21 August 2015
Transcript - #2015173, 2015

Interview with Marius Benson, ABC News Radio

MARIUS BENSON:

Joe Hockey, good morning.

TREASURER:

Good morning Marius.

MARIUS BENSON:

Is that settled that the threshold for online purchases will drop from the current $1,000 level to zero?

TREASURER:

Well, I had preliminary discussions with all of the state and territory treasurers last night. There appears to be a consensus that we need to have an equal playing field for Australian business, with offshore businesses, when it comes to the GST. But we’ll make a more formal decision today.

MARIUS BENSON:

So, if it goes to zero, the question is can you police it? Can you police people buying that t-shirt, that CD?

TREASURER:

Well, it won’t be about policing the consumers. It will be about policing the vendors overseas. So, when a company overseas sells a product into Australia, they need to charge the GST in the same way that an Australian business employing Australians located in Australia will have to charge a GST for the same product or service.

MARIUS BENSON:

And how much revenue would you expect from that lower threshold?

TREASURER:

Well, it is something that we’re going to discuss with the state treasurers. At the moment we’re not putting a number on it because what we have to do, is go to individual companies offshore as other countries have done, and ask them to apply the GST to their sales in Australia. This is something that the Japanese, the Europeans, and virtually every other developed economy in the developed world is doing. And because there is a collective engagement by countries on this, the companies are responding positively.

MARIUS BENSON:

So, do you think it will be a significant amount or is this really just tidying up something that needs to be tidied up – and no significant revenue as a result?

TREASURER:

Look, it is about the integrity of the system. And it’s also about giving Australian business a chance to compete on a level playing field with businesses located offshore. If a business offshore is able to automatically charge less for the same goods and services that are sold in Australia, then ultimately it costs Australian jobs. And what we want to do is make sure that people pay their fair share of tax because after all if someone or a company is not charging the GST, then in those circumstances the taxpayers are ripped off.

MARIUS BENSON:

So, Treasurer, you think you’ve got consensus there on that online purchase change. The GST itself though, there’s no consensus. Is it the case that in your view that as long as one state, even one state, is opposed to changes to the GST that that’s stalemate – it can’t change, the rate can’t change?

TREASURER:

Well, the states are the beneficiaries of any increase in the GST. That’s the bottom line. They receive every dollar of the GST and they are the beneficiaries of an increase. And the states are obviously asking for more money, they always do. But they’re saying they need more money and they want us to raise the taxes for them. That’s all well and good, but what we are committed to is lower, simpler and fairer taxes. And a tax system that is able to cope with the 21st Century. How’s that? Well, as we just talked about we’ve got a new and emerging digital economy, you can buy goods and services anywhere in the world from your lounge room. We need to have a tax system that is able to cope with that, and the current tax system can’t. So, we’re going to have a very detailed discussion with state treasurers today. I’m pretty sure there will be no final conclusions that will come out of it, because there’s a lot of work to be done. But there is goodwill on all sides – whether it be Liberal or Labor – at a state treasurer level and the federal level. There is goodwill towards getting the right outcome.

MARIUS BENSON:

No final conclusion – can you say, you talk about the reforms you have in mind now and taking them to the next election. Can you say you’ll be taking a change to the GST to the next election?

TREASURER:

Well, no, because we are still working through all the issues with the states…

MARIUS BENSON:

Sorry – no you won’t be taking it?

TREASURER:

I’m not playing a game Marius…

MARIUS BENSON:

No but I’m trying to clarify, go on.

TREASURER:

I’m not ruling things in or out, because we’ve got to look at the entire taxation system, and you’ve got to assess it against its capacity to meet the needs of Australia in the future, as well as the need to raise the appropriate revenue to deliver the services Australians need. And, when you look at all of that it will be ridiculous for me to start speculating on what the outcome of that would be.

MARIUS BENSON:

But, you used to rule out a GST increase?

TREASURER:

What we’ve always said is that if there were to be any change to the GST, then it would be taken to the people at the next election.

MARIUS BENSON:

You mentioned again there, your commitment to lower taxation. Can I approach that question with some trepidation because I’ve raised it with you before. I’ve got the Budget Paper number one in front of me - statement 10, table 4 - the percentage of the GDP taken in tax 2015/16, 22.3 per cent. That is higher than any tax take during the Labor years.

TREASURER:

Okay, now go back a few years before that Marius, given you’ve got the table in front of you. How high does it go?

MARIUS BENSON:

How high does it go? In the Howard years you mean?

TREASURER:

In 2006/07 how high was it Marius?

MARIUS BENSON:

2006/07 it was 23.7.

TREASURER:

And that’s higher than today isn’t it?

MARIUS BENSON:

That is.

TREASURER:

Yes, that’s right. You see Marius, what happens is, that obviously, revenues go up and down according to the performance of the economy…

MARIUS BENSON:

Sorry, 2006/07 was the Howard years.

TREASURER:

That’s right. The economy was performing very well in those days. Then Labor came in, revenue fell, because the economy dropped off a cliff. Now the economy is starting to come back. Revenues are improving. The bottom line is – what is the impact of taxation policy? And taxation policy is a result of what we’ve done at the last election. And the policies we’ve implemented, means we are collecting over $5.5 billion dollars less today than would have been collected if Labor were re-elected. And the example of that is the Carbon Tax, we abolished, the Mining Tax, we abolished. 96 other tax changes we’ve dealt with that were announced by Labor and even the previous Coalition Government, we finally dealt with. So we cleaned up the taxation system as far as we can. We’re collecting less tax than would have been collected with additional taxes like the Carbon Tax. The net result is going forward, yes, revenues will increase because the economy is increasing. So the bottom line is it needs to be a fair system.

MARIUS BENSON:

Okay, can I go to Dyson Heydon, because today he will consider whether he is biased. Are you happy with that as a way of determining the issue?

TREASURER:

That is the legal process. That is the legal process. And the legal process is, that a Royal Commissioner – if an application is made by a participant in the Royal Commission to remove a Royal Commissioner, the Royal Commissioner will determine if that’s the right outcome. And if the Royal Commissioner makes a decision and the applicant is unhappy, then they can appeal it to the Federal Court. So there are appropriate appeal processes out of this process.

MARIUS BENSON:

You’ve been critical of - or the Prime Minister in particular, has been critical of Labor attacking Dyson Heydon, but isn’t it valid to criticise a public figure in that position?

TREASURER:

Well, Dyson Heydon is a former High Court judge. He’s a New South Wales State Government Supreme Court judge who was appointed by a Labor Government. And you see the only reason why Labor is attacking Dyson Heydon is because the union officials in the Labor Party that have been hauled before the Royal Commission, and in many cases are starting to have police investigations into their behaviour, are worried about where those police investigations are going to go. And so, if there’s nothing to fear, if there is nothing to fear at all about transparency, then Bill Shorten shouldn’t be worried whether it’s Dyson Heydon or any other former High Court judge.

MARIUS BENSON:

But can the Government criticise Labor for attacking this distinguished Jurist when the Government attacked another distinguished Jurist in the form of Gillian Triggs?

TREASURER:

Well, look, I’m sorry I don’t quite equate a Human Rights Commissioner with a former High Court judge. I don’t think it’s exactly the same [inaudible].

MARIUS BENSON:

Human Rights Commissioner, Dean of Law, Professor of Law, Dean of the University of Sydney Law School…

TREASURER:

Yeah, well Dyson Heydon’s got an incredibly impressive curriculum vitae as well. But in one case you’re dealing with a Royal Commissioner and in another case you’re dealing with a Human Rights Commissioner, and quite frankly I think they’re very different circumstances Marius.

MARIUS BENSON:

Joe Hockey, I’ll leave it there. Thanks very much for your time this morning.

TREASURER:

Thank you, see you then.