30 March 2015
Transcript - #2015063, 2015

Press conference, Melbourne

REPORTER:

[Inaudible]

TREASURER:

Well, I understand the Shadow Treasurer said they are up for a debate about reform of the taxation system – they're prepared to be a part of it. We welcome that, we welcome that and certainly we're looking for community engagement – a deeper community engagement. And it's all too often the case that people are immediately calling for the answer. Well, if we came with a package of solutions people would say, ‘well, you didn't even have a conversation about it; you didn't talk to us about it’. So, step one is to raise the level of awareness of some of the massive challenges facing the taxation system. Step two is to have a draft paper released later in the year with a range of options. And option three is to take it to the election – the final recommendations.

REPORTER:

[Inaudible] the alternative for a plan of some description or an investment in Australia is not Denmark or Scandinavia; it's Singapore or Hong Kong or somewhere in China. So, how much – can you just describe to us how much focus is on, I guess, the category some of the accountants have used as the more advanced Asia-Pacific nations, in terms of comparisons of rates and [inaudible] and so on and so forth.

TREASURER:

Well, clearly our rates are much higher than a lot of our trade partners or trade competitors. There's no doubt about that. Whether it be in company tax or individual tax and I, you know, you do have different comparisons for different data, but in comparing the level of personal income tax and company tax in Australia with that of other OECD nations, we're simply pointing out that there is enormous systemic risk associated with that over-reliance, if you like, on company and individual taxes. It is the systemic risk that I most want to emphasise. I mean when – and I was there, as Jim will remember like no one else, I was there for the last tax debate and there was an argument – a good argument, about wholesale sales taxes and the fact that it wasn't a fair system. The big difference today is we're in a more global environment. Capital can move immediately in a way it couldn't nearly 20 years ago. And because of that, we are losing control of our destiny from a taxation perspective. Therefore, we need to have a proper conversation and properly consider all of the pressure points in order to develop the best tax system going forward.

REPORTER:

Treasurer, you're meeting the State Treasurers [inaudible] in two weeks’ time. What conversation will you have with the Victorian Treasurer about the East West Link?

TREASURER:

Well, I'm off to have a conversation with him today. There you go.

REPORTER:

What are you going to talk to him about today?

TREASURER:

The East West Link and a few other things. There you go. That's an immediate response to you.

TREASURER: 

Jim? And then I'll have to go, I'm sorry.

REPORTER:

[Inaudible]

TREASURER:

I don't want to pre-empt the discussions. I am very concerned about the ability of young Australians to be able to afford their first home. It is in many ways a great stabiliser for communities and families, but also importantly, it's a very advantageous form of saving – long-term saving in your family home. It provides a stability that many want and it's been a traditional Australian right to own your own home and that has been increasingly, and not just in more recent times, but over the last few years, it's just become more and more difficult for people to own their first home. So we've got to nut out, in conjunction with the states, better opportunities for young Australians – or any Australian. I mean, you could've been renting for 30 years and want to buy your own home – any Australian to buy their first home. Okay Jim, final one, I'm sorry.

REPORTER:

[Inaudible]

TREASURER:

Well, I'm not going to buy into what you're suggesting, which is to have a debate about broadening the GST or increasing the GST because the GST itself is under increasing pressure as a result of the digital economy. There are companies now offering services directly to Australians and they're not charging the GST. I want to find a way for them to charge the GST. That's something that I will certainly be raising in Washington at the G20 in four weeks' time. It is something that I think – I know the OECD is working on it. But we'll also have something to say in the Budget about tax integrity, which we've been working on for some time. But the GST is under as much pressure from the new digital economy as any other tax. In some cases, more so, because it's not just services that can be delivered over the Internet now, it's increasingly goods. You press your button, you have a financial transaction, and two days later that good turns up at your front doorstep. Now, this is a changing environment we're dealing with. So, I don't want people to think about what was the tax solution for yesterday. I want people to discuss and think about what is the tax solution for tomorrow? Because we've locked in, through legislation, some of which we want to change, ever-growing areas of expenditure, but we haven't got ever-growing areas of revenue. That's why we never get to the point as a nation that we live within our means under the current arrangements. So, we have got to make sure the system works to our future benefit. Now, I'm sorry, I really have to go. I'm running late.