18 February 2016
Transcript - #2016017, 2016

Interview with David Koch, Sunrise, Channel 7

SUBJECTS: Backing Australians in our transitioning economy; taxation

DAVID KOCH:

Treasurer Scott Morrison joins us now. Treasurer, I was so excited about your press club lunch delivery yesterday. I tuned in but it was the same old, same old. Blame the states, cut back on the spending – nothing new at all.

TREASURER:

Well, David, the good news that I outlined yesterday which you would have seen is that the Australian economy in this very tumultuous global economy is performing very well. We have had very strong jobs growth. Australia is the best place to be at the moment in terms of our economy. Confidence is positive. Business conditions are strong. This is good news. Our economy is transitioning, what we need to do as a Government is ensure that that economy continues to transition well, that means continuing to have spending under control and it means keeping taxes down. That is the message – we need to get taxes down and get spending under control.

KOCH:

But you keep talking about tax reform. You keep – everyone promises – every Treasurer promises tax reform and never delivers. You are not going to deliver either.

TREASURER:

David, what was raised in terms of the GST was raised first by the states in August last year. We went through the methodical process to work out whether it would be the right thing in this country to increase the GST to lower personal income tax and the numbers didn't stack up. So we decided not to do it for policy reasons – not for politics reasons. That's a good decision. I think people would hope that governments would make decisions based on policy, not politics. We will continue to work on the other tax measures between now and the Budget but raising taxes isn't a policy. Raising taxes is just putting a burden on your viewers.

KOCH:

But making taxes more efficient, that's what tax reform is about. Ok, so you have knocked GST on the head. You've flown the kite on negative gearing on property – are you still looking at that?

TREASURER:

Well, the Labor Party is the one talking about negative gearing.

KOCH:

No, no, what about you? Are you looking at negative gearing tax reform?

TREASURER:

We'll consider these issues but I have always…

KOCH:

So, yes you are or not?

TREASURER:

I have always been very clear that negative gearing…

KOCH:

You are or not? Yes or no?

TREASURER:…is a viable saving vehicle for ordinary Australians and I want to make sure that...

KOCH:

But does it go too far? Does it need to be reformed?

TREASURER:

There are excesses.

KOCH:

Ok, so you are still looking at that. Superannuation – are you are going to reform that?

TREASURER:

We have made it clear that we will be looking at superannuation. And we will hope to make either a statement before the Budget on that or at the Budget.

KOCH:

Ok, that's excellent. So, it's good you are reinforcing the economy is in good shape. We have been doing it here for about the last two years. Everyone has been glass half empty rather than glass half full. We are seen as an economic miracle around the world? Aren't we?

TREASURER:

We are, we are tapped in well to the parts of the global economy that are growing – and that is still China. Others are quite blue on China. China is going to have massive growth in their middle class. It's going into a consumption economy. We are very well connected with our services industries into China, particularly now after the China Free Trade Agreement. So, the story for us is positive. That's why I'm realistically optimistic but at the same time, the environment for the Budget is difficult and I'm not going to a Treasurer who tries to sell the public a unicorn on this thing. It is going to be hard and we need to keep at it and we need to ensure that people are backed in as they are the ones making the transition in the economy and we will all be better for it. Higher taxes for higher spending is not the plan for jobs and growth and that's not what we will be doing.

KOCH:

No, no, we don't want higher taxes but we want more efficient taxes.

TREASURER:

Correct.

KOCH:

You had another go at the states as well. Are they getting out of control?

TREASURER:

All governments – federal governments, state governments, local governments, I mean, in difficult budget times, you just can't say, "yeah, we have to spend more money and we'll tax people more." That was my simple message. We have things we have to absorb, like the National Disability Insurance Scheme, an important initiative but it has to be paid for. There are all sorts of pressures on the public purse and we have to find innovative ways of doing it. Other than just saying to your viewers – the taxpayer – you've just got to pay more. They are already paying too much in my view. I want to be able to, where I can, reduce the tax burden on Australians – not increase it.

KOCH:

I think we will all agree on that. Keep being positive on the economy, Treasurer. Good to see you.

TREASURER:

Thanks David. Thank you for your time.