14 March 2018
Transcript - #2018025, 2018

Interview with David Koch, Sunrise

Subjects: Financial Services Royal Commission; Location Tax Offset; Labor’s tax proposal

DAVID KOCH:

Treasurer, good morning to you.

TREASURER:

Morning, David.

KOCH:

This tactic of drowning the Commission in documents and spreadsheets to slow it down – no one's really buying it, are they?

TREASURER:

No, and I certainly know Commissioner Hayne is certainly not buying it. He's running a very tight ship there and I think he's applying this process very effectively. He's not giving the banks any quarter on this and he's getting on with the job, which is what he's been asked to do.

KOCH:

See, the banks also claim they've already changed their culture internally from a sales culture into a more of a customer-centric focus. Do you think that's being achieved?

TREASURER:

I think that's been one of the changes that has been taking place. A lot of the things that will appear before the Commissioner are things that have come to light before, have been dealt with by ASIC, but it does highlight some pretty sickening behaviour and there have been actions that have been taken on a lot of these issues but we look forward to seeing what Commissioner Hayne recommends and he's taking all of these submissions, his team is working very hard. APRA and ASIC, the other government regulators, they're cooperating fully and assisting the Commission as you'd expect them to do and I think Commissioner Hayne has gotten off to a great start.

KOCH:

It looks as though everyone's getting on the same page which is terrific. Hey, while we've got you, a couple of other things – you're being asked by the Queensland Government this morning to help with a one-off tax break so they can keep filming 'Dora the Explorer' there. Are you considering that?

TREASURER:

We do consider all of these on a case-by-case basis. The last one we did was a very significant one and that was the 'Aquaman' film that was filmed in south-east Queensland and the Federal Government stumped up there significantly. We're considering these things at the moment, David, and also in the lead-up to the Budget more generally.

KOCH:

Well, you've got all our grandchildren and young children sort of campaigning for this too.

TREASURER:

I reckon.

KOCH:

Now, tell us about this new Labor plan to abolish the cash rebate available to shareholders which, according to their figures, shave $59 billion off the Budget. Can this work? It's sort of fiddling around with dividend imputation, isn't it? And franking credits?

TREASURER:

What it is is Bill Shorten is going to steal the tax refund of retirees, pensioners and lower income Australians. If a company pays tax then they can pass that on to the person who has the share. Now, if you or I have one of those Commbank shares or a Telstra share – there are a lot of pensioners, 230,000 pensioners in fact, have these shares. The way it works for them is if they haven't paid enough tax, well, they get the full value of that credit back in a tax refund but if I do it or you do it, we get to reduce our tax. So what's not fair is why do we get the full value of that refund in our tax but Bill Shorten wants to steal it from pensioners and retirees and those on low incomes? It's a very unfair tax smack on older Australians.

KOCH:

I totally agree because we forget that this was introduced because the company has already paid its full amount of tax so they get their shareholders to pay it again, that's a double taxation, isn't it?

TREASURER:

It is. On dividend imputation, 70 per cent of the value of all dividend imputation goes to the people in the top two tax brackets but 85 per cent of the value of these refunds go to people in the bottom three tax brackets. So this is a slug on people on lower incomes. I think it's very cynical. He's hoping people will think it's all too complicated but it's not. Bill Shorten wants to take your tax refund if you're a pensioner and you've got shares in the Commonwealth Bank or Telstra and remember many years ago, David, a lot of these pensioners bought these shares when the Commonwealth Bank was privatised or going back to GIO and all of these, they got their shares there, it's cash they need and Bill Shorten's going to strip it away.

KOCH:

Silly idea. Treasurer, thanks for joining us.

TREASURER:

Thanks a lot, David. Good to be with you.