5 November 2015
Transcript - #2015037, 2015

Doorstop interview, Melbourne

SUBJECTS: Tax White Paper process; address to the Economic and Social Outlook Conference; interest rates; mortgage rates; the Government’s national plan for economic growth.

QUESTION:

Treasurer, you talk about having a better tax system how do you see any changes to the GST fitting into this sort of broader narrative, especially in light of the modelling that we have seen today?

TREASURER:

Well, first of all we want to see a better tax system that encourages, I should say even more so, backs Australians who are out there every day working and saving for their future and investing in their capabilities. That is the discussion we are having and we are linking this to the many other important economic changes we will be making to ensure that Australians can work through this transition that we see in our economy and come out even stronger on the other side. We know Australians won't be intimidated out of their own prosperity and out of their own opportunities and we are going to back them strongly to do that. The tax system has to achieve that [inaudible]. So, that is where we are at at the moment. There are many options, as the Prime Minister has said, on the table. I note that people are running models on all sorts of options. I should stress that they are not the Government's options. The only one, that I am aware of, who have publically advocated for an increase of GST are former Labor Premiers and state governments. What I do know about issues relating to compensation though was whether it was on the carbon tax - where Labor believed that they could have compensation for a carbon tax - or indeed when the original GST was introduced back in the early 2000s that there was an effective compensation method and it worked. I have seen no evidence to suggest that those things haven't been able to be accommodated with tax changes of all sorts of natures over time. Of course any of the options that the Government, working together with the states and territories, would contemplate would always mean that you would have to have effective measures in place to ensure that the most vulnerable and others were protected in those circumstances and the form is the lived experience - not the theory - the lived experience on compensation issues, is that it works.

QUESTION:

Mr Morrison, Reuters ran a story this week saying that China is broadcasting what is effectively propaganda from radio stations within Australia - is that a concern for your Government and is it something that you think that FIRB…

TREASURER:

It is a matter properly handled by the Communications Minister and ACMA. So, that is where I will leave that.

QUESTION:

So, it's not a FIRB issue?

TREASURER:

No, it is a matter for ACMA and the Communications Minister.

QUESTION:

I understand you are trying to lay the ground work for sorting out the problems, this is detailing the problems - when can we expect concrete specific solutions to the problem which is tax reform?

TREASURER:

I think first what we have to do is establish why we are doing this and why would any of these changes that would be [inaudible] be necessary. That is the process we are engaging in with the states and territories. Now, what I want to see is an outcome which makes Australia's economy stronger which makes people's jobs more secure and ensures that they are getting the backing and the choices that they are making every day. So, that is where we are up to at this stage of the debate. The Prime Minister and I don't intend to get ahead of that, I think it is important that we continue to work through those issues with the states and territories and continue to articulate what are some of the challenges we have to address. Let me say it again in 16-17 if you are on the average wage you will be on the second highest tax rate. Now, I don't know if people have woken up to this yet but that is what is going to happen if nothing changes. It is an important thing to do to ensure that we avoid those sorts of outcomes in our tax system which penalise people who are simply getting about their day of working and saving and investing.

QUESTION:

Doesn't there need to be a plan though that people can debate?

TREASURER:

Well, at the moment what you need to agree on and what you need to focus on is what are the things you need to fix and that is where we are up to right now.

QUESTION:

What do you make of Glenn Stevens' comments this morning? He seems to suggest that the interest rises by the four major banks shouldn't dampen economic confidence but at the same time he also seemed to suggest that an interest rate cut could be on the way?

TREASURER:

Well, I will leave it to the Reserve Bank Governor when it comes to matters of interest rates and what he may or may not do. It would be very inappropriate of me to comment one way or the other. What I was encouraged by in what the Reserve Bank Governor said today and indeed what the board said in their statement I think showed a strong confidence in the economy. Rates are low and stable and as a result of that I think people can continue to go out there and plan and invest and do the things that they need to do. Our economy is transitioning and Australians know that, Australian businesses know that but the other thing we know is that Australian businesses have been getting their balance sheets in order over the last 12 months or so. Australian householders have been doing the same thing. They have been paying down their mortgages while rates have been low and they have been able to get a bit ahead of their mortgage too for many people and I think that is a positive thing. What it means is we are at a stage now where people are ready to launch, if you like, both as businesses and householders and people in their jobs and in the economy. So, there is a good set of conditions that are coming together where I think people can plan for their future with confidence despite the headwinds and the volatilities and the uncertainties that are out there. I will leave it to Glenn Stevens to speak for himself but that was my take out of the comments that he has made.

QUESTION:

And how about the eight pillars that you talked about today in your speech.

TREASURER:

The eight apps.

QUESTION:

The eight apps - are you trying to, is that about the Government trying to refine its message on these economic issues?

TREASURER:

It's what we are doing. It is what we are doing to grow jobs and to grow the economy and it is important that as you go through these transitions in our economy and the things that are happening more broadly globally that Australians can have confidence about what the Government is doing to provide the most stable platform for them and that is what we are doing. None of these things whether it is ensuring we have a strong financial system, ensuring we have a good tax system that backs people who are out there acting in the economy successfully every day, the trade agreements that have been secured. All of this is part of the one central plan to grow jobs in the economy. That is what the Government is doing as part of its contribution and it is over to Australians to continue to do what they are doing and look for their opportunities and they know they will get backed by a government who has a strong plan.

QUESTION:

Can the electorate expect a concrete tax plan before Christmas or after Christmas?

TREASURER:

The Government will continue to engage as we are and I think I have outlined pretty clearly the process we are following and we will continue to follow that process. It is important that we get these things right and others may wish to rush to failure and to pre-empt things and to get ahead of where the Australian people are on these sorts of things - I certainly don't plan to do that. The Government wants to take the Australian people with us. The Howard/Costello Government was able to achieve that, the Hawke/Keating Government was able to achieve that and together as a government led by Malcolm Turnbull we are seeking to achieve the same sorts of outcomes which leaves our economy stronger and Australians more confident in their own jobs and about their own futures because we are backing their efforts.

Thank you.