EDDIE MCGUIRE:
Scott, good to have you on board.
TREASURER:
Good morning. It’s great to be here.
MCGUIRE:
And yesterday you were in the seat of Higgins and doing all sorts of things.
TREASURER:
Yeah.
MCGUIRE:
Now, can I just ask a question off the top? Our economy is going beautifully at the moment, we have interest rates at record lows, inflation, unemployment. Why are we all still a little bit frightened and could I ask you, when you go to sleep at night, what is it that you go, “What do we have to accelerate and what do we have to defend?” Where are we sitting in the world economy at the moment?
TREASURER:
In the world, we’re doing very, very well and we’ve got to keep that in perspective. But the things that focus my mind most are I want people to be able to earn more – if you’re running a business, I’d like you to earn more, if you’re working for one, I’d like you to be able to earn more and the more people could earn, the better their wages are – the information yesterday, the data we got yesterday was a little bit better than what we’d been seeing. But the other one is we want Australians to be able to buy a house, and particularly young Australians, and in the last Budget, I put in a measure which allows them to save 30 per cent faster for their first home because I give them a tax cut on what they save.
MCGUIRE:
Okay, just take us through that. So first of all, the International Monetary Fund yesterday again urged for company taxes to come down, the best way at the moment where there’s negligible increase in income as far as wages are concerned – it comes down to you. If you can cut taxes but at the same time, you’ve got to earn the money to keep going so we’re understanding of that. What is your strategy? Because we’ve seen Trump cut the taxes over there…
TREASURER:
Yeah, it’s had a huge impact.
MCGUIRE:
It’s had a huge impact.
TREASURER:
Well, I was over there a few weeks ago actually and I saw it but it comes down to pretty simple proposition. If I make businesses pay the Government more, then they can’t pay you more. They can’t invest in their business more. It’s pretty straightforward and that’s what’s happening in the US, that’s what happens when we do it here and the other problem is a lot of the other countries in the world are lowering their taxes so France is, the UK is, Singapore’s already low, the US are doing it so what that means is if we keep ours high, then the jobs and the investment will go overseas.
MCGUIRE:
The only thing with that though is all those countries you’ve mentioned, there has been no bigger divide between the rich and the poor in the history of their countries or their economies. So at some stage, you’ve got to get the money in. We’re understanding of that we’ve got a mixed economy in Australia. How do we find that balance between incentivising businesses to actually increase their investment in Australia to be able to promote more jobs? And at the same time, look after the 20 per cent of people who can’t look after themselves in Australia for one reason or another.
TREASURER:
Australia has one of the – I must say – one of the best social services, social security system in the world. It’s targeted. It helps people who need help and we need to ensure that we continue to pay for that and in the Budgets that I’ve handed down, we’re both delivering on that and we’ve also put in there that break for businesses so they can invest in their businesses more because if businesses invest more, they grow more, they employ more people. Last year, 1,100 jobs were created every day, 403,100 jobs in the last 12 months. People are getting jobs, nothing better than that.
WIL ANDERSON:
We all agree that people getting jobs is a fantastic thing but these American tax cuts have led to growing inequality and we just want in know in Australia, what are the safeguards that aren’t just going to make the rich richer and leave the rest of the people behind?
TREASURER:
It’s our social security system. It’s like the health system. We don’t have the American health system. We don’t have the British one. We don’t have the American welfare system or the British one. We have the Australian one which means that we have a really good safety net. I used to be the Social Services Minister and we’ve got to protect it, we’ve got to make sure it’s focused. We’ve got to make sure that the people who are on welfare are people who really need it and people who are having a loan of it, don’t take a loan of it. And we’ve made a lot of progress on all of those things. We, right now, we have the lowest level of welfare dependency of people of working age in 25 years. So, people getting off welfare and people getting into jobs. Tick, tick.
LUKE DARCY:
You’re saying the impact of the tax cuts in America have been profound instantly. What sort of things are you seeing? What positive news is happening out of America?
TREASURER:
Companies like Walmart have boosted what their minimum wage has been, others are providing bonuses, they’re planning new factories, investing in new equipment and new technology to boost the size of the business, some are coming home. It is a range of things depending on what they’re doing. I was down in Texas and I was up in Seattle and it was pretty universal. Now, the big difference between us and the United States is that our tax cuts are all funded in the Budget and we go back into a surplus of balance projected in 2020-21. So, we’re paying for ours in our Budget, they’ve got different issues on that but I’ll leave that to President Trump to explain, I don’t have to explain his Budget, I just have to explain mine.
MCGUIRE:
Scott, you had a bit of a whack at Tony Abbott overnight. Tony’s going down the ‘ban immigration’ routine again – clearly as an economist, you want to have people coming in because it stimulates the economy. Can I put it to you though that over the years with all the goodwill involved in this over every side of politics, we still haven’t quite got the immigration right as far as the investment that’s required in infrastructure, for new people coming in – that is education, health services and helping people integrate so whether it was the Irish back in the 20s or whenever it was when the Irish came out right the way through from the people from the Middle East now to the Africans that we sort of dump them into an area – whether it’s Broadmeadows, Dandenong or out in the western suburbs of Melbourne – in your area up in New South Wales and out in the western suburbs, and we sort of leave them there and they fester and we get a crime problem. It’s happened with every wave. When do we decide, okay, we need to invest in these areas?
TREASURER:
We wrote $75 billion in the last Budget – I announced – right now, the Federal Government has given the Victorian Government $2.6 billion to spend on infrastructure that they haven’t gone on and spent. And that’s not including the East West Link which is another $3 billion – so they’re sitting on a pile of money which is there to actually get them on to build things like Monash Freeway and things like this. And it’s been months and months and months.
MCGUIRE:
I don’t think you’re going to accuse the state government of Victoria for not building it at the moment. There’s not a street in Melbourne that’s not shut down…
TREASURER:
I come from Sydney and you can’t move for the cranes, you can’t move the roads and the rails and the things that are being built and they’ve got a lot of catching up to do. They’re always asking me for money but when I send them money, they don’t spend it and get on with it. I don’t know what they’re waiting for.
ANDERSON:
We have the Federal Treasurer here, I want to ask him about the bonk ban, but we probably should do that after a break I reckon.
TREASURER:
I’ll ready myself.
DARCY:
We probably should find out how Barnaby is going as well, with the Treasurer, we’ve got some big issues to discuss with Scott Morrison.
MCGUIRE:
Great to have you on.
[BREAK]
[CABINET MINISTER QUIZ]
ANDERSON:
Here’s the thing, there was rumours a while ago that you were going to be the next PM of this country and now the Prime Minister’s out of the country, bloody Mathias Cormann is acting Prime Minister.
TREASURER:
How good is that?
ANDERSON:
Is it good?
TREASURER:
His hometown in Belgium is going off.
MCGUIRE:
Have you checked his citizenship [inaudible]? [LAUGHS]
TREASURER:
The ultimate Bradbury moment. [LAUGHS]
MCGUIRE:
Hey Scott, you mentioned before about the infrastructure in Victoria. Now, I contend that Victoria is building a bit at the moment. My point to you is as a bloke who comes across as one of the grown-ups at the table, the fact that you’ve had a bit of a go back at Tony Abbott today because he’s doing the dog-whistling on immigration, you’ve said, hang on, if we drop 80,000 people a year, that’s going to cost the Budget $4 billion to $5 billion in four years. So you’ve got the serious hat on in the situation. Can we get to a situation where a statesman like yourself who can take these things forward can work closely with an ALP government in Victoria – if that’s the case – to build Victoria? To this city, saying, “I’m giving you money.” And they’re saying, “No, you’re not giving us enough money.” Or you want to force through a Liberal policy when the ALP are the elected government here at the moment. Can we find some consensus among serious smart people like you and Tim Pallas or Daniel Andrews and build Victoria? And you’ll get the credit for it.
TREASURER:
I would hope so and look, in a lot of cases, that’s exactly what happens. There are disagreements on some things but on a lot of things… I’ve worked with Tim now for the last two and a bit years, we disagree on some things, we agree on others…
MCGUIRE:
But in your case, what do you reckon we need to do in Victoria? If you’re going to write the cheque, what do you think we need to do?
TREASURER:
I just want them to get on with it. For example, the Tulla Rail Line, we’ve put $30 million into that to get a feasibility study up on that, we’ve got the Maribyrnong development, the Defence land out there, we want to see that happen. There’s a range of projects that we’d just love to see get ahead and go ahead and less talking about it and just making it happen. I don’t want to sit there and fiddle and quibble over the architect’s drawings and all of that and get a shovel out but the state government build these things so here’s the go, get on with it.
DARCY:
There’s an $11 million rail project happening at the moment. We are removing level crossing so there’s a fair bit happening, I suppose you want us to do that, the state government wants us to do something else. Is that for political points or is it just perhaps you should just send the money down and we’ll spend it, Treasurer.
TREASURER:
We’ve said what we’d like them to spend it on and there’s nothing wrong with that. It’s federal taxpayers’ money and things like the Monash Freeway project, we really want to see that happen. We’re doing the work as I said on the Tulla link. We want to see more done on regional rail in Victoria and we’ve made that fund available for the Victorian state government to access but they’re sitting on about $2.6 billion now. We’d like to see them get on with it and it’s up to the people of Victoria who they elect but in my view, I think Matty Guy would do a better job.
ANDERSON:
Alright, enough of that stuff. Bonk ban. We’ve got to talk about the bonk ban. Has your diary cleared up now that the bonk ban’s in place?
TREASURER:
[LAUGHS]
ANDERSON:
You haven’t had to move any staffers on, Scomo?
TREASURER:
No. I sleep in the same bed I have for the last 27 years.
ANDERSON:
Is that right?
TREASURER:
That’s right.
[INAUDIBLE THEN LAUGHTER]
ANDERSON:
Don’t need to answer that. [LAUGHS] But here’s what I will say. Does an awkward question get asked at home when this sort of story comes out? I imagine because you’re a man who spends a lot of time, I imagine it’s been asked in everybody’s house around a time like this. Say a footballer has an affair on an overseas trip, I bet when you get home, the question gets asked of everybody else…
DARCY:
Tend to get thrown out a bit on the home front when one of your mates has indiscretion…
ANDERSON:
Treasurer, is that the same in Canberra?
TREASURER:
The AFL actually set a standard on this a while ago. This is just – forget the moralising on this sort of thing – it’s just not a great idea professionally in any sort of workplace where there’s an imbalance between the boss and others who work for you to have that happen, it makes it a bit dysfunctional and doesn’t make the office work as well as it would otherwise, so, far from being at some sort of morality issue, I think we’re all grown up enough to know that’s not what this is about, it’s just common sense. It’s regrettable you’ve got to write this stuff down but clearly, we do.
[LAUGHTER]
MCGUIRE:
The Dow Jones fell off 100 points again today and the last couple of weeks we’ve seen it jump up and down 1000 points in a day which is unheard of before. Percentage wise, it’s not as gruesome as it sounds but still, it’s quite significant. Is that the biggest issue we’ve got as far as our economy is concerned at the moment? That there would be a share market crash or are we well enough insulated at the moment to get through?
TREASURER:
No, that isn’t the biggest issue that is facing us and I don’t think anyone is saying that either and I don’t think you’re suggesting it as well. Yeah, there’s been a lot of volatility lately and that sort of flows on from what’s happened in the United States but what’s driving them in the United States, we don’t have those same issues here in Australia. So, that volatility will play out for a while and people hadn’t been expecting that to happen and that’s what happens in markets when things happen that people don’t expect they go a bit haywire for a while. I’ve seen it quite a number of times now since I’ve been Treasurer and the key thing is people should just stay calm and carry on.
MCGUIRE:
Scott, I’m going to give you a 30 second free hit outside of off stump, okay? We’ve got a lot of tradies, small business owners listening to our show right this second. What are you doing at the moment to give them a better life and a better chance for their business?
TREASURER:
I’m proud of this. As a Government, we increased what a small business is from $2 million to $10 million so we have given small businesses the biggest tax breaks any government ever has – that means you can do GST on a cash basis, you get access to pooled depreciation, you get access to the instant asset write-off – $20,000, you spend that on a piece of kit or some tools or whatever, you can immediately expense it and that’s for businesses all the way up to $10 million – and we’ve cut the company tax rate already in law for them from 27.5 per cent and it’s going down to 25 per cent by law. So for small businesses, they’ve never had a better friend than Malcolm Turnbull and Scomo.
[LAUGHTER]
DARCY:
We didn’t even get the Barnaby and you’ve mentioned yourself in the third person.
[LAUGHTER]
ANDERSON:
[inaudible] …drop the microphone and walk out of the studio.
[LAUGHTER]
TREASURER:
Scomo out.
MCGUIRE:
Can you come back again?
TREASURER:
Of course, I’d love to come back. I’ll come back in my Sharks jumper – you’ve got no idea what I’m talking about now.
MCGUIRE:
What are you talking about? You’re the Treasurer, we know you’re in a Sharks jumper [LAUGHTER]. I just got a text message from the Premier Daniel Andrews saying…
ANDERSON:
What is he saying?
MCGUIRE:
He says, “I’d love to take Scott for a trip around Victoria and have a look at all the infrastructure and come together and get the funds to make it all happen.”
TREASURER:
You’ve got the funds, Dan. Spend it.
DARCY:
Would you go for a drive with him, mate? Go for a drive around and have a look and see if he can line up all the projects to get them done.
TREASURER:
I can think of nothing better than spending quality time with Daniel Andrews.
ANDERSON:
Let’s make it happen. Thank you to the Treasurer.