21 February 2014
Transcript - #2014010, 2014

Interview on Sunrise, Channel 7

SUBJECTS: G20 and social expenditure

NATALIE BARR:

Our Treasurer Joe Hockey will be playing host as G20 President. He will rub shoulders with key economic leaders of the world. Joe, we should call you “Mr President” this morning.

TREASURER:

I am a Republican, but, no, that would not work.

NATALIE BARR:

Why is it so important to have these world figures in our backyard?

TREASURER:

The eyes of the world economy are on Australia this weekend. We are coming together to try and focus on how we can grow the global economy and create more jobs. It sounds like a lot of words but it really does have an impact on everyday Australians. We will be discussing how the US is going with its own economy and the impact on the Australian dollar. We will be focusing on whether digital companies should pay tax and how we can get them to pay tax in countries like Australia. We will be focusing on infrastructure and how we can get new private investment in infrastructure to build our roads, our railways and our airports. At the moment the whole world needs new infrastructure; governments have run out of money. So the question is: where is this infrastructure going to come from that is going to drive the global economy?

DAVID KOCH:

I have been grizzling about the fact that companies like Apple sell a hell of a lot of goods here and pay no tax to build schools and roads. Do you discuss those sorts of things? Do you say “Hey! Pay your fair amount of tax here!”.

TREASURER:

This is where the rubber hits the road on these issues.

DAVID KOCH:

That is a benefit to all of us. Every single Australian needs…

TREASURER:

Without naming individual companies, because various countries get very agitated when their companies are named, but from our perspective, it is really important that there is a principle that where you earn the money you pay the tax. These are the sorts of issues we will raise. This is the place where you have the 20 leaders representing 85% of the world economy sitting in the room, here in Sydney, working out how we can have a growing world.

DAVID KOCH:

You are going to gang up on Germany and China, aren’t you?

TREASURER:

We are not ganging up on anyone.

DAVID KOCH:

They rig their currency to improve their exports. This is the reason our exporters cannot compete.

TREASURER:

We are not ganging up on anyone.

NATALIE BARR:

There is no rigging?

TREASURER:

There is no ganging up on anyone. We are going to work together to focus on clearer rules and greater co-operation. I know that sounds like just words, but you have got to bring everyone with you. There is no chairman who can make a decision that everyone has to follow. You need everyone to agree. You need 20 people in the room to agree and that is proving an interesting challenge.

NATALIE BARR:

I can imagine.

TREASURER:

If only I could bring you into the room, Kochie. You would be useful.

NATALIE BARR:

I don’t know if that is such a good idea! Changing the topic now, everyone is talking about the proposed changes to Medicare. One of the suggestions is charging Aussies to go to the doctor. Do you support this, the $6 charge?

TREASURER:

The starting point is, if our health, welfare, and education systems stay exactly the same, Australia is going to run out of money to pay for them. We will either have to have a massive increase in taxes – and that means fewer jobs at the end of the day – or we are going to have to look at ways that we can restructure the system to make it sustainable. Now the fact is, Medicare [and other Federal Government health expenditure] is going from $65 billion of the Budget today, to $75 billion in the Budget in just three years. That is the equivalent of imposing effectively half the carbon tax to a full carbon tax just to pay for the growth in Medicare. For example, the aged pension. When it was introduced, in the early 1900s, life expectancy was 55. Today life expectancy is 85 and yet the pension starts at 65.

We have got to be fair dinkum with the Australian people - if nothing happens we will never get back into surplus. We will never pay off debt. Debt will keep going to $667 billion. We have got to be open and honest and say - as we have always said about these things – that just to maintain our quality of life, we are going to have to all work together to make these things sustainable.

DAVID KOCH:

So there is a tough Budget coming up in May?

TREASURER:

It is not about tough. We are the best friend Medicare has ever had but only if the Medicare system is sustainable. That is what matters. We have got to keep things going.

DAVID KOCH:

Get those international companies to pay their tax here – that will help.

TREASURER:

I am doing my best.

DAVID KOCH:

Good luck. It is going to be a great weekend.

TREASURER:

It will be.

DAVID KOCH:

Christine Lagarde, is she a nice person? She is like a rock star!

NATALIE BARR:

I know, I read about her on the weekend.

TREASURER:

She is a very nice person. She is very pleasant.

NATALIE BARR:

You guys should catch up and have dinner.

TREASURER:

I’m not going there.

DAVID KOCH:

Joe cooked her dinner the other night.

TREASURER:

That is not for publication.

NATALIE BARR:

We won’t go there.

TREASURER:

If anyone knows my cooking skills… then thankfully they won’t believe that.

DAVID KOCH:

Cheese on toast. Have a good weekend.