28 June 2017
Transcript - #2017127, 2017

Joint press conference, NT

SUBJECTS: Extra funding for Northern Territory schools; Minister for Defence Industry; GST distribution; housing affordability; Labor’s negative gearing proposal to drive rents up and up; infrastructure; Fair Work Commission ruling on penalty rates and Northern Territory funding

SENATOR SCULLION:

Thanks so much for coming up mate. It’s been an absolutely fantastic budget and tremendous to see you here in the Territory to see the fruit of your efforts. There is an awful lot going on. And I think certainly, the work you’ve done, to make sure that we get this fantastic education package through for the kids has just been a wonderful piece of work so thank you very much and welcome mate.

TREASURER:

Thanks very much, Nigel. It’s great to be back in the Territory. I’m pleased that I’ve been missed and the NT News has been looking forward to me coming back. I appreciate the warm welcome and the invitation. It was great to have Mathias up here a few weeks back to let everyone know I was coming. I am pleased to be here today because with Nigel, we’ve been able to as part of the ground-breaking new funding package for schools, deliver some $23.5 billion that passed through the Senate with Nigel just a week ago. Part of that package is that we’re delivering an additional $78.5 million for public schools here in the Northern Territory. And the reason we’re doing that is because we get it, that in the Northern Territory, when you talk about needs-based funding, we get the needs here in the Northern Territory when it comes to the education of Northern Territory children. Whether it’s the remoteness, whether it’s the language issues, whether it’s any of these issues that really often work against young children here in the Territory getting the education they need, we know that we have to step up, we have to stump up, to ensure that those issues are addressed. The per-student funding is some 50 per cent higher than what we are seeing in other parts around the country. And that’s because the needs are greater – so that’s common sense. Our whole education funding is based on ensuring that where there’s the need we are going to meet it. And there’s a consistency and a transparency about it. So that has, I think, worked greatly in the favour of the Northern Territory in ensuring we have that program, not just over the next couple of years, but over the next 10 years. Here’s the thing about our schools funding package – it’s fully funded, the whole thing out over the next 10 years.

When Labor made promises about schools funding back in the 13-14 budget, there was no money in the budget to back it up. They didn’t even put it in the budget. That was called out during the 2013 election by the Treasury Secretary and the Finance Secretary as part of that normal process we go through during election campaigns.

But elsewhere in the budget Nigel, I mean just next week businesses up to $25 million turnover; they will have a tax cut next week. We’ve already delivered the tax cut for small businesses all around the country, including here in the Territory. The instant asset write-off for small businesses up to $10 million, next week that goes on for another year as well.

And the budget is addressing issues, whether it’s cracking down on multinationals, we’ve got the new Diverted Profits Tax that comes in on the first of July, or out there with additional support – whether it’s on health or it’s education and we are delivering on all of those fronts for Territorians. And of course, our infrastructure package – here in the Territory next year alone just less than $30 million from the 1st of July next year going into infrastructure works here in the Territory – that’s part of a program which is spending just under $200 million on some major road projects around the Territory which Nigel has been fighting for so great to be here, and happy to take questions.

QUESTION:

Treasurer, the Chief Minister said earlier that for the 10-year education program he has to rely on the goodwill of the federal government to actually see that though. He said he can’t rely on that goodwill. How do you respond to that?

TREASURER:

It’s in law.

That’s how I respond to it; it’s legislated.

QUESTION:

But he’s also saying the $78 million is not nearly enough for what the Territory needs. Senator you probably agree?

SENATOR SCULLION:

No I don’t. That $78 million isn’t just a figure. It’s actually been hypothecated back to some instructions in a review in 2013 that actually has a formulaic approach. The fact that, principally language, sometimes it’s remoteness, but we as a Territory have a much greater need than anywhere else, even in Queensland and Western Australia in somewhat similar circumstances, and that $78 million has actually been worked out specifically to do that. It wasn’t necessarily a part of that package.

QUESTION:

Is that an admission it was not funded properly to begin with in the Northern Territory?

TREASURER:

Not at all. Funding in the Territory is about 40 per cent higher than the next highest state. So if that doesn’t tell you that we get the needs here in the Northern Territory and that’s what’s been built in the program then I don’t know what will. Because fully funded legislated programs that address the real needs-based education of Territorians and their children, that’s what the package delivers, and it’s there. It’s not a funny money promise that they previously got. It’s a real money deal for the Northern Territory schools, right across the Territory, not just here in Darwin but in the most remote areas of the country.

QUESTION:

Why is this additional funding separate to Gonski when it was supposed to get rid of special deals?

SENATOR SCULLION:

Can I just say, this is not a special deal.

TREASURER:

Correct.

SENATOR SCULLION:

This goes back to 2013 as I’ve indicated about how we ensure that young men and women in the Northern Territory can actually get access to a secondary school.

From what the report said, even in Year 4 they are a year behind, Year 9 sometimes up to five years behind in literacy and numeracy. So this is specifically funds to go to the Northern Territory Government to assist in closing that gap. So it is not some special deal. These are unique circumstances and those unique circumstances are being met with these funds.

TREASURER:

It’s based on real needs, that’s the point. A special deal is some sweetheart arrangement to make some little issue go away. That’s what the Labor party did with their 27 special deals around the country. This is based on a proper process, a real identification of need and the delivery of support to address that need.

QUESTION:

To national issues, should Christopher Pyne be demoted?

TREASURER:

Nonsense, seriously.

SENATOR SCULLION:

Why would you demote him?

TREASURER:

A bloke has a couple of words at a bar, at a pub, talking about things with some mates and all of a sudden that’s the criteria. You’ve got to be kidding me; you’ve really got to be kidding me. I think people are so over this rubbish; they are so over all of this. I didn’t expect to get insider Canberra gossip up here in Darwin. I mean, I don’t think Territorians would be that interested, we’re certainly not. We’re just focused on what we’re here to do and that is to deliver funding for kids in the Territory.

QUESTION:

Let’s start with the Territory and the figures and the cuts and that $2 billion cut in GST and the Gunner Government has put out some numbers today from your own figures confirming its own figures which shows by 2020 over $2 billion. What do you say to Territorians who can’t function like that?

TREASURER:

What I say is that the Grants Commission each year provides their advice, their recommendations; they set it not the Government about what the funding levels are and it’s only done on an annual basis. So this year’s figures came out and it demonstrated that there was some $270 million less than they would have otherwise anticipated to be there. Now what it will be next year, I don’t have a crystal ball about that and neither does the Gunner Government. So they cannot make these assumptions about what the next four years are. That would be inappropriate. So all I’ve ever said is this is what the figure is for the next year, and that’s what the Grants Commission recommended.

Now what I have done in response to all this because when you think about it, Territorians are in a position where they are over $4 each for every dollar raised effectively on the relativities here in the Territory. I’m off to the West tomorrow. Down to Western Australia. They’re at less than 37 cents. Now this is a system which we think we need to have a good look at and I’ve tasked the Productivity Commission to ask a really important question, is the way we distribute GST money between the states and territories, is that costing the nation economy? For example is the decision of the Government up here not to realise their gas resources, is that holding the Territory back? And should those sorts of decisions be rewarded by getting extra GST? When you’ve got a state like Western Australia which has been realising their resource opportunities and has been penalised under the system for doing it.

So look I think it needs a fair dinkum look at it. The Productivity Commission is looking at that, not from a parochial point of view. Every state and territory will always say I need more money than that state or this state or that territory for these reasons. But as the Federal Treasurer it’s my job to work out: is the way we are distributing this money costing jobs in the national economy? Because we want the whole economy to grow. That’s what is going to support the Territory; it’s what is going to support Western Australia, South Australia, Tasmania, everywhere. So that’s what we are doing on the GST. I’m meeting with the Treasurer later today and we are going to talk about some of these issues; the remote housing issues as well which have been raised by Nigel in the first instance but the Treasurer here has also raised those issues. And I’m keeping a pretty open mind on those things.

QUESTION:

Are you saying that you are going to penalise the NT Government though for its moratorium on Fracking? Are you going to penalise them financially?

SENATOR SCULLION:

If you are talking about in future years, so next year is completely up to what the Northern Territory Government do. How they make a submission. At the moment it is looking pretty grim that one of the principal things that they can do is to lift the moratorium on gas and get on with that because that will change the relativities. Now they are not doing that. So nobody else is punishing the Northern Territory except for the Gunner Government.

TREASURER:

The Productivity Commission is looking at whether the way states and territories operate is giving them a leave pass under the GST formula for not getting on and doing things. So where you have states and territories that get on and do things, should they be penalised by getting less GST because they haven’t gone on and made decisions and reformed their economies and taken advantage of the resources that they have. In the Budget, we’ve funded the development of feasibility works about a gas pipeline down to Moomba, and there is already the gas pipeline work which is going forward.

Now the most urgent thing currently to put downward pressure on electricity prices in this country is gas. The show is about gas right now when it comes to what electricity prices are and what is happening in the wholesale market. So as a Government, we are doing everything; we are looking at everything, to ensure that we can get that supply of gas, Australian gas to be used in the Australian market and to look at ways over time, where we can have greater certainty about that gas supply. Now the Northern Territory has an opportunity to play a part in that. So we need to get the politics out of this gas debate and focus on what Australians are focusing it on, which is not what people are saying in pubs after a party conference. What they are saying is what are you guys doing to put downward pressure on power prices? And it’s on gas and we are working on getting that gas available to the domestic market.

QUESTION:

Just on the substance of what Mr Pyne said, is the Government considering a policy shift on same sex marriage?

TREASURER:

No.

QUESTION:

Do you think points of difference with Government policy should be kept within the party room as opposed to people like Tony Abbot airing them publicly?

TREASURER:

I reckon the politics of personalities is really boring.

SENATOR SCULLION:

Hear Hear!

TREASURER:

It’s not about me, Nige, it’s not about Tony any more than it was about Kevin Rudd. I think people are over all the personality obsessions. It’s not a reality television show, its serious stuff. And that’s what Australians know. Australians are interested in that. They are interested in their power prices; they’re interested in funding their schools; they’re interested in fully funding the National Disability Insurance Scheme which in the Budget we stumped up. And the Labor Party are left stranded on this, playing politics on the National Disability Insurance Scheme. We are reversing those measures from some years ago in relation to the Medicare Freeze and things of that nature. We are getting on with guaranteeing the essentials that Australians rely on. In what is still a tough economy for many Australians and it’s been tough up here.

I mean, today for example, we have the Census statistics which have come out, which around the country including here in the Territory which shows that rents have gone up over the last five years. I know in the housing market whether you are here in Darwin or wherever you might be. A lot of the focus has been on buying a house. What the Census showed is that more Australians are having to rent. And more Australians who are renting are getting themselves into rental stress. That’s why in the Budget we outlined the most comprehensive housing package a Federal Government has delivered probably since the war years.

QUESTION:

Treasurer, you are meeting with the Chief Minister later today, you mentioned you will be talking housing, are there any other topics where the Federal Government might be willing to work with the NT Government to provide some extra funding, I’m thinking beef roads, anything like that?

TREASURER:

Well the Infrastructure Programme is always something we are already talking about. The Northern Territory Government raised with us how they wanted to repurpose some of the spending out of the Asset Recycling Pool. That would require us to come to a new agreement, they said they had a different set of priorities and we are waiting on them to tell us what those new plans are. I mean that’s up to them. They’re a new Government, well not as new as they were, but you know they’ve had some, I reckon they’ve probably had enough time to work out what they want to do on this front and it’s, we’re open for them to put that down on the table and have a chat about it, and work out how, what can be delivered within the envelope. So we’ll talk infrastructure, we’ll talk remote housing, of course we’ll be talking things about the point of consumption, online betting as well, those sorts of things which you know is an issue which I know is very relevant here in the Territory but is also an issue that nationally we’re trying to get some consistency on because it is a pretty significant issue.

QUESTION:

Are you concerned by that Census data showing the continual fall in people owning their home outright, do you think it puts strain on people’s superannuation when they hit retirement?

TREASURER:

I have made those comments myself in the series of presentations I have given over the past year. I think it is important that we support first home buyers to be able save quicker so they can buy their first home. That’s why we did the super savers programme which people can start having savings go into from next week. Now if you take up the super savers programme and you are saving for your first home you will save 30 per cent faster because of the tax cuts we’re giving you than you could before. Saving exactly the same amount of money out of your weekly pay packet, and you get to your goal 30 per cent faster. And we think it’s important to do that and that’s why we put it into the Budget. But the other thing is we know if people can get into the home market and they can buy their first home, that releases some of the stress and pressure that’s on the rental market. And what I know is this, is if you abolish negative gearing, if you abolish negative gearing and you basically tell those mums and dads who predominantly get involved in negative gearing that you want them to leave the market then you are going to drive up rents. Now if you are saving for your first home I have no idea how putting up your rent is going to help you achieve that goal. And with more people renting, that’s why we have announced the measures that we have, tax incentives to build more affordable accommodation, more affordable rental accommodation. That will mean a lot here in too in the Northern Territory with your community housing organisations. We have met with all of those organisations since the Budget around the country and they are really excited about what we are doing about affordable housing. We need to increase the stock of affordable housing, increase the stock of private rental accommodation. We need to increase the stock overall and boost the supply so people can get the home they are saving for or they can rent the home they are in much more affordably.

QUESTION:

You said that people don’t like personality politics so, how do you think people react to this disunity, do you think it’s damaging and how damaging is it?

TREASURER:

Well, I’m not distracted by it.

QUESTION:

But other people might be.

TREASURER:

Well, we’re not.

SENATOR SCULLION:

I’m not. The Coalition Cabinet here are not distracted at all by it.

TREASURER:

That’s the thing it’s just an assertion.

QUESTION:

Tony Abbott is though.

TREASURER:

He’s not in the cabinet. We’re not distracted by it. We’re just getting on with it and honestly, I mean the Prime Minister was down on Melbourne radio the other day and people were having a crack at him about this, the broadcaster at the time I think was Neil Mitchell and he said “Well, let’s just take some calls and find out what actual people want to know about it” and it wasn’t about those issues and that’s where I think Australian’s are. Honestly, I said on Saturday at our Federal Council, people are turning down the sound on Canberra and guess what guys they’re turning it down on you guys as well because they’re just over all of this sort of circus coverage. The real business of Canberra is not a circus, it’s a very serious business where peoples livelihoods, their wages, their futures, infrastructure, investments, medical care and the real needs base funding we’re announcing here today – that’s what matters to people. They’re not interested in all that other nonsense.

QUESTION:

Is it your conservative colleagues though who are creating this circus because if they weren’t talking about it, we wouldn’t be able to report on it.

TREASURER:

That’s a usual retort given by the media and you know, it doesn’t work on me any better than the last time one of you probably tried it. Honestly, we’re just focused on what Australians are interested in and that’s what’s happening around their kitchen tables with their bills, with their jobs. Our economy continues to do incredibly well in a global context but we know that isn’t being felt everywhere around the country. What focuses my mind as Treasurer every day is what we can do as a Government, how we can continue implement our policies that drive investment in this country, which will lead to lifting wages for Australians.

QUESTION:

What’s your response in context to Bill Shorten’s comments that you will roll back the penalty rate cuts?

TREASURER:

Well, he needs to explain why he put in place a Fair Work Commission and said he would respect the independent judgements of the Fair Work Commission. So how does this actually work with Bill? If Bill Shorten was the Prime Minister is this how it works? We’ve got the Fair work Commission, it goes and makes an independent judgement which business and everyone else has to rely on as a system of certainty. Do they then have to sort of go oh Ok, the Fair Work decision has been handed down, now let’s just wait for the Bill Shorten press conference to see if it’s going to be overturned or not. I mean what sort of a mad system’s that, I mean that’s crackers. I mean what sort of certainty are you going to get? I mean why have the Fair work Commission if it’s just “oh well, this is what we’ve decided but we better see what Bill thinks” and I don’t know, John Setka gets on the phone and says “I think that’s pretty crappy” and all of a sudden, the things turned over. I mean that’s a mad system. They’re not thinking these things through. It’s the same with their negative gearing policy. They don’t think it through. You know what the two biggest risks to the Australian economy are at the moment? As always, because of our engagement with China, the performance of China has a critical impact on our economy and the good news on that front is things continue to go well there, we’re building our market share, we’ve got our free trade agreement and that relationship is going incredibly well but the other one and all ratings agencies have said this, is our housing market, if there’s a hard landing in our housing market, that could have a very serious impact on our economy. That’s why we haven’t gone in there, welding this big chainsaw and getting rid of negative gearing and things like that. For one simple reason, it would cause a hard landing in the housing market which would seriously undermine our economy and peoples jobs. It’s not a good idea and it’s particularly not a good idea when things are brittle as they are.

QUESTION:

On the Northern Territory economy which is arguably has had a hard landing (…inaudible), would the federal government consider doing what it has the power to do and overrule the Northern Territory Government if it decides to make that ban permanent?

TREASURER:

Well look, let’s see, they’ve got this process which seems to be taking a while but the bottom line is this, Australia needs more gas and the Territory needs more jobs and its needs to take advance of the resource opportunities that it has here, whether it’s on gas or anywhere else and this is important for the Territory’s development and its’ future. And so, let’s see what the Territory Government ultimately decides. But at the end of the day, the decisions you make on these sorts of things you know, become, it’s like ‘Sliding Doors’ and walking through them and there is an alternative universe if you do not take advantage of the opportunities in front of you and I want to see the Territory, Nige does because he is passionate about it, wants to see it walk through the right door on these things and take advantage of the opportunities that are there. I think there is a generation of Territorians who are already here, and some who will still come and make their way up here, who will want to see those decisions taken in the right way.

QUESTION:

Did you make any assurances to the owners of the Wickham Point detention centre you would continue to lease that facility until 2020?

TREASURER:

I always acted in accordance with everything that I have talked about on that issue and that’s a matter that is being perused, as you know, through another process and it should be dealt with there.

QUESTION:

The youth detention royal commission has heard this week that there is very little accountability in the way the Territory government spends all the federal money it get for Indigenous disadvantage? Is it time to put more ties on that funding that the Territory government gets?

SENATOR SCULLION:

Well, first of all, I think what’s needed now; I will be talking with the Territory government about this. I want to wait till the full report come out. But I want to talk to the Territory government about how we can have more data points, trigger points for data so we can actually understand because they would say to me well it’s very hard to know exactly what the outcomes are, because we don’t measure the data in the right way, which is fair enough. But after that point, we need to know that every dollar, whether it is spent from the Federal government or from the Territory government, it’s got to be made sure that it is done in a sophisticated way that makes sure we don’t have duplication but is actually done in way that is evidence-based. We will be collecting all the evidence in this regard and that’s the only way we’re going to make sure every single dollar; make sure the issues are moved in exactly the right direction. I hope to be working hand in hand with the Northern Territory Government on a new approach in regard to the funds that we provide the Territory Government.

Now in the past, and there has been a lot of criticism about a whole range of Territory Governments going back a long way, about when you give untied grants well they’re from the Grants Commissioner and where they end whether they’re another roundabout in Parap or where they really should belong, which is in a new level of amenity in Yuendumu. So, whilst those issues have gone on and on, there just aren’t specific data points for collection, there isn’t a specific agreement. I for one am someone who doesn’t like the notion of untied grants. I believe we provided funds to go and do a particular thing. As the $78 million we just announced this morning, that will be going to the Territory Government. But I’ll want to know exactly how they are making sure that those particular children who need to ensure that their literacy and numeracy is increased in so much as they can access secondary school, something most of us would take for granted. I want to make sure it actually makes that difference and so the conversation will be about how we how we’re going to do this and where’s the evidence and I think it is very important that we change our approach.

TREASURER:

We’re going to have to go. I regret it’s been a bit of a time before I‘ve been back again. Its’ great to be back in the Territory. I will be making sure that it won’t be so long between visits on the next occasion, Nige. But it’s always great to come up here and there’s been a bit to do over the last couple of years, there’s been two budgets, there’s been an election. And we’re pleased to be just sort of getting on with the job. It’s always great to have Nige, who is constantly within the cabinet room, within the party room, around the grounds, really doing the work that you would expect him to be doing for the Northern Territory. Despite the fact I haven’t been here for a couple of years, Nige has kept us very up to speed, as today’s announcement of $78.5 million in additional funding, needs-based funding for Northern Territory schoolchildren demonstrates.

Thanks a lot, great to be here again cheers.