BRETT MASON:
Well Treasurer, welcome back to SBS. It's always good to see you.
TREASURER:
Thanks.
MASON:
One of your colleagues described this as the Oprah Budget. 'You get a tax cut, you get a tax cut, everyone gets a tax cut!' when what Australia really needs is a Doctor Phil Budget, they need a very cold hard sobering discussion about debt. What does this Budget do to pay down our $0.5 trillion gross national debt?
TREASURER:
The net debt falls by $230 billion over ten years, and it pays down from now. We've reached the turning point on where debt has come to. The gross debt figure can be misleading, because of what that deals with. For a start it's $126 billion less than what we estimated just last December, point one, but point two, the reason we're using gross debt to pay for unfunded superannuation liabilities is because we don't want to raid the Future Fund. If you raid the Future Fund to pay for these things, then yes, gross debt would be less. But the Future Fund is earning about 7 or 8 per cent. Debt costs about 2.7 to 3 per cent. So, it would be an unwise financial decision to make gross debt lower for that at the expense of the taxpayer at the end of the day.
MASON:
When did debt and deficits stop being a looming disaster?
TREASURER:
Debt and deficit has never stopped being important, and the deficit has halved in the last two years, and we move back to an earlier balance — very modest, we know — in 2019-20, a year ahead of where we had previously projected, building to stronger surpluses up to 1 per cent of GDP over the medium term. But, as I say, net debt which is, at the end of the day, what costs the tax payer. Net debt is what determines what your interest bill is, and that interest bill over the forwards is $2.2 billion less than it is at the start.
MASON:
You must admit though, it's still a staggering debt. It's a bit like telling a mum and dad with a credit card bill just to ignore it — it will go away — when the reality is that the longer it sits there, the more expensive it becomes to pay off.
TREASURER:
Net debt will fall to 3.8 per cent of GDP over the next ten years.
MASON:
It's still more than $0.5 trillion though, that's a lot of money.
TREASURER:
It won't be at that in ten years the net debt, it will be well down on that. It will be down $230 billion and more. Now, that is the steepest reduction in net debt that we've seen on any projection coming out of the Budget since we weren't in debt.
MASON:
Turning now to baby boomers, once again they're the big winners out of this Budget, as they tend to be. What's in this Budget for young people, people who have never been able to afford their first home, baby boomers are getting assistance to stay in their homes when they retire. There are many people who are earning a lot of money, young people, who can't afford to buy their first home.
TREASURER:
In last year's Budget, and they have that available right now, they have a tax cut for first home buyers which means they'll be able to save 30 per cent faster than they could otherwise because we're giving them the same tax concessions for their first home savings as they get on their superannuation. That's in there, they can go and access that right now. That is a big tax cut for first home buyers. It's important as part of the measure we introduced last year, and it's out there and ready to go. But, you know, people starting out in their jobs, walking out of training and workplaces, they are in the very zone of the lower and middle income tax brackets which we're focusing on in terms of tax relief, which starts from 1 July.
MASON:
But there are many people who are professionals who are earning a very good salary who constantly complain that they can't afford to buy their first home. What's in this Budget for them? I'll ask you again, specifically.
TREASURER:
I just told you, they're getting the first home savers tax discount. That's there, it's in there. It exists now. Please go and take it.
MASON:
And you think it will make a difference?
TREASURER:
It will enable them to save 30 per cent faster for their first home.
MASON:
You've spoken about the importance of getting people into work. You and the Prime Minister are very proud of the jobs growth in Australia. What about the 3,500 refugees every year who, under this Budget, will now have to wait longer to get Government assistance to find their first job here in Australia?
TREASURER:
We provide the best resettlement services for refugees who come to Australia of any country in the world. That's recognised but the international agencies. I recall that from my time when I was Immigration Minister. So, when it comes to supporting people who come to Australia, I mean, Australians can hold their heads up high, as can this Government. But, at the same time, we have our priorities and we invite people to come to this country to make a contribution not take one, and we don't apologise for ensuring that we have welfare systems that don't encourage abuse of the system, or encourage more people to come and jump on boats.
MASON:
Hospital bed numbers are at their lowest of all time, yet we're seeing visas for 200 GPs being stripped from this Budget. Surely Australia needs more doctors and not fewer.
TREASURER:
We're having 3,000 more doctors in rural and regional areas as a result of this plan…
MASON:
Well, that's a target.
TREASURER:
…and 3,000 more nurses in rural and regional Australia. So, we're actually delivering through our workforce strategy more doctors into rural and regional areas. That's what we're delivering. That's what the plan does.
MASON:
It's the biggest savings measure in the Budget paper. So, are you really saying that there are too many GPs in Australia, that we need fewer GPs in communities? Because I think that many people would find that very difficult to believe.
TREASURER:
Well, they can make their own assessments. What I do know, is our plan is getting 3,000 more doctors into rural and regional areas and we're putting five new medical schools throughout the Murray Darling area, as well as one in Western Australia. And that is actually about training more doctors, Australian doctors, to go out there and work in rural and regional areas and I think that's great.
MASON:
Where did this extra money come from? You talk about it being a non-accidental surplus one year earlier than expected. But isn't the reality that most of this economic success is due to the global economic circumstance. We know that the global economic markets have had their best performance in around six years. How much has that contributed to this coming to surplus one year earlier than expected?
TREASURER:
Well that helps, but I wish it were that easy. I wish it were that easy that you just have to wait for someone to do something offshore and apparently all your lights light up. That's not how it works. We have put Australia in a position to really grow as a result of global growth. Look what we've done on the export trade deals. No one, no country, has done as well as us when it comes to striking deals all around the world: for our farmers, for our service providers, for our manufacturers. We've invested in research, in technology, in science. We've backed in a defence industry plan, which is seeing people who used to make cars now working in defence contracting. We're seeing our economy transition. I mean, $80 billion was ripped out of the Australian economy off the back of the mining investment boom, and we've managed to keep the economy both growing and transitioning. You know, of that, over 400,000 people who have got a job, one in five of those jobs went to men aged over 55. Now, they were the people who were supposed to get left behind, but under this Government they've got jobs.
MASON:
How much money have you set aside for an election? We know there will be one probably in the next year. How much money have you set aside? Many economists have said that there is extra money in the kitty this Budget that you've held something back.
TREASURER:
Well, I don't know what they're basing that on.
MASON:
So there's not an election war chest of funds there, you've spent all that you can in this Budget?
TREASURER:
We prepare every statement based on how we see the economy at the time and how we're seeing collections, how we're seeing our programs perform, and that's what the job of putting the Budget together is. And you seek provision for the future, and provide for the services. You mentioned hospitals before, our new hospitals agreement with the states and territories being signed on to. That is a significant boost for hospital funding all around the country. So look, we'll keep investing in the essential services, but the only reason we can do it is a stronger economy. And if you do things that harm the economy by jacking up taxes, having taxes at unsustainable levels – which is what our opponents want to do – well you just harm the economy and when you harm the economy, you harm everything else.
MASON:
You had your Cabinet meeting yesterday, you started this year in a very good mood. Julie Bishop said that the mood within the Coalition had never been so good coming out of the Christmas break then of course there have been quite a few distractions. How confident are you that this is an election winning Budget?
TREASURER:
Well I don't make those judgements, and that's not how I put them together. Australian's will make their own decisions but wherever Australians are tonight, when I delivered the Budget, whatever they're doing — with their families or not with their families, in work or out of work — the stronger economy we're building for the next ten years is going to help them. And a weaker economy will harm them. And we're for a stronger economy.
MASON:
Scott Morrison, thank you very much.
TREASURER:
Thanks a lot.