10 February 2017
Transcript - #2017011, 2017

Doorstop interview, Sydney

SUBJECTS: A50 Speech; Labor out of excuses on business tax cuts as RBA Governor exposes Labor's threat to jobs; housing affordability.

TREASURER:

Is it wonderful being here in Sydney for the A50, joining my colleagues who have also been presenting here today. Engaging with the world’s investors, fund managers, who make decisions worth billions, tens of billions, hundreds of billions of dollars’ worth that impact on the global economy. For them to come here to Sydney, once again, and to see this wonderful city on display today, it is a bit warm, there is no doubt about that. What better way to convince those from around the world there can be no better place to put your resources time and effort than Australia. Particularly in Sydney on a day like today.

I wanted to make a couple of points before throwing to questions. I will be making broader remarks to the A50 but frankly the speech that was given by the Reserve Bank Governor last night – independently. There is no question about the independence of our Reserve Bank. It is arguably – not arguably – it is the best Central Bank in the world. Dr Lowe is regarded as one of the most qualified and experienced central bankers in the world. I know that because I attend the G20 meetings with other central bankers and I am very well aware of the high regard in which the Reserve Bank of Australia and indeed Dr Lowe, as indeed Glenn Stevens, was held in.

What he has said removes, in saying that Australia must have a competitive tax rate. Must have a competitive tax rate to ensure the living standards and stronger wages and incomes of Australians in the future. We must have competitive tax rates. It removes any last excuse that the Labor Party, and in particular Bill Shorten, have, in continuing to stand against the common-sense competitive changes we want to make to our tax system to ensure businesses are more competitive, that investors can invest with even more confidence, with better returns which drive up wages, which support jobs and the security of jobs. Labor must abandon their hypocritical opposition to these changes. They are standing in the way of Australia's prosperity and competitiveness as the rest of the world moves to lower rates of corporate tax, they want to strand Australian business, but more importantly they want to strand Australian jobs and they want to strand Australian wages from being able to remain competitive and to be able to grow and share in what will be a continuing improvement in the global economy.

That is critical for Australia's competitiveness and the time has run out on Bill Shorten's hypocrisy on this. They used to support this when it was convenient to them politically and, like with everything on Bill Shorten, he walks away from things when it is politically inconvenient. Well, he has to stop running and face the reality that Dr Lowe set out last night, and that is competitive tax rates are good for the economy, they’re good for jobs and Bill Shorten should drop his cynical opposition and get on with it and support the Government's changes.

The other thing which is critical is we must have affordable energy in this country for Australian businesses. I was shocked to hear that Labor's energy spokesperson Mark Butler has described the failures in South Australia as a hiccup. That's an insult to every single South Australian boiling in the dark, as I described yesterday in the House of Representatives, and sweating it out again. He calls that a mere hiccup. Labor's ideological commitment to standing aside from common sense energy policy that can deliver security and affordability and sustainability is an indictment and to dismiss what happened in South Australia as a hiccup, I think, is appalling as a shadow energy minister, but disgraceful as a Member of Parliament from South Australia itself. So, energy security, competitive tax rates, continuing to get on with the job of fiscal consolidation, these are the things that our government is doing and Labor are opposing.

Any questions?

QUESTION:

Treasurer, you say you are shocked to hear the Labor Energy Minister in South Australia saying it's a hiccup…

TREASURER:

The Shadow Energy Minister.

QUESTION:

The Shadow, I beg your pardon. Yet NSW faces the same scenario here in Liberal New South Wales this afternoon?

TREASURER:

Today in New South Wales the demand challenges of New South Wales are significantly greater than what they are in South Australia. In New South Wales, if there are challenges here today, they won't be because of an energy experiment that was conducted on behalf of the government, which is what we've seen in South Australia. That experiment, like Labor's experiment on border protection when they were in Government, like Labor's experiment on insulation programs and school halls and all the other policy experiments they've inflicted on the Australian people. The Australian people remember all of this and these experiments have worked themselves out on the ground and they are working themselves out on the ground in South Australia as we speak. It’s not a hiccup – it's a mess and Labor's ideological approach to energy is no way to support Australian families and business.

QUESTION:

Do you agree with the Prime Minister’s assessment, that there is a cult of excessive CEO remuneration in the private sector?

TREASURER:

I think Australians, when they look at these issues scratch their heads. That puts a great accountability on boards, CEOs and executives to explain. It’s not for the Government to make those explanations. The Government isn’t running those companies. The boards of those companies are running those companies and they are making those decisions and they have to explain those to their shareholders and to their customers ultimately. This trust between businesses and their customers and the community more generally is for them to manage and, like any other Australian, you see these things and sometimes you scratch your head.

QUESTION:

What does it mean for the Government to have the RBA's support, as you do push ahead with plans to cut the corporate tax rate?

TREASURER:

I should stress that this position of the Governor is completely independent of the Government and I wouldn't want anyone to draw any inappropriate links between these things. The speech I learnt of last night, like others did, but Dr Lowe's assessment, both of the economy and what's needed in the economy, I couldn't agree more with. I think his clear articulation of the challenges that are in front of the Australian economy, and his optimism also about the Australian economy at the same time, I think set out very clearly for the Parliament as they consider not only the Enterprise Tax Plan but also the measures to fix the Budget and ensure we meet the projection of a balance in 2021 should be a very sober and clear independent warning to the Parliament that here we have arguably the most distinguished and independent and experienced and qualified person in the country when it comes to assessing the economic issues. As an analyst, as a respected academic in this area in times past has said, cutting taxes for business supports wages, supports jobs, supports growth. And this has to be achieved at the same time as getting the Budget back into balance. That's the Budget I handed down in May. That's the Budget we are now legislating through the Parliament. $22 billion in fiscal consolidation measures passed last year, $13.2 billion remain. They are before the Senate and before the House as well and they should pass.

QUESTION:

Why is the Government looking to scrap the National Housing Affordability Agreement?

TREASURER:

The Government has made no announcements or decisions on any of those matters but I’m glad you raised the issue. It is true that under the National Affordable Housing Agreement that was put in place by the Labor Government which was basically a one-way ATM to the states. What it did was just spit out money to the states and asked for nothing in return. Now, this is some $1.3 billion every single year in perpetuity that it spat out to the states, rolled over every year without any questions and you’ve got to ask yourself, ‘What has that delivered?’ Has it delivered one net extra dwelling for people on the lowest incomes, who are most at stress in the rental market? Well the answer is that it hasn’t. Billions and billions and billions poured out courtesy of the Labor Party when they were in government and it hasn’t delivered a single additional net house anywhere in the country. That is a national disgrace and that funding needs to be put to work to ensure that there are more houses in this country – whether it’s for people who are key workers or people who are on very low incomes or people who need affordable rents not just social housing – that’s what it needs to do. But the plans put in place and the funding put in place by the Federal Labor Government in a cosy arrangement with those Labor states and others is an indictment on those who signed up to it.

QUESTION:

The IMF has today raised concerns about a rise in protectionist policies on global growth. Do you think that Donald Trump’s economic agenda could impact global growth?

TREASURER:

We’ll wait to see about what the policies are. What I do know is that the Trump Administration and I note that he’s tweeted again today about some tax announcements he might be making in the next few weeks and what President Trump is intending to do on tax rates, if we don’t move in the same direction as we are already seeking to do then Australian jobs and wages would be stranded. So that he’s intended investment in infrastructure in the United States as Dr Lowe remarked last night, that could have a very positive impact on the global economy, particularly for Australian commodities – iron ore and things like this – so that could have a very positive impact. Now, obviously, Australia is an open trading economy. The reason we have our prosperity today is we’ve been a country that has embraced trade, embraced investment – which is why I’m here today – and has embraced a positive immigration program since we first began. That’s why we’re a rich country today and we need to continue those settings to ensure that the prosperity that you and I enjoy today as a result of those three things is not denied in the next generation. My kids, the kids of others who are here and grandkids who will also rely on those policy settings to underwrite their prosperity in the future. So we stand for open trade when we pursue our trade arrangements, we do it with Australia first and ensure our interests are represented. I’m here today with Andrew Robb, our former Trade Minister, who was the architect of many of these agreements and it’s important we continue to make that case and I know that we are, the United Kingdom is very forcefully and others around the world. But now, it’s time for me to go and speak to these investors and I’m very keen to see them continue to see Australia as the place in the world to invest. We’re now in our 26th year of consecutive economic growth. We are world leaders in economic growth and that’s why if we continue to get the policy settings right and the Parliament continues to support policies that this Government is putting forward to keep this going then future generations can assume the same.

Thank you.