RAY HADLEY:
Treasurer, good morning.
TREASURER:
Good morning, Ray
HADLEY:
You would be all bouncing around down there today with this latest Fairfax poll wouldn’t you?
TREASURER:
Well, I think what it shows is that people are getting on board with increasing confidence. We have already seen that come through in some figures last week on consumer confidence and business confidence and what we are seeking to do as a government is engage Australians in the positive plans we have to grow our economy and grow jobs and we welcome the fact that that collaborative approach is getting people on board.
HADLEY:
On Friday you met with the state and territory treasurers looking for options for tax reform - this is a hard one, particularly as you are dealing with people for the other side of the fence politically. How did you go?
TREASURER:
It was a great meeting and all of those Treasurers have the same objective that I do and that is that we have to grow our economy. We have got to support jobs and whether it is in South Australia where they probably face the greatest challenge at the moment, or our home state here in New South Wales, Mike Baird has been doing a great job but we all have the task of growth and as Treasurers that is what we remain most committed to. So, the politics tends to get put aside and I thought that was a good start on Friday and we talked about a national platform for economic growth and jobs. So, it wasn’t just about the tax system. We talked about, well, how can the tax system be made to work better for people so they can get out there and work save and invest but also what are the other things we can do when it comes to improving the competition out there so people get more choice in the services they have and if states are going to spend money how they can spend it better.
HADLEY:
Now, I have a bit of empathy here for you and I will explain why. When you were Immigration Minister and Social Services Minister you were robust and forthright. Now, I have got to tell people, I have been doing this type of programme for a long time, it is very rare for a Treasurer, either a federal Treasurer or a state Treasurer to make themselves available to the media. Even when Mike Baird was the Treasurer in New South Wales I don’t think I spoke to him in the entire time he was Treasurer. I know that previous to that I would speak regularly to Michael Costa, as soon as he became Treasurer we didn’t talk anymore. I took it as they had to be careful what they said because of the impact on markets, but you are here and you are doing exactly what you were doing when you were Immigration Minister and Social Services Minister. So, I’ll talk about that before I get to this. There is an article today by Rowan Dean in the Courier Mail and I won’t go through it in chapter and verse but it talks about the old Scott Morrison and the new Scott Morrison. How as both shadow Immigration Minister and then Immigration Minister, forthright, the quote, “our most immediate border task upon coming to government was to stop the boats - job done.” You were a can-do Minister both as Social Services and before then Immigration. Then he talks about you as Treasurer and he has got a few quotes here. “The discovery process is one that the Commonwealth Treasury will continue to lead to simply develop an itemised list of options that exist. There is nothing attached to any of these lists, it is simply to ensure that we are able to have the universe of option that are available. This is a step by step process, I have no intention of ending it in a dead-end on this issue. What I have is the intention of working collaboratively” blah, blah, blah.” He says “pure waffle, none of Mr Morrison’s trade mark conviction or clarity which is hardly surprising”.
TREASURER:
Well, Ray, if you are going to get stuff done you have got to bring people with you. I think people forget that when I was Immigration Minister we didn’t start turn-backs for three months and the advice I got from General Jim Molan was never rush to failure and you have got to set things up. I am totally committed to changing the tax system to ensure that we are not in a situation where the average wage earner in 16/17 will be on the second highest tax bracket. That is just nuts. That is not something we can continue.
HADLEY:
But will you also agree that while it was difficult to turn around immigration and to a certain extent social services in the time you were there, this is a much bigger and more complicated job?
TREASURER:
Well, it is by definition and what I have made clear is that I think we have got to get spending under control. I think I have been pretty crystal clear about that and there has been no change in my position on that. I have been very clear about the fact that if you want to make changes to the tax system then you need to explain to the Australian people why. Otherwise they just think you are on some sort of accountant’s picnic where you are trying to raise everyone’s taxes and they get nothing out of it and I think I have been pretty clear about that. Last Friday I put on the table with all the states and territories, competition reforms that would see Australians have more choice in an area which frankly wasn’t getting the attention I think it needed. So, already within a month we have outlined I think some pretty big areas for economic reform. On top of that we have got innovation and we are continuing what we are doing in infrastructure. Look, I can understand that some people, even still, might be harking back and a little bruised about some stuff. They are welcome to that. I am just getting on with the job. What I will do though, Ray, your listeners know is that I will go about it in a way where I get all my ducks lined up so I can actually get the outcome. There is no point in going out there and saying you are going to do x or y or z until you can actually get it lined up to achieve it. People know me, I will get the result but I will get the result by working with people and getting them on board and as I said in response to your first question, people, I think, are getting on board with that approach and that is good but there is no point in releasing documents on tax reform and things like that if they just end up going on the bookshelf just to satisfy someone’s great desire to see an announcement when I would rather an outcome.
HADLEY:
Ok, now one of the things that you can’t really dictate to which does impact on the economy is the housing market. Now, everywhere I go over the weekend, I pick up every newspaper, I listen to every radio broadcast it is all about the housing market is in decline, auction clearance rates lowest in three years - it is all doom and gloom. I have never seen so many cranes across Sydney.
TREASURER:
True.
HADLEY:
I have never seen so many tradies working on houses, particularly where I live in the North West. I mean someone is going to have to buy them and yes they might be a little bit cheaper but at the end of the day the market will meet it. I mean is it frustrating, I know you can’t talk up the economy when there is not much to talk about, but it seems to me that everyone is sort of a glass half empty sort of person when they write about this stuff.
TREASURER:
Well, I think so, mate. I think that is true but what we all know about real estate is over the last ten years it has all gone up and over the last 12 months in particular there has been quite a spike in markets like Sydney and in Melbourne and even in Brisbane. It wasn’t that long ago that the same people were talking about the housing affordability crises and what was the government going to do about it. I think the truth is always in the middle. We have had a particularly good supply response on housing, especially in New South Wales and we are now starting to see that flow in and that means that there is some relief for people trying to get into the housing market. That is a good thing. There is some relief for those, hopefully, who are in the rental market. Let’s not forget that 30 per cent of people in this country rent and that is not a bad thing. What we all know about the housing market in Australia is there is always very good strong demand which means that over the medium to longer term house prices have gone up and they always have. The issue is, in the short term, people trying to sell and buy in very short time frames well, maybe those margins won’t be what they were but in the medium to long term it is always a strong investment as anyone has ever owned a house in this country for that period of time knows.
HADLEY:
Westpac, you took to them with a big stick last week and you know to a certain extent I can’t believe the arrogance of bank executives. They get very big bonuses based on and predicated on making very big profits for their shareholders but the sort of figures being bandied about by this .2 of 1 per cent rise to counteract charges coming from other areas it is just gouging. There is no other word for it, they didn’t raise it by.1 of a per cent or .075 of 1 per cent to cover their increased costs. They just went bang, crash, wallop we will have a bit of that thanks and we will justify it by saying we are paying more for our money.
TREASURER:
On that issue specifically, what we have had is a bank make a commercial decision and banks can make commercial decisions. My only point was this, yes, APRA had put out there a higher capital requirement. Westpac would have raised now some $6 billion. Now, that is around $2 billion more, what I am advised, would be necessary to cover off that APRA commitment.
HADLEY:
Well, that has got to be gouging if they move it four and got six.
TREASURER:
Well, they might have other reasons for going to six and I am not commentating on those.
HADLEY:
Yeah, to make more money for their executives, that’s what it’s for, so that they can have a bigger share dividend and they get their big bonuses.
TREASURER:
Well, at the end of the day Westpac needs to explain that to their customers. Now, Westpac also increased term deposit rates for people, pensioners and self-funded retirees, by 25 points - so that is good news. They had another measure in there for first home buyers - that is good news. At the end of the day it is for the banks to explain their own commercial decisions. They can’t blame APRA or the Government or anyone like that. They have got to make their own calls. When a small business has to pay more on their inputs, they don’t always get the opportunity to pass those on to their customers - they have to wear it. Now, it is great that the banks are profitable. We need a good, strong banking system.
HADLEY:
Of course.
TREASURER:
It is one of the reasons we survived - it is the reason, I think, we survived the GFC. At the same time they are a company that has to explain their decisions to their customers and I am simply not going to allow a situation where they try to blame it on APRA or the Government.
HADLEY:
Now, I have a feeling that you have gone back in time to an interview I conducted with one of your predecessor’s Peter Costello and we are talking about Brian Harradine and having all of those mobile phone towers in Tasmania to get Telstra through. I pick up the News Limited papers on the weekend and you are pledging to look at Glenn Lazarus’ proposal for grandparents to be paid to look after children of working families. Is this your mobile phone tower moment?
TREASURER:
Well, on this one, Glenn, I think will be disappointed. He will raise any number of issues with me but the Government is not considering basically paying grandparents to be child care operators. Where a grandparent is the primary carer of a child, now, that is I think a very feasible and very real situation but you are largely treating them like parents under the Family Tax Benefit system there and I think that is a very fair case. For those who are doing the normal thing like my parents do and a lot of people’s parents do then, no, the government isn’t considering that. That said, you can be pretty confident, Ray, that I do follow the Costello process when it comes to getting things through the Senate.
HADLEY:
In other words whatever they need, they get, within reason.
TREASURER:
Well, they will look to clip their ticket and look that is part of the way it works. I would rather not have to spend more than we have to but it is more important that we get things done and we got quite a lot through the Senate last week and we were really pleased about that so already, I think, we are seeing a bit more momentum there. We’re hoping to get some more. I am hoping the Labor Party will actually move away from the position they have had previously and actually be a bit more collaborative on these things. We want to see Australian families have more affordable child care by the end of the year with our Bill but to do that you have got to make the savings to pay for it and the Labor Party can still agree to that.
HADLEY:
It could be worse, you could be Bill Shorten.
TREASURER:
It could. Well, look, that was very disappointing last week, the attack Bill had on Malcolm. I think it showed, it was just a very small thing for them to do. They really diminished themselves.
HADLEY:
Do you know what was really dumb, ok, those sort of attacks rarely work so he sent the attack dogs in and they were more like yelping poodles than attack dogs. You know, fair dinkum, Chris Bowen - he is not a German Shepherd, he is more a lap dog but he sent those people into bat because he knew he couldn’t say too much because of the Royal Commission and it blew up in their face. Mark Dreyfus, doing impersonations of Clark Kent…
TREASURER:
It was all embarrassing.
HADLEY:
And the polls would probably reflect that today but I don’t know how they can possibly go to the next election with Bill Shorten as leader because it just consigns them to Opposition for another period of time.
TREASURER:
Well, that is a matter for them but they all participated in this. Just because Shorten made them do it doesn’t mean they didn’t think it as well. At the end of the day it was a really poor judgment on the Australian people. They thought in their small attacks on, being small people, they thought that Australians felt the same way, that there was this envy out there which said, we don’t want people to be successful in this country and if they’re successful than I can’t be because they are taking my - I mean Australians don’t think like that. They are very aspirational. We have got quite a big attitude when it comes to the aspirations of Australians and we want to ignite it but the Labor Party showed this week that they have a very small opinion of Australians and they demonstrated that in the House.
HADLEY:
Ok, as always thanks for your time. We will talk next week.
TREASURER:
Thanks Ray.