PRESENTER:
Joe Hockey, welcome.
TREASURER:
Great to be with you.
PRESENTER:
Who do you put more faith in for some stability in the economy and for the Government: small business or Treasury with its forecasts which are – some people are saying – optimistic?
TREASURER:
They're not optimistic, they're about accurate. And why? Because we've carefully considered advice from the Reserve Bank and carefully considered advice from the International Monetary Fund and others and credible economists such as Bill Evans at Westpac and others have said, yes, they're credible. And why? Because we're seeing historic low interest rates, low electricity prices, the Australian dollar's come down which gives our exporters enormous opportunities and importantly, we're seeing good growth in the rest of the world. It's starting to come back and we've seen the worst of the Global Financial Crisis; as Australia lifts, as the rest of the world lifts, we're going to lift as well.
PRESENTER:
So, no reasonably – or credible prospect of China and the world [inaudible] iron ore prices falling away further [inaudible].
TREASURER:
We've taken, certainly by today's standards, a reasonably conservative approach to the iron ore price at $48 a tonne. It's been trading around $58 lately. But look, there's always going to be some swings and roundabouts. The bottom line is we are reducing government expenditure, we're reducing the size of government by around 0.5 per cent of GDP per year…
PRESENTER:
But spending’s still running historically high?
TREASURER:
It's too high. It's too high. It's not as high as the highest point under the Rudd Government but it is still too high and as you can see, we're reducing expenditure. That's hugely important. But at the same time we're trying to grow the economy. What we're doing is providing an incentive for Australia's 2 million small businesses to go out there and have a go.
PRESENTER:
[Inaudible] which goes back to the original question: you're putting a lot of faith in small business, you're giving them these tax breaks, why does it follow that they are: A, going to spend – that they've got the confidence to do that, or B, more importantly going to hire?
TREASURER:
Well, because there are new growth opportunities for small business. Some of the biggest companies in the world today started as a small business only a few years ago. If you look at the Facebooks or Uber or Airbnb or AliBaba, they were tiny businesses a few years ago. Now they are enormous and the future is going to be about small businesses becoming big businesses, big employers. Now, we've got those skills, we've got that innovation in Australia. Now's the time to invest in the tools that are going to help to create that growth.
PRESENTER:
Business is suggesting in some cases that the cash flow isn't there, though. They're not going to take advantage of a tax break if they haven't got the money to spend in the first place.
TREASURER:
That's exactly what accelerated depreciation does. It improves their cash flow. And why? Because they were going to deduct those items over a number of years. Now they can deduct it on the 1st of July, which means they get the cash back and they can reinvest in their business. So, it's accelerating the purchase of the tools and equipment that’s going to grow their business.
PRESENTER:
Alright. Now, there are savings, you've had to find them. Obviously foreign aid has been cut [inaudible]
TREASURER:
That was last year's Budget, which…
PRESENTER:
But we're starting to see the influences including closer to home around Indonesia. There are tax hits coming for visa applicants. What have you tried to do; spread this as far and as thin as you can?
TREASURER:
We don't want to increase taxes on Australians, unlike our opponents. We actually focus on trying to reduce the tax burden on Australians, so Australians can reinvest. But yes, we are closing loopholes. Yes, we are ensuring that, for example, people on working holidays in Australia pay tax from dollar one that they earn. And we are, yes, closing down some of the entitlements that people were getting in the tax system [inaudible] and we're going after the multinationals – the 30 multinationals we've identified that are not paying their fair share of tax.
PRESENTER:
And you're still unable to tell us what that's worth?
TREASURER:
Well, because we have identified how they're moving their profits out of Australia to places like Singapore and Ireland and the Bahamas and what we're doing now is identifying how much they do. But I'm not going to make the mistake of my predecessor and bank and spend money that I haven't collected.
PRESENTER:
You've indicated though that that will be in the billions; how quickly is that money expected to flow?
TREASURER:
Well, as soon as we can get the legislation through Parliament. We're properly consulting with tax officials. We're also liaising with other countries because we want the whole world to follow our lead in this regard.
PRESENTER:
Okay, now the Senate – the Senate crossbench hasn't been able to put its finger thus far on anything in particular that it's going to stand up and fight on. Do you think on an early assessment that this has done the trick where you need to get most of this through – certainly more than last year?
TREASURER:
What matters most is you actually have policies that are in the best interests of Australia and all the policies in this Budget are in the best interests of Australia. That's what we're focused on. And I think it's absolutely right. We want to grow the economy, grow jobs, provide incentives for small business and for families to get out there and have a go.
PRESENTER:
Alright, putting it to the test – Nick Xenophon, Clive Palmer, plenty of other politicians on the hill here this morning are sniffing the breeze and feeling the possibility of an early election off the back of this. Has it entered your calculations at all?
TREASURER:
No.
PRESENTER:
At no point during the preparation – all the pre-releases of these initiatives, childcare…
TREASURER:
No, we're doing what is right for Australia. We never sat down and said let's have an election. Never, not once.
PRESENTER:
Full term, you're giving a [inaudible].
TREASURER:
We're determined to go full term and we want to deliver the sorts of initiatives that are going to grow the Australian economy. The bottom line is if you have good policy you will be rewarded by the electorate. That's the bottom line and we have good policy and we want to implement that policy.
PRESENTER:
You're determined to go full term. What, though, if there was further deterioration, there were unexpected developments, you didn't see them last year, what if there were, in the remainder of this year, further signs of trouble ahead?
TREASURER:
I don't see trouble ahead. I mean, we have been able to cope because we have an economic plan that is flexible and responsive. And then since we've been elected we've seen a loss of $90 billion of expected revenue. The biggest fall in the Terms of Trade in 50 years – massive fall in the iron ore price. But, Australia's economy is growing, it's one of the fastest growing economies in the world and it's going to get faster.
PRESENTER:
Alright, full term for the Government; Joe Hockey the Treasurer – full term in the job?
TREASURER:
Yes. I mean, we've got unfinished business.
PRESENTER:
And you passed a test you reckon, last night?
TREASURER:
My test is with the Australian people. Are we helping to grow the Australian economy, build prosperity, create jobs? We are on track to do that.
PRESENTER:
Alright Joe Hockey, go forth [inaudible]
TREASURER:
Thank you very much.
PRESENTER:
Thank you.