28 September 2015
Transcript - #2015004, 2015

Interview with Ray Hadley, 2GB

SUBJECTS: Leadership, border protection, Gosford site selected to start the jobs, NSW Central Coast, Bill Shorten’s $57 billion great big budget black hole, providing real opportunities for Australians who want to work, save, and invest

RAY HADLEY:

He is in the studio now with a Bible not in sight but there is a crash helmet here that he bought in and we didn’t get time to talk about the crash helmet because we were overtaken by other things.

TREASURER:

We were, we were Ray.

HADLEY:

So you signed it, I will sign it – it was the crash helmet I invited him to wear on my programme and I will leave it having signed it with Mr Morrison to donate to a charity some time.

TREASURER:

Kookaburra Kids which is a fantastic charity down in the Shire and does a great job for families who have someone in the family who suffers from mental illness, particularly the children who have to deal with those situations. It is a great charity.

HADLEY:

Let’s pick up where we left off to a certain extent. Have you had an occasion to speak to Tony Abbott since that infamous Monday night?

TREASURER:

No, I haven't.

HADLEY:

One of the things I'll say to you, right, and this is not perceived about what happened or what did happen, we move forward ok. I think he's a really good bloke.

TREASURER:

So do I.

HADLEY:

I'm a bit concerned about him. I'm going to talk to him tomorrow, on air. Is there a possibility given what he said in the Telegraph, to Taylor Auerbach, that somehow you two can get together and sort out your differences?

TREASURER:

I'm sure that once – I mean these things are very emotional events and I'm sure once the dust settles and time moves on then we'll be able to have that opportunity, but I'll give Tony his space. I've got an important job to get on with and he'll be back in Parliament when we get back there in a couple of weeks. I wish him only all the best to him and Margie for their future and the decisions that they're having to make and mate, I think that's the best place to leave it.

HADLEY:

Will we be able to continue our regular discussions? We did that with Tony Abbott’s imprimatur last time, and that continues?

TREASURER:

Happy to Ray and for the particular reason you said in your introduction – I want to have a chat to your audience as we have been doing for many, many years. You and I get to have a chat as well. But it really is about the opportunity to talk to your listeners about what is happening, about decisions that can impact them and for you to raise issues with me they are raising with you.

HADLEY:

Ok. One of the things that came out last week, the Prime Minister had a discussion with David Speers on Sky News and said things that concerned me and other people, having supported you and I am talking about you individually and not just the government, in stopping the boats and I was concerned. I noticed by later that night on Radio National he was taking a different approach in relation to Nauru and Manus Island and there are people Scott who are greatly concerned that he is a bit softer than the last Prime Minister on a number of issues you and I agree on vehemently. Boat people for a start and to a lesser extent climate change. But he did point out even in the interview with David Speers and then when he went the other way on Radio National that night that it is always going to be done by consensus, via Cabinet. Now Cabinet is not going to be weak on these issues you fought so hard to win are you?

TREASURER:

No absolutely not. I was pleased to see Peter Dutton continuing in the role of which you know I recommended him for when I left the role to the former Prime Minister and I am pleased to see Peter continuing to serve.

HADLEY:

Stop there. Did you lobby on his behalf to give him the job?

TREASURER:

I have always thought Peter should continue in that job and I have been a very strong supporter of Peter in that role as Peter knows and others know because it was a hard thing to do to stop the boats, it really was hard. Peter I think picked up that job from me when I left it around a year ago and continued with the strong position that was there and equally his decisions on bikies which was something we started when I was in the portfolio and the legislation we introduced and the fact we have got more people in our detention centres now because they have been convicted of various offences and they should be going home – well, good.

HADLEY:

See one of the things I don’t understand about that – I mean I can understand people being opposed to the tough line you took and I take on illegal boat people. I mean I have had battles even with John Singleton one of the shareholders of the radio station on the same issue about my tough stance on that. But I started to read yesterday and started to pick up some sort of bleeding heart from the left deciding that the really strong action you have taken from criminals as a government, exporting them back to whence they came if they are not Australian citizens, is all of a sudden tough and heartless…

TREASURER:

Well it is just common sense, it is just obvious.

HADLEY:

I can’t argue that position because I don’t understand where they are coming from.

TREASURER:

I don’t either. I have no doubt about the strong position of the government under Malcolm Turnbull, that the government will take on border protection. Malcolm and I have discussed these issues many, many, many times when I was in my former portfolio. I am a member of the National Security Committee of Cabinet as Treasurer and you can be sure that the same position I have taken on those issues will remain as strong going forward as it always has been.

HADLEY:

I noticed on Friday when I was on air you were on the Central Coast. This was a promise made by your predecessor Joe Jockey regarding an ATO office at Gosford. Now I declare an interest. I have been a supporter of the Central Coast taskforce for quite a number of years which is headed up by quite a number of people and supported by John Singleton as well. I reside occasionally on the Central Coast. I have a place at Toowoon Bay so I declare all of that interest there. But I really think even allowing for that major announcement on Friday that we have, and I think you would appreciate this even though you come from the other side of Sydney, that we have this unbelievable untapped resource in NSW called the Central Coast.

TREASURER:

I agree. I go up to Patonga a bit.

HADLEY:

Do you?

TREASURER:

I love going up to Patonga. It is a great place. The pub down there on the water is absolutely fantastic. But that said it was very exciting to be up there with Lucy Wicks last Friday and I pay tribute to Joe Hockey for commencing that process to have what is not just an Australian Tax Office facility but a Commonwealth Government hub for a whole range of different services. I think it is going to have an enormous impact on the Gosford CBD. I think it is going to be a catalyst for other private sector investments. Lucy Wicks has been the real champion of this up there on the Central Coast. It would not have happened were it not for Lucy and the strong support she gets from the people you have just been talking about who have been a real driving force for change up there on the Central Coast. I love the Shire but if I will leave the Shire to go and spend a few days on the Central Coast of my volition I think that tells you a bit about what I think about the opportunities up there. This investment, by putting those people there and providing those services, is going to draw people into the area and as I said act as a catalyst for other private sector investment. The government can’t do it on its own…

HADLEY:

No.

TREASURER:

And it needs to have others who become part of this.

HADLEY:

Well I am glad you mentioned that. I don’t want to focus the entire interview on the Central Coast but I want to focus a lot of it because I love the area. You had Lend Lease up there, not you personally but you know the Liberal federal government and the Liberal state government in NSW, a fully funded process – they were going to make a mini Barangaroo. There were a few naysayers up on the Central Coast who said ‘oh no you can’t do that, you can’t have apartments here, you can’t do that’. It was going to be a mixture of green space, Lend Lease were hot to trot. It wore them out – ten year process – so in the end they said ‘blow this, let’s go somewhere else. There are too many obstacles.’

TREASURER:

That is frustrating. We need more planning but less regulation. You can plan for things but then you have to have a process that I think facilitates the investment. By all means have a discussion about what you want in particular places and what you want to achieve but to have the planning system and regulations act as a handbrake on jobs in that part of the world – I mean Lucy is also passionate about having higher education opportunities for people living on the Central Coast. She wants people to live the dream – live on the Central Coast and work on the Central Coast. I have the same dream for the Shire.

HADLEY:

Can you use your influence to lean on Premier Baird and Mr Stokes to say – let’s put this back on the agenda? Three hundred thousand plus people and disproportionate amount of money spent on the Central Coast in terms of infrastructure and in terms of things like Lend Lease wanted to do as opposed to say Newcastle or the ‘Gong’.

TREASURER:

Rob Stokes is the Minister for Planning. He was very helpful in getting this project up in the CBD – the one where we have got the Commonwealth hub – 600 employees going there. That project will get started, as I said on Friday, in about July next year. They should be building and it should be ready at the end of 2017. So the state government was very supportive of that. It is on an old public school site so they facilitated that. So I think we have got a good partnership there and it showed what state and federal governments can do when they get together and hopefully there can be more of it.

HADLEY:

Well let’s put some other people up there apart from public servants. Let’s do that.

TREASURER:

Sure.

HADLEY:

Now the Australian front page today goes into detail about Labor’s unfunded policies. Apparently they have made $10 billion worth of promises since the Budget and now face a $57 billion black hole. Will Bill Shorten and Chris Bowen actually announce any savings measures or have they, will they?

TREASURER:

They have been so modest in the areas of savings you can barely find them. The problem they have got is they keep going around promising that they don’t like what we have done on savings measures and if they don’t like them well commit to reverse them or actually front up to people and say no they will do the same thing. But we have got promises whether in the foreign aid area where they are spending like crazy. This is why Chris Bowen’s argument when it comes to changing the tax system – he doesn’t want to change the tax system so it can help people work, save and invest, he wants to change the tax system so he can get more money off people so he can spend more money off people. This is the real dividing line now between Labor and the Coalition when it comes to tax. We want a tax system that helps the economy grow. In 2016/17 Ray if you are on an average income which will hit about $80,000 you will be in the second top tax bracket. Now the last time that happened was in 2000 – there was the risk of that. So that is the problem with the tax system. There are not the rewards in there, the incentives for people to work, save and invest. Labor just wants the tax system to chase their higher spending. Honestly I think the tax system isn’t there to meet the government’s spending aspirations, it is there to meet Australian’s economic aspirations.

HADLEY:

Many people including the former head of Treasury say that the time you have allotted is not enough time to generate the changes you wish to generate. How do you sort of condense it and pack it into the time the next election occurs?

TREASURER:

Well the tax white paper process has been going for a while now. There was a discussion paper released some months ago and there have been thousands of submissions that have come into that. But the timing is something you have to consider carefully. When the Howard Government and Peter Costello did this it did take around about, Peter tells me, 18 months from start to finish through going through the process and around three years for full implementation. As you know Peter and I talk a bit and he has been very helpful with the sort of early advice he has been giving me around these issues. But you have got to get it right. That is the main thing. The other thing is you can’t get locked up in an accountant’s picnic on this where everyone is debating this feature or that feature. You have got to agree why you are doing it in the first place. Why I think we need to change our tax system is I just don’t think it is giving people who want to work, save and invest a fair go.

HADLEY:

Are you talking to the former Treasurer a lot more since you became Treasurer?

TREASURER:

Joe and I have had a couple…

HADLEY:

Sorry I am talking about Peter Costello, not Joe.

TREASURER:

Oh sorry. Yes I do. I talk to Peter and I have done that over many years Ray. We all sort of find our mentors in politics and I have been very fortunate to have many of them and Peter has been one of those over a long period of time.

HADLEY:

You would be silly not to. I don’t mean to be disrespectful, given you have your training wheels on as Treasurer and he was the man who brought the deficit down from $100 billion down to a $22 billion surplus.

TREASURER:

Well I am confronted by a similar challenge. The net debt to GDP was the same when he was starting off as when I am starting off today. On top of that when he left the role of Treasurer if we had the same expenditure as a percentage of GDP today as it was when Peter Costello left we would be in surplus today. It was just over 23% and even though revenue has fallen as a percentage of GDP since that time, we would still be in surplus now if that were the case and that says to me that that's why I have to focus on controlling spending, others try to convey that as slash - that's not true. It's about controlling the growth in expenditure.

HADLEY:

26% of GDP is not sustainable, now you lead me to the next question. You've got a hostile Senate. You want to make cuts, you know in real terms cuts, they have to be…

TREASURER:

We want to slow the growth. Social services expenditure is about 3.5% real growth a year, $154 billion, it's a big rock in the budget.

HADLEY:

More than seven out of ten Australians who are on unemployment benefits have been there for more than a year. Now when you came to your previous portfolio you wanted to cut that and you want to keep cutting it. My point being both with that, hand in glove, you have a hostile Senate. How do you get it through the Senate because every other time you have gone to the Senate as a government for important measures to reduce spending, or at least put it hold so it doesn’t increase, you get knocked on the head, you get cuffed around the ears.

TREASURER:

Well I had some success back in June when we were able to get those pension changes through. They were significant, they were very big changes to the part pension and we were able to get them to agree because I got others on board – whether it was ACOSS or others who helped me do that. Now on this occasion one of the things you do by getting those young people particularly off Newstart is to get them into jobs. One of the problems with our tax system is what is called the effective marginal rate of tax. If you go off welfare and go into work you actually want to go forward financially, not backwards. That is an important part of how we have to change the incentives. That’s why I say if young people want to work more then out tax system has to reward them for doing that.

HADLEY:

About two months ago I interviewed Peter Costello on that Saturday morning program where you also featured and I will use my expressions not his. In order to get these things through I said what did you do in government and he said ‘suck up to them, whatever they want give it to them and you will get it through’. So are we about to see a bit of sucking up to Jacqui Lambie and the rest?

TREASURER:

I am just going to keep doing what I have always done with the crossbench Ray because I have had a lot of success with the crossbench and I have done it largely by listening to them. That is step one. Find out what it is they are trying to achieve and if you can come to an agreement that helps them get what they want to do and you get what you want to do then you have a way forward.

HADLEY:

Well he explained, the former Treasurer, beautifully with Brian Harradine the late Senator. What he said was ‘they now have got more mobile phone towers in Tasmania per capita than any other part of the world because when we wanted to privatise Telstra Harradine came to me and said I am worried about communications’. He said ‘Brian what do you want?’ He said ‘I want more mobile phone towers’. So he said ‘now it wouldn’t be a part of New Zealand where you can’t get mobile phone service thanks to Brian Harradine’.

TREASURER:

It is not rocket science.

HADLEY:

Ok. One final thing if I can just go back to Gosford I have just got a text. We have got the performing arts precinct on the waterfront up there. State and Council have the funds, the feds said they would match it as part of their election promise, it is not in the Budget, it is $10 million. If they get the $10 million the project is ready to go – ‘bang, crash wallop’. Now I know this is without notice – can you find $10 million to honour a promise, not made by you but by your predecessors to get this kick-started because if they get the performing arts precinct up and running I am giving you a tip Minister, it will start to reinvigorate the area. It is only $10 million.

TREASURER:

Lucy Wicks I think is the best advocate in the business when it comes to local members and Lucy and I get on very, very well and I am sure she will be continually knocking on my door on this. I am not about to make those sort of Budget decisions…

HADLEY:

I will knock – it is only $10 million.

TREASURER:

Budget decisions on air…

HADLEY:

It is a lousy $10 million.

TREASURER:

Because one thing you won’t get from this government is decisions just falling out, tumbling out of the sky.

HADLEY:

It is a lousy – I will sign the hat for a lousy $10 million.

TREASURER:

[laughter] For Kookaburra Kids you are giving $10 million?

HADLEY:

No.

TREASURER:

2GB - $10 million for Kookaburra Kids, they will be ecstatic.

HADLEY:

No – the board have just collapsed. Someone get the defibrillator for Russell Tate. Quick. The Executive Chairman. Can you look at it please?

TREASURER:

I will look at it carefully Ray, of course I will and Lucy will make sure I will.

HADLEY:

I will sign the helmet, not the helmet [laughter]. I will sign the crash hat, the hard hat during the break. Thanks very much for coming in.

TREASURER:

See you next Monday.

HADLEY:

All the best.