9 May 2017
Transcript - #2017082, 2017

Interview with David Speers, Sky News

Subjects: Budget 2017

DAVID SPEERS:

You made no mention in the election campaign about higher taxes on working Australians or this new tax on the banks, were you honest with voters?

TREASURER:

Absolutely we were. There’s nothing [inaudible]. What we did in the last election is we took a plan, that was outlined in my last Budget and we sought to get that through the Parliament. And we had $25 billion in measures that we were able to get through the Parliament. I didn’t expect that we’d be able to get that much, let alone the building and construction commission law and all those other measures. There are $13.5 billion today that we’ve had to reverse in this Budget tonight, to reset [inaudible] starting at. Now that has to be paid for. We have one of two choices: we allow the deficit to grow, the debt to grow or we take the decisions that are necessary to set Australia up. Now so we’ve taken those decisions and let me just say on the NDIS, we would like to fund that gap with the savings measures we put forward but the Senate has said no. Now, they are an elected Senate by the Australian people. Now I’m not going to allow the disabled Australians, their family, their carers and others to go another day without having this funding issue on the NDIS settled.

SPEERS:

But you’ve known this issue for a while [inaudible]

TREASURER:

We have and we took measures through the Senate as you know earlier this year and they were rejected and I said at the time that only leaves two options for the Government and we’ve had to take that.

SPEERS:

You did though sit here last year just before the election saying that we have a spending problem not a revenue problem, it’s been around for a long time yet tonight you’ve abandoned spending cuts…

TREASURER:

Actually, no, no David…

SPEERS:

Not all, but $13 billion of them…

TREASURER:

David, our spending growth is at less than two per cent a year…

SPEERS:

But your revenue growth is far more than that…

TREASURER:

Well David, our spending from previous Budgets which we’ve had to reverse, has had to be made up by those measures otherwise the Budget would go into bigger deficit and debt so we’re not going to allow…

SPEERS:

But your mind that’s not having a spending…

TREASURER:

You’re saying that we haven’t kept spending under control and that’s not correct. If the spending is growing at 1.9 per cent, we inherited spending growth at 3.5 per cent…

SPEERS:

I’m not saying that, I’m just pointing what you spent…

TREASURER:

Spending as a share of the economy was over 26 per cent…

SPEERS:

I’m just highlighting what you often told us…

TREASURER:

It’s now 25 per cent…

SPEERS:

That we have a spending problem, not a revenue problem…

TREASURER:

And that remains the case.

SPEERS:

Well then why is the answer now on the revenue side? As you said tonight $20 billion in extra revenue…

TREASURER:

We haven’t walked away from the expenditure goals. I mean we’ve got $1.5 billion in net savings in welfare alone…

SPEERS:

You’ve dropped $13 billion…

TREASURER:

Well David, it wasn’t as if we had, in addition to the savings measures we put forward in the previous Budgets, more friendly easier savings that could have just been taken out of the bottom drawer and present. We put a comprehensive savings plan to this Senate and this Parliament, now they are within their rights…

SPEERS:

Well Labor would say that company tax cuts, you could get rid of the rest of it.

TREASURER:

They are within their rights to say no we won’t have that. But what we’ve done is we’ve continued to keep spending under control, less than two per cent, 25 per cent as a share of the economy and expenditure. It’s the lowest it will have been at for some time.

SPEERS:

That’s true and it’s good to see that coming down, but let me ask about the other side, the revenue side, what you’re collecting, it’s going to hit 26 per cent of GDP under this Budget that’s the highest since the Howard Government in 2005, I mean you can no longer say that Labor are the higher taxing side.

TREASURER:

They would be taxing even more. And we know that because they were going to abolish negative gearing and abolish capital gains tax discounts…

SPEERS:

They didn’t have a bank tax or a Medicare levy…

TREASURER:

They’re going to put up personal income taxes and at the moment it’s not even sure they’re not going to reverse the company tax cuts that have already been legislated through the Parliament. So I can guarantee you one thing, Labor will always tax you more.

SPEERS:

The bank levy, let me ask about it. The $6 billion, we just heard from Anna Bligh she says this could undermine the stability of the banks, it will have to be paid for either by shareholders or customers or both.

TREASURER:

I think that’s absolute nonsense. The banks have got $30 billion in profits this year, this levy, which is on liabilities on just the top five banks is $1.5 billion. It’s a six basis point annualised that’s 0.06 per cent.

SPEERS:

So who’s going to pay?

TREASURER:

They should pay.

SPEERS:

The shareholders?

TREASURER:

No the banks should pay.

SPEERS:

The shareholders?

TREASURER:

The banks should pay, this is a six basis point. Now this in the world of banking they see these movements on a monthly basis if not more regularly. So this is asking the banks, I think reasonably and fairly, to contribute to the work of Budget repair.

SPEERS:

You agree that’s their shareholders? That’s superannuation, everyone with super.

TREASURER:

It is consistent with the levies on liabilities that exist all around the world and importantly it’s not on deposits, it’s not on mortgage accounts, it specifically excludes the regulatory requirements on strata…

SPEERS:

Can you…

TREASURER:

…The ACCC will make sure that, and they’ll be tasked and funded to achieve, the banks do not mislead or misrepresent any changes in the price as a result of what this levy does…

SPEERS:

That doesn’t mean that they can’t pass it on…

TREASURER:

Well, money is fungible, but the banks have got to be upfront with their customers, because what this does is the smaller and regional  banks, they are not affected by this levy, and my advice to any Australian who isn’t happy with what a large bank is doing, is go to another bank.

SPEERS:

On infrastructure, can I ask you about the good debt bad debt distinction, what evidence is there, to take one, $8.4 billion you want to spend on in-land rail, how will we know this is good debt?

TREASURER:

Infrastructure Australia has already highlighted there the important strategic role that…

SPEERS:

It’s not on that high priority list Treasurer…

TREASURER:

It is an important project…

SPEERS:

It’s not on high priority list…

TREASURER:

Western Sydney Airport…

SPEERS:

Western Sydney Airport [inaudible] in-land rail, it’s not on that high priority list.

TREASURER:

This is linking Melbourne and Brisbane and every region in between. This is one of the biggest nation-building regional projects that we have seen.

SPEERS:

So, can we see the evidence as to why…

TREASURER:

Well, at every stage of the process, because there is also the call out to be working with the private sector along [inaudible]…

SPEERS:

So there will be a cost-benefit analysis…

TREASURER:

Look, as with the public sector, the private sector is not going to invest in a project without going through [inaudible]. This is a large project, this is a long running project and is linking one of the most significant [inaudible] for a large [inaudible] in the country.

SPEERS:

Can I ask you too about the trial of drug testing and welfare recipients announced tonight, how will this work, will all new dole recipients face a random drug test?

TREASURER:

No, no, this is a very small trial of around 5,000 new welfare recipients which we’ll be targeting into a couple of locations that are still to be selected. This is a try-and-see if this will work. See, we’re a Government that will actually try something, see if it can work. I’ll give you an example, cashless debit cards. We’ve had very successful trials of the cashless debit card from previous budgets, we are expanding that program from tonight, now we’ll trial this program in a similar way and work with the community…

SPEERS:

So what, if they’re part of a trial, will they face a random test and would have to…

TREASURER:

And if they’re found positive, then they’ll be subject to substance abuse…

SPEERS:

So if someone knocks on their door and says you need to…

TREASURER:

No, no, as part of the process of the mutual obligation of compliance [inaudible] and if they’re found to test positive, there will be subsequent tests and potential referral for treatment, which would be important. But at the end of the day, eight out of ten Australians go to work, to ensure that our welfare bills can be paid through their income taxes. It’s only fair that people who are paying for welfare get a fairer deal as well.

SPEERS:

So Treasurer finally, as you look at this Budget, look at the history of the Coalition since coming into Government in 2013, how would you characterise, you know, the shifts that we’ve seen, you’ve said it tonight yourself, this is a reset Budget, how do you explain that?

TREASURER:

We are a practical Government, we solve the problems that are in front of us. Now my predecessors had to solve the problems that were in front of them, they tried a number of measures we support, we’ve supported those measures now for many years and tried to get them through. You know if you can’t get to the destination you're trying to get to one way, you’ve got to go another way, that’s what normal people do. You know we are not going to sit here and sit on a high horse on ideology and you know, be very bombastic about holding a particular position. [inaudible] The Australian people didn’t elect us to do that…

SPEERS:

Do you accept the criticism it’s a Labor Budget?

TREASURER:

No I absolutely reject that, and if they think so well they can vote for it.

SPEERS:

Alright, Treasurer Scott Morrison.

TREASURER:

The difference between the Labor and Liberal Budget is ours is paid for.

SPEERS:

Treasurer, thank you for your time.

TREASURER:

Thanks.