PRESENTER:
Please welcome the Treasurer, Mr Joe Hockey.
PRESENTER:
Guys, stay back, because I am going to ask the first hard-hitting question tonight to the Treasurer. You were at the World Cup final yesterday. There was a photo, you had a selfie with the New Zealand Prime Minister, John Key. What is that – what's the colours of your tie there, Joe? What is going on?
TREASURER:
I really don't have an answer, actually.
PRESENTER:
You are wearing New Zealand colours at the World Cup!
TREASURER:
Mate, I got up at 5 o’clock yesterday morning and grabbed whatever looks long and I got a tie like that, and it was black and white and I apologise.
PRESENTER:
You’ve gone with New Zealand colours?
PRESENTER:
I was using reverse psychology.
PRESENTER:
Okay, were you so tired you thought you were the New Zealand Treasurer?
TREASURER:
He has got a surplus, I haven't! He is in good shape! But John Key is a great guy.
PRESENTER:
Did he feel like walking out after that [inaudible].
TREASURER:
No, he was pretty good. He kept saying, ‘it's about to rain, you know, it's about to rain’. I said, no mate…
PRESENTER:
Your White Paper today; you are talking about perhaps potentially looking at the GST and the rate of the GST. You can't get anything through the Senate, you can’t get anything through the Parliament; you've got no hope in hell of ever raising the GST have you?
TREASURER:
Well, it's not our plan to raise the GST. We want – you know, the world economy is changing…
PRESENTER:
But the White Paper says [inaudible]
PRESENTER:
No, no, don't get carried away, Steve. Don’t get carried away. Ease up.
PRESENTER:
You would love to put it up!
TREASURER:
No! No!
PRESENTER:
No?
TREASURER:
No!
PRESENTER:
Yes you would!
TREASURER:
No, I wouldn't! I know what I'm thinking in this situation. But, you know, we all see it in our daily lives, right, the total change in the way we live our lives. I mean, Facebook is the biggest media company in the world today and it has no journalists. Uber is the biggest taxi company in the world and doesn't own one taxi and you’re seeing this complete change in the way business operates. Australians are increasingly buying goods from overseas, where no GST is charged. We're looking at how we can bring back the integrity into the tax system, but raise the revenue for the future. And that's the big question. Given the world economy is changing, given that consumers are changing their behaviour, how are we going to raise the money that pays for the essential services of the future?
PRESENTER:
So, if Bill Shorten and Daniel Andrews said, ‘yeah, let's put it up to 15 per cent’ – the GST; you would say no, would you?
TREASURER:
I want to have a look at the entire tax system.
PRESENTER:
Pardon, you would say no?
TREASURER:
I don't think now is the right time [inaudible]. I think Australian households could not cope with an extra increase in the cost of everyday goods now. It’s not on the radar.
PRESENTER:
So, that's that bit of the White Paper gone then?
TREASURER:
I think you have got to look at the entirety. Personal income tax; it is few and fewer people that are paying more, because we're getting older as a community and because we're getting older there are fewer people in paid work, which means the tax burden is falling on them. Two per cent of the taxpayers in Australia pay 26 per cent of personal income tax and in company tax, twelve companies pay a third of all of our company tax. So, if we lose one of those companies in a takeover or it goes offshore, we’ve got real problems with our Budget.
PRESENTER:
Okay, one another aspect of it that is touched on in the report and we’ve spoke about on this program before is negative gearing. 1.2 million people do it. It’s a big tax break and costs a lot to the Budget. It also drives house prices up for people trying to get into the market. Are you seriously going to look at it? Are you actually going to look at this?
TREASURER:
Everything is there to be looked at. The issue about negative gearing is, if you abolish negative gearing, the question is, will it increase rents? For all those people renting homes, if the owner of the home can't offset the interest they pay on their mortgage against their primary income, it has the capacity to push up rents for those most vulnerable.
PRESENTER:
But the data is that that's not what happened.
TREASURER:
No, no, actually it did happen in Sydney when it was last done in the 1980s. Sydney rents went up. It didn't go up in other capital cities…
PRESENTER:
In most other capitals.
TREASURER:
I understand that…
PRESENTER:
But it just feels like we're not serious – like we talk about it and we say we want to have a discussion and that seems to me code for doing nothing about it ultimately.
TREASURER:
Well, I wouldn't have started it if the plan was to do nothing.
PRESENTER:
Do you have a plan to do something?
TREASURER:
Yes, we want to move on this but it’s also important…
PRESENTER:
On negative gearing?
TREASURER:
No, on tax generally but I think it's really important we try and get all sides of politics backing this. The idea that a government would lay down a plan and say, ‘take it or leave it’, to the Australian people, I think those days are over. I think we have actually got to have agreement between all sides of politics to make sure we have a tax system that copes with the future and pays for our future, for our healthcare, for our welfare.
PRESENTER:
I know it's impossible to believe but I've just turned 60, which is the magic superannuation…
PRESENTER:
No!
PRESENTER:
Yeah, it’s true.
PRESENTER:
You don't look a day over [inaudible]
PRESENTER:
The magic superannuation age, and you people are going to try and put your hands into my super. You want to get your hands on the superannuation money of Australians.
TREASURER:
I would love to have my hand in your pocket! I tell you what, that would cover the deficit, wouldn’t it?
PRESENTER:
Are you guys done with the flirting here?
PRESENTER:
You want to get your hands on.
TREASURER:
There’s only three people between us!
PRESENTER:
But don't you?
TREASURER:
No, no, it's not a case of that. You know, when superannuation was introduced in 1992, life expectancy was 72. Today, it's 82 and in fact, in 40 years’ time it will be 100. So, the question is how are we going to save enough in our super to actually give us a decent quality of life when we go into retirement. And that’s a big question – it’s not doing it now. So, we have to have a look at the interaction between super and the age pension as well.
PRESENTER:
You were talking about Facebook and Uber before, could we say maybe in the future a government without any politicians!
PRESENTER:
Why don't we follow down that road!
TREASURER:
It sounds like a good idea! You push that! Let's see how we go. And wait for your next tax audit, mate!
PRESENTER:
We saw Mike Baird on the weekend, in the New South Wales election. He was very good at selling something that was very unpopular. Many people would say your Budget was very unpopular and you didn't sell it well. Are you going to call in Mike Baird to help you with tax reform?
TREASURER:
Well, I think we need all the Premiers, all the States, whether they be Liberal or Labor to come on board for the discussion. There's no doubt about that. Mike was outstanding, and the New South Wales Libs were really courageous in taking a privatisation plan to the electorate. Ultimately, if we want to maintain our status quo in Australia we have to change. There is no choice. The world is changing on us. No one knows it better than your audience, which is a much younger audience. The world is changing. If we think that having 1950s regulations or a 1950s tax system is going to serve us well in 2050, we can forget growth, we can forget jobs.
PRESENTER:
Joe, thank you very much for coming in and to be fair, the 50s did have great music. So, there was at least that! I do appreciate you coming in. Everybody, please thank Joe Hockey!