The Treasurer is in the US meeting with business leaders and tech companies. Scott Morrison joins me now from Silicon Valley in California, Treasurer thanks for joining us. Last month the US passed the most significant reform to their tax system in decades. They dropped their corporate tax rate from 35 per cent to 21 per cent. I have got a comparison to our major trading partners. Why is it so important our company tax rate be competitive with those other countries?
Because otherwise the jobs and investment goes offshore to where taxes are lower, David. We have already seen here, and as you say I'm in Silicon Valley at the moment and we are already getting feedback from companies here that they are restructuring, they are simplifying their systems, investing more in their employees, investing more in what they are doing here with technology, access to finance for small business. These are the benefits of having a more competitive tax rate. And if we don't get ours down to 25 per cent we will be left behind.
The average Australian will be sitting at home going "okay, I understand that, but we have a budget problem, we've got a budget deficit, we can't afford to cut revenue". Does this mean you'll slug us more in taxes as individuals to make up for the companies?'
No, absolutely not. The corporate tax cuts, this Enterprise Tax Plan is fully accounted for in the budget which has it coming back into balance in 2020-21. And we are working to deliver middle income tax cuts as we are working through the budget process this year. Again, that will not come at the expense of getting the budget back into balance. These are the things that help grow your economy. It's about growing the economy. I agree with you David, in the piece you wrote earlier this year, we've got a very optimistic outlook for the economy, and we have to seize those opportunities to get more jobs and higher wages.
So what you are saying is, if you don't do it, these big overseas companies, which many Australians work for, will say 'hey, we will scale back in Australia and maybe do most of it overseas, because we will pay less company tax on the profits'.
Well that's right, and it's not just in the United States. The UK is dropping their corporate taxes. France is dropping their taxes. In Singapore, they are already lower. We can't afford not to do it, because the jobs, the investment, the higher wages, will go offshore. So if you are looking for a job or you want a higher wage, those standing in the way of tax cuts in Australia are not on your side.
Treasurer, thanks for joining us.