SABRA LANE:
Joining us now to discuss it, hopefully with some more detail, is the Treasurer, Scott Morrison. Treasurer good morning and welcome to the program.
TREASURER:
G'day Sabra.
LANE:
Voters might be a little bit confused. The Medicare Levy is going up to help pay for the National Disability Insurance Scheme but now the Government is also holding up the promise of tax relief, how can you do both.
TREASURER:
Well you can do both, and it's important that when you do both that you don't put any strain on Australia's AAA credit rating, that we will absolutely maintain our trajectory back to balance as it's currently projected in the Budget, and so this will be achieved in a fiscally responsible manner. Let's be clear about what's happening with Medicare and what's happening with personal income tax. What we're doing with the NDIS is having a levy - which is exactly what Labor did - to ensure the NDIS scheme is fully funded. We've got an insurance levy for an insurance scheme, and the NDIS should be securely funded. By having a levy that provides that secure funding, it not only gives them that resource, but it also I think contains the scheme to live within it means within that resource. Now, we should be able to cut taxes, as we seek to do, and not have that affect the NDIS. The Labor Party, they intend to raise taxes, well that shouldn't affect the funding for the NDIS either, so the NDIS should be quarantined and set aside, and funded separately and that's what I announced in the Budget. What the Prime Minister has said, is we want to also reduce personal income tax, particularly for middle income earners, and that's a statement of priority.
LANE:
Why announce it now, and when are you looking to deliver these cuts?
TREASURER:
Those details will come when the Government has worked through the details we are currently working through and have been for some time. We know, that over the course of the last few years, that it's been a long time since any Australians had a decent pay rise. That has been confirmed in a series, as you know, of presentations, discussions, we've had on this program. This is a real pressure on Australians and we want people to know as we went into Christmas, that our first priority in taking the Budget back to balance is to ensure that we can give them some relief when it comes to their personal income tax. Now we've already done it twice, as Treasurer I've already delivered two tax cuts. It's always been my intention that wherever I can, and the Prime Minister, that we will cut taxes.
LANE:
Let's quantify it, what kind of a tax cut are you hoping to deliver. Are you talking about a sandwich, and a milkshake tax cut. Something that's quite modest?
TREASURER:
It's too early to be providing those details. I don't intend to do that today. What Australians should know is this, when it comes to a choice between increasing taxes, and cutting taxes, we're going to cut taxes. The Labor Party is going to increase them. Not just on personal income tax, small business, capital gains tax they're going to increase, negative gearing they're going to get rid of, a $150 billion in higher taxes under Labor. And we're saying we're going to cut personal incomes taxes, as well as corporate taxes.
LANE:
Let's talk about what you're doing, are you looking to tinker with the thresholds or the tax rates?
TREASURER:
all of those details will come, once the work has been done.
LANE:
Can the Budget afford it? Lifting the threshold by something like $3000 would cost about $4 billion a year, we're still in deficit, we're entering our tenth year of a straight deficit Budget.
TREASURER:
We won't be doing anything that puts at risk our trajectory back to balance.
LANE:
How does this square away with the need for Budget repair, given that the Government has tried big spending cuts in the past, you've abandoned some of those because the Senate wouldn't agree.
TREASURER:
Well the Senate abandoned them. They rejected them and the Government took a practical decision and guess what we did? We kept the trajectory of the Budget going back to balance. We're a very practical Government when it comes to managing the nation's finances. Now we know that we have the uncertainties of the Senate, and the Labor Party and opposition which says one thing on company taxes or says one thing on wanting to have savings, and then votes the other way in the Parliament. We find a way through that and have continued to do that. That's how we've kept the AAA credit rating despite the Labor Party, and despite what's happened in the Parliament and we'll just continue to do that Sabra. But what the Prime Minister's doing, what I'm doing is trying to let Australians know that at the first opportunity, we'll be seeing the cut taxes for middle income Australians like we already have - we increased the threshold to $80,000 to $87,000 and we also got rid of the deficit levy which the Labor party wants to put back on.
LANE:
If you don't mind me saying, you're sounding a little like Santa but you're not saying exactly when the gifts are coming. The gifts might not be coming this Christmas nor the following Christmas.
TREASURER:
Setting the direction is important and people knowing where we're heading is important and as we frame future Budgets and I can obviously say it won't be in MYEFO and I don't think anybody had that expectation, but what we have been doing now for some time was working how we could provide tax relief to middle income Australians. That's our priority, that's what we're working on, what the Labor party's working on is how they want to increase taxes if they become the Government and now gives middle income Australians a very clear choice.
LANE:
Was it a Cabinet decision to stop the House of Representatives from sitting next week?
TREASURER:
This was a decision that was canvassed amongst the leadership and that's a matter for the Speaker at the end of the day and he was advised by the Government and that's what was done.
LANE:
There's plenty of legislation for the Reps to consider – NDIS bills, national security, a redress scheme for child abuse…
TREASURER:
The NDIS bill is in the Senate.
LANE:
And there are other related bills…
TREASURER:
There are 42 bills in the Senate right now that they could pass…
LANE:
There are related bills ready to go…
TREASURER:
If they could get through all those 42 bills in the next fortnight then I'd be happy to send them some more but I don't think people complained that in the next fortnight the Senate has a short workload. They've got plenty to pass, the issue hasn't been whether they've got plenty to pass, the issue has been that the Labor party, the Greens and others have been blocking legislation in the Senate – important ones, like this one, the Super Saver bill is in the Senate. That can give first home deposit savers a tax cut now, that's what they should be focusing on once they've dealt with same-sex marriage.
LANE:
Does the Government fear backbenchers crossing the floor to vote for a Commission of inquiry into the banks and has Cabinet considered it? News Corporation today is saying that Cabinet has considered a Royal Commission?
TREASURER:
You wouldn't expect me to go over what the deliberations of Cabinet are but you also wouldn't find it puzzling that Cabinet from time to time would consider these sorts of issues. Of course they would…
LANE:
That's reported that you pushed back…
TREASURER:
And to talk these issues through but the Government's position remains the Government's position on that and what we're doing on the banks is what matters. We're taking action now – as you know – everything from accountability reforms for the Banking Executive Accountability Regime – the BEAR, the increased resources for ASIC, the new complaints authority which will have binding outcomes for people, the changes we've made on competition in banks, new credit reporting rules and opening up the mutuals and co-ops. Now I know you want to ask the next question but there is a lot we're doing on banks and we are taking action now and that's why a lawyers' picnic for three years costing a $150 million is not going to get an answer for anyone.
LANE:
Okay, the next question I want to ask, the Prime Minister's just announced that Philip Ruddock will examine whether Australia's laws adequately protect the human rights to religious freedoms. What are your views on that?
TREASURER:
I'm very pleased about this and I've been working with the Prime Minister on this since the outcome of the vote of the plebiscite last week – the Marriage Survey last week – and this is not a substitute for not dealing with amendments to the same-sex marriage bill in Parliament. Those amendments as individual members of Parliament will still be pursued and I have a view that they should be supported. What this does is it says to 4.9 million Australians who had a different view – and I think to many more Australians who also believe religious protections need to be looked after – that we will do a thorough review of this and Philip Ruddock is exactly the right person to lead it. He is well-respected in Australia's religious and ethnic communities, he will understand what the fears and anxieties are, he is a great listener about what those anxieties and fears are and where there are any deficiencies in our law or where he can actually provide assurances that our laws are providing these protections, I think that will be a great comfort and great assistance so I think this is a positive move, it doesn't replace what many of us believe we need to do in the Senate and the House now, but you've got to be careful about making changes that obviously you don't have any unintended consequences. I'm for religious freedoms, not for religious extremism.
LANE:
Treasurer, thank you very much for talking to AM this morning.
TREASURER:
Thanks very much, Sabra.