NICK MCCALLUM:
The Federal Treasurer joins us now, Mr Morrison thanks for your time.
TREASURER:
G’day Nick.
MCCALLUM:
So does this mean we’re going to get the much vaunted tax cuts next year?
TREASURER:
Well there’s a promise, the Prime Minister recently said, that’s now what we need to work towards and that’s certainly what I’m doing. And there’s Budget next year and there’s a lot of work to do between now and then, but we definitely want to do everything we can to put more of the money that people earn back in their own pockets.
MCCALLUM:
And in a nutshell why the improvement?
TREAUSURER:
Well we’ve been able to get expenditure under control, that’s the main one. And particularly in the welfare area, that has done the lion’s share of the work in terms of the outcome we’ve seen today. And about 70 per cent of the improvement is because of that. The other portion has been an improvement in some revenues around corporate taxes and superannuation. But we’ve had a pretty big write down in what we’ve seen on personal income taxes we’re expecting over the next four years. So the forecasts are very credible and the numbers are equally robust, so what we’re seeing here I think is a pretty good read on what’s happening.
MCCALLUM:
Your move to restrict the welfare in some areas to some migrants, now is that fair given we ask migrants to come here and assimilate virtually straight away and say we want you to be one of us but then we treat them differently when it comes to welfare? Is that fair?
TREASURER:
Well there already is waiting periods for migrants to access various welfare payments. I mean, people who come from other countries to Australia come to make a contribution, not to take one and that’s always been, I think, the real philosophy of migration to Australia which has meant we’ve been such a successful immigration nation, I’d argue we’re the most successful in the world. And what I know from being a previous immigration minister and social services minister that particularly those who come as skilled migrants, they have a lower rate of unemployment, they have a very high level of integration into our community and that’s what we want to continue to encourage and not have a system that basically runs as a bit of a honey pot.
MCCALLUM:
But the point remains though doesn’t it, that if we say to them assimilate straight away, but you’re going to be treated differently, is that inherently unfair?
TREASURER:
No, I don’t think it is. I mean if you come to the country, you come to the country on the rules that we set out. And the rules are that there’s a waiting period before you can access taxpayer funded benefits. I think that’s totally reasonable, I’m quite sure your listeners would agree.
MCCALLUM:
Well we’ll put that to the test shortly. Now the other one is the cutting of the funding toward universities. Now you did try to get a series of measures through the senate do you think these measures will be able to get through the senate or will you have to try and get these measures through the senate?
TREASURER:
Well first of all over more than 90 per cent of what we’ve announced today doesn’t require confirmation by the Parliament, it is something that can be done under legislation that was actually passed during the Labor years so that’s why we’ve taken that option because the Parliament has sought to frustrate our efforts to bring the Budget back to balance. But the overall change today because we’ve taken out all the previous savings we tried to do on higher education and we’ve introduced these new ones and overall the higher education sector is up $500 million on the changeover. So there’s not a cut to higher education today there’s actually an increase in funding for higher education of $500 million, we’ve just replaced one set of changes with another.
MCCALLUM:
Ok but students now, as I understand it, will have to start paying back their HECS debts when they start earning $45,000 as distinct previously what was at $52,000.
TREASURER:
Yeah, that’s correct. That’s one of the measures that requires legislation as does the lifetime cap on how much debt can be provided to students, around $100,000 generally $150,000 for those on medical degrees and things like that and that also requires legislation. The bulk, the vast bulk of the saving though comes from the freeze for two years and you know when you had universities, higher education funding running at 15 per cent growth but their costs running at 10 they’ve been building up a bit of a balance there and we think they’ll be able to absorb this two year freeze.
MCCALLUM:
But how then, I mean this is basically picking on lower income earners isn’t it?
TREASURER:
I don’t follow you.
MCCALLUM:
In terms of if you’re $45,000, that’s not a lot of money that you’re earning. And then to say that they’re HECS debt is going to have to be paid back…
TREASURER:
It’s a debt, it’s not a grant and it has to be paid back, and people have had the opportunity of more than half of their education funded by the Australian tax payer, and the balance being provided by a low interest loan, and when you’re able to earn money, that’s been the deal since Bob Hawke was the Prime Minister when he first brought it in. It’s not welfare, it’s a loan.
MCCALLUM:
I understand that but shouldn’t we, in this day and age, be encouraging people to go to university.
TREASURER:
Yeah that’s why we provide low interest loans and we pay for more than half the cost.
MCCALLUM:
But by bringing it down to 45, from 52, you do make it harder don’t you.
TREASURER:
I think that’s a manageable change.
MCCALLUM:
You think people can cope with that?
TREASURER:
I think they can and there are other hardship measures that are there to help people if they’re finding these things too difficult, this change doesn’t sit in isolation to all the other forms of support and assistance that exist out there, whether it’s in the tax system, or the welfare system, or the family payments system, there are a lot of other measures. Australia has a very generous welfare system, we spend over $150 billion on it every year, and for the first time, this Government has ensured, in almost 25 years, we now have one of the lowest rates of welfare dependency of people of working age. I think that’s something Australians should be proud of.
MCCALLUM:
Mr Morrison, I know you are busy and you do have to go, but I quickly wanted to ask you, when we can expect to go back to surplus now?
TREASURER:
2021, and a balance of over $10 billion is now what’s projected. This time last year, that figure for that same year was just over $1 billion, so we’ve really seen things firm up over the past 12 months and that’s because we continue to get spending under control, this Government has the lowest rate of expenditure growth of any government in the last 50 years. It was 4 per cent under the Rudd/Gillard/Rudd Government, it’s now less than 2 per cent under us, it was 3.3 per cent under the Howard/Costello Government and it was even higher under the Fraser Government and the Whitlam Government. When it comes to keeping expenditure under control, this Government is delivering, but above all we’ve been delivering the jobs and growth we promised, some 200,000 jobs created just since the Budget and over 1000 jobs being created every single day this year, the best in four years.
MCCALLUM:
And I’ve got to ask you, you’re expecting a reshuffle over the next couple of days?
TREASURER:
They’re matters for the Prime Minister, the Treasurer balances the books, that’s my job and it’s his job to pick his team, and pick his cabinet, and it’s a pleasure to work as part of this team, it’s a very strong team, that’s just getting on and delivering what we promised at the last election.
MCCALLUM:
But you got to expect to have a few different colleagues over the next couple of days?
TREASURER:
I don’t know, it’s totally up to him. He makes those calls, he’s the captain of the team and he’s doing a fabulous job, as confirmed again in the Bennelong by-election on the weekend up in Sydney. It was great to see that very strong response was there, and I think we finished the year with a very clear message that the Turnbull Government is just getting on with it and delivering as we promised we would.
MCCALLUM:
On that, do you agree with John Alexander that the high court judges are out of touch toffs?
TREASURER:
I haven’t seen the comments, I have no idea in what context he made that.
MCCALLUM:
That was a good fend off there, he made it…
TREASURER:
I haven’t seen the comment, genuinely Nick. I have a habit of not talking about something I haven’t heard about.
MCCALLUM:
Ok.
TREASURER:
Good plan I find most times.
MCCALLUM:
Yes, ok, good on you, thank you very much, Scott Morrison the Federal Treasurer, I appreciate your time, I know you’re very busy, I appreciate your time. Merry Christmas to you and all your staff.