27 June 2018

Interview with Deborah Knight, 2GB

Subjects: Labor's business tax; Enterprise Tax Plan; Dreams2Live4.

DEBORAH KNIGHT:

Good afternoon to you, Treasurer.

TREASURER:

G'day, Deborah.

KNIGHT:

Is it safe to say this announcement took you by surprise from Bill Shorten yesterday?

TREASURER:

It never surprises me that the Labor Party wants to increase taxes but I think it really did come to surprise many people because he's been basically trying to get away with it for the last couple of years. He's been running around saying, "Oh, we're just going to hit the big top end of town." And all the rest of it but the truth was – I mean, he actually told the truth for the first time yesterday and the truth was that he's going to take back the tax cuts that have already been legislated by the Parliament for businesses between $10 million and $50 million in turnover. That's on top of his previous week's announcement that he's going to take back $70 billion of personal tax relief that we were able to legislate through the Parliament last week. As many of the retirees who are listening to your program, I'm sure, would know they want to impose a $5 billion a year tax on retirees by denying them their tax refund from their share investments. So, this is a bloke who's quite happy to tax people more and now he's going to tax medium sized and small businesses more.

KNIGHT:

So what do you think his motivation here is? Because when Bill Shorten is asked directly, "Why do you dislike business – small and large business?" He says, "I'm not anti-business, I'm pro-worker." But what do you think the motivation for this particular move is?

TREASURER:

Let's just think about that "pro-worker" statement. This is going to equate to those businesses in that range over the next ten years at about $1 million per business. It's going to equate to around $12,500 for every worker in those businesses. So that's $12,500 per worker that that business will now have to pay to the Government in tax rather than in investing in new equipment for that worker or even paying them more and doing these sorts of things over the next ten years. So, if he's for the workers, he's certainly not demonstrating it by taxing the businesses that employ them more. The second point I'd make is he likes tax. He loves tax. He loves spending your money and all of your listeners' money, and the problem with Labor is they never spend it very well. We all remember the overpriced school halls and the insulation batts and the cash for clunkers and the debt. They love to spend your money and they spend it really badly and that's why they keep putting up taxes.

KNIGHT:

Now, this is obviously an issue that you are going to capitalise on big time as you head into these Super Saturday by-elections. In terms of credibility and leadership, it seems as though it's also got members of the Labor Party nervous.

TREASURER:

Well, he said, Chris Bowen said there'd be this, exhaustive process and "we'll be considering it carefully." And all these sorts of things. They did none of that. What I'm asking them today is if he can go out one morning and all of a sudden declare that this is what they're doing for businesses between $10 million and $50 million. What he hasn't been truthful about, well, what is he doing to do for businesses between $2 million and $10 million? The Labor Party doesn't get the difference between revenue and profit. For a lot of businesses – particularly in the construction sector, in the mining services sector, car retailers, things like this – they have a very high turnover but they have a very slim profit. So a small business – there's one that I know of up in Rockhampton, They've got 35 employees, they operate out of a blue shed on the outskirts of Rockhampton. They've got a turnover of almost $50 million because they service these massive big radiators that go on the front of the mining trucks. Now, they've got 35 employees, it's run by a family and Bill Shorten thinks they're Google. I mean, it's a joke. What it's exposed is it's not about hitting the top end of town, it's just about hitting everybody all the time because they can't control how much money they spend.

KNIGHT:

We're speaking to the Treasurer, Scott Morrison. I would love to hear from you on this. Are you one of these small and medium sized businesses who would take a hit from this decision, this announcement – a surprise one by Bill Shorten yesterday – to repeal the tax cuts? What's your view? Now, Treasurer, the company tax cuts you're currently trying to pass, aiming to provide tax relief for businesses with a turnover of more than $50 million, Pauline Hanson has confirmed this morning One Nation will not support the move. What's your plan B?

TREASURER:

Let's just see what happens in the Senate. We've been around a long time around this Senate and we will just wait and see what happens in the Senate. What people know about the Liberal and National Parties is that we've got a plan for a stronger economy and you don't… I mean, yesterday, Tanya Plibersek said, "Where does all the money come from?" Well, the money comes from people who have paid taxes and businesses who create jobs so people can pay taxes. The reason we want to see businesses be more competitive is so they can keep doing just that. The Pharmaceutical Benefits Scheme, affordable medicine, hospitals, schools – all of this depends on a stronger economy. Our plan for a stronger economy means making sure that the businesses who operate in it – large and small – because they all employ people, can compete on a more level footing with the companies overseas. Because overseas – in the United States, in France, in Singapore, in London, in the United Kingdom – they're all bringing their taxes down. When our tax rate went to 30 per cent – and that was done under both Paul Keating and Peter Costello – then there were about 19 other countries that had tax rates higher than us…

KNIGHT:

Ok …

TREASURER:

…now there will only be one.

KNIGHT:

It's clear you want this through, you want it passed but you need Pauline Hanson, you need the Senate and the crossbench to get it through.

TREASURER:

True.

KNIGHT:

I know Pauline Hanson has a tendency to backflip – is that what you're banking on here?

TREASURER:

All I'm saying is – Donald Trump says it all the time – "let's just see what happens".

KNIGHT:

You might have to help her out with her definition of a backflip though because she said yesterday and I quote: "I haven't flip-flopped. I said no originally and then I said yes and then I said no and I stuck to it." That's a backflip, isn't it?

TREASURER:

I don't have to commentate on what Pauline does, I'm just interested in finding what the outcome is in the Senate. We're still very focused on that because we believe it's the right plan, Deb. That's the thing. You want a stronger economy and we do have a stronger economy and we want to make sure the benefits of that stronger economy get into every corner of the country and for that to happen, our businesses have to be competitive. Nine out of ten Australians work for private businesses, they don't work for the Government. So, we want to create jobs in the private sector by businesses being able to compete and do better. It's a very competitive world and if we don't make our tax rates competitive then other countries will cut our lunch.

KNIGHT:

Alright, we'll see what you come up with to get her over the line and look, I must admit too, Scott, I saw a softer side of you last week…

TREASURER:

You did, Deborah. [laughs]

KNIGHT:

I MC'ed a fundraiser, a wonderful lunch for this charity Dreams2Live4 which helps out…

TREASURER:

They're a great charity.

KNIGHT:

It's fabulous. It helps out adult cancer patients who have had the cancer return or spread. Alan Joyce – the CEO of Qantas – was interviewed by Peter Overton, my colleague and friend, as you were and you opened up about your personal life, you're a good curry cook.

TREASURER:

I am. I like cooking curries.

KNIGHT:

Saturday night at your place.

TREASURER:

Saturday night at my place, I cook my girls some curries – and Jen, my wife – and we often have friends over. It's just a family ritual and there's nothing more important than family. When you do the job I do, I'm sure you too, Deborah, and certainly Peter as well, that family time is very special so we try and make it like that.

KNIGHT:

I've got to tell you, last year, Dreams2Live4 at their lunch, the inaugural lunch last year, they raised $67,000 as a result of your efforts and of everyone in the room, they raised $120,000.

TREASURER:

That's fabulous news. Congratulations to everyone who was involved in that, it was a great event there and to be a part of it. I should say that on Saturday night, we've got to eat that curry – if the Sharks are playing down at Shark Park – early so I can get down there and cheer on my team.

KNIGHT:

[laughs] Priorities, I love it. Treasurer, thank you so much for joining us.

TREASURER:

Thanks, Deborah.