SANDRA SULLY:
Joining us now is the Treasurer Scott Morrison who has begun the big sell of his second Budget. Mr Morrison thanks for your time tonight.
TREASURER:
Hi, Sandra.
SULLY:
You'll get plenty of headlines from this Budget, most of them arguably positive but there’s some big spending and you'll lift taxes on all Australians.
TREASURER:
Well, we're doing a number of things here. The key issue is we're securing better days ahead by making the right choices tonight and we’re doing it in a number of areas. We're continuing to grow our economy with more and better paid jobs, we’re ensuring that the services that Australians rely on, Medicare, the National Disability Insurance Scheme, schools funding, all of this is guaranteed and increasing. Thirdly we're putting downward pressure on the rising costs of living on things like electricity bills and housing costs and for pensioners in particular, those who lost access to the pension early this year, they're getting their pension concession card back so they can access those state and territory discounts and other discounts, and we're living within our means. I mean, spending growth is less than two per cent, it's going down to 25 per cent of the economy. So we're keeping expenditure under control, but we’ve had to pay for the reversal of $13.5 billion of budget improvement measures that were rejected by the Senate. Now you‘ve got to deal practically with that. That means we’ve said if you can't pass the savings then we'll have to do things on revenue. But on the NDIS, can I make this appeal – when Labor introduced the NDIS it was supported by the Coalition, by the Liberal and National Parties and we supported the 0.5 per cent levy. Now we've been having a disagreement about how you fund the gap. There's more than a $50 billion gap in funding for the NDIS over the next 10 years. We can end that speculation. We tried to do it by savings, they said no. So we said let's do 0.5 per cent increase two years from now. Not right now, two years from now, and it only gets put on when the bills start coming in.
SULLY:
You referred to a $13 billion slap down by the Senate. Really that's a slap down to Tony Abbott. But out of the blue in tonight's Budget you’ve slugged the bank with billions in new taxes. They won't be happy about it. Is this the Coalition's version really of Kevin Rudd's mining tax?
TREASURER:
No not at all. That was a tax that didn't raise any money. This is a revenue measure that will raise money. The banks have made $30 billion in profits this year. This is a $1.5 billion it’ll raise from the levy. It’s six basis points, it’s a very small fraction of liabilities…
SULLY:
But how do you make sure the taxpayers don't wear the cost and they're not passed on?
TREASURER:
Because it's not on their deposits, it’s not on a pensioner’s deposit account which the last bank tax that Labor brought in was, it's not on mortgages and our competition regulator, our competition cop will be watching the banks closely to make sure that they don't mislead or misrepresent how they might change any of their pricing. And you know what, if you don't like what the big banks doing, then go to one of the smaller and regional banks because this evens up the playing field a bit for them tonight as well.
SULLY:
True, you say that often but it's easier said than done. As a consequence of the Budget can Australia…
TREASURER:
It's really quite straightforward. You can just go to the other bank, and you can deposit your money with them and take your home loan out with them.
SULLY:
It's not that easy, I wish it was. Now listen, can Australia keep its AAA credit rating as a result of this Budget tonight?
TREASURER:
Well at the end of last year we were able to do that and tonight we're in an even stronger position. We’ve reversed the measures that can’t pass the Senate, we’ve kept the budget and improved the Budget going to balance by $7.4 billion by 2020-21, we almost even got there in 2019-20, we are no longer borrowing to pay for our everyday expenditure in just one year from now, and we’ve ensured that our forecasts are very credible, they’re in the middle of the pack and they’re in fact less than what the IMF, the International Monetary Fund, is saying and so on all of those measures that would be consistent with the messages we’ve received that need to be addressed that have been put out there by the agencies.
SULLY:
Treasurer this new levy on foreign investors, just $5,000, surely your critics will argue that it simply doesn't go far enough.
TREASURER:
Well, that's what they pay to get their approval for foreign investment. Now this would be paid every year if you don't lease out the property or occupy it for six months. But it’s not just that, we are abolishing the capital gains tax exemption for principal residence for foreign investors, that is a very significant measure, and on top of that we're restoring the 50 per cent cap on sales to foreign investors that Labor removed when they were in government. So, I mean, I think it will be a lot less than 50 per cent that will go to foreigners these days, but we’ve restored the cap that Labor lifted to allow foreigners to buy much more of our real estate and particularly in places like Sydney and Melbourne.
SULLY:
One element of tonight's Budget that I think will attract quite a bit of flak will be this targeting of welfare. Can you give us some more detail on how that will actually work?
TREASURER:
Well, it's a very small trial when it comes to the drug testing, and we're only going to try it in a couple of communities, some 5,000 people will only be affected by that. And if it doesn't work, well it won't be continued. If it does work, and like we have done with the cashless debit card, which we started as a trial recently in the last couple of years, that's worked very well and we’ve expanded that tonight. So we're a government that just tries to wrestle and deal with difficult problems, trial solutions and where they work, we’ll continue. Because you know, taxpayers, eight out of 10 of them have to go to work every day to pay for our welfare bill. They deserve a fair deal too. And people who are on welfare need to meet their mutual obligation requirements. And the measures we’ve announced tonight I think go some way to addressing that.
SULLY:
Finally Treasurer, is this just a Budget that’ll make Australians like Malcolm Turnbull that much more?
TREASURER:
This is a budget for Australians who are making the right choices in their own lives to secure the better days ahead for them. We're backing them in like we’re backing in small business once again in this Budget. We're building Australia – road by road, railway by railway, runway by runway, indeed with the Western Sydney Airport. $75 billion invested in our infrastructure. In the Snowy 2 Hydro Scheme and working with the states in Victoria and NSW to free up more of their capital to build more infrastructure in their states. This is a nation building Budget which is going to drive growth to support jobs and better paying jobs for Australians.
SULLY:
It's been described as a Labor-like budget in the size of its spending. We appreciate your time tonight Treasurer. Thank you...
TREASURER:
Well it's not that Sandra and let me take you to task on that.
SULLY:
Ok.
TREASURER:
The difference between a Labor budget and a Liberal budget is, a Liberal budget is always paid for - Labor just make empty promises.
SULLY:
Thank you.
TREASURER:
Thanks Sandra.