KIERAN GILBERT:
Thanks for your time, I alluded to that review that you've commissioned by the competition watchdog. What are you hoping to achieve from that? Do you feel that electricity retailers are duding consumers?
TREASURER:
I think there are some serious questions that are being raised by some recent reports, and work that has been done more broadly. What this is about, this action is not in isolation. This comes on the back of the ACCC inquiry into the east coast gas supply. It comes on the back of the Prime Minister getting all the gas suppliers in a room and making sure that we have the gas we need to power our gas-fired power stations; where we need them, and when they need to switch on. It comes on top of what we've been doing in competition and regulation reform in the gas industry. There's the Snowy Hydro 2.0, we're looking at the infrastructure, we're looking at the transmission and we're looking at the retail market, in particular in this initiative, with the ACCC doing the work there to ensure that customers are getting the best deal, and there's the appropriate pressure downwards on prices.
GILBERT:
We've seen privatisations over recent years, why is competition not working in this sector? That's the main question, isn't it?
TREASURER:
Well, I'm not jumping to that conclusion. What we are doing though is observing some aberrant results that are coming out. There was the recent report by Grattan, which showed the real dislocation between retail prices and wholesale prices, and suggested profit margins were, 13, 14 per cent and higher, and so they themselves said, 'well, that's based on our data but it's important there is definitive data…'
GILBERT:
So gouging essentially?
TREASURER:
The ACCC will do their work. They will look at what is a very complex industry. There's a lot of integration in these sectors and you've got to be able to pull that apart, look at the contracts, look at what's making up the costs, and come to some clear judgements. Now, the ACCC has the powers to do that, that's what they are there for. They did great work on the gas-fired industry on the east coast, which has led to actions by the Government, and this will provide the basis for actions from the Government as well.
GILBERT:
The Ipsos poll, not a lot of good reading for the Government, it does seem a bit odd that the Greens were polling 16 per cent, that's quite a high number, but overall, the one bright spot for you is that support for the company tax cuts 44 per cent supporting; 39 per cent opposed.
TREASURER:
Well, that's a message for those in the Labor Party who have acted as complete hypocrites on this issue. They said they supported reducing company taxes, because they know it increases investment, they know it supports higher wages, they know it supports jobs, but for crass political reasons, Bill Shorten would rather undermine the economy for his own political benefit, just like he's trying to crash the Budget, to crash the AAA rating for his own political benefit. That's what we know about Bill Shorten – it's all about Bill.
GILBERT:
Does the company tax cut remain your vision, your plan, even beyond this week where you're unlikely to get the full package through?
TREASURER:
Well, the policy is incredibly important. The policy is designed to attract investment in a world environment where other countries are dropping their company taxes; that's why I put it in the Budget, that's why I look it to an election, and that's why I put it in legislation.
GILBERT:
So, it will remain?
TREASURER:
That is why I want them to vote for it this week. I am not going to take the pressure off the Labor Party for them to be able to walk into that Chamber this week without having to fully face the consequences of what this could mean. What they have to do is do what they have always said they believe in and they are putting jobs and wages at risk by not supporting the Enterprise Tax Plan. They must vote for it.
GILBERT:
Will you get the revised plan through? Hanson is suggesting that she might hold the Government to ransom over another arrangement with a sugar company and cane growers in Queensland?
TREASURER:
I don't think that is a very helpful approach to these issues. I don't think the public expect their politicians to go on strike. I don't think that is the mature way to deal with these things. They may be unaware of the enormous work that has already gone on on this issue. Myself, working together with George Christensen and Barnaby and the Prime Minister, in particular, have already got to a point of an agreement between Queensland Sugar Limited and Wilmar, the cane crusher up there in far north Queensland. We have actually doubled the term of that agreement from six years to 12 years and there is a draft agreement I am told will be on the desk today. So, they said when they got to the agreement a few weeks ago that it would take four to six weeks to complete. We are still in that process and so the opportunity to brief any members of Parliament about that process is there.
GILBERT:
And finally I want to ask you about Tony Shepherd, the respected businessman who carried out the Audit Commission report into the Budget, basically, when the Coalition won office. He has had another iteration of that report through the Menzies Research Institute, basically suggesting that the amount that we rely on company and private personal tax is too great. The implication is that we should be looking at a consumption tax increase. Is that a possibility down the track?
TREASURER:
I don't believe it is. We dealt with that issue a year ago. We did the work on the changes that would be needed to make that happen and half of the increase in tax gets hoovered up in extra compensation and what it does is it just means higher welfare payments at the end of the day with only half of what you have been able to raise actually reducing taxes and other initiatives and the growth dividend from that was not as strong as you would have hoped for it to have been. So, we had a good look at that and we decided not to proceed with it. They were the economic and fiscal reasons for doing so.
GILBERT:
So, more broadly how do you respond to Shepherd then and this report?
TREASURER:
A Budget that focuses, like the last one did, completely on growing the economy to drive investment, to support jobs and to support higher wages.
GILBERT:
Mr Morrison, appreciate your time. Thank you.
TREASURER:
Thanks a lot, Kieran.