TREASURER:
Well it's good to be here in Adelaide today and I have appreciated the opportunity for several meetings today, obviously starting with Rowan Ramsay the member for Grey. He and I met earlier today to discuss the issues in Wyalla where he was obviously just last night, and I appreciate him coming down to Adelaide to be able to run through the various issues there. The work that the Government has been doing in supporting the Administrator and particularly the most recent provision of a $50 million facility to further improve the viability of this business going forward as it prepares for sale and to receive the updates on how that process is working. We're obviously very cognisant of the other challenges the business faces and are working closely with the administrators to that end. The new Minister for Industry will be in Adelaide soon to be talking through those issues also. Minister Hunt will be here he tells me in the not too distant future and obviously he'll be catch up with Rowan then as well as the administrators and the South Australian Government and I look forward on my next visit to Adelaide to also catching up with Tom Koutsantonis as well to discuss many other issues that relate to this. Obviously matters regarding the energy market are impacting heavily there as well, and Rowan has been very forthright in his views on those topics and so they are issues that have to be addressed as well.
It was also good to meet with Nick Xenophon and the whole team, Nick's team. It was the first of what I expect to be quite a number of meetings, not just with myself as Treasurer but my other colleagues and I think it's a good sign of the good faith of the Government and the crossbench seeking to work practically together to make the new Parliament work. I've enjoyed a good relationship with Senator Xenophon for many years, and to have the opportunity to connect with his broader team and to in the first instance clearly set out what the challenges are. And the budget challenges are real, and they have a material impact on the living standards of Australians and the need to ensure that we action the matters that are in the Budget. That there are some $40 billion worth of measures both in the Budget and that have been refashioned from previous budgets that are essential to driving the budget back towards balance. On the expenditure side, and on the revenue savings side, are also an important part of the Government's plan to drive investment.
We spent quite a bit of time talking about the critical need to drive investment, private investment, in this country because that's what drives jobs. That's what we set out every single day of the election campaign. It was all about driving investment and you don't drive investment by taxing it more. That's why we were seeking to reduce the tax burden on investment in this country, which means you're reducing the tax burden on jobs. The Government's focus on investment has been central to all of our economic plans and policies.
I also note that this afternoon David Kalisch, the Chief Statistician will be standing up in about 45 minutes or so, and he will obviously be addressing the issues that relate to the forthcoming Census. The Minister responsible Michael McCormack will be making some further comments. Happy to take initial questions people have on that matter.
On the last matter, I want to echo what the Prime Minister said earlier today and I said yesterday. And that is; that it is for the banks to explain fully to the Australian people, to their customers, why they have not passed on the full impact of the rate cut yesterday. Now, I welcome the fact that they've lifted deposit rates for various products that they have available. But there is no reason on the issue of overseas funding costs for the banks to not pass that fully on, and to have retained the benefit of that rate cut for the banks themselves. That is a matter that the banks have to explain to the Australian people. That is not for the Government to do. It's for the banks to do, because they have made those decisions in their commercial interests, and in the interests of transparency, it really does fall to them to do that in the most transparent and efficient way possible.
QUESTION:
The Prime Minister has demanded that the banks pass on the rate cut in full whereas yesterday you said this was a commercial decision…
TREASURER:
Well, it is a commercial decision.
QUESTION:
But do you also echo his demands? Because there's a bit of a contrast…
TREASURER:
No, not at all. The Prime Minister has said what I've said. They should pass it on in full.
QUESTION:
On the issue of the Census, Nick Xenophon has obviously brought a number of concerns to you and there are concerns expressed in the community, particularly about people not filling out the Census in time or in the correct way. Nick Xenophon said that you told him people worried about getting fines shouldn't be we be worried? How do you give such assurances?
TREASURER:
Well, in the last Census, there were 100 penalty notices issued. Just a hundred. The last resort is for the ABS to issue a notice, only if there is a clear willingness of the respondent not to participate. Now, I don't anticipate that being the cause of any difficulty in this area. The Census is a very significant undertaking. In this year's Census, we are seeking to lift the participation through online forms from one-third to 65%, and the statistician advises me that they remain very confident about being able to achieve that. Now, one of the issues that they've had to address in the last week or so was the product actually of the efficiency of Australia Post and that was that the letters that came out from the ABS actually arrived in a few cases a little earlier than anticipated. As a result, they've had to gear up a little more the resources in their call centre. One of the other challenges they've faced with their call centres is that people are calling when they as yet have not received their letter. So if you haven't received your letter yet, there is no point in ringing that number, because it's not designed for that purpose. But I welcome the fact that the ABS has extended its general enquiries line out to 10 o'clock in the evenings to be able to enable people to answer questions in relation to that. This is a very big undertaking. It's a very important issue. I'm more than confident that the penalty notices are not going to be issued in the sort of circumstances that people are worried about. In fact, it is not until the 23rd of September of this year that people are being asked to complete those Census forms online. Now, the vast majority of people will actually complete them in the normal period, sooner or around Census night. In fact, 100,000 people have already done just that. So, it is a big undertaking. It is something that the ABS is very familiar with managing, and particularly on the issue of privacy. The ABS on the Census has, I'm advised, an unblemished record on this issue, working with the same contractors that they're working with in this Census. The major change of this Census is to seek to significantly increase the compliance with the Census through online. Now, that is going to save the costs of running that Census around $100 million. So, this is a worthwhile way to upgrade the way the Census is conducted. But the Chief Statistician, I'm sure, will have more to say about that this afternoon.
QUESTION:
Nick Xenophon mentioned Ausgrid, what did you indicate about the national security considerations behind the sale?
TREASURER:
That they would be fully considered.
QUESTION:
Can you elaborate on that?
TREASURER:
No. Obviously it's a national security matter, so you wouldn't expect me to.
QUESTION:
And could those concerns be a potential deal breaker?
TREASURER:
Well, we'll be making our announcement at the appropriate time. But as with every single one of these matters, the national security issues on a case-by-case basis are keenly considered.
QUESTION:
Going back to Arrium and, in particular, Whyalla, what sort of things did you discuss with Rowan Ramsay? Is there any scope for further support for the industry or further support for businesses who could be impacted by it?
TREASURER:
Rowan in particular raised with me the issue of trade creditors in Whyalla. While the main focus is obviously to get Arrium in the best possible position to be able to be taken up by a new owner, and to ensure that that business has a very strong and viable future. Now, already the administrator is advising about the good pipeline of orders, and that includes, of course, the $80 million in orders that we've put in through the direct purchase around the rail project. But on top of that, I can assure you that on every single defence procurement project it has been a consistent focus of the Government to be enquiring about the importance of using Australian steel in these very significant procurements. Now, we know that in some particular cases that steel is just simply not made in Australia. But wherever possible and wherever it is, the defence team are in no doubt about the Government's priority. Equally anti-dumping arrangements have been continued to be pursued and have been welcomed by Arrium and more importantly by the administrator. But there still remain very practical things that both the administrator is raising and that Rowan is raising. Now, we've already acted on one of those through the $50 million facility. There are other measures there that we'll continue to work through with both the State Government and the administrator. But what matters here is not throwing cash at this. What matters here is investing wisely and the fact that we have already chosen to invest – invest – $50 million in the future of this business, I think demonstrates our confidence in the ability of this business to go forward and that's what matters. I mean, 5,000 people on Newstart is just less than $70 million a year. But worse than that, they're people who then wouldn't be in jobs, not the fact simply that they're on a welfare benefit. We want to work with Arrium and the administrators in particular to ensure that this business goes forward viably. That's the best thing for the town, it's the best thing for the employees and it's the best thing for Australia to have this business being viable and strong.
QUESTION:
Is our economy struggling? What does it mean to have a historically low interest rate?
TREASURER:
What it means is that in recent times the bank has been able to make movements in rates, particularly on the basis of their confidence that real estate markets, and particularly the investor surges in those real estate markets, have tapered off. Now, that, they acknowledge, has been a direct response to the practical result that was achieved in the wake of the APRA measures, which has seen investor credit growth in the real estate market level off and it is actually growing now at only the same rate as householder. So, there has been an adjustment in the real estate market which has enabled the Reserve Bank to be in a position where they have been able to act, as they have chosen to, in a way they didn't feel they previously could, because of the pressures in the real estate market. Having addressed that, they've obviously formed the view that they could take the decision they took yesterday without having that negative impact on the housing markets. Now, our economy is growing at 3.1 per cent. This is one of the strongest rates of real economic growth in the advanced world today. I returned from the G20 just over a week ago and there is no other seat I would rather be sitting in other than Australia's seat when it comes to economic growth. There is no other seat I would rather be sitting in, in terms of ensuring we have a level of debt in this country which is significantly below that of other countries around the world. What all of that reminded me of was the need for us to continue to focus on driving growth and driving investment to drive growth, because that's what underpins jobs. We have an employment growth rate in this country of around 2 per cent and that needs to be maintained. It will only be maintained if we continue to pursue policies that drive investment. Increasing taxes on investment has one result – it results in less investment. So the Government is acting to put in place policies that drive investment and the Reserve Bank has acted in its remit to do things that they believe will have the same outcome. We are in a low-rate, low-inflation world at the moment. That is not an unusual position to be in and, in fact, other countries have negative rates, and even lower rates of inflation. So, I think it is a statement of the relative strength, frankly, of where we're currently sitting at the moment, not the contrary.
QUESTION:
But isn't the RBA's move to help the economy along by cutting rates, isn't that weakened by the fact that the banks haven't passed on this rate cut in full?
TREASURER:
Well, this is why the banks should explain in full why they haven't passed it on in full and why there needs to be real transparency for that. There is no legislation which forces banks to do this but I think there is, in an open, democratic society, in an open market, the opportunity for those banks to explain that to the Australian people and as they should.
QUESTION:
And if the banks don't pass on this rate cut in full, and they don't explain themselves properly, do you think that could leave them vulnerable to a banking royal commission?
TREASURER:
Well, look, all actors and participants in our economy need to ensure that they're maintaining the best of possible relations with their customers, and with the economy more broadly. And so that is a matter for them to manage. The Government believes that, obviously, these things should be passed through in full. I think everyone believes that. Certainly customers believe that, and they have every right to. But the banks need to explain that. They have shareholders, they have customers, and they are part of the broader economy as well. So, our banking system, though I stress is the strongest banking system in the world. It has been critical to our success as a country, particularly over the last 10 years, of weathering some pretty big storms. The return on capital in our banks exceeds that of what is being achieved in other places, particularly in Europe and having a strong banking system is something Australia should not take for granted. But at the same time there needs to be that transparency with customers.
Thank you very much for your time.