PETER STEFANOVIC:
So, that's a few years away. The problem is now. And let's bring in Stephen Jones out of Canberra. Stephen, good to see you. So, you've got those comments from Wesfarmers then you've got the comments from Steven Kennedy. A rough ride ahead in your view with your data. How bad are things going to get in the second half of this year or is the built up savings enough to steer most folks through?
STEPHEN JONES:
Look we know that households are doing a tough, we know that a lot of small businesses out there are doing it tough. It's why our budget was very deliberate about dealing with supply side shortages to take pressure off inflation ensuring that we could provide support to households and small businesses without making a tough situation worse. There's no doubt that monetary policy is having an impact on slowing economic activity in Australia and around the world, by the way. Right around the world we're seeing this. We're not immune from it narrow path through, but we think we can make it. And as the Treasury Secretary said, we expect to see a turnaround in the back half of next year as those monetary policy settings start to ease.
STEFANOVIC:
So, Rob Scott also warned against an increase of 5 per cent to the minimum wage that is up this Friday. He says it could stifle investment and put jobs at risk, according to him. Are they reasonable warnings or overblown in your view?
JONES:
We know that everyone's doing it tough but nobody more than low and minimum wage workers so we think it's only reasonable that they're provided with a decent wage increase to enable them to keep their head above water. The independent Fair Work Commission accepted the recommendation of the incoming government last year and increased minimum wages that made a real and material difference to minimum wage workers. They'll make their decision for this year in the coming months and it's important that they're able to get on with their job and do that independent of government or other voices. But we think that minimum wage workers should be provided support in these difficult times and the bargaining arrangements that we've got in place have obviously got to take into account capacity to pay profitability and productivity in setting wage settings for the years ahead.
STEFANOVIC:
Timely I guess that the RBA Governor will appear at a budget estimates hearing this morning but given the big squeezes on we've been talking about that and a collapse in new home approvals are rate rises more or less likely?
JONES:
Look it's not for me to sort of predict where the Reserve Bank is going to go on here but from here but on the issue of new home approvals this is of deep concern to the government. We've got our accord, we've got our objectives for new house building. It's absolutely critical that state and local governments do their bit to ensure that we are removing the blockages to new home and apartment building approvals. We can't get more housing built if all the links in the chain aren't working together. And the approval process absolutely critical to us dealing with the housing crisis that we're facing.
STEFANOVIC:
Right. On the topic of recession, I've asked you this question dozens of times, but according to some leading economists, the risk of recession is not insignificant. In fact, it's increasing. So, has your view changed on that at all, Stephen? Are we still going to avoid a recession?
JONES:
I've said to you on a number of occasions in response to those questions, the path through is narrow, but we think we are well placed -
STEFANOVIC:
Still? Even still?
JONES:
We still think we're well placed . Our budget deliberately calibrated to ensure that we don't make inflation worse while dealing with those supply chain difficulties. By which I mean the fact that we've got a skills crisis in this country and dealing with the skills crisis dealing with the energy inputs which are a big factor on inflation. A decade of blockages in energy policy trying to move those long term supply issues that have so bedevilled productivity and economic growth in this country, we think, let's use this opportunity now. Won't add to inflation, will help to sustain long term economic growth. That narrow path through to ensure that we do miss what other economies around the world are going to have beset upon them, and that is a recession. We think we can get through.
STEFANOVIC:
Okay. Still narrow path. Okay. Final one on PwC. Stephen, turns out it was behind 15 schemes that were designed to help multinationals sidestep tax laws. What's your thoughts on this?
JONES:
Absolute disgrace. I congratulate the Tax Office for getting onto it and getting onto it quickly. We've put in place 4 steps to address the PwC crisis. Number one, the referral to the AFP to ensure that if criminal charges are appropriate, then they're pursued. Number 2, ensuring that we review our outsourcing policy. First step in that, bring more work in house. Second step in that, ensuring that we have an ethics test on new government contracts. Number 3, legislative reform. This is important one, Peter. We've got a bill before the Senate at the moment which would give the Tax Practitioner Board more powers, more independence, and more resources. It needs to pass. It's blocked at the moment. It needs to pass. We're calling on the Senate to make it a priority when it resumes work in a few weeks time. Pass that bill. It's a part of our response to the PwC scandal. And while that's going on, more consultations are going on with Treasury and the Tax Office about what further steps need placed. I think most Australians would say this 4 step plan in response to the PwC scandal is appropriate.
STEFANOVIC:
Can PwC, final one here, can they be trusted with more contracts?
JONES:
Look, we've set the bar very high, not just for PwC, but for everybody who's providing services to the Commonwealth ethics, the way you behave, will impact on the way and your ability to win Commonwealth Government contracts. And that's in the context of us wanting to bring more work back in house. Over a decade, we've run down the capacity of the Commonwealth. We need to ensure that we're rebuilding Commonwealth Government public service capacity, which means we have less reliance on outsourcing. But one point I do want to make, and it's an important one. The incident at the heart of the PwC scandal was a former government. In fact, 4 prime ministers ago saying, we want to consult with business and tax professionals on how to get our tax laws right, and the abuse of that trust led to this scandal. We want to be a government that consults, but it's incumbent on those whom we consult with to ensure that they keep that information and that trust to ensure that they're not using the information they gain through that consultation process to weaponise or monetise the information they've gained. That is the evil at the heart of what's going on in this PwC affair. If you want us to be a consultative government, then trust has to follow.
STEFANOVIC:
Okay, Stephen Jones, we're out of time. Talk to you soon.