SABRA LANE:
Treasurer good morning and welcome back to AM.
TREASURER:
It’s good to be here Sabra.
LANE:
Now, the Government has threatened gas companies with export restrictions to ensure better prices. What comparable measure can you employ with the electricity generators to guarantee cheaper supply?
TREASURER:
The first meeting was quite constructive and we are already seeing action flowing from that meeting, in particular the commitments to be writing off to everybody going to standard offers off their discount period, we are working with them to make it quicker to be able to switch between retailers and so on. So, we are making a lot of progress but they are under no doubt or illusion that should the Government need to put the pedal down on this to get more action from them then we are clearly prepared to do that. But at this point we are getting a good response from them. I am looking forward to the meeting we are having later this week and we will be able to update on progress of what they are getting done. At the end of the day, the Government will reserve the right to act.
LANE:
What legislative instrument or tactic have you got up your sleeve that you can use to encourage them to do the right thing?
TREASURER:
That is not something we are progressing with at the moment because we are getting action from them. That was the whole point of the Prime Minister calling them in in the first place. With the gas providers, we have had pretty strong discussions with them and there is a process now in place that we have set up to ensure that Australian gas can be used to keep Australian power prices down which is a key part of our overall plan. The plan is to get the gas here in Australia, used here, it is to get a better deal out of retailers, it is to get better regulation so it doesn't force prices up, it is to invest more in particular things like storage and generation. What the Prime Minister is doing down there at Snowy today, this is a project that is going to create 5,000 jobs, 2,000 megawatt hour capacity. This will power some 500,000 homes at peak demand for a week. This is huge – 350,000 megawatt hours generated by this. This is a massive project. People talk about visionary projects, well, Snowy 1.0 was the benchmark, Snowy 2.0 is setting a new benchmark.
LANE:
On to the GST, have West Australians hit the jackpot no matter which party holds power in Canberra, they will now be rewarded with billions extra because they can't cut Government spending?
TREASURER:
I am interested in solving the problem with GST and the relativity deficiencies we have seen emerge in Western Australia. It was this Government that stopped the drop when it came to the GST relativity distribution to WA falling. We acted to do that. We provided top-up payments. There is $1.2 billion already in the bank – not promised – it is in the bank in Western Australia and it is already pursuing major infrastructure projects there. Now, Bill Shorten didn't promise to fix GST relativity, he just promised to spend more money and has no idea where it is going to come from which will mean more taxes for the Australian people but particularly in Western Australia. Labor's $150 billion and more in higher taxes, if they are ever to occupy the government benches, will hit Western Australians hard.
LANE:
Sure, but up until 2000 WA was the major beneficiary of the carve-up of finances under the Federal Grants Commission. It changed from 2000 because they were raking in royalties from the mining boom and when the boom ended, as Saul Eslake, respected economist, points outs, they didn't cut back Government spending. They have got themselves in their own pickle. Why should we bail them out?
TREASURER:
They were getting less than 30 cents in the dollar. I mean that is ridiculous.
LANE:
That is because they were getting a royalties boom.
TREASURER:
No, it is because of a GST distribution system that clearly wasn't working. That’s why. We are interested in fixing the problem. That is why I set the task to the Productivity Commission to look at this problem in a national economic context. It is not about this state versus that state. It’s - is the formula actually costing our economy? That is a key question to ask and I have asked it. We will continue to work to provide a durable, lasting solution here – not a sugar hit top-up with money that Bill Shorten doesn't have.
LANE:
If that formula is out of whack, what about the GST itself, it was put in place 17 years ago and that hasn't changed. Is it fit for purpose?
TREASURER:
We went over that a couple of years ago, Sabra, and the Government is not pursuing any changes there.
LANE:
Too hard. The last time we talked, you talked about the Commonwealth Bank as being an epic fail. Have you had further briefings from the CommBank Chair Catherine Livingston and are you more or less confident about what the bank is doing now?
TREASURER:
I still think there is a lot of work to do and there will be further announcements made about responses to what has happened at CBA. We already had ASIC come out a couple of weeks ago and announce they were undertaking further investigations in relation to directors and other responsibilities and what has occurred on this matter. We have AUSTRAC with the case before the courts and the directions hearing on that is very soon. Then there are other responses that are there and in the wind and I have been working very closely with the regulators to make sure that we have a full court press response to what has happened at CBA. I am confident that is what is being provided by our regulators.
LANE:
The Chief Executive, Ian Narev, will now retire at the end of June next year. The bank says that this is succession planning; that it's been brought forward. Did you demand or strongly suggest that it was time for him to move on?
TREASURER:
No, I didn't, because that's the job of the board. The people I hold responsible for the Commonwealth Bank of Australia are the chair and the board of directors. That's why I asked the chair to come and see me directly, because they're responsible for all of these things. And the Banking Executive Accountability Regime (BEAR), which I'll be introducing into the Parliament in the next few weeks and months, that regime puts accountability back in the senior levels of our banking system. But you can't go around and make decisions that affect the lives of millions of Australians and just walk away.
LANE:
Are you satisfied now that the bank is no longer exposed to the risk of money laundering?
TREASURER:
Well, AUSTRAC are the ones who are tasked with ensuring that's the case. I am pleased to have heard from CBA, when I met with the chair, that they take this incredibly seriously and that they see this as their most important responsibility in terms of the integrity of how the bank operates. Now, the proof of that will be in the pudding.
LANE:
Your seat of Cook is named after Captain Cook. With the current debate about statues and monuments, Geoffrey Blainey, the historian, pointed out on the weekend that a report back in 1975 suggested a monument be built acknowledging Indigenous contribution and heroes of the past but that's never happened. Should that be revisited, to acknowledge the place of Indigenous Australians?
TREASURER:
Every year on the 29th of April we gather together as a community at Kurnell and it's effectively a reconciliation ceremony. It's a meeting of two cultures ceremony. And we acknowledge both the incredible achievements of, at that time he was, Lieutenant James Cook when he arrived, but we also acknowledge what has happened in Australia over the last 200 and more years, almost 250 years now, and the challenges faced by Indigenous Australians. I mean, that idiot who did this on the weekend, he's not doing anything to help Indigenous young Australians. This was just an act of pure ego and vanity; it's disgraceful. Late last week I was up in Western New South Wales with a wonderful program, Clontarf Foundation, and they're changing the lives of young Indigenous men in tough communities. They're going on, they're getting jobs, they're finishing school, they're being a positive force in their community. We're investing into that program fairly significantly – that's how you help Indigenous young Australians – not carrying on like an idiot and vandalising public statues.
LANE:
Treasurer, thank you for talking to AM this morning.
TREASURER:
Thanks Sabra, good to be here.