2 November 2015
Transcript - #2015034, 2015

Interview with Ray Hadley, 2GB

SUBJECTS: Tax White Paper process; providing real opportunities for Australians who want to work, save and invest; superannuation; social services portfolio; education system; National Mosque Open Day; voting age; Glenn Wheeler.

RAY HADLEY:

Treasurer, good morning.

TREASURER:

G'day Ray.

HADLEY:

Now, Samantha Maiden wrote with some authority yesterday in The Sunday Telegraph that the GST is going up to 15 per cent. People, I have got emailers and callers here saying that if they raise it how are they going to compensate tax-payers, pensioners, what happens to self-funded retirees. These will be questions, I know, that everyone will be asking. At the end of the day and I listened to Graham Richardson on Sky this morning saying simply it can't happen unless they all agree and by they all he means the states.

TREASURER:

And that is why we are talking to the states. The report that was there on the weekend was based on some work that was done at the request of the states and territories to give them an idea about what the various options were. At the next meeting of state treasurers we will be looking at what all the state taxes are and what all the options are there. So I think people, Samantha in particular, are jumping the gun a bit on all of this. We are working closely with states and territories as people would expect us to do and what we want to do is fix a tax system that actually isn't backing people at the moment who are out there working and saving and investing when you have got people in the 16/17 year, next year, if you are on the average wage you will be in the second highest tax bracket. Now, that is not a good outcome, that is not something that I think we can allow to continue so you need to look at ways of how you can fix that and that is what we are doing.

HADLEY:

You are going to have about 25 balls up in the air juggling it because to appease the states, basically to get Victoria across the line they will want more money. Mike Baird and previous New South Wales Labor premiers before him and Barry O'Farrell have said we don't get our fair share commensurate with the size of our state and all the rest of it. I mean how do you deal with all these people?

TREASURER:

It's not easy but you have got to engage them I think in good faith first and that is what we have been doing. The other thing I want to put people's mind at rest about is we don't want to go and look at any changes to the tax system which basically just hand over bucket loads of money for people to spend without any controls on spending it better of doing anything like that. You don't go around raising taxes to chase higher and higher levels of expenditure. That is why I have been saying from the outset you have got to get your expenditure under control. States equally have to look closely at their expenditure because if you are going to do anything in the tax system you don't want to increase the burden of taxes on people, you just want to raise it in a smarter more clever way that doesn't leave, for example, the average wage earner on the second highest tax bracket in the country.

HADLEY:

I'm struggling to understand why the Victorian Government would want to double the Medicare levy instead.

TREASURER:

I think this is a very complicated idea. There is the GST which has the revenue that goes to states so they can spend it on the services. To actually now be trying to be introduced some sort of grab on income tax as well as the GST to go to states I just think this makes the system more complicated - not less. That is why we are engaging but look these are all contributions, these are all ideas. The only person who is not engaging in any of this is Bill Shorten who is just out there shouting at the clouds.

HADLEY:

Let me come back to him in a moment but self-funded retirees cop a hammering with low interest rates and all the rest of it. Where do they fit into the mix? I am getting email after email from self-funded retirees saying well hang on what about us, is there anything in it for us?

TREASURER:

Well, what we want to make sure of with superannuation is that we need to respect the fact that people have been saving under particular rules over a long period of time that there is nothing that punishes or penalises them retrospectively on any of these things. I mean that is one of those iron clad rules about when you look at these systems. People who are self-funded retirees have landed in the place, through their own great efforts, where we would like to see more and more Australians be when they reach retirement. I mean the reason you have a superannuation system which has tax incentives is to ensure that when people get to retirement age they don't need to go on the pension. Now, when Bill Shorten looks at superannuation all he sees is dollar signs and more tax revenue, what I am looking at, what the Prime Minister is looking at, is how we can make the system work better so when people get to retirement they can be independent and not dependant on a pension.

HADLEY:

Ok, back to Bill Shorten. If you can convince the Victorian Government and others that we need…and I take the view and I don't expect a comment but everyone is talking 15 per cent, it might be an ambient claim and 12.5 might be where we end up or 15 as the case may be. But just say you get agreement from the states can Bill Shorten, can the Greens and the crossbenchers still be a roadblock to you once the states all agree?

TREASURER:

Well, Arthur Sinodinos said on the weekend that any position you ultimately got to you'd be wanting to be taking it to the Australian people and Malcolm I think has always been very clear about that since coming into the role as leader and as Prime Minister and you have got to take the Australian people along with you. That is why working with the states at the moment I want to work through every possible option to make sure we come up with the best one.

HADLEY:

So, you will present this to the electorate - I am sorry to interrupt you but it is very important. So, if you get some sort of an agreement on an increase on GST to either 12.5 or 15, whatever the case is, and the states are happy you will address the nation and say this is what we are going to do if we are returned to Government in an election say early, mid next year?

TREASURER:

If that is where we ended up.

HADLEY:

Yes.

TREASURER:

Well, I think that honestly, Ray, goes without saying. I think that is the minimum expectation people would have and I think that is entirely reasonable. Let's say the states decide to do something different with their state taxes, they may choose to do that. I am not going to get locked in at this point in the discussion to any one particular proposal. I mean David Gillespie, you know David, our very good member for Lyne. I know none of us are particularly a fan of the previous one but he is a very good member for Lyne. He has put forward, I know there are a lot of listeners up that way to this programme…

HADLEY:

And by the way they have just re-joined us after the hub collapsed.

TREASURER:

Oh ok.

HADLEY:

So they are back with us, 2MC are back with us.

TREASURER:

Good to have 2MC. Look, David has been consulting with his community, he has made a suggestion today, he has put that in. I have got to say, it is at the pretty extreme end of the options that you can technically consider but that said at least he is part of it and he is having a contribution. Bill Shorten is not making any contribution to this, he has no credible plan to grow jobs and to grow the economy. He has just got one big, fat, whinge.

HADLEY:

That's a nice way of putting it. DSP - when you were Social Services Minister you and I looked at this and you vowed to rein it in. Front page of News Limited papers today $10 billion - $17 billion in the last decade for the Disability Support Pension. You can nearly…and we can't find out for privacy reasons you can back it in however that whenever we have got some bloke that is on charges of something and you investigate he is on a Disability Support Pension and he looks to be able bodied going in and out of court and bench-pressing and all the rest of it. What do you do with it because it is just growing like topsy and it doesn't seem, despite your best efforts, to be reined in?

TREASURER:

Well, the good news is that the number of people on the DSP today is lower than it was at the last federal election. We have actually been reducing the number of people on the Disability Support Pension. We have also been able to halve the rate of growth in the cost of the Disability Support Pension. It is around about $17 billion now which I know is a lot of money and it is about that level going over the Budget in the Forward Estimates. Christian Porter is right to say that not only with the Disability Support Pension but there is…as a country we are going to increase our expenditure on supporting people with disabilities by one third with the introduction of the National Disability Insurance Scheme as that moves and transitions towards full scheme implementation. So, there is a very big demand going on the tax-payer to support disabilities and I don't think anyone has a quarrel with the National Disability Insurance Scheme and this is a big investment so we need to be able to find savings and find better ways to deliver services in other areas so that we can pay for this. The good news, Ray, is we have actually decreased the number of people on the Disability Support Pension, we have introduces tougher controls around how you get onto it.

HADLEY:

With your doctors.

TREASURER:

With the doctors and a range of the other checks that we put in place and there were earlier changes to the impairment tables by the previous government and that is all good. The other thing we need to remember though is that there are people who are grandfathered on the DSP, Ray, that you go back 10, 15, 20 years when there were changes made to the DSP and they could have been working up to 30 hours a week and the grandfathering arrangements meant that they got to stay on the DSP for life. Now, that problem will be solved over time but they're grandfathering arrangements that were put in place by previous governments including the Howard Government...

HADLEY:

So, we have got to wait for them to pass?

TREASURER:

Well, that and to move on to the aged pension and things like that. So, there is a long tail in solving this problem.

HADLEY:

So, my anecdotal story that I tell quite often about when the Whitlam Government came to power in the 1970s when I first started working that people my age, 61, now have children and grandchildren who have all been on some sort of Centrelink payment - three generations of Australians.

TREASURER:

What I would love to see is people keep more of their own money by having a tax system that allows people to keep more of their own money so they don't be in a position where they have to ask the Government for money.

HADLEY:

Look, we have that much to do, I have got a couple of others quickly. Today, ballooning costs of student loans. Now, they say by 2018 front page of the Tele $70 billion - forget about the $17 billion for the DSP 7 - 0 $70 billion and of the $70 billion $19 billion will never be repaid. Why won't it be repaid? Is it because people just don't get to the level where they can earn enough money to pay it back?

TREASURER:

Correct but there are other changes we are introducing right now. The previous government back in 2012 extended the HECS debt system to people in diploma courses in vocational education. Now, they would get, the college, would get a full payment after five weeks of the course starting regardless of whether people went on to finish or not. It was basically pink batts for vocational education.

HADLEY:

On steroids.

TREASURER:

So, what we have done is we will be introducing a scheme where those payments will be made over instalments and so the incentives will be for people to actually do the course and finish the course and you can't do things like offer them free iPads and things like that to sign up.

HADLEY:

What are you going to do with those people? I mean it appears…

TREASURER:

Well, they will get knocked out of the scheme, they won't be eligible to receive any payments.

HADLEY:

We will talk in a moment about the open day, the Mosque Open Day, but members of the Sikh community are decent, hardworking Australians and they are copping a hammering at the moment because of a few alleged thieves among their community.

TREASURER:

The private colleges do a good job in the education system, there are some rogue operators and I saw that when I was in immigration many, many years ago as the previous Immigration Minister where colleges would try and rort the immigration system. Now, some of the unscrupulous operators, who are a minority I should stress, there are great private colleges more generally and we want to make sure the system works for them. You have got to have both public and private, it helps train people the Greens want to knock out private all together.

HADLEY:

You can't have them stealing off us.

TREASURER:

No, of course not and they will get deregistered for the purposes of receiving the HECS payments.

HADLEY:

What about the millions, the $57 million they have garnered from the Federal Government over a period of time?

TREASURER:

Well, where they have rorted things and they have committed crimes we will pursue them.

HADLEY:

Ok, you went to a mosque, I heard, I was on air Saturday and I heard a news report about you going to your local mosque.

TREASURER:

I went to two - I was at Kingsgrove and I was at Lakemba.

HADLEY:

Lakemba Mosque that's what I heard and that is wonderful. I heard all the positive discussions about that from the non-Muslims and Muslims saying that it is great that people not of our faith came and looked. But then you get this mob Hizb ut-Tahrir undoing all the good. There should be stories today about what happened at the mosques on Saturday but there is not because it has been overtaken by the lunacy at Bankstown about don't stand for the national anthem, walk out, don't involve yourself in the Australian community, we are not part of the community. I mean why aren't this mob banned? I know the Prime Minister says keep them in the open - I would rather keep them shoved away in some dark corner.

TREASURER:

I think you will find the Prime Minister actually has not said too much on this issue at all and is reserving his position to be able to deal authoritatively with this and through the proper process. You are absolutely right, Ray. What I saw on the Sunday - as opposed to what I saw on the Saturday at Lakemba and at Kingsgrove - on Sunday we saw no friends of Australia in the way they were carrying on those speakers, that speaker in particular and no friend of the Australian Muslim community either. They are no friends of that community - they do them no favours. The wonderful people I met on Saturday where we had really good discussions. I mean when I was at Lakemba I met a group of people that had come down from the Blue Mountains, another that had come from Manly, other people had come up from the Shire; they were asking really honest questions and they were getting, I think, very honest answers. They were throwing the doors open and good on Samier Dandan and Jamal Rifi and everyone for pursuing that very open approach. I just wish there were more people like them and not the clowns we saw carrying on on Sunday.

HADLEY:

They are clowns and it is a bit like a non-Muslim school principal in Victoria allowing children or directing little children nine, 10, 11 year olds out of the assembly hall thinking she is doing them a favour when in fact she is doing exactly what Hizb ut-Tahrir did on Sunday and causing them no end of drama.

TREASURER:

That is true. The mosque I was at first on Sunday morning was a Shia mosque in Kingsgrove and we talked about that issue and they were just as mortified and just as embarrassed about that as any of the rest of us would be.

HADLEY:

One final thing quickly, Bill Shorten grasping at polling straws 18 to 16 the age to vote. I mean if that is the best Bill can do, Bill is a void, a vacuum that we don't need in politics.

TREASURER:

Well, a vacuum, I think, is the right way to describe it. He has no credible plan for jobs in the economy - none at all. He wants to spend the tax measures that he has come up with like 10 or 15 times over to come up with $62 billion in black hole expenditure he has got commitments to going forward and so he talks about lowering the voting age to 16. I mean it is just a distraction. Bill should focus on what the main issues are in Australian politics and that is how to get a better tax system that backs people who want to do positive things in our economy and he just doesn't seem to be up for that discussion. He wants to give everyone something to fear, someone to blame and nothing to believe in.

HADLEY:

I think we have covered everything thanks for your time. Talk to you next week.

TREASURER:

Thanks Ray.

HADLEY:

Treasurer Scott Morrison in the studio. Oh before you go, before you go there was a lot of publicity about the Glenn Wheeler function.

TREASURER:

Yeah, it was great.

HADLEY:

It was and he was, there were touches of the brilliance of Glenn Wheeler that we knew and loved and there were some comments about Michelle his wife which were funny but maybe inappropriate to discuss here.

TREASURER:

Yes, true.

HADLEY:

But thank you for getting on board.

TREASURER:

It was great.

HADLEY:

The bible thing. Brohman spent $10 of his own money to buy a little pocket bible…

TREASURER:

Which he wanted back.

HADLEY:

The $10?

TREASURER:

He wanted the $10 back.

HADLEY:

Well, he had already been to petty cash. He has gone up and seen the cash department and put a chit in for the $10. That's hilarious anyway thank you for doing it.

TREASURER:

My pleasure.

HADLEY:

And a mate of mine was able to buy it, Kevin Waters from Kevin Waters Towing. We are all going to have dinner together or lunch together.

TREASURER:

Yeah we are with Paul Signorelli who was very generous.

HADLEY:

And I was there again on Saturday night actually for the Australian Maronite community for the GNK Foundation again at the same venue as it turned out. Anyway, it was well done and thank you to Kevin and everyone else involved for the money raised. It was done in the spirit of trying to help a mate and that is what Glenn is. Thank you.

TREASURER:

Thanks a lot, Ray.

HADLEY:

All the best. Scott Morrison, the Treasurer.