TREASURER:
Well, it was a very constructive meeting of the state and territory treasurers with the Commonwealth today. We covered a lot of topics as we always do. Apart from updating on the economy, looking at the changing trends in financial technology, we have had the opportunity to review the programmes about business regulation reduction, we have been working on that for some time. There was a significant and wide-ranging discussion about the issue of housing affordability and affordable housing and I want to stress the difference between these two topics. Housing affordability is dealing with affordability issues in the private housing market, but with the affordable housing – social housing issues – that was another discussion which was also very useful. In that area in particular we are taking the issue of the bond aggregator to the next level. There is a taskforce that has already been set up to work through the implementation of that arrangement and we also looked very carefully at our next meeting to be looking at how the housing associations area could be further supported and improved to build their capability so they can play an even greater role in ensuring enough affordable housing is out there in the market for people of low incomes or key workers or people in that situation. There was the usual discussion about GST relativities and it would be no surprise that the states and territories were unable to agree on any changes that should be made in that area and the relativities will be released this afternoon. On the broader issue of housing affordability and when it comes to tax matters with the Commonwealth Government I should also stress there was no commonality of a position amongst the states and territories on that issue. It is ultimately though a matter for the Commonwealth. We did have a very important discussion about the role the Council of Financial Regulators are playing and that their opportunity to address, through their own levers, what has been a sharp increase in the level of investor credit particularly over the last couple of months which is a matter not just about housing affordability frankly but it is also an issue about household debt and the levels of household debt and the need to make sure that is well managed from a financial stability point of view. Critical also in our meeting today, we were able to agree, subject to state and territory governments conferring again with their cabinets and with the reservation of the Northern Territory, to move forward to prepare a proposal for a nationally consistent approach to point of consumption tax on online gaming. Now, this is a very important issue, both from a revenue perspective but frankly more importantly from a social perspective. We all agreed that it was necessary to work on a nationally consistent approach already in South Australia. There is legislation that is dealing with this. So, that provides a good starting place to look at models but a nationally consistent approach also on issues around harm minimisation is necessary. This is not about raising revenue for revenue sake it is about ensuring that there are proper investments back in consumer protection frameworks. Also, to fully understand what the impact of these issues are on national sporting codes and how that may impact on them and what options would need to be considered by state and territory governments and indeed the commonwealth as a result of going down this path. So, that is some pretty serious headway being made on some big issues whether it is housing affordability, online gaming or ensuring the proper distribution of resources across a range of different service areas, once again I think a very constructive meeting.
QUESTION:
Mr Morrison on the macro prudential stuff, the Council of Financial Regulators, did you give the states any indication above what you have been saying publically in the last week about your talks with the regulators and asking them to cast a stronger eye on investor loans.
TREASURER:
No not a great deal more granularity on that Phil other than to say that I have been concerned over the last couple of months that the macro prudential measures that were put in place a few years ago which have been very successful – very successful – in meeting their objectives in the last couple of months we have seen the impact of that wear off and it is now for the Council of Financial Regulators to determine what their next step is and that is a matter for them but as you know I attended their last meeting and we had a pretty detailed discussion of that and so I advised the state and territory treasurers about the progress on that front. So, the next step is for the CFR to make any announcements or decisions that they consider necessary to address that issue.
QUESTION:
Treasurer on affordable housing what is next in terms of building up social housing. Does the AHURI model get adopted, was there specific discussion about that today? Secondly, the Victorian idea about the commonwealth releasing more land whether it is defence or CSIRO owned, wherever that might be. Was there a broader discussion about that today?
TREASURER:
All of these issues were canvassed and it is a commonwealth idea to actually use commonwealth land and that has already been happening including with defence land. That has been happening for many, many years. So, I wouldn’t say that is a new idea. It has been around a long time. Just in the same way state crown land is used for these purposes. When it comes to housing affordability you are working right across the spectrum and when you are dealing with housing more generally you are also dealing with the very real challenges of homelessness all the way through to issues in the private market. What I am very pleased about is that the state and territory treasurers together with the Commonwealth are taking a narrow view on this. I was pleased to acknowledge the work that had been done, particularly in NSW and Victoria on these issues. We don’t have to agree on every single measure but what I think there is, is a genuine commitment particularly from those states most impacted, to deal with this issue and to use the levers that we have available as is appropriate. Now, the other thing to point out which the states and territories were very keen to reinforce is there is no one national housing market in Australia. So, what may impact in Sydney in one way can impact exactly the reverse in Perth and certainly the West Australian Treasurer was keen to make those points as was the Tasmanian Treasurer and indeed the Northern Territory Treasurer where the volatility of the housing market in the Northern Territory has been quite profound. In the space of five years we have seen things move from one end of the spectrum to the other. So, the use of big stick, sledge hammer type changes one must be very cautious of that because it can have quite negative impacts in markets.
QUESTION:
Does that mean you are keen to release more commonwealth land, previously military land, Australian defence force land?
TREASURER:
I’m simply saying the idea of the Commonwealth land being used for housing purposes is not a new idea and the Government will outline its package at the Budget.
QUESTION:
Treasurer, on the GST you mentioned there was no agreement on relativities. Were you able to give any comfort though to Ben Wyatt that there could be some more Commonwealth funding forthcoming in the Budget and help them out.
TREASURER:
We’ll work through those issues in the normal way as we have previously. I met separately with Ben this morning, as I did with Nicole from the Northern territory and we had some good positive discussions. There is good collaboration amongst the Treasurers. We all have it in common that we are trying to manage our Budgets and ensure that expenditure doesn’t get out of control and from that point of view it is a bit like a Treasurers’ union coming together. We have a common interest in dealing with those challenges and I thought they have been very constructive. On issues of relativities I mean clearly I am yet to see any commonality on that point across that point across the states and territories and that is always going to be an issue.
QUESTION:
Treasurer is there any discussion on a transition from stamp duty to land tax?
TREASURER:
Well, that is entirely a matter for the states and territories. They are both state taxes and where they wish to do that that is entirely a matter for them. It is within their province just as the ACT Government has done that.
QUESTION:
Treasurer, on the National Partnerships Agreements, there is some discussion around giving the states a slice of personal income tax or any means of reforming those agreements?
TREASURER:
The states have some suggestions on those areas but the Commonwealth is yet to see anything that we would find attractive on that front or doable on that front.
QUESTION:
So will you stick with the idea of them coming cap in hand every couple of years for these National Partnership Agreements?
TREASURER:
Well, National Partnership Agreements are non-ongoing arrangements. That is how they were set up. There are perpetual arrangements like in hospitals and schools and housing and things like that, but where there are additional agreements which are done intentionally for a fixed period of time well there can never be any presumption beyond the life of those agreements. That said in particular I had been quite keen to ensure that the National Partnership Agreement on Homelessness for example has been renewed several times while I have had responsibility around that. I make this point. Next week there will still be opportunity for the Parliament and the Labor states’ colleagues who sit in the Senate to pass Government savings measures. So, if the Labor Party is going to seek to continue in the Federal Parliament to blow up the Budget and undermine the Budget and work against the Government getting the Budget back on track. Well, they can’t be surprised in the Labor states when the Commonwealth is exercising fiscal restraint. If the state Labor treasurers want some of those issues progressed my advice is this weekend get on the phones to every Labor Senator in your state and tell them to support the Government’s savings measures and fiscal position.
QUESTION:
Can I ask you just quickly on Pauline Hanson what do you make of her trying to capitalise on the attacks?
TREASURER:
I have already made a comment on that today.
QUESTION:
Just a last one on housing Mr Morrison, you have being cautious about the use of big stick, sledgehammer changes…
TREASURER:
I am not the only one saying that by the way. That was remarked on by a number of Treasurers today from both sides of the political fence…
QUESTION:
Small states.
TREASURER:
No, I wouldn’t call Western Australia a small state.
QUESTION:
In terms of population.
TREASURER:
Any Western Australians here? I don’t think they like, I would never dare call Western Australia a small state.
QUESTION:
Ok, but would you use that description for capital gains tax, negative gearing – are they big stick, sledgehammer type measures?
TREASURER:
I’ll let you draw your own conclusions, Phil. You know how I have described sledgehammer measures before. A sledgehammer measure is what the Labor Party put to the last election. Those approaches clearly weren’t supported in Western Australia, in other states and territories. They understand there is no national housing market and what you do in one place can have a very negative impact somewhere else. So, it would be wrong to say that there was commonality on support for those types of things and I consider those types of sledgehammer approaches very dangerous. They are not about housing affordability. Labor’s policy on those issues has nothing to do with housing affordability. It is just raising revenue through a tax. If they just want to call it that, well, by all means call it that and say you are just trying to raise a tax but don’t pretend you are trying to make anybody’s house cheaper or more affordable by jacking up taxes.
Thanks very much.