8 May 2018
Transcript - #2018070, 2018

Interview with Ross Greenwood, 2GB

Subjects: Budget 2018

ROSS GREENWOOD:

Treasurer Scott Morrison, this was your third Budget, was it, do you believe given the fact that you could hand out $140 billion worth of tax cuts over the next ten years, was the number you put out in the press conference today. Does that give you some satisfaction that you can actually hand out that level of tax cut to Australians?

TREASURER:

Well I'm not handing anything out, it's their money. They earned it. I'm saying I think you should keep it. I think when taxes rise too high in the economy it cost jobs, it costs the economy, and that only drags further on what the country can earn. So I believe in lower taxes. I don't believe that you crash the economy with higher taxes. I don't think you give government a blank cheque, by saying well you can just raise the taxes to whatever you like now. Now, the Labor Party will run around and say, oh we can do this and that, but I'll tell you whose going to pay for it. You are. Because they're going to jack up taxes by at least more than $200 billion over the next ten years. They will take taxes as a share of the economy, based at what they said at the last election, to almost 26 per cent. Now, Gough Whitlam didn't even have dreams that extended to taxes as a share of the economy that, I mean his best fantasy never got that close. But these guys, they're in it for real.

GREENWOOD:

Is there an argument here that the tax cuts that you have announced tonight, if welded into the economy, if the Government gets re-elected. That ultimately is there is a downturn, part of the problem is, that they are there, they can't be moved if income does drop into [inaudible], if there's a fall over the next ten years.

TREASURER:

The worst danger is that you put up taxes, you keep them high, you keep punishing people for earning more and working hard and what do you think that will do to the economy? I mean what do you say to, this is why we cut taxes for small businesses and we've seen more businesses start. This is why we cut taxes for businesses who are startups, and we've seen more startups. I mean were looking to grow the place. We're not looking to tax the place. I mean the Labor Party just see themselves collecting rent from the economy. We see ourselves as partners to see the economy grow, they just don't get it. Higher taxes, is economy and job sapping and that's what we've done in this Budget. They talk about these things as expenditures, as giveaways. I mean whose money do they think it is? It's theirs! They earned it. Why are you trying to nick it off them all the time Bill and Chris?

GREENWOOD:

One aspect in the Budget, I've got to come to and that is wages growth. You anticipate that over the next couple of years that wages are going to grow by 3.5 per cent. Now…

TREASURER:

We've revised it down from the December figures and look they sit within the, I think the modest range. That doesn't even get us back to the long run average of where wages have been previously and so you know, it's over four years. So it's the back end of those four years on those projections. I mean look, with our forecasts and particularly where it comes to where revenue has been and where we've been on commodity prices and I mean you've seen that Ross. Our expectations on commodity prices have always been exceeded by what's happened in practice. Now that's the right side of the line to be on. To be on the cautious conservative line. That's what we've seen at every Budget statement that conditions improve, because we haven't over-estimated on these things and the ultimate outcome has been better. It's always better to get it right on that side of the line.

GREENWOOD:

So will Peter Costello ever see the government debt paid off in his lifetime?

TREASURER:

Well I'm sure he'll live a long and fruitful life, but I'm looking forward to him ensuring, seeing that over the next ten years more than $230 billion in net debt is paid down and that's what this Budget projects.

GREENWOOD:

Ok, so then come on to the next aspect of this and that is say for example in aged care, the Government has created a new arrangement to try and help those people who choose to remain in their own homes to give them some relief. Just explain what you've done there and why you've done it?

TREASURER:

Well we've increased the number of at-home in-care places by 20,000 actually. We did 6,000 back in December and 14,000 now. Now what that is doing is that the pressure on the aged care system is actually for people to want to stay at home. But it costs to stay at home and be cared for. It doesn't cost as much as actually going into residential care. But we want to be able to facilitate that choice that so many more Australians want to stay at home with their loved ones, with their families and to be there at home for family meals and all these sorts of things. They want to respect their dignity and their choices as they grow older and this helps do that. Now there is a lot of demand on this system and we've for the higher care places, which is where the most demand is. We've increased the number of places over 2017 by over 80 per cent. So that is going to facilitate more people being able to make that choice. Now on the current waiting list, a reasonable proportion of those are already in the at-home care system. They're just not at the level that they would like to be on and have been assessed at. We're also going to take a good look at how the assessments are done to make sure were getting those right, so that the higher care places are going to where they're most needed.

GREENWOOD:

Ok, so does that mean that A) more care is provided, so you've got to train more people. But then also, you appear to be getting to the banking business by allowing people to effectively borrow against the home to increase their income. Is that the role of government?

TREASURER:

Well the pension loans scheme is existing, it's been there for ages and we've just basically thought well if its fair enough for a part-pension to get it, why isn't it fair enough for a full pension to get it? Now it's up to them, it's not mandatory. It's an option that's been there for many many many years and we just thought it was terribly unfair that a part-pensioner could increase their income by doing this, if they so choose and a full pensioner couldn't, or for that matter a self-funded retiree. Now what the take-up will be, well that's a matter for individual choices. But if they would like to do that, and they would like to that with the government. I mean those are the choices that do exist in the private sector. But the take-up has more been amongst those on higher incomes and this provides just a facility that's there if they so choose.

GREENWOOD:

You've always said that there would be for every spending measure from the federal Government, there would be a commensurate cost cutting reduction out there somewhere.

TREASURER:

Correct.

GREENWOOD:

In this particular Budget, the thing that's not obvious are the cost cutting measures that are sitting out there. What would you say are the biggest cost cutting measures in this Budget?

TREASURER:

Look they continue to be what we do around welfare compliance. This remains a very important part of the Budget and we now have the lowest level of welfare dependency amongst the working age population in more than 25 years. This is one of the reasons why the Budget itself is improving because we're taking people from receiving welfare to paying tax. Now in rugby league they call it a 12 point turnaround. You stop them from scoring and then you score yourself. In about 5 minutes it actually happened the other way around the other night when Sharks and Eels played, but we got there in the end. But my point is, this is one of the things that's really driving the economy. I mean the commodity price impact on this Budget is only in the first couple of years and all of that is returned to the bottom line. All of the commodity price impact in 2017/18, 2018/19 and what remains of it in the early parts of 2019/20 is returned to the bottom line. Beyond that when taxes as a share of the economy are at risk of going above the speed limit, then we return that to the people who earned that money.

GREENWOOD:

Ok, what about the spending though during that time? Because if your spending goes out beyond 23.9 per cent, you can't return it back to surplus.

TREASURER:

Well there's more than just 23.9, that's the tax revenue. There's…

GREENWOOD:

I know because you, other revenues…

TREASURER:

But expenditure as a share of the economy is falling 24.7 per cent over the Budget and the forward estimates and our real growth in expenditure over the Budget and forward estimates is 1.6 per cent and as a Government since 2013, it's been 1.9 per cent. Now that compares 4 per cent under Labor, that preceded us and 3.3 per cent under the Howard Government.

GREENWOOD:

OK just a final one. Every Treasurer since Christendom has said that they will crack down on the black economy. You've done it again today in this one. Is it, will the money genuinely come? Because these crackdowns happen all the time.

TREASURER:

Well no this one, this one has been in the works for about two years and I think the banning of cash transactions in this country of $10,000 and more is a very serious measure and if you're a crook, if you're a terrorist, if you're trying to cheat on your tax, or you're just going to take a discount so someone else can. Well, gigs up. You know, it's not clever as I said in my speech tonight. It's not funny. It's not ok, you're actually ripping off a decent hard working Australian who is paying their tax and doing the right thing and were standing up for them.

GREENWOOD:

Treasurer, Scott Morrison always great to have you in here on Budget night, we really appreciate your time this evening, so soon after your speech.

TREASURER:

Well great to have you down here in Canberra Ross and we can get back to warmer climates soon aye?

GREENWOOD:

We've got brand new studios, that's great. Thank you so much.