LEON BYNER:
You delivered the Budget last night in the Federal Parliament, Scott Morrison, Minister thanks for joining us this morning.
TREASURER:
G’day Leon.
BYNER:
Ok, I just need to clarify one matter that does have people scratching their heads. You’re in the next ten period saying, ‘the Government would give $140 billion in personal income tax relief over the next ten years’. But you surely know that in this new millennium, getting a second term, let alone a third, is more than a leviathan task. So, so again it’s an aspiration with two road blocks. One, getting re-elected, and two, a hostile Senate. What do you say?
TREASURER:
Well neither, neither of those things are actually true Leon, with great respect. I mean this Bill, which I’ve just introduced into the House of Representatives now, which provides that full seven year plan to be legislated and made law. That can occur right now. Right now. The only people who need to vote to make this happen right now for the next seven years are actually sitting in the Parliament. So if it’s supported in the Parliament, then it will be the law of this country, and those, that seven year plan will be legislated and Australians will have the certainty of being relieved from bracket creep into the future of paying lower, simpler and fairer taxes. That can all happen right now. Now the other point I’d make, and I think you would agree with this point too, I’m not giving anyone anything. I’m just saying you earned it, you can keep it. And there’s a big difference. I don’t see tax relief as an expense for the Government. I see taxes as an expense for tax payers, and the fact that they don’t have to pay the Government more in higher taxes, I think is a very important principle. And so that’s how I see it. I think the economy is doing better, and we’re working to make it even stronger with our infrastructure spending, our tax relief for businesses so that they can invest more, everything. Well last night I announced a new medical industry plan, which I think will have some real positive benefits for South Australia. I think our medical industry in South Australia, our research community there is very strong. I think they can create real income and growth for the State. So you’ve gotta do the right things that make a stronger economy. So this is, this is why we’re in a position I think to do this.
BYNER:
Do you think Senate will wear a very different income tax scheme, where up until now it’s been progressive, will have for a lot of people, almost a flat tax rate? Do you honestly think the Senate are going to deal with that and say yeah?
TREASURER:
Well look that’s up to them. But I mean we’re for lower taxes, so we’re not going to walk back from that. I mean that’s why we come to this place. We want our tax system lower, simpler and fairer. We don’t think taxes and higher taxes is the way to build a stronger Budget. I mean there’s a limit to how much tax there should be. As you know we’ve put a speed limit on that. It’s 23.9 per cent, which I must say is not an unreasonable figure. I mean Paul Keating, even Paul Keating delivered three surplus Budgets on tax to GDP at a lot lower than that, and so it is a very reasonable level. And what you have to be more concerned about, is why would the Labor Party want to build their Budget on higher taxes, and there’s over $200 billion in higher taxes that they’re going crush the economy with if they get the chance to be the Government. So we don’t think that’s the way to support a stronger economy. In this Budget, debt is coming down $30 billion over the next four years. It’s coming down $230 billion and more over the next ten years. We’ve turned the corner on debt. We’ve got expenditure now over the forwards back under the long-term average, and we’ve put a speed limit on taxes. And the Budget goes back into balance in 2019-20, and strengthens to more than 1 per cent of GDP over the medium-term. So you know we’re getting a lot of the right ticks in the right boxes on these things.
BYNER:
Look, you’ve got an interest bill at the moment of $16.4 billion on what we’ve already borrowed, and Peter Costello, who I know is your mentor and you said yesterday, ‘look, I’m sure when he sees what I’ve got to offer, he’ll have a different view’. But, he was less than optimistic that we would see surplus in terms of the national debt in our lifetime.
TREASURER:
Well he hadn’t seen the Budget yet, and then the Budget was handed down, which showed that we’d turned the corner on debt this year and we reduced it by $230 billion over ten years, as I said $30 billion over the next four years. That means our net interest payments are actually $2.2 billion lower than what they are around about now by the end of the forward estimates. That’s what happens when you start paying debt. That’s what happens when you get tax and spending under control and you bring the Budget back to balance. We’ve been working towards this for five years Leon, and it’s been, it’s been tough going as you know, and as you make the right point about the Senate, I mean, despite that though since the last election, we’ve been able to pass on the previous forward estimates, $41 billion worth of savings to the Budget…
BYNER:
Look…
TREASURER:
…and that’s savings. So we’ve been making progress there but yeah you’ve got to respect the Senate and work with them and we’ll do that on this Budget as well.
BYNER:
Look, there are 30,000 people nationally who’ve been disconnected from power because they couldn’t afford their bill; we have recent stats of one in seven children don’t have breakfast every day; we’ve got 105,000 homeless and we say while we’ve generated 1 million jobs, that the unemployment rate or the people looking for full time work is about 720,000. How are these people, in these predicaments, going to benefit?
TREASURER:
More jobs. More than 1,000 jobs according to the Australian Bureau of Statistics created every day last year. This is the strongest jobs growth record in our economic history. We’ve got the lowest level of welfare dependency, people on welfare in more than 25 years for those who are of working age. I remember when I left university and went into the labour market and we had more than one in five people of working age on welfare. Well more than that. And now that’s down to just 15 per cent and falling and the unemployment rate is falling. And it’s falling because we’re creating a stronger economy. The stronger economy is what guarantees the economic choices for Australians in whatever situation they’re in. If the economy is weaker, everybody’s choices are worse. And that’s why we’re focused on building the economy up. And you don’t do that by slugging it with higher taxes.
BYNER:
Is there enough money in the Budget, Scott Morrison, to afford three months’ worth of fuel storage in Australia right now which we’ve agreed to do but don’t?
TREASURER:
Well that’s an issue that the Energy Minister is working through as we speak as you probably know, but when it comes to energy, let me say a couple of things in terms of what our tax relief means. $530 a year and it comes in a lump sum, I should stress, and it comes back through your tax return. That covers around a quarter of a family’s electricity bill for the full year. You know, a quarterly bill. And when you’re talking about a dual income household both parents at the average wage, that’s a $1,000 bucks, that’s half your year’s electricity bill covered by that.
BYNER:
They get that when?
TREASURER:
They’ll get that in their tax return for the 2018-19 year, so they’ll get that in July 2019. That’s how you deliver it. If we didn’t do it that way you’d see the tax relief leak up to high incomes and we wanted to make sure that what we had available to do this was fully targeted on those lower and middle income earners so I think it’s very meaningful, particularly that it comes in a lump sum. And it means, you know, those bills can be paid. Now the other thing I’ve said in the Budget speech you would have heard perhaps me saying that the National Energy Security Board has, through its own modelling estimates, determined that once we get our National Energy Guarantee in, once that’s in, after that, that we will see average household electricity bills fall by about $400 bucks. So, you know, we’re delivering on taking those cost pressures off, whether it’s on electricity, whether it’s on the tax system, that’s how you deliver this. But none of it’s possible without focusing on a stronger economy and what small business do in our economy, we’ve extended the instant asset write-off, we’re cracking down on phoenixing, which is a system where people, you know, they let their businesses go bust and then they reinvent them in another corporate structure and other small businesses they owe money to can’t get their money back now we’re cracking down on that. That’s very important to support small business.
BYNER:
Alright just quickly, but this is all predicated on getting it through the Senate and that’s going to be a very difficult job. Is there any consideration for a half Senate election next year early?
TREASURER:
Oh, it’s not something that’s entered my mind because that’s not my job. But, look, I don’t know why people would make that assumption about the Senate. Why would the Senate, I mean, if people are sitting there thinking about the South Australian senators they might want to elect at the next election. Why would those South Australians senators or candidates want people to pay higher taxes?
BYNER:
Yes but you see it’s the cross benchers you’ve got to worry about.
TREASURER:
Well they’re the ones who get elected in South Australia and so why would those cross benchers want to support higher taxes? Why would they think that South Australians would want to pay higher taxes?
BYNER:
You’ve had this debate already, with the business cuts.
TREASURER:
Personal income tax cuts are another thing altogether, surely.
BYNER:
Scott Morrison, I know your time is rushed, but thank you for joining us today.