15 May 2018
Transcript - #2018094, 2018

Joint doorstop interview, Townsville

Subjects: Budget 2018; Turnbull Government’s investments into Townsville and North Queensland; Productivity Commission review into horizontal fiscal equalisation; Labor’s retiree tax

SENATOR IAN MACDONALD, SENATOR FOR QUEENSLAND:

It is great to have the Federal Treasurer here in Townsville a few days after the Budget to spread the good news of our last Budget which is just fantastic. I am so excited to have Scott Morrison here. You know, he's the only Treasurer since Peter Costello all those years ago who has been able to head us towards a surplus in the Federal Budget. Under Scott Morrison, Australia is now paying its own way like any small business, like any family budget, we are getting to the stage where we are earning more than we are spending. In a couple of years under Scott Morrison's leadership we will have the budget back into surplus. Scott is not a stranger to Townsville. It is great to be able to show him around this town today, particularly the stadium and a few other things that are really happening here thanks to the federal government and it is a delight Scott to welcome you here to see what is happening and to continue to spread the good news about the Budget. I might now hand over to George Christensen who is the Member for Dawson which, as you know, is just across the street more or less, the electorate of Dawson, and George will add to my welcome to the Treasurer.

GEORGE CHRISTENSEN, MEMBER FOR DAWSON:

Thanks very much Ian and it is a great pleasure to be here with Scott Morrison our national Treasurer who delivered what I think is a terrific budget for North Queensland. In fact in the electorate of Dawson from Mackay all the way up to Townsville there is pretty much close to half a billion worth of infrastructure works and if I just step over the border to this place we are investing a hell of a lot of money, $100 million in total in fact, towards construction of the Townsville Stadium and I'm pleased to see a lot of that go to local businesses, particularly local employment. I know the Treasurer spoke to people in the stadium there and was very impressed with the level of localism that has been involved in this project. I will let him speak a few words but it will be great when this place is fully constructed and we can invite you back Scott to see the Cowboys beat the Sharkies.

TREASURER:

Good on you George and Macca, Ian, it is great to be here with you. It's great to be back here in Townsville. Last time there was a crew up here from the Shire it didn't end too well for us at 'Smiles' Stadium in the first round of the NRL. They are always great contests between the Sharks and the Cowboys. I always enjoy them thoroughly. I was talking about Taumololo last night actually during the Sky broadcast and how wrestling debt to the ground which we have been doing over the last five years is a bit like wrestling good old Taumalolo to the ground. You have to get hold of him and drag him down. That's what we have been doing. With this Budget, we're now starting to pay down that debt, reducing debt by $30 billion over the next four years. $230 billion and more over the next ten years. Particularly why I'm here today with Ian and George is that at the last election we said we were going to commit $100 million to get this built and here it is. It's happening. A promise in action. Delivering on the ground. It's tremendous to see the works underway, all on time, all on budget. Some 230-odd North Queensland businesses benefitting from the construction. 85 per cent of the trade packages provided here, all going to local North Queensland businesses, which is tremendous. You have just under 240 people thereabouts inducted on the site, and the overwhelming majority of those are local people, which is tremendous to see, and a very high rate of Indigenous employment on the site as well, tracking above the target, well over 20 per cent at the moment. That's tremendous to see. Over $40 million has already spent on the site. So it's really starting to move. And that's fantastic. Of course, that $100 million that the Commonwealth has invested, partnering with the State Government here to make this happen, is part of a much bigger package for Townsville. It's part of a $250 million package for Townsville. I want to assure everyone in Townsville that full $250 million will be committed to projects in Townsville. As we know, the eastern access rail corridor has had a feasibility economic analysis done on it, and the State Government has received that and people are aware of the issues there. We're in the process of now just receiving our own analysis of that. We're only going to invest money in projects that are going to make a real impact on the ground, creating jobs, supporting investment, building a stronger economy here in North Queensland, here in Townsville, and across the nation. Later today, I'll be meeting with the port authority here and talking through some of their key issues around what they would like to see invested in here. It's true that the port authority does very well for the State Government. It turns about $15 million profit a year, and that's great. It's good to see it's a successful port, we are keen to see as much that reinvested back into the port facilities here, rather than propping up state budgets. It should go into providing infrastructure for Townsville, and I'm looking forward to having a good conversation about that, as well as the other infrastructure priorities here around Townsville.

The other thing, you know, the Northern Australia Infrastructure Facility, that both Ian, chairing that committee many years ago, and George has had a strong interest in, we liberated that NAIF fund, we made it far more flexible. It can make smaller loans, get more involved in projects that it could before, and I notice the editorial in the paper today, outlining all of that. I think they're good changes. It has been too restricted. It has been far too tied up in too many rules, that has prevented, I think, some real money flowing. So the Prime Minister and I, Matthew Canavan, the minister responsible, are very keen to see a lot more of that lower cost finance making its way to these important projects right across Northern Australia. There's $1.5 billion for road funding, and North Queensland projects will feature in that.

So this is about creating a stronger economy for Townsville. It's about creating a stronger economy for North Queensland, and it's about creating a stronger economy for Australia. Because only with a plan for a stronger economy that we outlined in the Budget I handed down last week, can we deliver on the essential services that Queenslanders rely on. Hospitals, schools, Medicare, all of these things depend on a strong economy in Australia. The record job growth we had last year, 415,000, one in five of those jobs went to Queenslanders. One in five. So Queensland is really sharing in the growing economy that we are building as a Commonwealth government, and the project you see behind me, the projects we're still committed to, and we'll work through here in Townsville, we will ensure that all of that $250 million, that quarter of a billion dollars that we committed to Townsville will be spent right here in Townsville, doing exactly what's happening behind us there, employing people, making a stronger economy.

QUESTION:

Treasurer, can you outline some of the North Queensland specific promises made in the most recent budget?

TREASURER:

We've got a quarter of a billion dollars here for Townsville. One of those projects is for the eastern access rail corridor and the other is happening right behind us. We have partnered with the State Government on both of those projects. The eastern rail corridor has some issues with the viability. When it was first floated, Queensland Nickel was doing something very different to what it's doing now. That gives us an opportunity to look at that project. If it's not one that passes muster, then that $150 million will be spent on alternative projects here in Townsville.

QUESTION:

Treasurer, can you understand why the people of Townsville feel like they have missed out in this year's Budget because you are spruiking announcements from previous years, previous budgets. What did Townsville get, infrastructure or any other specific…

TREASURER:

Townsville is getting a quarter of a billion dollars' worth of investment right here from the Commonwealth Government. And there's another $150 million out of that quarter of a billion that is still to be invested. So $100 million going on behind us and there is $150 million more coming.

QUESTION:

You mentioned the Productivity Commission. You are releasing its report into GST redistribution, will you adopt its recommendations?

TREASURER:

The PC report will be received today by the government. We'll be releasing that next month, in a few weeks' time, once the government, the Cabinet, has had an opportunity to be briefed and I also promised the state and territory treasurers that prior to its release, they would also have the opportunity to be briefed. I don't anticipate that will take too long. I anticipate being able to do that next month, which is not that far away, and the normal process for any Productivity Commission report, it's 25 sitting days, that could mean it could go to September. We're not doing that. We'll get the report out. I should stress it will be a report to government, not from the government. It's another important next step in this process as we work through trying to make the GST more reliable in terms of the distributions made to the states, more predictable, so states and territories can budget with a lot more certainty, whether it's here in Queensland, Western Australia, Tasmania or elsewhere. The other thing we said to the Productivity Commission is you need a clear transition plan if you're going to make any changes, which means that all states are in a position to ensure that what they're getting currently, the amount of money they're getting currently, is not eroded as well. They're the things we still have to work through. There will still be a very exhaustive process that follows the Productivity Commission's report release and we'll consider its recommendations but we'll be doing other work in parallel and working with the other states and territories to come up with a package of possible reforms ones we have been able to finalise that. So it's the next step in the process. The report will be made public, as it should be, and that will be done once we have the opportunity obviously for the government to work through it, and look at it, and be briefed on it, at a cabinet level, but also for the state and territory treasurers to get that opportunity as well, which I promised them when I last met with them a little while ago.

QUESTION:

Treasurer, what's the difference between funding TEARC without a business case and now having to potentially revise that and refusing to fund water security or the port channel widening project for the reason you don't have a business case yet?

TREASURER:

There are business cases coming forward on all of these projects. We think you should be making investments where they make the biggest impact. If the TEARC project doesn't stack up, we'll invest that $150 million elsewhere in Townsville. That's what I am saying very clearly. That money will stay in Townsville. If TEARC is not the best project to invest it in, then the money will go to other important projects which create jobs here in Townsville. I'm meeting with the port authority later today and we will have a good chat with them about what their proposals are. On the water issues, there's a report coming forward from a taskforce, and Ian, that's in September of this year, and so there will be an opportunity to consider that when that comes forward. But our commitment here to Townsville has not budged an inch. You're seeing the promise we made at the last election delivered right behind me. I stood here in Townsville, not long before the election as did the former Member for Herbert Ewen Jones, and said we were going to build this, and it's being built. We're keeping our promises to Townsville and we'll keep that promise of a quarter of billion dollars being spent on important infrastructure projects here in Townsville.

QUESTION:

No NAIF money has been spent in Queensland so far. Would the government admit to this date, it's been a failure?

TREASURER:

I'm been very disappointed, frankly, with the NAIF so far. That's why we changed the rules. That's why we freed it up. I think the analysis that has been made of that has equally frustrated the Prime Minister and myself and I know Minister Canavan and prior to that, Josh Frydenberg, who was minister. So we've tidied it up, made it more flexible, gave it more room to do the work it needs to do. And I know as was reported here today, the head of that fund is looking forward to getting out there and getting some projects happening. No-one is more keen or enthusiastic in seeing the NAIF hit the road running. It's been disappointing [inaudible] to date but that's why we have taken the action we have.

QUESTION:

To your knowledge, has there have been any interest since those rule changes have been announced, from big projects?

TREASURER:

Yes there has. Ian, did you want to comment on that?

SENATOR MACDONALD:

Of course, the NAIF board is bound by secrecy. We can't say too much but I'm assured by the NAIF board and by the Minister we're a few weeks off some announcements for some very major projects. While I have the mic, can I also, Treasurer, you would be aware of this, we just spent $75 million on CRC, which is based here in Townsville. We just announced over half a billion for the Great Barrier Reef, to be spent in North Queensland, and the local member and the member for Kennedy said there's nothing in it for Herbert or Kennedy. Well I can show him 70,000 people, many of whom will include you here today, who will get more money in their pay packets because of Scott Morrison's work in returning money to the workers in tax cuts. So 70,000 people in Herbert have got a lot out of this Budget.

QUESTION:

There's a report today saying some power companies have been overcharging customers to have a tax bill. If that's true, should they be charged and refunded?

TREASURER:

We're taking action on that through the AER. Minister Frydenberg has issued those instructions. As some people may know, polls and wires companies have a pretty good deal. They get a guaranteed rate of return under the way the rules work. And what they're looking at is whether they've been overcharging by over claiming what they've been paying in tax on that model. That's not on. So the AER is getting into that. Whatever action needs to be taken as a result of that inquiry will be taken. They can't be taking customers for a ride on these things. I would hope that is not the case. But we wouldn't be initiating this investigation, this inquiry, if we weren't concerned.

QUESTION:

Treasurer, any reason why you're not touring the site today, like Bill Shorten did?

TREASURER:

I did tour the site. I have just taken a tour of the site. It was good to get a tour of the site.

QUESTION:

[inaudible]

TREASURER:

I look really bad in those hats and glasses. I don't know if Bill looks any better in them quite frankly. I thought, you know, the three pretty faces you have here would look much better without out the sunnies and the hats and the luminous vests. I thought I would give you a break from the luminous vests.

QUESTION:

Any problem for the State Government with you being on site?

TREASURER:

There are arrangements for these sorts of things. I'm not looking to pick a fight over that, I'm just interested in it being built. I'm sure the people of Townsville couldn't care less which politicians walk on site and don't. We have just been on site, we had a good briefing, had a chat to a few workers and I'm just really pleased to see it happening. I think it's great that it's happening. We're spending a quarter of a billion dollars here in Townsville. How good's that?

QUESTION:

[inaudible]

TREASURER:

How's it possible? She's a self-funded retiree. She doesn't get a pension. What she has, she has investments in shares that receive franked dividends, and because she is under the threshold for paying tax, it means she gets a rebate for the value of those franked dividends. That is what she lives off. This is what happens in Australia. Bill Shorten doesn't seem to understand this. Self-funded retirees, small businesses, buy shares in Australian companies, and where they don't have a taxable income, they actually get that as a refund. It's their money. It's their money. And he is counting on more than $5 billion a year by ripping off retirees, pensioners, nannas, nonnas and yayas all over the country. It's a theft. It's a cruel theft.

QUESTION:

So how much did she say she was losing each year?

TREASURER:

She is losing over tens of thousands of dollars, she told us yesterday.

QUESTION:

How soon do you expect to release the GST report?

TREASURER:

I just answered that question earlier.

QUESTION:

Tony Abbott has tweeted support for Australia moving its embassy to Jerusalem, as a Cabinet Minister would you support that position?

TREASURER:

Well I will leave those matters to the Foreign Minister. Ok, great. Thank you very much.

QUESTION:

[inaudible]

CHRISTENSEN:

I would just say in regards to funding that is coming to Townsville, there is no way people can say that North Queensland is receiving nothing. We have got $1.5 billion of dedicated strategic road funding for North Queensland. There is $1.4 billion in our additional funding for the Bruce Highway that is sitting there un-earmarked that could actually fund local Bruce Highway projects. We are investing over $400 million just down the road on the Haughton River Bridge to upgrade that and that is going to be built with local businesses and local workers. There is this project here and Ian and myself have been a flea in the Treasurer's ear about the two key issues we know are in Townsville, water and the port. The Treasurer has just said again and again we have $150 million that may be spared to look at these other projects. So that is certainly a lot for Townsville and it is a lot to boost local employment.