BARRIE CASSIDY:
Now we'll go to our program guest, the Assistant Treasurer and Minister for Small Business, Kelly O'Dwyer, who joined the Prime Minister this week in announcing the Government's response to the Murray inquiry. It's been in the works for quite a while, but as you'll see, Malcolm Turnbull took ownership of the response.
PRIME MINISTER:
Now I want to thank David Murray and his panel for the hard work they've done. I want to thank the Treasurer and the Assistant Treasurer for the hard work they have done and of course their predecessors, in particular Joe Hockey and Josh Frydenberg. But this is very - this response is a response of the Turnbull Government to this inquiry.
CASSIDY: Kelly O'Dwyer, welcome.
MINISTER O’DWYER:
Thanks very much, Barrie.
CASSIDY:
Does that imply there that the Government's response under an Abbott Government would have been different?
MINISTER O’DWYER:
No, I think it's just a self-evident truth that the Turnbull Government is a reflection of Prime Minister Turnbull and also the Cabinet that he presides over. The financial system inquiry response was clearly something that was discussed at cabinet over quite a period of time. I'm not telling too many tales out of school when I say that there's obviously a lot of robust discussion that takes place around the Cabinet table, as you would expect, and I think it is a self-evident truth that it is reflective of the Turnbull Government.
CASSIDY:
Now you're asking the Productivity Commission to assess the effectiveness of superannuation. Are you responding there to an inquiry with another inquiry?
MINISTER O’DWYER:
No, not at all. We think it's very important that the superannuation savings of Australians are properly protected, that they are in funds that are competitive and efficient and that there is transparency around that. We know that we want them to have the very best possible returns so that they can live out their retirement in the best possible way. What we've simply said in response to the Murray Inquiry is that the Productivity Commission needs to look at the effectiveness, the efficiency and the competitiveness of our superannuation system as a whole, which was exactly what Murray said we should do.
CASSIDY:
But no matter how effective or efficient you make it, what percentage of people can really genuinely live off the savings from superannuation rather than draw on a pension?
MINISTER O’DWYER:
Well more and more people – that's the whole objective behind the superannuation system. When it was set up all those years ago in 1993, it was set up to be an alternative to the aged pension so that people didn't have to rely upon the aged pension or even the part-pension.
CASSIDY:
But only high income earners are really in that category though, aren't they? They're not relying on even a part-pension?
MINISTER O’DWYER:
We're certainly seeing a shift now as more and more people have the benefit of those forced savings over many years. Less people are relying on a part-pension, so there is a transition. That's why we want people to be able to maximise their retirement savings through their superannuation because their superannuation, for most Australians, apart from the family home, is their second-highest wealth accumulation tool.
CASSIDY:
And what about some of the tax concessions around superannuation at the higher end, are they untouchable?
MINISTER O’DWYER:
Well what we've said is that with our tax white paper process, everything's on the table. We will consider all good ideas, we will look at them very carefully and we're not ruling anything in or out. It's a little bit ridiculous when you're looking at all the options to start cutting things out and taking things off the table and the Prime Minister and the Treasurer have been very clear on this, that we're going to look at all the options because all of the options interrelate. Our taxation system relates to our transfer system which relates to our superannuation system, so you have to look at all of the options when you're coming up with a package.
CASSIDY:
Politicians are often at their most candid on their way out. Joe Hockey, the Treasurer, said during the week that the tax concessions on super should be carefully pared back. Is that a view that's shared within the Government?
MINISTER O’DWYER:
Well as I just said to you, Barrie, we're going to look at all of the options on the table.
CASSIDY:
But that's a long way from what - Joe Hockey made the call on it. He made the call. He said they should be pared back.
MINISTER O’DWYER:
He has a view on this. Many other Australians also have a view on this and we will consider and weigh these matters very carefully.
CASSIDY:
Also on negative gearing, he said they should be skewed towards new housing as an incentive to add to the housing stock as it exists at the moment. It invites speculation on existing properties. Is that again another topic that should be more seriously looked at?
MINISTER O’DWYER:
Well, you know, I'm going to have to repeat myself...
CASSIDY:
It's on the table.
MINISTER O’DWYER:
I'm going to have to repeat myself here and say it is on the table - all these things are. Although I would note with negative gearing that there is obviously a lot of discussion about negative gearing and I think a lot of people say that only wealthy Australians take advantage of negative gearing. When you look at the facts, that is not the case. Average income earners largely are the people who do get to take advantage of negative gearing - nurses, policemen and women on an average wage, investing, for instance, in a property. Most of them hold only one property, which adds to the housing stock that's available for people as well. So, you need to look at this holistically, which is what we're saying that we will do.
CASSIDY:
In his series of TV interviews at the weekend, the Prime Minister talked about a sovereign wealth fund. To be fair, he talked about it once the country returns to surplus, whenever that might be, but Bill Shorten's response was why a sovereign wealth fund when you already have a future fund?
MINISTER O’DWYER:
I think it's very clear that we do have a sovereign wealth fund, the Future Fund. What the Prime Minister was talking about was that over the budget cycle, you should make sure that you are not spending more than you bring in and when you bring in more, you should actually save that money for future generations. The Labor Party, during the highest terms of trade, the highest terms of trade ever experienced in our country certainly didn't put any money away, they didn't contribute anything to the Future Fund; in fact they spent it all and put us on a trajectory of spending growth that is increasing exponentially. Now, we are doing our best to pare that back.
CASSIDY:
And that's been the pattern since the last election.
MINISTER O’DWYER:
We're doing our very, very best to pare back...
CASSIDY:
It's continued on for two years.
MINISTER O’DWYER:
...to pare back the spending growth. No, we have cut back the spending growth and that is why the Government is looking very carefully...
CASSIDY:
It was at 25.9 per cent of GDP. Spending's never been higher.
MINISTER O’DWYER:
Well indeed, we recognise that there is a problem with spending. We absolutely recognise that. The Prime Minister has said it. The Treasurer has said it…
CASSIDY:
But this is Joe Hockey's spending that I'm referring to here.
MINISTER O’DWYER:
…The Treasurer has said it. Well, there was spending set in train by the Labor Party over the forward estimates period. We have pulled it back. It was much, much higher under the Labor Party. But there is more work to be done, which is one of the reasons why we are looking at our priorities in government and how we can bring forward better packages to make sure that we can deliver on those services and the infrastructure projects that people in Australia expect us to deliver on.
CASSIDY:
Yeah, on the question of infrastructure, what Malcolm Turnbull is talking about or advocating for is a really massive new borrowing in that sense to try and kick-start some of these projects. This sits a bit uneasily though, doesn't it, against the previous dire warnings about debt and deficit?
MINISTER O’DWYER:
What the Prime Minister has said is that when it comes to important national infrastructure, we are going to have, as a government, an open mind as to what ought to be funded. It's not simply going to be roads, but we're going to include rails as well. Anything that is going to help us improve growth in our economy is something we should contemplate and the method by which we make a contribution also is something that we will carefully think about. He is saying that simply handing money to the states to deliver on these projects is not always the best way of delivering those projects and we need to be a little more imaginative and a little more innovative.
CASSIDY:
Yeah, in that sense he was talking about the Federal Government becoming an equity partner or perhaps loaning money to the State Governments as a sort of an investment. Can that work without really impacting on the budget bottom line?
MINISTER O’DWYER:
Well certainly we're going to look at all of these options. We're going to see what is fit for purpose depending on what the infrastructure project is and I'm very confident the Prime Minister will have more to say about that over the coming months.
CASSIDY:
Now just finally on the gay marriage issue, he has again reaffirmed party policy that there will be a plebiscite. How soon do you think that can happen beyond the next election?
MINISTER O’DWYER:
I think it's very clear that we're going to have a people's vote on this issue. That was what was decided upon in the Party Room. We'll have a people's vote and it would be absolutely bizarre of a Parliament to ignore the will of the people. So, once that people's vote happens, which I think will be very shortly after the election, I think the Parliament will respond.
CASSIDY:
So it could be as soon as the first 100 days or something? Quite...
MINISTER O’DWYER:
Well it's up to the Prime Minister, through discussions with the Cabinet, to announce the timetable. It will obviously be a matter that we discuss in our Party Room as well. So I'm not going to give you a timeline now, Barrie. It's a matter for the Prime Minister, the Cabinet and the Party Room to determine the best timetable. But I think it's very clear that the will of the people will be paramount. The Government is listening to the will of the people and it will act on that.
CASSIDY:
Thanks for your time this morning. Appreciate it.
MINISTER O’DWYER:
Thanks a lot, Barrie.