27 June 2018
Transcript - #2018132, 2018

Interview with Sabra Lane, ABC AM

Subjects: Labor's business tax; Enterprise Tax Plan; Turnbull Government’s crackdown on multinational tax avoidance; Financial Services Royal Commission; Huawei.

SABRA LANE:

Joining us now is the Treasurer. Scott Morrison, good morning and welcome back to the program.

TREASURER:

Thanks, Sabra.

LANE:

Business leaders have been visiting Canberra this week on a charm offensive over the National Energy Guarantee and also on those tax cuts to try and win those extra votes. Has it worked or will this hit the fence?

TREASURER:

Well, we'll see. The Senate will consider the matter this week and we've been working hard on this because we believe it's the right thing to do for the economy. We've always believed that. We took it to the last election so it was clearly set out before the Australian people and we were returned as a Government and we've been seeking to have this legislated since. Now, you're right, we have had success in legislating tax relief for businesses up to $50 million – they're not big businesses, they're not multinationals, they're not the big end of town as you said in the opening report there. Bill Shorten has said now that he's going to reverse those tax cuts for businesses between $10 million and $50 million. Question is; what is he going to do to businesses $2 million to $10 million?

LANE:

We'll get to that in just a short… Senator Hanson met with Mathias Cormann yesterday and she says that she's not across the line and one of her main criticisms is that she thinks the Government's not doing enough to rein back tax, you know, multinational tax avoidance. It's reported today that a taskforce has managed to clawback $2.7 billion this year. Is that correct?

TREASURER:

Correct. Yes, it is. And we've been working on this for some time. Australia is actually leading the world in combatting multinational tax avoidance. We introduced that legislation back in 2015 – Labor voted against it by the way – and we've had great success since then. I mean, companies like Google are now paying twice in tax what they were previously and we're drawing more and more of this revenue into the tax net – some $7 billion of sales revenue coming into the tax net. Now, I'll be at the G20 next month and this will be the item on the agenda once again. An options paper which we've put together we'll be releasing soon which canvasses other options but those options are the sorts of things that are being canvassed in other countries.

LANE:

And that $2.7 billion, is that indicative of what you might also get next year or will it be a case of diminishing returns?

TREASURER:

We'll see. There is an immediate catch-up, you do see some of those figures as companies start to restructure themselves and that's what we wanted them to do. We said, "You're moving money around, you need to stop doing that." And that's why I introduced the diverted profits tax which said, "When we catch you moving it around now under these new laws, you won't pay 30 per cent, you'll pay 40 per cent." And that's been a very effective measure too.

LANE:

Are you hoping that this information will help convince Pauline Hanson to change her mind?

TREASURER:

Ultimately, we want all the Senators to support our legislation and she's raised those issues so I think it's right for us to demonstrate the significant action that we've taken but also that we're going to continue to take. I mean, that job isn't finished yet and we're going to keep seeking to ensure that this new economy, the digital economy, is not tax-free. It shouldn't be. The old economy isn't and there needs to be a transition in our tax system to ensure that it's capturing the new economy in the same way that it did the old.

LANE:

The Opposition Leader, Bill Shorten, has said that a future Labor Government would roll back the tax cuts that have already been delivered for small businesses with a turnover of $10 million to $50 million. Would a future Liberal Opposition recognise that mandate? You've just talked about a mandate for your own tax package, would you recognise that?

TREASURER:

I'm not going to talk for a future Opposition because I don't plan to be in one. We plan to be in Government and implementing our policies. He's not only rolling back the tax relief for small to medium sized businesses up to $50 million – between $10 million and $50 million. He's also rolling back the tax cuts that we've legislated, some $70 billion of roll back for personal income taxes as well. So, this is just proving our point that they're for higher taxes. The question I have today is how much revenue does he expect to raise from increasing the taxes for businesses between $10 million and $50 million? It's Labor Party policy, they should tell people what the revenue estimate of that is. Chris Bowen's got some cleaning up to do. The second point they need to do today is confirm the position for businesses between $2 million and $10 million. If Bill Shorten can announce that off the back of a speech in Canberra, he can end the mystery: will Bill Shorten roll back the tax cuts for businesses between $2 million and $10 million?

LANE:

Voters might prefer this tax policy over your own. The coming by-elections will be a litmus test of that.

TREASURER:

Well, we've cut taxes for small business and medium sized businesses. Bill Shorten wants to put them up. We've cut taxes and provided tax relief for all working Australians. Bill Shorten wants to roll them back…

LANE:

And the point of the question?

TREASURER:

So they're clear questions, they're clear questions for the electorate at the end of the day.

LANE:

And the point of the question to you is; is this going to be a litmus test?

TREASURER:

We'll see what happens in the by-elections. As you know, a Government has not won a by-election off the Opposition in over 100 years. So I think that sets what the expectation, I think, is in these contests. So I don't think there should be any resetting of the mark on this but our policies…

LANE:

If [inaudible] are as unpopular as you think it is…

TREASURER:

Sabra, these are our policies. We're very upfront about our policies. These are the policies we're putting in place in Government. These are the policies we take to the next election because these are the policies that we know are growing the economy and has created over a million jobs since we were first elected – 80,000 jobs for young people just in the last 12 months. Last year, record jobs growth, more than 1,000 jobs every day. That's how you get the jobs. You just heard in the report that you put to air just before we came on, small businesses, they don't have to have a very big turnover before they're captured now by Bill Shorten's higher taxes. $10 million for many businesses with large capital [inaudible] and big servicing clients, like the mining engineering business I talk about up in Rockhampton. They're almost $50 million, 35 employees…

LANE:

Labor's constantly said that it has different choices. It wants to spend that money on offering more money for health and education and that might be that voters prefer that than what the Coalition is putting forward…

TREASURER:

Labor always want to spend more but they never spend well. This is the problem. They want more taxes because they want to spend more and more. But the problem is that they always spend more than they tax. They're constantly chasing their tail. That's how the Budget got in such a mess when they were in Government last time. That's how they ran up the debt and that's what we've been fixing for the last four and a half years. Labor just wants to spend more of your money.

LANE:

On the Banking Royal Commission, has Commissioner Kenneth Hayne requested more time yet to carry out his inquiry, given that yesterday, the Commission seemed to be making slow progress through this week on farming finance issues and he's conceded that they're going to need to set more time aside to do that?

TREASURER:

He hasn't asked for more time, no. But I commend Commissioner Hayne for the way he's getting about this task.

LANE:

On Huawei, I'd like to ask you some questions. Huawei is presenting at the National Press Club today. You do sit on the National Security Committee of Cabinet. Are you able to explain to Australians why the Government seems to distrust the telco Huawei?

TREASURER:

We will always act in accordance with the advice of our national security agencies when it comes to matters of national security. That's all I can tell you as a member of the National Security Committee.

LANE:

Huawei says that it's never guilty of doing anything wrong and it's worried that it's going to be cut out of operating the 5G network. Are you able to shed any light on that?

TREASURER:

I'm able to shed light on the fact that we'll always operate and make decisions consistent with the advice of our national security agencies.

LANE:

Huawei Chairman John Lord will offer to fund the establishment, apparently, of a testing centre in Australia to ensure that its 5G equipment is free from any outside cybersecurity threats. Would that kind of commitment ease concerns over Huawei?

TREASURER:

I never discuss what the National Security Committee and National Security Ministers would consider simply to say that we will always take the advice of our agencies of what's in the best interests of keeping Australians safe and the national security of our country.

LANE:

Treasurer, thank you very much for joining AM this morning.

TREASURER:

Thanks a lot, Sabra. Great to be here.