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Transcript of interview with Michael Brissenden: ABC AM: 9 November 2016: US election; working holiday maker tax arrangements; making superannuation more sustainable; Labor's superannuation lies



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The Hon. Scott Morrison MP Treasurer

TRANSCRIPT ABC AM

WEDNESDAY 9 NOVEMBER 2016

E&OE

Subjects: U.S. election; working holiday maker tax arrangements; making superannuation more sustainable; Labor’s superannuation lies.

MICHAEL BRISSENDEN: Good morning.

TREASURER: Good morning Michael.

BRISSENDEN: We’ll get to the backpacker tax in a minute. Just on the U.S. election, your front bench colleague Christopher Pyne, I noticed late night, said he thinks Hillary Clinton will win and that would be the best outcome for Australia because she supports free trade. And supports the United States being deeply engaged in our region. Do you agree?

TREASURER: I think the issues of deep engagement in our issue and free trade are very important for Australia, particularly on the issue of free trade and the TPP, both of the candidates have said a lot of things which aren’t terribly encouraging, but I think, as always, we will wait for the American people to make their decision…

BRISSENDEN: Do you think Hillary Clinton is the best outcome though for us?

TREASURER: Look, I think it’s a matter for the American people and I would no more welcome overseas commentators saying what Australians should decide, and on that basis I think it’s up to the American people and we would work with whoever is elected on this great day of democracy, and we’ve got a wonderful relationship with the Unites States and that has always endured, regardless of who sits in The Lodge and who sits in the White House.

BRISSENDEN: OK, to the backpacker tax, the way things stand at the moment, no one wants the backpacker tax really to stand at 32.5 per cent do they? But that’s what could happen. That’s what could happen if agreements can’t be agreements can’t be reached in the senate so will you compromise?

TREASURER: Well we have compromised already. We’ve brought down a package which takes us down to 19 cents, which puts us in an internationally competitive position when you take into account what is actually left in the backpackers pocket after they’ve done the same amount of work. In fact, they’re in a better off position, even compared to countries like New Zealand which has a lower tax rate but their wage rates are lower. This is a competitive position. We’ve also put the money into supporting the tourism industry to go out there and get more backpackers to Australia and we’ve done that also by reducing the visa application charge for backpackers to make it more competitive. I’d also stress with backpacker numbers, they’ve been falling since 2012. Before the Budget was even introduced in 15/16, the numbers had already fallen by 35,000, and that was after the tax free threshold was raised to $18,200, and they’d effectively had a tax cut as a result of that. So the notion…

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BRISSENDEN: The point is if you don’t compromise you’re going to get 32.5. Isn’t that right?

TREASURER: The Labor Party have broken a promise Michael. At the last election they said they were going to resolve this issue at no cost the Budget. They factored into their forward estimates the revenue of these measures. What they did yesterday is throw that out the window.

BRISSENDEN: They did always say they were going to reduce it to 19 per cent though didn’t they?

TREASURER: No, what they said was, their forward estimates included the revenue of the $500 million. So they said they were going to resolve this issue with no detriment to the Budget. Now we said the same thing and we’ve done that, with a compromise position which keeps out international competitiveness, strikes it at 19 per cent, a level that the agricultural sector welcomes as does the tourism industry because hospitality workers are also affected by this, and we have compromised. What Labor is doing is playing politics. They just want to drive a wedge in the House of Representatives and play politics with a very serious issue. We’ve compromised, the Labor Party wants to play politics.

BRISSENDEN: Ok but you’re holding out for 9 per cent really, because Jaquie Lambie and the Labor Party…

TREASURER: It’s $500 million, the cost of what Labor announced yesterday. That’s four times the annual national partnership agreement on homelessness.

BRISSENDEN: How much will it cost the agricultural industry, if it’s at 32.5 per cent and numbers fall further?

TREASURER: Well this is why we’ve introduced the compromise package into the parliament Michael. So the Labor Party are refusing to compromise on this. They’re playing politics with it, they’ve gone back on an election commitment to deal with this within the Budget and forward estimates which they have set out in their own election costings. So this is a backflip when it comes to that commitment at a cost to taxpayers of $500 million. So what they’re saying is they want to give a bigger tax cut to foreign workers and ask Australian workers to pay for it. Who else is paying for it? It’s $500 million where the Budget goes backwards. So who’s paying for that? You are, are your listeners are paying for that, so foreign workers can get a tax cut and put an even greater disincentive in these areas for them to employ Australians.

BRISSENDEN: Sure but you’ve had pressure from your own backbench. These are very important workers for agricultural sector aren’t they?

TREASURER: And we’ve listened and we’ve compromised.

BRISSENDEN: But you haven’t agreed, and you won’t agree to drop it to 10 per cent which is the figure…

TREASURER: Because that costs $500 million. Now, Labor have put forward an unfunded proposal. They promised to have a funded proposal. And they back flipped on that. Just like yesterday they back flipped on their commitment not to have additional super taxes.

BRISSENDEN: Ok we’ll get to super in a second, but still the uncertainty continues for the farming sector doesn’t it?

TREASURER: Well Labor can resolve it and the Senate can resolve it. The Government has compromised.

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BRISSENDEN: So you’re going to test it in the senate aren’t you?

TREASURER: Of course. The Government has compromised and others have refused to. 19 cents on the tax is significantly less than 32.5 cents. The common-law position is that if the senators are unable to resolve this then it will default to 32.5 cents. Now I don’t want to see that. That’s why we’ve compromised.

BRISSENDEN: Ok, on super…

TREASURER: Let me just make another point on that. Labor are saying that they think small businesses between two and 10 million dollars should pay higher tax rates because they refuse to support the Government, even on that redefinition of a small businesses. So they’re saying, no, small businesses can pay higher taxes, but we want foreign workers to pay lower taxes. That’s their priorities and we don’t support that.

BRISSENDEN: Well I think a lot of the farming sector want them to pay lower taxes too don they? To encourage them.

TREASURER: Well we’re offering those small business farmers, between 2 and ten million dollars, a tax cut and access to the instant asset write-off. An offer they refuse and they’re saying no we want foreign workers to get a tax cut, Australian businesses and Australian workers have to pay for it.

BRISSENDEN: I do quickly want to go to super. You’re introducing the Government’s planned super changes into the parliament this afternoon, Labor has come up with some suggested amendments. You’re basically indicating you’re not going to consider them.

TREASURER: Labor lied. Labor lied at the last election, they said that they would have changes to superannuation which would be within the same Budget envelope as the Coalition. That’s what they said before the election.

BRISSENDEN: They claim their changes are going to save $1.4 billion a year.

TREASURER: They’re saying at the last election, no we won’t go beyond the $3 billion, the net position, and they’ve lied on that. And they’ve come up with an extra, at least, $1.4 billion in extra taxes, on Australian superannuants and those saving for their superannuation. Now, we see that as a blatant lie. A secret super tax, which they refuse to reveal to the Australian people. Their penalising people with home based businesses, those who work in small businesses who don’t allow salary sacrificing contributions to their superannuation, tradies who also have a wage job as well as a contracting job, you don’t get the same access to superannuation tax concessions as others do. This is a very unfair punishing proposal from the Labor Party to treat superannuation as a tax milk cow, not to treat it as we have, and that is to reform the system to make it more flexible, to make it more sustainable, and to maker it fairer.

BRISSENDEN: But the Labor plan will save money…

TREASURER: No what it will do, it will increase tax, and it will increase tax on mothers who are trying, after having children, to rebuild their superannuation balances. It increases tax on tradies, it increases taxes on people who are saving for their superannuation and want to do more, and are working for a small business. Now, Labor didn’t say they were going to change any of those things. The only issue they raised before the election, with our package, was the non-concessional lifetime cap of $500,000. That was the only issue they raised in their post-Budget reply, and now they’ve welched on that, and they want to bung on an extra $1.4 billion secret super tax that they refused to reveal to the Australian people. Now, we were upfront Michael, before the election, we attracted

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criticisms for it, but at least people knew exactly what we were going to do, I’m following through on that today. Labor Lied.

BRISSENDEN: OK, Scott Morrison thank you very much for joining us.

TREASURER: Thanks Michael.

[ENDS]

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