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Transcript of interview with Ray Hadley: 2GB: 26 July 2016: federal election; Senate; Pauline Hanson; superannuation; Royal Commission into youth detention in the Northern Territory; Brexit; Secretary General of the UN; Kevin Rudd; greyhound industry; terrorism

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The Hon. Scott Morrison MP Treasurer




RAY HADLEY: I’m happy to say he is back in the studio.

TREASURER: Well it is nice to be here in the studio Ray

HADLEY: This is salubrious.

TREASURER: Quite a different presence from the old one.

HADLEY: Well I can tell you that we normally work in the other old one but when we have special guests like you…

TREASURER: Oh is that right. It’s nice to be here.

HADLEY: That’s an official lie. Well there is an old expression that John Tap used to use when he was calling races and I was one of his understudies ‘as close as a boarding house scrape of butter’ or ‘as close as a housing commission coat of paint’ as I would say. In the end it was pretty close.

TREASURER: It was very close. Federal elections always are close I remember making those comments here. There are some seats that were a surprise; there are many others that were anticipated. But it was a few weeks before the election and I was down at Shark park for the warriors game it was the ugliest wobbliest field goal for the golden point that you had seen…

HADLEY: But they get the two points.

TREASURER: But you get the two points and you know what the warriors didn’t do a victory lap after that game by the way. Bill Shorten did one and he didn’t win the election.

HADLEY: Yes but he might be doing a victory lap as opposed to you doing one because you have to deal with the Senate that is yet to be determined.

TREASURER: Look I am more optimistic. I mean in the last..

HADLEY: Well you are by definition.

TREASURER: I am optimistic, that is what people in the Shire like. But six out of eight senators last time you had to get in that last senate and they were all completely different and it was almost a compete impossibility to get any consistency or cohesion in that Senate. Now while there might be a vote or two extra - nine or potentially ten you have to get there are fewer moving parts. There is a block of votes with Nick Xenophon, a block of votes with Pauline Hanson, and then you have got


Derryn and potentially David Leyonhjelm and others. There is I think more of an opportunity I think for consistency amongst that group particularly on Budgetary measures. The other point I raise is this, Labor and the Greens no longer as a bloc just block legislation. They will also need to get crossbench support to continue the sort of Budget sabotage that we saw particularly that the Labor Party do.

HADLEY: You would think if she does get three Pauline Hanson via One Nation it is most unlikely that she will ever support the Opposition her block. Mr Xenophon usually goes your way..

TREASURER: Well he doesn’t actually but Nick is a professional politician who is pragmatic and you can work with to go through…

HADLEY: When I say he doesn’t go your way he is no unreasonable to deal with

TREASURER: No he is not he is very professional.

HADLEY: He is not mad and some of them have been mad in the past. You mentioned David Leyonhjelm in NSW it comes down to - and everyone thought he was gone but it is either David Leyonhjelm or the Christian Democrats. Now in NSW I guess we don’t know what is going to happen because we have never been in this territory before in relation to preferences.

TREASURER: That’s right. I mean with the optional preferential arrangement above the line what that means is now much of the vote exhausts. Now in NSW we are more used to seeing it because this is what happens in state elections and as the preference count is done we will see what the real impact of this is but I think - the Prime Minister and I and other senior Ministers have been engaging with the crossbench and talking to them. I have spoken to David, I have spoken to Pauline and Nick and we are getting on with the job.

HADLEY: Do you think the Prime Minister regrets having said there is no place in the Parliament for a person like Pauline Hanson or words to that effect?

TREASURER: Well I think the commentary you have heard from the Government particularly about Pauline is that half a million people voted for Pauline Hanson and she has earnt her position and what other Senators have been able to be elected by being elected. Now that is a stark contrast to the way Senates have been elected in the past. So everybody who stands in the Senate has got there by way of getting votes and you have got to respect that.

HADLEY: Effectively the Prime Minister called 500,000 people dills, effectively.

TREASURER: 500,000 people voted for that party and we have consistently I think stated our absolute respect for that process. And we will work with Pauline, I have spoken to Pauline. I was one of the first to speak to Pauline.

HADLEY: She is not an unreasonable person.

TREASURER: There is - I think one of the first tasks for all of these Senators is to take their time, to not be bullied into positions and things like this. There is an enormous amount of information that they have to get across and the Government will be supporting them to get across that detail and information with the briefings that we provide. But they have to take the time to make their own calls. It is some weeks before parliament goes back so there is an opportunity to do that but first of all the count has to be finished and they have to be duly elected.


HADLEY: Ok, there seem to be a disconnect with the western part of Sydney and your party. You are part of the Sydney scene even though you are down in the Southern part of Sydney. What happened in the west? Where did you go wrong there?

TREASURER: Well the results particularly in Macquarie with Louise Markus and Fiona Scott out there in Lindsay and of course Russell Matheson down in Macarthur were very disappointing there is no doubt that the issues around Medicare and so on had a big impact in those three seats.

HADLEY: Why didn’t you combat that? It was the old story that I used to say to the former Prime Minister, roll the sleeves up, get down and dirty if you are wrestling with pigs you need to get in the mud.

TREASURER: Well look I would answer you this way Ray, we said it wasn’t true. We said every day it wasn’t true, we ran ads saying it wasn’t true.

HADLEY: But people didn’t believe you.

TREASURER: But equally 2GB said in every single slot that it wasn’t true and people didn’t listen to that either.

HADLEY: We weren’t offering ourselves for election.

TREASURER: No but Ray. The point is the media called it out as well and this radio station called it out as well and somehow as a result of the on the ground buffeting of people over phone lines and text messages had its result. Now that is something that we have to address over the next three years but also we have said particular in the area of Health we need to rebuild people confidence about our commitment in this area by having practical policies that meet peoples service needs but do so in a sustainable way that is affordable. I mean we cannot afford the level of services and everything we do currently unless we do one of two things and that is find greater efficiencies or raise taxes. Now I am not a fan of raising taxes as you know and so it is important that we deal with that dilemma but people have got to know that we are very committed to the services in health or education or all of the other areas ad that will be a keen focus of delivery for the Prime Minister and the rest of the team.

HAD LEY: One seat remains in doubt in Queensland, Herbert. Now when I went off air yesterday the sitting member from the LNP was one vote - one vote in count in front he is now 73 behind there

will be of course a recount because it is under 100 to start with but where do we go with that I mean it is so close on preferences two party preferred it comes down to 73 or fewer than that if they do a recount it goes back the other way. Where are we headed?

TREASURER: Well the next step is possibly the Court of Disputed Returns and that leads to a fresh election. There were issues that were raised in the Court of Disputed Returns in McEwen I think in 2010 and that had its process. So look it is hard to say Ray.

HADLEY: So we could be going back to the polls?

TREASURER: We could be going back to the polls in Herbert. It could produce a determinative result but we just have to wait and see. It is an enduring nightmare for all of those closely connected but particularly for people living in Herbert and Townsville.

HADLEY: Now, speaking of recurring nightmares Alana Jones worked on the Prime Minister leading up to the election and I worked on you. Both of us spectacularly unsuccessful about superannuation changes. The Australian today reports that the Liberal National Small Business Committee has labelled your superannuation changes as madness and they are talking about he $500,000 cap on


non-concessional contributions. Now I have noticed since the election you have been far more accommodating of suggestions that maybe just maybe there will be changes. Whereas before the election when you and I sat in these - well not in these same chairs but in another studio in the same situation, you were emphatic there would be no change. So…

TREASURER: we are not looking to change the policy Ray. What we are looking to do is to ensure its prac tical implementation. Now even before the election we made a number of changes for people who receive compensation payouts and how they would be treated or people who had real property transactions that they were in the middle of at the time of the Budget. There are other issues around life events that are technical issues and there will be exposure draft legislation coming out in the next few weeks and we will go through that normal process. Fundamentally Ray what we are talking about, let’s take small business for example as I said on your programme during the election campaign there is up to $1.9 million in contributions that can be made outside the non-concessional cap for small businesses. Now that is not something that seems to be well known and that relates to sale of assets within those businesses particularly if you are over the age of 55 or the sale of those businesses that you have spent your whole life working on and those proceeds there is already an exemption that enables those things to come into place. But we are talking about a budget that needs to be brought back to balance. This is an important part of that job of bringing the Budget back to balance with savings in other areas and the welfare system and other parts of the government’s budget and we have been very tight on our expenditure. But these changes both make superannuation more sustainable, more fair - I mean this is enabling people on lower incomes to make better contributions than they could before with better support. It enables partners to be able to better support each other and build up each other’s superannuation savings over their lifetime. Particularly for those listening to this programme those who are tradies who may be having a wage as well as being a contractor to be able to fully access the deduction to make their contribution. Now this is a package that deals with fairness, sustainability but above all it is also contributing to getting the Budget back in to balance. Now that is a big task, now I have just got back from the G20 which is why we w ere not able to talk yesterday I was still coming back but we have got to get the Budget back into the black and this is part of getting the Budget back into the black. For those who have already made contributions to their superannuation of over half a million dollars well they have an average balance in their superannuation of $2 million. So the change we are saying is well you can’t put anymore in after that. So the people in this situation would probably have already but in around $700,000 in after tax contributions and if we are to say well you can go and put in another $500,000 on top of that $700,000 and that is the way a concession is being asked to be offered up and that comes at a cost to the Budget of over half a billion dollars. Well I think you have got to ask yourself a question about he fairness of that and the ethnicity of that when we need to get the Budget back in the black.

HADLEY: Now, will you change your mind just a little bit? Having done through all of that I listened intently to every word you said and I am looking to say to you that the most unfair part of the package is the $500,000 cap on non-concessional contributions were the rules changes, it’s not fair.

TREASURER: Well Ray let me ask you about that, how is it fair that someone who has already put $700,000 in non-concessional contributions into their super is now allowed to put another $500,000 into that and they already have a superannuation balance on average of $2 million?

HADLEY: Well it appears to be Minister - Treasurer that you need to convince your Liberal National Party Small Business Committee that it is not mad, not me.

TREASURER: And I am happy to do that Ray but this is what is being asked for and what this will do is save the Budget over half a billion dollars and we have to get that Budget back into balance. Our credit rating is at risk and we all know that to be the case and if those savings aren’t found in that way then they would have to be found in other ways which I think would actually be more unfair to other people. So look it is a legitimate debate, we will continue to have it we believe the policy is


fair, we believe it makes the superannuation system sustainable and when we are asking many others in other parts of the country who are recipients of other benefits or other issues to take their share of the load in bringing the Budget back to balance then we think this is a reasonable proposition in this area.

HADLEY: I know you have seen the footage from Four Corners last night and the Prime Minister this morning has announced there will be a Royal Commission into youth detention in the Northern Territory. The only concern I have is that Royal Commissions are lengthy, cumbersome, we need immediate action don’t we on what we saw last night?

TREASURER: Yes, and the Prime Minister announcement about a Royal Commission is not to the exclusion of that Ray. It is important that when something of this scale has occurred - it has shocked me, appalled me, you, everyone, the Prime Minister, the Chief Minister in the Northern Territory then it requires that scale of a response. But it also will require immediate responses and I have no doubt that they’re the details that will be worked through with the Northern Territory Government, the Prime Minister and the Attorney General now. It is not instead of I think you have to deal with what is clearly a broader systemic issue, we have had inquiries into this area before and these issues haven’t been picked up so you have to deal with the bigger picture issue here but you also have to deal with the immediate issue and those immediate issues I have no doubt will be addressed by the Prime Minister and the Chief Minister.

HADLEY: Ok, so the immediate issue is dealt with but you see one of the problems we have is you have got these young blokes in the system from the age of 11 so while the abuse may be systemic so are the reasons the kids come into the system. If there is a Royal Commission we have to find out why that young bloke I spoke about, why he since 11 has been in in in. he has been violent when he is outside, he spits at people, he does all sorts of antisocial things, he thieves things, he behaviours in an anti-social fashion and the way he was treated is abhorrent but the way he treated other people was similarly abhorrent. We didn’t find out why he got himself into those situations, high on ice at the age of 12 or 13.

TREASURER: Look I think that is all true Ray and I think they are the issues that can be picked up in a Royal Commission. But let’s not also forget that there are good stories out there about how some of these instances are being avoided. You know of many of them, I am a big supporter of the Clontarf Foundation and they run an outstanding programme at Endeavour High School and that brings young aboriginal children, kids out from rural NSW they stay down at Kirinari Hostel down there in the Shire and Jeff Hardy who runs that programme down there is doing an extraordinary job and he is turning young indigenous lives around. There are other programmes like that around the country.

HADLEY: Noel Pearson is doing incredible work.

TREASURER: Noel is doing the same thing so look there are solutions to this and the solutions are different in almost every corner of the country and it does need to be very customised but the horror of what we saw last night cannot go unanswered and you know you and I have been critical of the ABC on occasions but I have got to take my hat off to them and that report last night and we will respond to that as the Prime Minister has made crystal clear. But you are also right Ray there are immediate things - actions that need to take place and a Royal Commission obviously isn’t set up to deal with those immediate things and you would expect the authorities to be dealing with those immediate responses that are necessary.

HADLEY: I might mention that when I am critical of the ABC almost entirely is Four Corners quarantined from that criticism and I interview them quite regularly. I don’t always agree with all of the stories they do but they do an outstanding job. Now back from the G20 in China of all places. We had a little bit of a set two with them recently about territories in the Philippines and surround areas was that discussed or were you talking about other matters?


TREASURER: We were talking about other things; I mean the G20 Finance Ministers meeting is to talk about economics. We were talking particularly about the Brexit vote in the UK and what that is all going to mean for Europe and the UK and how that is going to play out around the world. The good news out of that was that the financial markets around the world despite some initial volatility, which was quite strong…

HADLEY: On that day.

TREASURER: Yeah but it balanced off and the central banks around the world work well together to ensure that that impact was limited. A lot of that is because of the work that has been done over the last five or seven years Ray where there has been a lot of strengthening done in the financial architecture which really did mitigate the broader impact of these events. But that said whiel the effect here in Australia is going to be very limited and that is both my view and the view that has been put to me by the Reserve Bank and Treasury and others, it is going to take some time for the UK and Europe to sort all of this out but I detect that a good faith to do just that because the stakes are very high. I met with Chancellor Hammond when I was there and the is a very clear eyed fellow and with new Prime Minister May together they will get on with the task pretty quick and obviously we are pretty keen to do a deal with the UK on free trade as quickly as we can.

HADLEY: Yeah before anything does change there.


HADLEY: A couple of quick ones, Kevin Rudd and his bid to become the new Secretary General of the UN I guess pressure on the Government to say past sins are forgotten do your best. How do you feel about that?

TREASURER: Well Cabinet will discuss this, that is what the Prime Minister agreed to do. I make the point about precedent that the Labor Party is carrying on about, back in 2011 Peter Costello made it pretty clear that if there was interest in supporting him to be the new head of the IMF then he was interested.

HADLEY: Ready to go.

TREASURER: He got nothing from Wayne Swan or Labor. Now the only difference between Peter Costello’s condition here and that of Kevin Rudd is that I think Peter Costello would be eminently qualified to take on that role.

HADLEY: And you are suggesting Mr Rudd is not eminently qualified to take on that role?

TREASURER: You may well say that Ray…

HADLEY: No I’m just interpreting what you said.

TREASURER: I couldn’t possibly comment. I will let - we will have our views in Cabinet about that.

HADLEY: Your friend and colleague Mike Baird and Troy Grant under fire shutting down the greyhound industry. Pru Goward a Liberal MP from Goulburn were we broadcast to said this is not what we do, Barnaby Joyce was on the programme with me as soon as he could last week or the week before critical of the decision as well. Shutting down an entire industry based on what I consider to be a flawed report by Justice McHugh in many respects it needs cleaning up, does it need shutting down?


TREASURER: Well Ray I heard what you said last week and you made the comparison to the Islamic community and you and I think share this view.

HADLEY: We do.

TREASURER: Some bad eggs in that community doesn’t mean that the community is full of bad eggs and I thought you made a pretty compelling argument about that to be honest.

HADLEY: Well there are some bad eggs and they are not allowed to get those bad eggs out of the industry because they haven’t got the legislation in front of them from the government because under the Surveillance Act of 2005 they can’t get rid of them.

TREASURER: I think this is going to be a very difficult issue for the state government. The state and federal government won’t agree on everything, we are obviously of like mind and I don’t want to create difficulties for them but I am obviously share concerns about the good people who have been involved in this industry and but there lifeblood into it. You have the other states now who are just looking to take their opportunities on this and so you wonder what the real ethicacy is at the end of the day when it comes to the welfare of those animals. But also those who have invested their heart and soul not just from a business point of view but also their life’s passion Ray. So look I don’t wish to be critical…

HADLEY: But you will be.

TREASURER: Critical of my colleagues but look I think this is going to be a tough one for them and what were the other options.

HADLEY: There were 79 other options. One of the things as I said and I will repeat for the benefit of people who didn’t hear it. We have some people in jail having been guilty of crimes in the name of Islam and we have some really nice decent Australians who are of the Islamic faith. So what do we do? Do we punish all of the Muslims because of the lunatics we have in various institutions and do we punish the entire greyhound industry because of some very bad people within the industry, a small percentage, as is the case with the people bringing great shame to Islam as well.

TREA SURER: Well look I just hope this issue will be dealt with practically. I can understand that the state governments real concern about the information that was put in front of them but look it is a

tough one Ray. Government is about tough choices that is why I I am not looking to be critical. We have got to make our tough choices, the government is back on the job, we have had the election there are still some issues that we have got to work through that will be difficult but that is par for the course with government. But if I can just say this because we have to wrap up but when I was in the G20, we are growing at 3.1 per cent, we are in our 25th year of consecutive economic growth, there is no other seat that I would have wanted to occupy around that G20 table on the weekend because while we have got our challenges - we read the loss of those jobs at Woolworths yesterday but our services sector is growing, retail sales are up over 3 per cent, we have got great opportunities in this country but they won’t continue unless we make difficult decisions and that is whether it is on super, it’s on welfare, whether it is on other issues there are going to be decisions none of us like but are going to be necessary and the Government will get on with the job of that.

HADLEY: In the meantime alert the greyhound industry. Thank you for your time Treasurer.

TREASURER: Thanks Ray, looking forward to 16 straight wins on the weekend.


Further information: Kate Williams 0429 584 675