12 December 2017
Transcript - #2017245, 2017

Interview with Miranda Devine, Miranda Live

SUBJECTS: Budget; Australia’s strong economic growth; Turnbull Government’s strong actions to combat multinational tax avoidance; Labor’s vote against the Turnbull Government’ strong Multinational Anti-Avoidance Laws; reducing taxes for businesses and individuals; Bill Shorten’s war on business and the economy; National Broadband Network; Turnbull Government; religious protections; Bennelong by-election

MIRANDA DEVINE:

Thank you for joining us, Scott Morrison, and you're in the studio on only our second Miranda Live show. Did you happen to watch Q&A last night with the Prime Minister?

TREASURER:

I missed it, I was 'Love Actually' with my wife actually – it's something that we do every year at Christmas – but I knew he'd do a great job and all the reports are exactly that so I was pleased to hear it.

DEVINE:

And that is such a good movie and that is exactly what you should be doing…

TREASURER:

At this time of year.

DEVINE:

I'm very glad to hear that you've got a healthy life. Q&A is a very unhealthy pastime I believe but the interesting thing, for me, about the show is that there was not a single question on the economy or debt or anything that really matters.

TREASURER:

And this surprises you because?

DEVINE:

Well, it doesn't really surprise me at all. It is the ABC after all but it was just the ABC agenda – you know, refugees and all the other Greenie rubbish but look, I wanted to ask you. Coalitions used to be famous for bringing down debt but after more than four years, the debt's even larger. What happened?

TREASURER:

Well, we've still got a deficit. That's the problem and we're reducing the deficit and in the last financial year, we brought it in just over $4 billion better than what we said we would and we're still on track to have our projected balance in 2020-21. We first said that back almost two years ago now and we've stayed on that track and we'll continue to stay on that. We've got the Mid-Year Statement that will come out early next week and that will update all the Budget figures and people will be able to see that. We just had the National Accounts come out so we had to wait to get those numbers to build all that into our forecasts. The growth in debt has fallen by two thirds since we came in and on top of that, our growth in expenditure is at the lowest level of any government in 50 years.

DEVINE:

Is that right?

TREASURER:

That's right.

DEVINE:

So spending to GDP?

TREASURER:

The growth in spending year on year, real growth in spending under this Government is at the lowest of any Government in 50 years and our growth in expenditure is lower than the growth in revenue which means you get back to balance.

DEVINE:

Still a very big spending Government though, isn't it?

TREASURER:

Well, no, it's not actually. At the end of the current Budget period, we'll have spending back at 25 per cent, a quarter of the economy. Now, when I became Treasurer, it was over 26 per cent. So, we are getting spending under control. It is growing at a very slow rate when you compare it to previous governments, even slower than it was under the Howard-Costello Government.

DEVINE:

Now, Treasurer, I believe that you have a scoop for us, an exclusive that you've brought especially for 'Miranda Live' which is good news for Australians?

TREASURER:

Well, you might remember two years ago, we passed the Multinational Anti-Avoidance Laws. The Labor party voted against having multinationals pay their fair share of tax. They talk about it but what we did was pass those laws, we put them in place and we put in place a Tax Avoidance Taskforce and in the first quarter of this financial year, that taskforce has already been able to raise some three quarters of a billion dollars in liabilities both from multinationals and from wealthy Australians and associated groups including all the trusts and these sorts of things. So that's three quarters of a billion dollars alone just because of the work of our Multinational Anti-Avoidance Laws and the Tax Avoidance Taskforce that we've put in place to make sure that when people earn in Australia – well, they just pay their fair share of tax, they shouldn't have to pay more, they should just pay what they should pay.

DEVINE:

So in plain language, that just means that people who have been getting out of paying tax – whether it's companies or high wealth individuals, trusts and so on – you've now cracked down on those tax loopholes and you are getting three quarters of $1 billion in one quarter, which means…

TREASURER:

There would be $3 billion over the year. Now, on top of that, you've got 34 companies now – so big multinationals – who have now completely restructured how they do things in Australia so they will be paying tax. They weren't before and the new laws have made sure that they're doing that. There's just under 560 Australians and trusts that are under close review and audit by the Tax Office and we've got quite a team that's working on this. So we're a Government that's been focused on making sure the tax system has integrity and it's getting results.

DEVINE:

Now, tax cuts, I know when I spoke to you a while ago you were against personal income tax cuts because you said the Budget couldn't really afford them but now the Prime Minister has announced those. Was that something that you were on board with?

TREASURER:

No, I've never been against personal income tax cuts.

DEVINE:

But you said we couldn't afford it.

TREASURER:

I had already delivered – we had delivered two lots of personal income tax cuts already. In my first Budget, we lifted the tax threshold from $80,000 to $87,000 so that meant if you had an ordinary average full-time wage in this country, you wouldn't have gone into the second highest tax bracket. So that was dealing in a modest way with bracket creep. And also, we got rid of the deficit levy and as you know…

DEVINE:

That's right.

TREASURER:

There was enormous pressure on maintaining the deficit levy and that was a commitment that we made back when it was put on that it would come off and, as Treasurer, and the Prime Minister, we made sure that it did come off. Now, I've always – every time I get the opportunity to cut someone's taxes, I will.

DEVINE:

So, the personal income tax cuts, will that come before the next election?

TREASURER:

I haven't said too much more about when this is going to happen and neither has the Prime Minister. We've got a Budget coming up next year and there's two Budgets before the next election and we'll be working hard to ensure that we can deliver those in a way that doesn't put at risk going back into Budget balance and that it doesn't put other elements of the Budget at risk – and particularly, our AAA credit rating. It was this time last year where Bill Shorten and Chris Bowen were running around saying that we were going to lose the AAA credit rating. They were talking down the economy and guess what? As usual, they were just making it up.

DEVINE:

We saw just a couple of weeks ago, the Business Council of Australia complaining that they had a lunch with Bill Shorten and he basically declared war on business. He said he didn't care.

TREASURER:

He doesn't. He thinks he can just do whatever he wants and there'll be no impact on the economy. There's $164 billion of taxes – additional taxes – that Treasury has now costed that Labor will introduce if they're elected to Government. There's taxes on housing, there's taxes on investment, there's new taxes on family businesses through their trusts, there's new taxes on businesses themselves. We've got the Bennelong by-election on Saturday and there's just under 18,000 small and medium sized businesses in Bennelong and they've already had tax cuts legislated by what we introduced in the Budget before the last election. Now, the Labor party are going to reverse those. They're going to reverse those and that's a $25 billion tax just on small business and medium sized businesses alone…

DEVINE:

But big business is not very helpful to the Coalition. You just get the feeling that they're not out there spruiking for you. Labor's got the unions spruiking for them but big business tries to be all things to all people.

TREASURER:

For large businesses I think we have to remember that they're big employers in Australia and the story is as much for them to tell as anyone else who's interested in the economy, as the contribution large businesses make in big investments, in big projects, employing lots of people. But on other occasions, what we've seen and how we've had to take on particular practices within the banks but also how we've had to take on particular practices with retail energy companies as well we've been getting good results on both of those fronts. They've got to be accountable for their own decisions and the way they deal with customers so we'll always represent the customer when it comes to those things. But at the same time, we need to recognise that people work in these large organisations, their job depends on it, their incomes, their wages – and so, for Bill Shorten to declare war on business, I think is a pretty numpty thing to do.

DEVINE:

Now, how's the economy going overall?

TREASURER:

Our annual growth rate went back up to 2.8 per cent…

DEVINE:

Isn't that really because of faster population growth?

TREASURER:

No, no, I've heard this line. It's actually because business investment has been growing and we've been waiting for that to happen at this level now for several years. Business investment is up 7.5 per cent on new business investment. We've got public – what's called new public final demand – which is investment in things like infrastructure and roads and bridges, as well as our huge investments in defence. That was up 12.5 per cent and so while people spending in the shops was actually quite flat in the September quarter, what made up for that was actually the surge in investment that we've had in businesses going out there and backing themselves and the economy and that followed a Government that was lowering their taxes.

DEVINE:

Sure, but aren't we a bit addicted to GDP growth depending on large migration?

TREASURER:

No, I wouldn't argue that…

DEVINE:

Aren't governments afraid to cut migration numbers because they're worried of the hit to the GDP figure?

TREASURER:

No, we should have population growth that can be supported by our infrastructure and you can have population growth that can run ahead of your infrastructure but it's a bit like talking about average rainfall, Miranda, population growth in Western Australia, South Australia, Tasmania, parts of Queensland…

DEVINE:

But are you comfortable with migration levels at the moment?

TREASURER:

Where they're currently sitting, they're contributing to the growth of the economy.

DEVINE:

So the NBN…

TREASURER:

Let me go back to that point, because I know that for many of your listeners, this will be a concern. If you have a population growth that's across the whole country, that doesn't mean it's even in all parts of the country and so while you have places like Sydney and Melbourne that can be quite congested, you've got places like Adelaide and South Australia…

DEVINE:

But no one wants to live there. Who wants to live in Adelaide?

TREASURER:

…that are going backwards because their population growth is not going strong enough.

DEVINE:

Because no one wants to live there. New migrants are not going to go and move to somewhere where there are no jobs and there's no electricity.

TREASURER:

That's why you need a change of government in South Australia so you can get the growth coming back into that economy…

DEVINE:

But meanwhile, Sydney and Melbourne end up overloaded.

TREASURER:

We've seen Western Australia post-the mining boom, they've had population growth challenges in more recent days. That's one of the reasons why we've got the problems that we have in Western Australia. We need a migration program that's responsible and a migration program that is responsible is one where the government controls it, where the government is in control of its borders and is deciding who comes to the country and as John Howard famously said, "The circumstances in which they come." And that's what we're doing.

DEVINE:

Right, the NBN, the Government spent about $50 billion on the NBN. It's a dog. Why don't you just close it up and forget about it?

TREASURER:

It was a dog…

DEVINE:

Still is a dog.

TREASURER:

It's a dog that's been turned into something much more improved on that…

DEVINE:

How come you had to stop the roll-out to fix all the problems? Including in my house by the way.

TREASURER:

Look, it's an enormously large project. It was a project that overpromised…

DEVINE:

But it wasn't your project. Why are you saddled with it now? It will be around your neck like an albatross.

TREASURER:

We need economic infrastructure, Miranda.

DEVINE:

Not really.

TREASURER:

Broadband? No one would be listening to this program.

DEVINE:

They're probably listening on their phones.

TREASURER:

I hope they are and I hope they're listening on their computers and all the rest of it. But building our digital infrastructure, our telecommunications infrastructure is important as building roads and bridges and power stations…

DEVINE:

But Malcolm Turnbull as ex-Communications Minister said that it was old technology. He said wireless is going to supersede and by the time it's rolled out…

TREASURER:

We're technology neutral and we are fostering an environment where you're seeing wireless actually expand. But at the same time, this is a project which is also going to build productivity in Australia and yes, we inherited a terrible project – ill-conceived, costs blowing out all over the place, over-promising and was always going to under-deliver – and over the last four years, we've been setting about getting that straight and we're rolling it out.

DEVINE:

But you're going to have to write it down at some point because it's not really an asset.

TREASURER:

Again, where it sits on the balance sheet depends on the return on equity, not on the asset value. So that's a detailed, technical discussion which I fear would only bore your listeners.

DEVINE:

Alright, let's just quickly get on to leadership, you were talked about as a potential leader during the Abbott years and then because of the angst which happened over the coup, your stocks amongst conservatives fell because you were accused of having been disloyal. Now, I personally didn't think that was fair but you were – I know you voted for Tony Abbott in the coup – but you were supposedly didn't make your block of votes that you controlled also vote for him. What do you say to that now two years later?

TREASURER:

I don't say anything because it doesn't change what I do every day and it hasn't changed what I've done over the four years that I've served as a Minister and had the privilege to serve as a Minister. In Immigration, I did my job and I got the results. In Social Services, it was the same thing. One of the reasons why our Budget is really starting to perform a lot better than it was is because the changes we've made on cracking down on welfare are really starting to pay some dividends now. The fact that we actually have to have people fill out their forms accurately and honestly means that people are not taking a lend of the system in the same way they used to be so they were changes we introduced, the same in child care and now I've moved into Treasury and the deficit is falling and the rate of growth of debt is falling and we're getting back to balance.

DEVINE:

Exactly. So you do a great job. Whatever you do you do a great job which is why you must have a baton in your knapsack. If Malcolm Turnbull fell under – God forbid – the proverbial bus, would you stick hat in the ring?

TREASURER:

No one's driving a bus and I'm sure he'll stay away from buses for the good sake of the party but for mine, I just love doing what I do. John Howard gave me great advice many years ago when I was interviewed to be the State Director of the Liberal party – a long, long time ago – he said, "Do the job you've got well."

DEVINE:

Now, conservatives actually have come back to liking ScoMo I believe in the party room because you stood up – when many others didn't and really no one in the Cabinet apart from you – for religious freedom and I know that you spoke about that in your maiden speech and you know the marriage bill that went through last week, there were several MPs, backbenchers like Andrew Hastie and Assistant Ministers like Michael Sukkar, who stood up and spoke to amendments but you were the most senior person, why did you do that?

TREASURER:

Because I believe in it. There was no great shock – well, there shouldn't have been any great shock to anyone about my views on that – I've held them my entire life and I've been quite upfront about them. I talked about them in my maiden speech in the Parliament…

DEVINE:

But last night, when I asked Malcolm Turnbull about this, the Prime Minister, he genuinely seemed to be mystified about the idea that the marriage bill would have any impact on anyone's freedom of speech or freedom of religion or freedom of conscience.

TREASURER:

Well, I know Malcolm feels strongly about religion in Australia and that it should be protected and I moved amendments along with the colleagues you mentioned – Alex Hawke was another one – and the overwhelming majority of Liberal and National party members, and Liberal party members in particular, voted for those amendments and so the people who voted against them were actually the Labor party and they did so as a block and they didn't even let them abstain. It was really disappointing. This was supposed to be a conscience vote and I respect my colleagues on my side of politics who may have a different view to mine and they got to vote their conscience just like I did, but this is something I've always felt strongly about. I have my own faith but that's not really the point. Everybody will have some type of faith or belief system and in this country that matters. It matters to identity and particularly for religious and ethnic communities, particularly in this city. I'm quite close to the Lebanese Maronite community for example among many others. If you go – I spoke about it in my speech to the Parliament – I went to Lebanon when the current Bishop was ordained there and I did a tour along…

DEVINE:

That's Maronite Bishop Antoine Tarabay?

TREASURER:

Maronite Bishop Antoine Tarabay. And I went to some of those northern villages – which is where many of Sydney's Lebanese community are originally from – Bcharre – I mean, you mention them in the Lebanese community and you get a cheer on every village that you mention – Hardine and so on. But when you look at those communities and what they've survived over a millennia, you start to get why faith, belief and religion is intertwined with community, family and survival and it's a big part of who they are. And when the bill went through last week, for many people of faith and religion in this country, they were wondering, "Well, what's next? What's next?" We've had the madness of the Safe Schools program and we're raising a generation of children for whom gender is apparently ambiguous for all of them. Now, I accept that in some specific cases there are specific cases but to mainstream that, I think, and create that ambiguity for most children, we do this having no clue, as Lucy Wicks said in her speech in the Parliament, about what the implications of that are. As a Member of Parliament, let alone a member of the Government, I'm pretty keen to ensure that we keep some common sense here.

DEVINE:

So how will that happen? Will the Ruddock review – there's only yes voters on the Ruddock review, not no voters, no campaigners – we have Frank Brennan who was a yes campaigner…

TREASURER:

You're making assumptions about everyone on that panel and I don't think you can, by the way, but that's for them to say. But moving beyond that, this wasn't meant to be a panel that was going to be the heads of the five families of every faith group in the country. That was not its intent. This is the process now through which people of faith and religion, or no religion for that matter, can make their submissions to Philip's review and that he – with his colleagues – can carefully consider that and bring that back to the Prime Minister. So this is a report to the Parliament, this is a report to the Government and this will be able to be considered by Cabinet and so I think there's a real opportunity here to see proper protections put in place but done in a sober way. I'm for religious freedom, I'm not for religious extremism. We don't want to create protections for religious extremism and I think everyone would agree with that. But we've got a good sensible process…

DEVINE:

But the amendments were not anything to do with religious extremism?

TREASURER:

Of course they weren't, no, not at all and the suggestion that they might have been, I just don't accept…

DEVINE:

Ridiculous, yes.

TREASURER:

And I said so at the time.

DEVINE:

Now, Bennelong, how do you think you guys will do? It's 50-50 now and of course, you're talking about Maronite Catholics – a wonderful 25 year old Joram Richa – is there for Australian Conservatives, your former colleague Cory Bernardi – and he's got 7 per cent on his first hit-out. That tells you something about how conservatives, social conservatives, feel about the Liberal party, doesn't it?

TREASURER:

I understand they're running a fairly constructive campaign and cooperating well and they're preferencing the Liberal Party strongly in Bennelong – so we welcome that. I was up there again this week and I found of those on sort of our side of the fence, the Liberal conservative side of the fence, there's a lot of cooperation and a lot of support amongst the candidates there. There's no animosity towards John Alexander from the Australian Conservatives or the Christian Democratic Party or anything like that.

DEVINE:

No.

TREASURER:

They're not running against John Alexander…

DEVINE:

But that 7 per cent should be yours.

TREASURER:

In many ways I think they're running in support.

DEVINE:

Sure, but that 7 per cent should be the Liberal party's and that shows you've lost your way, doesn't it?

TREASURER:

No, I don't think it does. I think the politics can move from time to time and people will respond in different ways. The economy over the last ten years since the GFC has caused a lot of frustration and when people feel frustrated they will move to different parties based on their own motivations and that's to be anticipated. What we have to do as a party is remain true to what we're about, particularly when we're talking about the economy, and that is to keep expenditure under control, bring the Budget back into balance, get debt down, make sure spending isn't wasted on programs that it shouldn't be wasted on and that's exactly what we're doing.

DEVINE:

Sounds fantastic and very Merry Christmas, Treasurer Scott Morrison. I'm just assuming we're going to get that tax cut before the next election – I'm just going to read between the lines.

TREASURER:

Well, I'm sure there'll be plenty of that – Budget speculation is starting early this year – but anyway, it's good to be on the program, Miranda.

DEVINE:

Thanks so much.

TREASURER:

I wish you all the best with it.

DEVINE:

Are you getting a break?

TREASURER:

I will be getting a break. I'm looking forward to getting away with the family and spending some quality time.

DEVINE:

Where do you go?

TREASURER:

I head down the south coast which we've done for a very long time so it'll be great.

DEVINE:

Good on you. Just like John Howard used to.

TREASURER:

He used to go up to Hawks Nest, I think, he used to go up north but I've been heading down there a long time, it's a beautiful part of the world but I won't say where because I don't want people to discover it because it's wonderful.

DEVINE:

No, exactly. Good on you. Thanks so much for coming on the show, Scott Morrison.

TREASURER:

Thanks, Miranda.