1 August 2017
Transcript - #2017147, 2017

Doorstop interview, Perth

SUBJECTS: Meeting with WA Treasurer Ben Wyatt; Productivity Commission inquiry into economic impact of horizontal fiscal equalization; the right choices securing better days ahead; the Labor Party’s plan to tax Australia out of business; PaTH program; same-sex marriage.

TREASURER:

I was pleased this morning to meet with the WA Treasurer Ben Wyatt in our offices here in Perth. It was a good, constructive discussion about the many issues that are on the table. In particular that of course dealt with the GST and the very unfair deal that WA has had on that distribution for some years now. Of course, the Commonwealth over the last few years has taken some initial action with $1.2 billion in additional support to WA for infrastructure to mitigate what has been a pretty rough deal for WA. We have to work to an enduring sustainable solution to this problem and Ben and I share that view and we need to continue to work together – not against each other on this – but to work constructively together to get to a durable solution. And to work through the details.

I appreciate the submission, many submissions, that have come from Western Australia to the Productivity Commission Inquiry. The Western Australian Chamber of Commerce and Industry’s submission was particularly useful in helping to work through these issues. We've got to put this in a national context and solve for the national economy and we have a job to do on that front. And Ben and I need to work together. He needs to work on his Labor colleagues in the other states, Victoria, Queensland, South Australia and the Northern Territory, to convince them of his arguments, as do I need to work nationally on the same issues as well.

So, it was a constructive and very positive meeting. We have a process in place to address this issue with the Productivity Commission and beyond that. And we're just going to keep working that process. We take this issue extremely seriously for Western Australians and we want a solution that will stick. A solution that is based on a clear national policy priority to make sure that it can endure and be there to give all states and territories certainty about these arrangements well into the future.

On other issues, can I say that I've been pleased again today to see some further data coming out which shows that both consumer and business confidence are seeing the better days that are ahead that I talked about in the Budget. Looking at expectations for the next 12 months, that I think, has been strongly encouraged by the very good jobs result we saw for the last financial year. More than 240,000 jobs created last financial year. That's the strongest jobs growth we've seen since before the Global Financial Crisis. And that is very welcome news for Australians all around the country.

On top of that, we've also had the manufacturing purchasing manager's index today, which again, for ten straight months, has shown that improvement in response to rising demands. So that's another data point which I think continues to give us encouragement, and continues to reinforce why we must focus on growing our economy. I mean, you want to improve living standards in the country, lift wage, get people into jobs? You don't follow the politics of envy, you follow the economics of opportunity. That's what will improve people's financial circumstances all around the country. And that's why we remain focused on growing the economy, to support that job growth that we've seen coming back and to support boosts in wages that will flow from further improvements in the economy and increased investment. Our opponents, the Labor Party, only have a plan of envy to tax Australians out of jobs and to tax Australia out of business.

I mean, Bill Shorten has no plan for growth. He was asked about his plans for growth yesterday. He thought someone was asking him about the bus timetable because he gave an answer about public transport. I mean, he doesn't have a plan to grow the economy. We are implementing our plan to grow the economy and we're seeing that in the jobs created. Today, the Prime Minister announced 10,000 placements with the Australian Hotels Association as part of our youth PaTH program to get young people into work. We announced that in last year's Budget and I'm pleased to see that we're just getting on with the job of implementing that for young people all around the country, including here in WA.

QUESTION:

Did you give any thought to writing a $2 billion top-up to WA in regards to the population statistics and the effect that that will have on our GST share?

TREASURER:

The estimates of $2 billion - we haven't seen what sits behind that. But as I discussed with Ben today, as Treasurer under the Federal Financial Relations Act, I have no legal ability to ignore the numbers of the Chief Statistician. There's just no flexibility on that. The Act doesn't provide for that. But we've demonstrated, we've put in an extra $1.2 billion over the last three Budgets to recognise the unfair situation that we think WA has had to deal with. Now, I remind Western Australians that when the Rudd-Gillard-Rudd Government was in place, the GST distribution to Western Australia fell by more than half. And they did nothing. Absolutely nothing. And so that's what you can expect from Labor at a Federal level. Now, I'll work with the WA Government here to get to a solution on this. We've already put our money on the table, $1.2 billion, to recognise that. It's us who have initiated the Productivity Commission inquiry to deal with this at a national level and we're working towards a solution.

QUESTION:

So given that you have to trust those ABS figures, is it possible then that there could be another top-up to counter this claimed $2 billion black hole?

TREASURER:

I'm looking to solve for the central problem. In the past, we've put in additional monies, if you like, as a band aid, to deal with the relativity up until now. We now need to solve for the real problem here and have an enduring solution to that. So, that's what I'm focused on. Rather than looking at the issues on the margin, we'll stay focused on solving the main problem which I would hope would pick up those types of issues as well.

QUESTION:

Can you afford though, with the polls the way they are and the feedback from the Western Australian community on the GST the way it is for Western Australia to cop another $2 billion?

TREASURER:

Well, I can’t accept the $2 billion figure because we haven’t seen the basis for it.

QUESTION:

Well, it is Treasury figures.

TREASURER:

Well, they haven’t shared the basis for coming to those numbers with us. What I am solving is the GST relativity problem and we are very well aware of how serious this issue is in Western Australia and there is an election in around two years’ time from now – just under that and we are working to solve that problem.

QUESTION:

Are you confident that will happen? You will be able to solve it prior to the election then because obviously with the polls showing the way people feel about the GST here are you confident you can turn it around?

TREASURER:

It’s not about the polls, it’s about the unfair distribution of GST to WA – that’s the problem I’m solving for. This is what I do – there’s a problem here and I need to fix it, and I’ll seek to do that working with whoever wants to have a solution on this. There will be others who just want to play politics with it, they can focus on the polls and play politics with it. Western Australians don’t care about the politics, they just want a fair share of the GST and that’s what I’ll be working to deliver.

QUESTION:

Moody’s today raised concerns about the total value of the GST could be shrinking over the next few years, do you have concerns about the projections of how much the GST will be worth over the next couple of years?

TREASURER:

Well, no one is suggesting to me from any of the states and territories that we should be increasing the GST. So, is that what you’re suggesting?

QUESTION:

No, well, Moody’s have said that the total GST pool is likely to get smaller than projected.

TREASURER:

We provide projections on the GST pool each year but, remember, we made some improvements to the GST base. We’re taxing – through the GST – digital transactions, digital services, that came in on 1 July, we’re extending it to low valued goods under the $1,000 threshold. We would have liked to have seen that come in earlier, but the Labor Party resisted that. That will come in on 1 July next year. We’ve moved to improve the integrity of the GST base as well, and all of this has led to several billion dollars extra in revenue coming into the GST pool by us improving the GST. So, look, we’ll continue to work with the states to achieve that but how it’s shared amongst the states and territories, it’s a difficult issue and I’m not going to overpromise on that, I’m just going to keep working the problem and solve for it and if anyone wants to work with me on that in good faith, and I had a good meeting with Ben this morning – well and good if people want to play politics with it, it won’t get us to an answer any time soon.

QUESTION:

Are you confident though of the projections for the GST over the course of the next few years?

TREASURER:

Yes, they’re in the Budget and these are looked at in every update. We’ll have an update at the end of this year.

QUESTION:

Is that a warning… sorry…

TREASURER:

Sorry, someone else can have a go. I appreciate your enthusiasm though…

QUESTION:

There has been some chatter and speculation about a potential cities deal being signed while you’re in town, was that discussed with the Treasurer and are you confident that you can reach a deal whilst in Western Australia, or is it unlikely?

TREASURER:

Those discussions are continuing and Ben and I had a chat about that today as well, we spoke about housing affordability, we spoke about the NDIS, we spoke about a lot of issues as you’d expect us to. I think we got off to a good start on infrastructure funding with the WA Government here. We repurposed the money we previously had for Freight Link and, on top of that, I ensured that that contribution was excluded from the GST calculations as well – as requested by the WA Government – and I was happy to do that. There’s a raft of issues we’re working on with the WA Government and whether it’s infrastructure, whether it’s the GST, whether it’s the NDIS, affordable housing – these are all constructive issues and we’re making progress on them all.

QUESTION:

And in relation to some reports in the east coast on the leadership…

TREASURER:

A question from the phone…

QUESTION:

Sorry, the leadership tensions in relation to the same-sex marriage…

TREASURER:

That’s coming from Canberra, is it? Of course. WA aren’t in the Canberra bubble…

QUESTION:

They care about the GST…

TREASURER:

I know. You guys are focused on what Western Australians care about, now we’re getting the phone-in questions from the gallery in Canberra.

QUESTION:

The leadership chatter around the same-sex marriage debate, how confident are you that won’t happen?

TREASURER:

We have a policy on this issue, as Treasurer I’m focused on getting people into jobs, growing the economy, implementing our economic plan, that’s what I’m focused on. We have a policy on that other issue and I don’t intend to engage in it any further.

QUESTION:

Are you comfortable in spending $100 million or more on an opinion poll on same-sex marriage though?

TREASURER:

Sorry?

QUESTION:

As Treasurer, are you comfortable in spending more than $100 million on what is essentially an opinion poll on same-sex marriage?

TREASURER:

I’ll give the same answer I just gave you. Our policy on this is clear, I strongly support that policy and that’s what we took to the Australian people. Thank you very much.