21 August 2015
Transcript - #2015171, 2015

Interview with David Koch, Sunrise

DAVID KOCH:

Federal Treasurer Joe Hockey meets with his state counterparts today, with a possible rise in the GST up for discussion. Joe's hoping to have a mature debate about tax reform and he joins us now. Joe, morning to you. Alright, a bit of a split between the premiers, higher GST or a higher Medicare levy. What are you in favour of?

TREASURER:

Well I'm in favour of tax reform that delivers lower taxes, fairer taxes, simpler taxes. If it's simply a case of arguing to change tax to increase revenue Kochie, then it's going to be a short meeting.

DAVID KOCH:

Okay, so - because the state premiers are saying look, our health bill is getting out of control. We need more dough, either from the GST or Medicare, we don't care. They don't seem to be talking about trade-offs, of getting rid of other state taxes. So you’re saying if it's just an increase in GST or Medicare, then you're not talking any more…

TREASURER:

No, because Kochie there is a tendency for the states to say please Federal Government, raise more money through taxes and give us the money to spend. I don't see that as a good reform formula. There’s got to be a trade-off that delivers a better tax system and one that can cope with the 21st Century. As you and I know, and I’m sure many of your audience know, that the economy is changing. You can buy goods just by using the internet, out of your lounge room. You can buy them anywhere in the world. What we have to do is make sure our tax system is ready for that sort of world.

DAVID KOCH:

So, you’re doing that by looking at cutting the $1,000 threshold from buying online - that will now be subject to GST?

TREASURER:

Yeah, that's an important integrity measure, Kochie. Because it is unfair to Australian businesses that they have to charge a GST whereas someone supplying the same good or service who is located overseas doesn't have to charge it. You know, we want to make sure there is a fair system in place. Now, what that means is we’ve got to have our tax officers go to those companies right around the world and say to them listen, you’ve got to charge GST. It doesn’t affect consumers in any other way - that they’re paying the same level of tax for a domestic good as they are for an international good.

DAVID KOCH:

Yep, and that's fair enough. Those companies should help pay for schools and roads like Australian companies do. It’s a level playing field. Last time, when the GST was introduced, the states said okay, GST is coming in but it will replace a whole bunch of state taxes. Now, it replaced a couple but not all that were promised. How are you going to keep them to account in terms of making their states more efficient; their health system more efficient? It's not just about more money. It's about them running a better system as well.

TREASURER:

Well, you are exactly right. You know, some of the states actually didn't keep their word, didn't abolish the taxes that they promised they would when they got every dollar of the GST. I think as part of the agreement, we have got to make sure that we continue to improve the quality of basic services and health and education, law and order. And that's part of the agreement that's being nutted out between the Prime Minister and the premiers. Today is another step along that path with the treasurers. I met with them last night. We had dinner, just the state treasurers and myself. It was a very good conversation. I mean - when you go behind closed doors, as you know Kochie, when I've been on with Kevin Rudd over the years, as soon as you get off camera you can have those sorts of conversations that Australians would be proud of. I think we are getting there.

DAVID KOCH:

So you are hopeful?

TREASURER:

I am hopeful that we can come up with a better system.

DAVID KOCH:

Alright, just quickly, something completely different. Reports this morning public servants and defence staff used government email addresses to access the adultery site, Ashley Madison, part of a global hack, all these details coming out. Are you concerned government resources may have been misused in this way?

TREASURER:

Kochie, look, well, if that's the case, yes - but I don't know what resources were used and the circumstances they were used. It's not something that I'm particularly familiar with this website, but maybe someone else is but not me mate, I’m pretty good.

DAVID KOCH:

[Laughter] You’re running away from that a million miles an hour!

TREASURER:

Of course I am. I don't want to go anywhere near this.

DAVID KOCH:

Good work. Yeah, Melissa is obviously watching. Good morning to you. Thank you, Joe. Good luck with the talks with the state treasurers today.

TREASURER:

Thanks Kochie, all the best.