SAMANTHA MAIDEN:
Good morning, Treasurer, you’ve said that Bill Shorten is coming after your family trusts. Why should there not be reform of this area of the tax system?
TREASURER:
We already have a Trusts Taskforce within the ATO, it’s been cracking down on misuse of trusts where people are gaming the system with the use of trusts and protecting the integrity of the trust system is very important so of course you’ve got to act on that, but what Bill Shorten has engaged in now, is he’s put the white flag up on growth and he says it’s all about just how you redistribute income around the system, now we don’t think that’s the way to grow the economy, in fact we think that slows growth, and so we believe in growing the economy to improve people’s living standards, he’s just now into this very negative spiral of just moving it around, taking off other people to allegedly give it to others, but I don’t think that’s the way to go forward.
MAIDEN:
Do you think this is a kind of class warfare attack from the Labor leader?
TREASURER:
He’s interested in the politics of envy, I’m interested in the economics of opportunity. That’s the real difference between what Labor is offering, and what the Government is doing. It’s just a very dark economic vision to look down the road ten years from now, and say personal income taxes should be higher, company income taxes should be higher, negative gearing should be divided to those who are principally on middle incomes who engage in those sorts of things to actually better their circumstances – he has a very flat earth view of the Australian economy. We don’t have that view, we think we should grow the economy to increase the number of jobs and improve people’s wages.
MAIDEN:
Do you use a family trust yourself?
TREASURER:
When I had a company we used to have one, but I must say it didn’t get much of a workout Sam because I wasn’t doing much at that time with it. I’ve had a dormant one now for some period of time. So it’s not something I’ve really particularly used, but I do know it’s used widely by small businesses, by rural small family businesses, by farmers. This politics of envy is, I mean he already wants to reverse the company tax cuts for small and medium sized businesses, up to $50 million, that’s their commitment, now he wants to go after the trust structures. Now I don’t have an issue with dealing with the integrity of the tax system, we were the ones who introduced the laws to crack down on multinationals that Bill Shorten voted against. Now, that raised almost $3 billion in additional liabilities last financial year, that was almost $3 billion in liabilities that Bill Shorten was pleased to flush away.
MAIDEN:
So, just for the layperson though, a large number of low and middle income earners don’t have access to these sort of tax alternatives in terms of family trusts, when you set up a family trust, what is the purposes of it, does it allow a form of income splitting, why did you look at that option, back when you had the business on the go?
TREASURER:
Again, it was only a business that I had running for a small period of time, back in 2007, late 2006, and all of that income came through to me, where I paid marginal tax rates on it. So, I mean, it’s a vehicle used in lots of different small businesses and rural businesses and family farms and things like this. It’s been around for a very long time Sam, so I have no issue with cracking down on the integrity issues here and we have been doing that. Almost a billion dollars in additional liabilities raised through the work of the trust taskforce and so the other thing you’ve got to be very careful of is this Sam. Where Bill Shorten wants to increase marginal tax rates, particularly at the higher levels, all he’s doing is creating greater incentives for people to use all sorts of contrived arrangements to avoid tax. The best systems of tax are ones that are broadly based, and fairly set, and that everybody pays them and we all get on with it. But the more complexity you build into the system, which he’s proposing and has been for some time, you just increase the incentives for people to try and game the system.
MAIDEN:
Let’s go to this flowering of democracy over the weekend and the New South Wales Liberal Party conference. You said going into that meeting that you wanted members to have a say, they’ve had that say, do you support the Warringah motion in full?
TREASURER:
I support the Party organisation now implementing decisions, working that through practically on the ground. I’m not going to lecture them about it anymore than I sought to lecture them on the weekend, I’m no longer the Party Director, I’m the Treasurer, and that’s where my focus is.
MAIDEN:
There has been a difference of opinion from some within the party though about how far these reforms should have, how much power should be rested away from the status quo. What is your vision of what should occur? Do you support in full what was in Tony Abbott’s motion? Or do you think that the Party needs to have a more nuanced approach?
TREASURER:
I support plebiscites and I support the Party organisation sorting it out and implementing things – and I certainly support the Treasurer not being distracted by it because my job is to focus on the jobs of Australians, the wages of Australians, the incomes of Australians. I don’t spend my time in back rooms wondering about pre-selections. I spend my time focusing on the Budget coming back into balance, about the 240,000 and more jobs that we’ve created in the last 12 months – they’re the things I’m focused on, Sam, I just don’t get involved in organisational politics. My time in that was before I went into Parliament – when I was a State Director and I used to be the keeper of the ring back then as a good independent State Director should be – and that’s what my heritage is in the Liberal Party and I protect it.
MAIDEN:
Fair enough but you’re still getting a fair bit of heat over these issues and others from your friends at 2GB – I was listening to Alan Jones this morning, he was saying there needs to be a leadership change at the top, Malcolm Turnbull needs to go and that you’re not the answer – how do you deal with those really powerful conservative voices that have basically gone sour on Malcolm Turnbull and yourself?
TREASURER:
Sam, I know these things deeply interest you and they may interest your viewers, but what Australians expect of me is not to be focused on those issues but to be focused on the economic challenges that they’re facing around their kitchen tables, around their small business, around tables they’re running – that’s where I’ve got to focus, Sam. Look, I just get on and do things. If there’s a problem in front of me – whether it’s stopping the boats or balancing the Budget – I just get on and do it, Sam. And if people want to criticise, they can. If people want to applaud, they can. But it doesn’t change what I do every day. I just get on and solve problems for the Australian people as part of the Turnbull Government.
MAIDEN:
Fair enough, I’ll ask you to humour me though on one more question that people are really passionate about and that’s same-sex marriage. Your colleague, Peter Dutton, is calling for a postal plebiscite to allow the Government to deal with this in this term of government. Would a postal plebiscite be a good idea in your opinion?
TREASURER:
I’m not distracted by that either, Sam – again, it’s just not on my agenda. But what’s on my agenda is the national economy, people’s jobs, ensuring that we’re doing everything we can to lift people’s wages as a result of growing the economy and that’s what I’m about, Sam. I mean, these things are just not distracting me and I know there are many people – we had a policy at the last election that we sought to implement.
MAIDEN:
Ok, but I’m just trying to understand, this is your senior Cabinet colleague – Peter Dutton – suggesting it as the way forward…
TREASURER:
I’m not buying into, Sam. That’s my short answer. I’m not buying into it. I know you want me to buy into it, Sam. I’m not buying into it. I’ve got a job – a day job – it’s called being the Treasurer and focusing on the things that are impacting on people’s kitchen tables and their businesses and that’s what I’m solely focused on.
MAIDEN:
But same-sex marriage is really important to a lot of people as well – particularly gays and lesbians, including in your electorate…
TREASURER:
It’s not economic policy.
MAIDEN:
So the policy is a national plebiscite…
TREASURER:
We’ve got a policy and we took it to the last election and that’s…
MAIDEN:
…not a postal plebiscite?
TREASURER:
Sam. I’m not buying into it. It’s hard for you to take it in sometimes, I think. I could be really blunt about it. I’m not buying into that issue, others can talk about it if they like. I’m focused on my job as Treasurer and that’s what the Australian people want me focused on – not being distracted by other issues where we have clear policies.
MAIDEN:
Good luck with that and good luck with your fight with Bill Shorten over family trusts. We appreciate your time this morning – you’ve been very generous with it.
TREASURER:
Thanks, Sam. Good to be with you.