19 December 2017
Transcript - #2017252, 2017

Interview with Kim Landers, ABC AM

SUBJECTS: Reducing the tax burden on the Australian economy; Bill Shorten’s $164 billion in higher taxes; MYEFO 2017

KIM LANDERS:

Treasurer, is Scott Morrison and he joins me on the line. Treasurer, good morning.

TREASURER:

Yeah, hi Kim, how are you?

LANDERS:

Well thank you. Now that you’ve got these updated budget numbers have you figured out how to deliver personal tax cuts for low and middle income earners?

TREASURER:

Well this was an important set of numbers to be able to work from to achieve that goal and that’s obviously the goal that the Prime Minister has set out and we’re busy about working that through now over the lead up to the next Budget and Budgets beyond that.

LANDERS:

So how big might these tax cuts be?

TREASURER:

Well that’s a matter for budgets to have that included in Kim, I’m not about to go into that at this point. I didn’t say they were going to meet MYEFO and we’ve just released that document now and we now work towards the next Budget.

LANDERS:

But a tax cut is guaranteed?

TREASURER:

Well what I’m saying is the Prime Minister has made that very clear that we’re going to look to provide relief in the tax system for middle income earners and that’s the mission and I’m now setting about the task.

LANDERS:

So when exactly do you think people will see that extra money in their pocket?

TREASURER:

Well when they’ve been delivered and when they’ve been announced.

LANDERS:

Will it come into effect though, are you trying to make sure that these personal tax cuts can be delivered into people’s pockets next year?

TREASURER:

Well what I’m saying Kim is that when there’s further to say about that, I’ll say more about it. But right now we’ve just delivered the mid-year statement which shows that we’ve got a $6 billion improvement on what we thought this year would be, that backs up a $4.4 billion improvement on last year. The net debt is actually less than what we projected it to be and in fact the debt deck falls over the forward estimates, it falls from $363 billion down to $355 billion between 2018-19 and 20-21. So we’re turning the debt ship around and we’re getting the deficit under control. In fact we’re reducing it and it will be gone by 20-21.

LANDERS:

You’ve had trouble getting your full company tax cuts through parliament, are you happy to concentrate now on trying to deliver personal tax cuts rather than pursuing those corporate tax cuts?

TREASURER:

No, I want to see the tax burden lower on the Australian economy. That’s what is going to drive the investment and the jobs and the higher wages that Australians need and depend on. You don’t get that way by having higher taxes, you get that way by lowering taxes.

LANDERS:

So what’s your plan of trying to get those corporate tax cuts through Parliament because you haven’t been able to so far?

TREASURER:

We’re just going to continue to make the case. The Labor party, Bill Shorten’s standing in the way of this change that will actually support higher wages, stronger growth and more jobs.

LANDERS:

Could you perhaps tweak that corporate tax cut package in order to convince Labor and the crossbenchers to support it?

TREASURER:

Pardon me?

LANDERS:

Could you perhaps tweak your corporate tax cuts package?

TREASURER:

Well look the Senate is where we have to get this through and we’ve been trying to get it through for some time and as usual Bill Shorten is standing in the way of economic progress. He wants higher and higher and higher taxes, in fact $164 billion worth of higher taxes it has been costed by Treasury as a result of the policies that he’s announced. Now that would be one big Mogadon on jobs and growth in the economy and the economy can’t afford it and we’re not going to allow him to put that sort of stress on the economy by ensuring that he never becomes Prime Minister.

LANDERS:

Wages growth is going to be smaller than predicted, what do Australian workers have to do to get a pay rise?

TREASURER:

Well what we have to see is a sustained growth in profits. For three years the average growth in profits was negative and we had small and medium sized businesses in particular dipping into their own pockets, not taking wages, to keep people in jobs. Now in recent times, in the last year or so, we’ve seen profits improve and that’s welcome but that has to be sustained. And when that is sustained as the labour market continues to tighten, we’ve got more than 1,000 jobs being created every day this year, that’s record jobs growth, the highest in forty years since records have been kept - and as that continues and we see more people getting into work then that will obviously create more pressure in the labour market which can lead to better wage outcomes as is forecast in the Budget. In the Budget we’re forecasting that wage growth will increase, it’s moderate but it’s certainly increasing.

LANDERS:

You’ve frozen enrolment based funding for universities, do you have an estimate for what that will do to student numbers and participation particularly in regional areas?

TREASURER:

Well there’s no reason it should have any impact.

LANDERS:

So you’re not, you don’t think it’s going to restrict access to places in regional areas because that is a concern from Universities Australia?

TREASURER:

Well they would say that and if they do that it will be as a result of their decisions.  They’ve been building up balances now for some years in that sector and yet we’ve got a third of students not completing their courses, we’ve got 25 per cent of debts not being repaid. There’s work to be done in the university sector to turn a lot of these numbers around based on the funding they’re already receiving. It’s frozen for two years. We sought to do longer term reform in the sector. That was resisted by the Labor party once again in the Senate. As a result of that we’ve reversed out all of those other savings measures and we’ve gone now with these ones, which wasn’t our plan A, it’s plan B and that’s come at a cost to the budget of $500 million. So higher education as a result of the announcement yesterday is $500 million higher than it was at the Budget.

LANDERS:

A ministerial reshuffle is looming. It’s an open secret that the Attorney-General George Brandis will become the next High Commissioner to the UK. Would that be well deserved for him?

TREASURER:

I have no doubt and if that’s what is confirmed today then I wish George all the best for that next phase of what has so far been an incredible career of public service. George has led our Senate well and he’s had been in the Parliament for many years and he’s done a great job serving both his country and the Liberal Party.

LANDERS:

Do you think it’s reasonable that the Nationals retain five spots in the Cabinet?

TREASURER:

Well they’re matters for the Prime Minister and the leader of the National Party, I’m sticking to the Budget.

LANDERS:

Will the Government’s record on the number of women in the Cabinet improve with this reshuffle do you think?

TREASURER:

Well again these are all matters for the Prime Minister. Treasurers focus on the books, Prime Ministers pick the team.

LANDERS:

Treasurer thank you very much for speaking with AM this morning.

TREASURER:

Thank you, Merry Christmas to all of your listeners.