PRESENTER:
Good morning Joe.
PRESENTER:
Morning Joe. How are you?
TREASURER:
I’m fabulous actually.
PRESENTER:
That’s the way. You a bit nervous mate?
TREASURER:
Three very intimidating guys [inaudible] I’m wondering whether you all pay tax.
PRESENTER:
[Inaudible]
PRESENTER:
[Inaudible]
PRESENTER:
Treasurer, you’re a good man Joe Hockey. It’s great to have you on Joe.
PRESENTER:
You’re looking magnificent and jeez you’re looking fit.
TREASURER:
I’m a good looking guy [inaudible]
PRESENTER:
How is Melissa and the family?
TREASURER:
They’re great, they’re terrific [inaudible]
PRESENTER:
How we looking? How we looking? How’s Budget mark two coming out? What stage are we at?
TREASURER:
We’re working on it. We’re working on it. We just released a tax discussion paper and I think that’s a big issue for the future of Australia. We’ve released the Intergenerational Report, which predicts we’re going to live to 100 by the middle of the century, which is pretty good news for you [inaudible]
PRESENTER:
One hundred and fifty you were saying the other day, were you not?
TREASURER:
You know, that’s right. It’s quite possible somewhere in the world today a child’s been born that’s going to live 150.
PRESENTER:
I was thinking what life would be like if I lived to 150 and you know, sadly, I think I’d still be waiting to see Richmond win a bloody grand final.
PRESENTER:
So, it doesn’t appeal to me that much.
PRESENTER:
Joe, we’ll go through a few of the topics in a moment, Joe, but we don’t usually get the chance to get you on here. Generally we only see you [inaudible] or something’s going on – you’re having a cigar [inaudible] all that stuff goes on so it’s good to actually get you on. Tell us about what you did this morning around the corner? You tweeted you were out having [inaudible]
TREASURER:
I was running a bit early. I’ve been up since an early hour and went to the pie shop down the road. There were a couple of good guys who I was giving a plug to because they [inaudible] I said, ‘what sort of business are you guys in?’ They said, ‘we’re in pest control’, and I said, ‘how’s business?’ They said, ‘we’re making a killing’. At any rate, the guy who said it, his mate said, ‘I’ve heard it 100 times’.
PRESENTER:
It’s got that feel about it.
TREASURER:
They drove from Geelong, so you can imagine…
PRESENTER:
[Inaudible] least you’re up early having a pie, which is the Australian thing to do. What’s your mate Tony Abbott doing eating raw onions? I have to ask you about it because it’s nutty behaviour Joe. Do you tap him on the shoulder and say, ‘hey mate, you’ve got to stop doing weird things because it’s freaking us all out’?
TREASURER:
No, I said change to garlic. Go through all your vegies…
PRESENTER:
He’s trying to freak Bill Shorten out across the table there, isn’t it?
TREASURER:
[Inaudible]
PRESENTER:
Joe, one of the things we’ve looked at in the last 12 months when we’d look at the Government is, it’s all pain, no gain at the moment for your guys [inaudible] through the Senate but a lot of the stuff you come forward with, okay their new ideas [inaudible] but you seem to get the cart before the horse, if you like. Everyone is getting the pain, beating you up and then in the end, you can’t get it through. Have you sort of said, ‘alright, we need to just cool our jets here and recalibrate and have a go in this year coming up to this Budget’?
TREASURER:
Look, it is difficult because there are no [inaudible] the status quo is unacceptable for Australia going forward when, in order to maintain our quality of life, we have to change and if we want to win, we’re looking at new competition coming from offshore particularly out of Asia. If we want to win we’ve got to be able to meet head on that competition. Now, you think about how the world’s changed just in the last handful of years. Facebook is the biggest media company in the world – doesn’t employ one journalist. Uber is the biggest taxi company in the world – doesn’t own one cab. Airbnb is the biggest hotel distributor – room distributor in the world – doesn’t own one hotel room. Everything is changing dramatically. So, we look at it and say, ‘well, where are we going to collect the tax in the future. Where are we going to have the jobs in the future and how are we going to take advantage of the future if we’re all living longer. So, there are a lot of big issues that we’re trying to confront. Maybe we tried to do it too early; we tried to do it too hard too heard. I fully accept that. So does Tony Abbott, but we can’t stop heading in that direction. We’ve got to prepare for the future.
PRESENTER:
What’s that balance between getting the Microsofts, the Ubers, the Apples to come to Australia and at the same time, pay their tax into the Australian economy and I suppose at the same time, why are we paying more than what they’re paying in America but [inaudible].
TREASURER:
No, that’s a good issue, Eddie, because it’s something that I’ve asked the Tax Office to look at and the Tax Office has now embedded its staff in a number of those companies that you just mentioned because we want to understand how much money they make in Australia because if you make money in Australia, you should pay tax in Australia. Now, I don’t know about you guys but I know people that will buy goods off the internet and have them shipped from overseas, they don’t pay GST on it. So, there’s that leakage of GST. Ultimately it means, if we don’t get the taxes here, then we can’t pay for the hospitals, the schools, the roads, and the welfare system that keeps us the way we are.
PRESENTER:
Treasurer, stick with us please. The Treasurer Joe Hockey our special guest. We’re going to come back and ask some more questions. 133 353, you might have one you want to ask yourself. We’ll take your calls as well.
PRESENTER:
Just out of interest when should I have my taxes in? What’s the date for that?
About now. And also, can you actually lodge your past tax returns [inaudible]
PRESENTER:
You’ve got to be a stickler for the rules. [Inaudible]
PRESENTER:
Joe Hockey, our special guest here on Triple M’s Hot Breakfast.
[AD BREAK]
PRESENTER:
Treasurer Joe Hockey is with us in studio this morning as our special guest and a date coming up for you; Budget, when do you hand that one down?
TREASURER:
Second Tuesday of May.
PRESENTER:
Just off the top of your head?
TREASURER:
Yeah…
PRESENTER:
No pressure there.
TREASURER:
No mate, I’m feeling very relaxed [inaudible]
PRESENTER:
Maybe you could get your boss to fly down to the golf club with his private plane?
PRESENTER:
[Inaudible] All I’m saying is, there you go, there’s our Treasurer, he understands fiscal responsibility. He’s parked in a car out the front of a pie shop. The Prime Minister – private plane, lands on a golf course.
TREASURER:
[Inaudible] lands on a golf course?
PRESENTER:
He went to a party on a golf course; you know what I’m talking about.
PRESENTER:
Don’t beat it up too much [inaudible]
PRESENTER:
I’m going to say to you, Treasurer that you could win an election if you could make multinationals pay tax in this country alone. If you could somehow conjure that up in your Budget, you win the next election I reckon.
TREASURER:
You never know, you never know. We’re doing what we can. I mean, it’s like trying to hold water in your cupped hands. You know, some’s going to get through and what we’ve got to do is work with other countries to make sure that they pay tax in the other countries and pay tax in our country. That’s something that I’ve worked hard on in the last 12 months. I’ll have more to say about that.
PRESENTER:
Theo’s on the line from Toorak. Theo’s got a question for the Treasurer [inaudible]
CALLER:
On the question of tax even, mostly they wouldn’t want to even raise the question.
TREASURER:
Just give us your Tax File Number mate…
PRESENTER:
This will be a Paid Paternity Leave, no doubt.
CALLER:
Good morning Treasurer. It’s a great opportunity to ask this question and particularly because you’ve mentioned the Budget that you’re working very hard on at the moment. I have found it very hard, and I don’t think I’ve ever heard a Treasurer or a Government come out and say, ‘guess what, we need $300 billion to run Australia each year’. We keep being told that we need to cut this and we need this and we need more tax, but if you [inaudible] bad analogy to a business, a business needs to know what its receipts are going to be for the year or anticipated receipts and as I said, I’ve never heard a government come out and just say, ‘look guys, we need – using my figure - $300 billion to run Australia, a year, to keep our standards that you mentioned a few minutes ago’. Is there a figure that is available – certainly got to be an approximate, but it something I’ve never been able to come across?
TREASURER:
Well, it’s nearly $400 billion a year just to run the Federal Government. Every day we need to borrow $100 million just to pay the day to day bills because our revenue doesn’t equal our spending. So, in order to pay our day to day bills, we have to borrow $100 million. Most of that actually comes from people living overseas because we don’t borrow a lot from Australians. We actually end up borrowing from people overseas. And that $100 million, if we weren’t spending it on day to day bills, it would be available – you could build 40 kilometres of new road every day, you could build two new schools every day. In a week, you could build a new teaching hospital. But instead, we’re using it to pay for the day to day bills and unfortunately, that is not sustainable. We’ve got to get back to the point where we’re living within our means.
PRESENTER:
Do you get [inaudible] because of the election promises? I mean, it just seems to me you make an election promise and any businessman knows, you’re adjusting by the minute, by the day, on what you have to do and you get lumbered with these election promises. For example, we saw everything – things change, you come into government, petrol prices suddenly drop from $150 a barrel of oil down to $50. Why don’t we use that to our advantage and say, ‘okay, instead of the price of petrol going from $1.50 to 98 cents, we’re going to cap it at $1.20, you happy with a 30 cent deduction? You go, ‘yep, I’m happy with that’. Alright I’m going to use that 30 cents and here’s what I’m going to do with it – because the worlds turned our way for a second.
TREASURER:
Well, Eddie, we actually did that. I mean, petrol prices have dropped from around $1.60 a litre, they got down to just over $1.00 a litre. They’re back up now around $1.30 but we want to put half a cent a litre tax on and the Labor Party and the Greens are stopping us in the Senate – half a cent a litre. So, they came down 60 cents and they’ve gone up roughly 30 and we want to put half a cent a litre tax on it to help pay the bills and I can’t get it through the…
PRESENTER:
But I reckon if you sold it better – not you, but every politician, say, ‘hey we’re going to have a website. Here’s where it is; that’s what we’re doing. Now, here’s our 40 kilometres of road that we’re building, by the way we’re going to put the rail system in in Melbourne off the back of this’…
TREASURER:
I know – that half a cent a litre was going straight to roads. So, I’m expected still to build a road without half a cent a litre in tax because – and the Greens of all people, mate, opposing an excise increase on petrol [inaudible] that’s their core policy and they’re opposing it.
PRESENTER:
People have been scared, in the last 12 months [inaudible] – people are scared in that the things they worry about – most people: get the kids through school; be able to go to the doctor; look after mum and dad when they’re getting old; keep their jobs. Those types of things – they’re the main things and then we’ll get to the work until you’re 90…
PRESENTER:
Buy a house maybe?
PRESENTER:
Buy a house – all that sort of stuff.
TREASURER:
Absolutely. Housing – I think people being able to buy their first home is a really big issue, particularly in Melbourne. You know, the capital cities. And the big change in our lives that we’ve seen is you can’t buy a house in a capital city and basically pay a mortgage on one salary. You need more than one salary.
PRESENTER:
Matt from Craigieburn is on the line, Treasurer. I think he’s got a question for you relating to that. Matt, fire away.
CALLER:
Yeah thanks for the opportunity, Joe.
TREASURER:
Hey Matt.
CALLER:
I’m a middle-income earner and I’ve just done what you’re just talking about. We’ve purchased a house in Melbourne. I’ve got one child. Both myself and my wife work but she’s not full time anymore because of our child. Why – we struggle pay cheque to pay cheque because of that. Why can’t a percentage of our super go towards what is the biggest asset in our lives – our house, and therefore, when I retire at 75, 80, 90, whatever it’s going to be, I own my home. I can sell it and live off that or I can live in my home without paying a mortgage and I’m not completely living on welfare or off a pension. I own my home and I’ve paid it off using my super.
TREASURER:
This is something that has been around for years and you know, I referred to it only a few weeks ago and everyone went nuts at me; Paul Keating and Peter Costello and a range of others expressed [inaudible]. It is something we need to properly consider when it comes to superannuation. I’m not sure if superannuation is going to do the job because when the superannuation system was started in 1992, life expectancy was 72. Today, it’s 82 and by the middle of the century, it’ll be close to 100. So, the question is, how long are we going to work, to what age are we going to work and, mate, I think you know, our lives are changing. The idea that you study when you’re young, you work during your middle years and you retire when you turn 65 – that’s being turned on its head. I know that a lot of guys love going to Bunnings. You go to Bunnings; one in four workers at Bunnings are actually aged over 50, which is a terrific story right? I met an 83 year old who was working at Bunnings the other day and I was rude enough to ask him how many days a week he worked and he said, ‘five of course’. So, he’s 83 right? So, the question is how are we going to structure our lives? I’m not sure that superannuation has the capacity to do it because a lot of young people actually don’t have enough in their super when they want to buy their first home. They don’t have enough in their super to be actually able to cover even the deposit these days, which is a challenge.
PRESENTER:
I suppose one of the other problems is if you access the super, that’s all that’s going to do is drive prices up in the property market as well because it will make it go in?
TREASURER:
Yeah, and I spoke to the Treasurer here in Victoria yesterday about housing supply; how do we get more supply on the market? It’s something I’m going to raise with all the Treasurers because we need more…
PRESENTER:
Get him to sell a few of his.
PRESENTER:
Is that right?
PRESENTER:
[Inaudible] saturate the market – not a bad policy.
PRESENTER:
Joe, one final: you touched on where we’re going to have to work longer and all of the rest of it…
TREASURER:
We don’t have to. It will hopefully be a choice but…
PRESENTER:
If you want to eat, you’ll have to. But one of the things I always find in recent times, it seems like you’re giving us tough medicine all the time. You’re giving us the stick; give us some inspiration. Now, for example, is there an opportunity where over 65 years of age, that instead of paying full whack on the tax if you’re working, you pay 15 per cent, which is the nominal superannuation figure? Which means you’re saving money cause you’re not paying a pension, somebody’s out there getting a tax break so they might work three days a week and then there’s more jobs around for people over 65. At the same time, they’re making money. So, you’re getting your money on your GST – there’s another 10 per cent, or maybe if you lift it up, a little bit more. there’s a more vital workplace but the emphasis goes rather than, ‘you must pay; we’re going to take your super, we’re going to give it to you [inaudible] just when you thought you’re safe’, to, ‘here’s something for you – over 65, get in there, go and you can actually keep being a vital contributor to society and the economy’.
TREASURER:
And we’re looking at all those initiatives. I don’t want you to think I’m always negative, mate, it’s just not in my DNA to be like that. I am more positive about Australia than any time in my life. I mean, I am more excited about our future as a nation than any time. I mean, we are on the cusp of the greatest ever era because of the emergence, you know, the middle class in Asia – 1.5 billion people going to middle class. They want our skills, they want our knowledge, they want our exports. This is a huge opportunity. We are the luckiest country on God’s earth. I want to make sure that we’re luckier and that we make our own luck into the future and, mate, I’m very positive about it.
PRESENTER:
Joe, can I ask you one favour please, when you deliver this Budget, here’s the banner I don’t want to see the next day, this kills me – this is my [inaudible] ‘beers up, cigs up’. This is the easiest cop out in the world and costs me a fortune.
TREASURER:
[Inaudible]
PRESENTER:
Occasionally, I am on Budget eve worried about my future…
TREASURER:
Hey, isn’t everybody?
PRESENTER:
‘Beers up, cigs up’; it’s always the one – it was the Herald Sun, wasn’t it [inaudible]
TREASURER:
I think those days are long gone, mate.
PRESENTER:
[Inaudible] because he doesn’t plan to live much longer [inaudible]
TREASURER:
Well, he’s in great shape [inaudible]
PRESENTER:
You’re very kind.
PRESENTER:
[Inaudible]
PRESENTER:
Joe, thank you very much for joining us. Good on you.
PRESENTER:
He’s optimistic – the Treasurer, he’s saying [inaudible] it’s all good.
PRESENTER:
Good luck with the GST [inaudible] you mentioned it yesterday. The last man to bring that up was John Hewson [inaudible]
PRESENTER:
Is that the way to get the money out of the black economy, though? Put the GST up and then you can give refunds back to people who are underprivileged?
TREASURER:
No, I think increasing or broadening the GST is a temporary solution in a sense because we’ve got bigger structural issues in our taxes. Look, in personal income tax, two per cent of tax payers pay 26 per cent of all personal income tax and only 12 companies in Australia pay a third of all company tax. So, our structural risk of people moving overseas or companies moving overseas is much greater now than it was five, 10 years ago. So, there are bigger issues to deal with. The GST – it’s easier for people to talk about it, Mick wants to pay more obviously, but you know, frankly, I think there are bigger issues at play.
PRESENTER:
Great to have the Treasurer with us this morning. Joe Hockey, always appreciate you dropping in.
TREASURER:
Thanks guys, good luck.