11 May 2018
Transcript - #2018089, 2018

Interview with Jon Faine, ABC Melbourne

SUBJECTS: Budget 2018; Tulla Rail Link; banking and financial services

JON FAINE:

Scott Morrison, Federal Treasurer, is in Melbourne this morning not able to come into the studio, but he’s probably drier staying where he is. Scott Morrison good morning to you.

TREASURER:

G’Day Jon. I’m on the freeway here, so in Melbourne. Sorry I couldn’t come into the studio. Would’ve liked to have done that but it’s a busy day.

FAINE:

It certainly is, and it’s going to be a busy couple of months. Bill Shorten last night in his address in reply, the Labor Party are showing that they’re going to put inequality at the very core of the next election campaign and I put to you Scott Morrison, that is indeed your weak spot, your Achilles heel.

TREASURER:

Well Bill Shorten is unbelieva-Bill. He’s just, he can’t be believed, and he can’t even believe even his Parliamentary Members. It’s just rolled-gold…

FAINE:

Could you address the question, inequality is your Achilles heel?

TREASURER:

Well I don’t believe Bill Shorten. You’re saying he’s making a whole bunch of problems about inequality. You can’t trust him. This is a bloke who said he thought company tax should be lower and now he says they should be higher, so they how can they believe him when he says other taxes should be lower. He can’t keep the same position on these things. He just can’t be trusted on it. What people can know from the Coalition, the Liberal and National Parties, is the best way to deliver fairness, the best way to deliver opportunities for Australians in whatever circumstances they are in, is through a stronger economy, which is what our Budget is. It’s a plan for a stronger economy.

FAINE:

They’ve picked up on and magnified the fact that your new tax plan is regressive, not progressive.

TREASURER:

Well even the Grattan Institute doesn’t agree with that. They’ve shown that there’s no real change in progressivity in the tax system for this reason: those on the top rate of tax at the end of the plan pay around 36 per cent of the tax paid in this country, and now it’s 30 per cent. So it actually improves the progressivity. So that just doesn’t [inaudible]…

FAINE:

Sorry I do not, I fail to understand how someone on $41,000, it’s thought to be fair that they pay the same rate of tax as someone on $200,000. How’s that fair?

TREASURER:

So are they rich are they Jon?

FAINE:

$200,000 buys you a standard…

TREASURER:

Is that rich?

FAINE:

…of the median or average or whatever other measure you make of income in Australia…

TREASURER:

It’s about 2.1 times…

FAINE:

Yes that is very well to do. You’re in the top 10 per cent of income earners…

TREASURER:

I accept that, but those who earn $200,000 and over, they will be accounting for 36 per cent of all the tax paid in this country. Now that…

FAINE:

So what?

TREASURER:

is actually more…

FAINE:

So what?

TREASURER:

Jon…

FAINE:

My question is why should someone on $41,000 pay the same rate of tax as someone $200,000?

TREASURER:

Jon the system is still progressive and it means that over the course of their working life, see our plan is for people who are earning $41,000 to earn $45,000, to earn $50,000, to earn $55,000…

FAINE:

I’d love them to earn $250,000…

TREASURER:

I would too…

FAINE:

but the fact is most of them never will…

TREASURER:

And I want to, and over the entire course of their working life, I’m glad you raised that Jon, over the entire course of their working life, under our plan, they will never face a higher marginal rate of 32.5 cents in the dollar. That’s great. Every each hour they take, every extra shift they take, every extra rise they hopefully get, and I believe they will, they will not have to pay more in higher tax rates. Because our tax plan is a plan. It goes over seven years. It addresses the situation for all Australians, and it provides more incentive and more reward. It’s not based on envy and bitterness [inaudible]…

FAINE:

No, it’s tax cuts on lay-by, it’s seven years away.

TREASURER:

Because that’s what’s affordable and we start with low to middle income earners, and we build up through the system. Those on higher incomes, as you say, they have to wait seven years, that’s right Jon. They do. They come last on the tax cuts scale. Well with the plan we have, those on low and middle incomes come first [inaudible]…

FAINE:

The cross benchers seem unmoved by your demand that the tax changes be dealt with as a package. There doesn’t seem to be much movement there.

TREASURER:

Well, everyone predicts things about the Senate Jon. They do it on radio, they do it in the paper, and they say this won’t happen and that won’t happen…

FAINE:

Well we’ve gotta have something to talk about…

TREASURER:

Well I’m sure you do and I know it’s always lively with you Jon, it’s a great program. But my point is this, we have been able to pass $41 billion of savings through the Parliament since the last election, and people said none of that could happen. So let’s just see what happens there. We’re engaging respectfully with the crossbenchers as always, but what you do know, the fact that we’re even talking to cross benchers means that the Labor party is going to vote against tax relief for Australians.

FAINE:

Because they say they have a better plan. You’ve got no year by year…

TREASURER:

But they don’t have a better plan.

FAINE:

You’ve got no year by year cost breakdown of your seven years away tax cut on layby plan. No year by year plan. So if there’s no cost breakdown, why should we believe it?

TREASURER:

Jon, the tax plan for the Budget and forward estimates, the full cost of that is laid out year by year…

FAINE:

The cost is…

TREASURER:

By year, by year, and then over ten years the full cost of the package is $140 billion, and that is what we do estimates on and Budget’s forever. Chris Bowen couldn’t tell you what the cost of his retiree tax is year on year beyond the Budget and forward estimates. I mean he’s in there demanding one thing from the Government, but he won’t actually apply the same rule to himself…

FAINE:

Can we talk about…

TREASURER:

[inaudible] announced a tax plan, and they didn’t actually say what the changes were in the speech. I mean how shifty is that?

FAINE:

If we’re going to talk about things that are missing. Your $5 billion Melbourne Airport rail link. Anthony Albanese this morning described it as a sham, there’s no money allocated, and it’s supposed to be joint-venture between the State and Federal Government financed by some who knows what ‘innovative’ scheme that supposedly is going to generate a commercial return from public transport? What planet are you on?

TREASURER:

Jon, I‘ll have to ask you the same question, and I’m glad you asked that, because let me explain how this works. In last year’s Budget we allocated $75 billion over ten years, which included provisions for projects, which we hadn’t yet confirmed or announced. One of those projects was the Tulla rail. So within the $75 billion we announced in last year’s Budget, and confirmed again in this year’s Budget, there is a $5 billion grant, that’s how it’s being treated, as a grant. $5 billion, real money, to go on the table to build Tulla rail, so $5 billion…

FAINE:

It’s not in the Budget, it’s not your money…

TREASURER:

Jon it is, no it is Jon. The full plan of the $75 billion was provisioned in last year’s Budget as a new measure. Ok? Now in the new Budget, you don’t go and provision it again because you already have. So there’s $5 billion in the Budget in grant funding treatment for the building of the Tulla rail. $5 billion. It’s there. So you can’t say it’s not Jon because you’re just looking at the accounting treatment of something that was announced last year. It’s completely…

FAINE:

Well it’s been announced but whether it actually comes up in the accounts is another thing…

TREASURER:

It is in the accounts Jon…

FAINE:

But what’s…

TREASURER:

And it is. No let me stop you there…

FAINE:

A joint venture…

TREASURER:

No Jon, forgive me. It is completely false for you or Anthony Albanese, or anyone to say that there is not $5 billion fully allocated in the Government infrastructure program…

FAINE:

Ok, I accept your challenge I will go back have a look at last year’s Budget accounts and see whether that stacks up…

TREASURER:

It’s in the $75 billion committed [inaudible]…

FAINE:

If it does, I’ll clarify it. But what’s…

TREASURER:

[inaudible] unallocated funding, it has now been allocated. $5 billion for Tulla rail.

FAINE:

A joint venture with the State government who knew nothing about this and say how do you think you can get return on capital on public transport? No one anywhere in the world can do that.

TREASURER:

Jon, the ultimate arrangement that we put forward and agreed with the State government will be worked out. But what we’re saying is currently, we are treating that $5 billion as full grant funding. Ok? That’s the money. What is clear is that the State Government in Victoria hadn’t allocated that money previously. We actually had. We set aside $5 billion along with $70 billion for other projects last year. You’ll remember it. It was the, we had the National Rail fund. That’s partly where that funding is coming from…

FAINE:

Alright I’ll go back and look at it…

TREASURER:

We announced that [inaudible] dollars…

FAINE:

Our time is limited, a couple of other quick things. $50 million bucks in your electorate to celebrate and commemorate Captain Cook while you slash the ABC. Have you got your priorities right or wrong?

TREASURER:

Yeah well I think one of the most important national stories there are is what happened back in 1770. And it’s not $50 million for a monument, that’s rubbish. That is [inaudible].

FAINE:

No I said to commemorate it…

TREASURER:

No I know…

FAINE:

It’s a celebration, it’s a lot of things…

TREASURER:

No it’s not. No it’s. Commemoration is another program. What was announced for Kurnell is the education facilities, there’s public services and facilities, there’s two wharves that are being built between La Perouse and Kurnell. That’s visitor infrastructure. Indigenous businesses will be benefitting from this public infrastructure at that site. That will ensure that people that come from all around the country, all around the world [inaudible], will be able to go there, and learn the story of the meeting of two cultures that occurred on April 29 1770. That is one of Australia’s most important stories that needs to be told. It’s not just the ABC that tells Australia’s stories. I mean there are places people should go to, and be able to learn and understand our history. Have it told by indigenous Australians, and Australians of other backgrounds, and to be able to, and for young children to be able to go there, we’re building those facilities for them, and there’ll be a new monument there and…

FAINE:

The cuts to the ABC, that’s a straight deal with Pauline Hanson is it for support in the Senate?

TREASURER:

No. The ABC has not been subject to the efficiency dividends for years, and I’m sure the ABC should live within their means, just like every other Australian does.

FAINE:

Alright now…

TREASURER:

And honestly, the sort of response I’ve heard from some, I’m not saying you Jon, but where we’ve applied that efficiency dividend to other government departments and agencies, they’ve just got on with the job of making it happen…

FAINE:

Sure and times when I’d quite like to do a bit slashing and burning around the ABC too but no one ever gives me the opportunity but there you go.

TREASURER:

Send Michelle your plan mate.

FAINE:

[laughs]. That would go down really well…

TREASURER:

[laughs].

FAINE:

The Mormons who have taken up significant numbers of positions on the executive branch of the Liberal Party, seem to want to expel people who are unhappy about the fact that there’s a significant number of Mormons now on the executive of the Victorian branch of Liberal Party.

TREASURER:

Mate I’m a New South Walesman. I know about as much about the internal works…

FAINE:

Well we have [inaudible] going to them too but…

TREASURER:

[inaudible]…

FAINE:

but are they crying that it’s religious vilification…

TREASURER:

Than I know about the Melbourne Storm internal works…

FAINE:

Well they’re calling it religious vilification cos someone described more than those moronic on social media, and they want to expel them for it…

TREASURER:

Well I think, I think…

FAINE:

This is the Party of freedom of speech, section 18c.

TREASURER:

I think that people should have religious freedom in this country. You know I feel very strongly about that Jon. Look I, I don’t like it when I see these sorts of issues sort of transcend into that sort of territory. But look it’s a matter for the Victorian division of the Liberal Party Jon. I’m further north mate so I don’t know much about those things. I’ll leave that to my colleagues, but  what I do know is if you vote Liberal, you’re gonna get a stronger economy.

FAINE:

The Hayne Royal Commission into Banking. Do you want it to be extended so it can continue to do its invaluable work?

TREASURER:

Well that’s a matter for the Commissioner. He hasn’t asked to do that. It’s very early on…

FAINE:

No but he’s talking about a nod and a wink. Do you want to get in a nod and a wink right now?

TREASURER:

Well I’ve already said that Jon. I’ve said whatever he would bring forward then the Government would look favourably on that. I’ve said that actually for months now. But Commissioner Hayne isn’t mucking about. I think he’s getting about the task you know very, very efficiently, and very effectively. And he’s cracking the whip and that includes the Government agencies and departments, ASIC, APRA, the Treasury indeed, getting our submissions in and ensuring that we’re you know, fully supporting him in the work that he’s doing, and that’s very important.

FAINE:

If it’s so important and so valuable, why did you announce a cut back and a slash to ASIC at exactly the same time as you’re asking them to do more?

TREASURER:

No well we actually provided an extra $124 million to ASIC. That was done two years ago…

FAINE:

No but you cut [inaudible]…

TREASURER:

Jon what we’re doing, what we’re doing is that we’re waiting for the Royal Commission to report in September and I have no doubt there’ll be additional calls that will be made at that time…

FAINE:

But why did you cut them in the Budget on Tuesday night?

TREASURER:

Jon I haven’t finished yet. Give me a sec. The other thing we have said to ASIC, and this has been between the Secretary of Treasury and ASIC, is if they could set out particular initiatives that they’re looking to do, then this doesn’t have to be in the Budget. We can agree to that additional support any day of the week, and we’re talking to ASIC now about what that might involve…

FAINE:

So will you restore the funding? You’ve taken it away on Tuesday, you’ll give it back on Friday?

TREASURER:

We’re asking. Well that was essentially a roll forward of the baselines. What we’re saying is, if ASIC has particular project needs for things that need to be done, then we’re completely open to that. We’ve told them that. We’ll wait for that submission to come from them, and it doesn’t need to wait for MYEFO or anything like that to do. But that’s what we will do. So if they need more, they will get more. They need to be very clear about what they need it for, and how that’s going to ensure that that enables them to do their job better. We just don’t go handing out money just because people ask. They’ve gotta put it forward and have a plan for how it’s going to be spent. That’s how you spend responsibly. And ASIC will have our support as it has already received with $124 million in additional funding two years ago.

FAINE:

We’ve just shown how efficient we can be. We’ve got through a lot of work in 12.5 minutes. Thank you for your time today.

TREASURER:

Good on you Jon, always good to talk to you.

FAINE:

Scott Morrison, Federal Treasurer, in Melbourne addressing fund raisers and doing the rounds in the post-Budget wash-up.