23 April 2015
Transcript - #2015084, 2015

Doorstop interview, Sydney

JOURNALIST:

… Why isn’t negative gearing something that should be looked at?

TREASURER:

Well, negative gearing has been a hotly debated issue in Australia for some years. The thing about the Labor Party raising the issue of negative gearing is they haven’t properly thought it through. You can’t trust the Labor Party with taxation policy. We’ve seen that with the Carbon Tax, the Mining Tax. We’ve seen numerous policy failures in relation to taxation. If you change negative gearing, then there are significant flow-on consequences from people that rent homes, and that needs to be properly considered. That’s why we do not engage with Labor on taxation policy on the run. If they’ve got a position on negative gearing, let them come out and explain what that is. Chris Bowen is trying to raise an issue that he doesn’t know how to bring it back down to earth.

JOURNALIST:

There may not be a case, but you may not be about to scrap it all together, but is there not a case for restricting it?

TREASURER:

We have a taxation discussion paper in the community. We are having a national conversation about taxation, but I’d say this. A lot of Australians have invested their hard earned money in real estate, and in doing so, they have offset the losses of that real estate against their primary income, in order to give themselves and their children some financial security. At the same time, there is a very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents. For a lot of people, a massive increase in rents is so unaffordable.

JOURNALIST:

So that’s a no then?

TREASURER:

I’m not going to partake in speculation [inaudible].

JOURNALIST:

Treasurer, there have been reports that cuts to States health and also education would come in as part of the Budget. But I [inaudible] on Friday the Prime Minister indicated it would come most likely and be revisited in July, which of those is correct?

TREASURER:

Well, what’s correct is the position we took at the last Budget, which will continue to be the case. We said that we would fund the four-year commitments on both hospitals and schools, but after that, the States need to account for the changes in hospitals and changes in schools, and we would continue to provide the base funding that the Commonwealth has always provided. Labor made commitments over the long-term on schools and hospitals that were never paid for, never paid for. The position we took to the last election and the position we took in the last Budget, stands.

JOURNALIST:

Treasurer, talking on the revenue side of the Budget. The Tax Commissioner yesterday said that he doesn’t necessarily take at face value, testimony given by the executives from some of the tech giants, in the inquiry into tax avoidance. Did you take their testimony on face value? What’s your…

TREASURER:

Look, I haven’t spent a lot of time looking at testimony to a Senate Committee, I can only say this. I have absolute faith, absolute faith, in the Commissioner of Taxation. Chris Jordan is an outstanding individual doing an outstanding job. He has had his staff embedded in a number of companies for an extended period of time. He is fully aware of the business models of those companies. I’ll have more to say on behalf of the Government in relation to taxation and multinationals in the course of the next few weeks.

JOURNALIST: Treasurer, what do you make of a slight increase in the price of iron ore overnight? Basically on the back of BHP saying that it's slowing down some of its expansion in this area.

TREASURER: Well, we obviously carefully, carefully monitor the iron ore price. Common sense must prevail. I'm glad that the producers in Australia are taking a more reasonable approach to production levels. Obviously, the price of iron ore is going to have an impact on our Budget and we expect our producers to behave collectively in a mature fashion.

JOURNALIST:

I do notice that as part of this initiative today, that you turn 50 in August this year. Is there any self-interest in any of this today that you’ve announced? I mean you could technically find yourself out of a job at some stage and maybe be part of that discrimination, Treasurer?

TREASURER:

Well, discrimination in any form is reprehensible. Discrimination against a Treasurer turning 50, is no different to discrimination faced by others in the workforce, including you Ross. I mean, you’re a young man, and in good shape as well, so let’s keep it that way. But if you continue that line of questioning it might not remain so [laughter].

JOURNALIST:

Treasurer, you raised again driverless cars today. What will come first, a driverless car or a Budget surplus?

TREASURER:

Well, I don’t think there’s a race on. We want to get to surplus as soon as possible. We want to start living within our means, but we’ve got to ensure that the work of the Reserve Bank is not at odds with the work of the Government, and vice versa. You can’t have your foot on the budgetary brake and at the same time have the Governor of the Reserve Bank with his foot on the accelerator. It sends a mixed message to the economy. We want the economy to grow, we want to do everything we can to facilitate investment. We’ve got to get the immediate Budget balance right, but there is absolutely no doubt about our medium and long-term commitment to get the Budget back to surplus with structural reforms in education, in health and welfare, that are going to ensure that we get to the point where we live within our means.

JOURNALIST:

Treasurer, how do you expect the Health Minister to find $3 billion in savings through the renegotiated [inaudible]?

TREASURER:

Well, look, we all have a savings task. If you want to get the Budget back to surplus, if you want to start living within your means, if you want to make our future more affordable, we all have to make reasonable savings. We all have to ensure that where there is a possibility that we can do more for less, we do that. Now, no area of Government is excluded. If you can do more, with less taxpayers’ money, that is a good thing for the nation and a good thing for taxpayers. Okay, thanks very much.