1 February 2016
Transcript - #2016010, 2016

Doorstop interview, Canberra

SUBJECTS: Polls, taxation, Labor's reckless tax and spend approach to the Budget, Labor's vote against the Government's strong anti-tax avoidance laws

QUESTION:

First up, are you disheartened by this morning's Newspoll which appears to show a majority of voters don't support an increase to the GST?

TREASURER:

It is important you do what is right for the country. I have had a bit of experience with this. I remember before the 2013 election turn backs actually had lower levels of support in the Australian community. It's important that when you believe that something's right for the country, that you remain focused on that. I'm encouraged today that Australians are showing the support for the Turnbull Government because the Turnbull Government is doing what's right for the country. And these are quite testing times internationally in the economy. We've got Japan, they've gone to negative rates, we've got global volatility and uncertainty which is out there, and for Australia to continue to prosper, as we are - more than 300,000 jobs created last year, consumer sentiment is positive, we're in a position where we've got retail sales growing, motor vehicle sales growing, all of this and to continue to focus on jobs and growth as all have said overseas, you've got to keep making the structural changes that will improve the strength of the Australian economy. That means you have to keep spending under control. It means you need to make the changes in your economy that really support people who are out there working every day, saving every day and investing every day and they're the people we're going to back in with our policies. We haven't made any final determinations on these matters, but I tell you the decisions will be focused on what's right for the country, what's right for the economy, what's right for jobs and growth.

QUESTION:

Could I ask about Mike Baird's latest proposal on the GST, whether you see any merit in it or are tempted by it – the upfront cash for the Commonwealth?

TREASURER:

Whether it's Jay Weatherill or Mike Baird they've both made it pretty clear that if you were to change the rate of consumption tax in this country, then there are ways that that can be done which particularly support low-income earners. They have made that very clear. So Labor's claim to the contrary on that I think is laid bare, particularly by Jay Weatherill and Mike Baird. What we've seen particularly from Jay Weatherill is that his motive in this debate is to try and do something right for his State. Bill Shorten's lettuce economics on this is all about trying to do something right for him politically. His motive is political, it's not driven by policy.

Now we'll continue to work these issues through with the States. I think we have to be very careful at this time and the Treasury Secretary made this very clear last week, that you don't go into this tax and spend cycle. That can put serious strains on the economy. It can put serious strains on the policy settings that are needed to ensure jobs and growth into the future. So the idea of raising taxes just for more spending, that's really what Labor does, it's something that we're not particularly attracted to when it comes to this tax and spend. We want to see a tax system that's growth friendly, not a tax system that is just feeding an ever growing appetite for higher and higher spending which is Labor's approach.

QUESTION:

Could you see any merit in what Mike Baird is proposing, to cleave-off just a small element of the revenue upfront for spending on health and education?

TREASURER:

There are a lot of issues in the COAG discussion. There are a lot of moving pieces in that and we'll continue to engage with the State Premiers and Treasurers on those. We have meetings on that this year. Our own position on that will continue to advance as we hold our own meetings and work through those issues as a government. But what we do appreciate is we have an open discussion with the States about these issues. Bill Shorten is just having a political discussion for his own interests.

QUESTION:

We've seen some interesting ideas being put forward in recent weeks, one was from the Financial Services Council which did some detailed modelling. There's been a lot of talk about income tax cuts in any tax reform but they also canvassed the economic gain from a company tax cut. What's your thinking on the relative merits of offering a company tax cut versus an income tax cut through personal tax cuts?

TREASURER:

Let's not forget that the majority of small businesses are unincorporated. A personal income tax cut is a company tax cut for the majority of small businesses in this company. We shouldn't underestimate that. The sad thing about economic models for those who run them is they're not perfect and they can't predict the future and they're limited by the assumptions they make and that in particular is an issue with some of the models that really don't take account of the real boost that personal income tax gives for small businesses who are unincorporated. That is an important point. But we as a government are the ones saying that we need to look at ways to reduce the income and wherever possible the company tax burden. We need to make sure that companies pay their fair share of tax, particularly multinationals. That's why we introduced the laws that were passed last year that became effective on 1 January this year which saw the number of companies now under scrutiny by the ATO go from 30 to 80 as a result of that legislation. So we took action on that. Labor voted against it. They voted against multinational tax avoidance legislation in the Parliament at the end of last year. So companies have to pay their fair share of tax. But the company tax rate, we all know where it sits internationally and globally, but equally and probably I would argue more importantly, the personal income tax rate is punishing Australians and next year, they're going to pay more personal income tax. The year after that they're going to pay more personal income tax unless something is done about that. I don't hear the Labor Party worried or concerned about the compensation for people who are out there working every day and having to pay higher and higher personal income taxes. They're happy for those taxes to just keep going up because they want the money to have higher spending. We haven't paid for the last thing they did which is on the NDIS and we all know the funding shortfall that is there with the NDIS. We're committed to it and we're working to ensure that that's delivered and incorporated into the budget but Labor didn't pay for the last thing they promised, let alone the new things they're promising.

QUESTION:

Treasurer, do you believe the high profile visit to America by Tony Abbott is frustrating for Prime Minister Turnbull?

TREASURER:

No.

QUESTION:

Have you heard that, as Amanda Vanstone has heard, that the main reason that Tony Abbott's staying in Parliament is because he believes he can have another crack at the leadership?

TREASURER:

So you're asking me to commentate on someone else's commentary about someone else? I'm not about to do that.

QUESTION:

Have you heard that?

TREASURER:

You can leave that for the coffee shop. I will stay focused on…

QUESTION:

Have you heard that though? You are a senior Liberal.

TREASURER:

I am not focused on that. Those things don't really attract my attention.

QUESTION:

Just back on tax reform - the Newspoll in the Australian today says this - 37% support for a higher GST when it's combined with an income tax cut and compensation. Is that a good base to work on if you were to advocate for greater reform?

TREASURER:

The government hasn't made any decisions on this yet and there will be popular polls on this and there will be a lot of discussion and when we are in a position to make a final determination on this, then we're making the reasons for it very clear to the Australian people. But what's important is we do what's right for the Australian economy, what's right for people who are out there working and saving and investing. We have to do what's right and that's what we're focused on. I believe that's why the Turnbull Government is getting the strong support which is also reflected in today's survey. We're getting that support because we're focused on jobs and growth. If we were to make any changes in this area, it is because we believe it will support jobs and growth into the future. So look, I'm no stranger to causes that don't enjoy popular support. I remember for five years, I campaigned heavily on what were very unpopular measures, whether it was on turn backs or other things. The surveys were against it and all the rest of it but I believed it was right for the country and we went into that last election, we said we were what we were going to do on that. We did it in the way we said we were going to do it and we got the result we said we were going to get. That is my conviction going forward.

QUESTION:

It takes time, when will we see your plan?

TREASURER:

There is an election later in the year Paul and all of these things will be very clear before the election. Thanks very much.