30 January 2017
Transcript - #2017004, 2017

Interview with Ray Hadley, 2GB

SUBJECTS: Treasurer’s visit to the United Kingdom and Germany; housing affordability; Turnbull Government’s stronger foreign investment framework; refugee resettlement; United States

RAY HADLEY:

Treasurer good morning.

TREASURER:

G’day Ray.

HADLEY:

Or should I say Scomo?

TREASURER:

That’s what I’ve been tagged as so I may as well embrace it.

HADLEY:

So you’re on Facebook now as Scott Morrison Treasurer, in brackets, Scomo.

TREASURER:

That’s how people are increasingly getting to know me, so I’m happy to take the nickname.

HADLEY:

I might have just have to put Ray Hadley on Facebook, in brackets “Raj”. That’s what my children are now calling me. Raj.

TREASURER:

If you’d like.

HADLEY:

No, I’ll leave you to Scomo. I’ve got Facebook but I don’t understand it. I just know it has a lot of hits when I put interviews on, like the one I’m about to conduct with you. You’ve just returned from Europe, you went to the G20 in Germany, you went to the UK, we had news coming back from Simon Benson at The Australian about all that. But given that we’ve seen a series of court decisions seeming to halt Brexit, what was your feeling having been there and come back? What will happen, where do we stand?

TREASURER:

Brexit will go ahead. I think what we’re seeing now, many months down the track, is they’re getting right across all the sort of details of things that have to be dealt with. There’s a large amount of that but I think there’s a lot of practicality entering into this now. I mean the impact here in Australia has been very minimal if anything. One of things I was most concerned about was how the financial services sector, the banks and all of these sorts of things were going to integrate across Europe and the UK. The UK is a very big financial sector and we’ve got enough volatility and uncertainty in the world globally in our financial markets and I was just keen and talking to all the parties over there that they work it out and be practical, and show common sense and get to a seamless position. We don’t need needless uncertainty that’s for sure.

HADLEY:

But Brexit is good for us in terms of trade is it not?

TREASURER:

We’ll have the great opportunity to form a free trade agreement with the UK. I spoke to the Chancellor there. They’re absolutely keen on that. Obviously once the formal issues are dealt with, with the European Union, but equally with the European Union as well. We’ve got opportunities on both sides of the channel there to pursue those things, and it puts us in a very strong position to do so.

HADLEY:

In relation to housing, you met with financiers and specialists in the UK on affordable housing. Now while you were away the Premier Gladys Berejiklian spoke about trying to make housing more affordable. Given you’re a resident of the Shire and I’m in the North Western sector, we’ve spoken about it before, I can’t believe how many units, townhouses and houses are being built out our way, let alone your way. I would have thought we would have an oversupply so that then prices would find themselves, but then we read in the paper today, and over the course of the weekend, they have got record stamp duty figures coming in for the New South Wales Government. The rivers of gold from stamp duty. But how do you combat this, how do you give young people an opportunity to get into the housing market in Australia?

TREASURER:

Well one of the key issues that came out from my discussions with those in the UK, and they have an even bigger problem that we do here, people pay more of their income in rents there, and they pay more of their incomes on their mortgages than they do in Australia. What’s interesting in the UK is they’ve never had negative gearing. Yet they have the same and worse affordability problems than Australia has. What both countries I think are faced with are this supply issue. And it isn’t just on the outer parts of metropolitan areas like out in the North-West of South-West or indeed the South. But it’s brownfield sites as they call them, those in inner-suburbs and other places like that where they need to increase supply. It’s also about who needs the housing. One of the big challenges we’ve got in this country over the next 20 years or so is, it’s not just the growth in population but the number of people in each house is getting less. That means you need even more houses. So it really is about how you can best get more housing effectively into the system, preserving our quality of life, that means you need good strong infrastructure and I think the appointment of Anthony Roberts here in New South Wales as both planning and housing minister is a cracker.

HADLEY:

He’s a smart bloke.

TREASURER:

He is, Robbo is a good bloke.

HADLEY:

Ok, but then, you see, as soon as I start talking about affordable housing it will be email after email about people from another part of the world, dominating at auctions. Now there’s a front page story in the Australian today; “Australian financial intelligence officials last year investigated more than 3.3 billion of suspect transfers by Chinese investors including one “B” for billion invested in property”. It suggested networks of families and friends transfer multiples of $50,000 into Australia, where it’s collected and then used by an agent to buy a property. That would fall into line with the complaints I get incessantly about what happens in auctions in Sydney, particularly.

TREASURER:

I think you’ve made the point before though Ray, when people have gone to auctions they think they’ve been misplacing foreign buyers for people who are actually residents of Australia, Australian citizens. The issues that you’ve highlighted do occur, and that’s why we have the compliance officers and the Australian Taxation Office going around and making sure that where people have illegally bought housing in Australia, as foreigners, then we force them to divest it. I’ve just issued more divestment orders I think, for residential property, than any other Treasurer, and Joe Hockey was doing the same thing. We’ve been pretty tough on that and we intend to keep being tough on that. We’ve tightened the rules around these issues and we will continue more importantly to enforce them. Even putting all of that into the picture you are still left with the big challenge of how do you get more housing for families, for older people, for young people in all different parts of cities, particularly for what they call key workers; police officers, nurses, teachers so they don’t need to travel two hours every day to go and teach kids or look after people in hospitals or protect them on the streets. In the UK they have had more experience at dealing with that particular issue and I was able to look at some of the things they are doing around that. They have rules over there which in developments they require up to 25 per cent of the lots to be available to people in those circumstances. That is called inclusionary zoning and in this country that really hasn’t been a big feature.

HADLEY:

As you have said before, not on this issue but on others, you put rules in place and whether they are people who reside in Australia of Chinese origin or they are fifth generation Australians they all find a way to rort it. You and I have spoken about it, we have examples of it, day after day after day.

TREASURER:

And that is why you have got to put the resources into compliance and enforcement. When I was Immigration Minister we beefed up and we put in train the establishment of the Australian Border Force and put more resources into compliance. We have done the same in the Australian Taxation Office which is getting us to the point where we are able to crack down not just on foreign purchases, illegal foreign purchases, of Australian real estate but we are cracking down also on multinationals not paying their tax. We have put a lot of resources into that. Whether it is in welfare or any of these things staying ahead of the curve is important. We have the situation over summer where we were being criticised for actually trying to claw back debts that had been from overpaid welfare. We had the even more laughable situation where the Labor Party were putting up their own fake news in terms of people affected who turned out to be not what was being claimed.

HADLEY:

Now, the other big story today is Donald Trump speaking with the PM yesterday and endorsing the deal that was done with President Obama. I get the feeling talking to Peter Dutton, your colleague, on Thursday that it would be done and he has said yes we will take the refugees from Manus Island and Nauru to the United States of America and that has got a domestic flavour to it because at the same time he has had this executive order barring citizens from seven mostly Muslim nations at the same time taking 2,000 of our problems to his country.

TREASURER:

This is an extraordinary achievement for Malcolm Turnbull as Prime Minister who has been able to secure the continuance of this arrangement under President Trump. They spoke yesterday, the Prime Minister and I spoke yesterday as well not that long after the call. He has been able to secure…

HADLEY:

Was he happy?

TREASURER:

He was very pleased that we were able to secure…

HADLEY:

Was he surprised that he was able to do it? I am tipping that when he picked up the phone he thought I am a million to one here and then all of a sudden 25 minutes later Donald, as he is called by Mark Latham, ‘The Trump’, ‘The Trump’ says ‘ok, we will honour the agreement’.

TREASURER:

Well, look, they are both business people, aren’t they, they know a deal is a deal. The Prime Minister, I think, has done an excellent job in being able to continue this arrangement. That will enable us to, where it is part of the arrangement they can go to that other country and that reduces the pressure on Nauru. So, look, it is a good arrangement. Peter Dutton did a great job in getting it there and Joe Hockey over there in the United States. It is another example Ray of everyone saying the sky is going to fall, you will never be able to do this, Malcolm Turnbull won’t get this done. Well, on everything from the Australian Building and Construction Commission, to Registered Organisations sorting out things like superannuation, the backpacker tax and now making sure we can continue on with this agreement with the United States, we are just getting on with it and Malcolm is leading it.

HADLEY:

Just finally on this executive order, we now are finding out today that it is in place for 90 days and then he will review it all. Surely to goodness, he won the election on the basis that he would do a whole range of things the American public by majority wanted him to do. Now, the hand ringers are out, the doomsayers are there and he is doing what he said he would do; ‘we are going to protect our borders, we are going to put a halt for 90 days, we are going to have a look and see who we let into the place and then we will revisit’. And he is currently banning entry from Iran, Iraq, Syria, Sudan, Libya, Yemen and Somalia. I bet there are people in Melbourne who wish we had barred some Sudanese from arriving here as well.

TREASURER:

Well, the rest of the world would love to have our borders and the way they are secured and the immigration arrangements we have put in place, particularly most recently over the last three or four years. We have got a good history around this and really the rest of the world is catching up to Australia now. Now, how the US wants to handle that is a matter for them as you say. They have had an election and the President is implementing what he said he would do. I remember when we came in in 2013 and I was implementing our border protection policy, people threw their hands up and I said look, I am doing what I said I would do in the way I said I would do it. Guess what, I am now getting the results that I said I would get. We did that as a Government and we have continued that as a Government and we are the envy of the world when it comes to strong border protection policies that protect the integrity of our immigration system. We are the most successful immigration country in the world and the reason we are is because we have got strong borders.

HADLEY:

We will talk next week. Thanks for your time.

TREASURER:

Thanks Ray. Good to talk to you.