8 December 2015
Transcript - #2015064, 2015

Interview with Michael Brissenden, ABC AM

SUBJECTS: National Innovation and Science Agenda; providing real opportunities for Australians who want to work, save and invest; National Platform for Economic Growth and Jobs; Ian Macfarlane.

MICHAEL BRISSENDEN:

Treasurer, good morning.

TREASURER:

Good morning, Michael.

BRISSENDEN:

Cultural change is the buzz word that is around. Effectively what you are saying is you want us to be more like the US in regard to innovation, aren't you?

TREASURER:

We are about growth and jobs and entrepreneurialism and innovation and the ideas boom is the pathway to those growth and jobs, Michael. This is an innovative and visionary statement which seeks to encourage and back Australians in the path that - I believe as a Government, the Prime Minister, we all believe - Australians want to take and that is to embrace the opportunities out there in the future. There are a lot of things going for us but what is in this statement is about ensuring the necessary supports and other cultural backing that is necessary to achieve the goal.

BRISSENDEN:

Sure, and I think most of the country would support your ideas on innovation. Certainly, Silicon Valley, as you know, is crawling with young Aussie entrepreneurs pushing ideas.

TREASURER:

True.

BRISSENDEN:

They are all there competing for venture capital in a huge market. I mean there is more than 300 people there.

TREASURER:

That's right.

BRISSENDEN:

The truth is there just isn't the same sort of money available in this country with just 23 million people, is there?

TREASURER:

Well, that is one of the reasons why we have focussed a fair bit of this package, when it comes to angel investors and the other arrangements for tax offsets to bridge that funding gap, that valley of death, if you like, for those start-ups and other companies, which are seeking to convert these ideas into strong businesses. It is disappointing when you see Australians having to go overseas to do that and seeing the benefits of their talent, their innovation, their ideas supporting another economy. Now, we want to make sure that that happens here and the arrangements we've put in place as part of this arrangement are designed to do just that; to give them the backing and support which will further encourage them to see their ideas take root here in this country and the jobs and the growth that flow from that take root here in this country.

BRISSENDEN:

Understood, the cultural shift though is going to have to be pretty big, isn't it?

TREASURER:

Well, we already have a lot going for us and I think that is important. It tries to build off those strengths but the areas of collaboration that are necessary between our university sector and the commercial sector, we've talked about the access to capital, the way that businesses can be more agile and flexible over the course of their life and relaxing some of the rules, particularly in the areas when companies get into trouble and enabling them to trade through those environments because that is the best thing to protect a job when a company is in trouble is to ensure that business can continue to function and to give them the opportunity to do just that and that is what we are doing as part of this package.

BRISSENDEN:

And one of the things you have sited is Chapter Eleven which is the US bankruptcy chapter. Why not go the whole way and adopt Chapter Eleven entirely? Let businesses keep their assets while they restructure. For small businesses this could mean the difference between restructuring and still keeping the family home or loosing absolutely everything to creditors.

TREASURER:

Well, we are not the United States and we have a different history when it comes to these issues and I think what is in this package, I think, is a sensible way forward to ensure that there is the flexibility in these situations which also at the same time, let's not forget, there are creditors, there are financiers, there are suppliers, there are all of those who are involved in these issues. What we are saying is, if you are going through a work-through, taking in someone who is going to professionally assist you to make that transition through the difficult part - period that your business is going through than we are going to give you that opportunity. Now, as Malcolm has said so often, if we need to make further changes than fine, we will, but let's give this a good go and I think that is giving Australians a good go and is backing them through what can be the most difficult time for a business and their employees and we want to give them that extra opportunity to make it.

BRISSENDEN:

It's not quite as flexible though, is it? As the US system?

TREASURER:

Well, if it needs to be more flexible then we will make it more flexible, Michael. This is, I think, a great way to go forward and I think it is a measured response but, I think, it is a very welcomed response from the business community and it is not just when it comes to those types of arrangements it also deals with companies when they change the nature of their initial venture and how they can then apply and be treated by other tax exemptions. When an innovative company is going through those early phases the nature of the business can change and you don't want some bureaucratic rule that is just pulling the rug out from under them as currently happens. So, we have made changes there as well. We have listened very hard on this package, Michael. Christopher and Wyatt and Karen and of course the Prime Minister have been out there listening to everybody on this and I think those who were part of those hack-a-thons and other discussions and various things like that will see a lot of the ideas they passed on in those consultations in this package.

BRISSENDEN:

You also included a 20 per cent tax rebate rather than a tax deduction. What is the difference and why?

TREASURER:

Well, the offset, what that means is that you can access it straight away, you don't have to wait till the company is in a position where it is actually making profits and so this creates an immediate incentive for investors who are looking to back people as well and that makes it more tangible, more real, more useful.

BRISSENDEN:

Alright, well, you are slinging more that $200 million to the CSIRO, basically putting back significantly more than was cut in the 2014 Budget. How do we read that? Wrong decision at the time or simply the act of a very different government?

TREASURER:

Well, I think all of these decisions are taken in their context. The 14/15 Budget was very much an austere Budget around savings and the challenge that we have now, as we go forward, is we are all about jobs and growth. This is the Government's number one priority and to drive jobs and growth and innovation, entrepreneurialism, an ideas boom - all of this is necessary to achieve that. Investing in organisations such as CSIRO are really important to getting the link-up between the Government and the commercial sector and the research sector and science sector. What it says to young people, all around the country, is this is a government that believes in science and innovation and technology in the future. My little girl is six and she told me the other day she wants to be a scientist. I think that is fabulous.

BRISSENDEN:

I wouldn't be the only one pointing out that it is a pretty big change of direction for the Government in regard to the CSIRO. The jobs and growth is another statement that is sort of thrown about at every Budget. It does seem like a very different emphasis.

TREASURER:

Well, jobs and growth will be produced by these sorts of policies and not just this one. Remember we have got the innovation policy statement which was launched yesterday but in addition to that we have got a $50 billion national infrastructure plan, we have got the most ambitious and successful trade agenda that this country has pursued in living memory. We continue to strengthen the Budget as we go forward; we are looking at changes to the tax system that will make our tax system a growth friendly tax system. Now, all of these aren't isolated initiatives, Michael. All of these things add up to jobs and growth and a Government that is putting the real policies in place to achieve that goal.

BRISSENDEN:

Can they add up to a cost to the Budget? Where is the money coming from? Talk about a cultural shift, in the last few years we seem to have left the Budget crisis behind and started spending again.

TREASURER:

Well, my focus is to ensure that this policy is paid for. We don't put forward new spending measures unless we are able to cover them off through the Budget process and I will be making announcements on that in MYEFO next week. That is the way this Government does business. We just don't go spend money, if we have to spend money, and in this area it is a strategic and wise investment for jobs and growth, then we will make the necessary adjustments to other parts of the Budget and that is a question of priorities to ensure it is paid for.

BRISSENDEN:

And those necessary adjustments, some expectations certainly were around a company tax cut. You would have to think that that was less likely in this environment?

TREASURER:

Well, let's not forget, this is a $1.1 billion package, Michael. If you were talking about company tax cuts you are talking about tens of billions of dollars over the Budget and forward estimates. So, I think they are entirely different propositions. The issues around company taxes are part of the process we are engaged with on changes to our tax system that make our tax system growth friendly.

BRISSENDEN:

Business has already said in response to this though that innovation is one thing but to really kick start jobs and growth company tax cuts would be the thing that they really want.

TREASURER:

Well, we are still in that process, Michael, so what the innovation statement does doesn't rule in or rule out anything more broadly on the tax system. What you see in the innovation statement is part a, if you like, of the White Paper that the Government has been working on tax changes. We have brought forward many of the items that would have been part of the White Paper on tax and they have been incorporated into this very forward looking statement and they have been tailored and focused under the Prime Minister's leadership and I think we have got a very good first instalment. It says to Australians we are fair dinkum about this. We are absolutely fair dinkum about it and we want to see innovation, we want to see entrepreneurs, we want to see businesses out there having the go that they want to have and we are going to back them. Our economy is in transition, we are moving well passed now the investment phase of the mining boom. The National Accounts show that our economy is making that transition and Australians are out there making it every day and they are particularly doing it in this area and this is the sort of statement that will back them in.

BRISSENDEN:

Ok, just finally and just quickly on Ian Macfarlane, his decision has left a bad taste in the mouths of some in the Liberal Party, apparently. Are you one of them?

TREASURER:

Well, look, it really is an internal matter and I am happy for the LNP to address that. We are all in the same bus, we are all in the Coalition, it is a very strong Coalition, we are all heading in the same direction which is about jobs and growth and Ian Macfarlane won't even have to change his corflutes at the next election if the change is approved. We are all a Party, both from the National Party and the Liberal Party and the LNP, who are focussed on jobs, growth, innovation, entrepreneurship under the leadership of Malcolm Turnbull.

BRISSENDEN:

So a happy team?

TREASURER:

Well, that is the point, Michael, that is the point and Australians know that the Prime Minister and the rest of the team are focussed on jobs and growth. Where there are internal matters to deal with they will be dealt with, others will chat about them. I am just about getting on with the job - as is the PM.

BRISSENDEN:

Alright, Scott Morrison thanks very much for joining us.

TREASURER:

Thanks very much, Michael. Thanks for your time.