TOM CONNELL:
I’m joined by the Treasurer Scott Morrison. Treasurer thanks for your time today.
TREASURER:
G’day Tom.
CONNELL:
Just beginning on this matter with Malcolm Roberts, if he’s willing to show it to one of my colleagues, a journalist, surely he should be showing voters out there to clarify this.
TREASURER:
I’m not going to get drawn into this Tom, this is a matter for Senator Roberts and other senators and the Parliament, so I’ll leave it there. I’m focused on the Treasury matters, which is my portfolio responsibility. So that’s where I’d prefer to leave it today.
CONNELL:
Just one more on this though there’s a call for an audit of all MPs and Senators, given what we’ve had in the last couple of weeks wouldn’t this be a good idea to clear this up?
TREASURER:
They’re matters for the Special Minister of State, and others to determine. They’re not things that really come across my desk. I know where my situation is so, I’m relaxed and comfortable about that. I think what the key is, I know they’ll be a lot of genuine interest in this, but the Government just gets on with the job Tom. That’s what I have to do. I have no control over those things, what I have to focus on are the issues about ensuring our economy continues to grow for more and better paid jobs, that we guarantee the essential services that Australian rely on, putting downward pressure on rising costs of living which is of great concern to me, and of course, ensuring that the Government lives within its means and that’s exactly what we’re doing.
CONNELL:
Alright well let’s get in the portfolio area. I’m interested to cast our finds back to the Budget where there is an undertaking to keep tax take at 23.9 per cent of GDP, now this is, I’m assuming a firm undertaking, that whatever happens you won’t go above that?
TREASURER:
We submit ourselves to the tax to GDP cap, have done for some time. The question is, why won’t Labor? Seriously, we’ve committed to it, at the last election, they didn’t commit to it. They had tax to GDP just going up, off into the Appalachians, and so it’s important for Bill Shorten to confirm, will he submit himself to the same tax discipline that the Turnbull Government will.
CONNELL:
We’ll see a bit more of their plan as it comes I suppose, but further to that, because a big part of that is reducing company tax, if, as is happening at the moment, the Senate continued to block that going beyond the threshold of $50 million, what do you turn to make sure you still keep under than tax take?
TREASURER:
We remain committed to our Enterprise Tax Plan, I introduced it back before the Parliament, the balance of that program, during the Budget sittings, now all the wise commentators also said we wouldn’t get $50 million turnover passed by the Senate. In fact, all the wise commentators said this would be an unworkable parliament, you wouldn’t be able to get anything through, nothing would happen. Nothing. Well 126 pieces of legislation has passed since the last election, 17 pieces of Budget legislation has passed, since the Budget was handed down. The Budget is passing the Senate, we have some important measures in the Budget being considered by the Parliament when we return and if Bill Shorten is interested in fairness, then he should ensure that we can fully fund the National Disability Insurance Scheme. He shouldn’t play politics with it, as he has been with disabilities. He should support the increase in the levy because everyone takes out, as Julia Gillard said, and that means everyone puts in. The Medicare Levy already has the essential carve outs for people who are disadvantaged, lower incomes and things of that nature. It already has that, so if it’s good enough for Labor to do it to pay for the NDIS, then it’s good enough for this Government to do it, and he should support it, and not play politics with it.
CONNELL:
Just on this tax take though, because I know you’ve gone further than I think many people expected getting the $50 million and that took a bit of wrangling, but almost none of the crossbench, certainly the Greens and Labor support going beyond that, do you switch to income tax cuts, if you can’t get the company through?
TREASURER:
We’re committed to 23.9. Always have been, always will be. That’s what Australians can expect, what can they expect of Bill Shorten working on trying to create the world’s biggest tax, I mean that’s his objective, he’s dressing this up and a whole bunch of other ideological, and other rhetoric, but that’s what he wants, that’s what they always want. They just want to drive tax as a share of the economy, up and up, and up, and up Tom.
CONNELL:
As for your plan though Treasurer, I’m just interested because the company tax plan at the moment is for $50 million, there’s almost no appetite in the Senate to keep going further. Would the switch from that, be income tax cuts? Is that something voters can look forward to?
TREASURER:
Tom, you’re getting well ahead of yourself I’m afraid, as many other commentators have previously. We’ll just continue to work with the Senate, like we always do, and get things done. We will work those issues through at the appropriate time. The Government’s plan is to implement our Enterprise Tax Plan for one simple reason - it’s going to create jobs. It’s going to drive investment and that’s what people need. We had more than 240,000 jobs created in the last financial year. That is the strongest jobs growth we’ve seen since before the Global Financial Crisis. You want to improve fairness in this country, make sure people can get a job, that’s what we’re doing. Best form of welfare is a job. That’s the Turnbull Government’s plan.
CONNELL:
But on this, the other but leaver from company tax, would you agree, that’s the single switch if you need to?
TREASURER:
I always want to see people paying less income tax, less corporate tax, because that means then keeping more of their own money. As a Treasurer, the level of personal income tax has come down under the time I’ve been Treasurer. I’ve been able to extend out, albeit, a very modest way, the middle-income tax rates for the threshold from $88,000 to $87,000. Now that was to ensure that we didn’t get into the situation where full time ordinary wage earners were forced into the second highest tax bracket. Now we did that in my first Budget. So, my record is actually bringing those taxes down Tom. My record, and the Prime Minister’s record, is doing that. And similarly for company taxes. We have delivered the biggest company tax cuts for small and medium sized businesses that we’ve seen in decades, I mean we’ve changed the definition of a small business from $2 million to up to $10 million. That is a huge boon for small businesses so they can go out, invest more, employ more people and grow their businesses.
CONNELL:
Yeah, well, we’ll see where that goes and obviously what Labor’s going to do because there’s an unanswered question for them. I want to get you on to trusts, we don’t know yet what Labor’s going to do but in some figures coming out in a report by the Australia Institute, $3.5 billion worth of benefits and in terms of where they go, 51 per cent of those go to people earning more than $500,000. Do you think there is a case there, perhaps, on the fairness, equality side? Just a tink, perhaps?
TREASURER:
We already have, as I’ve said all week, we already have a Trusts Taskforce within the Tax Office that looks at integrity issues in this area. And since we’ve had that, we’ve raised almost $1 billion in additional liabilities, so when it comes to people rorting these things, we’re already acting. It’s already happening and Bill Shorten likes to talk about tax integrity, but he actually voted against multi-nationals paying their fair share of tax – a legislation that I took through the Parliament, which ensured that last year alone, we had almost $3 billion in additional liabilities raised. So, he was happy for multi-nationals to pay less tax. Now on this issue of trusts, he simply doesn’t get it that small businesses and particularly in the farming sector, family farms legitimately use trusts – as he said back in 2011 himself, so I don’t know what’s changed – in 2011 he said that it was all fair dinkum, it was all good and it was all legitimate. But those businesses use them because they’re income is variable, so unlike if you’ve got a job and you’re paid a wage and your wage is the same – and hopefully increasing all the time, which is what I want to see – people running small businesses or farms, their income can be highly variable so one year…
CONNELL:
So that means…
TREASURER:
Let me finish, Tom. They’ll pay a very high rate of tax and then the next year, they’ve got to borrow money to pay the tax bill. So this enables them to better flexibly manage their affairs. Now, Bill Shorten doesn’t get what’s happening in rural Australia, he doesn’t understand what’s happening with small business. He’s going to reverse the tax cuts we’ve already legislated for small business, now he’s coming after them with a meat cleaver on trusts…
CONNELL:
Well, just on this illegal use of it because I’m talking about obviously illegal use of it so if you get the example of small business and someone has a small business, they might have three adult children within the current arrangements, they can obviously distribute part of the earnings from that business instead to them – so adult children, they might be at university without a job – and take advantage of the tax-free threshold. Are you essentially saying this needs to be a benefit, a boon for the small business ahead of the salary or the wage-earner, that this incentive is needed in…
TREASURER:
What I’m saying is, Tom, what I’m saying is that I’m not going to buy the usual set-up from Labor which goes on about these issues and it’s a smokescreen just to whack up taxes. This is what it always is and it’s always based on a false premise. Trusts are used legitimately and have been in this country for generations – and particularly in the rural sector and particularly for small business. And I think that matters and I think I’m not going to allow Bill Shorten just to diminish those Australians, to diminish farmers and their concerns – we had the head of the NFF on radio this morning, who I think was setting out the position very clearly and they have every reason to fear Bill Shorten. Every single reason. If you run a small business or you’ve got a family farm, you cannot trust him because he doesn’t get you and he wants to tax you more.
CONNELL:
What if, Treasurer, Labor decided to clamp down on these tax benefits – the legal ones at the moment – and redistributed as lower income tax for everybody? Would that be something you’d look at?
TREASURER:
Again, let’s take their plan on negative gearing, this is the great hypocrisy of this…
CONNELL:
We are nearly out of time and I just want to know if you’d consider that particular plan…
TREASURER:
I’m not going to respond to speculation of something he hasn’t announced yet, Tom. I don’t know what he’s saying but I do know what’s driving…
CONNELL:
…Increasing the tax.
TREASURER:
Tom, I know what’s driving Bill Shorten. What’s driving Bill Shorten is they have an appetite for tax that they cannot quench and we’ve always seen that and on negative gearing and on capital gains tax, they say that they’re there for the wage-earner – it’s nurses, there’s 38,000 nurses who negatively gear properties and you know why they do that? To actually increase their wealth. They say they want to improve the wealth distribution but they’re saying to nurses, teachers and one in five police officers – one in five police officers negatively gear and they want to wipe that out for them? And you know who gets to continue to negatively gear under Bill Shorten’s policies? People who have large investment income, people with large salaries, people with large incomes that come from their broad investments, so he’s happy for them to negative gear, but if you’re a wage-earner like a nurse or a teacher or a police officer, then you’re struck off Bill Shorten’s list. It’s one big, fat con.
CONNELL:
Just finally on this though, if the plan is not actually increasing tax overall, would you look at it when it’s unveiled on Sunday? At least, consider it?
TREASURER:
I’m not going to respond to something he hasn’t announced, Tom, I don’t think that’s a fair question to ask. Let’s see what he announces on Sunday but I know one thing that won’t change, you will never be able to quench Bill Shorten’s appetite for higher taxes and conning people into believing that the higher taxes are better for them. Higher taxes would stymie growth and cost jobs.
CONNELL:
Well, as you say, we will see the final detail probably on Sunday, Treasurer. So we’ll look forward to speaking to you once that plan is unveiled. Thanks for your time today on Sky News.
TREASURER:
Thanks a lot, Tom. Good to be with you.