STEVE AUSTIN:
Scott Morrison, Federal Treasurer, good morning to you.
TREASURER:
G’day, Steve.
AUSTIN:
Can I get some clarity from you as the nation’s Treasurer, once the detail is sorted out, is the Federal Government committed to the Cross River Rail project here in Brisbane?
TREASURER:
As you just said in your introduction, IA hasn’t even given it the pass mark so certainly, if that’s the case, I can’t see that on the agenda. We’ll look at these things subject to it going through the business case testing so it’s not running too well on that. Where we are absolutely committed and moving ahead is what we’re doing on the Bruce Highway whether it’s the Deception Bay interchange, the Pine River to Caloundra corridor improvements, the M1 Mudgeeraba to Varsity Lakes section and the Gateway merge point at Eight Mile Plains, that’s where we’re spending hundreds of millions of dollars and that’s our priority and that’s what we’re doing.
AUSTIN:
You wouldn’t have heard it but the Deputy Premier, Jackie Trad, Minister for Transport was on ABC Radio earlier this morning expressing concerns that the modelling used to approve rail projects like WestConnex in Sydney is the same modelling that’s used to sort of fund or underpin the business plan for Cross River Rail here in Brisbane. In other words, the implication is that there’s something going on – something seems to be interfering with the business plan model put up.
TREASURER:
Well, she would say that, wouldn’t she? Because the answer wasn’t the one she was hoping for. I’m not calling that into question but just saying that we’ll run the ruler over those things – that’s Infrastructure Australia’s job – and that’s the assessment that they’ve currently made. That’s the process that project’s following but our priorities, as I stress, we know people are sitting in parking lots north and south of Brisbane, we’re putting money into fixing that problem.
AUSTIN:
Tony Abbott, when he was Prime Minister, was famous for saying he wouldn’t fund public transport projects like Cross River Rail. Is Malcolm Turnbull, or are you, of a mind to fund them or do you have the same will?
TREASURER:
Well, we do. We’ve got a $10 billion National Rail Program. We’re happy to get involved in those projects. We’re doing some of them in Western Australia so we don’t have an issue with that. It’s not about whether it’s rail or road or ports or airports – where infrastructure will boost the productivity and passed the test of a business case we’ll certainly look at it. But at the moment, this one isn’t measuring up.
AUSTIN:
Ok, so there’s no philosophical objection to rail projects and public transport?
TREASURER:
No, it’s like the energy debate. No philosophical preference to a particular form of energy source either, we just want to solve the problem.
AUSTIN:
On the issue of energy, the Australian Competition and Consumer Commission is investigating the cost of electricity at your instruction, they’re here at the moment, they’ve been here for a couple of days taking public evidence about that. Do you have a view as to whether the state government’s decision to retain government-owned corporations in public ownership is contributing to rising electricity prices?
TREASURER:
I’ve got a great suspicion that that’s what’s happening. But it’s for the inquiry to determine the facts on this. Queensland isn’t alone, I remember other state governments when they had direct control of those assets, they’d fleece it off dividends to prop up their budgets and then pass the costs on to when they invest into the system onto customers. Or they were gaming the system, in terms of holding back supply at various points to ride the highest spot prices to profiteer. Now, whether that’s happening or not, Rod will take a good look under the hood on that and work that out. I think we’ve got to look at all of these things when it comes to addressing the energy problems we’re facing, not just obviously electricity prices but – Matt Canavan, you mentioned in your introduction, now Matt was doing a great job as a minister and he was bringing forward the gas export controls to ensure that we keep gas in Australia for domestic use which is very important also to addressing this issue. We’re investing in Snowy Hydro 2.0, major pumped hydro storage capacity – 4,000 megawatt hours – investing in low emissions technology. So we’re working right across the board.
AUSTIN:
On the issue of Matt Canavan, Queensland has already lost one federal representative in Greens Senator Larissa Waters. Matt Canavan has resigned from Cabinet but not from the Parliament. There appears to be further doubt on his story about “it’s my mum’s fault” over Italian citizenship with The Australian newspaper reporting that ballot papers have been sent to the Canavan family from Italy casting doubt on his story. Does the Cabinet, or you, have any concerns about the consistency of Matt Canavan’s story that his mum signed him up as a citizen of Italy?
TREASURER:
No, I don’t, but that’s not for me to judge. The High Court is going to determine this matter. Matt’s done the right thing by submitting himself to that process. The Australian, the ABC for that matter, or anyone else, they’re not the High Court and so we’ll wait for that process to follow its course and I’m very hopeful. It would be devastating to lose Matt as part of our team. He’s done the right decision to stand aside and Barnaby will take up that important work but hopefully we can move through this as quickly as possible. But in the meantime, we’ll all just keep getting on with the job.
AUSTIN:
Shouldn’t he though release documents that would remove any doubt about his account of how this occurred? In other words, remove any doubt?
TREASURER:
He should submit himself to the court process and get an outcome and that’s exactly what he’s doing…
AUSTIN:
But his first responsibility is to the people of Australia, surely, not to the court. His first responsibility is to be…
TREASURER:
The courts at the end of the day are supposed to represent people. It’s how the Constitution’s set up, that’s what the people put in place to resolve things like this…
AUSTIN:
That’s a legalistic argument. I mean, people voted for him.
TREASURER:
No, no. That’s a true argument. It’s a fact, it’s the Constitution, and the High Court is the right authority to try this – not the media.
AUSTIN:
He is an elected representative, voted for by the people of this state, doesn’t he owe them further clarity and release documents that remove doubt over this question altogether?
TREASURER:
The best people to provide clarity for this is the High Court – that’s why they were set up, to determine these sorts of very important legal matters and to be able to determine them with certainty…
AUSTIN:
What about someone like Senator Malcolm Roberts who has also not released any paperwork to remove any doubt about his citizenship situation?
TREASURER:
He’s not a member of the Government so I’ll let him and his…
AUSTIN:
I know but the High Court decision will affect him as well, I assume, if there’s any doubt about it and all voters need is…
TREASURER:
Well, I’m not aware of the case with Senator Roberts. You asked me about Matt – well, Matt submitted himself to the High Court of Australia. I think that’s a pretty big deal and I think we should respect that process and allow them to do their job.
AUSTIN:
There’s some suggestion that the Greens Senator Larissa Waters resigned altogether, the same standard should be desired of Senator Canavan?
TREASURER:
I think they’re very – on the face of it, the circumstances are quite different. Matt was born here. On what he has said, he had absolutely no knowledge of this or had any involvement in it, one way or the other. That’s what the High Court will ultimately judge on and I think circumstances are different.
AUSTIN:
Alright. On the issue of inequality, the Reserve Bank Governor of Australia, Philip Lowe, says that inequality in Australia is getting worse, it’s happening under your leadership as head of Treasury. Why is it getting worse, Treasurer, and what are you going to do about it?
TREASURER:
Don’t verbal the Governor. What the Governor said was that inequality over 20-30 years has gotten worse. Income inequality over 20-30 years has gotten worse and I haven’t disputed that. The OECD actually found that in their report in 2015. What they also said in that report is that it’s gotten less worse in Australia than it has in other OECD countries, but they also have found that income inequality since the Global Financial Crisis, so in more recent times, has gotten better. Now, what the Reserve Bank Governor was referring to was more recent movements in asset prices, particularly house prices, on what’s impacted on the wealth equality measure. What I’ve been referring to is the money that’s actually in people’s pockets that pays for the grocery bill and on that score – whether it’s disposable income, household income or gross household income – the Gini coefficient, which is the universal measure for these things, it has actually improved over the last five years. That’s what the data…
AUSTIN:
How can that be when wages growth is basically stagnant?
TREASURER:
I’m telling you what the data says, that’s what the Census said, that’s what the most recent data says, the HILDA survey…
AUSTIN:
So you’re telling me that wage growth has increased? Has risen?
TREASURER:
The inequality measures take into account many other data points, but let’s put the data to one side. That’s what the data says. Now what Australians feel, and I acknowledged this in the Budget, is that because wages growth have been slow, because economic growth has been tough and because the changes that have been happening with globalisation and technology, not all parts of Australia and all Australians have shared in the growth in the same way. But that doesn’t mean that Australia is not a fair country. We’ve worked very hard as a country to be both prosperous and a fair country, and Australians, I don’t think, measure fairness in, “I’m only doing better if someone else is made to do worse.” I don’t buy into that. That’s not fairness. That’s just trying to settle scores through the tax system and I don’t think that’s the way to run a modern economy. And that’s what Bill Shorten’s doing, he’s masquerading ideology in a cloak of fairness which is quite frankly a con. And he’s going to do that to justify taxing people’s small business trusts and rural trusts, family farm trusts and put on technology taxes and goodness knows what. I don’t buy it that Australia’s not a fair country…
AUSTIN:
Why shouldn’t he look at trusts given that for many years there’s been a belief that trusts are a means of avoiding lawful taxation in Australia?
TREASURER:
We’ve already got a tax taskforce, within the Australian Taxation Office, that deals with integrity issues on trusts and we’ve actually raised $800 million worth of liabilities since it was set up. So where trusts are being misused, the Government is already acting on integrity. He’s not talking about that, he’s not talking about it at all. This is why someone legitimately uses a trust, if you’re a small business or a farmer, you will use a trust because your income varies often from year to year. You have a good season, you have a bad season…
AUSTIN:
So trusts are a stabiliser in a sense?
TREASURER:
You get taxed at a much higher marginal tax rate and then in the following year, you’ve got to take out a loan to pay a tax bill because you’re income in the following year is way down. So it’s a legitimate tool to actually give businesspeople, who employ people and run family farms for generations, the opportunity to manage their income over the cycle. It’s also done to protect the assets, for family farms and small businesses who put a lot on the line. So I think that’s pretty fair enough and in fact, Bill Shorten said it was fair enough back in 2011. But he’s changed his mind now because he’s chasing every vote like an ambulance chasing politician.
AUSTIN:
So is your concern trusts are a security net, a safety against the ups and downs of sort of global economies and the Australian economy?
TREASURER:
Well, it has been and that’s why they’ve been used in Australia and that’s particularly why, because our economy and a lot of our businesses, particularly in the rural sector have had to deal with those sort of things.
AUSTIN:
My guest is Federal Treasurer, Scott Morrison. I have to let you go and leave it there. Thank you so much for your time this morning.
TREASURER:
Thanks a lot, Steve. It was good to be on your program. Cheers.