13 May 2015
Transcript - #2015109, 2015

Interview with Lisa Wilkinson, Today, Channel 9

LISA:

Morning to you, Treasurer.

TREASURER:

Good morning, Lisa.

LISA:

Treasurer, tell us, what happened to the Budget emergency of 12 months ago?

TREASURER: Well, we’ve taken a lot of action, there’s been a number of things that we decided on last year that have been implemented that have helped  to repair the Budget.  We can’t deliver those extra bonus payments for Gonski education after three years, yet education is still growing by 6 per cent in real terms; we can’t deliver bonus payments to the states for hospitals, yet we’ve got health spending growing by 6 per cent;  we can’t deliver big handouts on foreign aid, in additional money. So we’ve made those decisions that’s given us the foundation to deliver a stronger and more credible bottom line now. And on the back of that Lisa, we’ve had a massive write down in revenue as a result of the falling iron ore price.

LISA:

Yet, Ross Gittins in the Fairfax press this morning said this is the Budget of a badly rattled government that’s put self-preservation ahead of economic responsibility. He goes on, ‘when Tony Abbott promised a dull Budget, what he meant was one that was the opposite of last year’s’. Now others are describing this one, your Budget, as an apology… is it?

TREASURER:

No, Ross Gittins has always been a big fan of the Government, I say ironically. The fact is that others, credible economists, are saying yes, the forecasts are credible, yes it’s the appropriate Budget for these times. We want to fire up Australian business, we want to fire up small business. We want to give families greater choice and flexibility in their childcare and importantly Lisa, we want to take advantage of the massive growth opportunities that are going to come our way with the growth in Asia over the next few years.

LISA:

One of the biggest ticket items that you’ve got in the Budget is the $5.5 billion package for small business. Many people agree that this will boost economic growth in the short term, but with that instant asset write off up to $20,000 a year for small businesses, aren’t you opening things up for the sort of rorting that we saw with Labor’s ‘Pink Batts Scheme’ and the Building Education Revolution that you were so critical of in opposition.

TREASURER:

Well, we were because in those cases the government was writing out a cheque and handing it to people. In this case, small business, who would automatically get depreciation on the items, but over a long period of time, we’re saying they can bring them forward. Bring forward the depreciation that they were going to get at any rate, into the 1st of July, and if they go out now and spend up to $20,000 per item, on anything that is going to grow their business, then they will get the depreciation on the 1st of July, 100 per cent of it. So what we’re doing is we’re bringing forward something they were already going to get, in order to try and get them to go out and spend some money, and importantly invest in the growth of their business.

LISA:

But that’s got to be open to rorting. I mean, you can buy a car for a family member and get the money back even though the business doesn’t need a car.

TREASURER:

Well no. Look, if people rort it, they’ll be caught under the laws.

LISA:

How are you going to catch them?

TREASURER:

Well, we already enforce the laws, Lisa, in relation to that. You can’t buy…

LISA:

But how will you know if a car’s being used for business or for a personal family member?

TREASURER:

Well, in cases we’ve got a fringe-benefits tax arrangement, and businesses that break the law are caught, and they’re prosecuted by the Tax Office. That happens now, we’re not changing anything that would make that any more difficult or any easier, we’re applying the tax laws. But I’d just say to you, small businesses have to spend their own money. We’re not giving them the money, they actually spend…

LISA:

But they get the money straight back on the 1st of July…

TREASURER:

No, they don’t get all their money straight back. They actually don’t get all of their money straight back, they get money back based on their taxation. So it reduces their taxation liability. That’s what it does, but it’s still money out of their pocket.

LISA:

Alright.

TREASURER:

But you know it is a big incentive to go out and grow.

LISA:

You’re also budgeting to raise $2 billion via bracket creep, whereby tax payers will find themselves in a higher bracket via higher wages being linked to rises in the cost of living. How are people expected to get out and spend when the Government has its hand in their pockets like this?

TREASURER:

Well, we don’t like it. We don’t like it, and we’ve built into our medium-term forecast, a personal income tax cap. I think that’s hugely important, Lisa. Because, ultimately, what we’ve got to do to balance a Budget is reduce government expenditure. And if we reduce government spending, then we can give back tax to people. And you’re absolutely right, if people move into a higher tax bracket, it’s not only bad for the families, it slows economic growth.

LISA:

Well, will you change that in the next Budget?

TREASURER:

Well, we will see what we can do. The sooner we can get government spending down, the more likely we can deliver those tax cuts which I agree with you, we need to deliver.

LISA:

Alright. You forecast a Budget surplus by 2020 but that relies on the economy growing at 3.5 per cent. Isn’t that a little optimistic?

TREASURER:

No, Lisa, I mean again, credible economists, and a number of the banks and others, including…and the Reserve Bank as well, are saying this is entirely credible, and why? Because we are seeing good economic growth overseas starting to pick up. We also have record low interest rates, low electricity prices, and we’re starting to see a massive increase in housing construction, we’re seeing good growth in retail. We’re going to see a pick-up in the economy. And importantly, that’s going to help to drive job creation which again, helps to create growth.

LISA:

You’ve also brought in the so called ‘Netflix Tax’, but that taxes Australians using Netflix, but what tax is Netflix paying?

TREASURER:

Well, we’re introducing a multinational anti-avoidance law, and if a company is operating in Australia, and I don’t want to talk about a specific company, but we’ve identified 30 multinationals with a significant presence in Australia, that are shifting their profits through Singapore, Ireland, the Netherlands and the Bahamas. We have been embedded in their businesses for the last few months. We’re going to go after them, not only claim back the tax that they should be paying, but we will penalise them up to 100 per cent plus interest on the tax they owe.

LISA:

Alright. You’ve allocated a meagre $30 million to domestic violence in the Budget. Most of that is just going to go to awareness campaigns, not supporting the national hotline, not women’s refuges, which has had funding stripped, not homeless shelters. But you’ve found $1.2 billion to fight terrorism. Treasurer so far this year, two women are dying a week through acts of violence, and no one at this stage in 2015 has died from an act of terrorism, fortunately, do you really think you have your priorities right when it comes to women in these situations?

TREASURER:

Well Lisa I don’t see what the link is…

LISA:

Well, the link is we’ve got a national crisis when it comes to women dying through acts of violence…

TREASURER:

Yep.

LISA:

And you’ve only given $30 million to that.

TREASURER:

Well, we have put in the Budget additional money, of which we have not announced last night, the Prime Minister will be saying more about that in relation to domestic violence in the next few weeks. So there’s more to come in relation to domestic violence. In relation to anti-terrorism, can I tell you, there is no apology from us, none at all, for making sure we do everything we can to keep Australians safe, and we are facing threats every week. I mean we had it last weekend, potentially a bomb going off in one of our cities. There is no apology from us at all, Lisa, for standing very firm and giving our counter-intelligence agencies all the resources they need to protect our country.

LISA:

Okay so can we just clarify there, the Prime Minister and you do see the sort of crisis we’ve got going on with domestic violence?

TREASURER:

Absolutely, absolutely…

LISA:

As a priority and it is something you’re going to commit some real dollars to?

TREASURER:

Absolutely. There’ll be further announcements from the Prime Minister, and various Ministers in the next few weeks. There’s obviously consultation with the states as well. But it’s a huge issue, Lisa, you know, we are very aware of it. I know it, the Prime Minister knows it, and we’ll have more to say about domestic violence in the not too distant future.

LISA:

Okay Joe Hockey, we know you’ve got a very busy day. We appreciate your time this morning.

TREASURER:

Thanks very much Lisa, thank you.

LISA:

Over to you, Karl.

KARL:

Hey Joe, when do your kids get Daddy back?

TREASURER:

I don’t know mate, but I was just thinking you are such a wimp for not being here, Karl.

KARL:

Wasn’t my call!

TREASURER:

You are seriously… oh yeah right, it just gets a little bit cold and you just wimp away. Mate, you’ve got to toughen up.

KARL:

If the Government would start to [inaudible] their broadcasters, we’ll be able to afford things like that. You get onto Netflix alright!

TREASURER:

Okay.

KARL:

Thanks Joe.