5 February 2018
Transcript - #2018007, 2018

Interview with Tom Elliott, 3AW

SUBJECTS: Enterprise Tax Plan; Newspoll; by-elections

TOM ELLIOTT:

Mr Morrison, good afternoon.

TREASURER:

G’day, Tom.

ELLIOTT:

Now, firstly, tax cuts. It appears through the centrepiece of Donald Trump’s economic strategy to cut American taxes, they’ve already had big corporate tax cuts there for around about 30 down to 20 per cent. Have they worked?

TREASURER:

Well, they’ve just come in and the response that I’ve had from companies large and small was very encouraging. Basically, their headline rate is coming down but there’s also increased allowances through investment and the companies are now just applying that to how they’re going to invest it back in new innovation, higher wages, there’s been staff bonuses, there’s been new research and development programs, investment in new manufacturing plant and equipment – this is what they’re going through the details of. So, it’s doing what it’s intended to do which is why we’re pursuing similar policies here.

ELLIOTT:

That was going to be my next question. When are you going to make a big cut to taxes here?

TREASURER:

We’ve already cut taxes for small businesses up to $50 million. We want to see that go across all businesses down to 25 per cent. We get it down to 25 per cent, that will put us on about a par with where the US have got to, or thereabouts. It will also mean we are where France is going which is at 25 per cent. The UK are going even further than that but the Labor Party are stopping us from doing all of that. They don’t have a plan to grow the economy or drive investment. This is how you do it and we’re keen to get on with it and I think 2018 can be a great year for Australian businesses and Australians but we’ve got to enable them to do it.

ELLIOTT:

So, when will you do it? When will you cut corporate taxes for…

TREASURER:

When it passes the Parliament. We’ve already got that in line now for those businesses who are up to $50 million but we’ve got a program to do that for all businesses over a decade…

ELLIOTT:

But if Labor has said no, I mean, is there any point in trying to push it again or what will you do differently this year?

TREASURER:

We’re going to continue to argue the case. We’re going to argue with the crossbench and we’re just not going to walk away from this. It’s too important. You’re not going to get a wage rise out of a business that’s being forced to pay higher tax.

ELLIOTT:

So, do you reckon we’ll get a further tax cut before the Budget?

TREASURER:

The program builds up so it’s $25, $50, $100 million and then it keeps going up year after year and then all the taxes come down so it’s a plan that’s affordable. It’s all in the Budget. It’s all paid for. We come back into balance projected in 2020-21. That’s one of the differences between us and the US program…

ELLIOTT:

What I’m saying though, when do you think Parliament will pass it?

TREASURER:

You’d have to ask the Labor Party because they’re in control of the…

ELLIOTT:

I’m asking you. You’re the Treasurer.

TREASURER:

I don’t vote with the Labor Party. I vote with the Government and we’re voting for it.

ELLIOTT:

Righto, when do you think the Labor Party will help you pass it?

TREASURER:

At the moment, they’re not indicating they will. I think that is a pox on their house for doing so. They are standing in the way of Australians getting better wages and more jobs.

ELLIOTT:

Personal income tax cuts? Are they on the agenda as well?

TREASURER:

The Prime Minister has said that, as have I, when we are in a position to say more then we will.

ELLIOTT:

When will that be? Will that be before the Budget or on Budget Night?

TREASURER:

When we’re in a position to say so…

ELLIOTT:

Because one of the things that I find odd about our tax system now – and I commend the corporate tax cuts, assuming you can get them through – but then you end up in a situation where your top personal rate could be 47 or 49 per cent depending on various levies and yet your corporate rate won’t be much above half that. Now, that’s as big as an incentive as you’ve got for people tax-wise to turn themselves into companies and pay a lot less tax and that just doesn’t seem to make sense to me.

TREASURER:

When people put things into companies and then pay them out of dividends, people pay on their marginal rate of tax. So, when it gets in your own hands, you pay your marginal rate.

ELLIOTT:

Yeah, yeah, but wouldn’t it make sense though to have a top personal rate which wasn’t very different to the corporate rate?

TREASURER:

Flatter taxes and fewer rates and all of that does make sense but the cost of doing that is prohibitive.

ELLIOTT:

So, are you going to make any cuts to personal taxes?

TREASURER:

The Prime Minister and I have made it really clear, we’re going to provide some income tax relief to middle income earning Australians.

ELLIOTT:

What about the dual citizenship fiasco that looks like claiming two Labor seats, you’ve got David Feeney in Batman and Susan Lamb up in Queensland. Is she going to be referred to the High Court?

TREASURER:

We’ll see what happens over the course of this week and beyond. She should just do the right thing. There’s no question about whether she is a British citizen, her own lawyer has confirmed it. David Feeney has done the right thing, he has resigned so we’re going to have a by-election there. John Alexander did the right thing last year so we had that by-election. That was settled as was the one with Barnaby, so on our side we’ve sorted it. So, the Labor Party should just get it sorted and allow the by-elections to be held and we’ll get on with it. At the moment they’re playing a bit of a game.

ELLIOTT:

Let’s say David Feeney loses the seat or whoever replaces him as a Labor candidate loses the seat. Will you then push the personal tax cuts and the corporate tax cuts against a weakened Labor Party?

TREASURER:

I think certainly Bill Shorten would be weakened and the Labor Party, if the Greens were able to win that campaign in Batman. But they shouldn’t be. If the Labor Party is as strong as Bill Shorten says it is, then he should have no trouble in Batman.

ELLIOTT:

Could I just get this in, so these personal income tax cuts again, before or after the Budget?

TREASURER:

We haven’t made those announcements yet Tom. As much as I love your program I’m not planning to make those announcements on your program this afternoon.

ELLIOTT:

Will it be winter?

TREASURER:

Tom, I think I’ve given you my answer mate, we can go around on this all afternoon. When the Government is going to be announcing those things that’s when we’ll do it. That’s not this afternoon.

ELLIOTT:

Speaking of announcing things, were you emboldened by the latest News Poll? The Prime Minister has massively improved his standing as preferred Prime Minister over Bill Shorten at the same time the two-party preferred, while still against you, has improved. Is everybody in the Liberal Party feeling better about things?

TREASURER:

Those things, they go up and down. I say that when they go down as well as when they go up. What I’m actually frankly really pleased about is the economy is getting off to a really great start to the year. We saw that some information came out today on two things, one was on job advertisements. That was at its highest level seen in many, many years. Almost 180,000 jobs advertised every week in January and then on top of that you’ve had the services industry index which has come out and given it the strongest start to a calendar year in about 14 years. The services industry accounts for about 80 per cent of jobs in this country.  We’ve got stronger growth now, even more, coming out of the United States, we’re seeing a resurgence back in Europe, China has been holding up its level of growth and then you’ve got all those South East Asian economies also doing well. I’m just seeing opportunities but if we don’t let our businesses be competitive and if we force them to have higher tax rates which Labor is doing, then it’s going to be harder for them to seize these opportunities. Australians aren’t going to get that benefit if Labor keeps standing in the way.

ELLIOTT:

Scott Morrison thank you for your time.

TREASURER:

Thanks a lot Tom, great to talk to you.