3 May 2016
Transcript - #2016071, 2016

Interview with Louise Yaxley, PM, ABC

SUBJECTS: Budget 2016

LOUISE YAXLEY:

Scott Morrison given today's Budget, where are we on the Budget emergency scale?

TREASURER:

What we're in the middle of is a transition of our economy from the mining investment boom to a more diversified stronger economy and tonight's Budget is a national economic plan to support that transition, to support jobs and growth and so the Budget is very much focused on that economic task.

YAXLEY:

Is there an emergency?

TREASURER:

That's language other people have used at other times. What I'm focused on, ensuring that the deficit is reduced, which it is in this Budget that helps us to deal with long term debt and ensures that we achieve it by reducing expenditure as a share of the economy and not increasing the tax burden projection on the Australian economy.

YAXLEY:

What does today's interest rate decision mean? Is that signalling a weakening economy that could put a risk to these forecasts?

TREASURER:

No, the Budget includes within it the inflation numbers that were considered by the Reserve Bank today and the market expectations of what could happen with rates in those forecasts, what the Reserve Bank did today was addressing those inflation numbers and they've got a target band of two to three per cent which they respond to. They've taken decisions knowing where the housing market is after what APRA decided late last year and that was easing off some of the pressure in the housing market and they feel they're in the position to make that change on rates now and that's what Glenn has said. He's very focused on the inflation figure and he has acknowledged the underlying strength of the Australian economy and particularly the way it's successfully transitioning.

YAXLEY:

We've got a pre-election forecast coming up in about a month – how similar or different is that document going to be than todays in terms of forecasts?

TREASURER:

Well, they're question you'd obviously have to put to the Secretary of Treasury and Finance, because they put those document together, but in this document we've worked very closely with our departments and I wouldn't expect there to be a change.

YAXLEY:

So you expect them to look very similar?

TREASURER:

They are the ones who put those documents together not me. So, what they look like will be a matter for them.

YAXLEY:

You're highlighting that this is a prudent budget not designed to have winners and losers but many people who vote in the election in early July won't be getting any specific benefits – is that a bit of a political risk?

TREASURER:

This Budget isn't about sweeteners, it's not about that old politics of winners and losers – it's about a national economic plan for jobs and growth. I think Australians want to see that from their government. They know that the risks that are out there in the economy, I think they're very literate on these issues and they know that they need a strong plan and they'll see one in this Budget. We all benefit by the economy growing and particularly young people, we've made a particular effort in this Budget to ensure that they can participate in our growing economy with a very targeted youth jobs plan called PaTH which is really about getting vulnerable young people in to jobs and ensuring that they don't have a lifetime of welfare dependency.

YAXLEY:

Why would an employer take someone on under that scheme, a long term unemployed person rather than taking on a more qualified person who has been in the workforce for a long time?

TREASURER:

Well, because of the way we've de-risked their decision. The financial costs are obviously a lot less under what we've put forward but equally, they're not the employer for potentially the first six to nine months so they can see how a young person can come and fit in to their organisation, give them the opportunity to learn the job preparedness and skills they need to be successful in that job. So, it really is giving both the employer and the employees the opportunity to get together and make it work, now it's quite a different approach to what we've done in the past I think you've just got to keep trying things in this area until you get it right and I think this is a really good step forward after listening to business and listening to young people.

YAXLEY:

Finally, on superannuation there are some big changes in here for low income earners…

TREASURER:

Yes, there are.

YAXLEY:

…but isn't one of those the Labor scheme rebadged? Is that an acknowledgement that it was wrong to want to scrap that?

TREASURER:

What it is, is we're not giving people a welfare payment we're giving them a tax offset, because it's their money and if they're on low incomes we want them to be able to make their contributions to superannuation and not pay more than they would on their income in tax. But what we've done in superannuation is we've raised some $6 billion from the top 4 per cent of those in superannuation and we've reinvested half of that back in to the rest of the superannuation scheme to help people who are working to save and invest, and we've also invested back in the earning economy in the tax cuts we've given to middle income earners and to businesses.

YAXLEY:

Thank you.

TREASURER:

Thank you.