25 January 2016
Transcript - #2016008, 2016

Interview with Ray Hadley, 2GB

SUBJECTS: Taxation, budget, Labor’s vote against the Government’s strong anti-tax avoidance laws, Liberal Party, Constitution of Australia, jobs

RAY HADLEY:

Treasurer good morning.

TREASURER:

Good morning Ray.

HADLEY:

Well you seem to have to say the same thing every week. You said the same thing last Monday, you said it again on Sky News and they are making a hullabaloo out of it today to say that there will be no tax reform unless it is approved by the electorate at the next federal election.

TREASURER:

That is absolutely right and the other thing I said yesterday is that the government hasn’t made any determinative decisions on this. We are actually listening to what Australians are saying right now and we are getting a lot of really good feedback. There has been I think a pretty useful chat that has been had over the last few months. I think that is a much better way to find the way forward in engaging with the Australian people than the old style approach of the big documents that are released, and journalists pour over them. But it sort of excludes the Australian people so what you and I are doing here I think is a much better way of doing it.

HADLEY:

In relation to this, I mean can I simply say that I get from our various discussions that you just don’t want to simply go out and get more revenue from tax to pay the interest bill, you would rather increase your income in other means by bolstering the economy without necessarily increasing taxes but your long term view would be to decrease taxes by getting more money in the can from other avenues – is that fair enough?

TREASURER:

Yeah, well you need to reduce expenditure. My view on that has not changed, others have tried to verbal me on that and that is just rubbish. We need – Peter Costello was right with what he said on the weekend. You don’t fix the budget by putting up taxes and that is not on our plan. What we are trying to do is actually reduce taxes and we are trying to find a way that we would be able to reduce taxes particularly personal income taxes and company taxes if that is possible. Because I mean you hear a lot of people talking about compensation, well next year if you are on the average wage you are going to go onto the second highest tax bracket – well who is compensating you for that? You are going to work, to earn a salary and you are paying tax and if we don’t change the personal income tax rates you will end up paying more. Now we are the only people talking about trying to do something to reduce personal income tax. The opposition just wants to put up taxes because that is their way to a surplus. That is not how you get to a surplus; Peter Costello is bang on when he says that.

HADLEY:

Now you mentioned the opposition - the Shadow Assistant Treasurer Andrew Leigh. If Labor’s tax increases they have so far announced like the tobacco tax hike, it will be $100 a packet the way they are going, would be used to fund personal income tax and also whether Labor would pledge to bring in income tax cuts but Andrew Leigh won’t be drawn on where the money will go by increasing taxes on some sections of society.

TREASURER:

Labor don’t want to reduce personal income taxes, they just want to put taxes up. The only reason we are even having this discussion about tax from the government’s point of view is because we want to see the economy grow and we want to get the monkey off people’s back who are out there backing themselves to work, save and invest. That is why we are having this conversation. The Labor Party – see you can have a surplus at any level of public expenditure so long as your taxes are higher. That is why I am saying, no you have got to get your expenditure to a level that is less than it is now and then that means you can have lower taxes. But Labor says no “let’s just let expenditure continue to rip and we will just have taxes higher than that. That is how we get to surplus.” Well that is not our plan; we have got a good plan for growth.

HADLEY:

See but it is very hard to explain to people so called bracket creep which you have mentioned already in our interview. It simply means that people who were formally taxed at the lower income rate through no fault of their own go on to the next income rate, taxable rate, and they are paying a lot more tax. We are not talking about people earning in general terms wads of money…

TREASURER:

$80,000 a year.

HADLEY:

We are talking about them going from one area to another. Look I have an email just here from one of my listeners, Brian who is in Canberra, “tax reform won’t fix our national debt and spending problems. Can the Treasurer please address welfare and DSP costs? The UK cancelled all DSP and asked all recipients to reapply under tougher assessment rules. Thousands didn’t bother to reapply and even more had their DSP reduced under the tougher assessments.” Now I don’t know whether that is factually correct or not, that is what he says happened. I know that in your previous guise you tried to reign in the DSP and we had all those stories in the Telegraph and the Courier Mail about 800,000 plus people on the DSP and it seemed every notorious crime member of Middle Eastern crime gangs, abled bodied young men, heavily tattooed, bashing people, were on the DSP. Where are we with that?

TREASURER:

Well we already are reigning in welfare expenditure and the argument is you need to continue to keep that tight. Under us for the first time the actual number of people on the DSP was falling. Now that is because of the changes that have been put in place, all of that has to be done – just like on multinational companies. They should be paying their fair share of tax and at the end of last year we put in a law which means right now as of the 1st of January the tax office can go and do that. Whether it is Google or Apple or whoever it happens to be, as a result of the law we passed at the end of last year those multinationals are now facing a much tougher test then they were before. If you earn an income here, you have got to pay tax on it. The Labor Party voted against that last year, amazingly. They bang on about multinationals, you put a bill in the Parliament that says this will help us tax them better and they vote against it.

HADLEY:

Treasurer Morrison back we go to the front page of all the papers today. The state Premiers and those from the territories signing a document pledging support for an Australian head of state. I have explained the Colin Barnett is a republican but hasn’t signed it for his own reasons. They are talking about something that we could discuss for the next five, six or seven years in relation to what we form. Do we have the time and energy to discuss all of that and keep going? And is it time again to address it or not?

TREASURER:

I am more interested in jobs Ray. I am more interested in growing the economy. I am more interested in the things that are needed to spark innovation and encourage enterprise.

HADLEY:

Well I am glad you said that because there are plenty of your colleagues who aren’t. It is not the most pressing – I mean we seem to have survived since 1901 the way we are and I am sure we will change in the future but I don’t know whether right now, relatively so close to the last time we went to the electorate, is the time to do it.

TREASURER:

Well, people are entitled to have these views. My views on this are on the record, I favour the constitutional arrangements we have but more importantly I think it is about what is really important and what is the government focusing on? We are focusing on jobs – 300,000 extra jobs last year, and we are focusing on how we can grow the economy and back people who are out there backing themselves. Now if others want to talk about those things that happen every Australia Day, fine. But the real thing we celebrate on Australia Day I think is our freedom as a people and the great opportunities we have and I would like to see Australians have more of them.

HADLEY:

Now I know you don’t want to be pigeonholed as being a conservative conservative but you are from the right of the Liberal Party, are you happy that the Prime Minister seemed to have intervened in relation to, you know, other like-minded people from the party like you who are being targeted by pre-selection challenges and he has quarantined them?

TREASURER:

Well I think the Prime Minister has done what Prime Ministers do in these situations. But I think the earlier hubbub about this was massively overstated. As things play out people will see that. It was a quiet period over Christmas and some conspiracy theories were floated. All of that was pretty much nonsense. I used to be a State Director of the party in NSW. After you have a redistribution and people’s boundaries get redrawn different ways people may have to make a few decisions and others try to overlay other motives on that. I didn’t buy that frankly, I have seen that before. It will go through its normal process. The Prime Minister has given the strong support Prime Ministers always give to sitting members and I have also given strong support to people like Craig Kelly who is my neighbour down in the Shire and I think he does a great job.

HADLEY:

Craig Kelly was being attacked by Kent Johns who was a member of the Labor Party when I think he was on Kogarah Council and then became a member of the Liberal Party. He is one of your, and I know you won’t like me using this expression, factional colleagues…

TREASURER:

No well he isn’t. He’s not. He is his own person…

HADLEY:

Well anyway he is from the conservative side of the party. But anyway we won’t dwell on that. What concerns me is the rural seat of NSW which goes from Picton down to Stockinbingal. It is a massive seat, massive seat. The point I made earlier this week – Russell Matheson who holds the seat of Macarthur and is a very popular former local Mayor there. Boundary changes put his future in doubt because he now has more of the city side of the electorate than the rural side of the electorate. But I would think that if anyone made a decision – be it the preselectors or someone in the party hierarchy to move him into the seat that takes in the rural part of the state that would basically be saying to the Labor Party ‘here, have Macarthur back, you are welcome to it’. Because I would think that Russell Matheson, of all the people within your party has the best chance of retaining Macarthur.

TREASURER:

There is no doubt about that because Russell has been such an outstanding member in Macarthur and as you say he used to be a Mayor out there and I think people really respect him. But I think you will see as time goes on Ray these issues will subside again and people will be able to see what has been banged on about over the last few weeks was just a bit of hot air.

HADLEY:

Are you happy that Tony Abbott has decided to run again?

TREASURER:

Yeah, good for Tony. The guy has been contributing to politics all his life, not just in Parliament and he is passionate about it and that is a good thing.

HADLEY:

Well it is good to have, I guess, new blood but it is also good to have experienced heads.

TREASURER:

Well of course it is and you need a balanced team. That is what we have. So good for Tony and particularly for people in his electorate good for them too because he has been a very good member for them. We have all known Tony over a long period of time. He still talks about his electorate when he was in senior roles and he always maintained his passion for his local electorate so good for him.

HADLEY:

I suppose you were absolutely stunned when you read the paper this morning and saw Clive Palmer has lost all support in the seat of Fairfax. He has gone from 26.5 per cent down to two per cent. I just mentioned in the intro – we have 506 people polled, seven per cent saying they think he is doing a good job. Now we have to find 35 lunatics in Fairfax who are saying he is doing a good job.

TREASURER:

Well it is results that matter in politics and what you do. Whether it is stopping boats or getting welfare reforms through that are very necessary or now what I am seeking to do in the area of Treasury – getting public expenditure down. I mean, public expenditure on our current plans is going to go from 25.9 per cent of the economy, almost 26, down to 25.3 per cent. So that is our current plan to get expenditure down. So we are very committed to that but at the same time it is about jobs at the end of the day, which I know you know Ray and I know your listeners know. I just want people to know that is what has Malcolm and I focused every single day of the week – jobs.

HADLEY:

Ok as always thanks very much for your time.

TREASURER:

Thanks Ray, good to talk to you.