DAVID KOCH:
I'm joined now by the man who'll be leading it, Treasurer Scott Morrison.
TREASURER:
Good morning.
KOCH:
On the politics, let’s get to the nitty-gritty. First home buyers – an interesting package. You can put your money into super?
TREASURER:
It’s your money, you are saving it and you’re going to get to owning your first home 30 per cent faster with this saving. So, it accelerates what they’re getting back on their own money that they’re already seeking to save now. So, it’s a tax cut on your first home savings.
KOCH:
So extra contributions into your super fund. It stays there, gets all the tax concessions and when you buy your first home, you just say, ‘I want it back then.’
TREASURER:
That's right.
KOCH:
Ok.
TREASURER:
Simple and direct and gets you there faster.
KOCH:
Ok. For seniors downsizing as well, again, another superannuation twist to that as well for those senior Australians to downsize and make their houses more available for families.
TREASURER:
That’s right, which frees up supply which is the big issue in housing. We need more supply, particularly in established areas, people downsizing, and then they can take from those proceeds of that sale of their principal residence, they can put $300,000 back into their superannuation – no caps, no limits, you can put it straight in there, $300,000…
KOCH:
So that’s each too, so for couples $600,000 as well?
TREASURER:
Correct.
KOCH:
So it doesn’t matter whatever your limit or not, it just goes in their superannuation?
TREASURER:
That’s right. It’s a non-concessional contribution and you put into your super and that boosts your retirement income.
KOCH:
Yep. Alright, small business – you’re going to extend the instant asset write-off...
TREASURER:
Correct.
KOCH:
…$20,000 for each item. What else is in it for small business?
TREASURER:
There’s a fund to reward State and Territory governments who are going to cut red tape for small business. Now this is very important. We’ve already cut a lot of red tape at a Commonwealth level, but what we need to do is get State and local governments to be cutting the red tape for small business. This is a big issue for small business, that red tape, and this will incentivise the states and territories and reward them for doing that for small business.
KOCH:
And the lower company tax rate will cut in as well too?
TREASURER:
That’s right. That tax cuts already legislated, 27.5 per cent for businesses up to $10 million, the instant asset write-off for those businesses, and then on top of that, we’ve got the cash position for the GST and pool depreciation. So this continues the strong support for small business.
KOCH:
You started off the Budget by saying we're all disgruntled, we’re all frustrated because we're not seeing big pay rises, that the benefits of economic growth are not flowing through to us. How does this Budget ensure that those benefits come through?
TREASURER:
Well, we’ve set Australia up for the growth that we’re now seeing globally. Around the world we’ve had a clear consensus over the last six months that things are starting to turn. Now, our trade agreements, the investments in our infrastructure, ensuring that our tax system is more competitive, our investments in the defence industry right across the supply chain – Adelaide, up in north Queensland, Western Australia. All of these things are designed to grow the economy that supports more and better paid jobs.
KOCH:
Yeah but pay rise, you’re only predicting 2.5 per cent in the next 12 months, 3 per cent the year after. The days of five and 10 per cent pay rises just aren’t there, are they?
TREASURER:
Well around the world I think that’s what we’re seeing, but we're doing everything we can to ensure that businesses can do better which means they can pay their employees better over time. You're right, our forecasts in this budget are conservative, they’re very conservative, and that’s important for the credibility of what goes in that document…
KOCH:
So do you reckon we could get bigger pay rises than 2.5 per cent?
TREASURER:
Well, history and the future will tell us what happens, but simply what I’m saying is we've taking a very cautious and prudent approach to the forecasts, and that means the ratings agencies that have a big influence on how much the country pays for their debt, I think they will look on that favourably and that’s I think the wise and prudent thing to do.
KOCH:
Ok, Medicare Levy going up, extra 0.5 per cent, doesn’t start for two years. I was surprised that it wasn't means tested, it wasn’t just targeted to high income earners. Everyone is going to pay that extra 2.5 per cent.
TREASURER:
This levy has one job and one job only, and that’s to fully fund the National Disability Insurance Scheme once and for all. You’re right, it comes in two years. That’s because that’s when the funding gap is. We're not going to strike the Levy until the bills start coming in for the NDIS.
KOCH:
But why on all of us? Why not just high income earners? Because high income earners are going to benefit from an existing levy coming off, so they’re used to it.
TREASURER:
Well, that was a temporary levy on the deficit, and our promise in the legislation was that came off, so we’ve kept our promise. That was for a completely different task, David – completely different task. All of us have an obligation to our fellow Australians with a disability to ensure that they can enjoy the better standard of life that the rest of us, through blessing, we may not have been suffering from a disability. That’s when it was first set up by the Labor Party. We supported them putting a 0.5 per cent levy on the Medicare Levy, to pay for the NDIS. The only problem was it didn't fully fund it. So, I wasn’t going to say to Australians with a disability, their carers and others, that we were going to leave this $55 billion funding gap over the next 10 years. This ensures that the NDIS is fully paid for. So, the politics should end on this. Let's meet in the middle on this. Let’s agree to support disabled Australians and fully fund this scheme.
KOCH:
You’ve got a tax on banks earning a lot of money. How can you guarantee they’re not going to pass that on to us as customers?
TREASURER:
Well first of all, it’s not on bank deposits, it’s not on people’s mortgage accounts, it’s not on shareholders equity. It’s on none of these things. It is on their liabilities excluding those. It’s even not on the things that we require the banks to hold in capital...
KOCH:
But they will just package it all up and say, “Constant funding’s going up...”
TREASURER:
And if they did that, they’d be lying to their customers. And what the ACCC will be doing will be keeping an eye on them to make sure that they don’t lie to their customers about this. I mean, as you absolutely know, a six basis point impact on their liabilities, I mean banks see more movement than that in a week or a month. And so this is $1.5 billion out of corporate profits we’re seeing for the banks of $30 billion this year. So they can do their bit for budget repair.
KOCH:
Ok, Treasurer, thanks for joining us.
TREASURER:
Thanks, David.
KOCH:
Appreciate it.