1 June 2018
Transcript - #2018100, 2018

Press conference, Sydney

Subjects: Australian steel exports; Amazon; delivering a fairer playing field for Australian businesses; ANZ; inactive superannuation accounts; One Nation.

TREASURER:

Thanks, everyone.  I just want to make a couple of points. The first one was that we are very pleased to see that Australia's efforts in ensuring that Australian steel and aluminium products have been successful in ensuring that what we are doing with those products in Australia and in our exports in the United States is to continue the treatment they have had and that we believe, as we have always said, that this is a great outcome for the United States and for Australia. This is the best possible set of arrangements and it really does set the standard in where free trade should be and so we welcome that arrangement. And I particularly commend the Prime Minister, of course, on this as well as Minister Ciobo for being able to work that issue through and, of course, Ambassador Hockey. The other point that I want to talk about today is the issue regarding GST on low-value goods. Now, this matter was first resolved by the Council of Federal Financial Relations, which is all the State Treasurers back in August 2015, where they agreed that we should be expanding the base of the GST to ensure that it picked up these low-value threshold goods and that was announced in my Budget in 2016-17. So, there has been some years where this has been clearly telegraphed that this would be put in place in Australia and it's a very reasonable proposition.

Why should a large multinational company, the second-largest in the world, in the case of Amazon, owned by the world's richest person, not pay GST on what they sell in Australia? When, if you go to an Australian digital online retailer, Angus & Robertson or something like that, and you do have to pay GST. It's a pretty simple proposition that Australian companies should not be put at disadvantage to large multinational companies when it comes to selling day-to-day items to Australian customers and what we are doing is levelling the playing field. We think the technological changes that are occurring around the world will of course make the economy stronger and it's great to see its great utility to customers and that's fantastic, but it is not a leave pass not to pay tax. It is effectively a reverse tariff. I mean, Australian retailers, whether they're digital or traditional bricks and mortar, in shopping centres or on main streets, they shouldn't have to face a tax when those they're competing with don't. So this is really just about levelling the playing field.

Now, I regret that Amazon has taken the decision that they want to try and force customers onto their Australian platform but that's what it is. They can make that commercial decision. Australians, I think, form views about this sort of stuff. If someone takes their bat and ball and goes home, well, Australians will form a view about that and if that is what Amazon has decided to do, well, that is their decision. And Australians have many other choices available to them and I'm sure they will exercise those choices. But I know for mum and dad retailers all around the country – particularly in regional areas and rural areas, I'm thinking about places down in Burnie, Tasmania and places like that – if that means that someone's going to come in and buy that pair of shoes in a local shop here in Australia or buy from an online retailer in Australia – well, good. I think that is great news for those retailers in Australia. I should also stress that the collection method that was adopted, was subjected to an independent review by the Productivity Commission when this went through the Parliament. And that Productivity Commission review found that the collection measure that has been adopted by the Government was the best available to the Government and that it should not be delayed in being proceeded with and so that was an independent review of that process. It was something the Labor Party actually, when they delayed the introduction of this measure, called for that to be done and we did it and it backed up the judgement of the Government with the collection measure that we had put in place. So, I find it hard to believe that one of the world's most technologically advanced countries in the space of more than two and a half years now say they are unable to work out a technological solution when it comes to the simple application of a sales tax on their products sold in Australia. They face different VAT rates and sales tax rates all around the world in the UK and Canada and they seem to be able to manage that. But in this case they say they can't manage it. Well, I've got a simple message. If you are selling things in Australia, it is subject to tax. You don't get a special deal because you are a big company or a multinational. We're certainly not going to let that wash with this Government and I am disappointed that the Labor Party has sided with Amazon on this, and multinationals. But it's not the first time and, in late 2015, when we introduced the Multi-National Anti-Avoidance Laws, Labor voted against them in the Parliament. Those laws have now seen around $7 billion worth of sales revenue come into the Australian tax net because of what our Government has done to crack down on multinational tax avoidance. So I think it's disappointing that Amazon would take this out on consumers in Australia but that's their commercial position and if they want to take their bat and ball and go home then I think Australians will have the same view about that as they do about others who do those sorts of things in our community. So, we are of course going to proceed with this. It's $300 million estimated revenue that will be going to the states and territories to pay for hospitals, schools, police stations, which is what tax revenue does. We think this is a very fair and reasonable step. I know retailers have been wanting to see this now for some time and they have been frustrated as the Government has with the legislation being delayed as it was by the Labor Party in securing its passage. Well, it's now coming in. It's time for those companies to sort of get themselves organised and they have plenty of warning to do so. If they don't want to sell things in Australia because they don't like paying tax, well, there are plenty of options here right at home. Questions?

QUESTION:

Just on the steel and aluminium tariffs, is there any clarity on Australia's treatment and whether or not it will be permanent or temporary?

TREASURER:

Our arrangements continue – that's what the announcement was today…

[INAUDIBLE QUESTION]

TREASURER:

There is nothing to suggest there would be a change in that.

QUESTION:

Treasurer, how significant is it that criminal cartel charges are to be laid against the ANZ?

TREASURER:

These are very serious matters and it is the product of an ACCC investigation but, given the nature of that and where it stands, it would be inappropriate of me to offer any other comment than to note that where these charges have come from stem from an ACCC investigation and they are the cop on the beat on this and that will be tested through the proper process.

QUESTION:

Have you been briefed on that matter, Treasurer?

TREASURER:

I have had a briefing, yes.

QUESTION:

Is it potentially another blow for the tax cuts on big business?

TREASURER:

I don't see a link between the two. I mean, the bank levy has already been applied and what that means is by the time that our Enterprise Tax Plan reached large companies of that size, the bank levy would have already yielded $16 billion in levy revenue, which would pretty much negate the value of the tax cuts for large banks. So, the bank levy effectively already acts for the major banks to discount, in fact, replace what would otherwise have come in the form of a tax rate of 30 per cent for banks at that level.

QUESTION:

Will the Government be prioritising the personal or the business tax cuts in the next sitting in Parliament?

TREASURER:

We can walk and chew gum at the same time, they're both important. In fact, we intend to pass both.

QUESTION:

Treasurer, the inactive super accounts initiative to reunite account holders with them. The Government's taking a very active role via the ATO rather than leaving it to the super industry to fix. Can you explain why?

TREASURER:

Because it's important that we reunite people with their super. If it stays in a lot of these – what are effectively dormant – accounts, it gets chewed up by fees and we want to ensure that Australian savings don't get chewed up by fees put on by superannuation funds and we can get that super back to them. Now, there has always been a process where people could initiate that process themselves. That hasn't been as successful as we would like it to be and we think there is a risk to this savings pool being undermined, and where we have that technology and where we have that capability, we would like to step up and help Australians with their savings by proactively reuniting savings to their active account. So we have the ability to do that now and we believe we should do it to assist those Australians, particularly those and many of whom have had different, many jobs over a short period of time, it particularly affects younger people, and this means that the Government is taking a more proactive approach which is pretty helpful for customers in the superannuation sector.

QUESTION:

There are question marks over the accounting and the way it was done in the most recent Budget. How would you respond to those?

TREASURER:

I don't think there are any questions about how it's done, frankly. I think it has been done in a very transparent way and it is properly accounted for in the Budget. But the goal here is quite simple, and that is we don't want to see peoples' savings chewed up by superannuation fees, by having money sit around in dormant accounts, when the Government can take actions to ensure that those accounts are reunited with the active account of the superannuation holder, policyholder. It's not the only thing we are doing with super – as you know, we're banning exit fees that super funds like to put on their accounts to try and prevent people from going to other super funds. We want there to be more choice in superannuation. We want there to be more transparency in how superannuation funds are managed. We'd love to see more independent directors on superannuation fund boards. We would like the Productivity Commission's recommendations they've made about default funds and how workers can be shoehorned into funds without any choice. I mean, that's not good. The job of superannuation funds shouldn't be to sit at the end of a big firehose of money, pouring money into their accounts and not having to work for it. It is important that consumers should have choice and that is what we want to give them.

QUESTION:

Has the super industry its self has been moving too slowly in making this possible?

TREASURER:

I think that's right but where the Government can assist and reunite these accounts – and we can – we should and we are and that is good news for Australian savers. And the superannuation system is a very important part of our economy, of our retirement incomes policy framework, and out of the investment funds that are there to invest in the country's future. And it's important that that system is as competitive as it can be to get the best outcomes.

QUESTION:

Have you been in touch with Brian Burston since he said he would support your tax cuts?

TREASURER:

I haven't, no.

QUESTION:

Do you think he would be a good addition to the Liberal Party?

TREASURER:

I don't think he has applied so I couldn't tell you. We have a great Senate team in New South Wales and all of those positions are filled and I'm sure there are many others in the Liberal Party who would put up their hand to represent us in the Senate as well. So I know Brian, I've known Brian for many years. I have always found him to be a very honourable fellow.

QUESTION:

Surely, you'd welcome an extra number though, wouldn't it?

TREASURER:

Well, how he votes is a matter for him and we appreciate his support for ensuring that Australia has competitive taxes for Australian businesses. Because the whole reason for gathering together today is Australian businesses are up against tough competition all around the world, whether it's Australian retailers competing with Amazon, digital retailers, online retailers as well as traditional bricks and mortar retailers competing with Amazon or Australian companies competing with manufacturers and others all around the world, we want to make sure that they have competitive tax rates because if they don't have competitive tax rates, those big companies will cut our lunch. They will come and take jobs away from Australia if we can't ensure that our own businesses are in a situation of the strongest, competitive arrangements that they can have and that means a more competitive tax rate for Australian businesses and all businesses, not just some.

QUESTION:

Is the splintering of One Nation a concern for you for passage of Government legislation in the Senate and what that means into the future?

TREASURER:

We have seen a lot of splintering of minor parties in the Senate over the years. We've sort of seen this movie before. We always highlighted that, with many of these minor parties, they can be very unstable choices and that's what we are seeing take place, it would seem. I think it reinforces the fact that the Liberal and the National Parties have always been a stable choice for those who want to see a more competitive Australian economy and more jobs, standing up for the important principles of ensuring the Government lives within its means, that we pay down the debt, that we ensure Australia's national interest is protected, to ensure that our borders are secure and we have an immigration program that is run in the national interest where we invite people to come to Australia to make a contribution, not take one. These are the principles and values the Liberal and National Parties have always stood for and have been the stable choice to ensure these things can be enacted with successful and competent and responsible Government. So, we are the stable choice when it comes to those issues and the matters that are being addressed in the instability of minor parties, which we have seen – not just with One Nation, frankly, we've seen it with a number of others – but we will continue to work with minor party and independent Senators on the crossbench. One of the reasons we always have to do that, I should stress, is because the Labor Party keeps working against the interests of the Australian economy. They have even worked against the interest of Australia in seeking to ensure multinationals pay their fair share of tax. They voted against the Multinational Anti-Avoidance bill and here we are seeing them sooking away, whinging away when it comes to Amazon having to pay tax in Australia. I mean, at the end of the day, whose side is Bill Shorten on? Amazon's or Australia's? Thank you.