KARL STEFANOVIC:
Scott Morrison joins us now. Good morning Treasurer.
TREASURER:
G'Day Karl.
STEFANOVIC:
You may say this Budget's a winner but will it save the Prime Minister?
TREASURER:
Well, what it's about is saving taxpayer's money. It's about ensuring that what they earn, what they work hard to earn they get to keep more of. A stronger economy is what is able to produce all the things we're seeing in the Budget and that's people working hard and they need to share in those rewards of their own efforts and that's what we're doing in delivering this tax relief. As you said, ten million Australians and that's going to make a big difference to families on low to middle incomes.
STEFANOVIC:
Will it save your bacon?
TREASURER:
Well, what it will save people is their quarterly electricity bill if they're on a middle income or low income. For a two income family on middle incomes it's more than a thousand dollars a year and it comes in one lump sum I should stress. So, the school books and the uniforms, it's about half a dozen tanks of petrol. That's what it means for a family under a lot of household cost pressures. We think that's important. They're working hard; they shouldn't have to pay more tax because a government wants to spend more money…
STEFANOVIC:
Gee that's two questions I've asked and two you haven't answered... You're on message this morning.
TREASURER:
Well, I'm not interested in that Karl. I'm interested in actually delivering tax relief for Australians who are working hard. It's about them, it's not about me, it's not about the Prime Minister, it's not about you. It's actually about Australians who are working hard and they should get the relief from their hard earned work.
STEFANOVIC:
Isn't tax cuts before revenue is realised a dangerous practice?
TREASURER:
Well, that's not what we're doing. The tax revenue that we've seen particularly increase over the next few years that is all going to the bottom line. That's what's producing the better result. In the years that we actually start having this tax relief kicking in, that's the years that we're back into surplus. So, that's what the numbers say Karl and that's the way we've designed it.
STEFANOVIC:
Didn't you also promise, and maybe it's even in this Budget reprinted somewhere, a commitment that any boost to the Budget due to better economic circumstances will be banked as an improvement to the Budget bottom line rather than given away as tax cuts or a package for baby boomers or anything else? What happened to that promise?
TREASURER:
Karl, I've got to stop you there. Tax relief is not a giveaway. It's their money. They give it to us. And what we're saying by having a tax speed limit, we've got a tax speed limit also in the Budget and it says that taxes can't rise as a share of the economy any higher than 23.9 per cent. That means as the economy improves, the Government is not going to come and take more money from you in higher taxes. Now, that's the guarantee we have in this Budget that we won't allow taxes to get out of control. Debt is now turned the corner. It's going to be paid down $230 billion and more over the next ten years – $30 billion over the next four years. So, what we've done is we've ensured that there is a speed limit on how much tax the Government takes from families and people right across the country. So that sits there in the rules and over the next couple of years when we're still in deficit, all of that additional tax revenue is going to that bottom line to ensure that we get back into that balance as soon as possible.
STEFANOVIC:
I guess the issue is, the concern is, that you haven't saved anything for a rainy day. What happens if those global economic circumstances change? If our economic circumstances change as a result of that and there is no certainty. It takes away, doesn't it?
TREASURER:
The great protection to the Australian people is a stronger economy and you do not get a stronger economy by taxing people more. People need to know that when they go out there to start businesses, work hard, do the extra hours, get the extra shift, that they're going to be able to keep what they've earned and not have it taken away from them in higher taxes. I mean under this Budget what we see is the Budget return to balance a year earlier and those surpluses increase over both the forward estimates and over the next ten years to more than one per cent of GDP. That's what we've been working to achieve and paying down debt. The debt will fall by $230 billion and more over the next ten years because debt has now peaked and we're now paying down debt. We haven't been borrowing to pay for every day expenditure now all year.
STEFANOVIC:
So why aren't you using more of that cash windfall to get debt under control, more under control? Why don't you just pay it off?
TREASURER:
Well we're reducing it, well because you don't allow taxes to rise higher in the economy than they need to. Now, I don't think Australians should be paying more tax than they should have to. We're going to get debt down by $230 billion, Karl – $230 billion. It will fall to less than four per cent of the economy over the next ten years because of the good practices we've put in place to keep expenditure under control, but we're also keeping taxes under control. Now, every time you hear Labor say that they have a budget repair plan, what it means is higher taxes for the entire economy and everyone always ends up paying for higher taxes in a weaker economy and less jobs.
STEFANOVIC:
So, you're still pressing ahead with your company tax cut plan even though it won't get through the Senate? Can we afford that as well?
TREASURER:
Well, you make your assessments on the Senate and you're entitled to. We're continuing to press with that measure because we know that if businesses don't have to pay the government more money in tax, they can invest in their businesses, grow their businesses, which is good for employees, good for jobs. We're sticking to it because it's good for a stronger economy. We've increased the number of in home aged care places here in this Budget by 20,000 this year. 14,000 in this Budget alone. Now, what pays for that is a stronger economy, and you don't get a stronger economy by taxing it within an inch of its life and that's why we've put a speed limit on taxes and we're getting our expenditure as a share of the economy down to below the long run average in this Budget.
STEFANOVIC:
Former Treasurer Peter Costello reckons the Australian public aren't going to cop it especially in light of all the atrocious behaviour by the banks. He's right isn't he?
TREASURER:
Sorry I missed the question.
STEFANOVIC:
The tax on companies, being reduced?
TREASURER:
Can you repeat it? Sorry Karl.
STEFANOVIC:
The company tax being reduced.
TREASURER:
Well over the course of the period in which we've got our tax plan in there for businesses, the bank levy will raise $16 billion – $16 billion by the time that those tax reductions for big businesses come into place. So, it's going to raise revenue costs of about $35 billion over the next ten years. $16 billion is coming back from the levy we've put on the banks, and over ten years it's almost $20 billion. So, the bank levy does what you're suggesting it should in ensuring that the banks won't be seeing the full benefit of that. Their taxes will come down at a gross level like everyone else, but they'll be paying more back in because of the bank levy that we legislated from last year's Budget.
STEFANOVIC:
When's the election?
TREASURER:
Well, you'd have to ask the PM. He's the one who decides that. It's due about this time next year.
STEFANOVIC:
Ok, we'll ask him, he's coming up on the show at about eight o'clock. How did you celebrate last night? I note with interest your daughter was there, did she enjoy it or did she fall asleep?
TREASURER:
Well no she stayed awake for the whole speech, as both of them always do, and it was lovely to see my family again last night. As you'd know Budgets take a long time to prepare and I've been away from home for a while and it was lovely to see them with Jen and you know you miss them terribly. We all have families when we come to this place and it was great to see them.
STEFANOVIC:
Plenty are saying that you'd make a good Prime Minister.
TREASURER:
Well, my job is to ensure that we have a stronger economy Karl. I've been thinking about this a lot lately. People who are looking out at the next ten years, they need a stronger economy for the choices they want for their families, and the stronger economy is what's going to do it, and you don't do that with higher taxes.
STEFANOVIC:
Scott Morrison, appreciate your time this morning on a busy day for you. Thank you
TREASURER:
Thanks a lot Karl, great to be with you.