DAVID SPEERS:
Thank you very much Treasurer, thanks for joining us. We heard from the Prime Minister a more detailed, perhaps a stronger argument for the company tax cuts today. Will this change the numbers in the Senate though do you think?
TREASURER:
We will continue to have those discussions but as he said today, this is an argument that really does commend itself. We risk being stranded. I have just come back from the UK and we are already sitting in a position where their corporate tax rates are below ours and the United States wants to go further than that even. If we want to strand capital, if we want to risk those jobs that come from that, well, you would vote against these changes.
SPEERS:
Is there any evidence on that risk with the UK and the US planning at least on cutting their company tax rates substantially are you doing any modelling on how that could impact us if we don’t change the company tax rate?
TREASURER:
We already know David. It’s a simple proposition, if the company tax rate is lower somewhere else and you get a bigger better return on the same outlay you will put your money there. It is a self-explaining argument and that is why it has always been supported from everyone from Paul Keating to Malcolm Turnbull and that included support from the Labor Party.
SPEERS:
The suggestion from the PM today though that this will mean for the average worker $750 a year in their pocket if you get the whole ten year company tax cut through, Labor says you have got to wait ten years for $2 a week.
TREASURER:
The Labor Party scoffs at growth. They scoff at improvement. What is their plan? They have no plan to increase people’s wages. They have no plan to give security to their jobs or grow the economy which is what the Prime Minister said today. Every single element of our plan, whether it is the Enterprise Tax Plan or it is the defence industry or whether it is what we are doing with our trade agreements or boosting energy affordability and security and sustainability, which is one of the core costs on business today, let alone households. When you go to South Australia, if you want to make sure places like Whyalla are going forward then they have got to have affordable, secure or energy. In Port Lincoln or anywhere else. Now, that is our plan. What is Chris Bowen and Bill Shorten doing…
SPEERS:
Speaking of your plan…
TREASURER:
Other than to whinge and scoff.
SPEERS:
If you don’t get this through and indeed the full ten year plan, which is what all these numbers are based on, the money in your pocket the jobs etcetera, if you do not get that through what are you going to do to get the economy back in positive territory?
TREASURER:
That is one part of a very comprehensive suite of policies. I just mentioned another, the infrastructure agenda, Western Sydney Airport, the major rail project…
SPEERS:
This is all spending though, Treasurer. This is all spending. What are you going to do to reform the economy?
TREASURER:
What I just talked about was major capital investments that are productivity unlocking infrastructure in our economy. It is infrastructure, it is energy, it is the affordability of housing which means Australian workers can be closer to work and have a lifestyle which they aspire to.
SPEERS:
What about things like tax reform, is that all done now? What about industrial relations reforms?
TREASURER:
Tax reform is something that never ends. You don’t just get to one point and say that is all you can do in your tax system. We have never suggested anything other than that. Every Budget, every year, every opportunity we have we will seek to improve our tax system and the Prime Minister today talked about the Diverted Profits Tax. That is something that is coming in in July this year and that is one of the additional measures and there will continue to be improvements to our tax system to make it more competitive but right now we would really like it if the Parliament supported a measure that would make our businesses more competitive today. It is an anxious time around the world and I think Australians are very anxious here. How do you deal with that anxiety? Give people greater security and give people greater sense of opportunity and how we are backing them in to realise the opportunity and that is what the Prime Minister said today.
SPEERS:
As part of this never ending consideration taxes do things ever come back on the table like the GST? Negative gearing? Do they come back on the table?
TREASURER:
We have been very clear about the GST. We went through that process and the numbers, frankly, didn’t stack up on that. It was thoroughly assessed and evaluated at the time and we came to a conclusion on that issue. We will continue though to work on the tax system, each and every Budget, each and every year.
SPEERS:
There was a strong focus too by the PM here today too on energy security and energy affordability. He has said that the renewable energy target was never actually designed to last in perpetuity. Does that mean at some point it could go?
TREASURER:
The legislation creates the certainty around the arrangements as they currently exist. What the Prime Minister was particularly focussing on today was the absurdity of the sort of 50 per cent RETs that the Labor Party are promoting. They are proposing higher emissions reduction targets, higher than what we have signed up to in Paris and RETs of 50 per cent. Now, that is job destroying, household budget destroying policy. Now, he can’t come to the press club – Bill Shorten – and say he is for jobs and supporting household Budgets but have an energy policy which fair dinkum just swipes their budget clean.
SPEERS:
But your own position on the RET, it stays as is?
TREASURER:
The legislation creates the certainty around the current arrangements. Yes it does.
SPEERS:
And you won’t have the [inaudible] for change?
TREASURER:
That is the legislation and you need some certainty around these arrangements so people can invest. Now, they were arrangements we came to under the Abbott Government and those are arrangements that provide that stability.
SPEERS:
The PM also posed a couple of times a pretty interesting question. We have the most affordable coal in the world but we don’t have in Australia any of the lower emissions high technology coal fired power plants that we have seen in Japan and other places elsewhere as well. What is the Government going to do to encourage that? He says why shouldn’t we be showing the rest of the world how this works. What can the Government do?
TREASURER:
Coal is part of our energy future, coal is part of our security and energy security and affordability and we will have more to say as time goes on but the Prime Minister…
SPEERS:
Well, that makes me curious.
TREASURER:
The Prime Minister made it very clear today that you cannot be technology dependent or biased in any way in this area nor can you be, frankly, resource dependent on these things. It is about energy affordability, security and sustainability. That is what households, families need, it is what businesses need. And coal is part of that.
SPEERS:
Let me cut to the chase – would the Government help subsidise, however help, an energy company build one of these pretty expensive, lower emissions coal-fired plants?
TREASURER:
Well, if we are talking about next generation, new generation technologies that provide lower emissions energy production whether it is coal or whether it is wind or whether it is any of the other sources why would you limit yourself to a particular resource and that is the question the Prime Minister was putting today. We can’t just keep going on seeing these stations close with nothing on the other side. Obviously there needs to be transition arrangements and there needs to be a greater acceptance of the many other alternatives that are out there. He also highlighted gas today. We have locked up our gas resources all around the country.
SPEERS:
But we do have taxpayer support for all the renewables; wind, solar, etc – not for this coal technology do we?
TREASURER:
The sun doesn’t always shine and the wind doesn’t always blow and so he made that point. So, these intermittent resource bases need to be supported by greater base-load resources and that is what he is signalling very clearly today…
SPEERS:
Including with taxpayer support.
TREASURER:
We need to have an energy future that is inclusive of what has been one of our greatest energy advantages for 100 years.
SPEERS:
Treasurer Scott Morrison, thank you very much for joining us.
TREASURER:
Thanks David. Good to be with you.