LAURIE OAKES:
Treasurer, welcome to the program.
TREASURER:
Thanks, Laurie.
OAKES:
We all remember the 2014 footage of the then Treasurer Joe Hockey enjoying a cigar with Finance Minister Mathias Cormann. Do you think Joe would have increased the price of cigars?
TREASURER:
Joe had to deal with the problems that he was facing in that Budget at that time. Every Treasurer does.
OAKES:
But you have increased the prices of cigars in this Budget?
TREASURER:
Well, whether it is that or whether it is what we have done with the banks or what we have had to do is we've had $13.5 billion of savings measures, we have been seeking to get through, many of which were from those Budgets back in 2014-15 and 2015-16. Now, the Senate isn't passing them. So we have to be practical about that. We have to deal with that. We have kept spending growth at below 2 per cent and it is heading back to just a quarter of the national economy which is the lowest level it has been at for some time, so keeping spending under control, but we have had to go to some revenue measures to deal with that shortfall, so we could A) get the budget back into balance by 2021 to the tune of $7.4 billion, but B) ensure that important services like the National Disability Insurance Scheme are once and for all funded and we can end any of the political debate about funding the NDIS and give disabled Australians certainty.
OAKES:
Well, Joe Hockey was clearly one of your targets tonight.
TREASURER:
No.
OAKES:
Well, the 2014 Budget was something you were trying to bury, surely.
TREASURER:
It was something we had been trying to pass for several years. We got $25 billion worth of savings measures through since the last election and we've ruled a line and said, "Those measures aren't going to pass. They were trying to solve some serious issues which we're still trying to address, but not with those measures." They are not going to pass the Senate. What does a practical person do? Find another way.
OAKES:
So even though those measures were dreadfully unpopular, they almost cost you an election you still think they were good measures?
TREASURER:
They are not passing and they’re now gone.
OAKES:
$13 billion worth.
TREASURER:
$13.5 billion and that means that has put a real strain on the starting point for this Budget, which only makes it more significant that we have been able to hold to the trajectory, hold to the path of getting a fair and responsible track back to Budget balance in 2021.
OAKES:
It seemed pretty clear today because you started the day by saying we have been listening. It seemed clear that you were trying to convince the Australian public that this Government is no longer nasty and it’s now warm and cuddly.
TREASURER:
What we have said, particularly in relation to wages growth, and we talked about that on Sunday, we are very conscious of the fact that people have not had a wage increase, a decent one, for a long time. That makes you acutely sensitive to the services. I think that, in part, was one of the significant reasons why those measures didn't pass. We've understood that and we've taken the decision on those measures and we have reversed them and we will reset on those measures and tonight we have invested in hospitals, we have invested in schools, we've invested in disability support. We've invested, for example, in providing children with protection in the Family Court system with additional support officers there to be there for them. I mean, that is a harrowing experience for a child and we've thought about them too in this Budget.
OAKES:
Theresa May once warned her party, the British Conservative Party, they were in danger of being known as the nasty party. Was the Liberal Party facing that? Is that why we've got this Budget tonight?
TREASURER:
I remember when I was in the UK earlier this year and I was hearing Theresa May talk about the Just-About-Managings – the JAMs – she referred to them as. I think there is a lot of resonance of that within Australia. Most people are managing, but gosh it is tough. What I'm saying to them, what I really want them to hear tonight, is that the better days I believe are coming and we're seeing confirmed in what is happening in the global economy and economists here are confirming for our own economy because of the way we positioned ourselves, all that sacrifice, all that struggle, we're getting through to the end of that period and these better days are there, but you can't take them for granted. So we get that and we've crafted a budget to give them encouragement, support, assurance so they can keep pressing on.
OAKES: As you are well aware by now, your Budget has been described as Labor-lite, maybe not so lite, how do you respond to that?
TREASURER:
The difference between Labor and Liberal Budgets is Liberal Budgets are paid for, Labor Budgets are all flim flam. They make spending promises they can never afford. What we've done in this Budget is we’ve funded our schools package, we funded our hospitals package, we’ve guaranteed Medicare with real money. We are filling the gap on funding which was left to us to fill on the national disability insurance scheme and we're taking those decisions. If there is one measure tonight, Laurie, that I hope the Labor Party can meet us in the middle on, it is on supporting fully funding the NDIS. It has always been bipartisan initiative, it should remain so. I don't want to have an argument about funding the NDIS, I would just like the Parliament to meet the Government in the middle and let's give the disabled Australians the assurance they deserve.
OAKES:
That involves a tax increase.
TREASURER:
In two years’ time. That is only when the bills start coming in.
OAKES:
But it is an $8 billion increase in personal income taxes.
TREASURER:
It is an increase in the Medicare Levy which is struck on a different basis to personal income tax, as you know. It phases in, particularly for families.
OAKES:
In the Budget papers, it is in the same section.
TREASURER:
Of course, but it is a differently structured levy to the personal income tax. It applies from dollar one, by the way, it doesn't have the progressive rates that apply to personal income taxes.
OAKES:
But everyone pays it.
TREASURER:
Not quite everyone. There are people on low incomes that aren't affected by the Medicare Levy, as you know, and larger families on low incomes are also not affected.
OAKES:
And later we find out that you…
TREASURER:
Supported.
OAKES:
You have always been against tax increases. You have said we didn't have a revenue problem. You said that you wanted to reduce personal income taxes.
TREASURER:
And I have.
OAKES:
You come in with this big whack tonight.
TREASURER: What this is, Laurie, it is an insurance levy. When the NDIS was set up, the Labor Party put in a half a per cent levy to support it. And we supported that in opposition. We didn't quibble over that. We knew it was important. We sought to get savings through the Parliament so we wouldn't have to do this. The Labor Party opposed it and the Senate opposed it. That is their right, but having said that, they now can't then say we can't support this levy because it’s exactly what the Labor Party did. We need to give those people with disabilities, their families, carers, the others in their lives, the guarantee and support that frankly they deserve. We should focus on delivering the NDIS, not quibbling over how it should be funded. We can agree on that now.
OAKES:
There would be a section of your party's base that will not like lots of this Budget, including the taxing, the Medicare Levy increase and the levy on banks.
TREASURER:
I disagree with that, Laurie. I mean, I know the Liberal Party members and base I know actually support people with disabilities…
OAKES:
They don't like tax increases.
TREASURER:
The Liberal Party members I know actually want to ensure those services exist for people who are less better off than they are. The Liberal Party I know is not running around spruiking for big banks. What they're about is a fairer deal for banks, for bank customers, which is what we deliver in this. Our executive accountability regime that I announced tonight is in line with other very significant schemes around the world and far tougher in many respects. Why is it that a senior bank executive can make decisions that impact the lives of thousands, tens of thousands, hundreds of thousands of Australians, and just be able to walk away? Now, we will require them to be registered and if they do that, they will be deregistered and won't be able to cause that harm in other banks, in other places. We will be able to clawback their bonuses too, Laurie, and you know that will get their attention.
OAKES:
It will certainly get the bank's attention. I wouldn't be surprise if they are out there squealing about it now. You don't deny, do you, that the ideologues in your party, on your side of politics, will be opposed to those tax rises and opposed to come of the other measures?
TREASURER:
There will be ideologues on either side of politics, Laurie, who won't like many measures in this Budget, but this isn't a Budget for ideologues. It is for hard working Australians making the choices they need to make to get their family ahead. I am with them.
OAKES:
The age of entitlement to a cheap cigar is over. We thank you.
TREASURER:
Thanks Laurie, always a pleasure.