13 May 2014

Interview with Matthew Taylor and Oriel Morrison, CNBC

SUBJECTS: Budget 2014-15

This is a transcript of the Parliamentary Secretary to the Treasurer's interview CNBC. The main topic discussed was the Budget 2014-15


Let’s get more on what we might be able to or might not be able to expect in the Budget later on today. Steve Ciobo is the Parliamentary Secretary to the Treasurer, joining us now. Steve, thanks very much for speaking to us. I know you’re not going to be able to tell me what’s going to be hard and fast in the budget, we’ll get those details when we go into the lock-up shortly. There’s some concern out there that cuts we might see to spending could really derail the green shoots that we’re seeing in the domestic side of the economy. Of course, we’re rebalancing from that mining-led investment boom into domestic consumption fears that some things, for instance, the debt levy on higher income earners might derail confidence – how are you going to mitigate that if it happens?


Of course, we’re very mindful of the potential impact from fiscal consolidation. None of us want the outcome to be that there is a slowdown. So we have been mindful of that in terms of the fiscal consolidation pathway that we’ve got, in addition to that what we’re also doing though, is to make sure we’re shifting from a consumption short-term budget towards an investment budget with a longer-term focus. A key part of it which the Treasurer has already outlined is what we’re doing in terms of the roads projects and the roads funding. So a key part of that is going to see stimulation across the economy as a result of our very big infrastructure projects.


We’ve already heard that, that it’s about $80 Billion over six years from a mix of state and federal funding. Where else will the infrastructure story be played out? Because that was for a roads package – what else can we expect later-on today?


Well, I’m not going to disclose any great surprises to you. You’ll have to wait until the Budget tonight, but obviously we are very focused, and the Prime Minister has said time and time again that wants to be an ‘infrastructure Prime Minister’ so our focus is going to be about making sure that we see investment in productive infrastructure a shift away from short-term spending and I think ultimately that’s going to be in the best interest of all Australians.


Singapore has a question for you.


Thank-you so much for that Steve, it Oriel here in Singapore. I’m interested in the impact that you think the Budget’s going to have on business, big business and small business in Australia. Of course we’ve talked a lot over the last few years about the Mining Tax which is obviously no longer on the table, has there been any discussions about another form of tax that might be similar to that one?

CIOBO: Well not under the Coalition. We’re very focused on making sure we keep taxes as low as possible Oriel. We want to make sure that we’ve got a credible pathway back to a surplus, we want to make sure that we’ve got fiscal consolidation that ultimately is going to be in the long-term interests of all Australians. So we’re not looking at imposing any surprise taxes or anything like that. In fact Oriel, we’re still fighting to get the Opposition to agree to the mandate that we clearly had from the last election; which it to abolish the Carbon Tax and the Mining Tax. So we ask the Labor Party again to get out of the way; let us do what we were elected to do – and that’s to reduce the overall tax burden on the Australian people.


But we are likely to get higher taxes of some form coming through in the Budget, right Steve?


Well look there is a lot of speculation in relation to there being a temporary deficit levy on Australia’s highest income earners – we’re talking about the top three or four per cent of income earners. Now ideally, we wouldn’t do this. But the reality is that we have to fight a very strong headwind, and that strong headwind was the former government which spent like there was no tomorrow Oriel, which actually led to an outcome where we have $123 billion of cumulative budget deficits which have been forecast - a debt pathway which was going to see us arrive at $667 billion worth of debt. In our view this is not something that is sustainable, it’s not something that we want to see continue, it’s not something we want to reach. We’re taking concrete steps to make structural changes in this year’s budget to make sure that we start to undo all that crazy spending and get us on a more fiscally consolidated platform so that we don’t see the kind of debt and deficit that we were projected to reach.


You mention that before the election the Prime Minister said that there would be no new taxes and that taxes would be lower under the Coalition, yet you just referred to the likely deficit tax levy that we could see later on, and there’s been a lot made, particularly in the domestic media here in Australia about broken promises from the Prime Minister. What do you have to say then to the community and to business who believed that there wasn’t going to be any new taxes, but then it looks like we might get one.


I think the Australian people understood that when we went into the last election that we were going to do several things: we said that we’d stop the boats and all the costs associated with an influx of some 50,000 asylum seekers; we said that we’d invest in productive infrastructure and in particular we want to focus on building roads; we said that we’d get the budget back on a pathway to being sustainable and back on a pathway to getting back into the black. That’s what tonight is going to be about.


We’re out of time. We’ll let you go, I imagine go into the lock-up now as everyone else is doing, Steve Ciobo, thanks so much for joining us.