TREASURER:
Well good morning. It’s a week away from the Budget. The Budget has three important tasks - first one is to stick to our plan for growth and jobs. That is what is needed to support the Australian economy as we move from the investment phase of the mining boom to our more diversified economy. That’s where the growth is. That's where the jobs are. We are sticking to our plan for growth and for jobs by backing in that investment, by backing in those who are out there working hard every day to make our economy a success.
We need to ensure that our tax system is sustainable and we make sustainable changes to the tax system, so it can support the needs that are there in the future. If it’s well targeted, it deals with the loopholes, those who are seeking to take a lend of the system, and that’s what we will be doing in this Budget. And, thirdly, we need to stick on your plan, living within our means to keep on our path to balance the budget to ensure that we don't pass on higher levels of debt, that we don't pass on higher deficits, that we get the deficit down. We're already on that path to reducing the deficit, we will stick on that path in this Budget. We will live within our means, we will drive growth and jobs and we will make sustainable changes that will be there for the future.
JOURNALIST:
Treasurer, wages growth is sluggish at the moment. Is bracket creep still a problem that you thought it was last year?
TREASURER:
Well, you've been talking about bracket creep. What I've been talking about is ensuring that we don't penalise Australians for doing better in this economy. The Labor party has a plan out there today to hit mum and dad investors harder to put a housing tax on mum and dad investors who are simply trying to get ahead. Two-thirds of Australians who use negative gearing are on an $80,000 taxable income, or less. Seventy per cent of them own just one property. Another 20 per cent have just two. That's it. They are using these legitimate methods, things that have been part of our tax system for 100 years. It is not a concession. It is just part of our tax system and they've been relying on it to provide for their future and to get ahead. What Labor is proposing is a housing tax that hits mum and dad investors and we won't have a bar of it.
JOURNALIST:
How hard it is to continue with that argument…
TREASURER:
It is not hard at all.
JOURNALIST:
…when you have the Grattan Institute coming out with their own data and their own reports say that say it is the high income, wealthy Australians who benefit most, at least 50 per cent when it comes to negative gearing? How hard is it when you have that?
TREASURER:
There are 39,000 nurses and midwives who use negative gearing. There are 57,000 teachers who use negative gearing. Almost 20,000 police and emergency service workers. There's more than 14,000 tram and transport drivers out there using negative gearing. Two-thirds have a taxable income of $80,000 or less. I know it suits the arguments of those who think Australians don't pay enough tax to find any excuse, any licence to increase the tax burden on the Australian economy. That is why the Labor party is going to increase the tax burden on the Australian economy at this very sensitive time over the next 10 years by more than $100 billion. That’s their plan, we don't think that is a plan for growth and jobs. A plan for growth and jobs ensures that we stick to ensuring we are backing in investment in this country that drives growth and drives jobs.
JOURNALIST:
You spoke about lowering the deficit but Deloitte Access Economics does not paint a pretty picture in that respect. They say our triple-A credit rating could be at risk if we don't raise taxes and cut spending in a sensible way. What do you say to that?
TREASURER:
The Budget is on May 3 and that will be the definitive position on what the broader impact of the parameters are. There have been movements in all sorts of parameters - the downward revision of global growth forecast by the IMF. There's been a range of things that have happened in the last six months and they will be updated in the normal way as part of this Budget. That data and that information will be there for everyone to see in the Budget. But this Budget has been framed on some very important principles, to continue to reduce the deficit. We will continue to reduce the deficit and we will do that by not spending more than we save on outlays. We will do it by ensuring that where the tax treatment of loopholes and things like this increase revenue in particular areas, then we're going to ensure that we don't increase the overall tax burden on Australians as a whole as Labor proposed to do. This is the way you get to a healthy budget balance, a sustainable budget balance. I don't accept the argument by those who think that Australians aren't paying enough tax and the way that you actually try to address your budget issues is with some short-term, quick fix of jacking up taxes. I don't think that is a sustainable plan. It's not a plan for growth and jobs and it is not a plan that the Turnbull Government buys into.
JOURNALIST:
What is more important - reducing the deficit, paying down some of the national debt or giving people tax cuts in the form of tackling bracket creep?
TREASURER:
What is most important is economic growth and jobs. That is what is most important in this Budget. Every page that you see in this Budget will be about growth and jobs because, as our economy is in this important transition, this change, and Australians understand it, Australians understand what is happening in the global economy. I don't think enough commentators out there give Australians enough credit for knowing what is happening in the economy. They know there are changes. They're making the changes themselves. They're putting in the extra effort. They're going out there and making investments for the future of their family. What we want to do is ensure that we back them in in this Budget. Those who are out there earning, those who are out there creating jobs, those who are supporting investment, particularly in small and medium-sides businesses. Those are the companies, those are the enterprises, those are the Australians with initiative who are out there actually creating a future for this country and a future for our economy. The worst thing you can do to them is go and whack a $100 billion additional tax burden on the Australian economy. That is Labor's plan. Labor thinks you don't pay enough tax. That is why when Bill Shorten says we have a revenue problem, he is looking for a licence from you for you to pay more and more and more tax. Not because he wants to reduce the deficit. He has no intention of reducing the deficit. What he wants to do is throw more money around before an election. Now, you are not going to hear that from us. What you will see is a sober, responsible, economic plan. This is not a typical Budget. This is an economic plan for growth and jobs.
JOURNALIST:
You are about to go and talk to your own public servants here. Do you believe there is still waste and inefficiency in the Federal public service?
TREASURER:
First of all there's a big difference between state budgets and federal budgets. The overwhelming majority of state budgets is in wages and things like that. In a federal budget the overwhelming composition of the budget is in things, payments to defence, large outlays things like that. So it's very different. Every government at every level always has to be looking at ways for it to live within its means because Australians are doing it, Australian householders are doing it. Families are doing it. Businesses are doing it and the Australian government and state governments, we all have to live within our means too. That means you are always looking for better ways to do things. Out there in the economy today businesses are being told that they need to produce the same quality of a product to be competitive in the market and they need to do it for less. That is what they're being told and they are responding to that challenge and they are ensuring that their products and the quality of their services are keeping up to the mark and indeed exceeding the mark and that is why they're succeeding. Now, government should not be given a leave pass from having to drive the sort of innovation in its own operations to deliver the same sorts of things that businesses and employees around the country are being asked to do and that has been a key driving thought and principle, a practical principle, that is driving our thoughts and our preparation of this Budget.
Thank you very much.