DAVID KOCH:
Treasurer, good to see you again. You've described this package as fair and rewarding to workers, critics say, hey, only modest cuts for low income earners and the rich are going to get the benefit.
TREASURER:
That's rubbish. Everyone going to work today from 1 July next year they're on a better tax wicket because we're reducing taxes right across the board and it starts with low and middle income earners, $530 is what they'll get in their tax refunds in addition and that's for people earning up to about $90,000 a year and then over the next seven years those taxes come down right across the board so that 94 per cent of Australians won't face a marginal tax rate higher than 32.5 cents. If we didn't make that change, it would be around about 63 per cent so this is a very big change to our tax system for all working Australians.
KOCH:
Yeah, none of us are going to knock back tax cuts. That's terrific but then the other thing we think about is can we afford it? You know, we've got a Budget deficit, you keep telling us to be conservative, that we've got to get the debt under control, we can't have the credit card for our kids. Can we afford this amount?
TREASURER:
The revenue impact of this package actually comes in in the year we actually bring the Budget back into balance in 2019-20. The Budget is coming back into balance a year earlier than we projected. With these changes, we are hitting our one per cent of GDP surplus over the same period of the plan. The net debt we've turned the corner on that this year, $30 billion in net debt is paid down over the next four years while putting this plan into place so it's responsible, it's fair and it's affordable.
KOCH:
Alright, so if we don't hit those Budget targets – sort of something happens overseas or here in Australia – are the cuts under pressure?
TREASURER:
No because what this is, David, is it's a responsible plan. We've looked at the outlook for over the next decade, of course you can get shocks…
KOCH:
Yeah, you can't predict that.
TREASURER:
Exactly and what – with all the best advice and looking at everything that's ahead – this is the right way to ensure that Australians have the right tax relief to give them incentive in the economy. But to grow the economy, the best defence against the shocks from overseas is a strong economy. And you don't make your economy stronger by taxing people more.
KOCH:
So just to explain that, more money in our pockets through the tax cuts means we go and spend it at the retailers…
TREASURER:
Correct.
KOCH:
…who make more money, who pay more company tax and then it comes back in. Is that the ripple effect you're talking about?
TREASURER:
Absolutely. You don't have a stronger economy by jacking up taxes and the Labor Party are going to put $70 billion – they confirmed yesterday – in higher personal taxes on Australians because they opposed this plan. They want to cut it in half if they're elected at the next election.
KOCH:
Okay. Alright, Treasurer, thanks for joining us, appreciate it.
TREASURER:
Thanks, David.