOLT:
He’s wasting his time.
TREASURER:
That may be your opinion but you would have to then reflect that opinion on all other Prime Ministers who have attended those meetings as well.
BOLT:
I certainly will but he is our Prime Minister and he is the one who is fighting for his Government’s life. Again time is short so why don’t I ask you something else…
TREASURER:
Well, you raised the issue. Let’s talk about what is happening at APEC at the moment. There is, and I have been at the G20 meetings and the IMF meetings as well where the real debate is how can we keep the world [inaudible] of ensuring that we continue to foster international trade. Now, we are not like the United States, we are not an $18 trillion economy which can absorb the indulgence of turning its back on world trade. We are a small, trading economy, always have been. Our prosperity is reliant on investment and trade. So, if we turn our back on that we are turning our back on a century of prosperity and are saying to our children that you are not going to get the benefit of that because we are all feeling a bit uncomfortable about it at the moment. Now that is not to say…
BOLT:
No, there is no argument from me it’s just…
TREASURER:
That’s what we are talking about…
BOLT:
No, the guy you needed to tell is Donald Trump – that is the point. Anyway, last question because as I said you have got to go, Peter Dutton, your colleague, the Immigration Minister said and I think absolutely correctly on this show, that Malcolm Fraser made a mistake in bringing in so many Muslim Lebanese refugees in the Lebanese civil war, against the advice of his Department. You have seen the jihadism, you have seen the levels of crime, you have seen the bikie recruitment, you have seen all that – was he wrong?
TREASURER:
I have always favoured an immigration program, and practiced one as a Minister, that focussed on bringing people to the country who came to make a contribution and not take one. Our immigration program has always been its best when it is focussed on skills and bringing people in for that reason. When you make decisions about immigration that involve bringing large numbers of people who have very serious challenges in integrating into the country and finding employment and becoming welfare independent then you run the great risk of setting up consequences downstream that can be very disadvantaging to the national interest. Now, that has happened from time to time in Australia’s history. On the main Australian immigration policy has got it right and unlike in places like Europe and the UK where they have got it wrong and they call it out as getting it wrong for large tracks of their immigration history, Australia actually hasn’t had, on the broad scale, those failures but there have been instances of failures. Let’ stake for example Malcolm Fraser’s decision…
BOLT:
But is that one? That is what I am asking you.
TREASURER:
…Vietnamese refugees…
BOLT:
No, no, no his comment was specifically about Lebanese.
TREASURER:
I understand that but hear me out on my point about Vietnamese. My point is that if we had been faced with the same challenge that Malcolm Fraser had been faced with in terms of the Indo-Chinese refugee crisis both the Abbott Government and the Turnbull Government would have done exactly the same thing. I think it is true to say that when you are taking people into the country who have come from very difficult circumstances you have to apply common sense and due care to ensure that you are not setting up problems down the track. Now, there are examples of that and I think that only underscores…
BOLT:
Is this one?
TREASURER:
…why we have been so right to be so careful about how we manage our intake and particularly out of the Syrian crisis we are being incredibly careful, we are focussing on those minorities that have been most persecuted but also have absolutely no chance of ever having a future in that country ever again. I think we have exercised the right judgments and that has been true under both Prime Ministers Turnbull and Abbott.
BOLT:
Thank you for your time but I guess from that answer you are not going to criticise Malcolm Fraser and you are not going to back up Peter Dutton. You will stay out of that one – is that how I interpret that? I won’t ask you again because I know you have to go.
TREASURER:
Andrew, that is an unfair characterisation and you shouldn’t verbal me like that. I think I made my point pretty clear.
BOLT:
No, I’m asking for clarification that’s all.
TREASURER:
Andrew, I think I have given the answer that explains my position crystal clear and I will leave it for viewers to understand what I have said.
BOLT:
Scott Morrison, thank you so much for your time on a busy evening.
TREASURER:
Good to be with you Andrew. Good to see you.