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Transcript of joint press conference: Queanbeyan Police Station, Queanbeyan, NSW: 27 April 2016: helping NSW Police officers save for their retirement; 2016 Budget; Turnbull Government says no to Labor's housing tax; Labor's $100 billion additional tax burden on the Australian economy; future submarine program

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The Hon. Scott Morrison MP Treasurer




Subjects: Helping NSW Police officers save for their retirement; 2016 Budget; Turnbull Government says no to Labor’s housing tax; Labor’s $100 billion additional tax burden on the Australian economy; future submarine program.

THE HON. DR PETER HENDY MP (MEMBER FOR EDEN-MONARO): As usual it is a great honour to have the federal Treasurer Scott Morrison here today to announce some very important news for the Police in New South Wales. We also have Russell Matheson who is the Member for Macarthur, we have Scott Weber who is the President of the Police Association of New South Wales and we have the Monaro Local Area Commander Rod Smith here again with us today.

Scott, over to you.

TREASURER: Thanks very much Peter, it is great to be here with you in Eden-Monaro in Queanbeyan. It is particularly good to be here with Russell Matheson. There is no greater advocate for police officers around the country in the Australian Parliament than Russell Matheson. As a former police officer himself - he knows it, he has been out there, he has dealt first hand with the issues that police officers deal with every single day and he has been a tremendous champion for police and their families importantly. To Scott Weber, it has been very good to be working with you and your team over a period of time on these issues. I know it has been a bit of a long journey and you have been incredibly patient over a long period of time but that patience I think will be rewarded in what I am about to announce today. Superintendent Smith, the Local Area Commander here in Monaro, it is great to be here in your command and some time ago Superintendent Smith had written to me about this issue as well.

I am no stran ger to police stations, in a good way. My father was a Local Area Commander many years ago in Sydney and as someone who grew up in a police family amongst other police officers

and their families. I know the job they do and I know the stress and strain it puts on those officers every single day. Too often we hear of the great burden that is placed on police officers, financial burden and other things like this, emotional burden and the stress of what they have to deal with every day.

The issue we have to deal with here is one that came up as a result of legislation that went through the New South Wales Parliament some time ago with the mandatory insurance that was included in the concessional contribution to police officers superannuation here in New South Wales. That limited the ability of New South Wales police officers, more than 16,000 in total, from their ability to save for their future with concessional contributions. If the pressure is not already enough on police officers in New South Wales it is too great when they are feeling stressed because they are unable to contribute to their economic future of their families by having basically the same rules applied to


them as applies to everyone else who can make concessional contributions to their superannuation. This is fundamentally a New South Wales issue and it is one that we have entered in an agreement, the New South Wales Treasurer Gladys Berejiklian and I, have entered into an agreement. There has been great support from the Police Minister in New South Wales Troy Grant and Commissioner Scipione, who I have talked to on this issue many times, to put in place an agreement for the next four years which will mean that the federal government and the state government will share the cost of remitting back to police officers any additional tax paid on their contributions as a result of their insurance contributions that are mandated under that legislation. So they will no longer be penalised for the concessional contributions they make on superannuation because they work in a dangerous job where they are required to have those insurance death and disability insurance contributions comprised as part of how you add up their superannuation.

This is an important change and I want to thank Gladys Berejiklian and I want to thank the New South Wales Premier and Troy Grant, the Police Minister for working with us on this. Now, this is the point we have arrived to today so this agreement is in place for four years and over the four years we work to put in place an arrangement. We are committed to working with the New South Wales Government to do that because at the end of the day we know that we have to address this issue, it hasn’t been addressed for far too long and the Turnbull Government is acting on that. Now, I want to invite Russell Matheson to say a few words about what he believes the impact of this will be as a former police officer and the number one advocate within our ranks, our Coalition ranks as well as in police ranks he has served on earlier occasions about what he thinks this means. I will invite Scott and the Superintendent to also make comments as they would like.

MR RUS SELL MATHESON MP (FEDERAL MEMBER FOR MACARTHUR): Thanks Treasurer, you pretty much explained it all but I would just like to thank Peter for being here today. Peter Hendy has been

a great advocate to the local police in relation to this issue. Superintendent Smith also thanks for opening up your doors to the Queanbeyan Police Station. To the Treasurer, he has done a wonderful job. I was knocking on his front door day in and day out and working with Police Association President Scott Weber and others through their executive. It means a hell of a lot to New South Wales Police Officers, hard working men and women. It helps them plan for their future. They are sworn to serve and protect and when they walk out their doors they have got an environment [inaudible] they don’t know what the day is going to hold for them, it gives them now assurance instead of uncertainty about the future so they can plan for their future with their death and disability and super contribution schemes. To them it means a lot because at the end of the day the importance of this means that their future, serving and protecting us in New South Wales is assured based on the fact that Scott has been working behind the scenes. It is a very, very complex matter in relation to this, it took a little while to go but the Treasurer really does get it. He has done a wonderful job working with the state government to assure the New South Wales, the hard working men and women of New South Wales police service, [inaudible] in the future. I thank the Treasurer. It is a wonderful gesture to be able to do that, to pick up the bill with the state government over the next four years and I would just like to congratulate Scott Weber from the police association as President, the way he has conducted himself through the whole issue through negotiations of the Federal Government and state government. So, Treasurer thank you very much. Thank you for being able to implement this to really address this issue for the hard working men and women of the New South Wales Police Force. I thank you for promoting my advocacy in relation to this because as a serving police officer for 25 years I know the Treasurer, as the son of a former police officer - a local area commander - knows how important it is that we have people who always remember who they are and where they are from. I will always be a strong advocate of police officers in all the states and territories of Australia so thank you very much.

MR SCOTT WEBER (POLICE ASSOCIATION OF NEW SOUTH WALES PRESIDENT): Scott Weber, President of the Police Association of New South Wales. This is a great day for all police officers across New South Wales. It is about protecting the protectors. Firstly, I would like to thank Peter and obviously the Local Area Commander Smith for their hospitality today but especially Russell


Matheson the Member for Macarthur who has been with us through this campaign for the last three years making sure that Police officer’s rights are protected. Again, the Turnbull and Baird Governments came on board in regards to protecting police officers’ rights and giving them the same opportunity as any other member of the community across Australia. The Treasurer, Scott Morrison, and we have heard him speak so passionately about police, with this decision today is about protecting police officers. It is about giving them the opportunity to actually move forward and look after themselves and their families.

SUPERINTENDENT ROD SMITH (MONARO LOCAL AREA COMMAND): I’ll be very brief, as an advocate for all the men and women for the organisation across the state it is fantastic that our calls have been answered and listened to and taken seriously and we are very supportive and thankful for what has been announced today and I am sure it will be of great benefit to our organisation.

TREASURER: Thank you Superintendent Smith. Happy to take questions, before I do that there are a couple of other little points I would like to make so why don’t we deal with just questions on this announcement and then I won’t detain the Superintendent and Scott for other broader matters.

Any questions?

QUESTION: On this announcement, can you just clarify, so police are now able to make extra contributions to their superannuation without being penalised?

TREASURER: That's right. The way it works now is that under that legislation that went through the New South Wales Parliament back in 2012, police officers of New South Wales were mandated to have an insurance contribution for death and disability. Now, that was included, in the calculation because of the way it was done under that legislation, in what their total value of concessional contributions are. Now that means if they went above the cap, it means they pay extra tax on those contributions and what we've agreed today is ensured that any extra tax that has been paid because of that will be rebated back to those officers by the New South Wales Government and so it's the New South Wales Government which does the process of making the payments and I know that there are issues that still needs to be addressed in terms of making sure they come back in a timely way and that's one of the other issues we'll be working on. But it means police officers will be no worse off as a result of these arrangements because of the dangerous job they do and the mandated insurances they're required to contribute.

QUE STION: Is there any Budget impact of this announcement?

TREASURER: Yes, there is and I'll be making that clear in next year's Budget - next week's Budget, I should say. It will be in the year after that’s Budget as well I should stress because this is a commitment over four years and so I'll be making that clear next week.

QUESTION: Treasurer, just on immigration, the Immigration Minister says that nobody from…

TREASURER: We're just dealing with police issues now. I'll go to other matters in a second.

QUESTION: So it would be fair to say this may be an expense measure on the Budget?


QUESTION: Is this what could be seen as a fairness measure; paying more money to let police…

TREASURER: It's the right thing to do. This is absolutely the right thing to do and it's an anomaly that's been there for a number of years and it was something that Russell had already been advocating to me as a Cabinet Minister and when I became Treasurer. I know it was a matter that


the former Treasurer had been working on and it was one that I was keen to pick up and ensure was addressed. This is a solution for the next four years but, as I said, we'll be working on the permanent solution to this arrangement. It's fundamentally an issue for the New South Wales Government but we're not going to stand by and allow the police officers to have to pick up the cheque while that issue gets sorted out. So we've stepped up with the NSW Government. I think it shows the commitment of both the Baird Government and Turnbull Government to sort this issue through.

QUESTION: So we can expect more of this in next week's Budget, reducing concessions from high income earners?

TREASURER: How out you wait until May 3. It's not too far away, not too many more sleeps. Any other questions on police issues today?

On that, I might thank the Superintendent and Scott for joining us today. Thanks very much for having us in your station, Superintendent. Scott, thank you so much for working with us. Stay with us, Russ, you're not dismissed yet.

More broadly I wanted to say this: We're standing here in a police station in Queanbeyan, there are 13,000 police officers across the country who negatively gear. More than one in five police officers use negative gearing to provide a future for their families and today we've talked about supporting police in NSW to be able to invest better for their future. One of the other things we're doing is we're not going to put on the housing tax that the Labor Party is going to put on if they're elected at the next election that will punish and penalise 13,000 and more - one in five police officers who engage in negative gearing. The Labor party likes to tell you that negative gearing is something for the highfalutin. This the same old class envy stuff we see from the Labor Party at every election. The truth is more than 13,000 serving Australian police officers negatively gear and that supports their families on top of that and we won't be having a bar of Labor's housing tax. What we will be doing is ensuring we maintain the arrangements that are supporting police officers and nurses and midwives and plumbers and Defence Force personnel and others who engage in what is a legitimate practice that's been there for more than 100 years to ensure they continue to provide for their future. But it's not just increases in a housing tax, a new housing tax, Labor want to put up income tax and Labor we learned today are bringing back the electricity tax as the leader of the opposition clearly says they'll be doing over the course of the next term if they're elected and they bring back their carbon tax. An electricity tax is only going to further punish Australian families. They've already got $100 billion in an additional tax burden on the Australian economy over the next 10 years. That includes their housing tax but now they want to put up income tax as well and bring back a big thumping electricity tax to boot. A higher tax burden on the Australian economy does not support jobs and growth. The Budget I will bring down next week on behalf of the Turnbull Government is about jobs and growth and that doesn't mean putting a higher tax burden, whether it's on police officers or whether it's on Australian families or small business and medium sized businesses that are out there creating those jobs.

QUEST ION: On negative gearing, the Prime Minister last night said the wealth of individuals who negatively gear is beside the point. Do you agree with that statement?

TREASURER: The Prime Minister was simply saying this - it's like saying tax deductions support those who are on higher incomes because they pay higher tax. So if you're paying 47 cents in the dollar, then obviously the value of a tax deduction is higher for you than someone who was paying 32.5 cents on the dollar. the point we've been making is that two-thirds of Australians, two-thirds of Australians, who engage in negative gearing have taxable incomes of 80,000 or less, 70 per cent own just one property, a further 20 per cent own two properties so what we're doing is ensuring that we're maintaining that important savings vehicle which provides stability and certainty and assurance for Australian families. If you want to support Australian families, don't put a housing tax on mum and dad investors, which is what Bill Shorten wants to do.


QUESTION: It's beside the point then?

TREASURER: They're your words.

QUESTION: They're the Prime Minister's words.

TREASURER: I have answered the question.

QUESTION: You’ve ruled out changes to capital gains tax, does that include in the superannuation arena?

TREASURER: Yes. The Prime Minister made that clear some time ago.

QUESTION: How dangerous do you think it is for Labor to engage in the climate policy they've announced today given what happened to the last two Labor Prime Ministers in exactly that area?

TREASURER: What we've seen from Labor is they just don't learn. They don't learn. They still think that the best way to support the economy is to increase the tax burden on the Australian economy. We've got a housing tax, an electricity tax, they want to increase the income tax. There’s not a tax they don't want to hike, this mob, because for one simple reason - they just want to throw more and more money around. What you won't see from the Government, particularly in next week's Budget, is you won't see the Government throwing money around before an election. You'll see a sober, responsible plan to support jobs and growth, to continue to reduce the deficit, to continue to keep expenditure under control. That's what you do in this critical time that we're facing in our economy. What Labor is going to do is just - you shake your head - what did they not get about the last election when the country said no to a carbon tax and now they want to bring it back, rebirth it in some other form. It only puts up electricity prices, that's fairly clear, and they can spin it anyway they want but what it means is they want to tax electricity.

QUESTION: There's been a sharp drop in consumer confidence in the past week ahead of the Budget. Should people be that worried about it?

TREASURER: The Budget will be out next week and I think that will provide greater certainty about the announcements that are there and the previous week we saw it go up by the same amount so I think you get a bit of volatility at this time. But confidence is important in the economy because it's supporting household consumption in our economy which is supporting growth and what you don't do if you want to support consumer confidence in our economy is whack a $100 billion tax burden on the Australian economy. That is a confidence crushing tax burden on the Australian economy that Labor wants to put on, over $100 billion. Whether it's the housing tax, whether it’s increasing income tax or their new electricity tax, it’s all confidence crushers.

QUEST ION: If putting up taxes is so bad for confidence, do you rule out putting up any taxes next week?

TREASURER: What I've said is we're not going to increase the tax burden on Australians, right? There are changes in the tax mix all the time. I mean, in every single Budget there are changes in the tax mix. The question is why are you doing it? Labor are increasing taxes to support higher levels of throwing money around on their spending and even those higher taxes won't be enough, which we've already demonstrated. They have almost around $60 billion in additional expenditure currently over and above the Budget and forward estimates. That's just over the next four years. Over that period of time they have $8 billion worth of new taxes and just $1 billion worth of savings to pay for it. Over 10 years, they've got more than $100 billion in taxes and expenditure that far exceeds that as well. So Labor is going to increase the debt, they'll increase the deficit and they’ll


increase your tax and they'll just throw money around. That's not a plan for jobs and growth. What we will do is ensure we keep that tax burden under control, we'll ensure that we don't add an additional tax burden onto the Australian economy because the policy decisions and the tax decisions that we take will ensure that we grow revenue to support the Budget by growing the Australian economy.

QUESTION: The Immigration Minister says nobody from Manus Island will be coming to Australia…

TREASURER: That's correct.

QUESTION: The Defence Minister said it would be assessed on a case by case basis. Who is right?

TREASURER: No-one on Manus Island is coming to Australia. Full stop. End of section.

QUESTION: One more policy one Treasurer Morrison. You say you're not going to go around throwing money around but just yesterday we see the Government commit to the largest-ever Defence build, a $50 billion contract, and the Prime Minister admitted it was more expensive to build all of our submarines here in Australia. Do you think it would have been more fiscally responsible to go for the cheaper option and build some of the submarines overseas?

TREASURER: No, this is the right decision and it's the decision that has been recommended also by an impeccable process that has got us to this point. This is not just an investment in the future of our Defence Forces - and remember we are the Government that has taken decisions on building ships. The previous Government did nothing for 6 years and left a yawning chasm in our continuous ship building capability and they basically put the Defence ship building industry into park mode, if not reverse mode, over the course of those six years because they just couldn't make a decision. Now we've taken a decision. We've run an impeccable process. It's not just on the submarines, it's on the frigates, it's on the Pacific patrol boats and it's on the other patrol boats that particularly are engaged in border protection activities as well as missions and for the Australian Defence Force. So we've engaged in those decisions to build a stronger Defence Force and to return the improvement in Defence Force commitments above the levels which were frankly pre-war under the previous Government. The other thing we're doing is investing in transforming the capability of Australia's defence industries. Our economy is going through a transition. The decision to commit this $50 billion, which is all part of the forward capability plan outlined also in the Defence White Paper, is investing in transferring high tech jobs in Australia, and investing in ensuring an improved capability for Australian industry which will have spill over effects not just directly in the ship building industry but more broadly across the economy, and more broadly around the country. This is an economic plan, as much as it is a defence plan. It’s a plan for jobs and it’s a plan for growth, and that’s why it’s such a good plan. Thanks very much, it’s good to be here with you.


Further information: Julian Leembruggen 0400 813 253, Kate Williams 0429 584 675