14 May 2015
Transcript - #2015118, 2015

Interview with Leon Byner, FIVEaa

LEON BYNER:

Joe, thank you for joining us this morning.

TREASURER:

Good morning, Leon.

LEON BYNER:

Now, our State Treasurer, Tom Koutsantonis, says the extra funds from the Federal Government, which are about $977 million, about $858 million of which is GST, are unreliable numbers, and that he also argues that this amount pales into insignificance when you take the cuts from last year’s budget, and so that’s why he’s justifying his very expensive advertising campaign saying the Feds have been nasty to South Australia.  What’s your response?

TREASURER:

Well, there is no government in Australia – no state or territory government in Australia, Liberal or Labor, that is made up of more whingers than the South Australian State Labor Government.  I mean, they are unbelievable.  We’re giving them an extra $7 billion over the next four years above what they got this year – an extra $7 billion, and still the South Australian Labor Government wants to play political games about what happened last year.  I really can’t understand that.  I think South Australia should be looking forward, and the fact we’re giving them an extra $7 billion is significant, and we’re getting on with the North-South Road Corridor in Adelaide.  We’re getting on with the Goodwood and Torrens Junctions rail upgrade.  Importantly, we’re increasing significantly the funding for South Australian hospitals by $208 million or 19 per cent increase, and that’s significant.  For schools, you’re seeing a 26 per cent increase in funding.  So, really, I’d say to Mr Koutsantonis, please focus on your job.  Please stop playing politics.

LEON BYNER:

SA is receiving less federal infrastructure funding per person than any other state.  In fact, we’re only getting, I think, $2 billion from a $50 billion five-year package.

TREASURER:

Well, no.  I have invited the South Australian Government to come forward with their proposals.  I have invited them.  What’s happened, Leon, is that other states have stepped up and said, look, we’ve got projects.  We’re working on projects.  Even in the case of Victoria, the new Victorian Labor Government, they cancelled East West which was ridiculous, but they’ve said, well, we’re coming back to you with other proposals.  Now, I’ve said to Mr Koutsantonis directly, “Sir, please come to me with your proposals and we’re prepared to look at them.”  But as yet, we haven’t seen any new proposals that the South Australian Government wants to work with us...

LEON BYNER:

So are you saying that the only reason we’re getting the $2 billion out of the $50 billion is because we haven’t asked?

TREASURER:

Well, there’s more to do, absolutely.  We’re prepared to do more.  We’re prepared to do more for South Australia.  Absolutely.  But the Federal Government – the Federal Government funds infrastructure in partnership with the states.  You know, the New South Wales Government, for example, had a big project;  asked us for a $1.5 billion contribution.  They said they’d double the project if we could lend them $2 billion and we did.  I’m prepared to do exactly the same for South Australia or Western Australia or any other state.  I’m prepared to give every part of Australia the opportunity to have a go.

LEON BYNER:

What did you mean yesterday when you suggested South Australia should start to believe in itself?  Because we believe in building the future submarines in Adelaide and, again, I have to ask you whether you do.  Do you?

TREASURER:

Sorry.  I lost you there for a moment.

LEON BYNER:

Well, yesterday you suggested South Australia should start to believe in itself, and we believe strongly in building the future subs in Adelaide.  Do you?

TREASURER:

I believe in South Australia, absolutely.  We have a proper process in relation to submarines and we’re going through a proper evaluation process as we speak.  But whatever the outcome, there will be more jobs relating to submarines in South Australia than there is today, no matter what the outcome.

LEON BYNER:

Well, is…

TREASURER:

South Australia will be a significant winner.

LEON BYNER:

There’s a workforce of about 2000 here, so you’re promising – you see, one extra job could furnish your argument.

TREASURER:

No, no, no, no.  There will be more jobs.  There will be more jobs.  We are going through a proper evaluation process.  South Australia is the only home for the submarine maintenance and whatever else happens with submarines.  South Australia is the only home in Australia for it.

LEON BYNER:

Well, you see, I wonder whether you understand how important the people of this state regard this.

TREASURER:

I do.  I do.  Because, as you know, I was there only – the last visit I made to any part of the country before coming back and putting the Budget together was to Adelaide, as you know, and I met a whole lot of businesspeople.  I was in your studio with you, Leon.  And I’m listening carefully to South Australia.  You have a group of Federal Members of Parliament like Matt Williams and Andrew Southcott and Christopher Pyne and Jamie Briggs and others who are indefatigable advocates for South Australia.  I can promise you we hear that.  We are doing everything we can.  We want to work in partnership with the South Australian Government.  I’m more than willing to sit down with the Premier and the Treasurer and actually work out how we can help the state to grow, but, really, the politics they play is above and beyond anything we have to deal with in any other part of Australia.

LEON BYNER:

Now, look, in December 2013, Joe, you challenged GMH in Parliament to make up its mind about leaving Australia or staying.  The next day, we got its answer:  Holden are going to cease car-marking at the end of 2017, leading to the loss of thousands of direct and indirect jobs in Adelaide.  Now, the problem is with this transformation scheme, it’s based on actual manufacturing numbers, and because of the way they’re scaling down, a lot of people are missing out on this transition funding to help them into other work.  So are you going to change the law to make that easier and fairer for people to access?

TREASURER:

Well, no.  That is a matter that Minister Macfarlane has been dealing with with South Australia on.  And specifically, Leon, you know, I don’t want to particularly revisit it, but the fact is– General Motors have said repeatedly they were leaving no matter what.

LEON BYNER:

Yes.  Well…

TREASURER:

So they were leaving no matter what.  I’m focusing on how I can build new businesses in South Australia – export businesses.  So, you know, for example, for the massive wine industry in South Australia, we’re getting the Chinese and others to remove tariffs.  That will be the fastest growing market in the world for demand for South Australian wine.  We are trying to get more resources into the universities. We’ve got a medical research fund that is going to be fantastic for Adelaide, because there are some great innovators and researches in relation to medical breakthroughs that aren’t getting the funding.  We’re focused on them.  And the good news for some of the advanced manufacturers that you’re talking about in relation to the car industry is the Australian dollar has come down from what it was last year, which even the Treasurer said to me is making a big difference for manufacturers in South Australia who want to export.  In fact, that’s the biggest thing we can do.  So instead of writing out more cheques to individual manufacturers, which is not sustainable, by getting a lower Australian dollar and opening up export markets, they’re going to get the jobs and they’re going to get the opportunities that no government handout is ever going to be able to replace.

LEON BYNER:

See, unemployment in South Australia is the worst on the mainland at 7.1 seasonally adjusted, and I’m asking you that question about this transition fund because there’s surely got to be a plan to respond to the loss of more than 100,000 jobs in the auto sector in the next couple of years.  And, as I said, if the criteria to access that money is based on production numbers, we know they’re winding down.  That just means that a lot of people on the auto industry who might be able to transform somewhere else, are going to miss out.  That’s why I asked the question. 

TREASURER:

Well, but what are they missing out on [inaudible]? 

LEON BYNER:

Well, the thing is, we have offered to transition people from the auto industry into another industry.  There’s money to do that.  Okay. 

TREASURER:

Yes.  There is money to do that.  That’s absolutely right.  And that is available and that is being used.  And that was worked out in negotiations with the South Australian Government.  So that is working, and the fact is, the only way there are going to be jobs is if there are customers.  And what we’re trying to do is open up the customer base so that there can be continuing manufacturing in South Australia.  But, I mean, I saw food manufacturers in South Australia when I was there last time and, previously, their great concern has been some of the tariffs they face in the markets that they’re exporting to.  We’re removing those tariffs.  We’re removing those tariffs as we speak, which means that they’ve got a better opportunity to grow their food processing in South Australia.  Importantly, you’re starting to see good investment in some South Australian tourism.  I understand that there’s some new hotels that are being contemplated in Adelaide.  That is very important, because when you get those tourists in, they spend their money in the town, in the city.  They go out to the regional areas.  That’s important as well.  Again, a lower Australian dollar is helping in that regard.  And most importantly, Leon, I want to find the next big manufacturers that are Australian based, that are small businesses now but want to grow.  So in our Budget we introduced accelerated depreciation for small business.  So all those tradies and small manufacturers and small businesses that are listening to your program, they can go out right now, buy an item to help them to grow their business that’s under $20,000 – or they can buy many items under $20,000 – and write off 100 per cent of it against their tax on the 1st of July.  So this is about firing up the whole economy and giving every Australian a chance to have a go. 

LEON BYNER:

Bracket creep is going to extract about $8.5 billion out of Australians’ pay packets over the next four years.  And even with that, we’re spending $96 million a day more than we get in. 

TREASURER:

Yeah. 

LEON BYNER:

Now, how can we argue that that’s responsible? 

TREASURER:

It’s not responsible, but it’s a lot better than what it was under Labor.  And it’s not sustainable over the medium term to continue to borrow $96 million a day.  That’s why we’re getting it down.  We inherited $133 million a day as a shortfall.  We’ve got it down to $96 million, but there’s more to do.  There’s more to do. 

LEON BYNER:

But the question is:  if there is, why didn’t you do it? 

TREASURER:

Well, if we had have cut further, if we had have reduced government expenditure faster, or if we had have done what Labor wants to do and considerably increased taxes, it would’ve cost jobs.  It would’ve cost more jobs and you wouldn’t be looking at an unemployment rate in South Australia of 7 per cent.  It’d be much higher, much higher.  And I might add, other states have had challenges along the way as well.  Queensland has lost, you know, around 18,000 jobs in mining construction in the last two years.  But they’re starting to come back because they’ve got a go get ‘em State Government previously under Newman – Campbell Newman.  Hopefully the new Queensland Government will continue that path.  I don’t know.  And in Victoria, they’ve faced big challenges in manufacturing as well.  But they’re starting to regroup as well.  We hope that will continue.  So the State Government has got to be a consensual business partner in this Leon. 

LEON BYNER:

On the business side, I just want to clarify a couple of things.  You’re saying in terms of road infrastructure, if the government of South Australia can approach you with a shovel-ready project, you would consider request for funding.  Is that correct? 

TREASURER:

Provided it is productive infrastructure and it is a partnership between the State and the Commonwealth.  I mean, you know, they’ve got their own budget.  We’re giving them an extra $7 billion over the next four years.  But if there’s a project that is going to help to strengthen the South Australian economy, we are prepared to look at them, absolutely. 

LEON BYNER:

Okay.  Now, one other point.  The Prime Minister told Parliament that the Japanese Soryu-Class submarine was the best large conventional sub in the world.  Now, the Soryu travels about half as far as far shorter periods – it’s much slower than the Collins – lacks US weapons and combat systems.  This is all from the summit that was held here by those in the submarine industry.  So how can we say that the Japanese submarine is better than the Collins? 

TREASURER:

Well, look, Leon, there is a proper evaluation process going on.  I mean, really, I’m the wrong Minister to talk to about the technicalities of individual [inaudible] submarines.  

LEON BYNER:

Well, it’s not so much technicality.  It’s about jobs because you said…

TREASURER:

Well, and as I said, Leon, it is going to get better for South Australia.  We want to find the new businesses and the new jobs that are going to be big businesses and big employers in the future.  That’s what we’re focused on.  And there will be more jobs in relation to submarines into the future because we are going to invest a lot in our submarines.  But, most importantly, we’re going to have the best submarines of their type in the world.  We need to have the best in the world.  And there’s a proper evaluation process going on.  Now, as for what the future is of South Australia, I am very optimistic about South Australia but you’ve got to be optimistic as well about South Australia.  And what we’ve got to do is give those great ideas that constantly come out of South Australia the chance to be big new businesses that employ lots of people.  That’s why we’re cutting taxes for small business.  That’s why we’re offering to build infrastructure.  That’s why we’re rolling out the National Broadband Network, so that they can get access, and most importantly, we’re opening up new export markets because South Australia is a great exporting State. 

LEON BYNER:

Minister, I can assure you there is no problem with my optimism about the State. 

TREASURER:

Great. 

LEON BYNER:

But I’m a realist.  And I understand that a lot of what decisions are made in Canberra have massive effect on South Australia. 

TREASURER:

Well, the biggest effect on South Australia, Leon, will be the decisions that individuals make about their destiny.  I’ll facilitate it.  I’ll do everything I can to help.  But, ultimately, individuals are going to be the controllers of their destiny, and we want to help in every way we possibly can. 

LEON BYNER:

Just one other point too.  Arthur Sinodinos said today that this idea of what was called double dipping by not allowing people with paid parental leave who had the permission to get it could take from two sources.  Do you resile from your original position on this? 

TREASURER:

Well, look, I’d just say to you, Leon, I don’t think it is appropriate to have, for example, public servants who do get paid parental leave paid by the taxpayer – and a big scheme paid for by the taxpayer – being able to go down to Centrelink and collect money from the taxpayer through another mechanism as well.  Do you think that’s fair? 

LEON BYNER:

Well, the – Bill Shorten says you’re targeting working people. 

TREASURER:

Well that’s completely wrong.  That’s completely wrong because the absolute minimum amount of money you can get under the Government’s paid parental leave scheme, is over $11,500 for 18 weeks, $11,500 for 18 weeks.  Now, if you’ve got your own private scheme, and your employer pays more than that, then we’re saying, “Well, if your employer’s paying more than that, terrific.  You’re employer’s paying that and therefore we won’t pay you under the Government scheme.”  But if your employer is paying less than that, you can come and access money from the Government scheme.  But if you want to be able to claim paid parental leave from both the Government and your private employer for the same period that you’re away on maternity leave, well, we can’t afford to do that because we want to put more money into childcare as well.  I mean, we want to put $3.5 billion into childcare.  We’ve had also to put in nearly $900 million into helping the states to pay for four year olds to have preschools. 

LEON BYNER:

Yes. 

TREASURER:

So, I mean, you know, earlier you said you’re spending too much. 

LEON BYNER:

No, no, no.  I didn’t.  I just made the point that when you were in opposition you were completely goading the then Labor Government, “you’re overspending, you’re spending too much [inaudible].” 

TREASURER:

They did.  And they did. 

LEON BYNER:

Yeah. 

TREASURER:

And now I’m doing something about it and people are complaining as well, you know. 

LEON BYNER:

I have to ask you this. 

TREASURER:

Yeah, sure. 

LEON BYNER:

How sure do you reckon you’re going to be to get this up through the Senate? 

TREASURER:

Well, again, you know, if Mr Shorten’s delivering his address in-reply tonight, he – you know, at the moment we’ve got Labor saying they want less government spending but their policies actually spend more.  They’re saying they want less government tax, but actually the Labor Party wants to tax everyone more, including on their superannuation which we strongly oppose.  They’re saying they want smaller deficits.  But, actually, all their policies will increase the deficits.  And they want less debt, but all their policies will increase debt.  So I don’t know how this magic pudding of theirs works.  But what I know is that the numbers in front of me need to be about helping Australians to get ahead, get jobs, and start paying down the deficit and debt we inherited.  And we’re on track. 

LEON BYNER:

And, quickly, if you were sitting in front of Tom Koutsantonis now, what would you say to him? 

TREASURER:

Mate, stop whinging and start working with us to help to build a stronger South Australia.

LEON BYNER:

Joe, thanks for joining us. 

TREASURER:

Thanks, Leon. 

LEON BYNER:

Treasurer, Joe Hockey.