26 April 2018
Transcript - #2018056, 2018

Interview with Gareth Parker, 6PR

Subjects: Federal GST Top Up for WA Hospital Infrastructure; fully funding the NDIS without increasing the Medicare Levy; Budget 2018.

GARETH PARKER:

The Federal Treasurer, Scott Morrison, good morning.

TREASURER:

G'day, good to be with you.

PARKER:

More money for health on the front page of The West Australian this morning, so you've got the headline, but is that really a GST top-up or just another grab-bag of one-off announceables?

TREASURER:

Well, it's topping you up to the 50 cents in the dollar arrangements and, as you know, we've been doing that for some years now and that's around about $1.4 billion in additional GST top-ups that we've been providing as a Government. But the fundamental issue is the one you and I have discussed before and that is to ensure we fix the problem and until that's in place, we'll continue to show good faith in what we've done through these sorts of commitments and to do it for the Joondalup Health Campus expansion and the Osborne Park Hospital extension and the refurbishment of the Royal Perth Hospital and this is just a further demonstration of how this additional support can go into very practical projects.

PARKER:

So, Treasurer, we shouldn't interpret these announcements, these top-ups, as the end of the matter? You remain committed to a sustainable fix?

TREASURER:

Yes, I do, and we saw this in another part of the country. I was in Alice Springs earlier this week and I've had to do something very similar there because of an outcome on the GST distribution which left – a very different context in the Northern Territory to WA – but the volatility of these distributions is what causes so many problems. So, the problem hasn't gone away, we've got a very good process for dealing with it and we'll keep working methodically through it. The next stage is for the PC to come back to us and then there will be further work to be done after that in working through to a genuine fix and a genuine solution but we remain committed to that.

PARKER:

Okay, do we expect the Prime Minister Malcolm Turnbull will announce money for a Yanchep Rail line when he arrives in Perth either later today or tomorrow?

TREASURER:

I'll leave his program and what he intends to do in the West to him and I know he's looking forward to a) getting back home to Australia but particularly looking forward to getting to the West and so I'll leave that to him.

PARKER:

I'm sure you've accommodated it in your Budget to be handed down next month.

TREASURER:

What we're doing in our Budget in the next couple of weeks is we've got to keep focusing on a strong economy because that's what pays for everything. Absolutely everything is paid for by the economy and if you don't focus on growing it, if you take it for granted and think it just happens on its own, well, things go south very quickly and when that happens, you can't afford what we're talking about. You can't afford hospitals, schools, pensions, National Disability Insurance Schemes, aged care, Medicare, all of that. All of it depends on a stronger economy and our Budget will be focused on a stronger economy to deliver those things.

PARKER:

Can I take you to your apparent decision on the Medicare levy increase to remind people this was something that you announced in the last Budget – so nearly a year ago – there was going to be a 0.5 per cent increase in the Medicare levy and at that point there was, I thought, a very moral case around that because there appeared to be a funding gap in the National Disability Insurance Scheme which is something all right-thinking Australians support…

TREASURER:

You've got to pay for it.

PARKER:

You've got to pay for it.

TREASURER:

All of that is true and I think Australians responded to that proposal generously and that wasn't a surprise to me. But at the end of the day, if you can do it without having to raise a tax, then you should and a lot has happened between now and then.

PARKER:

So what's changed?

TREASURER:

What's changed is more people have got into jobs and are they're not drawing down on the welfare payments. What's changed is the companies are actually doing much better than they were a year ago and the economy's actually strengthening and that's showing up in the increased revenues that we're picking up. So, we're actually able to achieve this now out of a stronger economy without having to increase the costs on households and families right across the country. Now, those households and families I don't think begrudged having to do that to support people with disabilities. That's why I was surprised that the Labor Party, straight out of the blocks, cynically opposed it. That's about politics. At the end of the day, we're fully funding the National Disability Insurance Scheme and we're doing it without having to charge Australians more through the tax system and the Budget remains on track to get back into balance when we said it would.

PARKER:

So, it's a curious thing for anyone, let alone a talkback radio host, to complain about not having a tax increase, but I just want to work through the implications of this because what you're saying effectively that the Budget has improved, you've got more revenue than you thought you would and so therefore, you don't need to increase taxes on Australians to pay for the NDIS. My question though, to what extent is this solution permanent? Because, as you know better than anything, economic conditions can go up, economic conditions can go down. What happens if the economy deteriorates either through the course of the business cycle or unexpectedly is the NDIS guaranteed to be fully funded?

TREASURER:

It is by this Government because our Government is also focused on continuing to provide a stronger economy and to ensure that we live within our means and we don't let expenditure run off the rails. We have the lowest growth in public expenditure by a Commonwealth Government, of any Government, in the last 50 years and more. So, we've kept expenditure under control. We also believe you need to keep taxes under control because if you allow taxes to run off, chasing an ever-increasing amount of expenditure then what you end up doing is taxes choke the economy and when you choke the economy, you're basically choking what pays for your hospitals and your NDIS and everything else. So, that's how we frame our Budgets. Now, our opponents have a different approach. They just spend like there's no tomorrow and then they tax you through the roof to pay for it and the thing is, taxes never keep up with Labor's spending because they can't live within their means.

PARKER:

In reaction to your announcement around the Medicare levy, Labor have already this morning said – to remind people, their plan was to impose a levy as well but only on people earning more than $87,000 – they're now saying they're going to reverse course on that. Here's a little bit of what the Shadow Treasurer Chris Bowen said this morning:

CHRIS BOWEN:

For some time now, Malcolm Turnbull and Scott Morrison have lectured the Labor Party and told the Australian people that it was absolutely vital for every Australian earning more than $21,000 to pay more tax to fund the NDIS. Labor took a clear position that this was wrong. The Government said the NDIS would be unfunded without this tax rise.

PARKER:

What's your reaction to that, Scott Morrison?

TREASURER:

When we put that forward last year, that was absolutely the case. What we've learnt about the Labor Party today is that back then, when there was a necessity to do this, they said they wouldn't agree with the Australian people and support that measure to fund the NDIS because they were in denial about the big black hole that they left in the program. But do you know what they went and did? They said, "no, no. We won't increase the Medicare levy to support the NDIS, we'll just increase the Medicare levy anyway." So, what I'm puzzled about today is, why are they actually not going ahead with that? It was never for the NDIS anyway. It was just a tax increase, that's all it was. That's why they were going to increase the top marginal rate of tax by two per cent permanently as well. That wasn't for the NDIS either. These guys just like increasing taxes. You're just getting politics from them today. We're funding the NDIS and not increasing people's taxes to do it.

PARKER:

Scott Morrison, you're also flagging that there may be a program of income tax cuts, the newspapers this morning suggesting that they might extend over the course of a decade until they fully kick in. Can you explain what the plan is and can I also ask, is this instead of company tax cuts?

TREASURER:

We remain committed to the company tax program because we believe that if companies are forced to pay the Government more tax then they're not in a stronger position to invest in growing the business and employing more people and boosting people's wages. So, we remain committed to that and you will see no change to that in the Budget. In terms of our broader plans, Budget is in two weeks' time , not today, and media always speculate on these things. They'll have a punt here, they'll have a punt there…

PARKER:

I presume it is well founded speculation?

TREASURER:

No, it's not. It's not informed speculation at all, it's just people trying to read between the tea leaves and crank up a story – whether they're right or not, the Budget will be released in a few weeks' time. When I do my footy tips, I make a punt that the Sharks are going to win every week. Now, sometimes I'm right about that and sometimes I'm wrong, in the NRL, but I don't do that with any particular knowledge of the future…

PARKER:

I hope you pay a bit more attention to the Budget than your footy tips, Treasurer.

TREASURER:

Of course, I do. Of course! Journalists always speculate on these things and so that's not done with any informed position in terms of anything the Government has provided but our plan and how we intend to deal with what we said last November. I mean, there's no secret about that. We said this last November that we would be working to deliver, affordably, tax relief for middle and lower income Australians. So, there's no big scoop there. That story's been around for six months.

PARKER:

Alright, we'll wait and watch and see what happens in the Budget. Good luck with the footy tipping, Scott Morrison.

TREASURER:

Good on you. You too.