20 February 2017
Transcript - #2017018, 2017

Interview with Ray Hadley, 2GB

SUBJECTS: Budget savings; Senate negotiations; housing affordability; Australian Banking Association; sugar.

RAY HADLEY:

Last week you failed to get Senate’s support for the Omnibus Bill aimed at cutting welfare. All of a sudden we had people from one side of politics saying there is an answer to this: increase the Medicare levy – which is just a tax hike.

TREASURER:

That’s Nick Xenophon’s proposal. There are still several weeks left of Parliament sitting, Ray. So that Bill actually wasn’t considered in the Parliament last week. A number of people expressed a view on that but there are still several weeks to go. We are definitely still working on it and our plan is set out in the Budget and is before the Parliament and that is to address the needs that we have by making savings. We remain committed to that plan. That is our plan.

HADLEY:

You see the problem you have got with Xenophon, as I understand it, reading between the lines he had spoken with you and others, including the Prime Minister, about what he felt he could do. Then he got hijacked by two members of his new Party. They apparently are a bit further left than him and said maybe that’s not going to happen. So, Nick had to go with the majority rules so to speak.

TREASURER:

How he runs his Party is up to him but he is the Leader of that Party.

HADLEY:

It’s not a very big Party.

TREASURER:

They could all get in one room and one car.

HADLEY:

They can get in a phone box.

TREASURER:

I have met with them all on several occasions, as my colleagues have and at the end of the day it is the Nick Xenophon Team and there is a need to continue to work with him as we are. But there would be no need to talk to the crossbench and having them in this situation of having to decide this matter if the Labor Party would get over their addiction to higher taxes and would work with the Government to get spending under control. Our spending as a share of the economy is higher than the long run average and that means we have got to get it down but our revenue as a share of the entire economy is actually above the long run average. That just says once again that the problem is actually getting expenditure under control and that is what we remain focused on doing and that is what is before the Parliament.

HADLEY:

I had Tony Abbott and Angus Taylor in the studio, on Friday, I was in Goulburn for other reasons, and he almost was channelling Paul Keating who I think said in 1989 said the Senate was unrepresentative swill. He didn’t go that heavy, the former Prime Minister, but he certainly said dysfunctional and he paid a compliment to Pauline Hanson which was widely reported on Saturday. He said it is almost impossible and he has some sympathy for you and the Prime Minister and others trying to negotiate your way through a minefield on a daily basis.

TREASURER:

It’s difficult but there is no point complaining about the pitch you are playing on. That is what you have to deal with and we have had some success. We have got $22 billion worth of Budget improvement measures through before the end of last year. The ABCC restoring the rule of law to the building and construction industry. That has been achieved and the only area where there was a major concession on that last year has now been rectified in the Senate. We got that through last week with Senator Hinch’s support. So, we are getting things done and this Parliament is more able to be worked with in the Senate than the last one. There is no doubt about that and the results speak for that. That doesn’t mean there aren’t still challenges. The Government has its plan and in the last Budget we actually cut taxes. We cut personal income taxes for hundreds of thousands of Australians and we cut taxes for businesses, particularly small businesses that employ millions of Australians. So, our record on taxes is to cut them.

HADLEY:

But what if you have got to put them up? If this all falls over in the coming weeks as you try your best to be a really nice bloke.

TREASURER:

Those who are opposing savings measures by implication that is the Labor Party and others. What they are saying is they want higher taxes. Now, I don’t want higher taxes. I don’t want higher taxes at all. My record is actually cutting tax.

HADLEY:

But you might have to. That is the reality of it. If the Labor Party and the crossbenchers don’t come to the Party you might have no other option. As unpalatable as that may be to you in terms of where you are politically and where you think you should be headed in terms of everyone remembering what a good Treasurer you were. They might remember you as the bloke who jacked up taxes. It would be a bit like you win a race by a length of a nose, doesn’t matter who you beat or who was behind you or what time you ran. It is what you did.

TREASURER:

It’s not a bad ideology. The economy today is better than it was a year ago. There are signs that things are starting to improve and that is not just here in Australia but it is around the world. What we have to be careful of is that we can’t do anything that might disrupt that and ruin that. There are businesses out there today, people are out there going to work today. They want to be earning more, they want more hours, their businesses want to be able to secure more contracts and what the Government does not want to do is do things on taxes that would stop them getting ahead. That is why we remain very committed to this plan that is before the Parliament and they still have several weeks to consider it. Our number one priority is to grow the economy. When the economy grows that not only supports the Budget, more importantly it supports the budget of Mums and Dads, of businesses, of householders who don’t need that tax pressure on the back of their neck. As I said, in my first Budget, I cut taxes.

HADLEY:

What do you think of the New South Wales Planning Minister, the recently installed Anthony Roberts’ suggestion to unlock super, or maybe defer stamp duty to get more people into the property market? He has obviously been given a commission by the Premier to try and get people into the market in a simpler way or to unlock money. Have you got any view on what the Minister is saying?

TREASURER:

Our Budget is in May and what we are determined to do on housing affordability will be set out there and we’re working through that. I have had some really, really good discussions with Anthony, as I have with Dom Perrottet and, of course, Gladys Berejiklian about these issues over a long time. It is a big challenge particularly for people here in Sydney and particularly people down in Melbourne. Whether it is in Queensland or other places, particularly South East Queensland there are real challenges there. We want to look at ways that we can improve that situation. It is not just for people who are looking to buy their first home, Ray. We have a lot of people in this country who rent their accommodation and will always rent. What I know is that last time the Labor Party abolished negative gearing – and remember they wanted to do it again – rents went up in Sydney. Now, if you are trying to buy your first home, guess what you are doing now? You are either living with Mum and Dad or you are renting. I don’t see how increasing someone’s rent makes houses more affordable.

HADLEY:

The Australian Bankers Association, I know a fair bit about them, I’m just wondering if the same PR hacks who were around many, many years ago are still being retained or their children or grandchildren are being retained. I mentioned to Barnaby Joyce in a discussion in another matter this morning – and also to Ross Greenwood – the recent appointment, you never really think about who the CEO of the ABA is because they don’t really have a profile so to speak. Tony Aveling made a famous phone call to John Laws about how the banks got a raw deal and how we did need an investigation and maybe we need to hear the whole story and subsequently learned through an act or an investigation that Mr Laws was being paid a large amount of money to be kind to the banks. I am sure they would never do that again. What about Anna Bligh being appointed. What ducks and drakes are they playing appointing a former Labor Premier to a position such as that?

TREASURER:

Only they can explain that.

HADLEY:

Have a guess.

TREASURER:

I will continue to deal with the ABA professionally as I always have regardless of who is in that job. Mainly, Ray, I deal with the chairs of those banks and I have just finished a round of extensive discussions with the chairs of the banks. I also deal with the CEOs and I’ll continue to do that. There are some big issues we’re wrestling with the banks, as you know we’ve already increased the powers of ASIC, we’ve given them more funding. We’ve got this Ramsay Review at the moment which is going to recommend a much better more effective, more cost effective binding way to deal with disputes between customers and the banks. So we’re just getting on with the job of actually fixing the problems. Now banks have a big job to do in that, one of the changes we introduced is we’ve all got to go to Canberra and appear before the House of Representatives Standing Committee and I’m pleased to see, and the Prime Minister referred to this yesterday, they’re under a bit of pressure and they’re cutting rates for credit cards. That’s what we want to see.

HADLEY:

Let me pull you up there. Let me pull you up there. I spoke to Ross Greenwood about that as well. The ANZ bank, none of the others, have reduced the rate by 2 per cent on the so called platinum card. The only ones with a platinum card according to Ross, and I’ve confirmed he’s right, are high earners. Who normally would pay it off anyway before the interest falls due. So it’s a bit of smoke and mirrors and I don’t like the Prime Minister tumbling for this rubbish. Two cards, both platinum, with high income earners who pay it off before the interest is due, and they’re trying to make out they’re good blokes, and good ladies. They’re not. To a certain extent, and I know you’ve resisted the Royal Commission calls, but I won’t cop that about the ANZ has done the right thing, the punters out there who don’t have access to the platinum card, they’re still paying 21 or 22 per cent.

TREASURER:

They should make them all more competitive and we want to see more competitive tension in the banking system. We also want to focus on things that actually get results, that’s why we’ve been doing what we’ve been doing. That’s why we’ve taken the decisions we have, which are actually producing better outcomes. Remember it was this Government that dealt with the issue of the fees charged, by the credit card companies and others, that go on your bill for an airline or a meal or these sorts of things, we got rid of those fees, and the unscrupulous charging that was going on there. So we’ll continue to put tension in that cord, and it’s important we do. It’s not for us to make excuses for the banks, they have to explain themselves, that’s why we think they should front us and explain their own decisions.

HADLEY:

Why the reluctance to, I know it’s expensive, but why the reluctance not to put them under a bit more pressure? They haven’t really been all that nice to the Government, either pre-election or post-election. Just while I’m on that, you mentioned at the meeting with the bank chiefs, it’s reported today that you cancelled the scheduled meeting.

TREASURER:

That’s not true. I had no scheduled meetings with the banks at all. I just finished a round of meetings with them.

HADLEY:

So you had no meetings to cancel?

TREASURER:

No. I don’t know where that came from. It was written by a gossip columnist for the Fin Review.

HADLEY:

So it’s not true?

TREASURER:

Not true. I have no scheduled meetings with the banks.

HADLEY:

Back to my other question in relation to no Royal Commission, given that they treat – I mean they still chain the pens to the desk – but given that they still treat customers like offal in the main, I mean, I really am angry about this platinum card and they’ve got all this publicity, and then when you look at it the number of people who hold platinum cards is a minimum number of cards, who pay their account on time, and don’t get charged interest, use the money for 30 days or whatever it is and then pay it. I mean, it really is infuriating.

TREASURER:

More and more people are doing that too, Ray, which is not a bad thing. They’re going to debit cards, and they’re using other things like that which means they’re not getting themselves on the hook with credit cards and that’s not a bad thing.

HADLEY:

Treasurer, not in Western Sydney, not in the suburbs of Brisbane they’re not, because the poor buggers are living day to day, not week to week. So, I mean, if you can afford to, of course like Ross said, he can afford to, you can probably afford to, I can afford to, but the poor battlers out there, they can’t afford to do it. They’re on the drip. They’re on the drip. They’re being drip fed by - they’re being charges exorbitant rates…

TREASURER:

We need to keep the pressure on.

HADLEY:

Yeah they portray themselves as some sort of white night on a stallion coming over the horizon, we’ll say, the ANZ bank, we’re going to knock off 2 per cent of the platinum cards…

TREASURER:

Well that’s not my view. That’s not my view that they’re the white knight on these things, Ray, it’s my view that we need to keep as much pressure on them as possible, and that’s what the Government is doing, and we’re focusing on things that will get them…

HADLEY:

Did you answer the question by the way about Anna Bligh, are you happy about that or not?

TREASURER:

It’s not for me to be happy about it or not happy about it.

HADLEY:

But do you think it’s, is it having a bet each way in case you lose the next election? They’ve got someone in the Labor Party there.

TREASURER:

Get them in to talk about it. All I know is…

HADLEY:

I won’t accept back handers so they won’t come on this programme.

TREASURER:

I will simply deal with whoever they put up, but in all of my engagements with the banks, they’re mainly directly with the banks themselves, I don’t need to work through an intermediately I can just pick up the phone, as I should, as previous Treasurers always have.

HADLEY:

Alright, just one final thing. This stuff about Wilmar, and it’s not your doing, it was done by someone else, someone gave this Singaporean company permission to buy these eight sugar mills.

TREASURER:

It was Wayne Swan from memory.

HADLEY:

It was a long time ago wasn’t it, 2010 [inaudible]. So it’s not your fault. But they’re acting like a real pack of bastards at the moment, and Barnaby said to me this morning, and he used some language I’ve never heard a deputy Prime Minister use in relation to what he wants to do with them…

TREASURER:

I’ve probably heard that language from Barnaby before.

HADLEY:

I’ll clean up and say I’m sick of this crap, and he didn’t use the work crap, he used another word that means crap. Anyway, I thought it was refreshing to hear the Deputy Prime Minister talk about this, he’s not going to cop that sort of rubbish anymore. But, as a Government, as he’s saying, you’re going to take a big stick to them, and he’s the deputy Prime Minister, he’s the bloke in charge of that area, but it must be infuriating when we invite foreign companies here and we look at them say they’re going to make promises and do things, and they down the track they pull the pin on all the promises they made, as Wilmar has done.

TREASURER:

At the end of the day, Wilmar and QSL, Queensland Sugar Limited, they’ve got to get in a room, and they’ve got to get this deal sorted out so cane growers in North Queensland can have a clear understanding of how their sugar is going to get sold, and how they’re going to get paid. What we have done, working with the LNP in Queensland, is Tim Nicholls has stepped up, and what he has said is, if this thing is not sorted out then he will be introducing changes to the legislation in Queensland, at the end of this month, which will basically force binding arbitration pre-contract between Wilmar and QSL. Now that’s the right decision and the Prime Minister initiated that in his conversation with Tim Nicholls, and Tim Nicholls was more than happy to step up to the plate on that, so good for Tim for doing that. The LNP is seeking to sort this issue out in Queensland, and it’s an issue in Queensland, so that’s where it should be sorted out.

HADLEY:

[Inaudible] Robbie Katter, and Shane Knuth from the Katter Australia Party step up...

TREASURER:

Well they should support him, that’s the bottom line because they’re Queenslanders, they should support these changes.

HADLEY:

According to the deputy Prime Minister, Annastacia Palaszczuk’s Labor Government doesn’t support…

TREASURER:

No they don’t, they’re going to do the cane growers over, but they will have to act on the legislation of their own parliament, and that’s where it should be addressed, that’s where we put the pressure, we’ve been working closely, the Prime Minister and I, with Barnaby, to get the right outcome here, and with Tim Nicholls up in Queensland who’s doing a fabulous job to get this issue sorted, and good for him for doing it. I know he has Barnaby’s full support in what he’s trying to do.

HADLEY:

Okay, we’ll talk next week, I appreciate your time.

TREASURER:

Thanks Ray, good to see you.