PETER VAN ONSELEN:
Thanks very much for your company, Treasurer.
TREASURER:
G’day, Peter, pleasure to be here.
VAN ONSELEN:
Let me start by asking you, I suppose, about the portion of the freezing of the Family Tax Benefit that pays for the childcare component that’s been carved off. Is that a trade-off that’s worth it or why is that a trade-off that’s worth it? I know that they’re reforms that are pretty well sought after and popular, but Labor claims that there’s going to be a real issue there for people that rely on the Family Tax Benefit, the fact that it will be frozen for two years.
TREASURER:
Well, that is Labor’s argument. I think that sort of sums their argument up and it’s complete hypocrisy. The Labor Party time and time again froze indexation, made very similar changes to the ones that are presented in this Bill. And the only difference is that when we’re doing it, we’re actually investing that money back in providing more affordable childcare. They just raised those savings and just splurged it. So, I think that’s the difference. We’ve actually got a clear plan to fund our Jobs for Families Package which is an incredibly important package. It was first developed when I was Social Services Minister and we’ve been seeking to get this passed for the last two years. It’s a great frustration and disappointment that families could have had this coming into being in July of this year based on the original legislation introduced and the Labor Party’s playing silly games over this and has denied that to families who have needed better childcare arrangements for years.
VAN ONSELEN:
How confident are you that the crossbench will hold? There seems to be some confidence there.
TREASURER:
These measures have been put forward today and I’m not going to presume upon the Senate. We’ve been working closely with them, particularly Senator Cormann, who’s been working on these measures with Christian Porter and we will just continue to work that process as we always have. People have often underestimated the Government, particularly since the election, about our ability to get things through and get things done. But last year, $22 billion worth of Budget improvement measures were passed. The ABCC which restores the rule of law on building sites was passed, the registered organisations, the list goes on. We’ll just focus on what we need to do and get the job done.
VAN ONSELEN:
You’re not proceeding with the decision to increase the Family Tax Benefit payment rates. Does this mean you’re now no longer phasing out the FTB supplements? Given the measure was meant to offset, in part at least, the effect of the complete phase out?
TREASURER:
We’ve been working with the crossbench to arrive at a set of measures which will achieve the Government’s objectives which are to ensure there are savings which can be contributing to the delivery of the Jobs for Families package for more affordable childcare as well as the broader task which is getting the welfare bill under control and contribute to the job of Budget repair.
VAN ONSELEN:
There’s a whole series of so-called savings that were in the old Omnibus Bill that aren’t in the new one. What’s the status of those?
TREASURER:
These are measures that continue to stand as Government policy. What we’re focused on right now is the measures that we’ve been working on with the Senate and those other measures are measures that stand as Government policy.
VAN ONSELEN:
So they stand as Government policy, there’ll be future attempts to try to seek their passage through the Senate? They’ll be contained in the Budget, would that be a fair assumption?
TREASURER:
It remains simple. With just over a week of sittings in the Senate, those measures could still be prosecuted and pursued and if there’s an opportunity to do that, the Government will certainly seek to do that.
VAN ONSELEN:
What about the previous idea of them going into the NDIS Bill? Is that still something for the older Omnibus measures that could be on the cards?
TREASURER:
Well, there is that opportunity if the Senate wants to support it.
VAN ONSELEN:
Alright. Let me ask you, if I can, about the company tax cuts? Labor was sort of peppering you with some questions about this today in Question Time. Sam Maiden and I just went over some of that. Is this something that is going to get put before the Parliament, in the form that you took it to the election? It sounds unlikely you’d be able to get it through the Senate because of some intransigence there but will you still try?
TREASURER:
It is before the Parliament in the entire arrangement that we put in the Budget. It’s currently before the House of Representatives and it will be going to the Senate in that form because we believe that’s what’s necessary. What I saw today in the House, in Question Time, was a joke from the Labor Party. Here’s Chris Bowen who’s always said that he believes that company taxes should be reduced. He’s questioning the Government about what our position was on this. Our position is that he should support it. If he believes in reducing company tax then he should vote for it and if he’s not going to vote for it, he’s in no position to lecture the Government on anything.
VAN ONSELEN:
Well, he did write a whole book about it so I don’t disagree with you about that.
TREASURER:
He did write a book about it. I think that can go in the shredder. There’s no doubt that Chris Bowen’s views on tax policy or growth or jobs or any of these sorts of things, you can’t believe any of them, he’s prepared to turn them over on the basis of Bill Shorten’s rampant populism of which he’s become an avid disciple. I think it’s very disappointing. Chris Bowen used to be someone who believed in good economic policy. Now he’s just a sell out to populism.
VAN ONSELEN:
Putting that to one side though. The company tax cuts, if they don’t pass through both houses of Parliament, will they then also like the old measures from the Omnibus original savings Bill, will they also stay within the Budget? Because the Budget will look a lot better if having been defeated in the Senate, those company tax cuts come out of forward estimates.
TREASURER:
I’ll just say what I’ve been saying and that is we put these measures in the Budget. We took them to an election. We won that election. We put them now into the Parliament and there’s an opportunity which remains for the Parliament to support those changes. We would then implore the Parliament to do just that.
VAN ONSELEN:
The expectation is that the Government will be able to get the split off component around childcare with the Family Tax Benefit freezing of indexation Bill through the Parliament and through the Senate with the crossbench. What about this new revised remaining Omnibus Savings measures though that is separate from that? That presumably is going to be much more sticky – would that be a fair comment?
TREASURER:
The process of discussion that we’ve been having with the crossbench on these measures and remember there is over around $6 billion in savings that were part of that Omnibus Bill. There’s some $13.2 billion of measures that remain outstanding in savings and Budget improvement that the Government has been seeking to achieve over the course of these Parliamentary sittings. We got $22 billion through last year. So that remains the target and as I’ve always said, once the Parliament has made up its position and voted on these matters – well, the Government will then frame the Budget accordingly.
VAN ONSELEN:
Irrespective of that half of the split Bill the component that deals with childcare that is revenue neutral – is that right because of the freezing of the Family Tax Benefit?
TREASURER:
Well, there are a number of elements to the bill that was introduced that is being introduced that deals with the savings on whether it is indexation periods, freezing of that or ordinary waiting periods and things of that nature. They contain a number of savings, there is the jobs for families package which went through the House earlier today and that will be on its way to the Senate and that has a cost of $1.6 billion. Now, $1.6 billion has been factored into the forward estimates now for some period of time and I am earnestly looking forward to those changes being approved by the Senate. This is a very big change to childcare. This is the biggest change to childcare that we have seen in a very long time and it is an important one. It is saying to those families who are most vulnerable, most in need to be out there working extra hours and getting those extra opportunities that we will make childcare more affordable for them. It has the price capping arrangement which removes, I should say, imposes a restriction on the runaway prices that we have seen been running in childcare. The old arrangements on childcare have been completely unsatisfactory and we have been warring with the Labor Party and the Parliament for the last two years trying to get these implemented and so I am one who is very much looking forward to having drafted their first iteration to it being passed and the families getting the benefit of that. This is real fundamental change which is going to help Australian families and I am looking forward to it being achieved.
VAN ONSELEN:
Can I ask you about your comment you have long made about this idea that we don’t have a revenue problem. Labor likes to characterise that as well. You can’t bring in new taxes by definition. I think it is a bit more nuanced than that. You shouldn’t be presumably be bringing in new taxes unless they are being offset by the removable of less efficient taxes. There is nothing unreasonable about that. Is that the guarantee though?
TREASURER:
This is what we have done consistently. The reason I make that point about revenue and expenditure Peter is this. The statistics speak for themselves. These are the facts. Our spending, as a share of the economy is both above the long run average and projected to remain above the long run average. Our revenue as a share of GDP that is also now at the long run average and going above it. If you have a revenue problem it means you are not raising enough compared to your historical performance. Now, that is not the case when you look at the actual figures. What we are having a problem with, this is our expenditure as a share of the economy, is higher. So, it makes absolute sense that you have to focus on the thing that is out of whack with the longer run trends and that is expenditure not revenue. Now, those in the high tax club like Peter Costello rightly calls it, the reason they say we have a revenue problem is because they don’t want to deal with the expenditure problem. What they say is just raise taxes, more and more taxes that way we can spend more and more money. Now, Chris Bowen signed up to that, Bill Shorten has signed up to that, there is no clear example of that then on their position on capital gains tax and what they want to do on capital gains tax. That is not about housing affordability. That increases the capital gains tax on buying a shop, on buying an office, on buying a factory, even on personal items. How does putting up a tax on a shop or a factory make housing more affordable? It’s a rouse. It is just a tax policy designed to drive more revenue.
VAN ONSELEN:
By the sound of that we can certainly rule out any change of heart by the Government on that capital gains tax adjustment.
TREASURER:
I am just pointing out the hypocrisy of Labor presenting that as a housing affordability measure. It is not a housing affordability measure it is just an old fashioned increase tax policy from the Labor Party. They don’t have a housing affordability policy, they don’t have an energy affordability policy they don’t have a child care affordability policy, they don’t have a job policy, all they have got is a big populist rant.
VAN ONSELEN:
Presumably, therefore there is no way the Government will go near changing that capital gains tax policy as it stands now.
TREASURER:
The Budget is in May and I am not responding to any of that speculation whether it is you or anyone else. No one should draw anything from that other than the Budget is in May.
VAN ONSELEN:
Just before I let you go Treasurer can I ask you this. You point out the high spending side of the Budget versus where revenue is at. Do you accept or do you acknowledge that Government, like it or not, is probably over the years ahead because of the ageing of the population, because of things like the NDIS as it gets rolled out, increasing health costs you name it, is perhaps likely whether we like it or not to require a bigger spending government or do you reject that principal?
TREASURER:
One of the challenges of an ageing population is what you end up with is a working age population which is not growing at the same rate as the non-working age population. If you look at our population growth it is at about 1.4 per cent. Now, that is made up of a growth rate for your working age population of around 1 per cent and of your non-working population of over 2 per cent. Now, we discussed this last time, I think it was on your program on Sunday. That gap presents a real economic challenge and it means that your programs that are addressing those, particularly as an ageing population need to be focused, they need to be targeted, they need to be sustainable and you need to be ensuring that you are building up the earnings of your working age population. This is the thing that I am focussed on every single day. I want Australians to earn more from the hard work they are putting in. I want businesses who are out there investing their own capital, putting their own homes on the line. I want them to be able to earn better profits and the company tax plan, the Enterprise Tax Plan I have in this Parliament is designed to help them do just that. So, that is what we need to focus on. We need to earn more otherwise you erode your tax base. You need to get more out of multinationals and we are doing that, as I said yesterday, $2 billion we are clawing back as a result of the laws that we passed through the Parliament which the Labor Party voted against. They voted for multinationals to pay less tax. It is embarrassing for them.
VAN ONSELEN:
Scott Morrison we know you have got meeting to get to we appreciate you joining us on PM agenda. Thanks for your time.