PAUL MURRAY:
Ladies and gentlemen, here at the Central Coast and watching us on Paul Murray Live, will you please welcome my friend, the Treasurer of Australia, Scott Morrison.
TREASURER:
G'day mate. How are you?
MURRAY:
ScoMo, how are you mate?
TREASURER:
I’m really good.
MURRAY:
Lovely to see you.
TREASURER:
Great to see you.
MURRAY:
If you don't say hi to the local MP there’ll be issues. Do you want to sit here or there? Where do you want to go?
TREASURER:
Well wherever you like mate, it’s your show.
MURRAY:
Let’s start up here.
TREASURER:
Ok.
MURRAY:
Start up here, it's very comfortable if we sit up here. Let’s make this look very natural. Firstly, thanks very much for doing this. I do appreciate it and most importantly being able to talk to people about whatever they care about when it comes to the Budget. I’ve got to ask the obvious question though, which is that you know, I hound you all the time, I text you, I annoy you, all the time about debt, debt, debt, debt, debt. When Rudd was the first person to legislate a debt ceiling, it was $75 billion. On Budget day, stroke of a pen, $600 billion and if you see the back bits of the paper, parts of it can go over $700 billion. If we get $600 billion that’s $25,000 for every person in this room, every kid born today, and every adult who will end up leaving us tomorrow. Why is that ok?
TREASURER:
Debt is a very serious thing and debt’s a bit like a tanker; it's out there and once it gets moving, as it did over all those Labor years, it's very hard to turn around. But this is what we have done on debt. First of all, debt and its growth, we have reduced by two-thirds since we came into Government in 2013. That's a very big cut. It was at 34 per cent, it's now less than 10 per cent growth. But debt growing at that level is still high, particularly by Coalition standards. The other thing we've done is we’ve cut the rate of growth in spending. It was 3.5 per cent and more when we came to Government. In our first Budget it was at 2.6 per cent growing and in the Budget I handed down the other night, it's less than two per cent. So, we're getting the growth in expenditure under control in the Budget I handed down this week. And the third point is this: over Labor's six years, all the debt and deficit they accumulated over those years, that was around $240 billion in deficits. Now, our equivalent six year period, taking into account the years that are coming up, we've got $70 billion in less deficits over that period of time, so that's more than 30 per cent that we've been able to keep those deficits down. Now, still got to turn that ship around, and looking forward, the things, the only things we are borrowing for, from 2018-19 onwards is this: to build infrastructure and to make and to pay for important defence equipment and things like that that we need, and to ensure that we don't raid the Future Fund. From 2018-19 for the first time in a decade, we will no longer be borrowing to spend on everyday expenditure. Now, that’s a significant achievement of financial management of the Coalition Government. We will no longer be borrowing for everyday expenditure. That won't be going on the credit card; we will only be borrowing from 2018-19 going forward for things that last.
MURRAY:
The size of government is something that you know, I care about deeply as do you, but lots of people in this room. I showed some figures over the past week. In 2007 to now, government spending is up 97 per cent. The population hasn't grown by that much, the number of businesses hasn't grown by that much. The take of income is up 80 per cent in federal government. Again, population hasn't grown by that much, workers haven't grown by that much. I think there’s a lot of people who are very frustrated about not just big Australia but also big government. You can compare budget to budget, and if it’s 97 per cent bigger than it was 10 years ago but the population is only 20 per cent bigger, what the hell's going on?
TREASURER:
Well, once expenditure gets baked into a budget, it's very hard to get it out. We've been endeavouring to get $14.7 billion worth of savings through the Senate, and in this Budget we had to reverse those out. We had to do that because it could no longer be credibly held on the Budget, and over the last 12 months or thereabouts since the last election, certainly since the last Budget, we were able to get $25 billion worth of savings through. And so it is important to keep a lid on expenditure growth, and as I said our expenditure growth is less than two per cent under the Budget that I handed down, and we will continue to keep the lid on that. But when you have important large programs like the National Disability Insurance Scheme, that until what I announced on Tuesday night has never been fully funded, and with the measure – the fair measure, the big-hearted measure which I want to thank Australians for responding so well to - I knew they would, that's what Australians are like. That sort of expenditure on those sorts of programs obviously means your expenditure’s going to be higher. Now, what we have to focus on is making sure that the expenditure that we undertake is targeted. I spoke to a welfare group this morning and they were asking me about welfare integrity and things like this, and when eight out of 10 income tax payers go to work every day just to pay the welfare bill, well it’s got to be targeted, it’s got to do its job. I think Australians have big hearts and want to help people who really need help, but they don't want people to free ride on it. So, we’re going to make sure continually that we target our social security support payments as best as we possibly can.
MURRAY:
Now this is the question I’ve got to ask about Shorten. You heard what I said at the start about polls and all the rest. I won’t play the Canberra game and get you to talk about that, but when Bill Shorten sits opposite and talks about ,‘Millionaires, millionaires, millionaires, millionaires.’ But he’s proposing a tax that starts of $87,000…
TREASURER:
Yeah, tell him he's dreaming. Honestly…
MURRAY:
He said it 14 times today.
TREASURER:
It's all Bill-dust, basically. That's what it is…
MURRAY:
I like that. That’s good, I like that. I don't mind that.
TREASURER:
And that's what we see. They like to spend money twice, that's how we got the big funding hole in the NDIS in the first place. They spend money twice, they make things up, that's why Australians just know they can't be trusted on these things. But look, I didn't come here to talk about Bill Shorten tonight, he does plenty of that talking about himself, so yeah.
MURRAY:
Alright, fair enough. Alright, let's take some questions now. So join me down on the floor...
TREASURER:
Sure, let's do that.
MURRAY:
As I do my best Oprah Winfrey here. You can say whatever you want about the similarities. Alright, so the Treasurer’s here, he’ll answer your questions. Let’s go. This man came from Adelaide to be here tonight.
TREASURER:
Oh great. Up the Crows!
MURRAY:
What's your name?
QUESTION:
Alan.
MURRAY:
Alan, g’day. Say g'day to the Treasurer, what do you want to ask him?
QUESTION:
I wrote it down because I have a bad memory. Unions, Labor's cash cow, are running big business pretending to represent workers and they pay no tax. Religious organisations also pay no tax and they own private schools, private hospitals, nursing homes, etcetera, and the backbone of Australia – private enterprise – can't compete because they have to pay tax. If it was put to you that they all pay their fair share of tax and that the revenue be quarantined to only pay down the national debt, which in today's political climate will never happen, and after the debt is paid then only be used for infrastructure spending, will you support this and if not, why not?
TREASURER:
Well, first of all on unions, unions should have the same accountabilities that a company should. If directors can be charged for mishandling and misusing money, then so should union officials and here we're not far from the seat of Dobell, are we, Lucy? And we all remember the former Labor member for Dobell, and it's very important that union officials are held to account for the union's members. We were able to legislate in the Parliament that type of arrangement for unions, to make sure they're treated the same way. Now charitable organisations, I wouldn't call a union one of those, unless it's a self-charity for union officials on occasions. But with those organisations, with charitable organisations, they're working here on the Central Coast on homelessness, they're working out there in the streets supporting people with cash assistance and doing tremendous work in our communities, and that's the sort of work we want to support them to do. Where they run commercial businesses, though, religious organisations, no they don't get tax treatment on that. If they are running cafes or anything like that, they have to pay tax like anyone else. So religious organisations, or any of those sorts of organisations that are doing positive, affirming work in the community, well that's an important part of the fabric of our society. We're a generous country and we're supported by some great benevolent organisations, but all suggestions openly received and considered.
MURRAY:
I’m not going to do this to every question, or I’m not going to do it all night, but just a show of hands – who thinks that churches should pay taxes? Alright, who thinks that only the businesses that they run should be the ones paying taxes? Alright, just a little random pub test if you will.
TREASURER:
There you go. A club test.
MURRAY:
A club test. It's official. Ok, what's your name?
QUESTION:
My name’s Carl.
MURRAY:
G’day, Carl.
QUESTION:
Thank you for coming tonight to answer our questions. I’m an engine worker. I went to work, support myself, my family, I’ve got a serious back injury – off the Budget this is. I’ve spoken to SIRA, I’ve spoken to WorkCover, I’ve spoken to the ex-State Finance Minister Dominic Perrottet had meetings with them asking the same questions, they said you’re the only person that can help us. I get a weekly benefit, I pay tax on my weekly benefit, but I don’t get any superannuation contribution. I’ve got about 15 years left, my employment possibilities are basically nil because my doctor won’t let me work. I’m, as I said, classed as seriously injured, so I’m above 33 per cent whole person impairment. Where am I going to be at 67 when I get cut off workers comp, if I can’t find employment and I’ve got $30,000 in super now and I’ve missed out of 10 years of super contributions? Can you help me?
TREASURER:
First of all in that situation, you will be on the pension and you will be supported by the pension…
QUESTION:
Is there going to be a pension?
TREASURER:
Well that’s a very good question. Yes there will be, there will be a pension so long as Coalition governments are there to manage the finances of the nation. This is an important point, I mean it is a very serious point. Barnaby Joyce makes this point quite regularly. You just can’t assume all of the wonderful supports we have in this country – the Pharmaceutical Benefits Scheme, pensions for older Australians, the work we do right across in hospitals and schools – I mean you need to grow your economy, businesses need to do well in our economy to ensure we’re earning the revenue to pay for these important services and we need to spend it well. But in terms of your particular situation, the pension is there to support people who find themselves in your situation and in the 2015-16 Budget when I was the social services minister, what we ensured was that those who had very low levels of assets in the pension, particularly who were previously on a part pension, they have been moved onto the full pension and they’re getting the full pension now where you have lower levels of assets. So, it’s all about ensuring and in your case with what you’re talking about with your superannuation fund where you think it will be, then you will be qualifying for a full pension. But you’re right to raise the question that we need to keep managing the finances well to ensure there aren’t just pensions for those who are receiving them today but there are pensions for those who will want to receiving them in 10, 20, 30 years’ time.
MURRAY:
What’s your concern about whether there would be a pension or not?
QUESTION:
Oh, I’m buying a home, my wife’s working full time to help support me doing that and that makes me feel about that big. When my workers comp cuts out, if we can’t afford to live we’re going to have to sell our home…
TREASURER:
And we don’t want to see that happen.
QUESTION:
But if I have to do that, then I’m not going to qualify for a pension because I might have a couple of hundred grand in assets because we bought 25 years ago.
TREASURER:
Well, no, if it’s a few hundred thousand then you would still get a full pension, but what’s important about the pension is it is there for those who need it most and that would be you in your situation, and we need to ensure that all of our welfare support payments are well-targeted at those who need them most, and, certainly, your situation I think would be very much covered by that. The fact that you’re able to own your own home in that situation is also really important. If people can own their own home and have reduced their mortgages to a certain level by the time they go into their retirement, then obviously their retirement incomes are going to be better served as well.
MURRAY:
Alright, we’ve got a question over here – have we got a lady who wants to ask a question, I know there’s plenty of fellas? Is there a lady who wants to ask a question? Alright, here we go, excellent. Well Twitter will be annoyed if we don’t have diversity. Alright, what’s your question?
QUESTION:
Mr Morrison, thanks for coming to speak to us, and I’d like to know why the Government gives preferential treatment to investors over young people who wish to buy one home? And they are often mums and dads, so please don’t give me the mums and dads spiel. Why are new builds open to 50 per cent overseas investors when there’s insufficient stock available for young people? And this isn’t a city-centric question. The investors have now hit the Coast. I live in an area where five homes have been sold recently and four of them are vacant. I am a fifth generation Australian. The sixth generation, which is the best educated generation of my family, and they are employed, are the only ones who will never I think have a home and they are typical of all the young people. I mean, you know, we older people can do more to help them I’m sure, but something has to be done.
TREASURER:
I understand exactly the point you make and that’s why what we’ve announced in this Budget is the following. Your kids – by the way, that sixth generation is the first generation to grow up entirely, if they’re 25 years old or thereabouts, never a recession in the last 25 years. That’s a great achievement for everyone in the room whose been working hard for the last 25, 50 years that we haven’t had a recession in over 25 years – that’s an extraordinary thing. But for those who are saving to buy a home what we’ve said is this: let’s say you’re on $70,000 a year as your income. If you are putting away $7,000 a year, saving from your gross salary you will get tax cuts, tax incentives to save by putting that in your superannuation, and after just three and a bit years you will be $7,000 better off. So you will be around 35 per cent better off from the Super Savers Scheme that we announced in this Budget, because it’s hard for young people to save, when we looked at this problem we said they’re saving but they just can’t move fast enough, and so we’ve accelerated their savings with tax cuts, by around a third. So, it’s their same money, they’re making that sacrifice, and we’ve said we’ll back you in and we’ll cut the taxes on your savings and you won’t have to pay your marginal rate in what your pulling out of your salary for your salary sacrifice. But that’s not all we’re doing. What we’re doing is we have reimposed that 50 per cent limit on those developments for foreign investors. The Labor Party took it away; we’ve put it back on. In this Budget we’ve also abolished all capital gains tax exemptions for foreign investors in residential retail property in the country. That’s something also that we’ve done. In addition to that, we have trimmed the negative gearing deductions that you can make, but it’s important that mum and dad investors – and I will refer to them as that because there’s 80…
QUESTION:
That’s ludicrous, they are investors.
TREASURER:
Well, yes, they are investors...
QUESTION:
We’re all mums and dads. These are the kids that may never be mums and dads…
TREASURER:
No, I understand that but…
QUESTION:
… because they can’t afford to put a roof over the kids’ heads. This is a good scheme you have for young people coming in and I commend you for that...
TREASURER:
Thank you.
QUESTION:
However, if you go – and I have watched auction after auction for the last two years and seen groups of young people being bombed out of the market by investors, and it’s not $30,000 or $60,000 a year these houses are going up. The last two auctions I went to were half a million dollars over the reserve of the property. Now something’s wrong. How can the kids get a home?
TREASURER:
Well, the something that’s wrong is we’re not building enough houses, and what we need to do is we need to build more houses. But the other thing we need to do is ensure, as I’ve said, as we take away those tax concessions for foreign investors, which is what we’ve done, that we help people save more, that we incentivise the state governments and local governments to ensure they’re building more homes which is what our policy is all about. There also needs to be more affordable housing. I mean 30 per cent live in housing which is rented – 30 per cent – and the only people who own those homes, it’s not owned by the government, it’s not owned by big superannuation funds or anyone like that, it’s just everyday Australians who own. So you’re absolutely right, housing affordability is a big challenge and we’ve put a comprehensive package together in the Budget for that, but particularly to help those first home buyers who want to save, and they’ll be a third better off under our program.
MURRAY:
Ok, thank you very much. Now look there were a few people obviously that you might have heard on TV at home that were grumbling a little bit during some of that answer. Who was one of the people who disagrees about the supply side being part of the issue here? I want to engage with as many people as possible and all the different views here. Say what you wanted to the Treasurer.
QUESTION:
Good evening. I’ve had four children – three out of my four children had bought houses at the age of 21. My son’s 30 and he’s got five houses now, he doorknocks right round the neighbourhood, doesn’t go to auctions, doesn’t go to sales or anything and that’s what he does. He just knocks, renovates, rents it out and goes to the next house. He’s done his university degree, he’s worked hard, sometimes two or three jobs to get where he is, and I think “Come on you’ve got to get off your bum and work.”
MURRAY:
Ok, thank you very much. I think I’ve spotted somebody who disagrees. Can I just ask you just one question before I get to this young lady, about negative gearing? Makes sense to me that people are able to have their house and another house, maybe even a second house and then everyone wants to pay property ‘kerplunk’ just before you need that for the back end. But why can’t you just say no to four, five, six, seven? Why can’t we just set a limit to say “Look you’ve got a bit of a system, but it’s not that big a system...”
TREASURER:
Well when it comes to negative gearing, lets understand one thing: that what’s happening here in New South Wales, and particularly Sydney and Gosford and down in parts of the Illawarra and so on and what’s happening in suburbs of Melbourne, over in Perth where they’re watching tonight, property prices have been going down. In Adelaide they’ve been running flat, in Hobart, Darwin they’ve been going down. And see, the thing is when you play around with the tax system, what you do in Sydney, which might have some impact arguably – arguably, but only arguably – what you’re doing is consigning those living in Perth and other parts of the country to an undermining of the property values. The thing is you can’t isolate negative gearing. It’s a tax system that applies right across the whole country. You can’t say you can negative gear in Perth but you can’t negative gear in Sydney – the Constitution prevents you from doing that. So, this is why using the big sledgehammer and the chainsaw of changes to the tax system can have very serious consequences more generally. I mean, the housing market has been running very hot, particularly where we are tonight and further south in Sydney, and what you don’t want to do is do things which actually can prick a housing crisis, and it’s important because that what that does is that flows into jobs and confidence in the economy and that can affect our economic situation quite seriously. So, I’ve been arguing you’ve got to use the scalpel, not the chainsaw. We have used the regulatory controls on the banks to restrict. You will have to have a tighter control on interest only lending now from the banks, it will fall from 40 per cent and it’s got to come down to less than 30 per cent. We’ve also put controls on the growth on investor lending to get it down below 10 per cent growth. So, that’s the scalpel and we’re already seeing the impact of that in the market. The last set of figures for Sydney house prices were actually flat and for apartments they were going down, and so you’ve got to be careful with this sort of thing.
MURRAY:
Alright Treasurer, we’ll take a quick break, plenty more questions in a moments time. This is Paul Murray Live from the Central Coast Leagues Club. More in a sec.
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MURRAY:
Thank you, everyone. Welcome back here to the Central Coast Leagues Club. Fired up audience here tonight and I’m very pleased to here on Paul Murray Live here with Treasurer Scott Morrison. Let’s not muck around, as many questions as we can possibly get on the TV. Now, Treasurer, there was a lady who was calling out a little bit before so let’s give her a chance to deliver it straight between the eyes. Up you stand ma’am, what’s your name, and what’s your question?
QUESTION:
Hello Treasurer, my name is Kerrie.
TREASURER:
Hi, Kerrie.
QUESTION:
I put it to you on behalf of the young people of Australia, how the hell can someone, a young family with a couple of children on $35,000 a year save $7,000 on and above their living expenses, their $500 for rent, towards a super fund? On and above, how the hell do you expect young Australians to meet that criteria of the Budget? Because feasibly, from an economic point of view for the young family, it is not something that can be accomplished.
TREASURER:
Look, I agree with you. I think that program will not help people who are at that level of income. A family in that situation is probably going to be relying on affordable housing and discounted rental housing and being supported potentially by community housing associations or they’ll be renting for a very long time...
QUESTION:
No, I disagree with that because there are young people that are not relying on the handouts that other people do…
TREASURER:
I’m not suggesting that.
QUESTION:
They are struggling, they are working in jobs and they are in lower income jobs, they’ve got their children, they’re trying to get through their daily life, and you’re now saying to them that, “Oh yeah, no worries just throw aside another $7,000 towards…”
TREASURER:
No, no I’m not saying that all with great respect….
QUESTION:
… “from your super.”
TREASURER:
What I’m saying is where people are in a position to save, their savings will go faster. Even if they’re saving $500 or $50, they will get tax cuts on their savings. But for people on lower incomes, one of the reasons why I’m so keen to get others into their first home is because when they’re not going into their first home, they’re staying in the rental market and that is driving rents up and making less rental accommodation available for people in the very situation you’re talking about. And so what I want to do is ensure that there’s more rental accommodation for them, and when there’s more people in that situation, it puts pressure on the affordable housing...
QUESTION:
[inaudible]
TREASURER:
Well I am agreeing with you.
QUESTION:
[inaudible]
MURRAY:
But ok. But how do you bring the price down? How do you think?
QUESTION:
[inaudible]
TREASURER:
I’m agreeing with you, we need more rental accommodation. We need more affordable housing accommodation, we need more social housing accommodation and we need more support for people who are sleeping rough. You know, last night there would have been women affected by domestic violence sleeping in their car between here and Newcastle. In the Budget we put $375 million to make homelessness funding for the first time from the Commonwealth Government permanent in this country and we have said that the focus of that money for homelessness needs to be on victims of domestic violence and young people – young people couch surfing. Now, I know in my electorate down in southern Sydney that’s one of the homelessness issues we have and I’m sure, Lucy, that’s an issue we’ve got here on the Central Coast. But I know because I’ve been here, I’ve sat down with the Wyong Council and I know that homelessness, particularly for women affected by domestic violence, is a very serious issue here on the Central Coast and we’re putting $375 million to make homelessness funding permanent.
MURRAY:
One more question on housing and then I’m going to move on from housing. What’s your name? What’s your question?
QUESTION:
Hello I’m Scott, I’m from Central Coast. I’m here with my One Nation friends. Back onto the housing – because you were pretty good at changing the subject there as usual – there’s one way we can solve the housing problem and I think everyone in this room would agree with me. Houses belong to Australian citizens, not foreigners.
TREASURER:
In response to your question, we have removed all capital gains tax exemptions for foreign owners of residential property. We have also forced the divestment of $120 million worth of residential property illegally obtained by foreigners. We did that. That wasn’t done by previous governments. We brought in the tougher regime around foreign investment in residential real estate and we have been getting results on all of those areas. We’re the Government that has also brought in the toughest multinational tax avoidance laws this country has ever seen. In just one year, $3 billion we have raised this year from our multinational tax avoidance laws. Not $5 million billion over 10 years like Bill Shorten said the other day – $3 billion from just seven companies in one year. That’s what we’ve done when it comes to cracking down on multinational tax avoidance. I’ll leave it to the Labor Party to explain why they didn’t vote for that legislation, but we have had the strongest set of foreign investment rules. Just recently I said the BHP, the Big Australian, has to remain Australian; it was the Coalition Government that said no when it came to the sale of the Kidman cattle property station and it ended up being bought by Gina Rinehart, and we keep a close eye on these foreign investment issues. We welcome foreign investment because it builds the country, but at the same time it has to serve Australia’s national interest.
MURRAY:
But, Treasurer, there is also this question too about supply, demand and lots of things. When I talked before about big government, the fact that spending has increased by 97 per cent in ten years, part of that a lot of people think is immigration – 200,000 people that we add to the list who need to go to hospital, who need to go to university, who need to find a place to live, which most often will be the populous of Sydney or Melbourne. Why doesn’t the Government, or why can’t the Government ever, ever even engage in the concept of big Australia doesn’t automatically mean awesome Australia?
TREASURER:
Well, when we had a big Australia debate some years ago, and I remember I was in it arguing the case from the Coalition’s point of view and we were arguing that we needed to have the population growth rate move from 1.8 per cent down to 1.4 per cent. Guess where it is now? 1.4 per cent. So, at that time net overseas migration was running at over 300,000 a year; it’s now down less than 200,000 on net overseas migration. But, let me make this one point about population growth and immigration: over centuries – not just over decades or weeks – when immigrants come from other countries, they predominantly come to those parts of the country where there’s the most economic activity and the most jobs. So, if you lower the level of immigration what it means is Sydney and Melbourne still fill up, and the rest of the country, where they’re actually wanting increased population, people don’t go there. Now, we need to ensure our regional migration program gets people moving to other places. Yeah, it’s true – up to Tamworth, out to Toowoomba, down to Bunbury all around the country. I think that’s a great move, but it is very important that we understand that our country has benefited greatly from a growing economy and that growing economy has in part been supported by our population increase over a long time, but you have to provide the infrastructure and the services to support it. $75 billion in this Budget on work from everything from Snowy 2.0 to building Western Sydney Airport, for improving the Tullamarine rail link down there in Melbourne, building the Melbourne to Brisbane inland rail link – one of the key projects which had been promoted by Barnaby. We’re building the nation with our $75 billion infrastructure package.
MURRAY:
Alright, let’s get another question.
QUESTION:
Good evening, my name is Dawn Bailey and I’m from the Central Coast.
MURRAY:
Hello, Dawn.
QUESTION:
Thank you Mr Morrison for you coming. I was at your function at lunchtime, but I won’t ask you the same question. I wanted to ask following on from what they’ve been talking about with housing. Now, you’ve phased out the National Rental Affordability Scheme, which in its concept was very good and very well-used, but once again anything that seems good and the government puts out can be rorted, and it was rorted...
TREASURER:
It was.
QUESTION:
It was, and you phased it out. Now I saw you on television the other day with Marise Payne and releasing a lot of land down in Melbourne that was Defence Force. You’ve got another new system that’s come in, and I am sure from what I’ve read in the Budget papers that for low social housing you’re allowing 50 per cent overseas investment in that social housing. Yes you’re going to give a 60 per cent capital gain on sale, but not to obviously foreign residents. How do you know that that isn’t going to be rorted again the same as the National Rental Affordability Scheme was by the overseas investors, I’ll say, I do apologise, that came in and they weren’t using it for social housing they were filling it up with lots – and I’m not being discriminatory – they were filling it up with a lot of students who were coming in from overseas.
TREASURER:
It was being rorted. The tax incentives we’ve put in place to develop affordable housing, social housing has to be housing that is run by community housing associations. So, that is the control that is put in place and the community housing associations are the ones who decide who the tenants that can go in and be in those housing. The other thing we’ve done is we’ve ensured – and we’ve worked this out with the states and territories – that where people are getting commonwealth rental assistance and where they’re recipients of other welfare benefits, we can direct deduct their rental payments so they get paid directly to the landlord. Now, that does two things: number one, the rent gets paid which means investors will be more likely to invest in building affordable housing. Number two, the rent gets paid, which means the person who was receiving that welfare support and is in community housing can keep the roof over their head. Because, you know what? If you don’t have a roof over your head and you’re not certain about that roof being over your head, whether you’re on a low income renting or otherwise, all of life’s problems get harder. It’s harder to get an education, it’s harder to get a job, it’s harder to live with a disability, it’s harder to deal with the pressures and your relationship and your families, and one of the things that’s really troubled me has been with the economic pressure that people have been under, it splits up families, and I can’t think of anything worse.
MURRAY:
Treasurer, we have a new Labor MP who has just been elected to the New South Wales Parliament. She’s here now.
TREASURER:
Congratulations.
MURRAY:
G’day hello how are you.
QUESTION:
Good evening, it’s great to be here.
MURRAY:
Alright what’s your question for the Treasurer?
QUESTION:
I’d just like to know what the plan is for TAFEs? So, $600 million cuts in TAFE over the next four years, we’ve already seen some big job losses here on the Central Coast. Ten per cent of our employees on the coast here are tradies. What’s happening with TAFE in the future under the Federal Government?
TREASURER:
Well one of the things we’ve introduced in this Budget, as you might be familiar with the old national partnership on skills. There’s $1.2 billion over four years that was being worked with, with the states and territories. That ran out on the 30th June. So, we’ve put a new levy on foreign workers and that’s going to raise us, over four years with what we’re putting in, $1.5 billion over the next four years. And state and territory governments will be able to draw down from that permanent fund which is put into every single year to support the programs they’re doing to train more apprentices in this country. This is an important fund, but for once we’re going to expect the states to actually get results before they get the money. Too many of these agreements in the past have been one way ATMs. So, where we’re spending money, whether it’s on housing or whether it’s on skills, we are going to be expecting the states to deliver the more apprentices which supports the training in places like here on the Central Coast. It’s called the Skilling Australians Fund.
MURRAY:
Alright, cool. Thank you very much. Congratulations again. Alright I’ve literally got two minutes, hands up who’s got more questions? Alright good, there’s plenty more to come. Sir you get one question and then we’ll go off to a break here, what’s your question for the Treasurer?
QUESTION:
Hi, Lloyd’s the name.
TREASURER:
Lloyd, is it?
QUESTION:
Lloyd. If we both die at the same age and everything’s equal in the world and you have two houses and I have a superannuation fund and they were both negative geared, because I have a super fund, like most people in the room, I pay 15 per cent extra death duties. If I own two houses, I don’t pay any death duties when the kids get the money. Can you fix that anomaly up?
TREASURER:
We made a couple of changes in the last Budget in how some of those arrangements were treated, I mean if you own your own house, obviously the principal place of residence has always had those exemptions…
QUESTION:
[inaudible]
TREASURER:
And I don’t think you’re referring to those arrangements, you’re talking about investment properties and things of that nature. Also, as you know, superannuation draws pretty significant tax benefits as well, 15 per cent paid on tax on the way in, 15 per cent on the earnings and if you’ve got more than $1.6 million in your superannuation account you’re only paying 15 per cent on your earnings, and if you’ve got less than $1.6 million you’re not paying any tax on the earnings whatsoever. Look, I’m happy to look at the issue that you’ve raised, it’s quite a specific one, and it would probably only arise in some particular circumstances, but we can certainly have a look at that and I’m always happy to look at the feedback we get from people about how the system’s working.
MURRAY:
Ok we’re going to take a quick break. Plenty more here from the Central Coast League’s Club on Paul Murray Live with the Treasurer. I’m loving hearing people have got plenty of questions. More in a sec.
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MURRAY:
Thank you very much. Welcome back here to Scott Morrison joining us here at Sky News at the Central Coast League’s Club where we’ve got plenty of people who’ve got lots of questions to ask here. Look obviously some people might want to go back to housing but there are other things to talk about so, sir. Let’s, stand up, sir. What’s your name?
QUESTION:
Ted.
MURRAY:
Ted, ask a question.
QUESTION:
Mr Morrison, congratulations on getting your tax cuts through for small business, but I’m really worried about the other $40 billion that’s going to cost the Budget for tax cuts to big companies, especially in particular your friends the banks, who..
MURRAY:
I don’t know if I’d say that at the moment.
TREASURER:
Or if they ever did I’m not sure we’ll see.
QUESTION:
They form a big part of our stock exchange and they make a lot of money already. Their return on investment is 13 per cent, banks in America return nine, banks in England…
TREASURER:
in Europe it’s even less.
QUESTION:
Correct, so why do they need a tax cut, half of them are owned by overseas banks. Four overseas banks own 50 per cent of our majors, four.
TREASURER:
Ok, well let’s talk about small business first just so everyone knows, in the Budget we extended the instant asset write off to ensure that small businesses up to $10 million, not up to $2 million, but up to $10 million we increased that at the last Budget will be able to write off $20,000 immediately. The other thing we’ve done is we’re going to reward state governments with increased support when they cut red tape for small business. If there’s one thing small business say to me is that you need to cut the red tape, now most of that red tape is actually at state and local level and so we’re going to be doing that as well and there is already a tax cut there for small businesses. But I’m asked about the tax cuts for the others. Now our corporate tax rate, you go out 10 years from now, that’s when the other corporate tax rates will come down to 25 per cent, if we leave it at 30 per cent we will have if not the highest corporate tax rate in the developed world, it will be pretty close to it. And tax rates will determine where people invest, and if you don’t invest in what’s happening in this country there won’t be the jobs and so companies will pay $1.2 trillion in tax over the next ten years, $1.2 trillion, that’s what they’re paying. And what we’re saying is, is we want to make sure that Australian businesses can be competitive in the world because if we don’t make sure their tax rates are competitive you know what’s going to happen, the jobs and the investment is going to go offshore even more and so it’s important that we make it competitive, that’s why we’re doing it.
MURRAY:
Alright, let’s do another...
QUESTION:
[inaudible]
MURRAY:
Alright just let me do a club test here, a little pub test idea. Who supports the bank levy that they’re putting in place? Alright who thinks it’s a bad idea? Who thinks it should be other industries? Who thinks the banks will definitely pass it on? So Treasurer, I mean I know that for a few days there was this debate about whether they would or wouldn’t, they either do it to shareholders by a cut to profits or they do it to customers by a little message on an ATM.
TREASURER:
Here’s another thing they can do. Every small business in this country is forced to absorb costs whether it’s from banks or other larger competitors or things like this every single day so if small business can absorb the cost, I don’t see why the banks can’t.
MURRAY:
Sir, the follow up question. Alright, sir, what’s your name?
QUESTION:
George.
MURRAY:
Alright, George is it?
QUESTION:
Yeah, George.
MURRAY:
George, what’s your question for the Treasurer?
QUESTION:
Look, just to follow up, it’s a follow up from what you just said there. Ok you’ve argued the case for business reducing the tax for business so that they invest more so that we get more jobs etc. right. But conservative governments all over the world agree with this viewpoint and they’re fervently competing for the business dollar by dropping their rates, if not their pennies, right, they’re all trying to do this. Now there’s only one logical conclusion that that eventually we’ll all be like the Cayman Islands and we’ll charge zero, right. But anyway in a world where governments anywhere are having problems getting multinational companies in particular to pay any tax at all, you’ve just had a bit of success, not much though. Wouldn’t it be better, wouldn’t it be a better policy to all agree to close the loophole on these pirates and then tax them even more for their past doings?
TREASURER:
Good idea, good idea. In last year’s Budget, let me answer. In last year’s Budget we said that if a multinational company is found not to be paying their fair share of the tax I will tax them more, it’s called the diverted profits tax, it was introduced in the United Kingdom when George Osborne was the Chancellor, I met George, liked the tax, decided to implement it here in Australia. It’s passed the Parliament and so that tax will come in in place on 1 July this year. So not only have we introduced the multinational anti-avoidance laws which Bill Shorten voted against in the Parliament, which has already given us $2.9 billion alone in this year only from just seven multinationals and we’ve got Google, and Facebook and others now changing how they design their tax affairs here in Australia, that’s already happening. We also now have the diverted profits tax, we’re going to make sure that the GST now will also capture digital services that are provided online which many multinationals use, that will be GST revenue that will go to the states and of course also on the low value items which people who are buying things from overseas rather than buying it in the local retail shops here in Gosford well we’ll put a level playing field on the GST for that as well. So we’re moving very strongly on multinational tax avoidance, I just wish the Labor Party would support us a lot more than they have.
MURRAY:
Alright, your question. Alright sir, stand up what’s your name? What’s your question?
QUESTION:
My name’s Dave Wayne, I’m from Darwin.
TREASURER:
Hey, Dave.
QUESTION:
Pleased to meet you Scott. In view of your recent Budget do you still consider the liberal party is a party of small government, limited government low taxation, low regulation and minimal intervention? And if so, if you still think that, what has the Turnbull Government demonstrated during its term in Government to show that?
TREASURER:
Sure. Happy to answer the question. As I said at the outset our growth in expenditure is less than 2 per cent over the next four years, in our first Budget in 2014-15 that was 2.6 per cent, expenditure as a share of the economy is will get to 25 per cent, 25 per cent , that’s basically what it was on average for the entire term, I should say on revenue we’re getting just above that and it will be at the same level that it was over the entire term of the Howard Costello Government, revenue as a share of the economy. So we have a lot more commitments though these days, I talked before about the National Disability Insurance Scheme, this is a good program that is going to get people with disabilities some real confidence.
QUESTION:
But can we afford it?
TREASURER:
Well, we can if we apply the approach that we’ve said. Now we sought to get savings through the Parliament to ensure that we could fund that important scheme and the Senate said no. Well they were voted in at least this time in the Senate and from the changes we introduced before the last election and we’ve got one of those senators here tonight who was elected duly by the people of New South Wales and it’s up to the Senate to decide what matters they’re going to pass and what they’re not going to pass. But in this most recent Budget, we’ve had to reverse $14.7 billion worth of savings because the Senate refused to pass them. Now that has to be paid for, it has to be paid for and that’s what we’ve done in this Budget and we’ve still brought the Budget back to balance in 2021 to the tune of $7.4 billion and importantly we will no longer be borrowing from 2018-19 to pay for everyday expenditure. So we’ve kept expenditure under control, we’ve reduced the growth in the rate of, in debt, by over 34 around 34 per cent under Labor to less than 10 per cent under this Government and under the Turnbull Government as well. So we’re keeping expenditure under control, we’re keeping welfare integrity in place, you’ll know of the trials that we’ve talked about in this Budget to ensure that people who are making, not trials I should say, but excuses for not being able to turn up and take jobs which are there and on offer and meet their obligations, well we’re not going to be accepting for repeat offenders the excuse that they were drunk or drugged.
MURRAY:
You gave a shout out to that Senator, Senator Brian Burston could you stand up from One Nation so everyone can see you there? Give a round of applause for your senator from New South Wales, Senator Brian Burston, friend of the show. We’ve got more questions here but a man’s got a hat that draws my eyes to him. Stand up, mate, what’s your question for the Treasurer?
TREASURER:
What’s does the hat, I can’t read…
MURRAY:
“Make America great again.”
TREASURER:
Isn’t that your hat, Ross?
QUESTION:
I was just curious, there seems to be a focus on identity politics with people my age. I’m 26, and like Q&A and the Left seem to focus heavily on that side of it, where the Outsiders or PM Live focuses on proper issues that matter. I was just…
MURRAY:
Why, I’m here tonight! Thank you, sir.
QUESTION:
I was just curious, how can we shift the focus in the main agenda to my demographic back on things like the debt, like the $600 billion debt ceiling. That scares the hell out of me [inaudible] every night. Fear tactics, but of course, but it’s true. So, I was just curious how the agenda can go on that instead of things like gay marriage, that to me are irrelevant.
MURRAY:
Great question, mate.
TREASURER:
Yeah, it’s a great question.
MURRAY:
Identity politics, how do we shift it?
TREASURER:
This is a great question, and apologies to those who are at home. To talk with a crowd there’s a lot of noise here, so hopefully it’s not coming across too loud. But this is a great question – intergenerational equity, that’s what this is about. This is a decision that Peter Costello and I took in this Budget this year. We have the Future Fund. The Future Fund was set up by Peter Costello and the John Howard Government and they did that to pay for the superannuation liabilities which actually run out over more than 100 years. And what we did in this Budget was something very important: what we said was we’re not going to touch the Future Fund. We actually could start drawing down from it in 2020-21 and we’ve decided not to do that for a really important reason. If we continue to allow Peter to run the Future Fund and keep increasing its value over the next 10 years, then all of those superannuation liabilities that were unfunded will be paid for and we will save a century of taxpayers from having to pay that bill. We just have to hold on for another 10 years, run surplus Budgets, get it back into surplus not draw down. Now, that’s a decision we took in this Budget. I guarantee if our opponents had won the last election they wouldn’t have been able to get their hands on the Future Fund quick enough. We’ve made a decision not to touch it. It’s an important asset for the future, and I can’t think of any other decision that one would get to make which could actually save a century of taxpayers higher taxes by ensuring we keep investing and allowing that fund to build to pay for our future liabilities. So, it’s just one of many decisions we’ve taken in this Budget, investing in education is also another, and I’m sure we’ll take a few questions on that as well.
MURRAY:
But what about that question about identity politics? I mean its seems that sort of either the Press Gallery or the Left or whatever, they always want to talk about the things that matter to them but don’t necessarily matter to anything that a politician can actually control. We see banks now, the same ones that say they don’t want to do anything about the Adani coal mine, who are more interested in diversity and all this sort of stuff. You have to be more polite about it than the rest of us in the room, but this pisses us off.
TREASURER:
Last Wednesday – after the Budget each year the next day you go along and you speak to the National Press Club – and I had Jenny there with me and my brother-in-law, Gary, and we talked about Gary’s struggle with multiple sclerosis and we made some important points about that and funding the NDIS. But the other thing I said at the start of the speech was basically everybody that was in that room, and it was full of politicians and journalists and lobbyists and industries, I said basically no one is listening to you in that audience. People are listening to the people in this audience tonight. In that audience there were those who think about all these sorts of issues all the time, Paul. They’re constantly talking about ideology and Left and Right and all this sort of stuff, and honestly, they just want a government that’s focused on doing the job for them and getting results. Now this is a very practical Budget. It’s dealing with the political circumstances that we have to address, because I don’t get a leave pass if the Budget doesn’t balance. I don’t just get to go out to the ratings agencies and the people we have to go to around the world and say, “Oh the Senate just weren’t very nice to us so can you can you cut us a break?” I don’t get that leave pass, and I have to make decisions with the Prime Minister and the team to make sure we continue to balance the Budget and the Parliament has to be accountable for their decisions and the Government’s just got to get on with the job and leave all that other nonsense to one side.
MURRAY:
Alright thank you for that. Got a question around this area here? Is anyone on this side got a question? Alright, sir. Alright just before I get to you sir, my apologies to my mother in the front row for swearing, I’m actually literally doing that to mum in the front row! Alright sir what’s your question, who’s it for? Obviously for the Treasurer.
QUESTION:
G’day Treasurer, my name’s Zeg. I’m the editorial cartoonist for Mark Latham’s Outsiders program and also the Quadrant Online, I’ll get that in there as well. The problem that a lot of the silent majority of this country have – and that’s the conservative silent majority in this country – is that this Government has shifted too far to the Left now – too far to the Left. When are we going to get the Government that we voted for, fiscally and socially? When will this happen, sir?
TREASURER:
Well, politics is not a theoretical exercise. Politics is a pragmatic business and you get paid for doing the job, not by giving political homilies. And what we need to do as a country is focus on getting things done. Now I’m a Liberal, I’ve been a Liberal all my life. Liberals believe in supporting education of our kids. Liberals believe in ensuring that there are services. I mean, if you go back to Menzies, education was one of his key issues as a political leader, and so Liberals believe in ensuring there are sustainable supportable services for generations, whether its schools or whether its education more generally or whether its hospitals or it’s the guarantee of Medicare that we’ve put in this Budget. We believe in that and we’ve delivered it…
TREASURER:
But we also believe you’ve got to fund it. What’s the difference between a Labor Budget and a Liberal Budget? A Liberal Budget’s always paid for, that’s the difference. And this Budget is paid for.
MURRAY:
Alright sir, I’ve got literally I think two more questions. You’re up sir. You’ve been looking at me all night going “please, please”. Ok, we’ve got you. Go for it.
QUESTION:
It’s almost like looking in a mirror. Look first of all I’d like to say that I’m an ex-colleague of your brother in law, Gary, so I’m a firefighter, so I’d appreciate if you’d pass on my best wishes to him…
TREASURER:
I will.
QUESTION:
… and I have been thinking of him. But having said that, I’m a firefighter, so I’m a unionist. I’m also a member of the Labor Party, so I’m playing by the rules and declaring, as you’ve asked.
MURRAY:
No I appreciate that, that’s all I ask.
QUESTION:
So my question: on May the 10th 2017 I went to the Daily Telegraph website, because they’re always accurate and honest, and I went to have a look at what they’ve provided for us in the Budget calculator. So, to cut to the chase, the results were as follows: a married couple with an income of $100,000 split 60/37 fare as follows – 2017-18, they’ll lose $1,493 per annum and in 2018-19 they’ll lose $1,545. Yet if that same couple had no children and an income of either $125,000 p.a. or a $150,000 on the same 60/37 split, there’d be no change in either year. So, now leaving aside that you’re clawing money back from families whilst preparing to hand over more than $60 billion to the business interests, would you describe your Budget as family-friendly, fair, equitable or even putting the pain where it can best be handled?
TREASURER:
I believe our Budget is fair. I believe it does address opportunity that is out there. I believe it is a Budget that seeks to provide for the essential services that Australians rely on, most particularly the National Disability Insurance Scheme, and I’ve been so impressed by the way Australians in particular have responded to that measure. They don’t want to turn the National Disability Insurance Scheme into a class warfare issue and class envy, which sadly Bill has sought to do. I’m hoping for a more mature and I think a more big-hearted response from the Parliament than what we’ve seen from Bill already. But, as a Budget, it does pay for the services that we’re providing. It is guaranteeing Medicare, it is providing $18.6 billion in extra support for schools. I mean schools here on the Central Coast, Gosford Public School’s funding per student over the next 10 years is going up 60 per cent and it’s the same for Gosford High School. But, St Edwards as well which is a Catholic private school here is getting an increase of 60 per cent as well. So, we’re investing in education, we’re investing in infrastructure, we’re investing in hospitals and we’re investing in Medicare. We’re investing in all of these things, but we’re doing it in a way which is keeping expenditure growth to less than two per cent which means that we are living within our means as a government. And as people do better, we don’t want to punish them – we don’t want to punish them…
QUESTION:
With all due respect, Scott, you’re making the people who can least afford it pay for it.
TREASURER:
Not at all, I disagree with you – I disagree with you. What the Coalition has always stood for is that the best form of welfare is a job and we’re supporting businesses, in particular small business, to ensure there are more jobs here on the Central Coast and right around the country, so they can be supported and get themselves into earning more.
MURRAY:
Ok well one last question. There’s a man in the front row whose waving his hand, he’s gone all the way to be at the front, he’s got to have a shot otherwise he’ll give me the dirty eye for the rest of the night.
TREASURER:
Is this on the same topic as before?
QUESTION:
Thanks, Paul. Congratulations on a very pragmatic Budget.
TREASURER:
Thank you.
QUESTION:
Pragmatic I said.
MURRAY:
I just think that everyone’s going to think at home that I picked the guy who was going to give him a compliment at the end!
QUESTION:
Not at all, not at all. My concerns were twofold – one on the increasing government spending, which you’ve dealt with already, and the other is reliance on welfare. Twiggy Forrest said recently, “Welfare should be a safety net and not a destination.”
TREASURER:
Agreed.
QUESTION:
And I agree with that. I personally would give the shirt off my back to the genuinely needy, but I perceive that there is a class of our society who choose welfare as a destination. We have 18 different social service categories, less than 50 per cent of households pay net tax. Are we in danger of building a welfare state? And what have you done and what are you prepared to do to address this issue?
TREASURER:
Well, it’s a very good question. Over the last 20 years and more, the size of our welfare system has grown under governments of all political colours and it is true, what you’ve just talked about in terms of people paying no net tax when you talk about the payments they receive and things like that. You can have a family, a household earning up to $80,000 a year, potentially, depending on how many children they have and so on, that wouldn’t be paying any net tax. And when you get to a point in the tax system where you’ve got more people who are receiving than more people who are paying, then that’s an important challenge that the country will face. I mean, the top four per cent of income earners in this country pay 30 per cent of the tax revenue. That’s a pretty fair share – it’s a pretty fair share. But on welfare, what have we done? On welfare, the number of people on the disability support pension because of the changes we’ve made has actually been falling for the first time in a very long time. Do I think people who have disabilities need the support of that pension? Absolutely I do, but those who really need it, and we’re making sure that we’ve got the targeting in place to ensure that those who need welfare support are the ones who get it. Those who are accessing welfare, in the same way… look we’ve talked about multinationals tonight, I made the same point this morning: multinationals should pay their fair share of tax and we should be very concerned to ensure the integrity of our tax system. I think taxes should be as low as possible but everybody should be paying them. But, equally, in the welfare system it should be targeted and helping those most at need and those who are accessing the system who shouldn’t be accessing the system well that means the people who need it most aren’t getting the support that they need. I think Australians have a big heart when it comes to social security, as well as the National Disability Insurance Scheme, but it’s got to be a two way street. There has to be mutual obligations. That’s something as a Coalition Government we have always remained very true to. So, whether it’s on the Disability Support Pension, the tightening up of the Family Tax Benefit system, indeed there were changes to the pension system as well, which we introduced. We have been able to make savings in the area of social security. We’ve taken those to as far as we can in terms of what can be supported through the Senate and we are still pursuing a number of those measures. But at the same time we’re looking to get people into jobs. The Youth PaTH Program starts this year. Now, that’s a program which is getting young, unemployed people into work by giving them the pre-job training so they know how to be in a job and operate in a job. It gives them the internship training to learn how the business works and then be offered a subsidised wage with a real job in that business and then they can get a full-time job in that business, that’s what happens this year. We also put increased funding, around $270 million I think it is, into a program called ParentsNext. Now this is a program which is being expanded to 20 locations, particularly in Indigenous communities and this is to support young parents, particularly single parents who’ve had children very young. Now, the best way to control your welfare system for the next 30 years is to make sure people don’t get trapped in it like Twig says. And so it’s important that we invest in the programs that get people off welfare and trapped in welfare, and get them into jobs. There’s two initiatives: one in last year’s Budget and one in the Budget I announced just the other night. So, we need to make sure the welfare system has integrity because you’re paying for it.
MURRAY:
Alright, Treasurer, on that note thank you very much. I do appreciate it, thank you mate. Ladies and gentlemen, Scott Morrison. Well done mate.