17 April 2018
Transcript - #2018042, 2018

Interview with Sabra Lane, ABC AM

Subjects: Immigration; Turnbull Government commits to Melbourne Airport Rail Link; Budget 2018; Financial Services Royal Commission

SABRA LANE:

Joining me now is the Treasurer, Scott Morrison. Good morning, welcome to the program.

TREASURER:

Hi Sabra.

LANE:

Why was this paper commissioned?

TREASURER:

It was actually initiated by the Secretaries of Treasury and the then Department of Immigration and Border Protection – now, the Department of Home Affairs. So, it is their paper, their initiative. As you say it was jointly done by those two agencies and I think they have provided some important factual information about the important role that immigration has played over a long period of time and that continues to be the case.

LANE:

The paper points out that in the 20 years to 2016 the population growth across capital cities grew by 37 per cent on average, mostly due to immigration. Isn't that the problem? That as people drive to work this morning in congested traffic and as young people think about buying new homes and they find themselves locked out, the huge problem is that infrastructure and housing supply just hasn't kept pace with population growth?

TREASURER:

I think they are very fair assessments. And that is why in this year's Budget, we will continue to be investing strongly in infrastructure. It is why, in last year's Budget, we put the measures in place to address housing affordability, particularly on the issue of housing supply. One of the interesting charts in the report shows that for quite a period of time, housing supply was not keeping up with population growth where it had in previous decades. That's an issue that needs to be addressed at the state and territory levels and many of the states and territories, I believe, are now doing that and that is a good thing. You have got to plan for growth.

LANE:

Are they doing it at a fast enough rate?

TREASURER:

Well, they have got to keep up with the pace. You have to plan for growth because it is the growth that is what ensures that we can guarantee the essential services that Australians rely on. It is the stronger economy that Australians can count on for Medicare and for schools and for hospitals and the Budget will be very much focused on ensuring a stronger economy to guarantee those essentials but also, as always, live within our means.

LANE:

The other thing is, things like public transport often don't keep pace as well.

TREASURER:

We were just last week, down in Melbourne, announcing Tulla Rail, which is one of the most overdue public rail infrastructure projects that we have got strongly behind, but it's

also important, I think, Sabra, that the paper explains, to understand what's driving population growth. Our natural increase of around 150,000 each year has been falling now proportionately but it has been about that for a while. Permanent immigration has been about the same level. It is the rise in temporary migration in recent times that has really fuelled that population growth. So, if you are sitting on a bus, or a tram or a train, the reason there is more people sitting on it actually has a lot more to do with the increase in temporary migration, people coming and studying, people here on visitors visas, and less so on the skilled work visas – that's actually been falling in recent times. So, you have got to understand what's driving the population pressures which our migration program provides the flexibility to do but in addition to that you have to plan for the growth which is what our Budget is doing.

LANE:

Just getting back to infrastructure, you talked about that project that you just announced. How are you getting around though the usual fights that do happen with states on either the funding mechanisms for these things or what projects should be prioritised. How can taxpayers actually be [inaudible] that their money will be spent wisely and in a timely fashion?

TREASURER:

Well, we have put that invitation to the Victorian State Government to work together on this project like we do on all the projects.

LANE:

We always [inaudible].

TREASURER:

Well, I think the public will expect the Commonwealth and state to work together cooperatively on this and I think the public actually are the safeguard for the governments at both levels to do the right thing by them in delivering this very important national piece of infrastructure for Melbourne and Victoria.

LANE:

Many governments have also tried to prioritise resettlement of immigrants in regional cities but they are still not the preferred places to settle even despite attempts by the former Deputy Prime Minister to decentralise services to rural Australia to make them attractive. What else do you do to make regional areas the number one spot for people to think, yes, I can make this my home?

TREASURER:

Jobs. Jobs in regional areas. People go where jobs are and where they are going to be and I think of the former Deputy Prime minister when I visited him in Tamworth when I saw what was happening in Tamworth. It was very exciting what was happening in the economy in Tamworth and the developments that were going on there for housing and that was because people were wanting to go there. Now, I commend that decentralisation initiative that the Government has been putting in place, started by Barnaby Joyce, continued now under the new Minister. So, I think they are all things you can do but at the end of the day you have got to have an immigration program that does a number of things. First of all your borders have got to be secure so Australians can have confidence the program is well run. Second it has got to be demand driven. It is the Turnbull Government that changed the nature of permanent migration to make it a cap, not a target. And so if it falls below that cap that is fine because what we are saying is we want people to come to Australia who are going to make a contribution, not take one. And the scheme, the system is designed to put that qualifier and then you have got to enforce the rules, which is what we do. So, we are running a good program and it is contributing to the national interest and we will maintain it in the national interest.

LANE:

The former PM, Tony Abbott has called for a cut of 80,000 people a year, saying that Australia just cannot sustain it. What happens if Australia carried out that cut?

TREASURER:

Well, look, this isn't about Tony Abbott. This is about what are the right policies in Australia's national interest but to go to the issue…

LANE:

But what would happen if that cut was made?

TREASURER:

Well, I just said it before and that is, if you go back to I think it is the 14-15 year, the permanent migration program accounted for just less than a third of the increase in net overseas migration. The increase in permanent migration that year that went to population growth was half what the natural increase was. So, if you are looking to understand what are the things that are really influencing how many more people there are on the bus or the tram or the train it is what is happening with temporary migration. So you have got to ask yourself some hard questions about that. We have got more international students who are coming here and studying in our universities that are generating important revenue for these universities which means we can give more places to Australian kids in those universities. We have got tourists here roaming the country, generating jobs in regional areas. So, that is why you just have to plan for growth. That is not the main driver on permanent migration for the overall population growth. In fact of natural increase, temporary migration and permanent migration has the lowest impact on population growth.

LANE:

The Daily Telegraph has you dressed up as Santa Claus saying that you are going to be Santa in three weeks delivering tax cuts.

TREASURER:

Dorey is getting in early with these front pages I see at The Tele.

LANE:

Why tax cuts, given this interview has just highlighted the huge need for infrastructure.

TREASURER:

This Budget will be a responsible Budget. I am not Santa Claus, it won't be Christmas in May, but, you know, I don't intend to be the Grinch either when it comes to these things. What we will have is what we have always produced and that is a responsible Budget with measures the country can afford. They're about investing in a stronger economy and that is investing in middle income Australians, it is investing in infrastructure and it is investing in the services that Australians rely on but you can't rely on those services if you are not building a stronger economy and you can't have a stronger economy if you are going to tax it within an inch of its life which is what the Labor Party are going to do and force Australians to pay more.

LANE:

Alright, just quickly, the Royal Commission, AMP has admitted to lying to ASIC about charging customers for advice and services they never received, recent cases – how shocking.

TREASURER:

This is shocking but I think what it demonstrates is the wisdom of the Government, when we went ahead with this inquiry…

LANE:

Reluctantly.

TREASURER:

Sure and the record is clear on that Sabra but when we did it we ensured it wasn't the narrow cast proposal that the Labor Party was saying we said it should include insurance companies. We said it should include superannuation companies, things that the Labor Party opposed. So, the Labor Party were happy to have an inquiry into one element but turn a blind eye in areas of superannuation and others. Now, we said, no, if there is going to be one it is going to be a fair dinkum one and Commissioner Hayne is getting about the job and I commend him for his work. I do find those revelations shocking from that evidence and we will await his recommendations.

LANE:

Treasurer, thanks for joining the program.

TREASURER:

Thank you, Sabra.