James Glenday:
The federal Assistant Treasurer Daniel Mulino joins us in the studio. Daniel, thank you for coming in to the News Breakfast studio.
Emma Rebellato:
Thanks, Daniel.
Daniel Mulino:
Thanks very much for having me.
Glenday:
Yeah, nice to see you in person. The government looks as though you’re on the cusp of making some changes to property investor tax breaks. Will you be looking to return any money you raise from that, will you be looking to return that to Australians in the form of income tax cuts?
Mulino:
Well look, what the Prime Minister and the Treasurer have both made clear is that any consideration of tax issues, and obviously I’m not in a position to announce anything here this morning but will take into account core principles like intergenerational fairness.
That was one of the core themes that came out of the 3‑day Economic Reform Roundtable late last year. Pretty much every participant in that said that that was something the government needed to bear in mind, and it certainly has been at the front of our minds during budget deliberations.
Glenday:
Yeah, just on that, I mean Bill Shorten said the mistake he made going to the 2019 election was not handing this money back in the form of income tax cuts, there’s been a lot of discussion that younger people are doing a lot of the heavy lifting in terms of the budget through wages and things like that. Is this on your agenda, big tax cuts at some point?
Mulino:
Well look, again, I don’t want to get into the details of taxes, but what I would also point is the fact that when you look at the overall package of what we’re doing for young people, it includes a massive amount of investment in housing supply, and that’s a key part of it.
So when we look at the things that we’re doing for young people, we have to look at the overall package. Building more houses is absolutely critical. And again, when it comes to younger people, and this is something which is featured very prominently in my electorate, we can’t forget other measures the government’s already taken, like the 20 per cent reduction in HECS, which was actually the first bill that we introduced and passed this term.
Rebellato:
Daniel, let’s talk about what’s going on with Iran, because nothing seems to be moving. The Strait of Hormuz is still blocked, nothing’s changing. Is your Budget now – are you having to look at this worst‑case scenario that nothing is going to change in terms of shipments and fuel and all those things that we’re all worried about?
Mulino:
Well look, we’re designing a budget that is fit for the times, and obviously we’re having to update forecasts as circumstances change. But one of the key things that has been in the forefront of the minds of all of the key players designing the budget has been this notion of resilience. And that’s something which the Prime Minister talked about yesterday at the press conference when we announced the News Bargaining Incentive.
Resilience is something which takes many forms. One aspect of that is financial resilience and fiscal strength. The budget is in much better shape than when we inherited it, the debt is $176 billion less than the trajectory than when we inherited it. But there’s also resilience when it comes to things like supply chains, the Future Made in Australia and a range of other measures are critical.
So we need to continue to monitor what’s going on in Iran. There are aspects of that which are impossible to predict. But what we do know is that we need to keep making sure that our economy and our society are as resilient as possible.
Glenday:
Did you have any conversations behind the scenes about delaying the Budget at all, saying, ‘Oh, we’re just going to push this off for 3 months because we have no idea what’s going to happen next’?
Mulino:
Oh, I’m not aware of any discussions of that nature.
Glenday:
Yeah, I feel for the poor bureaucrats who are trying to do the numbers and forecast what’s going on in the global economy. You mentioned the news bargaining code, this is going to fund Australian journalism, you’re going to get the support no doubt of a lot of Australian media outlets who think this is a great idea. Do you expect a legal challenge from some of the big social media giants? Do you expect them to actually comply or are they going to try to strip all news content off their platforms?
Mulino:
Look, I don’t want to speculate about whether they’ll challenge or not, but to your other point in the question, I mean this is a direct response to the fact that when the News Media Bargaining Code was in place and there had been a number of commercial deals, some of the media, digital platforms – sorry, some the digital platforms responded to that by taking news off the platforms.
And what we’re really saying with this News Bargaining Incentive is that journalism is critical to Australians being able to tell their stories, it’s critical to the health of our democracy. And so we need to ensure that given that digital platforms now have such incredible market power, given that it’s critical that journalists and media organisations deal with them, there’s no alternative that they pay their fair share for the content that they use.
Rebellato:
Why not other companies involved in this? Obviously Meta, Google are caught up with this. But Microsoft owns LinkedIn, you’ve got Snapchat, OpenAI, why haven’t they been caught up in this?
Mulino:
So the threshold for which digital platforms are captured is based upon number of users. So it’s 5 million users for a social media platform and 10 million for a search engine. And so as more digital platforms cross those thresholds they’ll be captured by the mechanism.
We have excluded LinkedIn it was considered to be of a different character to the other digital platforms, mainly a networking site for professionals.
So we’ve sought views from stakeholders on this in the discussion paper that we put out last year and based upon the submissions that we received we haven’t changed our view in terms of excluding LinkedIn. We’re including at the moment, based on the current thresholds we have, Meta, Google and TikTok, but as I mentioned those thresholds are in place and we’ll capture more platforms as they rise in scale.
Glenday:
Does Australia need another interest rate rise or are you worried that if there is another interest rate rise we’re just going to drive a lot of people out of work and put the economy potentially into recession?
Mulino:
Well you won’t be surprised to hear that I’m not going to comment on the independent Reserve Bank’s deliberations.
Glenday:
You’re an economist. Broadly what do you think, where do you think the Australian economy sits? Do you need to send that price signal or is it just going – I mean we can’t control the price of oil obviously.
Mulino:
Well look, what I’d say is when it comes to the federal government’s part in all of this, we have played a very responsible role in putting the government’s balance sheet in better shape. The government’s net position is over $230 billion better off than the trajectory than we inherited, and that puts downward pressure on inflation.
So the Australian Government is playing its part but obviously there are international forces at play that are likely to see upward pressure on inflation and like to put pressure on the economy. So the federal government will continue to play its part. And of course the Reserve Bank will interpret international movements in economic forces as it will.
Glenday:
I feel like that was a very skilled no comment. Daniel Mulino, thank you very much for joining us this morning.
Mulino:
Thanks very much.