JOURNALIST:
Treasurer, at the beginning of your speech you talked about how you wouldn’t want to take too seriously the forward estimates on the Budget. Right at the end you said that Labor might not be left with, the Government had other ideas in terms of the Budget, and you might not leave them with a huge surplus. Does that indicate you want to (inaudible) . . .
TREASURER
No, I don’t think I said you shouldn’t take them too seriously. What I said is, that they are predicated on growth continuing at current rates and no policy change. And the speech that I was giving is in relation to the current year. I was asked, I think, at the end, a question about, you know, the long term interest in the Treasury, and the point I was making is that the Labor Party, no doubt, is working overtime to get into Government because they would inherit an economy in a much better state than I did in 1996. So, I wouldn’t . . .
JOURNALIST:
Does that mean you . . .
TREASURER:
. . . I wouldn’t over read any of those comments any way Mr Cleary . . .
JOURNALIST:
. . . would you prefer to spend the surplus rather than leave it to Labor?
TREASURER:
I’m not speculating on policy, except to say this. The Budget has to be kept in surplus. Having put the Budget in surplus, the important thing is to keep it there. And I intend to run a strong fiscal policy. And the fiscal policy that we will run will be such as will continue to reduce debt, and to ensure that we free taxpayers from Labor’s debt burden. They ran up debt by $80 billion. We’ve brought it down by $50 billion. We have a plan where we could wipe it out, and I’m dedicated to continuing to run surplus Budgets which will make a contribution to that.
JOURNALIST:
As that deficit comes down, that leaves you room to go to the polls promising further tax cuts, does it not?
TREASURER:
Well, as you deliver surplus Budgets, and as you reduce debt, that means you’ve got to raise less interest to cover debts, and that gives you more flexibility in your spending. Instead of using people’s taxes to service past debt, you can earmark it for more investment in health and education, as I showed in my speech today. It also gives you the opportunity to cut taxes, which we did 27 days ago. We cut taxes . . .
JOURNALIST:
But wouldn’t that be a central plank of Liberal policy at the next national poll, to give us a further tax cut?
TREASURER:
The Liberal Party stands for lower taxes. And 27 days ago we introduced the largest income tax cut in Australian history. We’ve cut company tax 27 days ago, and there’s another one coming in a year’s time. We’ve cut capital gains tax. We’ve abolished wholesale sales tax. So, I think the important thing is that we look at where we are, rather than we keep on speculating on the future, if I may so. We’re only 27 days into the last income tax cuts you know.
JOURNALIST:
The wages figures that came out yesterday, the third quarter above expected wages growth. Does the threat of some kind of wages growth breakout threaten your low inflation outlook that you talked about on Wednesday?
TREASURER:
Well, I wouldn’t call that a wages breakout. But I would make the point, that it’s important that wages be consistent with a low inflation economy. And I think what people ought to have in their mind is that sure, there should be reward for effort, but wages have got to be based on productivity improvements. And if we get to a situation where people are being offered wage settlements in excess of productivity improvements, that won’t be good for our economy. So I would say to employers, and I would say to employees, that it’s important when you’re doing these negotiations to bear in mind that we want low inflation outcomes, that we want wages based on productivity. People have now had the largest income tax cut in Australian history, and their take home wage as a consequence is higher. And there is no need for wages to be chasing prices. And it’s important that we keep that in mind if we’re going to continue the strong growth, low inflation economy.
JOURNALIST:
Treasurer, would you like to be Prime Minister one day?
TREASURER:
Look, I don’t speculate on those sorts of things. I haven’t in the past, and I’m not going to start now.
JOURNALIST:
The Prime Minister has raised it of course, this week. You have made no secret that you wouldn’t duck taking on the top post. You haven’t had a change of heart, have you?
TREASURER:
Well, you know, you say, I’ve made no secret of this, or no secret of that, but I’ve never engaged in any of that conversation. I can tell you, I’m not going to start now.
JOURNALIST:
To the next thing. You said, there’s always unfinished business with economic reform, but you didn’t actually make any mention of what you flag as the next big area, and that’s superannuation. Will you be announcing some sort of a Wallis style inquiry into superannuation reform?
TREASURER:
Well, when I decide to make an announcement, we’ll announce it. But, I won’t be announcing it today. What I’ve said is, that it would be a good project to simplify superannuation. And it would be a good project. But can I just make this point. On 1 July, I think it’s the 28th of July today, is it not? I better get that right or else you’ll say, the Treasurer doesn’t know what day it is, okay. I think, on 1 July, right, we introduced a whole new tax system, but that was only 27 days ago. Now, I think it’s important that we bed this system down before we start on new big projects. Now, we’ve got the new income tax reductions, we’ve got a new goods and services tax system, we’re abolishing stamp duties on shares and financial institutions duty, company tax cuts, capital gains tax cuts, new Commonwealth-State relations. I really want to digest those big changes before we start chewing on a new one. Now, you’re then going to say to me, well, Treasurer . . .
JOURNALIST:
(inaudible).
TREASURER:
. . . no, no, no, you’re going to say to me, now you’re going to say to me, Treasurer, well, you’ve been digesting for 27 days, how many days do you need to digest . . .
JOURNALIST:
(inaudible)
TREASURER:
. . . and the answer is, you need to digest longer than 27 days. So, don’t ask me how many, it depends on how well your digestive juices are working . ..
JOURNALIST:
That indicates you wouldn’t want to do anything before the next election in terms of (inaudible) . . .
TREASURER:
Oh no, I didn’t say that, did I? I think the important thing is we just make sure that we bed down these tax changes. There’s still quite a lot to do. Remember this, people have still got to put in their Business Activity Statements. We’ve still got to get the Pay As You Go system up and running. So far, so good. I think in the last 27 days people would say, that the tax changes have been as good as anybody would’ve hoped. But, we’ve just got to make sure that we bed them all down properly . . .
JOURNALIST:
Are you concerned about the cash flow problem that was raised in one of those questions there?
TREASURER:
It was raised, and I think I answered it.
JOURNALIST:
What about the . . .
TREASURER:
Last question.
JOURNALIST:
. . . Deputy Prime Minsiter has a proposal that some of the proceeds from the sale of Sydney Airport should be used in major infrastructure projects (inaudible)?
TREASURER:
Oh look, I won’t comment unless I’ve seen (inaudible) . . .
JOURNALIST:
Can you comment on the wages figure yesterday?
TREASURER:
. . . unless I’ve . . .
JOURNALIST:
(inaudible).
TREASURER:
Thank you very much for your time.