BEN FORDHAM:
The Treasurer Scott Morrison is out and about in Sydney’s west tonight at a function with Prime Minister Malcolm Turnbull and the New South Wales Premier Gladys Berejiklian. He’s been good enough to spare us some time and he joins me right now. Treasurer good evening.
TREASURER:
G’day Ben, good to be with you.
FORDHAM:
Let me start with an easy one. Where are you? What are you doing?
TREASURER:
We’re out here in Bankstown at the Bankstown sports club for the Heroes of Western Sydney event which is run by the Daily Telegraph, and they’ve been doing it for many years now and it’s a great opportunity to recognise all the community people right across Western Sydney who have been transforming this area for many, many years so it’s just a great opportunity to come and say thank you.
FORDHAM:
The foreign interference report has been handed down earlier this afternoon. I don’t expect that you’ve had a chance to read it, but I thought I’d just you generally about it first of all this is a bipartisan report and there’s a suggestion that super Saturday by-elections could be infiltrated by foreign forces in some way, I know the Government is calling on the other parties to get on board and get all of this passed through the parliament before super Saturday. Have you got something to tell us on that?
TREASURER:
You rightly say that’s only come down this afternoon, what’s important is I think the parliament works construct together, we need to handle this issue sensitively as we have been, and I think be able to take it through the parliament in a very constructive way, there are very sensitive issues but they’re very important issues and the laws that we’re proposing as a Government will ensure a protection for our national security and basically how we do things here in Australia which should be done without any external interference.
FORDHAM:
Let’s go to the economy, it’s reportedly defied world trends to record its fastest growth since 2011, now not every day as Treasurer you’re able to share good news, yesterday was one of those days when you were.
TREASURER:
That’s true, I mean growth is now up above 3 per cent, on the most recent numbers and what that means is Australia is back on top of the pack of the world’s most advanced economies. This hasn’t happened by accident, it’s happened because, principally, because businesses have been investing and the Government has been investing in major infrastructure projects, our exporters have been doing well, all of this is coming together, that’s what having a plan for a stronger economy is all about. When you have a stronger economy, you can pay for Medicare, you can pay for the Pharmaceutical Benefit Scheme, aged care and all the rest of it, so a stronger economy is the point, because all else flows from that and our economy is certainly much stronger than it has been.
FORDHAM:
We always picture Treasurers sitting in an office in Canberra somewhere and talking to Treasury and crunching numbers, but you made an observation that you’ve picked up on just from driving around the streets when you’re in the car and you spot a ute on the road and you see a phone number on the back or a website and say ok someone is advertising their business. Whenever you see those utes, I quite like that. Just share this story about what you’re thinking, what you’re feeling when you see those utes on the road advertising a job.
TREASURER:
Well look, many, many years ago, the rule used to be the more cranes you saw on the sky line, the better your economy was doing. But my view is the more utes your see out there with people running their businesses and doing well with their businesses, buying new utes, then that also means the economy is doing well. It’s as true in the southern suburbs of the Shire and St George as it is up in Tamworth or across in Bunbury in Western Australia. And we are seeing that in this most recent set of National Accounts. What we saw is inventories of utes going up, we saw capital imports of utes going up, for those businesses, and we saw businesses who were investing in their businesses actually buying utes. So, utes and jobs mate, that’s what we’re seeing. Those utes I think are a great symbol of the strength and resilience and the go getting nature of the Australian economy and Australian small business in particular.
FORDHAM:
Out of those figures yesterday, let’s have a look at the positive and negative for a moment. I’m going to ask you the areas that you are hoping for some improvement. Let’s start off with the good stuff, when you looked at that growth yesterday, where is that coming from? What’s fuelling it? What are the big ticks at the moment that’s giving us that good result?
TREASURER:
Well the most consistent growth, over now what is six successive quarters and more, has been the growth in non-mining investment. So putting the mining industry to one side, all the other companies, they’ve been growing their investment at a rate of 10 per cent over the last year, now that’s five times the average. So businesses are seeing their better conditions and they’re responding confidently, they’re investing in their businesses, that’s what they’re doing in terms of creating more jobs, that’s why we’ve seen more than a thousand jobs created every day in last year’s calendar figures, and so we’re seeing that, we’ve had a good quarter when it comes to our exports but that counted for less than half of the overall contribution to growth when you take out the imports from that. A big part of that exports was what was happening with minerals, but it was also our service industry as well. This was a set of numbers which show growth pretty much right across the board and that was very welcome. The area we want to see improve is the household consumption figures, that’s you know, how much people spend in the economy, but that moves from quarter to quarter. Last quarter it was up by 1 per cent, this quarter it was less than half that. The quarter before that it was about half that, so these things move up and down. We saw cafes, restaurants, that down a bit in the most recent quarter, but in the one before that it was right up, and it was actually the Rugby League world cup that had a bit to do with that as well.
FORDHAM:
Is there a chance that people aren’t out there spending in restaurants and cafes because they’re, I suppose, putting too much money onto things like power bills?
TREASURER:
There was a bit of that, but it was also people buying furniture this time around, those sorts of things were up in this most recent round of consumption records so it does move a bit from time to time, but what we want to see, and this can only come from a stronger economy, is people participating more in the economy, people are still saving I should stress and this is a good thing because Australians are quite well ahead of their mortgages particularly when you compare that to other countries around the world. On average, they’re about 2 and a half years ahead of their mortgage payments. This is a good thing because they’ve built up a bit of a buffer when you’ve got interest rates overseas starting to climb up, that hasn’t happened here yet. But, we do have a good buffer in place for householders who have been quite prudent in how they’ve saved.
FORDHAM:
If we had some income tax cuts and some company tax cuts there might be a little bit more money to spend. I know that your opposite number Chris Bowen, the Shadow Treasurer says your income tax cuts benefits men more than women so there’s now a gender war when it comes to tax cuts. I know that Sarah Hanson-Young from the Greens has also jumped on this bandwagon as well, have you got a comment for Chris Bowen and Sarah Hanson-Young?
TREASURER:
Well, first, to Chris, if Sarah Hanson-Young is agreeing with your economic policy, you better think twice about it Chris. The second one is, I think they’ve embarrassed themselves with this argument. The gender pay gap is a serious issue. To suggest that it’s got something to do with the tax system is a nonsense. You don’t fill out pink forms and blue forms on your tax return. It doesn’t look at what your gender is any more than it looks at whether you’re left handed or right handed or you barrack for the Sharks or you barrack for the Tigers. It makes no difference. It’s based on what you earn and if the Labor party doesn’t want to support tax relief they shouldn’t go around trumping up these sorts of excuses. What are they suggesting, that somehow men should be taxed more than women? It doesn’t make any sense. I think they’ve really embarrassed themselves on this and no one I think is taking it terribly seriously from an economic point of view. But you make a good point about the need for tax relief and that is what will support great consumption in the economy and that is why we’ve focused it first on low to middle income families, lower to middle income earners, but over time we’re dealing with bracket creep, we’re overall making sure that 94 per cent of Australians won’t face a tax rate any higher than 32.5 cents in the dollar and that’s a good thing. But you’ve got to set it out there, and you’ve got to have a clear plan, and you pass that through the Parliament I think people can work, can plan for their future with a greater degree of confidence.
FORDHAM:
Your healthy growth projections are based somewhat on the immigration levels that we currently have. You’re in western Sydney today and you would have heard concerns from Western Sydney about population, about immigration, and about whether or not there’s enough infrastructure to go around. Are you hearing those calls Treasurer?
TREASURER:
What I’d first say is the Budget doesn’t assume an increase in immigration levels over the Budget and forward estimates. The Budget actually estimates there might be a slight decline over that period of time on population growth and what’s happening with immigration levels. So that’s what the Budget does. So, that’s how those numbers have come together. What the Budget’s increasing performance depends upon, continues to depend upon, is basically people getting off welfare and into work. So creating jobs, having people invest in the economy through their businesses and that’s why we need more competitive business tax rates because you don’t achieve any of this, I mean no one is going to get a wage rise if they’ve got to pay higher taxes, and no one is going to spend more in the economy if they have to pay higher taxes, so the idea of higher taxes being good for the economy is a numpty of an idea.
FORDHAM:
Just to go back, I love when you say numpty. Just to go back really briefly to immigration. Do you hear those messages because I’ve got a different job to you, clearly yours is a lot more important than mine, but I can’t help but pay attention to it because not only do I hear it on the talk back line, I hear it in correspondence coming to me on social media, talking to people in the street it seems to be an issue that comes up all the time do you hear it as much as I do?
TREASURER:
I do and I understand that people are concerned about the pressures of population growth. They’re also concerned about ensuring they have jobs and they have growing incomes and they have the services and infrastructure that they need when there is pressure on these things and that’s why we are investing $75 billion in our rolling infrastructure program and addressing those issues but, we’ve also got to understand what is actually forcing the population pressure. Let’s talk about it simply this way. Let’s say the population growth was based on 10 extra people, well this is how it would play out. Just under four or those would have been people born here. Just over four of those would have been people here on temporary migration, so a working holiday visa, a temporary skills visa, a student visa and two of them would be on a permanent visa. So the real thing that’s actually pushing population growth is that temporary migration which is students, and holiday makers, that’s the primary driver of what the growth is in there at the moment. Now whether that will hold up or not, those are demand drives programs, but those students, and those tourists are very big drivers of people’s jobs and incomes particularly in regional Australia where tourism is so important.
FORDHAM:
I would ask you what it was like to be at the MCG last night seeing NSW win but we’ll never shut you up, you get back to the function good to catch up.
TREASURER:
I wish I was.
FORDHAM:
You weren’t there?
TREASURER:
I wish I’d been there, I was at the pub in Caringbah having a great night. I was at my local pub. But I enjoyed it thoroughly.
FORDHAM:
Enjoy the function. Thanks so much for your time.