20 December 2016
Transcript - #2016189, 2016

Interview with Lisa Wilkinson, Channel 9, Today

SUBJECTS: Berlin attack; MYEFO; Turnbull Government’s Enterprise Tax Plan to drive economic growth

LISA WILKINSON:

Federal Treasurer Scott Morrison joins me now. Treasurer, good morning to you.

TREASURER:

Good morning Lisa. It is not a very happy morning with these terrible events in Berlin. It is very, very saddening.

WILKINSON:

It is, we are continuing to update everyone with that news. At this stage we believe that nine people are dead and more than 50 injured. So, we will get more on that shortly but back to you, it looks like you dodged a bit of a bullet yesterday.

TREASURER:

I think the decision by the ratings agencies yesterday was expected in our view, given what we presented yesterday. We have actually improved on the decisions we make as a Government, the Budget position by $2.5 billion. That is taking into account all the election commitments we had and a lot of investment in regional Australia and in particular infrastructure and so on. We have fully funded all of that. Coming down from the Central Coast this morning on a train, that Wi-Fi commitment for the Central Coast train, that was fully funded in yesterday’s MYEFO too. It is difficult economy in which to manage these sorts of things. You have outlined the pressures, I think accurately, and the Government will continue to get on with the job and make things as tight as we possibly can.

WILKINSON:

One of the ratings agencies, Standard & Poor's, says that they remain pessimistic that you can actually return to a balanced Budget by 2021. The truth is with so many factors at play you actually can't promise that. Can you?

TREASURER:

And I haven't. I have simply said that the balance is projected to come in 2021 based on all of the assumptions and the best data that we have available to us right now. Those agencies will make their own assessments on the data that they have available to them right now. That underscores the importance of doing two things. First of all, to have policies that focus on driving investment that supports people's jobs and the extra hours, in particular, that I know many Australians want to work so they can boost their incomes. To do that you need businesses to have the support to go out and make those investments and create that extra head room in their businesses. That is why we are so keen to give, particularly small and medium sized businesses, some tax relief and we are getting resistance on that by the Labor Party who used to believe in those things.

WILKINSON:

The Government had a bit of a go back in 2014 at a hard line Budget and did a very quick retreat. Would a recession be such a bad thing? Could it be the wake-up call that we all need here in Australia that we just can't keep living like this?

TREASURER:

I have heard people say that and people say that they wish for a burning platform to do X, Y and Z. Well, on a burning platform people get burnt and I don't wish that on the Australian economy or anyone. I think it is important that we clear any fog of unreality about the challenges that we face. That is certainly what I am seeking to do and the Government is seeking to do. That’s why we need partners in the Parliament who are prepared not to borrow from our children to pay for today’s welfare benefits. Effectively that is what the Parliament is still enforcing on us. We still have $13.2 billion in saving measures, $12.5 billion of that on payment savings, particularly in the welfare area. The Parliament, particularly the Labor Party is saying we want small businesses to pay more tax because they want a bigger welfare system and we don't agree with.

WILKINSON:

And part of the problem is with so many crossbenchers, so many different factions at play it does makes any future hard cost cutting, getting it through the Parliament, really difficult.

TREASURER:

It is, but I would point to the fact that in just six-and-a-half sitting weeks since the election we were able to get through $22 billion and more of Budget improvement measures. And some of those were very difficult.

WILKINSON:

But there is still a lot stuck in Parliament.

TREASURER:

There is $13.2 billion stuck and there is $22 billion that has passed. In 6.5 weeks we have almost got through two-thirds of what we were hoping to get through over the course of this full year. So, that is far better than people expected and, I think, it was better than the ratings agencies expected.

WILKINSON:

Over the next four years you have a $64 billion interest bill. That is without paying off the debt. That is based on current record low interest rates. Are we seeing the cost of not cutting the Budget quickly enough or hard enough?

TREASURER:

We will move the Budget back towards balance as quickly as we can and as responsibly as we can. You rightly point out that needs the support of the Parliament. As long as there are deficits then the debt will continue to rise. We have slowed the growth of debt because we have slowed the rate of growth in spending. Under the former government the real growth in spending was over 4 per cent.  We have cut that back to more than half to less than 2 per cent. That is slowing the rate of debt and debt will now peak at a lower level than previously forecast as a share of the economy. That is a good thing. Over the medium term it will fall from 19 per cent down to 10 per cent. At the same time, you are absolutely right, Lisa. So long as there is a deficit we are still adding to debt and we are still saying to our kids, "you are going to have to pay for many of the current benefits that are being handed out in cash today."

WILKINSON:

As you say Australian families are going to carry this burden and yet it has been announced that the Government is planning to spend nearly $48 million on new offices, staff and parking for MPs. Is that really appropriate when everyone else is being asked by you to tighten their belts?

TREASURER:

The $30 million which you refer to, and that is for staff, that is particularly going for the crossbenchers and the other parties in the Parliament and Government as well, that is to try and ensure that the Parliament can get through the enormous volume of work in trying to get these measures through. This is in direct response to the requests that have been made of the Government to assist all of the various parties to be able to deal with the workload. We want the Parliament to work better in this 45th Parliament and we have responded to those requests.

WILKINSON:

It is not a sweetener for crossbenchers that you want to cuddle up to?

TREASURER:

I think it is practical. It supports parliamentarians right across the Parliament to get the job done. I think the public have a right to expect the Parliament to pass things, the Parliament not to operate like a stop sign, but like a go sign to get things done. We are certainly pursuing that agenda in the Parliament and we are looking for those partners.

WILKINSON:

Treasurer, we will have to leave it there. Before you go, you always make yourself available to us here on the Today Show and we really appreciate it every year. We hope you have a lovely Christmas.

TREASURER:

You too, Lisa, and Merry Christmas to all Today’s viewers. It is a wonderful, blessed time of the year but thinking of those families in Berlin and hopefully no Australians are affected – terrible news.

WILKINSON:

Let’s hope. Thanks very much.