TREASURER:
It's a very difficult day in Townsville today as you would just have learnt with the Employment Minister and Ewen Jones announcing the Government providing the federal entitlements guarantee to support the 700 or so workers affected by the decision and the outcome up there at Queensland Nickel. All our thoughts are with all of those families who are affected by this and to reassure people that the Federal Government will be standing alongside them working through the issue around the Federal Entitlements Guarantee. I want to commend Minister Cash for the decision today to provide that support and I particularly want to commend Ewen Jones who has been a tireless advocate for the workers of Queensland Nickel. What has happened to those workers because of what has happened at Queensland Nickel is a disgrace and, of course, we will be following through, certainly with the special liquidator, to ensure taxpayers' interests are protected and to ensure that we go after every dollar, to ensure that those entitlements are looked after and the entitlements guarantee, of course, provides that underwriting. In addition, I'll be expecting the regulators, ASIC and others, to be pursuing this within the full extent of their powers and, of course, as I said yesterday, the Government will be making its response to the capability review of ASIC before the Budget.
On other issues, I note last night that the Labor Party confirmed once again that they will be seeking to tax the Australian economy more than $100 billion over the next 10 years. Chris Bowen made that perfectly clear last night. That's their plan. They want to increase the tax burden on the Australian economy over the next 10 years by over $100 billion. But what he was caught out on last night by Tony Jones was the fact that they're not increasing taxes to reduce the deficit, they're increasing taxes to throw even more taxpayers money around; to increase their spending over 10 years and he was caught out on that. So, it's not about reducing the deficit, it's not about improving the sustainability of Australia's fiscal position. They're doing it because they don't know how to constrain their own spending. The other thing we learnt last night was the Shadow Treasurer was caught out on his own costings. He will not release the full details of his own revenue estimates. He likes to talk about revenue over the next 10 years. He likes to talk about things over the next 10 years. Well you know what? You've got to bring down a Budget for the next four years and what I know is over the next four years, Labor are spending more than they're taxing, they're spending more than they're saving. So, what you will get with a Labor Party is higher taxes, a higher deficit, higher debt and even greater pressure on Australians around the country. Our Budget is designed to do three things: to grow the economy and to support growth in jobs; to ensure that we have a tax system that is better targeted so it can support investment that drives jobs and growth; and thirdly, to ensure that we continue on our strong path to Budget balance by keeping our expenditure under control, by living within our means, like all Australians are, like everyone else is, the Government must do the same thing. And to ensure that we can do things that are affordable and support Australian families and businesses and the community more generally in a way that's sustainable.
QUESTION:
Are you increasing taxes on cigarettes?
TREASURER:
The Budget is on May 3. We will announce all our measures there. What I can tell you is where the Government makes moves in whatever areas we may, what we will be doing is ensuring that we're reinvesting in ensuring that there is a fairer and better and lower tax burden for Australians.
QUESTION:
Is it easier to hit smokers because there are less smokers these days?
TREASURER:
You're talking about speculation. The Budget is on May 3 and the Government's measures will be announced on May 3.
QUESTION:
The Finance Minister said the Government will be taxing better in the Budget and that the worst thing is to raise taxes in a bad way.
TREASURER:
That's right.
QUESTION:
What does that mean and what is a good tax increase?
TREASURER:
What it means is that you don't do things that increase the tax burden on the Australian economy. This is a very sensitive moment in the Australian economy. It's a tough economy out there globally. We've seen in the meetings in Washington this week with the IMF that global growth is being revised downwards and that means we need to work even harder and you don't support your economy by increasing the tax burden on that economy. That's what the Labor Party proposed to do. Not to reduce the deficit, but because they can't control their own spending. So, in this Budget, what we will be doing is ensuring a more targeted tax system. A tax system that, I think, more fairly raises the revenue that we need to raise and ensures that where we are able to raise that revenue we're putting it back into supporting investment because it's investment that supports growth. It's growth that supports jobs and we're a Government that has a plan for growth and jobs and that plan will be laid out very clearly in the Budget on May 3.
QUESTION:
Treasurer, what's the priority? Is it addressing bracket creep or paying down the deficit [inaudible]?
TREASURER:
The priority is jobs and growth and the Budget is focused on jobs and growth by ensuring we have a tax system that is fair and targeted and ensures that it's supporting investment that drives jobs and growth and continues us on this positive path to budget balance. We are getting our expenditure under control. It is falling as a share of the economy over the next four years and beyond. That is our commitment to the Australian people, to live within our means, to grow the economy, to support jobs and that's what the Budget will do on May 3.
QUESTION:
Do you need to increase revenue in order to bring down that deficit, do you think? Do you think that needs to be a priority of government, to bring down the deficit [inaudible]?
TREASURER:
The Government is not looking to increase the tax burden on the economy. If you want to stop something – tax it more. If you want to stop something – tax it more, that's why the Labor Party is going to increase taxes on investment. They want to see less investment with their changes to negative gearing. They want to see less investment by putting up the capital gains tax on investments, not just in property, residential property but on factories, on shops, on shares, on business activity. They want to increase the taxes on investment. Last night Chris Bowen didn't seem to understand that if you take one out of three purchases in the property market, that it won't have an impact on prices. Of course it will. It's simple, economic maths which seems to elude him. He doesn't understand that under his proposals on negative gearing the minute you put your key in the door of a new property and turn it, it's like buying a new car and driving it off the lot. You're selling it into a completely different market from the one in which you purchased it. The Labor Party just don't grasp these fundamental principles when it comes to the economy. They forget completely, on negative gearing, that it's mum and dad investors. It's mum and dad investors who use negative gearing to help them build their wealth for the future. They don't have all the same options that people on very high incomes have, so what they do is they put aside that extra bit that they've been able to put together and they go and buy an investment property and it's there to try to support them in their retirement, or help their own kids get into the property market in a place like Sydney where it can be really tough. They don't understand that it's nurses, it's teachers, it's police officers, it's defence force personnel – these are the people who use negative gearing. These are the people that Labor think are the problem and need to be targeted with the higher taxes that they want to impose on the Australian economy.
QUESTION:
Treasurer, when those people at home; the mums and the dads and the nurses and the teachers hear you talking about revenue measures, it is understandable that they get a little bit nervous. What exactly are you talking about?
TREASURER:
Since 1901 there have been revenue measures in every Budget and there are revenue measures in this Budget. What I said yesterday was entirely unremarkable and I think the response to those comments has been feverish but a little too enthusiastic which you normally see in the lead up to the Budget. What I can tell you about revenue is our revenue measures are designed not to increase the tax burden on the Australian economy but to ensure we're better and more fairly targeting our tax system so that we can support investment which supports growth, which supports jobs. Labor's tax measures are about increasing the tax burden on the Australian economy which is not a plan for growth, it's not a plan for jobs and $100 billion in extra tax burden on the Australian economy, not to reduce the deficit, but just to try and catch up with their out-of-control spending. Thanks very much.
QUESTION:
[Inaudible] Queensland Nickel what does this mean for other workers in companies that may fail?
TREASURER:
Well, these programs are there to support situations like the one we see in Queensland Nickel and the reason we're able to do what we've done today with Queensland Nickel and for Minister Cash to be able to make the announcement she has made, is because we have got our expenditure under control. We have worked on the Budget to ensure that these types of commitments can be afforded and we can provide this sort of support. That reminds me of, again, why it's so important to keep your expenditure under control. If you go and throw money around like the Labor Party wants to do, then you've got to put up taxes like they are going to do and it leaves you short when it comes to dealing with things like Queensland Nickel. Now, we're in a position to act on Queensland Nickel today and to provide that support because we've been exercising the strong budget discipline that we have been doing since we came to office. I think that's incredibly important and that's why we're able to stand there, as Ewen Jones is standing there today, shoulder to shoulder, with the people of Queensland Nickel and their families and to be able to give this commitment and to give this support. That is the dividend of ensuring that you run your Budget well and that's what Australians will see on May 3.
QUESTION:
You said it was a disgrace, the collapse of QNI – is Clive Palmer a disgrace?
TREASURER:
I'll leave that to the regulators to work through those processes and to run these issues to ground and I don't want to get into a personality commentary on these things but I do expect the regulators to pursue this matter all the way.
Thanks very much.