20 August 2015
Transcript - #2015170, 2015

Interview with Sabra Lane, 7.30

SABRA LANE:

If you're one of the thousands of shoppers who buys goods online from overseas in part to avoid paying tax, your days could be numbered. Tomorrow, it appears likely that treasurers from around the nation will agree to scrap the $1,000 threshold on online purchases, which has meant until now those goods have been GST-free. The Federal Treasurer Joe Hockey will sit down with his state and territory counterparts in Canberra to see if they can reach agreement on tax reform. For a discussion about tax and leaks, I was joined earlier by Mr Hockey. Treasurer, welcome to 7.30.

TREASURER:

Great to be with you, Sabra.

SABRA LANE:

Mr Hockey, when are you going to deliver personal and corporate income tax cuts, given today you've said they're too high?

TREASURER:

Well the starting point is we've got to make sure that we live within our means and we've got to reduce the budget deficit, get the budget back to surplus. And when we can do that, obviously we want to reduce the tax burden on everyday Australians.

SABRA LANE:

But when are those words going to become deeds?

TREASURER:

Well, we've got a plan. We're working towards that plan. As we approach the next election, we'll have more to say about tax reform. We have a tax reform process under way at the moment. We've received 850 submissions from the community about proposed changes to the taxation system. Our goal is lower, simpler and fairer taxes and we'll deliver.

SABRA LANE:

Business is looking for a tax rate of about 25 per cent. Are you able to deliver that and a cut for workers at the next election? Is that something that you can take and offer as a second-term Abbott Government?

TREASURER:

Well, Sabra, again, it's easy to give tax cuts when you're running a surplus, but we inherited big deficits from Labor and that means that we have to borrow money in order to fund our day-to-day needs as a government. Now, clearly, that makes tax cuts much more difficult. But importantly, we've got to have a tax system for the 21st Century, one that can cope with a new digital economy and the mobility of labour that we've never seen before and we're very focused on getting that right. That's one of the things I'll be discussing with state treasurers tomorrow.

SABRA LANE:

At that meeting tomorrow, New South Wales has been calling for a lifting in the GST rate to 15 per cent. Labor states are against it, so does that mean that idea is as good as dead?

TREASURER:

Well look, the fact is that a number of states have raised it, not just NSW. There are constructive discussions. We want everyone to have the opportunity to put everything on the table. Obviously, whatever is - comes out of those discussions and comes out of future discussions between the Prime Minister and the premiers will feed in to our plan for tax reform that we will take to the people at the next election. Quite obviously, it is important to have a mandate from the people for substantial changes in the taxation system, so, we want the people of Australia to have a say in it.

SABRA LANE:

So potentially, you might be asking Australians at the next election for a mandate to lift the GST?

TREASURER:

No. We aim for lower, simpler and fairer taxes. What sort of mix that is, I think it's important to give everyone the opportunity to have a say. Labor states, the union movement, as well as community groups and stakeholders right across the board.

SABRA LANE:

As a result of tomorrow's meeting, it looks likely that all the treasurers will agree on imposing the GST on online purchases from overseas worth less than $1,000. Already that's being dubbed a parcel pick-up tax?

TREASURER:

Well that's ridiculous because if you buy a good in Australia or a service in Australia, it's most likely you'll have to pay GST. And if the good or service is supplied by someone based overseas, at the moment you may not have to pay a GST. So what we want to do is have neutrality that preserves Australian jobs, importantly, gives Australian businesses not an advantage, but an equal opportunity to compete with everyone overseas. This is a global trend, Sabra, so it's not Australia acting alone. Countries all around the world are doing this to make sure that there is no disadvantage to local businesses and local jobs.

SABRA LANE:

Sure, but how does that fit with the Liberal brand of lower taxes?

TREASURER:

Well, it is about integrity in the taxation system. And fundamentally, if there is a gap in existing tax, a loophole, if you like, that it means we simply have to raise the money somewhere else off everyday Australians. And quite frankly, I would rather have a fair system where everyone pays the same amount of tax for the same sort of good, whether it comes from your local shopping centre or it comes from someone overseas.

SABRA LANE:

Was it foolish for to you promise to try and get rid of GST on women's sanitary items earlier this year, given that it looks like there won't be approval to do that?

TREASURER:

Well, no, what I did say at the time, and it was on the ABC, that I would take it to the states. If there are going to be changes to the GST, given that it is a state tax, then all the states need to agree to it. And ...

SABRA LANE:

But I also remember that you said that, yes, you didn't think that the tax should apply.

TREASURER:

But it is a state tax. I mean, I've got many views on state taxes, but in this situation, it is a requirement for all the states, all the states and territories to agree. Now, if they don't agree with that, well that's their call. There won't be a change. But ultimately, I can't have it both ways. When people are worried about the tax increasing, they say you need all the states and territories. When they're worried about the tax decreasing, they say that you don't need everyone's agreement. Well you can't have it both ways. Either it's all in or all out. And from - in between elections, in between mandates, the only way to do it is to get agreement of all the states and territories.

SABRA LANE:

And if they knock it on the head tomorrow, will you still argue for it?

TREASURER:

Look, it'll be done. We have to move on to other issues.

SABRA LANE:

How do you feel about suggestions even written about today that the Prime Minister might improve his own prospects by dumping you as Treasurer?

TREASURER:

Well that's a silly question, Sabra.

SABRA LANE:

It's not a silly question. It's in the press today. Some of your colleagues have been ...

TREASURER:

It's in the media! It's in the media, so it must be right! It's in the media.

SABRA LANE:

Ah, well, and, and ...

TREASURER:

Look, look, you know what ... ?

SABRA LANE:

Treasurer, and some of this stuff finds its way into the media because your colleagues tell us.

TREASURER:

Well, well, Sabra, there's lots of gossip around this building. I would urge everyone to focus on what's important for everyday Australians, which is jobs, job security, better pay and the opportunities to grow prosperity. That's what I'm focused on, the Prime Minister's focused on, ministers should be focused on. Everyone should be focused on that. That is the goal. Please, gossip - you know, really, we can spend all day talking about gossip around this building. It's extraordinary stuff, but ultimately, the Australian people are the ones that determine our future.

SABRA LANE:

Do you agree with your colleague Eric Abetz that those leaking are gutless?

TREASURER:

My view is that we need to focus on what's important, get on with the job. We're in the middle of serious discussions about the China free trade agreement, which Labor opposes. That's thousands of jobs that would be lost in Australia if that doesn't proceed. We've had a big discussion this week about the Adani Carmichael mine in Central Queensland. That's 10,000 jobs that Labor's opposing. We want to get on with the job of new infrastructure and creating opportunities for everyday Australian families.

SABRA LANE:

If the party doesn't perform well in the Canning by-election next month, will that be trouble for the Prime Minister and for the Government?

TREASURER:

You know what? I've been here for nearly two decades. Everyone sets a benchmark when it comes to by-elections. There's nothing new about this, Sabra. I mean, everyone keeps setting benchmarks. You know what the benchmark is? Having good policy, and if you have good policy, you have good political outcomes. So, we deserve to be judged on what we've done to improve the Australian economy. You know last month, Sabra, 38,000 jobs were created in Australia and we inherited 3,600 jobs a month from Labor. So more than 10 times the number of jobs created in one month, compared to the trend that we inherited from Labor. So, that's what matters to everyday Australians.

SABRA LANE:

Treasurer, thanks for talking to 7.30.

TREASURER:

Any time, Sabra. Thank you.