QUESTION:
Treasurer, you said to Ray Hadley just then that the intention with the GST was always to fund tax cuts – either company or personal. How does that square with the idea that the GST was supposed to be a states tax - raised by the states for the states?
TREASURER:
Everyone will have different objectives in coming into these discussions. Our objectives have always been how do we relieve the burden, tax burden, for those who are out there working, saving and investing and backing them in as we move through this transitioning economy? Our objectives haven't change. The Government will always make a decision that we believe is right for the Australian economy in the times we have. That doesn't mean the Red Sea is going to part on every issue you hope it will part on and that is not a problem. You have got to be practical in this business and you have got to make decisions as a team which I fully support. The Prime Minister leads that team. As he said, the first amongst equals. We have been seriously canvassing and looking at these issues. We haven't done what the previous government did which is just to write it off before they even started. There is no point in producing these large tomes and then to throw them away. What we have done is seriously look at this, enabled the discussion to continue and for these issues to remain alive. We have all participated in that but ultimately governments have to make calls on these things and come to a landing. That hasn't finally taken place yet but we are getting to the end stage of that process. We remain absolutely committed, I remain absolutely committed as does the Prime Minister, to what I want to see and what we want for this country and that is people who are out there working hard, running small businesses, out there making the contribution to generate the earnings which actually pay for the welfare system, it's got to be fair for those people who pay for the welfare system as well. We are strong advocates for those doing that.
QUESTION:
The Government has been saying that there needs to be a strong economic imperative here to boost jobs and growth, the modelling that had been commissioned around GST changes, can you give us some sort of flavour as to what that was showing? Was there much of a boost? Was it showing much of a boost or not?
TREASURER:
It is interesting, there is nothing we have looked at which would have certainly hurt growth. That's important. Everything we have been looking at has been pro-growth. In an environment like this, where world growth is very, very sluggish for all the reasons we understand, then it is important that we fight for every inch of growth that we can get. That's what this Government is doing. That's what this Government will always do. It's about growth and jobs. We will look carefully at everything. We just don't write things off carelessly and politically. We examine them carefully as the Prime Minister has said, we set up what the benchmarks are for what they need to clear. If they can't meet those benchmarks, that's the reality. But that is our process. We will do what's right for jobs and growth in this economy. I'm part of the team that's doing that. The Prime Minister is leading that process.
QUESTION:
Labor has already proposed superannuation tax trimmings and they are looking at negative gearing – not ending it but placing limits on it. Is there a chance that you may end up more in lock-step with Labor than you originally thought when it comes to, at least, the changes you will make to tax – not on how you will spend it?
TREASURER:
Labor's plan is to tax and spend. We will not be in lock step with that plan.
QUESTION:
What about the tax bit?
TREASURER:
I have given you my answer.
QUESTION:
Negative gearing appears to be on the table. You have had some comments to make before how you feel as though it is of benefit, it’s not something that just high income earners benefit from.
TREASURER:
Negative gearing has been and continues to be a real opportunity for middle income earning Australians. Nurses and doctors and whether it is a policeman or others, these are people working every day and trying to get ahead, they're not the problem. We need to look at all aspects of how our tax system works but what we are not about, we are not about taxing and spending. That’s not what we are about. We are not about raising taxes to support higher spending. That's Labor's approach. That's Labor's approach – it's not ours.
QUESTION:
Just when it comes to the debate, a week ago you were talking about ready to go into bat, if you like, for unpopular changes, you spoke about boat turn backs. Do you feel as though the debate has shifted since then because of political realities?
TREASURER:
That's for you to commentate on. What I said last week, right here, was the Government will seek to do what's right for the national economy. That's where we are at. We will do what's right for the national economy. We will soberly consider things, assess them and make decisions. That's what we are in the process of doing.
What Labor does is they believes the way they should be funding their higher expenditure is to raise taxes. They are not raising savings measures. There are virtually no savings measures in Labor's plan. Over the budget and forward estimates, of the some $9 billion that they've identified, about $7.8 billion or thereabouts is in higher taxes.
So their plan is to have higher spending with higher taxes that still don't match up to the $13 billion and more of spending commitments that they've announced since May. This is the problem with Labor. For example, the way they want to fund their latest spending increase, they put it on a measure, what should be a health tax measure, and the whole point of that health tax measure is to reduce its base, to actually see the revenue decline over time – not increase. They've used a revenue measure that, if it does its job, will decline to pay for an expenditure that is going to increase. That's called creating a long-term structural deficit. That is not a plan for jobs and growth. That is not what this Government should do.
QUESTION:
Wasn’t Stuart Robert lending his…
TREASURER:
Is there anything else on those other issues? I will come back to that.
QUESTION:
I just wanted to ask you, actually, if you agree with Jay Weatherill's comments that the Commonwealth is now leaving the states to hold the can, as it were, on expensive health options?
TREASURER:
Jay has been making contributions to this debate. We have always welcomed that. But if the proposition was that you should increase the GST to give the states a bucket of money to spend more, that has never been a proposition, I'm sure you know, that I or the government have countenanced. We have been very clear about that. I was very clear with the Treasurers when we met last year. So, if that is what the purpose was then that has never been something the Government has really given any comfort to.
We have never been about trying to increase taxes to support higher spending. That is not our objective. Our objective, what has driven us through all of this, it’s for the whole reason of examining this and dealing with the vagaries that come with that and the criticism that comes with that, is we'll leave no stone unturned when it comes to finding ways to reduce the income tax burden on people who are out there earning money every day in this economy. If that means on occasion those plans don't come to fruition, what Australians should know is we are going to be looking for it all the time. That is our motive, that is our incentive because we believe that is the way to back Australians in in this transitioning economy. You don't back them in by increasing taxes to support higher levels of spending. That's not a plan for jobs and growth.
QUESTION:
Treasurer, wasn’t Stuart Robert lending his prestige as an Australian Government Minister to his business mate up there in China?
TREASURER:
I think that is an offensive suggestion, Paul. It is a massive overreach and it’s a shocking beat up. Thank you.