17 August 2017
Transcript - #2017157, 2017

Interview with Fran Kelly, ABC Radio National Breakfast

SUBJECTS: Turnbull Government acting to fully fund the NDIS, providing certainty for Australians with a disability and their families; Bill Shorten’s politics of envy; wages; citizenship

FRAN KELLY:

The Treasurer joins me in our Parliament House Studio. Treasurer, welcome to Breakfast.

TREASURER:

Hi Fran, nice to be here. Nice of you to have me.

KELLY:

You will introduce the Medicare Levy Bill today. There is actually no rush to get it through, I guess, because it doesn’t start for two years. How confident are you that you have the numbers at the moment?

TREASURER:

Well, we are engaging with the crossbench on this. All of the crossbenchers right across the Senate. We have had productive discussions but I think it would be premature for anyone to suggest we have come to any agreement. We certainly are not suggesting that, we are just dealing with them constructively. It was always our intention to bring the Bill into the Parliament as soon as practical. It is important for the Budget that these significant measures are dealt with by the Parliament which provides certainty for the estimates going forward. Most importantly, Fran, it provides certainty for families living with people with disabilities, caring for people with disabilities and, of course, those Australians who live with disability every day. They deserve to have certainty about the funding of the NDIS. We want to provide them with that. I am very hopeful that the Senate will want to provide them with that and I am disappointed that Bill Shorten wants to short change them.

KELLY:

I guess I am just asking about the timing and wondering if it is a distraction from the Government's currently troubles. Senator Xenophon has told us this morning he hasn't spoken with you for at least three weeks about this and then it was just a routine Budget discussion. The Greens say nothing has changed. So how have the negotiations actually progressed?

TREASURER:

I think we are making progress but I am not overstating it, Fran. That is my point. We had always intended to bring the Bill in this sitting fortnight.

KELLY:

We spoke to Senator Jacqui Lambie earlier. She is one of the votes you will be trying to round up presumably. The higher levy, when you introduce it, when it comes in, which is in 2019, it comes in when a single person earns $21,000, I think I am right in saying, and families earn $36,000. The Opposition, we know, wants to shift that floor up to $87,000. Jacqui Lambie told us this morning she is certainly open to passing your Bill but she wants a fairer deal for lower income earners. Let’s have a listen.

Jacqui Lambie:

I think it needs to be pushed up higher. I don't think, I think Bill Shorten is calling for $87,000, it starts there. I think that is too high. I think we can find some middle ground here.

KELLY:

That is Jacqui Lambie speaking to us earlier. How much room is there to negotiate some middle ground, a higher threshold?

TREASURER:

You have got to work things through the Senate. That is always the way these arrangements are made. What is important here though is that we don't create complications in the tax system and in the Medicare Levy. The Medicare levy is a broadly-based levy. This is not about Bill Shorten's politics of envy. It is about disabilities and so we are focused on getting the funding in there for the National Disability Insurance Scheme. Other issues that Senators may address and raise, we will work through those questions with them, providing those crossbenchers with a lot of information and data at the moment. The Prime Minister made a very good point about this some months ago in the Parliament. If you have a Medicare Levy, a part of it that only comes in at a particular income, you get a massive spike in the effective marginal tax rate. That is just not good design. So, there are issues that the Senators are raising, and they are, we will work through them in the due course of taking this through the Parliament.

KELLY:

If you get it through, you are introducing it today, if you get it through and it goes through quickly is there any thought to bringing forward the start date of the introduction of the Levy?

TREASURER:

No, not at all. This is designed to bring the money in when the bills come in and that is in 19-20. So, this is a very targeted measure. In the future, governments like our government would want to reduce taxes. If it was a Bill Shorten government he would want to increase taxes. In either case, the way this is designed is that the levy at 1 per cent out of the 2.5 per cent, that would be secure. So, governments could on transfer payments, welfare payments, taxes, make whatever changes a government may wish to make but the funding flow from the Medicare Levy would be secure. Now, that is the fatal flaw in what Labor plans to do. A - they don’t accept that there is a funding hole for the NDIS. Not at all. Not one cent of their increase in the Medicare Levy is going to pay for the NDIS. Not one cent. And even if it did…

KELLY:

But 100 per cent of the increase in the Medicare Levy under you is going to the NDIS?

TREASURER:

100 per cent. All of it. And the Bill also deals with a combination of other things from other funds that also goes into the NDIS special savings account to pay for the NDIS. This is about disabilities. It is not about redistribution of income. It is not about Bill Shorten’s politics of envy. This debate is about Australians living with disability.

KELLY:

The increase will cost a worker on $70,000 a year about an average of $350. At the same time you will raise taxes on eight million Australians. We have had confirmation yesterday that wages have stalled at a record low. Earnings for around 10 million workers in the private sector have actually just fallen below the CPI. So, households are not keeping up with the cost of living. How do you expect average income earners to afford a higher levy? It is a double whammy isn’t it?

TREASURER:

It’s in 2019-20, and unlike others, I don’t share the view that the Australian economy and wages won’t lift into the future, particularly if we continue to make the good choices we’re making around the economy - investing in infrastructure, investing in our defence industry capability, lowering taxes for small business, making the decisions that actually grow your economy because that’s how you lift wages.  You don’t lift wages by increasing taxes. That’s not what we are doing.

KELLY:

Were you shocked by this wages figure…

TREASURER:

No.

KELLY:

Because you’ve been promising for a while, better days ahead, and the result, as I say for the private sector, 0.4 per cent over the quarter, the weakest result since the GFC, which is 10 years ago this month.

TREASURER:

The near-term forecast for the Budget was at this level. So this was exactly what we’d put in the Budget. It was totally in line with what the near-term forecasts were for wages.

KELLY:

Wages growth, I thought the Budget was 2.5 per cent forecast in the Budget?

TREASURER:

This figure was for the last financial year.

KELLY:

So you’re confident that you’ll hit that 2.5 per cent?

TREASURER:

We look at these figures every update Fran, and we’ll do that again at the end of this year and we’ll update those if they need to be updated.

KELLY:

You’re listening to RN Breakfast, our guest is the Federal Treasurer Scott Morrison in the Parliament House studio. Can I move onto the citizenship debate. The Government has been ridiculed really over the last few days for its response to Barnaby Joyce’s predicament with the allegations of treachery and international conspiracy theories. The Government looked a little desperate. Are you?

TREASURER:

No Fran. I’m surprised that people, particularly here in the gallery, have been taken in by the faux outrage of the Labor Party. They’ve looked like, frankly, a bunch of children carrying on at a Christmas pantomime.

KELLY:

Why is that?

TREASURER:

All the chortling, and all the carrying on that we’ve seen by the Labor Party, it’s all part of a tactic. The bottom line is this, rather than come into the Parliament and raise these questions, what they’ve done, in a very sneaky sort of way, is run around over there in another country and try and dredge all this stuff up. It’s just been sneaky. Now I know some people here think it’s terribly clever of them to do this, and they give them great credit points for doing this, but the bottom line was, it was pretty dodgy and I think the Australian people get that.

KELLY:

Bottom line, is it dodgy that Barnaby Joyce, who has been, from his own admission, a New Zealander, New Zealand citizenship, dual citizenship since the time he entered Parliament until just this week, is still sitting in the Cabinet, is still Deputy Prime Minister and still casting votes? Why shouldn’t he step down from Cabinet and not vote in the same was Matt Canavan has left the ministry and is not voting. 

TREASURER:

The two circumstances are different but the other issue is, Matt took this decision and the Prime Minister, based on very strong advice, has taken a decision in relation to Barnaby that he has. But let me also stress this, the question you’re ultimately asking Fran is a question being considered by the highest court in this country…

KELLY:

That’s right and while they consider that is it appropriate for someone, I mean Barnaby Joyce in a few weeks’ time will be acting Prime Minister.

TREASURER:

Of course it is, and the Speaker himself made that point in the Parliament this week.

KELLY:

Can I ask you finally, about Michael Keenan’s situation. There’s suggestions today that he could be a British citizen, because by [inaudible] of his father being born in the UK. Now the Minister has put out a statement saying I renounced my citizenship in 2004. Should Michael Keenan, if there are questions, have to show his paperwork is in order?

TREASURER:

Well Fran I think you’ve already answered the question you’ve just asked me by referring to Michael own statement…

KELLY:

Well Malcolm Roberts made that statement and he’s been referred to the High Court.

TREASURER:

I think the matter has already been addressed by Michael and I’m happy with his comments.

KELLY:

And the Government’s not asking to check his paperwork?

TREASURER:

I know that we would be very satisfied about these things and I think Michael dealt with this a long time ago, as he’s already pointed out.

KELLY:

Treasurer thank you very much for joining us.

TREASURER:

Thanks a lot Fran.