20 December 2016
Transcript - #2016188, 2016

Doorstop Interview, Canberra

SUBJECTS: Enterprise Tax Plan, Mid-Year Economic and Fiscal Outlook.

QUESTION:

Treasurer you mentioned in your interview with Kim Landers earlier about the importance of getting this tax cut passed for businesses up to $10 billion. Is the Government thinking of splitting it into a ten billion section and then trying to get the rest through later?

TREASURER:

The Government is putting its Enterprise Tax plan to the parliament in full and we’ll continue to pursue that.

QUESTION:

Mr Treasurer, you have a surplus forecast in 2021 which is about a billion dollars which is wafer thin, given all the things which drive growth in the Budget you’ve downgraded in MYEFO, growth in real and nominal terms, wage prices and inflation. Do you accept it won’t take much to knock that surplus forecast off and all of a sudden in 2021 you might turn into Wayne Swan?

TREASURER:

The projection for 2021 is based on the economic parameters and the other assumptions that are set out in MYEFO, and I think those assumptions and parameters are very transparent. They are very clear. I think one of the reasons why the ratings agencies have affirmed the position they did yesterday is they’ve seen for the Government a very honest and transparent account, the Labor party had to reluctantly agree to that yesterday. I don’t recall the last time where there’s been bi-partisan forecasts in a Budget and I commend Treasury on the work that they’ve been able to do around that, and I think that adds to the credibility of the document. Those issues are set out in the document. That’s what a MYEFO does.

QUESTION:

How vulnerable are we though? What if there’s further downturn in China? Surely that could throw that surplus plan off path?

TREASURER:

These issues again, they’re set out in MYEFO. I make this very important point. No one should be under any illusion about the economic challenges that we face. I was just asked on one of the programmes there about whether the country needed to go into darker economic times. I don’t want the Australian economy to go into darker economic times, I want to continue to pursue the changes and reforms that are necessary to set up the next 25 years of economic growth. I’ve said it on many occasions. I don’t want our kids to face the sorts of things that were faced 25 years ago, I don’t believe that that is going to occur, or about to occur, but we can’t be complacent about it.

QUESTION:

You’ve had the triple-A credit rating renewed or affirmed by all three rating agencies, there’s been much made of that triple-A credit rating, but is what is good for ratings agencies always what is good for the country.

TREASURER:

The Government has to govern in the national interest, and doesn’t do so only with an eye to what ratings agencies may say from time to time, they will make their assessments, but the Government always has to make it’s assessments about what’s in the best interests of the Australian people and the national economy. I think those assessments are very aligned at the moment. That is a repeated, or reaffirmed I should say, in the judgements they made yesterday on the MYEFO statement. The Government will always do what is in Australia’s national interests. We will do what is in the best interest of the national economy. We have two very important tasks. We need to get the Budget back into balance. That is true – why? Because that is what improves our fiscal strength and resilience in an uncertain world and enables us to deal with shocks and other challenges that come our way. Why do we need to get the Budget back into balance because we need to get the debt under control because we can’t expect our kids to have higher levels of debt and higher levels of taxes because people want more benefits today. That is why you have to get your welfare system under control and that is why you have to bring the Budget back into balance. The other key thing we have to pursue is to drive growth in our economy. Once you get the Budget back into balance, as occurred under the Howard Costello Government, what drove the debt down was the growth. That is what drove the debt down and that is what we have to achieve as well. That is why investing in our economy, whether it is in infrastructure, as we are already doing, or with our defence procurement plan over 20 years, or our export trade deals, or our innovation and science agenda or particularly our enterprise tax plan – all of these things are designed to drive growth in the economy now. Now, there is no plan from the Labor Party. The Shadow Treasurer was literally caught at sea with no swimmers and the tide went out yesterday when it came to his questions to him on their economic plan. There was zip, zero and nothing. By contrast, the Government sent out a national economic plan for jobs and growth in this year’s Budget, $22 billion of measures have already been passed in just six and a half weeks of sitting. Next year we are coming back and we want to see $13.2 billion more passed between now and the Budget. In May of next year we will bring down the Budget which will add to that plan of jobs and growth.

QUESTION:

You mentioned the $10 million figure there I am just wondering what the thinking was around that – why you mentioned that?

TREASURER:

There are two measures in the enterprise tax plan. There is the measure which deals with lifting the threshold of a small business definition to $10 million and that is one part of the enterprise tax plan and there is the broader part of the enterprise tax plan which sees the overall level of corporate tax rates drop to 25. So, they are two specific measures within the enterprise tax plan. On that note, Merry Christmas, have a great break. There is a lot of work to do next year. Can I also say, having just heard about these absolutely terrible events in Berlin at this most sensitive time of year our thoughts and prayers are with those families and hopefully no Australians are affected but perhaps family members are. It is a horrible reminder that even at times like this which are supposed to be full of joy and family and faith and all of these sorts of things, it is a terrible reminder of the evil that is out there in this world. I think it is an important thing to do as we go into this Christmas break to count our blessings. This is a wonderful country and we thank God for it. Thank you.