LEON BYNER:
Treasurer Scott Morrison, good morning.
TREASURER:
G'day Leon. Sorry it's been a while since we've been on; been a bit busy.
BYNER:
Well I bet you have. First of all before I get to the Budget, got to talk quickly about Kidman, You don't realise I think how excited people were when you announced a preliminary decision to block the sale because you didn't think it was in the national interest. You realise of course that most Australians agree with you. But there is a bit of cynicism about the preliminary decision. There are those who've been posting on my Facebook site "Ah, they'll just change it after the election." What do you say? So it will be for sale no doubt.
TREASURER:
What Kidman try and do now is a matter for them. I understand there is some statement saying they don't want to break it up, well that's a matter for them, but I think I've made my view pretty clear.
BYNER:
Jobs and growth. Now the jobs and growth Budget leaves the unemployment rate…
TREASURER:
I should stress Leon that my view isn't shared by the way on Kidman. The Labor Party thinks that was the wrong decision. They actually think it should have been sold, and it should have been approved, but you know that's what Chris Bowen says but I don't understand why he thinks that. I set out my reasons pretty clear as to why I didn't think it was a good idea but Chris Bowen seems to think if he was Treasurer, well if he is Treasurer when it comes back I can only assume he will approve it.
BYNER:
Well again if we get him on the show tomorrow because they've got a Budget reply speech tonight I'll certainly question him on this. On your jobs and growth Budget it leaves the unemployment rate at about, we're going to go I think from 5.7 to 5.5 on your own numbers. But where does that leave the exodus in South Australia of Holden, GMH, Alinta going out, thousands of jobs going, so where are these extra jobs going to come from?
TREASURER:
Well this why our defence industries plan is so important and it's a significant decision, whether it's on the frigates or it's on the submarines. This is a big decision which is about securing high-tech manufacturing jobs for decades and while yes of course the benefits to South Australia and Adelaide in particular will be very positive, it will also effect right across the country through the defence industry supply chain. This is why we talk about this transitioning economy and the things you need to do to continue to support that. Now defence industry plan for local high-tech manufacturing and technology is incredibly important, but the small business and medium size business company tax cut, that's also important backing in those small businesses, those agile small businesses who are innovating, finding new markets, doing incredible things and they're the ones who are putting on all the jobs and that's why we're backing them so I'm quite surprised that the Labor Party straight out of the blocks, immediately said, no no, we think if you're more than $2 million a year business you're just a big fat cat and we're not going to give you a tax cut. I just don't think they get it.
BYNER:
The previous speaker, one of our economic commentators made the point in the UK they want to move company tax to 17%. Singapore has got 25 so we're pretty much at the very high end, you're reducing it somewhat but…
TREASURER:
We're reducing it to 25 over ten years and we're doing it in a way we can afford and we're doing it in a way which focuses the effort on small and medium sized business first because we know that's where Australian companies overwhelmingly reinvest their earnings in growing their business and that means they're putting people on and it's been small and medium sized businesses that have been the key sources of jobs growth and over the next four years more than well over half of employees working for companies in this country will be in a company with a lower tax rate.
BYNER:
How many jobs do you think this Budget will facilitate in the next 12, 18 months, 2 years, got any ideas got any projections?
TREASURER:
Well let's look at the history. Last year 300,000 jobs were created in the Australian economy.
BYNER:
That's true, but you see when you give these numbers, there's also people that lose jobs too so the real truth is the net isn't it?
TREASURER:
Well of course and the unemployment rate has come down as you know already and the forecast is for it to go to 5.5% in this Budget.
BYNER:
We're well above that of course.
TREASURER:
Back in December the forecast was still at 6% and so Treasury has formed the view that the employment circumstances, and when you look at the employment leading indicators that is certainly been backing that up. Now it's a tough economy in which we're making these gains and in places like South Australia arguably more than any other than North Queensland and parts of Western Australia that's where this transition is being felt far more acutely, particularly out in places like Whyalla. Now what people in Whyalla and places like that don't need is a Treasurer to get up at a Budget and splash a whole bunch of money around and put up taxes to try and pay for it. That's Labor's plan. What my plan is, what our national economic plan for jobs and growth is, is don't spend more than you save, where you are able to raise additional revenue by cracking down on multinationals as we are with our new diverted profits tax.
BYNER:
By the way, just for the record, this is important. How much extra money do you reckon you'll get for the Treasury coffers as a result of this crackdown that you wouldn't have had?
TREASURER:
Over the next four years $3.9 billion, which I note is more than twice what the opposition was estimating as a result of their efforts. We're going about it in a very different way and as you know last year we put legislation into the Parliament to crackdown on multinational tax avoidance and the Labor Party, Chris Bowen in particular and Bill Shorten voted against it. They didn't want to have a bar of that plan so they talk big on this stuff but they actually never deliver. They were in Government for six years, didn't touch it, didn't touch any of it.
BYNER:
I want to talk about Arrium because the Prime Minister when he made the announcement recently about our defence procurements for SA. He proudly said "we're going to use Australian steel" and of course you'd hope that Arrium could be part of that. But that's a few years away. In the meantime, Arrium is under a lot of challenges. Is the federal government prepared to do anything to assist them?
TREASURER:
Well we're working with particularly the State Government and Tom Koutsantonis down there was working closely with Christopher Pyne, and obviously working with the management administrators there and we'll continue to do that. But the most practical thing we did was to bring forward that steel purchase for Arrium for the rail track corporation. Now that was an important, practical thing that we could do which was about ensuring that they had a good client, who had a big contract. Now that's how this business is going to survive. Clients with contracts. That's where we have acted and we're working closely with Tom and Jay and I've got to say that relationship working on these practical issues has always been a very good one.
BYNER:
So, what are you going to put on the table? What kind of things might you, if you are going to help Arrium …
TREASURER:
Nothing further has been asked of the Federal Government at present. The things that we have done is to bring forward that steel purchase contract. And that's the most practical thing we could do. That's some $80 million and obviously when we go through the defence procurement and that is where it can be made in Australia to the appropriate standards that are needed in those defence contracts. It's Australian steel as well. So we are doing the practical things Leon. I mean we can't make the global economy be something it's not, we've got to deal with the circumstances we're in and I know Australians get that and I know South Australians get that. They don't have rose coloured glasses on and neither do we. They know we've got to make our way through this transition and that we need a plan to get there, and last night they got that plan.
BYNER:
Alright, I want to ask you about that plan because in the OECD we are the only country well into single digits for manufacturing. Now we have to rail back and get some of that manufacturing business so, and this is going to be part of the growth we're going to need, what are your thoughts on this? How does the budget help that?
TREASURER:
Well, there are three areas. Firstly, the innovation and science agenda and certainly we are supporting companies who are investing in innovation, and not just start ups but across the board. The defence plan for our defence industries and the procurements, particularly on naval ship building, that's going to support high tech manufacturing technology. The export trade deals are also incredibly important to generate new business opportunities, not just to the manufacturing sector. But in South Australia as I've said on your program before, the service industries are actually bigger than your manufacturing industry and are growing much faster particularly in areas such as international education where South Australia has, I would argue, the best product on the market when it comes to combining outstanding higher education along with a very liveable city and environment. I mean it is really an outstanding proposition and what we've done in securing access to those markets for those services I think is very good for South Australia. So they're the three things we're already doing, but the tax cuts and incentives for small businesses and hard working families, that's also going to back in South Australians who are out there making it happen and we're going to do it by cracking down on tax avoidance and loop holes, that's what is paying for it. With all of that Leon, we've still got the guaranteed funding for health and education and roads that we can afford. It's not with money that's not there.
BYNER:
We don't appear to have any new infrastructure projects from this budget, or are you going to announce some as we get closer to the election?
TREASURER:
Look we already have a large number of those underway in the North-South Corridor is one that we've been very heavily committed to now for some time. But this is not just another budget where you just go around and make a shopping list of announcements. This has to be the plan that I've outlined and we already had some 180 projects around the country already underway or in preconstruction phase and that's incredibly important and the North-South Corridor is one of those.
BYNER:
Treasurer you mention procurement a few times. Will Australia go ahead and sign a WTO procurement treaty which could make it illegal to take into effect the social and economic effects of buying local?
Are you there Mr Treasurer? I've lost him.
We'll take a break and we'll come right back.
Line drops out