DAVID COLEMAN:
Well good morning everyone and welcome to Padstow here in the heart of the Banks electorate here in Sydney. It’s great to have the Treasurer, Mr Hockey, here with us at Studio Shirts and with Roger Touma and his team. This is an example of a great Australian small business manufacturing and designing shirts right here in Sydney. It’s great to hear from Roger about the success of the business, particularly the increase in sales since the recent Budget. So welcome to you all again and I’ll ask the Treasurer to say a few words.
TREASURER:
Well thank you very much David. To Roger and Sola, thank you so much for having us at your business. We just heard that even though their turnover is more than $2 million, which is the threshold that we set for the small business tax cuts, there has been a surge in business activity since the last Budget. It’s always been our plan that if we can lift the tide and get small business more active, then every other business will benefit as well. I’m very pleased with that result, this is very encouraging and reflects back to that the economy is starting to get very good momentum. That’s come about because we’ve been able to make the necessary reforms to the economy, to strengthen the economy, to open up new markets. One of the things that we continue to work at is how to improve the capacity of the Australian economy. The Prime Minister has advised me that discussions with the Premiers and Chief Ministers have been very productive so far. I’m encouraged by that because ultimately it’s going to have to be a partnership between the States and the Commonwealth to strengthen the Australian economy. You can only do that by reducing the overall tax burden. Tax changes, if they result in higher taxes, do not represent tax reform. What we want to see is lower, simpler and fairer taxes. What we also want to see is a removal of duplication between the Commonwealth and the States. Now, anything we can do to provide more integrity into the taxation system, to streamline the delivery of government services, is a significant step forward, not only for consumers, but it’s a step forward for the economy as well. So I’m encouraged by the progress of the discussions between the Prime Minister and Chief Ministers and Premiers so far. There’s still much work to be done. It is the beginning of the process, not the end, and it also represents everything we are about - that we will do everything we can to strengthen the Australian economy for the benefit of everyday Australians. Over to you.
JOURNALIST:
Mr Hockey, in light of the cost judgment yesterday, did you have a stiff drink last night?
TREASURER:
[laughter] No, no, no, no. I tell you what, if I was a shareholder of Fairfax Media I wouldn’t be too happy with that result.
JOURNALIST:
Do you regret taking on the action?
TREASURER:
Not at all.
JOURNALIST:
Why not?
TREASURER:
Well, someone has to stand up to the bullies and I chose to do that. And even though I paid a price, if I was a shareholder of Fairfax Media, writing out a cheque for one-and-a-half million dollars, and carrying the burden of an Editor-in-Chief who has acted maliciously against the Treasurer of Australia, I wouldn’t consider that a win at all. Only Fairfax Media could consider a finding of malice by the Federal Court as a win and writing out a cheque of one-and-a-half million dollars of shareholders money as a win. Well, it’s not a win in my book.
JOURNALIST:
How much will you be out of pocket?
TREASURER:
Well, we’ll wait and see but, you know, someone has to stand up for what is right and I’m prepared to do it. I will not be bullied by anyone.
JOURNALIST:
How many people have the financial resources to stand up to people?
TREASURER:
Well, do you have any questions about the economy? I’ve put out a statement, I’ve said what I said. I want to talk about my country and get on with the job as Treasurer.
JOURNALIST:
In terms of the taxation debate then, given that the Social Services Minister said he doesn’t want to see an increase to the Medicare Levy, given that the States have such a diverse range of views on taxation, has any progress been made at all really over the last 24 hours?
TREASURER:
Well, look in my discussions with the Prime Minister, he said there have been very constructive steps taken. Good progress has been made, but it is the beginning of the process, not the end of the process. That’s hugely important, reforming the Federation is a big task. Quite frankly, lots of people have opinions on individual taxes. What we want to do is have a system that delivers lower, simpler and fairer taxes.
JOURNALIST:
Sydney’s median house price has climbed above a million dollars, does that indicate to you that a review of stamp duty should be on the table at COAG?
TREASURER:
Well, you know the overwhelming message about Sydney house prices is that you’ve got to increase the supply of housing. You’ve got to increase the supply. The demand is extraordinary in Sydney, so the response has to be to increase the supply of housing. Now, we are prepared to work with the States to find ways that you can increase the supply, we are even prepared to consider a range of different initiatives that will help to address that supply logjam. There has been a significant increase in the number of building approvals in recent times. There’s also been a significant increase in housing construction, but clearly it is not meeting demand. There’s much work to be done. Now we’re prepared to work with our friends in the New South Wales Government, anything we can do to help we stand prepared to do.
JOURNALIST:
Treasurer, you talked about the need to simplify Australia’s tax system. Do you think an increase in the GST is the right way to go if it is also going to have to be accompanied by compensation packages for some households?
TREASURER:
Well, I’m not going to speculate on the outcome of the meeting between the Premiers and the Prime Minister, but I will say this: Tax increases overall do not represent tax reform. What you’ve got to do is reduce the taxation burden on Australian businesses. We are standing here in a business that is the beneficiary of taxation reform in the last Budget, where we introduced accelerated depreciation for businesses under $2 million, cut the company tax rate to the lowest level in more than 40 years, and also introduced a tax cut for unincorporated businesses. Now, that is flowing through the economy, that’s flowing through to other businesses. The best example of that is right here, a business with turnover of in excess of $2 million, but they’re actually the beneficiary of increased demand from smaller businesses. So, we’ve got good momentum building in the Australian economy. Of course there are threats to that, Bill Shorten’s new Carbon Tax is a threat to that. Of course the reckless nature of policy making in the Labor Party, one day they have one view, the next day they have a very different view. One day they’re split, the next day they pretend to be united, and I think it’s important to have stability and certainty and that’s what the Coalition Government is offering.
JOURNALIST:
Treasurer just clarifying your answer just then, are you suggesting that you don’t want taxation reform that leads to higher revenue, which is what the Premiers actually want from the GST…
TREASURER:
We want lower, simpler and fairer taxes. If we’re simply going to end up with tax changes that increase the amount of money going to governments and don’t do anything to improve the Australian economy, that’s not tax reform. Simply increasing taxes is not tax reform. Tax reform is having a fairer, more equitable system that helps prepare the Australian economy for the 21st Century.
JOURNALIST:
Yesterday we had the Governor of the Reserve Bank suggesting that Australia needs to reassess what trend economic growth is. He’s suggesting that we may have to get used to under three per cent as being the new normal, as he put it. The Government is relying on trend growth above three-and-a-half per cent over the [inaudible] ten years to get back to a Budget surplus. Do you think you need to reassess what trend economic growth is for Australia?
TREASURER:
Well, no. But I did warn when I released the Intergenerational Report, that we were facing a longer-term period of below trend growth and redefining the trend is one way of approaching it. I would prefer to look at ways that we can improve productivity, and if we can improve productivity, we can speed up the capacity of the Australian economy. The Australian economy will benefit from new initiatives such as a free trade agreement with China. I note that Bill Shorten wants to now try and amend, even scuttle that free trade agreement with China. Well that’s just going to hurt Australian businesses and it’s going to have a negative impact on Australian jobs. So quite frankly, what we’ve got to do is find ways to speed up the Australian economy through improving productivity, lowering the overall taxation burden, getting rid of regulation and red tape, and focusing on ways that we can incentivise business to go out and have a go, and that’s exactly what we’re doing.
JOURNALIST:
Do you think you’ve been - the Government’s been vindicated in terms of its border protection policy given that Bill Shorten has seemed to change his view on boat turn backs?
TREASURER:
I can’t help but think that we’re going to have one of those pretend fights at a Labor Party conference, where the leader pretends to come out and have a grand victory over the evil people on the other side of their faction. This has got all the hallmarks of a pretend fight. I’m sure Bill Shorten has done a backroom deal with some of his political opponents in the Labor Party. He’ll try and scuttle the free trade agreement with China and he’ll appease the unions and the flipside is he gets what he believes to be a win on border protection. We see these pretend fights at Labor Party conferences. The bottom line is you can’t trust the Labor Party and you certainly can’t trust Bill Shorten, especially when it comes to border protection.
JOURNALIST:
Given that you’ve said in the past that Bronwyn Bishop’s expenses didn’t pass the sniff test, do you think the constant media reporting about expenses is providing a distraction for government work or proving to be a political liability?
TREASURER:
Well, I’m getting on with the job of ensuring the Australian economy is stronger and more prosperous. David is doing the same I assume, and everyone else here. The business is doing the same as well - getting on with the job of a stronger and more prosperous Australian economy and we’re not being distracted by those sorts of things.
JOURNALIST:
Treasurer are you any less reluctant to embark on any legal action given what’s happened with the Fairfax case?
TREASURER:
You always stand up to bullies. You always stand up to bullies wherever they might be and frankly I make no apologies for that.
JOURNALIST:
Treasurer can I just ask about the Northern Territory potentially becoming the seventh State and having the power to do…
TREASURER:
Haven’t we heard this before?
JOURNALIST:
Well that’s right, it appears to be now unanimous support at COAG. They would then have power over uranium mining, a whole raft of issues that they currently don’t have power on. Does that complicate the picture for governance in Australia or are you supportive of the Northern Territory becoming a State?
TREASURER:
Look, I think we had a referendum not too long ago in the Northern Territory on that specific issue. They chose not to go down that path. So, we’ll leave it at that, thanks very much.