GARETH PARKER:
Scott Morrison is the Treasurer, Scott, good morning.
TREASURER:
G'day Gareth.
PARKER:
A victory lap?
TREASURER:
A victory for all Australians who are going to work today, those who are already on site, those who are on the bus or the car on the way, or the train, because they are facing an economy where they will pay less tax.
PARKER:
What about you and the Prime minister though?
TREASURER:
Well, it is not about us it is about them. That is why we are focussed so hard on it. What I am pleased to see is the Budget I handed down in May which this was a key measure in that Budget, it has been passed through the Senate. We are getting things done as a Government, we are getting on with our plan for a stronger economy and this is a key part of that plan.
PARKER:
Ok, what does that mean to people? What will it really mean to them because the small tax cut is welcome I am sure for middle income earners at the moment. But the rest of the plan is so far in the distance. We could have two elections, maybe three elections before the whole thing kicks in.
TREASURER:
Well, let's start with what it means straight away. There are 200,000 Australians who will not go onto the 37 cent tax rate on the 1 July because of the changes we are making – number one. If you are a double income family on average incomes you will be $1,000 and more better off as a result of the changes that were passed by the Parliament yesterday. Now, look I agree I am not saying that is an enormous amount of money but it is real, it is half a year's electricity bill. It is tyres on the car and more. It is a fridge. It is all these sorts of things, replacing those big household items. So, this is important relief for families. Then we deal with bracket creep and we make the tax system simpler and you say it's into the future. Well, that is true but how many times have people rang your program and said, "gee, I wish those politicians were focussed on the longer term and just not on the next couple of years, for the next election." And that is what we have done, it is a longer term plan because it is part of a longer term plan for a stronger economy which is what the whole show is about.
PARKER:
Is it really tax reform or is it just stopping bracket creep from eating away people's pay rises that come about through the ordinary course of inflation?
TREASURER:
That's what tax reform is and when you deal with bracket creep, when you deal with a simpler tax system that abolishes an entire tax rate. We are getting rid of the 37 cent tax rate – no one has done that in memory, certainly in the last 20 years. These are the biggest changes to personal taxes we have seen since the GST.
PARKER:
Ok, Budget repair, is that not a priority anymore?
TREASURER:
It totally is and I set that out in the Budget, the Budget will come back into balance, into surplus a year earlier than we previously projected. So, that is in 2019-20. The debt on net debt, we turned the corner on that this year and we pay down debt by $30 billion over the next four years and more than $230 billion over the next ten years with our plans. So, the Budget AAA credit rated, that is what was just affirmed by Moody's about ten days ago. We continue to manage the finances as well, we continue to support a stronger economy with our policies.
PARKER:
You said it's not about you and the Prime Minister but clearly this is a political win. I don't think there is any quibbling with that. Are we going to see an earlier election than next year as a result if this plays well in the community?
TREASURER:
No, the Prime Minister I think has been pretty clear about this. He calls it not me or anyone else in the Parliament but he has been very consistent on that point – the election is next year.
PARKER:
Mathias Cormann, West Australian Senator, people think he sounds like Arnold Schwarzenegger, but he is not The Terminator – he is The Negotiator, isn't he?
TREASURER:
He is. We have a great team and Mathias has done an extraordinary job. I work very closely with Mathias and also the Prime Minister obviously. This has been a great team effort. We all play our role in doing the job for the Australian people which is to deliver a stronger economy, which guarantees the essential services Australians rely on and delivering this tax relief is a key part of that plan and Mathias has shown great skills in being able to [inaudible] with the support of the other members of the team. The Crossbench have the need to do this and what it shows Gareth is that we are getting things done. People said after the last election, "oh they will never get anything done. the Senate is unworkable." Mathias and the whole team have demonstrated that is not the case; $41 billion in Budget improvements and savings passed by the Parliament since the last election. Now, this personal tax plan passed through the Parliament. People said that couldn't happen. The Labor Party tried to make it not happen. They are for higher taxes, we are for lower taxes.
PARKER:
Are you going to go back and have the company tax fight again?
TREASURER:
Of course. That is another important part of our longer term economic plan and for businesses to be competitive they need competitive tax rates. People's jobs depend on this, the investment in companies to see them grow depends on this. Particularly in the West, in the West we are starting to see things having turned the corner and start to head in the right direction. I know we have a way to go but we are not going to get the West back to where we need it to be if we hit them with higher taxes. That is what Bill Shorten is proposing. It is not just higher taxes on personal income, basically they are going to the next election saying vote Labor and there will be $70 billion in higher personal income tax at the next election but there are higher taxes on housing. There's a $5 billion a year tax on retirees, there's higher taxes on small and medium sized businesses, family businesses, superannuation contributions. It's a pretty big list. It's over $200 billion now. How's the West's businesses and jobs going to improve if they just get hit with all these higher taxes?
PARKER:
I presume that you're going to hammer that message everyday between now and the next election, you will just point to – unless the Labor Party change course, of course. I presume you'll just point to the fact that they oppose this tax plan and say this is what you've got coming.
TREASURER:
That's exactly what they did. So I'm just telling the truth. But there's a clear choice. There's a very clear choice here. Labor are for putting taxes on. We're for taking taxes off and just on that, everyone will pay more under Labor – whether it's for private health insurance or it's their electricity bills or it's their taxes – I mean, under Labor, you pay more. That's why you can't afford Labor. The Government's finances can't afford Labor. We know what they do to that every time we get in but Australians can't afford them either.
PARKER:
So you've got the income tax cuts through, you're still working on company tax, you know what I'm going to ask you about next, don't you?
TREASURER:
Yes, sure, and I look forward to your question.
PARKER:
The Productivity Commission report, you've got it, I think you're the only one who's seen it. What's in it?
TREASURER:
We'll be releasing it soon…
PARKER:
Soon?
TREASURER:
Well, soon. I said in June that we've got one more week to go, the Government is also looking…
PARKER:
So next week?
TREASURER:
…at its response. I'll make more announcements about this next week but what I'm saying is, Gareth, is I remain – and the Government remains – as committed as ever to fixing the problem and we've been patient about that and I want to thank your listeners and Western Australians for their patience as we've sought about doing this. We've been working hard on a real long-term plan to fix this. I know Western Australians, they don't want cash handouts or anything like that, that's not what this is about. This is about a fairer system that recognises what's happened in the past and making sure, how that completely wrecked and stuffed up the GST distributions, that doesn't happen again and I know West Australians, it's just not about them, they don't want it to happen to another state either, if something like that were to happen. You can have a land boom in New South Wales and that could have the same impact on the GST distribution as the mining boom did have on Western Australia so I know that Western Australians are just looking for what's right and we're working very hard on that but not some sort of short-term thing. I know we've been doing that for a number of years with the promise of putting in something more permanent and we're working very hard on that.
PARKER:
So next week it's going to be out and you're genuine…
TREASURER:
What I'm saying is I'll make more announcements about this next week, Gareth.
PARKER:
Okay, but you're genuine about the fact that it's going to be a real reform of the system, not just another series of cash handouts.
TREASURER:
Exactly. That doesn't fix the problem. I know what the problem is and the PC have done a very good job in really defining what that problem is and they've given some good options on the way forward and we have to consider carefully those options and look, we're working very hard on it because we genuinely do get it and I want to commend all of my Western Australian colleagues – Julie Bishop, Mathias Cormann, Christian Porter, Michael Keenan, Michaelia Cash – particularly who sit around the Cabinet table but going out to Ken and Benny Morton and the whole team there, they've been very engaged in this issue and very patient.
PARKER:
We have our antenna up in this state because last week, Will Hodgman, when he was handing down his state Budget, the Premier of Tasmania, he said, "Well, I've spoken to the Prime Minister, I'm assured that it will be business as usual for us." And we sort of say, "Well, hang on, how can this be?" If there's going to be changes, there's going to be winners and losers and if the Tasmanians are assured that it's business as usual, we get a little bit nervous over here in the West.
TREASURER:
Once you see where we plan to proceed, I think that will change in terms of what you just said in terms of anxiety because we know we need to fix the problem. We also need to make sure that in other parts of the country that the essential services they rely on from their state governments are also not put at risk…
PARKER:
So will they get assured…
TREASURER:
We'll be making sure that right across the country, we do this effectively, with a long-term plan that deals with the problem and make sure we can take the whole country with us – which I know is what West Australians have always wanted. They've wanted us to deal with this as a national problem, not as some sort of parochial thing in Western Australia. Western Australians, I know – I mean, I come from a part of Sydney which is very parochial called the Shire and we love where we're from and if there was ever an eastern port to Western Australia, it would be in the Sutherland Shire I suspect – but we're also greatly passionate about our country as I know Western Australians are and so they will want what's right and that's what we're working to deliver.
PARKER:
Okay. We'll talk to you next week.
TREASURER:
Good on you. Thanks, Gareth.
PARKER:
Thanks, Scott Morrison, Federal Treasurer.