12 February 2018
Transcript - #2018012, 2018

Interview with Leigh Sales, ABC 7:30

SUBJECTS: Barnaby Joyce, Bank Royal Commission, corporate tax cuts

LEIGH SALES:

Treasurer, welcome to the program.

TREASURER:

Thanks, Leigh.

SALES:

I'll come to economic matters shortly but just firstly to follow up on Tom Iggulden's story. Next week, Barnaby Joyce will be the acting Prime Minister. Is he the best standard bearer for the Turnbull Government?

TREASURER:

There's no one I know in the Parliament who's as a stronger advocate for rural and regional Australia, and while events regarding Barnaby's private life I'm sure are disappointing and are disappointing – most importantly to his family and others – that doesn't change the fact that Barnaby over a long period of time in his public life has dedicated himself to public service and the people he represents so yes, of course he is.

SALES:

But the private life matters aside, there's also a workplace issue here which is that the person who is involved was a member of his staff. Do you think that that means it's a legitimate area that concerns should be raised about?

TREASURER:

I think questions have been asked, but I haven't seen anything substantiated. I mean, what has occurred here is that there are no questions about the merits or the skills of Vikki Campion in terms of the roles she was performing – I don't think anybody is questioning that and it was set out in the House today that the allocation of staff are a matter for the Leader of the National Party and had they assigned those – and I don't know if any impropriety has been established there either. So, I know that people might want to understandably focus on some of those issues but the heart of this, I think, is just a very sad and heartbreaking story and the women I'm most focused about here are these four daughters and there's a wife and let's not forget that there's a young woman who is having a child as well and I'm not quite sure how a lot of this attention is helping any of them.

SALES:

You mentioned that the National Party is in charge of its own staff movements, but Barnaby Joyce is the leader of the National Party so who approves his staff movements?

TREASURER:

In the same way that in the Liberal Party, at the end of the day, there's someone in charge and in this case, it's of course the Leader of the National Party to allocate the roles…

SALES:

So that means he's the person who does that himself.

TREASURER:

Sorry?

SALES:

So he's the person himself…

TREASURER:

Well he's accountable for that.

SALES:

The Ministerial Code of Conduct makes it clear that partners cannot be employed by any other Minister without the explicit approval of the Prime Minister. Today, the Prime Minister's office when asked if Barnaby Joyce had breached the Ministerial Code of Conduct said 'no because he hadn't declared Vikki Campion as his partner'. Do you think voters would buy that?

TREASURER:

He can't have two partners at the same time and he was obviously still married and I don't know the status of his relationship with his wife at that time, but again, trying to untangle those sorts of very personal issues of when things start and when things stop, I don't think is clear in the most innocent circumstances. I think this is another situation which again is very disappointing, it's very devastating, I think it's very sad. I think marriage breakups are one of the worst things that can happen and families are devastated by them and for me, I just find this terribly disappointing and upsetting.

SALES:

As a Treasurer, you constantly deal with Australia's top business leaders. Is Federal Parliament out of step with corporate Australia in the way that it manages relationships between bosses and subordinates?

TREASURER:

I can only speak for my own conduct and I think over time a lot of these standards have changed and modernised and there have been progressive developments.

SALES:

But when you say compare the Federal Parliament, which is like a business in some ways, to the corporate world, which company in Australia could you imagine allowing a situation where a married deputy CEO has an affair with a staffer when it becomes known in the office, she's promoted elsewhere and then not only is the boss not sanctioned in any way, he gets to act as the CEO?

TREASURER:

Without going into some recent corporate memory of some rather large companies where there was CEOs and staff involved in these sorts of things, I think that the behaviour in the corporate sector – as in many other sectors – I don't think has been exemplary and I think it's incumbent upon all people in positions of authority and responsibility, particularly where they have people working for them to treat them with the utmost respect and ensure they're never working in an environment where they feel uncomfortable.

SALES:

If we can turn to matters in your portfolio, the Banking Royal Commission started today. The Commissioner's expected to deliver his interim report by 30 September. We know it's a huge undertaking – is there any prospect of extending that date?

TREASURER:

I think that's a bit premature at this point. It's day one and I think Commissioner Hayne has set out his clear determination to get cracking on this and get the job done. I think he's, using a phrase: "putting a bit of stick about", when it comes to the banks themselves and what he expects from them in getting their submissions in. Certainly I know agencies that I and the Minister for Revenue are responsible for have been working overtime to make sure they can get their information to the Commissioner and I noticed a strong determination to move through this in an efficient way.

SALES:

Staff at banks have been given impunity to testify of wrongdoing if they wish but how many staff do you really imagine would be prepared to do that?

TREASURER:

I would expect banks and all of their employees who are involved in these cases to be taking the advice and instruction of the Commissioner in terms of being very open in terms of addressing any of the issues the Commissioner is looking at.

SALES:

But nobody would trust really that there's not going to be any blowback if they go and testify against their own employer?

TREASURER:

Again, I would expect both the institutions and those who work for them to be complying with what the Commissioner is doing and he's made that very clear that that's what his expectation is and the Government obviously supports him strongly in that.

SALES:

On your proposed company tax cuts, are you going to be introducing a package into the Senate again?

TREASURER:

Yes, of course, and it's the package that passed the House of Representatives last week. It's the second part of what was the whole plan that I outlined before the 2016 election – remember that was before Enterprise Tax Plan – that we took to an election, was successful at that election and had been seeking to put in place. We've got businesses up to $50 million in turnover that are already receiving and are on the plan for those tax cuts and we're legislating the balance of that plan that we took to the 2016 election.

SALES:

But what's different now? Why would you get it through the Senate now when you didn't last time?

TREASURER:

We don't wibble-wobble, as my colleague Mathias Cormann would say, on economic policy. We know what we think is right for the Australian economy. We know that it doesn't make any sense that if you want businesses to be in a position to pay wages that are higher than today, you don't insist on them paying higher taxes to the Government. You can't expect them to be paying employees more if you keep demanding that they pay you as the Government more, and that's the nonsensical argument that the Labor Party is putting up. The Labor Party is standing between a wage rise for workers and this plan.

SALES:

But how do you know that your company tax cut will deliver higher wages? How do you know that it won't deliver more capital expenditure or bigger dividends for shareholders?

TREASURER:

I certainly think it will involve further investment in the company and growing the economy because it will also then involve higher wages which companies have already said. We've had BHP, we've had Qantas say this, we've had the former CEO of Bunnings and et al company and Wesfarmers, and he's now going into Woodside. We've already got businesses saying that's what their behaviour would be and that's been my experience having just been in the United States last week, that's how they're reacting. It really is a fairly common sense position that if you enable business to have more room to provide that wage increase then they're more likely to do it. If you give them less room, they're less likely.

SALES:

But if you go to an election say with this company tax matter as an issue, you wouldn't be able to say exactly when wage increases would arrive and nor would you be able to say what magnitude those wage increases would be, is that a message with sufficient cut-through for the electorate?

TREASURER:

What we're saying is that by focusing on policies that grow the economy, Australians benefit. You can't have a world class health system without a strong economy. You can't have a durable pension system and Pharmaceutical Benefit Scheme without a growing economy. The Coalition Government, the Turnbull Government is focused on policies that grow the economy and wages lift for one of two reasons here: directly, in terms of the pass-on, but also by the business expanding and growing. Now, all I know is, if a business has to pay the Government more, it's in the worst position to pay employees more. That's just common sense.

SALES:

That's a tougher message than saying, "Here you go, have fifty bucks a week."

TREASURER:

I think Australians – and let's take small and medium-sized businesses for a start – we know in those businesses there's been very good support for those tax cuts because small businesses – people who work in small businesses – have a more direct line of sight with the person who owns and runs that business and they know that for many years now, those businesses that had to dig deep into their own pockets to pay the wages, to keep the business afloat and they see the benefits. Now, that is also true for larger businesses and so with more and more businesses coming out now and saying very clearly that this is what this means and even Professor Holden, one of the Labor Party's favourite economists, reciting research that shows it's actually lower skilled workers, women, disadvantaged workers that actually are the real beneficiaries of this change – it just underscores the point: Labor is standing in the way of better wages for Australian workers.

SALES:

Scott Morrison, we're out of time unfortunately. Talk to you again soon. Thank you.

TREASURER:

Thanks, Leigh, great to be with you.