KIERAN GILBERT:
Mr Hockey thanks for your time. Your focus behind the G20 has been this commitment from member economies to commit to growing their economies by two per cent over five years. Given the obstacles facing your Government – your own economic agenda – do you accept that there are some doubts as to whether Australia itself – the host nation – will meet that two per cent goal?
TREASURER:
No, the only road block to growth and jobs in Australia is Bill Shorten and the Labor Party. We are focused on laying down an agenda that can generate future prosperity, generate opportunity. We are doing that domestically through a range of reforms: getting rid of the Carbon Tax, the Mining Tax, laying down a Budget where we start to live within our means, and importantly, moving forward, initiatives in relation to competition policy, taxation reform and the Federation reform. So, we have got a local agenda and we have also got an international agenda, and that will be the focus of discussions this weekend.
KIERAN GILBERT:
Treasurer, but as you know, central to our commitment on growing the economy by two per cent, is your Budget, $30 billion of which, in terms of your agenda, remains in doubt because of the Senate blocs.
TREASURER:
Well, it is not a Senate bloc, it is a Labor bloc and Labor created a mess and now they are trying to prevent us from fixing it. We are determined, Kieran, to fix the mess that Labor created. We want to generate the jobs to generate the prosperity. The only way we can do it, the only way the rest of the world can do it, is through structural reform and that is what we are focused on; getting the reform flowing through in cases like higher education, in cases like co-payments for health services. If we don’t get that reform then what will happen in the future will be far more painful for everyday Australians. So, let’s deal with it now. Let’s make sure we deal with it now and that is how we will get the jobs and prosperity.
KIERAN GILBERT:
By having this peer review process, countries setting what they are going to do about increasing the size of their economy – growing their economies, and then having reviews at subsequent G20s, do you think that this Brisbane Summit has made the G20, will put the G20 on a more sure footing for the future? You made it relevant for the future?
TREASURER:
There is no doubt about that, Kieran. Look, it is easy to be distracted by other events, and even though other events are always going to be important when you bring the 20 most significant leaders in the world together, we cannot lose focus on what our collective goal has to be; and that is to lift the quality of life for people right around the world, to focus on how we do that. And the best way to do that is through job creation, and you can only create jobs if you facilitate the enterprise of individuals. You know, allow small and medium sized enterprises to grow, allow people to get on with the job of commerce. Now, we are very focused on the structural initiatives that are going to build a stronger economy. We are doing it domestically, we are doing it globally, and we won’t be distracted.
KIERAN GILBERT:
Is there a risk though that your focus – single minded focus on economic growth, will be over-shadowed by that significant announcement by the two most powerful men in the world – the Chinese President and the US President, in Beijing this week?
TREASURER:
No, I don’t think so. Look, issues like climate change and Ebola, and a range of other issues, will be discussed, there is no doubt about that when you have the leaders of the 20 largest economies in the world – the 20 largest countries in that sense, in the world, you are inevitably going to get those sorts of discussions over a two-day period. But what matters most is the outcome, and there is a clear path to an identifiable outcome focusing on a number of things, as you said: lifting global growth by two per cent, importantly, building infrastructure that is going to deliver the jobs and opportunity in the 21st century, cracking down on tax cheats, particularly multinationals that are engaged in tax-avoidance – extreme tax-avoidance, and obviously tax evasion, and also importantly, finalising the rules that apply to financial services companies right around the world, following the GFC – the Global Financial Crisis. Some of these issues are very technical but what they do is they draw a line under the sand – on the sand, in terms of ending the pessimism and focusing on opportunity and growth.
KIERAN GILBERT:
I want to ask you about that profit shifting in a moment, but first just finishing off on this climate change issue and focus this week, do you accept that climate change is an economic issue? This is something the State Department yesterday said they see as one and the same. That is why they want a significant focus on climate change at the Summit. Do you accept that it is an economic issue, as well as an environmental one?
TREASURER:
Well, everything is an economic issue, everything is an economic issue. Inequality is an economic issue, and community engagement is an economic issue, of course climate change is an economic issue. It is not solely an economic issue, but it has an impact on the global economy, as does ebola, as does war, as do a range of things, there is no doubt about that. Therefore, it is appropriate, at an economic forum, they are discussed. But climate change is not going to drive economic growth over the next decade. You know, these things need to be taken into a context, and the context has to be, job creation – how are we going to create jobs? And that is the focus of a lot of the discussions this weekend.
KIERAN GILBERT:
You have spent a lot of time in China recently, in your job as Treasurer. The Prime Minister says he doesn’t want to be distracted by what might happen in 16 years’ time on climate change, he wants to focus on the here and now. Do you accept that China is taking concrete actions to reduce its reliance on burning coal, for example?
TREASURER:
Well, yes it is but it has got continuing increases in emissions to 2030, and then they are hoping, as I understand it, by 2030, to start reducing their emissions. So, to put it in perspective, we are in the business of trying to reduce our emissions off a base load and China actually has increasing emissions, and said in 2030, it will start to reduce them. So, what is good is that China and the United States are talking. What is good is that China is dealing with climate change, but what is more important is that the economy continues to grow in China, and grow strongly, because they are our biggest trading partner. And if China is strong, then Australia is strong.
KIERAN GILBERT:
The AFR reports that the Tax Office is reviewing the tax affairs of 100 multinationals, Treasurer, to determine if they are engaging in inappropriate profit-shifting. From what I understand, the US has been the country that has held out in terms of the negotiations at the G20 to try and crack down on this. Why is that? And have they come to the table finally, with some sort of substantive agreement on this to combat inappropriate profit-shifting?
TREASURER:
Look, I think the United States now does recognise that it needs to be a global effort and that they lose out, as much as anyone else when multinationals undertake creative tax structures to either minimize their tax in the United States, or even go so far as to evade tax in the United States. Now, this is not just an issue for Australia, it is an issue right around the world, and we can make all the unilateral decisions we want in Australia, but ultimately, if there is a leakage opportunity anywhere else in the world, companies will take it. So, what we have got to do is have coordinated global action to go after the global companies, and that is exactly what we have done during this G20 year. We have driven the agenda hard to go after those global companies engaged in tax evasion.
KIERAN GILBERT:
Is it basically the ‘name and shame’ them as well? Because then you have still got countries like Luxembourg, which remain, as you say, the leakage points?
TREASURER:
Well, ‘name and shame’ is one angle. Firstly, I would rather get the tax out of them; that is the starting point, and if I can get the tax out of them without naming and shaming, then that is terrific, but I want to get the revenue out of them that the Australian people expect to get out of these companies.
KIERAN GILBERT:
Treasurer, thanks for your time; a busy day for you, appreciate it.
TREASURER:
My pleasure, Kieran, thank you.