15 April 2015
Transcript - #2015079, 2015

Doorstop interview, Morgan Stanley event, New York

TREASURER:

The message I’ve got here in New York from some of the biggest investors in the world, is that they are looking for opportunities in Australia. They’re particularly looking to use us as a springboard into Asia, because unquestionably the growth in the world is going to come from the US and from Asia over the next decade, and you can’t rely on Europe the way you once could.

REPORTER:

You talked about change and political courage that governments will have to have, political courage to make the changes, and the fact that consumers want 24/7 shopping but they don’t want to lose their penalty rates or things like that. Does your Government have that political courage to make those difficult changes? Are you going to be able to push the things through?

TREASURER:

Well I don’t think anyone could accuse the Abbott Government of lacking political courage. But it is a compact, it’s a compact with the community, it’s a compact with the business community. That we all work together to deliver the reform that ensures that we have a future with prosperity and jobs. Now the fact is, we are not alone. Australia does not walk alone on the need for reform. We’re the same as many other countries, unless we reform we’re going to go backwards, and we need to reform just to maintain the status quo.

REPORTER:

Going back to your first Budget, it was a tough sell. Your May Budget now and its reception will be crucial for the Government. What have you learnt from that first Budget and the controversy and opposition it created, to apply to this one?

TREASURER:

Every Budget has differing economic circumstances. Now we are facing a different set of challenges to what we faced in our first Budget, when iron prices were higher and when the world was growing a little bit faster. So now we need to continue with our path back to surplus, it needs to be tempered a little to ensure that you don’t have Budget policy working in contravention of the direction of monetary policy. So, we’re not going to have an arm wrestle between the Reserve Bank and the Commonwealth Treasurer. We’re going to get the balance right and we’re going to focus on making it easier for households and better for business so they can employ more Australians.

REPORTER:

Last question from me, Peter Costello and you had some exchanges last night. Given that you’ve had some time to sleep and maybe think about his comments, can you concede that perhaps his comments about bracket creep are something that the Government need to address?

TREASURER:

The Government doesn’t like bracket creep. The Coalition doesn’t like higher taxes. That’s why we abolished the Carbon Tax, the Mining Tax. That’s why we’re going to give a tax break to small business, so that we can create more jobs and greater prosperity for everyone. But as I said yesterday, the fact is, if I had the same level of taxation as Peter Costello I’d have $25 billion extra each year to spend. I don’t have that luxury, I’ve got to do more with less and I’ve got to strengthen the Australian economy at the same time. We are determined to get the balance right, we’re very much focused on the future, we’re not going to worry about commentary about yesterday.

REPORTER:

Question about BHP and Rio Tinto, it seems like their strategy as iron ore prices are falling is to just crank out as much production as possible. Are you concerned at all that that could backfire?

TREASURER:

Well look I will be speaking with the Chinese Finance Minister in Washington about expected demand for iron ore over the next 12-months and beyond. Obviously we don’t control commodity prices, but I think everyone has a responsibility to ensure that our supply to key markets is consistent, predictable and reliable. Now frankly, when you have an iron ore price that has dropped as dramatically as it has in the last 12 to 18 months, we’ve got to build shock absorbers into our system to cope with it. Falling Australian dollar has helped, there’s no doubt about that. But there are many other challenges along the way.

REPORTER:

The Aussie dollar is down quite a bit over the last couple of quarters, 20 per cent or so. Do you think it needs to go further?

TREASURER:

Well look, I’ll leave that to the markets. Obviously we’ve seen a strengthening of the US dollar. I know there are going to be very significant discussions in Washington over the next few days about currencies and Australia will have a strong voice at the table.