LOUISE YAXLEY:
Treasurer thanks for your time.
TREASURER:
Not at all.
YAXLEY:
Why shouldn’t people see this higher Medicare levy as just a personal tax increase?
TREASURER:
Because it’s directly going to support in two years’ time, not the first of July, the only people paying more tax on the first of July will be big banks and multinationals being forced to pay their fair share of tax. This is a levy in two years’ time to ensure that the NDIS, the National Disability Insurance Scheme, is funded once and for all. People, Australians who live with a disability deserve that support, it’s an excellent scheme, it has bipartisan support, it needs to have bipartisan support on its funding. There is a gap that needs to be filled, and this fills it.
YAXLEY:
There are some exceptions for low income earners, but you’ve acknowledge that people haven’t had a wage rise for a while and then you are hitting them in two years’ time with a tax increase though.
TREASURER:
Well, what we ultimately do with personal income taxes in the years ahead will be matters for the Government to consider. What this does is once and for all ensure that Australians with disabilities, their families, their careers, their friends, their associates don’t live with the uncertainty about funding for this Scheme and Australians are fair minded people and they’ve always supported the Scheme when the original levy was introduced by the Labor Party, it was supported by the Coalition in opposition and was supported by the Australian community. I think they believe in this Scheme, it’s important for Australia, it’s the generous and compassionate country we are and I think we all understand it’s all of our responsibility.
YAXLEY:
Why not continue instead though with the deficit levy on higher income earners because they’re going to get a tax cut when that expires in July?
TREASURER:
The deficit levy was legislated for three years and we don’t break promises.
YAXLEY:
So did you consider doing it?
TREASURER:
It was legislated to go out after that period of time, and that was the promise and we weren’t breaking that promise.
YAXLEY:
You’ve previously been very strong saying that there’s a spending problem, not a revenue problem, so why should people accept that now you’re raising more revenue?
TREASURER:
Well expenditure is growing at less than two per cent over the course of the forward estimates and that retains the low level of expenditure growth that we’ve been pursuing. I mean we inherited expenditure growth of over 3.5 per cent from the Labor Party. So we continue to control expenditure, but we’ve reversed $13.5 billion in savings in net terms because of their blocking in the Senate. Now there’s only two choices when that happens: you either allow your debt and deficit to increase or you pay for it, and the Senate has said that they are not going to pass the savings so that leaves the Government really with this option.
YAXLEY:
So what in practical terms will this Budget do to ease the cost of living for people?
TREASUER: Well, on energy, the Prime Minister’s plan to ensure more secure and affordable energy is directly contributing to that and his securing gas supply for domestic use has been critical to that objective as well as the competition measures that we’ve been undertaking. In the housing area, everybody from those who are homeless who get extra support in this Budget through to those who need more affordable housing, there are special incentives for that. If you’re saving for a first home there are quite significant tax cuts on your savings. First home buyers will be able to save some 30 per cent quicker or there about, as a result of what we’ve introduced. If you’re a pensioner and you lost access to the pension earlier this year you’ll be getting your pensioner concession card back, which gives you access to all of those discounts that you previously received, and that was key feedback that we’ve received, and of course before 30 June there will be that one off payment of $75 and $125 for couples, for pensioners, disability support pensioners, veterans and single mothers.
YAXLEY:
You’ve also noted, mentioned that people haven’t been seeing their wages increase. What is in this Budget that will mean that they’re more likely to get a pay rise?
TREASURER:
We’re investing in growth and we’re particularly investing in growth with our $75 billion investment in major infrastructure. Whether it’s Western Sydney Airport and the inland rail, we’re doing feasibilities on the Tullamarine project, the Geelong to Waurn Ponds line duplication, some $100 million there, $830 million plus on Bruce Highway upgrades, there’s the package in Western Australia of infrastructure projects and the continuing investments in South Australia the north-south corridor. So there’s a big investment in infrastructure and nation building in this Budget to support growth. Small businesses will continue to get support with their instant asset write-off for companies with a turnover up to $10 million and a big fund, $300 million over two years to incentivise the states to cut red tape for small business.
YAXLEY:
Now, just one final question. When it comes to the numbers, does the $19 billion loan due to be paid back by the NBN in 2021. Now that appears to help you get to the surplus. Could that be seen just as an accounting trick?
TREASURER:
No absolutely not. This is a $7.4 billion surplus in 2021 and more than that from the year 2018-19, for the first time in around a decade, the Government will no longer be raising new borrowings to pay for everyday expenses. We’ll be making sure that our hospitals, our schools, both of which get significant increases in this Budget, and particularly with our Gonski 2.0 changes, that extra $18.6 billion for educating our children, all of this will be paid for, no longer out of new debt but out of the taxes that Australians pay.
YAXLEY:
So where’s that $19 billion from the NBN coming from?
TREASURER:
That was announced in the MYEFO statement and there was an arrangement between the NBN and the Commonwealth with a set of loans and repayments which cover those issues.
YAXLEY:
Treasurer thank you.
TREASURER:
Thank you.