QUESTION:
Introducing the super reforms on the day of the US election. Are you trying to avoid attention on them?
TREASURER:
No, not at all. What I am endeavouring to do is to ensure the Senate has the opportunity by introducing it this week to have their Senate Inquiry and to have that resolved in good time for them to be able to consider the matter before the Parliament rises at the end of the year.
QUESTION:
Given Labor appeared to offer support to the negotiated changes a couple of months ago and now they are backing away. How do you see it progressing?
TREASURER:
That is a matter for the Labor Party. The indications that I am getting from their public comments is that they clearly had a secret plan to add additional taxes on superannuation which they didn’t disclose before the last election. At the last election they said the only changes that they were contemplating would result in the same Budget outcome that the Government had put forward, of around about $3 billion in net positive revenue impacts. Now, they have come out yesterday and said, no, no, no, we are going to do that and add on an additional $1.4 billion. Now, they did not say before the election they were going to tax super harder. They did not say before the election that they were going to reverse the measure which was there for tradies and home business operators and those who have other sources of business income as opposed to just their wages. There are 800,000 or thereabouts Australians who are in this camp. They didn’t tell them the truth. They didn’t tell those who may have been carers, or those who had children who were trying to get back and were trying to build up their superannuation balances they were going to reverse the catch-up contributions that we were providing in our package. What we did in our superannuation package and what I am introducing today are the biggest reforms to support more flexible, sustainable superannuation then we have seen in more than a decade. We have looked at the superannuation system as a whole and have tried to improve it. The objective of superannuation, making it clear what the concessions are all about. That is what today’s positive changes are all about. Labor just wants to tax it more because they can’t stop spending.
QUESTION:
Now, Treasurer, on backpacker tax it looks as though that is dead and buried…
TREASURER:
Why do you say that?
QUESTION:
Well, it doesn’t appear that Labor will support the 19 per cent.
TREASURER:
Well, Labor are playing politics on the backpacker tax. They have got no interest on this issue other than to try and drive a wedge into the Government. I suppose they see that as their job. I take my job more seriously than that. What the Government has done on backpackers is arrive on a compromise position by listening to the agriculture sector and the tourism sector. We have honoured our promise on the backpacker position by ensuring we have resolved this with a compromise that doesn’t come at a cost to the Budget. Labor promised before the last election that they would do the same thing if they were elected. They said we will do the same thing as the Government. We will go and come up with a compromise package that doesn’t cost the Budget. They included the revenue just as the Government did in their forward estimates. So, Bill Shorten lied at the last election on superannuation. He lied at the last election about the backpackers arrangement. He lied about Medicare, he lied about border protection. You just can’t trust Bill Shorten. Just ask anyone in the Labor Party, let alone all the people I have just listed who would be affected by those measures who he lied to. Bill Shorten is a liar.
QUESTION:
Labor says that you changed your policy on superannuation after the election, you obviously tweaked it, we all can see the result of that now. So, why is it not ok for them to change their policy?
TREASURER:
We maintained the policy intent of what we were doing in our superannuation package and we reformed one element. Just one element. The package has not been substantially altered as I think there was a report today suggesting it had been substantially altered. It hasn’t been substantially altered. Ninety-five per cent of the package is going through as I outlined it in the Budget. There was one change in one particular area which related to the lifetime non-concessional cap arrangements. We reformed those to the $100,000 carry-forward arrangements. That is a modest change in our overall $6 billion package. We did that as a result of consultation and listening to the feedback we got at the election. Labor are not responding to anything because they didn’t put this forward at the election. They said, on superannuation, that the impact on the Budget in terms of additional tax revenue from superannuation would be no more than $3 billion net. Now, they’ve lied because they are now saying that it is $1.4 billion more, well it will be more than that. So, that is an out and out lie to every superannuant in Australia. Bill Shorten has lied again. He can’t be trusted on these issues and the Labor Party knows he can’t be trusted. Just ask any leader he has ever worked for.
QUESTION:
19 per cent won’t pass though.
TREASURER:
You don’t know that and I am always more optimistic than perhaps the Press Gallery is on these matters.
TREASURER:
The Government has compromised on this issue. What I know is, the Labor Party is saying that small businesses between $2 million and $10 million in turn-over a year should not get a tax cut. They should not get access to the instant asset write-off, they should not get access to depreciation pooling provisions. They are saying that is bad for the economy, that can’t be afforded – but a tax cut for foreign workers can be afforded at a cost of $500 million which they refuse to fund. So, Labor is saying tax cuts for foreign workers, no tax cuts for small business. That is the choice that the Labor Party has made. Now, we don’t share those priorities. We have very different priorities. The package we have struck at 19 per cent ensures that backpackers are in the same, if not better position as key competitors in Canada, New Zealand and the United Kingdom when it comes to what is in their pocket after they have done a day’s work. It is exactly the same, in fact it is slightly better at just around $10,500 that remains in their pocket which they all spend in Australia out of the $13,000 on average that they actually earn while they are here working in Australia. Now, backpacker numbers have been falling since 2012. They fell by more than 35,000 including when they got a tax cut from the Labor Party last time by abolishing the tax free threshold. It is not the first time Labor has argued for tax cuts for foreign workers. When that happened the numbers continued to fall, why did they continue to fall? The economic conditions in the home countries from where the backpackers come from. Overall we have seen tourist arrivals increase and that is largely being driven by the tourism markets out of China. Now, we have a work and holiday maker visa for Chinese tourists coming out of China but that is a capped scheme. It is capped at 5,000. The markets from which the uncapped schemes operate in Europe and North America and the United Kingdom these markets have been going through very difficult times economically and that is why the backpacker numbers have been falling for some time. Labor is trying to sell the Senate a pup to get them to back their plan to cut taxes for foreign workers.
QUESTION:
One of the lessons from the election was to focus on bread and butter issues and job and growth. So, why did yesterday’s Party Room meeting focus on 18C and is 18C a distraction for your Government from a voting majority that wants jobs and that kind of thing?
TREASURER:
No, in short. I am not distracted by it. I am 100 per cent focussed on the issues of the upcoming mid-year economic statement, the tax plan that we have, the innovation and science agenda that we are pursuing, the trade agreements, the defence procurement plans, the reform to our superannuation arrangements to make it fairer and more flexible. That is what I am focussed on. The Government is focussed on all of that. What we have done is enabled, I think, a very sober and useful process for intelligent people in the Parliament to be able to see if they can come to a landing on this issue. It is not important to everybody in the country but when you have cartoonists being hauled up by the Human Rights Commission, well, I think most people in the country would want to ensure that we are doing things to ensure that political correctness is not getting too bolshy around the place. It is a good process to deal with an issue that is a concern to many Australians but it is not distracting the Government one inch.
QUESTION:
On the US election Minister Pyne has backed Hilary Clinton saying she is what is in the best interests of Australia. Is that the official view of the Government?
TREASURER:
I look forward to the American people deciding who their next President is and the Government will work with whoever is elected to that high office and it is a big day for democracy in the world and it always is when the United States votes and we look forward to the outcome and then working with the administration that is elected.
QUESTION:
What do you think of Kevin Rudd having another crack at Malcolm Turnbull overnight. He says Malcolm Turnbull is wrong to say that Turnbull begged Kevin Rudd not to dismantle the Pacific Solution?
TREASURER:
I think the reactions to Kevin Rudd’s contribution are crickets. Silence. Not much interest.
QUESTION:
Could you offer more?
TREASURER:
Who cares is my response.
QUESTION:
Just on Barnaby Joyce’s comments this morning. He said that there needed to be a strong US presence in the Pacific. He also said whoever the next President was that they needed to actually ensure that the US remained a counter-balance, his words, to China. That is a pretty blunt suggestion, do you share it?
TREASURER:
It is the Government’s view that a strong presence in the region is a positive thing. As is strong support for free trade agreements. We have seen world trade growth really waning in the recent decade, particularly over the last five years. That was a matter of considerable concern at the recent IMF meetings I was at in Washington. When it comes to a constructive and engaging and positive presence of the United States in the region we always welcome that. It has been standing policy for both sides of politics since the Second World War and indeed before. I don’t think there is anything inconsistent about those comments. I think they are quite useful comments and we look forward to continuing that partnership which provides for that presence going forward and both candidates have made comments during the course of the election which haven’t been exactly pro-free trade but I would hope at the other side of the election that we can have a more pragmatic way forward.
QUESTION:
[Inaudible] counter China though? Do you agree…
TREASURER:
I am not getting into a commentary on those issues. I think we have made it clear what the Government’s position is.
QUESTION:
The strongest opposition to free trade agreements seems to be Donald Trump. How much persuading would be in the Government’s hands if he were elected as President?
TREASURER:
Well, you are all getting ahead of yourselves. Let’s just wait to see what the outcome of the US election is. We have got a wonderful relationship with the United States. Not just shared interests but shared values that have survived Prime Ministers, Presidents for generations. I have no doubt that that will continue to be the case and we will continue to have a very positive relationship regardless of who is in the White House and I think that has been one of the great stable partnerships of world politics and I have no doubt that that would continue.
QUESTION:
Whatever the result do you hope that it is a clear result?
TREASURER:
I hope the result is what the American people want. That is what I hope for. That is the whole nature of democracy. I would no more welcome American commentary on what the outcome of an Australian election would be and in respect of that principle I tend to not offer commentary on these things.
QUESTION:
Are you any more bullish on the prospects of the TPP sneaking through, perhaps through the [inaudible]?
TREASURER:
I will let the Trade Minister reflect on those issues. He is much closer to those discussions. It is obviously in our interest that the TPP is progressed, not just in our interest but frankly in the interest of world trade growth. It is in the interest of developing countries of South East Asia, it is in the interest of world trade that these things go ahead. The way you lift people out of poverty in the world is to ensure a more healthy, global economy and to ensure that trading is continuing and that trading is opened up more, is fairer – all of these things. So, the TPP ticks these boxes. It is part of an agenda which really seeks to lift people’s living standards. It will lift Australian’s living standards, but not just ours. For two centuries this country has prospered as a result of trade, of positive immigration, of positive foreign investment in this country to meet the great investment opportunities that we have. Our generation has grown wealthy off these great initiatives over centuries, why we would want to deny future generations that prosperity is beyond me.
QUESTION:
Any concern about a divided America though, especially if the result is not clear?
TREASURER:
Again, the American people are making their decision today. Let’s let them make it. Let’s celebrate another great day for democracy in the United States and they will decide who their President is and who that administration is and God bless them and let’s see what the result is and we will work with the administration that is elected.
Thank you.