LEIGH SALES:
Scott Morrison, thanks for coming in.
TREASURER:
Thanks Leigh.
SALES:
What is responsible for making this budget deficit smaller than what was forecast in the May Budget?
TREASURER:
Well, since the May Budget we've had an improvement in revenues since then and we've had some changes to how much has been spent which has gone down a bit and that has meant that the budget deficit position is now below 2 per cent of our economy. That's the first time we have seen that in some time. We have always had a very conservative approach to our budgeting and our forecasting, and we've been able to come in under those estimates and that's good for the budget.
SALES:
Well, Labor says that there are factors which are sheer luck in this, which includes say a slower than anticipated take-up of the NDIS.
TREASURER:
Well, there has been a slower than anticipated uptake of the NDIS but there has also been an improvement to government revenues and that has come off in improved company profits, and improved company tax receipts. I mean your parameters are variable and what it shows is, that for the last two years and more than that, we've been able to keep our expenditure and our estimates of that, pretty much on line. There hasn't been big variations, in fact, the variations have only been down and our estimates of revenue over the last two years, they have also been slightly down on where they were a few years ago. But that's why we have able to keep our projections on track and that has given ratings agencies a lot of confidence in the numbers that we have been putting out there.
SALES:
Well, you say you are keeping your projections on track but in this Government's first budget in 2014-15, you forecast that by this year the deficit would be $10.6 billion. Now that we have arrived here, the deficit is actually $33.2 billion. Why is there such a big gap between what you forecast you would achieve and what you've actually achieved?
TREASURER:
Revenue, that's the key issue. Over the last two years, when I did my first MYEFO, we made some big changes to a number of the forecasts and we changed those revenue forecasts and they haven't changed much over the last couple of years. They've been slightly down on what we first said but also we've got expenditure down so we've cut our cloth to meet what the need was. But you're right, if you go back, if you go back to the 2013-14 Budget, in fact, the Labor Party was projecting $40 billion more revenue than occurred in 16-17...
SALES:
You're the Government...
TREASURER:
I understand that, Leigh, but the point that Labor is making which is reflected in, because they raised this point today, they're saying "Well, why has that gone up by that much?" Well, the reason it has is because the revenue fell by about $18 billion.
SALES:
But nonetheless, for a government that was elected campaigning that it would fix Labor's debt and deficit disaster, to use your words, it is quite the hole in your credibility, isn't it, that you haven't been able to, not only have you not been able to eliminate the deficit, you haven't even met the projections you set up for yourself in your first budget.
TREASURER:
Well, the deficit is less than 2 per cent of GDP. Our expenditure as a share of the economy is down to 25 per cent now. Now when I became Treasurer, just two years ago, it was at 25.8 and so we have been keeping expenditure under control. Now a business knows this. You can't control always what you earn but you can control what you spend.
SALES:
25 per cent is still historically pretty high.
TREASURER:
No, it is long-run average actually, 24.9 per cent is the long run average so we've been able to bring expenditure as a share of the economy back from, we inherited it well above, under the average of the Labor years, well above that and we have brought it back down now to 25 per cent. Now that hasn't been done easily. The other point I would make from our first budget back in 14-15, I mean we had a lot of spending savings in those budgets and they weren't able to be realised and in the last budget I had to reverse out $14.7 billion in savings and I had to replace that with revenue measures to keep the budget on track. Now Labor can't have it both ways, they can't complain that the expenditure is not lower when they don't pass savings measures that keep expenditure lower.
SALES:
A major threat to the economy would be a shortage of gas, as the Prime Minister pointed out yesterday. Given the seriousness of that, why not restrict gas exports immediately?
TREASURER:
Well, we have that option available to us and the mechanism that has been developed by our Government, would come into effect on the 1st of January and so we have until November before we would be in a position to either pull that trigger or not. But what you have to be sure of is that by doing that, you'll get the right result. The right result is to ensure that next year we can get around 110 petajoules - put it this way, there's 63.4 petajoules that is currently being sold offshore in excess of the contracts for exports. Now that's more than about 15 big ships...
SALES:
So surely if you restricted those exports, then you are going to boost the domestic supply?
TREASURER:
Well, if the industry can deliver that for us, then there is no need to exercise that control. That's the point.
SALES:
Why leave that to the 11th hour though, why not pull the lever now?
TREASURER:
I wouldn't call this the 11th hour. We are still a long way out from the end of the year. What matters here is actually - will we deliver the gas next year and that's the ultimate test. Now we will meet with the gas companies before the end of this week, and if we can get that absolutely, objectively verified commitment that that 110 petajoules can be available next year then that's the issue solved for next year.
SALES:
It is...
TREASURER:
But the longer term issue is getting access to gas supply and having the moratoriums lifted whether it is in Victoria, New South Wales or up in the Northern Territory. I mean the answer to a lot of our gas challenges is under our feet here in New South Wales, and in Victoria and the Northern Territory.
SALES:
Just finally, we heard earlier that efforts to get women on boards seems to be stalled at around 25 per cent. Why do you think more progress is not being made on that?
TREASURER:
I would like to see more progress made. What I am pleased about is that the female participation rate in the economy now is at one of its highest levels at 60 per cent. Female employment is at 5.7 million...
SALES:
Why is that not reflected...
TREASURER:
That's the highest level we have seen. There are more women employed today under our government than at any other time.
SALES:
But why isn't that reflected at board level?
TREASURER:
Well, we want to see that flow through. I think we're at 25 per cent now. We're doing our bit. We have targets within the Government.
SALES:
But why do you think it is not happening? I mean we've been talking about it now for quite a long time.
TREASURER:
I think they're really the decisions that the chairs and the institutions make. I mean, industry funds, for example, now have a very big say about what happens in public companies. They arguably have more control over those things than the Government does I would have thought. In fact, they do have more control because they're shareholders.
SALES:
Well, is it sexism then, is it boys' club? What is it?
TREASURER:
Well, I hope it is none of those things. As a father of two daughters, I want them to grow up in a country where they'll be able to realise every ambition that they have, and that includes the job they want to have, working in the employment they want to do, and if they want to become a director or a pop star - I have one who might be on that path, who knows - but that's what we want to see them realise. So of course, we would like to see it higher. Carol Schwartz, I appointed most recently to the Reserve Bank board and she joins Kathryn Fagg and Cath Tanna who are great members of that board and I look forward to making further appointments along those lines in the future.
SALES:
Scott Morrison, thank you very much.
TREASURER:
Thanks a lot Leigh.