20 June 2017
Transcript - #2017123, 2017

Interview with Paul Murray, Paul Murray Live

SUBJECTS: Schools funding; House of Representatives vote; bank levy

PAUL MURRAY:

Joining us from Canberra now is a very proud member of the Sharks Army. A Cronulla Sharks fan. I say that because we had the joy of being at the footy together at the weekend. His mob beat my mob, and hold up what have you got with you now Treasurer Scott Morrison? You have a friend with you?

TREASURER:

My brother gave me this for Christmas after we won the Grand Final last year. I thought I would bring him in just to say hello, Paul.

MURRAY:

Well, thank you.

TREASURER:

We enjoyed having you down at Shark Park, you are welcome there anytime. People loved having you there.

MURRAY:

It was fun to be there. It was lovely to be there. I am sorry that my boys got run down at the end there. But let’s get to matters of state. I love that we can use props on telly. You should bring him into the House and see what happens.

TREASURER:

I’ll table it.

MURRAY:

This Gonski negotiation, we read that $5 billion ends up being put on the table mid-negotiation but it is still not enough for the Greens. Before we get to the Greens part of it, how did extra money just appear in this deal seemingly so late in the negotiation and how can we afford it when we are in deficit and we have got that broader government debt?

TREASURER:

I wouldn’t pay too much attention to all of the to-ing and fro-ings that go on in the nature of all of these discussions Paul. We have had tight Senates now for many years and there is a process that goes on and offers and counter offers are made and people have these discussions. What will ultimately matter is finally determined and what matters is that we are able to get this package which creates real needs based funding in Australia in place and the funding we have in the Budget pays for what we put in the Budget. There is no fake money here, there are no fake funds, there are no fake promises. It is a real commitment and they were all set out in the Budget and that is included in our trajectory over the Forward Estimates. The discussions will continue over the next couple of days and we are still confident about being able to come to a landing but we are not there yet.

MURRAY:

What about, obviously you are not the Education Minister so I’m not going to ask you, but there are plenty of people that are happy because there is more money but they wish that there was more teacher performance in this. That there were other things that came along with money to guarantee better performance. Has the way this fight been fought when it is just about dollars mean that there doesn’t seem to be the same philosophical push behind it that previous Governments have tried to do it and it has made it hard for your own supporters to actually bulk up on this?

TREASURER:

There are two parts to this. There is the funding which is set out in the Budget but there is also the process that David Gonski is working through. That is what Gonski 2.0 actually is, that is, going through the very issues that you raise about the performances system and ensuring the money that is being committed to the program over the next decade gets the result which is what matters most to parents, all of us whose children are in whatever school they’re in. So, we are doing both. The discussion we are having right now is the level of resource that goes into the school system and every element of the school system has their funding increased over the next decade, indeed over the next year, the next four years.

MURRAY:

Now, as we talk about Budget repair and the frustration that I am sure that you have and certainly lots of us who are watching this debate. I couldn’t believe that last week in Parliament the Labor Party votes against compensation for the carbon tax that no longer exists, that would have saved the Budget a billion dollars and it would have affected not a single person currently on welfare. That is an incredible statement about how basically unless you are going to up spending or up taxes you are not going to get a deal out of the alternative government.

TREASURER:

Not out of Labor. It is worse than that. What Labor did at the last election is they fully factored in the saving of abolishing that measure for future welfare recipients. So, it was actually in their costings. It is the same business we are seeing when they are going on about the Enterprise Tax Plan. Bill Shorten and Chris Bowen have spent the reversal of the Enterprise Tax Plan on reducing the deficit, paying for schools, paying for hospitals, paying for the NDIS, paying for everything under the sun. I heard Chris Bowen say today that he doesn’t believe in hypothecation. I think the reason for that is if you hypothecate the money you can only spend it once. He seems to want to spend it about six or seven times. You can’t do that. The same is true when it comes to this issue of the welfare payments for the carbon tax compensation. We got rid of the carbon tax and as you know electricity prices fell at that time because of the other pressures in the system. We know that those prices are rising again.

MURRAY:

Now about George Christensen, we are going to talk to him in about half an hour’s time. He has crossed the floor. He has voted against the Government. The Government only won the vote by one vote. It was about penalty rates. Now, George has often talked about crossing the floor but to actually do it and for the Government to only get there by one vote. This has got to be a pretty serious moment for the Government here and it has got to be a pretty serious situation if Christensen is willing to do it fir that do you now believe even more so that if he threatens to do it again on a Budget measure or anything else this is going to happen again?

TREASURER:

I don’t have those concerns. George had pretty specific views about this issue which he telegraphed pretty clearly. The Government won the vote and when you win the vote, the vote is won. They are the numbers. That is the calculus. Him doing that today did not change the outcome and he has acted consistently with something he had said previously so I don’t think there is any great surprise about that. George hasn’t been running around saying that he is not going to vote for Budget measures and things like that. Nothing of the sort. He is simply on this one occasion done something consistent with what he had previously flagged. The Government held the vote and that is frankly what matters at the end of the day.

MURRAY:

You are at the pointy end of the ship. Philosophically what do you think about a member of your own team in a Parliament where you have a majority of one being willing to cross the floor?

TREASURER:

The difference between us and the Labor Party is if that had happened in the Labor Party they would have thrown him out of the Labor Party. On our side of politics we have a more tolerant view of those sorts of things. It is not done lightly. I am sure he didn’t do it lightly. But he made that decision. They didn’t win the vote and that is that.

MURRAY:

Just finally, the Bank Levy passed through Parliament. We know that the banks did their best to try and fight it. I think they were on a losing battle the second this thing came out. Again, for those who have a philosophical problem with the idea of any specific industry being too profitable or too unpopular that you are able to put a levy on it. Is this for those sorts of measures for Australian businesses?

TREASURER:

That’s not why the levy is going on. The levy does this. Australian banks, the large banks, have a 20 to 40 basis point advantage in the market by virtue of the unique position they hold in Australia’s banking and financial regulatory system. They enjoy what is quite a significant funding advantage over everyone else in the market. That is courtesy of, effectively, the taxpayer position that they have been put in. Now, that is why it is not just a temporary thing, Paul. It is a permanent, structural thing. This is to recognise the fact that there is this arrangement in place and a six basis point levy when the advantage could be up to 40 basis points I think is quite a mild and modest measure. Particularly in the environment we are in it is a measure that will have no consequential impact on issues of economic growth. The Reserve Bank Governor said that himself in the minutes that came out of the meeting just today. It is a common sense measure, it is a structural measure, it is done on a very sound basis. Of course the banks don’t like it and the Labor Party even tried to run the clock down on it and they ran all of the banks arguments and all of that sort of thing. At the end of the day it passed, it is coming in on 1 July. I will tell you what else is coming in on 1 July, the Diverted Profits Tax. So, if you are a multinational and you shift profits offshore, you won’t pay 30 per cent tax on those profits, you will pay 40 per cent tax. On top of that we are also taxing digital services – Netflix and all of those – who are multinationals putting services into Australia. They will be subject to the same tax arrangements that everyone else is. And on Low Value Goods that are being imported from overseas, they will face the same GST that you will down the street at a local shopping centre or the local shop. So, that comes in one year after that because the Labor Party had that deferred for a year. We are getting on and dealing with multinationals but we are also making sure that the large banks, this is not an unreasonable levy, and they will be paying it from 1 July.

MURRAY:

Treasurer thanks again and thanks so much for your time.