19 December 2017
Transcript - #2017249, 2017

Interview with David Koch, Channel 7 Sunrise

SUBJECTS: MYEFO

DAVID KOCH:

Treasurer Scott Morrison joins us now. Treasurer good to see you from the fruit markets there. Let's focus on a couple of particular issues. First of all, lower wages grow, we are not going to get big pay rises for a while and unemployment still above 5 per cent when the US is down just over 4 per cent. Are they a concern?

TREASURER:

We have had the best jobs growth numbers on record over the last 40 years. This year we have had 1,000 jobs being created every day this year and that has never been bettered. As we see the labour market get tighter, then we would expect to see that flow through in wages in the years ahead. The good news is that the projected debt is down. The deficit will be less this year, some $6 billion less. That is particularly because we're getting welfare spending under control. Most of the heavy lifting in this improved result is actually because payments are going to be lower. There is a revenue uplift as well but that is only about 30 per cent of the story. 70 per cent is better spending.

KOCH:

Ok. Let's not get too carried away here because you say government debt is dropping, government debt is actually still rising, it is just less than you predicted. Government debt still goes up, which is why I find the hint of personal tax cuts may be a bit getting ahead of ourselves. Do you think we should chalk up more surpluses and get rid of the that debt before passing on tax cuts?

TREASURER:

Well first of all net debt is actually going to fall in nominal terms over the forward estimates and over the next ten years. It will fall to around 7.7 per cent of GDP.

KOCH:

A long way out.

TREASURER:

No it is peaking next year David at 19.3 per cent of GDP and it is falling. Net debt is falling in 19-20 and beyond. They are the numbers.

KOCH:

But the actual debt keeps going up.

TREASURER:

Well that is because we are building roads, we are building railways, we are building airports.

KOCH:

I know what you're doing. There is good and bad debt. Don't worry I know what you are doing. I just think hinting at personal tax cuts is just pork barrelling. We are not in surplus yet. We will get there. We have big debt. Shouldn't we be paying that down first before passing on tax cuts?

TREASURER:

What we want to see is middle income earners in Australia have more money in their pockets which will also be good for consumption. As you know, the September quarter figures were very flat. Walking around the markets here today, they want to see more money going through their tills and consumers out there spending more. We have seen that flat. That is why we have been doing so much to get energy prices under control and the National Energy Guarantee will lower energy prices by $400 for the average household bill. So we need to get the pressure off consumers, pressure off households so they can be out here where it is mangoes and cherries in season at the moment. I have had my offers this morning and they are tasting good.

KOCH:

Are you being a bit mean to university students making them pay back their HECS sooner?

TREASURER:

It is not a grant, it is a loan. That is the whole point. More than half of a university student's education is paid for by the taxpayer and then there are fees for which they can get lower interest loans and they should be paid back. We have around 25 per cent of the debt that won't be paid at all, a third of courses that are not being completed. There is plenty of room there to focus spending that money better in the university sector.

KOCH:

Will you be Treasurer tomorrow? Are you going to stay Treasurer in the Cabinet reshuffle?

TREASURER:

Absolutely. I welcome that. We are getting on with it. We're turning the debt ship around, David. But out here in the markets, it is all good for Christmas and we are looking forward to a great new year.

KOCH:

Spruik the mangoes. You have a very good Christmas too. Thanks for your time.

TREASURER:

Thanks David.