LISA WILKINSON:
Good morning to you Treasurer.
TREASURER:
G’day Lisa.
WILKINSON:
Five months and we are yet to see any change in the way the economy has been handled just more mounting debt. Whatever happened to that budget emergency?
TREASURER:
What we have announced is of course the big innovation package last year. What we've also seen is business and consumer confidence has picked up particularly over the last five months and we've seen job growth continue and of all the uncertainty and turmoil there is in the world at the moment, Australia is the best place to be in terms of the economy. This is good news. Our economy is transitioning. Our confidence is good and our rate of growth is higher than all the major countries in the world. So, while things are tough, sure, what we have to do is make sure we don't drag on that by putting taxes up on people. That's what we'll be planning to do – not putting taxes up on people so they can get ahead.
WILKINSON:
Treasurer you're a can-do minister. Stopping the boats proved that and you were clearly working towards more ambitious tax reforms particularly on the GST but the Prime Minister well and truly killed that. Did he hang you out to dry?
TREASURER:
No. What we did was, Lisa, if we thought the GST was a bad idea for political reasons that decision could have been made last year. What we did is we went and did the work. What that work showed was is for all the effort of increasing the GST on one side, to reduce taxes on the other side at the end of the day that didn't boost growth. Now, we're about boosting growth and jobs. The times are tough globally at the moment. Everybody understands that. Anyone who watches the stock market and these sorts of things knows what is going on outside. That means we need to continue to have a steady hand to get government expenditure, continue to get that under control and not hit people with higher and higher taxes which is what our opponents are proposing. They are just proposing higher taxes.
WILKINSON:
In the time you let the GST debate sit out there Labor did get a bit of a heads up. They have already announced policies in a number of key areas. It seems they're now getting the jump on you. Are you going to announce any economic policy before the May Budget?
TREASURER:
We'll continue to announce policy. We've already announced major policy.
WILKINSON:
There wasn't much in that speech yesterday.
TREASURER:
Yesterday was a framing of the Budget. The major policy announcement so far has been the innovation statement of over a billion dollars invested to make us a more innovative economy. That is a significant policy which was announced before Christmas.
WILKINSON:
This is all stuff we already knew.
TREASURER:
The Budget will be in May like it always is. It’s not in February. What I was making the point about yesterday is the task of the Budget is to keep spending under control and not hit Australians with higher taxes. All Labor have done, Lisa, is announce higher taxes. That's not a policy. That’s a slug on your viewers.
WILKINSON:
They were the ones that said don't lift the GST and you followed suit.
TREASURER:
No, what we've done on looking at the GST is to reduce personal income taxes. What they’re saying is we'll tax you more but we won't give you any tax relief. They want to tax people more to chase higher levels of spending. What we're saying is the best way to get ahead in this economy, to back people in, is to ensure expenditure is low so taxes can be low.
WILKINSON:
You have boasted about slashing spending by $80 billion but you've gone and spent $70 billion. Is that really an economic record to boast about?
TREASURER:
What we've done is over 300,000 jobs were created last year, Lisa. That is record job growth since 2006. What we've also done is where there's been additional claims on government spending whether that’s in building new infrastructure or things like that we've been able to pay for it with savings. So, we've been able to ensure the new spending that has come on has been paid for by savings in the Budget – not higher taxes. We've actually cut taxes by $20 billion. So, lower taxes, lower spending is the plan for growth. Higher taxes for higher spending – that's a road to ruin.
WILKINSON:
But the problem is you need to dramatically cut spending. That deficit is really an embarrassment for the country. Where are you going to cut spending?
TREASURER:
The spending as a share of the economy under our plan is already falling from 25.9 per cent of the economy to 25.3 per cent on the Budget we've got out there. We have $13 billion of savings right now which is being opposed by the parliament in the Senate and particularly by the Labor Party. That includes welfare payments which frankly have no purpose to them. They’re cash splashes in July for welfare payments. They’re one-off payments, we want to get rid of those payments so we can ensure we can get even better targeted family assistance particularly for those who need child care. You need better spending, you need more targeted spending and you have got to say no to new spending. That's how you keep spending under control and that is what I said yesterday.
WILKINSON:
Is there a huge disconnect between what you would like to do economically right now and what's politically possible this close to an election?
TREASURER:
What's really the issue, is the number of options are limited in this sort of economic environment. You need to...
WILKINSON:
But this is the same economic environment that the Prime Minister, the new Prime Minister said that it needed a new economic plan and that was five months ago.
TREASURER:
What we said was we need to continue to explain why there is the need for the strategy of low taxes and low spending. That's what I'm doing today. There is no easy answer to this, Lisa. It does take years. I mentioned, it's Test Match not 2020. I could tell you, like others have in the past, that this can all be solved in one or two years. But I'm telling the Australian people the honest truth that this will be a hard slog over a long period of time. You've got to be disciplined and very sober about it in this difficult economy so people continue to get in work and we continue to build confidence in the Australian economy. This is the best place in the world to be when it comes to the economic times at the moment. We're doing better than our competitors. China is still growing and we're well synced with the growth in China. We need to spend less, tax less – not spend more and tax more as Labor wants to do.
WILKINSON:
So will the real cuts happen after you get elected if that happens?
TREASURER:
No, our Budget will set out what our saving measures are. They're already in there. There's $13 billion which still need legislating which Labor is saying no to and they've announced an additional $14 billion on top of that since the Budget. They want to tax you 20 times more than they want to save. I don’t think that is not a plan for jobs and growth. Our plan for jobs and growth is to get spending, continue to get that down so we can keep taxes down.
WILKINSON:
Alright, well a brand new Cabinet is going to be sworn in today – the second in five months. Did the Prime Minister do the right thing keeping Tony Abbot off the frontbench?
TREASURER:
He's got a renewed Cabinet. I think that's putting a lot of energy into the government and I think people can see that. People like Alan Tudge and Dan Tehan who are coming into that Ministry today. Steven Ciobo who goes into the trade portfolio taking over from just an exemplary Bradman-like effort from Andrew Robb. This is great renewal and this is positive change and I think it is setting us up with the right team for the future.
WILKINSON:
Would you like to see Tony Abbott on the frontbench?
TREASURER:
I don't make those decisions. The Prime Minister is about renewal in his team and that's what has occurred. I think that's great for the country.
WILKINSON:
Ok. Treasurer Scott Morrison, great to have your company this morning. Thanks for your time.
TREASURER:
Thanks Lisa, thanks for having me.