DANIELA RITORTO:
Thank you very much for joining us here. Nobody will be too fussed about seeing the big banks being slugged, but won’t we all end up paying for this through higher fees? You can’t really stop them.
TREASURER:
I don't think we should be, because this is a levy which is very similar to similar positions that have been done in other countries. The UK has a different version of this, but it’s basically a similar type of an impost. I mean, this isn't a tax on people's deposit accounts, like the Labor tax was. It’s not a tax on people's mortgages or things like this. It is based only on the top five banks. It’s capped only for those above $100 billion in liabilities. And the ACCC has been given the task, and funded, to ensure that banks are not misrepresenting. You're right, banks put up prices on people every day. We’re not terribly happy about that, but they won't be able to misrepresent what they're doing. I mean, this is not a tax on people's deposit accounts, it’s not a tax on their mortgages, so why they would actually tax them or charge them more as a result, well that would be very deceptive and I don’t think that would show good faith to their customers.
RITORTO:
Talk me through the thinking behind this Medicare guarantee fund. Isn’t it just a separate account you could still cut from it if you wanted to. Are you that spooked really still by Labor’s ‘Mediscare’ campaign?
TREASURER:
First of all, we're unfreezing the freeze on the Medicare payments which Labor put in place and we're unfreezing that tonight. We're also doing similar things with the diagnostic imaging and other things of that nature. We're investing more in the pharmaceutical benefits, $1.2 billion on those arrangements, $10 billion all-up on investments in healthcare, including important investments in mental health. The Medicare Guarantee Bill is to assure Australians. We need to reassure them. Labor ran some lies at the last election, fairly blatantly and openly, and we need to reassure Australians that Medicare is something we're committed to, we're funding it, we’re being transparent about it. The real difference between a Labor and Liberal Budget is our Budget is always paid for. They just make empty promises.
RITORTO:
Let’s move now to this welfare crackdown. It doesn’t really save much in terms of the budget bottom line. This drug testing, even Tony Abbott thought about it and dumped it. Is this more about being punitive?
TREASURER:
No, it’s not. If people can't get into work because they've got issues with drug and alcohol abuse, then we just can't look the other way on that. I mean the best way to get your welfare budget under control – I used to be the Social Services Minister, I’ve got a pretty good appreciation of the size of that bill – eight out of 10 taxpayers go to work every day to pay for it. Now, it’s got to be fair to taxpayers as well, but what this does is, it’s a trial. There’s only 5,000 people affected in a couple of locations yet to be selected. We are going to see if this will actually help, whether it will work. If people are pinged on one occasion then they can be referred to treatment. But if there is no response, if you can just not turn up to job interviews, not do your mutual obligation requirements, not meet with your job service provider, not take a job that's been offered to you which is reasonable work and your excuse is, ‘Well, I was too drunk, or drugged’, that's not fair to taxpayers, and it’s actually not fair to them either. We should actually step in, and that's what this does.
RITORTO:
There's a real ‘Australia first’ theme, I'd suggest, to this Budget. Some of these measures, the levy on temporary foreign workers, banning foreigners from buying up more than 50 per cent of developments, attacks on empty properties held by foreigners, making migrants wait years longer for the pension – don't you risk sending a real, you know, people aren't welcome to Australia message with this?
TREASURER:
Not at all. I think immigration has been one of the cornerstones of Australia's economic success over generations. We talked tonight about Snowy 2.0. What better example is there than that project which we want to invest more in, and the announcements we’ve made tonight. I mean, that project was as magnificent in its engineering achievements as it was the diversity of the workforce that built it. So, I'm pro getting people to take that work and come to Australia where they have the skills and they come to make a contribution and not take one. That’s the best thing about Australian immigration, I’m a big fan. But we also need to be training Australians. There are Australians who were born here and about half of Australians have at least one parent who was born overseas. They're all Australians, we're all Australians, and we want to see our own children trained up to take those jobs, and that means we’ve got to invest in the skills and the training and the education that's there. We used to have a scheme where you would pay one per cent of your payroll internally into your own company for training or two per cent into an industry fund. Now, frankly, that compliance just wasn't working. We have no real idea about how many people were really doing that. They should have been doing it and I'm quite sure some employers were. So, we are going to get rid of that scheme and we're going to say you pay a simple levy on each and every foreign worker for the time they're there on a temporary visa and if it is a permanent one you pay a one-off levy. That goes into a Skilling Australians Fund, which supports every Australian, whatever your background is, wherever you've come, so you can get the skills you need to have a successful future in Australia.
RITORTO:
That surplus in 2020-21, nice to see one…
TREASURER:
Isn’t it?
RITORTO:
Indeed. Is it not though a little heroic because a lot of it is based on wages growth and you’ve been telling us for the last few months just how bad wages growth has been, how flat has been. Are you being a little ambitious?
TREASURER:
I wouldn’t call three per cent wages growth terribly dramatic either, to be honest. I mean, we’ve been at less than two per cent now for a while. Our forecasts in this Budget are actually quite modest. Our growth forecasts are actually less than what the IMF is saying about Australia, and where we’ve pitched our other forecasts sit in line with consensus forecasts in this country. So, I think we’ve been prudent and they’re backed up by our investment in growing the economy, where we’re backing small business, we’re saying you can extend your instant asset write-off for another year. We’ve put $150 million aside each year for two years to incentivise State and Territory governments to cut red tape for small businesses. Now, a lot of your viewers would run small businesses and this is good news for them. We’ve already given them a tax cut, we’ve already said if you’re up to $10 million you can get access to all these small business incentives. Now we’re going to cut red tape. We’ve already cut a lot of red tape at a Commonwealth level, but for small businesses frankly, most of the red tape is state-level, State and local government, and we’re going to incentivise them to cut that red tape. So, that’s going to support growth, $75 billion over the next 10 years in infrastructure investment – the inland rail, Western Sydney Airport, these are big projects. Snowy 2.0, which I know people will feel very proud about seeing that come back to its rightful place in our infrastructure vision.
RITORTO:
Just lastly, Treasurer, you used the word ‘reset’ a lot today. Is this what you needed, that clean slate, get rid of the history, the past that goes to 2014?
TREASURER:
Well, we’ve endeavoured to prosecute those measures for many years now and they were trying to deal with some specific problems and the Senate has made it very clear and it would have been not credible to maintain those measures in the Budget; ratings agencies would not have looked positively on that, and so that’s $13.5 billion. Now we said at the time, if the Senate says no to those measures, we will have to find another way to ensure we get back to that balance and that’s projected, I’d stress, to be $7.4 billion in 2020-21. But the other good news in this Budget is this: from 2018-19, we will no longer be borrowing to pay for our everyday expenditure. We haven’t seen that in about a decade, and we’re not going to draw down on the Future Fund; we’re going to let that fund actually build up so we can pay for our liabilities over the next 100 years. I mean that’s another big investment in the future. So, this really is a Budget which does make the right choices to secure better days ahead for Australia.
RITORTO:
Treasurer, thank you.
TREASURER:
Thanks a lot.