3 April 2017
Transcript - #2017058, 2017

Interview with Ray Hadley, 2GB

SUBJECTS: PaTH program - getting more young people into work; Newspoll; Turnbull Government’s Enterprise Tax Plan to drive economic growth, boost jobs and boost wages; Labor’s new $4.3 billion budget black hole

RAY HADLEY:

Treasurer, good morning.

TREASURER:

G’day, Ray. I can give you a traffic report from the M5, it’s pretty slow but you’ve got that covered off I’m sure.

HADLEY:

Well, let me tell you, Treasurer, among all the scoops you’re about to deliver that’s one that I know about. Because every day of my working life, the M5, the M2, the M1 and every other damn road coming into Sydney or Brisbane is slow.

TREASURER:

Well, the good news is there’s a lot of work going on here, as you know to expand it. We’re heading in from Peakhurst, I’ve been out launching the new Prepare, Trial and Hire program to get young people into apprenticeships and jobs. Just been out with a young bloke, Raymond, who set up RMW Joinery. He set this business up, he was 24, five years ago and he’s going to take on a young, unemployed person into his business, give him a go with an internship and then if it works out, give him an apprenticeship. Great news.

HADLEY:

Ok, I got the email this morning where you were joining Michaelia Cash and David Coleman in making the announcement and you’ve just explained it in part. But you’re talking about assisting 120,000 young Australians into these internships so it’s a trial and if they work out, they get an apprenticeship. Is that how it works?

TREASURER:

Well, they can get either an apprenticeship or they can get an ordinary full-time job. They can get into traineeships and what we do is we first give them a Prepare program and that’s done with local community organisations. If you’ve been out of work for a little while or are a young person who’s never been in a job, you need to come up to speed with how you conduct yourself in a workplace, look for jobs, do things like that. You then get an internship where you continue to get your Newstart payment and you get a top-up on top of that because you’re actually in there having a go and getting a job. And after that period, which can be up to about 12 weeks, then you can get an actual job and there’s a further subsidy to support them for six months. So it’s all about trying to de-risk that employment for the business but also give a young person a chance. Here we’ve got a young bloke under 30, running his own business – it’s not a huge business, a turnover between about $1 million and $2 million – and he’s going to give a young guy a go, and I think that’s fantastic. RMW Joinery, he’s giving young people a go, give him a go.

HADLEY:

Ok. Look, I can almost script this myself. I ask you a question about Newspoll and I don’t need for you to answer because I can answer it as you’ve answered over the last 12 months about Newspoll results. So I’ll put it to you in another way, I’ll catch you another way. Can you explain to me and my listeners how it’s possible for Bill Shorten to gain ground on anyone when it comes to preferred Prime Minister? Can you explain that one?

TREASURER:

Look again, Ray, all I can do is tell you this. In the last week, since we last spoke, we’ve actually got another very large thing through the Parliament, and that is to ensure small and medium-sized businesses get a tax cut and they get access to things like the instant asset write-off if they’ve got a turnover of up to $10 million. It used to be $2 million, we’ve increased it to $10 million. So they can go and purchase things for their business – up to $20,000 of costs – and instantly write that off on their tax. So that’s what we’re doing. The week before, we got our childcare reforms through so we’ve just got to keep doing the things that we know the Australian people need us to do, and others will rightly commentate, call the horse race and all of this, but we remain focused on those things.

HADLEY:

But you didn’t answer the question, and the question I’ll repeat…

TREASURER:

[Inaudible]

HADLEY:

No but you bag the crap out of Bill Shorten every time you get on the program, you give it to him and I don’t argue with you because I don’t think he’d make a great Prime Minister, but he’s actually taken ground off the Prime Minister. You see, you can’t get out of this, you basically described him as unelectable, he’s a dolt, he’s stupid, he’s dumb, and yet he takes ground off your Prime Minister. Can you explain it?

TREASURER:

The election is in two years and that’s when the ultimate test will be put and they’ll be looking at what we’ve done, so I’m focused on what we’re doing. Tax cuts in the last week, affordable child care and savings measures through the Parliament the week before that. Ray, we’re just getting on with the job of government and people will be able to make up their minds when it comes to the next election and they know Bill Shorten’s a phoney and as time goes on…

HADLEY:

And he’s getting closer to beating your bloke in the race to be the preferred Prime Minister. If he’s a phoney, what’s that make your man?

TREASURER:

He’s still a long way behind the Prime Minister, Ray…

HADLEY:

Listen. If Bill Shorten can’t be led by 20 percentage points – the bloke, who can’t lead him by 20 percentage points based on his performance, shouldn’t be Prime Minister and that’s what I’m saying to you. Hello? Hello. This is not rehearsed. The call just dropped out. He’s saved by the mobile phone. We’ll get him back on line in a moment. In the meantime, we’ll take a break.

[Break in audio – line disconnected]

TREASURER:

Thanks Ray, sorry about that and sorry to your listeners.

HADLEY:

No, that’s ok, things like that happen. It can’t be helped. Look, I will move on because we are not going to get anywhere with the other thing. Your company tax cuts which you just mentioned prior to the broadcast being interrupted. What did you have to do with Nick Xenophon to get that company tax rate down?

TREASURER:

A range of things were in the package. A lot of them had to do with the initiatives we are already looking at in energy and some of the work we are doing there around gas, solar, on top of that they requested there be a one-off payment to pensioners and DSP recipients and we agreed to that. We want to see the tax cuts get through which we were able to achieve and that is very important for 3.2 million Australian businesses and even more importantly the 6.5 million employees who are covered by these businesses who will get the tax cuts. That is more than half the labour force. That means every part of the company tax cut plan that we said would be implemented in this term has been passed. So, people said that wasn’t going to happen at the start of the week. I am pleased it did. The problem Bill Shorten has now is that he was counting on using $4.3 billion of that package to fund his higher spending. So, now he has got a very big hole - $4.3 billion in his Budget and that is over $21 billion over the next ten years. So, when he says he is going to spend money on schools or things like that you can’t believe him because he doesn’t have the money unless he is going to increase taxes on small business.

HADLEY:

Ok, so in other words you provided for it in your Budget estimates so it is all covered and away it goes. In relation to, you just said that the employees of those organisations will be befitting. How will they be benefit with a company given a tax break, talking 30 – 25 per cent with those businesses with an annual turnover of up to $50 million. How does an employee get the benefit?

TREASURER:

Because a company has more headroom, they can invest more in their business and that investment includes investing in their staff, investing in their people. Numerous…

HADLEY:

Yes, but you can’t guarantee that Treasurer. I mean they might decide on behalf of their proprietors, be they a public company or a private company that they are going to keep that money for themselves.

TREASURER:

Well, we are predominantly talking about private companies here because we are up to $50 million. But you know what small business does Ray. They pay their employees first, they pay their creditors second and they make sure they meet all those commitments before they pay themselves. Numerous business people have come up to me and said, “that means I can keep that person on. I can extend their hours. I can give them a pay rise.” This is what it gives them the head room to do. That is why we want to do it. That is why it is so important for the economy that we do it.

HADLEY:

But you admit there are some public companies that would fall into – not many but some. You are now intent on making sure that it covers every company sometime in the foreseeable future, correct?

TREASURER:

Yes, we have got the ten year plan and we want to see that come into effect. To do that we have to get the support of the Senate. So that really is contingent upon the Senate being prepared to support that that we remain committed to it because we know that it will attract investment. The rest of the world is dropping their tax rates…

HADLEY:

I know that, I mean, by comparison, people we are in competition with across the world with similar types of economies tax rates for businesses are unusually high in Australia.

TREASURER:

Well, they are. We are about the sixth highest in the OECD at the moment for company tax rates. That just means the money, the jobs, the investment, the wages, they all go off shore because there are lower company tax rates there. So, it is important that we achieve that and that is what we have done. We said we would do it and when you combine that with what we have done on multinational tax laws as well - we are clawing back around $2 billion this year alone because of the tougher multinational laws we put in place. That is a big achievement. We’ve just had our Diverted Profits Tax pass last week in the Parliament. Now, that’s the one where if multinationals try and shift profits offshore and don’t pay tax on it here well, we’ve given ourselves the power to go through their books and where we snag them doing that, they’ll pay a 40 per cent tax, not 30, as a penalty rate. It’s one of the toughest multinational tax laws in the world today.

HADLEY:

So, when does it come into being the tax [inaudible] companies with an annual turnover of $50 million? When does that take effect?

TREASURER:

If you’ve got a turnover of up to $10 million, it’s effective right now.

HADLEY:

Immediately? Right.

TREASURER:

Immediately. Next year, it starts for companies up to $25 million and then the year after that, it’s for companies of up to $50 million. That’s the 2018-19 year.

HADLEY:

Ok, now, you also mentioned on the run through that my ears pricked up about this rebate for companies spending up to $20,000. Now, just take me through that again. You say, previously it was for companies turning over $2 million, is that what you said?

TREASURER:

That’s right and now those laws mean this financial year, if you’ve got a business with a turnover of up to $10 million, you can access the instant asset write-off. So, a good example is there was a firm up in Brisbane called Bowmaker Realty which I visited when we were talking about this issue. They’ll go and buy a Hyundai, or whatever, car – just under $20,000 – for their sales force or for their rental management. Now, they can instantly write all of that off on their tax which helps them to grow the business.

HADLEY:

One of those cars at $19,990 or something like that on the road.

TREASURER:

Yes. So, if you’ve got a business of up to $10 million turnover, you can get access to that right now.

HADLEY:

Right now?

TREASURER:

Right now.

HADLEY:

Alright. We’ll leave it there. Thanks very much, I appreciate your time.

TREASURER:

Thanks, Ray.