GARY ADSHEAD:
Good morning to you, Treasurer.
TREASURER:
G’day Gary. Good to be here in Perth. It’s a gorgeous day.
ADSHEAD:
It is. It is very pleasant. It’s a bit chilly for Perth but that’s alright we can deal with that. Just straight off, how close are we to our GST floor that the Premier has been pushing for, for quite a while. Do you honestly think we have got any chance of that before March 11 – our state election – to sort out GST?
TREASURER:
Well, that is not the proposal and the Prime Minister never indicated that. What we are planning to do, what we have said is necessary to do is once the system rebalances itself, as you go out over the next couple of years, Western Australia’s share of the GST will actually increase over the next few years. That is what it is projected to do. What we are trying to do is future-proof the system. So, no state – including Western Australia – ever has to go through what we believe has been a pretty egregious outcome. And it was never an outcome that I think those who originally put this together ever conceded it could have that impact. That is why as a Government we put in an extra billion dollars. That is 20 per cent more than WA received over two years to top that up because we recognised that was a real dud result.
ADSHEAD:
How easy is it to fix though?
TREASURER:
Well, it is not easy to address but what you have to do is you have to be patient; you have got to wait until the system rebalances. So, everyone is back at a normal level and then you talk about a reasonable floor that you could put in underneath that point. So you are not changing what anybody is currently getting at that time because Western Australia has increased and I think that is very, very necessary and then you can deal with the other issues at that time.
ADSHEAD:
So, the other states whingeing about it, if it is just putting in a floor then it is to their benefit as well, isn’t it?
TREASURER:
Well, I believe so. I come from one of the big eastern states that has always been subsidising across this model. It could happen to Queensland in the future, they could find themselves where Western Australia arguably possibly could. I would hope no state would ever get to the ridiculous level that WA ever got to again. That is the point. We have got to future-proof the system and I think Colin and Julie Bishop and Mathias Cormann and the whole team and Christian Porter and Michaelia Cash, Dean Smith, you know I could read the whole list but they have all argued very strongly on this point. That is why as I said we put a billion in over the last, both this year and last year, to recognise. I know it doesn’t fix it all but I think it does say that the Government are listening very hard and have acted.
ADSHEAD:
I wonder if, from over in Canberra, you have been listening to what has been put up as a quicker fix to our Budget issues here in Western Australia? That is by the state governments partners in government – the Nationals. They have got a new, well an old leader re-elected, Brendon Grylls, who has come up with this idea of a $5 per tonne hit on two of the big miners; Rio Tinto and BHP. What do you think about that from Canberra?
TREASURER:
No, I am not flash on it, mate.
ADSHEAD:
Anything else?
TREASURER:
No, I think that is blunt enough. I mean increasing taxes is not something that I think helps the economy particularly when the economy is working.
ADSHEAD:
Ok, well how can you have partners in government then that are completely at odds on how…
TREASURER:
Well, I will leave those issues to Western Australia. I don’t really want to get into Western Australian state politics on this issue other than to say that if you ask me do I think actually increasing taxes on a sector which has gone through a pretty difficult time of late, and it will improve and the production volumes are of course doing well but you know if the prices we get etcetera, you know that all needs to be thrown into the mix. You know taxing more is not the answer. What is important is you have got to make sure the people who have to pay tax, pay tax. That is why we have cracked down on multinational tax avoidance. That is why we are changing parts of the tax system nationally to recalibrate it where we think it is a bit out of balance. That is one of the key reasons why we are making some of these changes to superannuation to ensure that that system is sustainable into the future. But increasing taxes just to pump up revenue, which is what Bill Shorten’s plan is today by the way. That is his plan. He hasn’t got savings. He has just got a lot more taxes and he calls them savings. This is what I think a saving is…
ADSHEAD:
But you are on board with the tobacco excise.
TREASURER:
…you don’t spend as much you were going to. You actually do something which means you don’t spend as much. What Bill Shorten says is, no, I am over this whole idea that you have to somehow get your spending under control. It is just easier to whack up taxes. And I don’t agree with him.
ADSHEAD:
But you are here to talk about a possible, what is being seen as a possible backflip on some of your savings measures and that is the super tax concessions because the backbenchers were getting it from their electorates. You could actually forgo some of the savings that you were promising as well?
TREASURER:
No, that is not my plan and it is not the Government’s plan to compromise the Budget in how we deal with this issue. It is our plan though to continue to work through with colleagues to see how things can be improved or better done but not at the cost of the Budget.
ADSHEAD:
So, in terms of the $500,000 it could be $750,000 or?
TREASURER:
Well, others are speculating on that. I am just talking directly to my colleagues about that and they are making suggestions, we are making suggestions but the bottom line is we know what this has to do both for the integrity and for sustainability of the superannuation system and we also know what we need to do in terms of the Budget. Both of those objectives will be met.
ADSHEAD:
Alright, just on the Budget, is it a waste of time and money then to go to $160 million plebiscite plus maybe $30 million on top of that to fund a yes and no campaign? Is this money that we can afford at the moment on an issue that could be resolved by the people we elect?
TREASURER:
Well, we took to the election and it was a very popular policy ever since it has been announced. It has the majority support in the community that the people that should make this decision are the Australian people. That is what we are giving them the opportunity to do. Now, democracy is never cheap on things like this but this is a big change, particularly for many people – both pro and those who oppose it. How this decision is made and if this decision is made then I think all Australians will have a greater sense of comfort in the fact that they made it and that that decision was not forced on them by others. Now, Parliamentarians are elected to go and vote on a whole range of issues. I understand that but on something like this I have made the case, as has others, that we should let the Australian people make this big decision and I think on the other side of whether that decision is made – yes or no – I think there will be greater acceptance of the outcome.
ADSHEAD:
Do you think our Premier should be worried that the plebiscite might now go back to sort of February next year at the same time that they’re campaigning hard for the state election? Do you think that the two will cross over? Do you share his concerns abut there being…
TREASURER:
Well that’s a matter for the Special Minister of State, Scott Ryan, and they have to obviously prepare to conduct this plebiscite, it’s not a straight forward thing as you say, there are contractors that have to be recruited, people working casual on the day, training has to be put in place, it’s not a small thing to run a full attendance plebiscite around the country. You’ve got to get that right and there’s only about six or so weeks of parliament before the end of the year and bills have to be passed to enable it as well. So, there’s a lot of work to do to make it happen, we said we’d do it and we’re honouring that commitment.
ADSHEAD:
Alright, do you mind if we just take a couple of calls, Treasurer, if you wouldn’t mind? June is on the line. He is just popping the headphones on. G’day June.
CALLER:
Yeah, hi Garry, good morning Mr Morrison.
TREASURER:
Hi June.
CALLER:
I will ask my question and then hang up and listen. Right, how can you Mr Morrison and Mr Turnbull, justify cutting the age pension where some will lose all of it, when some civil servants are getting as much as $40,000 a year pay rise – that was on the radio this morning – and with the retired PM with all of the [inaudible] pensions they get and the perks each year. I will hang up and listen for your reply. Thank you.
TREASURER:
Thank you June. Well, what I believe you are referring to is a decision in last year’s Budget, and what we did in last year’s Budget is in the same way we are making changes on superannuation we have got an ageing population. There will be fewer and fewer people working to support a growing and growing retired population. We looked at the pension system last year and we are looking at the superannuation system now. On the pension system we have people under the current assets test that could have a million bucks and the family home and get access to a welfare payment in the form of the pension. What we did is we recalibrated the level of assets that you could have in order to have access to a pension payment. What we also did though was for those who have very low levels of assets – so not people who have $800,000, $900,000, a million bucks, $1.1 million – but people who have low assets at around $200,000 or $250,000 we will put hundreds of thousands more people on a higher pension at the lower level. So, these are the difficult decisions that governments have to make, Gary. None of us welcome them but when you inherit the deficit that we inherited. When the changes were made to extend the part pension to more Australians that cost the Budget a billion a year and when it was done there was $20 billion in surplus and $40 billion in the bank. Now, we don’t have that anymore and so these are difficult changes and we are making them across the board.
ADSHEAD:
Graham, hello Graham.
CALLER:
Good morning Treasurer, good morning Gary. Treasurer, can you just help us understand why gambling revenues are not included in the equalisation formula of the GST when mining royalties are? This is hurting Western Australia quite substantially in not having many poker machine revenues, whereas a state like New South Wales might get, say, $1.5 billion a year in taxes from that source and can this change in a future adjustment to the formula?
TREASURER:
Well, going forward, as you heard the Prime Minister say when he was here the other day we’ll obviously look at the ability to put a floor in under this which I think will deal with a lot of the risks there is, but particularly for resource based states like Western Australia but arguably other places like Queensland. Whether there are other matters that can be looked at in the process of that well I think that will come up at the time. The [inaudible] formula for GST distribution has been around for a while. I know it is a constant frustration and any change to it is very difficult. So, look, these are issues that are raised. I know when I come to the West…
ADSHEAD:
But do you understand how we feel about that?
TREASURER:
Of course I do.
ADSHEAD:
Because we have sort of held the line on the pokies.
TREASURER:
Yeah, and good for WA for doing that and that is why both as Treasurer and previously as a member of the ERC we topped up WA’s GST distribution by a billion in infrastructure projects and funding for that very purpose. That’s why, if you ask me if we recognise it of course we do and there is a billion dollars’ worth of proof.
ADSHEAD:
Mark’s there, hello Mark.
CALLER:
Yeah, how are you, mate? What you don’t understand, Scott, mate, is you may need more with the tax department, if you earn over $100,000 and you are a certain age then you have got to pay the $3,000 rebate for not being in private health. Mate, you know, in ’07 I had, in 2007, I had 11 heart attacks and triple by-pass surgeries. You know I can’t even get insurance, mate? And yet you are screwing me for $3,000.
TREASURER:
Well, it is very difficult to deal with a specific case like this but if you want to talk to the producer I am happy to get the details of your particular case and we will follow that up for you.
ADSHEAD:
Ok, hold on the line, Mark, we will try and do that. Robert, g’day Robert.
CALLER:
I am going to ask my question and then I’m going to hang up. Mr Treasurer, we had an election just over two months ago and you are asking that people should vote on the same sex marriage stuff shortly that is going to cost $160 million. Why can’t you have put a stamp on one of the election papers to say “do you agree to same sex marriage?” And after the sentence say yes or no. Why didn’t you do it at the election and save us all that money?
TREASURER:
Well, we did what we said we would do and that is we had an election. We said if we were elected then we would let the people decide this issue. The Labor Party had a different view. They said they wanted politicians to make that decision on behalf of all Australians. Our position prevailed at that election and we are now going to go and do it. We are very transparent about this. We didn’t hide anything. We said that is the two options. They are the two policies at the election. The election is over as you rightly said, a couple of months ago. So we are just going to get on with it.
ADSHEAD:
Ok, but on that it is going to be later than it was planned.
TREASURER:
No, that is actually not true, Gary.
ADSHEAD:
Well, there was a commitment towards…
TREASURER:
No, there wasn’t Gary. The Prime Minister has been verballed on this. He said he would do it as quickly as possible.
ADSHEAD:
I thought he said before December.
TREASURER:
His preference was to try and get it done this year but if that wasn’t possible than that wasn’t possible. We won the election. We are in now. We are going through the practical issues. It will still be held exactly as he said. As soon as possible and we hope that to be early next year.
ADSHEAD:
Alright, and do you share the view of Mathias Cormann about Bill Shorten on Budget repair. I have got to play it to you.
TREASURER:
The jelly on the plate?
ADSHEAD:
We have got to play that.
MINISTER FOR FINANCE: Like jelly on that plate. The wibble wobble, wibble wobble, jelly on the plate. First opposing, then supporting, then not knowing what to do.
ADSHEAD:
There you go.
TREASURER:
Well, Mathias is bang on as usual.
ADSHEAD:
It’s just that he says it better than you.
TREASURER:
He does. Look, his accent is ten times better than mine and his sense of humour, I suspect, is a lot better as well. Mathias is a great mate but the point he makes is the important one. Bill Shorten will get up there today at the Press Club in Canberra and he will say, “oh I have got all of these other savings.” They are not savings. They are higher taxes.
ADSHEAD:
You agree on the excise on tobacco, don’t you?
TREASURER:
Yeah, I know and he will get his opportunity to vote for that one. Yep, he will get his opportunity to vote for that. He will get his opportunity to vote for the other revenue measures like the diverted profit tax, cracking down on multinationals. He can vote for that one too. He will get his opportunity to support the changes that we are making in superannuation to make that fairer.
ADSHEAD:
Is this the Omnibus?
TREASURER:
No, no, the Omnibus Bill is simply this – the expenditure savings, so things that you pay out as opposed to taxes you raise, they had over $6 billion of those savings on expenditure in what they put to the Australian people and we are just simply identified that and said now vote for it. Now, that is just the starting point. I would hope and expect that the Opposition would actually engage with us on far more than that. I mean we have $40 billion just over the Forward Estimates of measures both on revenue and on expenditure savings that will improve the Budget – $40 billion. So, $6.5 is just the first step and he should step-up otherwise I think Mathias is bang on. Otherwise it is wibble wobble, wibble wobble.
ADSHEAD:
Well said, and are you looking forward to the new Senate and dealing with Pauline and Derryn and so on and so forth – the colourful Senate?
TREASURER:
Look, I think, I have already had, as you would expect a number of meetings with people as has my office and I think we are getting across the issues. I think we have got to give people as they come into the Senate time to get across a lot of these Bills and these measures. I mean Nick Xenophon has been around so he has known some of them but he has got two new Senators there and a new member of the House as well. So, we have taken them through that. You have got others like Bob Day and David Leyonhjelm who have been around for a while so they already know what all these measures are. They were dealing with them in the last Parliament. So, we will work with them all. I think there are arguably fewer moving parts in this Senate and I would hope there is more sympathy in this Senate for fixing the problem of the Budget. People, I think, sometimes dismiss it, “oh yeah, it is a deficit, we are used to deficits and all the rest of it.” We can’t be casual about the deficit and we can’t be casual about debt increasing. Debt interest payments on debt today are one of the major line items in the Budget. That is going to continue to grow and it will continue to grow so long as the Opposition and Bill Shorten continues to try and play Budget sabotage like he did for the last three years. I think people are over that. They just want the Parliament they elected to do the job, fix the Budget and get on with it.
ADSHEAD:
Alright Federal Treasurer we will let you get on with it. I do appreciate you joining us today.
TREASURER:
Thanks a lot.