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Budget 2013: Transcript of interview with Ticky Fullerton: ABC "The Business": 15 May 2013: Small Business; LNG; Geoff Dixon
TRANSCRIPT OF INTERVIEW WITH TICKY FULLERTON ABC “The Business” 15 MAY 2013
E & O E - PROOF ONLY
Subjects: SMALL BUSINESS, LNG, GEOFF DIXON
TICKY FULLERTON: Well, the Federal Minister responsible for small business has a rather big portfolio. It also includes Resources, Energy and Tourism. Gary Gray took on the job as Minister only a few weeks ago and he joins me now from Canberra in all the Budget wash-up.
Gary Gray, welcome to the program.
GARY GRAY: Good evening, Ticky.
TICKY FULLERTON: Now look, we've just seen a few voices from small business and of course they've got a very long wish list, but one I will quote you, and he says: nothing announced of substance in the Budget that would make a difference to the tax burden of business, to the regulatory burden of business and nothing meaningful that would make it easier to employ people.
GARY GRAY: You know, the most important thing that any Government can do in a budget is get the macro-economic settings right to ensure that inflation is kept low, to ensure economic growth is robust, to ensure interest rates stay
as low as they can be, and at the same time ensure that we have the lowest
unemployment rate that we can possibly have. That more Australians are in work than we've ever had before forms part of the critical agenda of the Government. That kind of environment is good for small business. It's good for any business. It's good for families.
TICKY FULLERTON: So it's really a macro-message that you're delivering about the business environment rather than any specific initiatives for small business, because I don't think there was a specific media release on it.
GARY GRAY: No, there was no specific media release
because there are a range of initiatives within the Budget that are quite embedded within individual portfolios. For instance, there's 460 million as part of the package that will provide assistance to farmers. There's 378 million in innovation, which is about innovation centres. There's specific money in the small business portfolio about the Small Business Advisory Service.
But in general, this is a budget which is about
getting the macro-settings right to protect jobs, to protect growth and to ensure that over the course of the coming year while we preserve our AAA credit rating, we also ensure interest rates are kept as low as they can be and inflation is as low as it can be.
TICKY FULLERTON: Well, I'll come back to a couple of issues on the Budget, but I want to dance across your portfolio tonight. To resources, and you've had six years as a senior executive at Woodside. Now I know you have just been across to this very big, big Texan LNG conference. What did you take out from that?
GARY GRAY: The great prospects for growth that Australia has. Also the great market changes that will take place over the coming five to ten years as increased LNG exports take place, both out of East Africa, also potentially out of the United States, into our Asian markets. But I also came away with a real feeling of optimism. That the mission that Australia has started in LNG production that may well see us become the largest exporter of LNG in the world, or certainly the second largest, is well and truly achievable. And I'm a real optimist that we'll have even more projects come online and be passed through their final investment decisions in the course of the next few years.
TICKY FULLERTON: Alright. Well, the Budget did acknowledge the growth that was to come from LNG. The peak body APPEA, though, says the oil and gas industry - this is a fascinating statistic, I didn't realise - is responsible for 30 cents in every dollar of Australian private sector investment, and they are very concerned about the changes to the thin capitalisation rules. You're going to take about 2 billion out, I think, tightening the debt equity ratios where a company can claim tax deduction. Now APPEA
says this directly hits the profits of these big oil and gas projects.
GARY GRAY: Yeah, it's a fascinating observation that APPEA make. It really isn't consistent with
conversations which I've had with the large investors. Now, if you look at the proposal around thin capitalisation, what it effectively says is, we believe there are companies that have been effectively burying debt in Australia for taxation purposes and placing revenue in other jurisdictions. With that kind of situation…
TICKY FULLERTON: Isn't this, though, going to hit the companies that you least want to, in other words these big projects.
GARY GRAY: No. Ticky, it's a decision which aligns
Australia's capitalisation ratios with those of the modern world. We have trends in the OECD to say we should be shifting towards these sorts of ratios. But more importantly what the initiative allows is firstly, if your current capitalisation ratio is different to 60/40 and is consistent with your global capitalisation ratio, then that makes sense. If it's not, then that should be something that the tax office should consider. But even if it's not, then the tax office will be able to make an arm's length ruling of your particular capital ratio.
TICKY FULLERTON: Alright.
GARY GRAY: So there are many processes built in to ensure that rather hysterical reaction that you've described, isn't the case.
TICKY FULLERTON: Alright. Well the peak body also - this is the peak body - they also worry about this jacking up of the cost of trading and or buying into these exportation permits. And life gets tougher in particular for the little guys just at the time when you might want to see some consolidation in the resources industry.
GARY GRAY: Yeah, and so - that's another interesting
comment by APPEA, which, again, they need to take consideration of what was said in the Budget statement last night. Indeed what was said is we will look at these exploration arrangements. There will be a period for consultation. And most importantly, any legislation will not be introduced into the Parliament until Spring, and these measures are not due to be introduced until July 1 2014. Now within that, you see a reaction from APIA that really isn't either considered or balanced or most importantly reading the
documentation that's before them.
TICKY FULLERTON: Alright. Let me ask you, one, on tourism, you've got $180 million, the bulk of which is going to Tourism Australia. Now there has been - no secret - a massive falling out between Tourism Australia and the national flag carrier, Qantas. Alan Joyce accusing Chairman, Geoff Dixon of a conflict of interest, which he denied. Now the Government
appoints the chair. Would you be surprised if Geoff Dixon resigns before the next election?
GARY GRAY: Geoff's a terrific Chair, and the work that Geoff has done to help build the shared vision amongst all of our tourism organisations, State and National, to grow our tourism numbers from about 60 billion a year in bed nights to today over 105 billion, is a real testimony to the work that Tourism Australia has done. I think that Australia's tourism operators, many of which are small business, would want to see more of the quality work that Geoff Dixon's done to support tourism, to support
tourism jobs, and to increase revenues in our
TICKY FULLERTON: Minister, I always need twice the allocated time with you. Thank you so much for joining us.
GARY GRAY: Thank you, Ticky.