JOURNALIST:
Now we have the Federal Treasurer on the line. Good morning, Joe Hockey.
TREASURER:
Good morning, Ian.
JOURNALIST:
Let's just start very quickly, were you pleased to see the Victorian Government has stepped in and helped SPC Ardmona?
TREASURER:
That is their call. That is their decision. I am glad that Coca-Cola has fronted up the money as well. Three times what the Victorians have and that is terrific and the jobs keep going and that is great.
JOURNALIST:
This view that businesses should survive on their own though would be something that I imagine you would say, 'Well, it is not a good idea for the Victorian Government to spend $22 million'. So you are supporting it or you aren't supporting it?
TREASURER:
Well the Victorian Government is running a surplus. The Federal Government has a $48 billion deficit and we inherited $123 billion of deficits and under Labor $667 billion of debt. So Victoria is in a much better financial position to be able to make that sort of decision. At the end of the day they were there before us at any rate. They were ready to commit before us and we had to make our decision based on all the other competing questions we had right around the country.
JOURNALIST:
Now, unemployment is going up in this country at the moment and it is likely to go higher with the car industry closing so where are the new jobs going to be and how do you create them?
TREASURER:
The starting point is that we expect 630 000 new additional jobs will be created over the next four years, 630 000.
JOURNALIST:
In what industries?
TREASURER:
All sorts of industries, including manufacturing. There are great manufacturers in South Australia that export into Asia even into Italy. San Remo being one example – sends pasta to Italy. These markets are open. We have just negotiated a free trade agreement with Korea which opens huge opportunities for, for example, agricultural exports out of Australia. Eliminating, for example, the 40% tax on our beef going into Korea, or the 22.5% tax on our lamb that goes in. Or taxes on our dairy products going into Korea of up to 176%.
JOURNALIST:
So far you've mentioned a lot about food industries which we don't normally associate as manufacturing.
TREASURER:
No, the do add, I'm sorry, San Remo does have manufacturing – it does. I was about to say our beer exports. Obviously, South Australia manufactures some pretty damn good beers and wine, it manufactures pretty impressive wine. Those tariffs, those taxes on our exports into Korea are going to go aswell. There is a tremendous growth in IT manufacturing. The IT industry traditionally would not be seen as manufacturing, but it is. It is not a South Australian example, but a lot of your listeners with children like me would appreciate how terrific the new Lego movie is. That was all made in Australia. 600 young Australians did all the animation for the worldwide Lego moving which is the biggest grossing movie in the United States in the last week.
JOURNALIST:
Now, we are talking to Federal Treasurer Joe Hockey who is in Adelaide to support the State Opposition Leader Steven Marshall in his bid to win the election in a bit over a month's time. Joe Hockey, just on this issue of the manufacturing industry. A very senior academic looked at the fallout from the closure of Mitsubishi and he found that; one third of those people who lost their jobs never got another job, one third got casual work and one third were redeployed. Can you talk about the assistance packages that will be there particularly for the people who will lose their jobs at Holden. What will you be doing to help them.
TREASURER:
Again, there is a temptation, and I just do not like it, but there is a temptation to say; 'Well that is the end of the earth because these jobs in this particular area are going'. It does not mean that there aren't going to be new jobs created and new opportunities created. The fact is that we have still got time in relation to the jobs in the motor vehicle industry. There are significant jobs in motor vehicle components manufacturing. We are actively looking at ways to help them develop into export markets. After all, one of the biggest manufacturing employers in Australia is a components maker – and that is Boeing. It does not make the whole plane in Australia. It actually makes parts of the planes that go to the assembly point in the United States. That is, as far as I am aware, the biggest manufacturing employer in Australia. What we are doing is, we have set up a taskforce led by Ian MacFarlane who is the Industry Minister. It has Christopher Pyne and Simon Birmingham, South Australian MPs, and a number of South Australian business people including Robert Champion de Crespigny. They are tasked with working on the business plan to lift South Australia.
JOURNALIST:
Just very quickly because we are getting a lot of texts from people talking about this phrase that you've used about the ending of the age of entitlement. They would like to know; would you also end the age of entitlement for ex-Prime Ministers having special offices and millions of dollars spent on them over time, would you also end the age of entitlement for people who negatively gear property and therefore benefit from that, the age of entitlement for exemptions on private car use, FBT exemptions. There is a whole list that are coming in. Is the age of entitlement going to go through and look at things where people are basically getting more than they should?
TREASURER:
That's a matter of opinion. Your opinion is that those people might be getting more than they should.
JOURNALIST:
No, no, this is the voters.
TREASURER:
They might be an individual opinion. The person who was opposed to negative gearing, that is their call. If you immediately remove negative gearing rents are going to jump for those most disadvantaged. There are swings and roundabouts on everything.
JOURNALIST:
Would you get the productivity to look at negative gearing because whenever we discuss this on the program it is very hotly debated as to whether or not it is beneficial to the country or whether it is a whole lot of people making money out of property and therefore it is not of long term benefit because they say in America they don't have it, is that correct?
TREASURER:
In America they have tax on the family home. You get tax deductions for your home mortgage in America, and you get taxed on the family home. There are variations, but that is my memory of it. But there are variations around the world and in, for example, Europe there are things like rent controllers, someone that controls rents. In Australia, when the previous Labor Government tried to get rid of negative gearing, there was a very significant jump in rents. Ultimately, if people are deducting there would be some times where the landlord would have lesser rent. There are swings and roundabouts. I do not want to get into a debate about that. The last thing about entitlements, generally, the bottom line is, we are an aging population and we are not replacing ourselves in total as a nation . With an aging population, with greater demands on health care and aged care now is the time for us to make the decisions about the sustainability of our quality of life. That means that we cannot continue to keep spending more and more money as a Federal Government if the money is not coming in. That is the debate we want to have.
JOURNALIST:
Thank you very much for raising that debate here on the morning program we would like to talk to you another time, Joe Hockey, so when you have got more time and you're back in town. Thanks again.
TREASURER:
Terrific. Thank you.