STAN GRANT:
Joining me now is Treasurer Scott Morrison. Treasurer I’m glad you could join us.
TREASURER:
Hi Stan.
GRANT:
I'm really drawn by something you said today and of course you were saying, look, this is a great result and better than expected, but you also said that growth is not being experienced by all Australians and we can't take that for granted.
TREASURER:
That's correct.
GRANT:
So what do you say to someone who hears these numbers today and says, look, that isn't my life, I'm not seeing this?
TREASURER:
What I'm saying is I understand that and that's exactly the point I was making today and while today's growth figures are very welcome, I mean, there is a strong rebound in our growth in the December quarter up 1.1 per cent, 2.4 per cent through the year real and in nominal terms it's over 6 per cent, which is the best we've seen for many years. That doesn't mean that how growth falls across the country on every Australian working out there, doing everything they can to better their own circumstances, is experiencing that growth equally.
GRANT:
Can I just come in there and say, why is that? Because we're seeing the growth, we're seeing consumers spending more, exports have been strong as well, but we're not seeing that filtering down and people are looking at it and saying, "look, I'm paying more for my power, I'm worried about my kids buying a house," all of the things we hear from people, they're worried about full-time employment, why is there this disconnect?
TREASURER:
This is why the Government is so focused on addressing the issues you have just raised, everything from making child care more affordable and through to making energy more affordable, in the Budget we’ll look at issues around making housing more affordable because we understand and recognise that despite Australia's comparative performance compared to the rest of the world, that doesn't mean that every Australian family who's out there working hard and trying to make things as best as they can for themselves is being able to realise everything they would like to. Now, we want to help them to do that and that's why our policies are designed to drive further growth in the economy and to ensure that all parts of the country can go with that. Now, I mentioned particularly today, Stan, that last year, I asked the Productivity Commission to look at what I'd call the map of our growth, the geography of our growth, and to give us advice about those parts of the country that are finding this transition from the mining investment boom to the more broader-based economy, particularly for services, and where we need to do things specifically in areas that will help those parts of the country appreciate and be part of that growth story, which is quite impressive compared to the rest of the world.
GRANT:
And in a transitioning economy, as we're seeing right now, there are questions about where that sustained growth is going to come from, because we know we can't rely on the mining anymore, consumption was a significant factor here, yet at the same time we've seen sluggish wage growth - in fact, a reduction in this quarter. People spending their savings, and that's not sustainable.
TREASURER:
Well, that's not quite true. I mean what you have seen is a fall in the savings ratio, it's not a debt ratio, it's savings ratio.
GRANT:
But wages aren't going up and they are spending more so clearly they're spending something, if wages aren't going up, the question is, where does the growth come from and where is that sustainability?
TREASURER:
The growth comes from the investment in businesses that are expanding and whether that's in new parts of the economy, in the services part, with tourism and education and financial services, or it's in advanced manufacturing, whether it is in our defence industries, where we're making record investments into those and today's growth figures, I should stress, one of the big features of the growth story in today's numbers was the investment we're making in defence, particularly in the aviation area, but also there was the NBN investment with the second satellite, these things worked into these numbers but also the investment we're making in other infrastructure and roads and so on. So the growth is going to come from a broad base. Exports are incredibly important. And I disagree with one other thing you said, Stan, I mean the resources sector will remain important, production volumes are up and prices were up, particularly in the December quarter.
GRANT:
But clearly we can't rely on that and one of the things you have been hoping for is to get the company tax cut through which you believe will flow down to jobs but that's looking unlikely as well, politically, and you are going to have to compromise and that would be a big blow to your plans in terms of being able to see that filter down to ordinary people and create the jobs you are hoping for.
TREASURER:
You can't get a job in a company that doesn't exist and you can't get a wage increase in a company that’s going backwards, you need to be employed in businesses that are going forward and earning profits and investing in themselves with confidence and opening up new markets and new products. That's where wages growth comes from and that is the sort of outcomes we're working to achieve with by our investment programs and you mentioned the tax plan, and that is true. So it would be, indeed, unfortunate if the Parliament, led by the Labor Party, who used to say that the outcome of a reduction in company tax would lead to better wages, would lead to more investment, are now blocking that. Now they are doing that for political reasons and I think that is a shame that they would play such games with Australia's prosperity.
GRANT:
Treasurer, one thing that's not going to lead to increased wages and that is the Fair Work Commission decision to cut penalty rates which you are also saying will lead to more jobs. But that's not guaranteed, either?
TREASURER:
That's what the Fair Work Commission says.
GRANT:
Yes. Do you believe that?
TREASURER:
I have no reason to doubt it. They have gone through a very exhaustive exercise set up by Bill Shorten - I mean, he picked the captain, the coach, he did the line markings himself for this whole Commission, and it has come out and produced a result which he said he would support, and now he has refused to do so. Now we're doing exactly what we said we would do. But that Commission report came to that conclusion, and I think there's strong evidence to support that, because the Productivity Commission formed a similar view.
GRANT:
But Bill Shorten, as we now know, is trying to have that overturned and he says you now own this but you can't guarantee that the jobs will ultimately be there.
TREASURER:
Well, Bill Shorten just changes his story every couple of months on this and you can't take his word on anything. I mean, he lied about this issue before the election and now he has changed his position now. So what we have done is respected the independence of this Commission, just like we respect the Reserve Bank and the courts, we respect everyone else. I mean, is he really suggesting that every time an independent body makes a decision that there has to be some sort of ratifying legislation from the parliament? That would sort of defeat the purpose, wouldn't it.
GRANT:
Treasurer, good to have you on the program, as I said, thank you.
TREASURER:
Thank you, Stan, good to be with you.