PRESENTER:
Treasurer, the Australian Bureau of Statistics has been causing some problems with the unemployment figures and the methodology they use. How concerning is that?
TREASURER:
I have said on a number of occasions that the numbers can be volatile out of the ABS and especially when they are on a monthly basis like the unemployment numbers. But I have asked the Secretary of the Treasury to look into the matters in relation to the ABS. I am unhappy with the volatility of the series. It is a broader issue beyond the ABS's current challenges with the monthly unemployment data. The fact is the previous Government left the ABS with insufficient resources to be able to upgrade their computer systems and also some structural issues that need to be addressed, including the fact that they haven't got a Chief Statistician.
PRESENTER:
What's your message to the market about how to treat Australia's unemployment figures?
TREASURER:
The ABS is still one of the best statistical collection agencies in the world and you've always got to look through monthly figures for trends. But the fact is, I have been consistently saying that even after taking into account last month's extraordinary figures, and I've described them as extraordinary, there is a good trend of job growth in Australia and it is running at three times the speed of last year's job growth and when you look at the overall data series including job advertisements that would confirm that you have relatively strong job growth in Australia.
PRESENTER:
If the former Government made a mistake by cutting resources at the ABS will you rectify that? Is the solution here to help the ABS build up its resources and fix the problem?
TREASURER:
I'm not writing out a blank cheque for the Australian Bureau of Statistics. I don't write blank cheques. But we have been, for some months, working on a new plan for the Australian Bureau of Statistics including better utilisation of resources and also better ways of collecting data and operating in a more contemporary fashion in the 21st Century.
PRESENTER:
A lot of people in the markets rely on ABS data but they don't pay for it. Should they pay for it? Should there be a user pays approach?
TREASURER:
That's one of the things we've been actively looking at. I'll be taking initiatives to Cabinet in the next few weeks.
PRESENTER:
Finance Minister Mathias Cormann has refused to rule out tax increases and further spending cuts to help pay for the fight in the Middle East and additional security measures. Can we afford our military commitment in Iraq and how do you plan to pay for it?
TREASURER:
Yes, of course we can. We will spend what we need to spend to defend our nation. Obviously, we will be saying more about how to deal with the costs of that in the upcoming Mid-Year Economic and Fiscal Outlook Statement. But I'd say to you, we will spend what we need to spend to defend the nation and given that we spend tens of billions of dollars each year on defence we have the capacity to deliver what we say we are going to deliver and it's another good reason for Mr Shorten to immediately pass the remaining measurers in the Budget. Everything comes at a cost and if Bill Shorten truly is honest about his commitment to deliver bi-partisan support in relation to our defence efforts in the Middle East he'll provide bi-partisan support to pay for it.
PRESENTER:
If you're not increasing taxes, though, is it inevitable that you'll have to cut into welfare?
TREASURER:
It means we make savings where we can.
PRESENTER:
[inaudible]
TREASURER:
Inevitably there will be discussions amongst Finance Ministers and Central Bank Governors about currencies and some of the movements are entirely predictable. But the fact is, Finance Ministers do not comment on individual movements in currencies and I'm not going to comment on movements in the Australian dollar.
PRESENTER:
Do you think countries have done what they should do to prepare for those [inaudible].
TREASURER:
Well, look, everyone's had fair warning. Janet Yellen's intervention, as the first intervention of the Sydney meeting of the G20 certainly lowered the temperature particularly in relation to emerging economies that had concerns about tapering. Those concerns were very real this time last year but I think the Federal Reserve's communications strategy has worked and continues to work. In my discussions with the chair of the New York Fed a couple of days ago it was clear that there is a coordinated strategy in communicating their moves, they're giving fair warning of changes and I think the world welcomes that.
PRESENTER:
If a merger of Glencore and Rio Tinto landed on your desk as Treasurer how would you handle such a proposition?
TREASURER:
I understand it's not going to land on my desk.
PRESENTER:
But it might in the future. Would it be a Foreign Investment Review Board [inaudible]?
TREASURER:
Of course it would be.
PRESENTER:
Fairfax is reporting today that the ATO is chasing a quarter of a billion dollars from oil giant Chevron who, it's claimed, benefited from tax free intercompany loans. What's your position on that?
TREASURER:
That's a matter before the courts so I I'll leave it there. Tax payers have the opportunity to challenge decisions by the Australian Taxation Office in court and the Australian Taxation Office has the opportunity and the resources to defend its position.
PRESENTER:
Just a quick follow-up on that. That Chevron matter goes back to 2000 so it has been around for a while. It does highlight that there are issues with transfer pricing and with debt and equity. Does the ATO have enough resources to prosecute these kinds of cases? Are you concerned about what's happening in the Australian economy with large companies shifting profits or avoiding taxes.
TREASURER:
There is no shortage of resources in the Australian Taxation Office. None at all. Particularly when it comes to litigation and some of these disputes have been going on for more than a decade. I will give the Australian Taxation Office whatever laws it needs to ensure that the integrity of our taxation laws is upheld and importantly we're the ones in government over the last 12 months that have gone on with the job of actually legislating policy intent particularly in relation to thin capitalisation and we're the ones that put in place the measurers to ensure that if someone is gaming the taxation system then they will eventually be caught.
PRESENTER:
That's before the G20 though isn't it? [inaudible]
TREASURER:
And we're doing it.
Thanks.