LEON BYNER:
Thank you for joining us today.
TREASURER:
G'day, Leon.
BYNER:
Now, you went and dumped the Medicare levy – that 0.5 increase – because you're telling us that the Government's getting more in tax receipts. Wasn't this extra money going to be used to reduce the debt?
TREASURER:
No, that extra money was being used to fully fund the National Disability Insurance Scheme and that's what we announced last year. It was directly tied to that and the improvement in revenues that we've seen come from the company tax base and personal income tax base from what we had estimated last year means that that tax increase is no longer needed to do that. So it had a very specific purpose and when you can achieve that purpose without having to increase taxes then I believe very strongly that's what you should do and so there is no need for that. So, it's good news for families who have family members or themselves with a disability, for their carers, they're getting the funding they need for the NDIS and we've still got a hell of a lot more work to do on the NDIS, I think, as everyone knows. It's good news for taxpayers because they're not getting an increase in their Medicare levy and it's good news for the Budget because we have not done this at the expense of getting the Budget back into balance when we said we would. So, that's what I call a 'triple bottom line'.
BYNER:
For the record, how much are you putting in from taxpayers' money that was the shortfall for the NDIS? What's the figure?
TREASURER:
Over ten years, the shortfall we had to make up, which we've already made some up from savings we've done elsewhere in the Budget, was $57 billion over ten years. What the Medicare levy was going to raise from last year's Budget – the increase – was $8.2 billion. Australians are very generous when it comes to issues around disabilities and we actually got a lot of support for that measure to increase the levy. People thought, "well, if it's for disabilities, fair enough." But equally, you don't over loan on that generosity and where you can find another way to do it without having to tax people more then that's certainly what the Turnbull Government – the Liberal and National Parties – will always do. The Labor Party are still going to bump up the Medicare levy to those earning over $87,000 and they weren't going to give any of the money to the NDIS, they were just using it as an excuse to increase taxes.
BYNER:
I need you to clarify something here, so over ten years, the shortfall's going to be about $57 billion…
TREASURER:
It was.
BYNER:
It was.
TREASURER:
But no longer. There is no shortfall now because we've been able to account to that, and we'll have more to say about it on Budget Night.
BYNER:
Alright, and you're using extra tax inputs that are better than what you thought, correct?
TREASURER:
That's right, the economy has strengthened, it will continue to strengthen, the revenues that we were seeing coming into the coffers, directly into the doors was backing that up so it wasn't based on any sort of arithmetic projection, it was based simply on the fact that we are actually seeing the revenue dividend from that. The other thing that I should say, we're also seeing payments grow not as quickly because of people being in work…
BYNER:
Alright, there's another point here…
TREASURER:
…and not on welfare.
BYNER:
If you give tax cuts, both to business and privately, as is being suggested here, provided of course you can get one through the Senate – and we'll get to that in a sec – but if you're giving tax cuts, aren't you going to cut into the very revenue base that's given you the largesse to do what you've just described?
TREASURER:
The revenue base grows because the economy grows, that's why it grows. There are two ways that you can look at this. If you keep putting up taxes on the economy, you actually kill the goose that is laying the golden egg…
BYNER:
But I've just made the point though, Treasurer, that you want to reduce the taxes for both business and the private citizen…
TREASURER:
Which will grow the economy.
BYNER:
That will grow the economy. So you think that by doing that, you won't shortfall your own revenue?
TREASURER:
No, that is why you believe in lower taxes. Taxes when they get too big as a share of the economy, actually hold the economy back, it actually – it's like a snake eating itself from the tail. The taxes actually start to consume your economy. Now, that's why we've always believed in lower taxes. Taxes should be only as much as you need to meet the obligations that you have as a responsible Government to provide the essential services that Australians rely on and a growing economy and a tax system that doesn't drag the economy back is what achieves that. That's how we've been running the Budget, we're getting the Budget back into balance – our projection on that has not shifted in five successive statements.
BYNER:
Now, you still want to obviously decrease company tax, correct?
TREASURER:
Of course.
BYNER:
But you're going to need to get this through the Senate and you've got Tim Storer that's not quite on board and Derryn Hinch who's got caveats. You still reckon you're going to swing it?
TREASURER:
Working hard on it and it was back in February when people said we had no chance and then as recently as the last sitting, we were only two votes shy. So, we don't give up on it because we know this is important to ensure the economy keeps growing. We can't take the growth of our economy for granted. We're in our 27th year of economic growth, that means an entire generation and more of Australians now have grown up in this country, thankfully, wonderfully without ever having experienced a recession. Now, plenty of your listeners, and you yourself will recall, Leon, will know what it's like to have a recession. And we know that when you go there, it's bad. It's all bad, and so you can't take your economy for granted and that's why we're ensuring taxes as a share of the economy are kept under control just like we're ensuring expenditure's kept under control.
BYNER:
On an adjacent matter, which is very current, this is the Banking Royal Commission, there is a very strong suggestion that banks should use their share of any company tax cut to establish a compensation scheme for victims of financial misconduct and pay for the Royal Commission. What do you think of that?
TREASURER:
Well, at the end of the day, it's the Royal Commissioner who recommends compensation – a) compensation may well flow from settlement of cases that comes from this and that would be paid directly by the banks or other institutions, insurance companies, superannuation funds, whoever, through the normal process. If there's some other form of compensation, I certainly don't think taxpayers should be subsidising compensation paid by the banks so I don't think that would be fair on taxpayers but banks, if there's compensation to be paid, it's banks who should pay it and that should come from whatever means. If the Royal Commissioner has a view on that, well, we'd be interested to know what the view is but one thing I think is important to assure taxpayers is, I don't think taxpayers should underwrite the failings of the banks. I'm the person who put the levy on the banks, Leon, I'm the one who's increasing the penalties for people to go to jail if they do the wrong thing here from five to ten years. Another one with Kelly O'Dwyer, we've set up the new Financial Complaints Authority and introduce legislation that kicks people out of the banking and financial system, if they do the wrong thing, forever. So, we're taking action on the banks, the Royal Commission is putting a bigger light on that. At the end of the day, we initiated that too and, at the end of the day, I think that's all people care about.
BYNER:
Just quickly, Today Tonight told me that when they approached the Securities Commission some time ago, they were told, "Unless it's over $3 million, we're not interested."
TREASURER:
I think ASIC will have the spotlight on them, too. It's one of the reasons why we've already increased their powers, we've already increased their resources but ultimately, there's a new Chair of ASIC – we've changed the Chair of ASIC, James Shipton – he's getting a new Deputy Chair coming in who's a prosecutor and they've got a big job to do, I think, to reassure Australians that they've got their eye on the ball as well. And we're certainly giving them the support, resources and powers they need to do that.
BYNER:
Alright, just quickly, so in a nutshell, on this NDIS funding. You're confident that no person who needs help within that scheme will miss out?
TREASURER:
That's right. There is not a dollar being changed for what is committed to the NDIS. Not one dollar, not one cent.
BYNER:
What's the costing in the next 12 months?
TREASURER:
Well, the scheme at the moment isn't a full scheme. When it gets to full scheme, it will be over $20 billion a year. But we're still some years away from that and the gap emerges as time goes on. So, it's still ramping up and at the moment, we're actually under-budget. At the moment, we're not spending as much as was previously committed. So, it is being managed carefully and I think there's still an enormous amount of work to do to get the mechanisms right at the NDIA as well and their interface with people living with disabilities. I get a lot of feedback – as I'm sure all Members of Parliament do. So, there's an enormous amount of work to do, we're committing the funds to make it happen but we want to make sure it's run well, effectively and efficiently for the benefit of all taxpayers but, ultimately, for those who need it most and they are the people living with disabilities.
BYNER:
You're going to have to get the debt down because, as you know, everybody understands that when you borrow money, you've got to pay the interest. So, will this Budget have a reduced debt or increased?
TREASURER:
Net debt – if I go back to where we were at the Mid-Year Statement – net debt will peak this year that we're going into…
BYNER:
So, it will be more?
TREASURER:
And then it will fall. It will start falling after this year and why is that? Because you don't start paying down debt until you get back into a surplus. That's just common sense. The deficit has roughly halved in the last two years and it will keep falling and that will be because we've got expenditure under control to the lowest rate of growth of any Government in at least 50 years.
BYNER:
The debt is such that it's bigger than when we had the debt levy introduced. You wouldn't reconsider that, would you?
TREASURER:
No.
BYNER:
Just wanted to know.
TREASURER:
No, I'm not for increasing taxes. If there's one thing that comes clearly out of this today is the Labor Party are going to increase taxes and we're going to reduce taxes. So, if you want to pay more tax then vote for the Labor Party.
BYNER:
Alright, so you're going to be offering tax cuts at the next Budget?
TREASURER:
Well, we've made it clear since last November that we've been looking at middle-income to lower-income tax relief – there's no surprise there – but the details of how and when, that's for Budget Night.
BYNER:
Alright, Scott Morrison, thank you for joining us today.