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Transcript: Radio interview 2GB: Enterprise tax plan, national energy guarantee, Labor's retiree tax, jobs numbers, return to surplus, cost of living, MH17, energy generation, immigration

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Thursday, 22 March 2018 Radio interview with Ben Fordham, 2GB

SUBJECTS: Enterprise Tax Plan, National Energy Guarantee, Labor’s retiree tax, jobs numbers, return to surplus, cost of living, MH17, energy generation, immigration


BEN FORDHAM: Well, we had a phone call today from the Prime Minister’s Office saying: “Have you got time for the PM to drop in for a chat?” Of course the answer was ‘yes’, Malcolm Turnbull. PRIME MINISTER: Decent of you, a busy man like you Ben. BEN FORDHAM: Malcolm Turnbull, good afternoon to you sir. How are you? PRIME MINISTER: Good to be here, good to be here. BEN FORDHAM: We’ll always make time, we have tried on several times to get you into the studio but you’re a busy man, right? A few other people want your time. PRIME MINISTER: That’s right, lots of things to do, it’s a big country. BEN FORDHAM: You’ve got a bit of drama going on at the moment with the company tax cuts, because it was really looking like this week we were getting closer. Pauline Hanson started warming to the idea. [Phone rings] Hang on, I’ll answer that for you. Who was that calling? PRIME MINISTER: That’s the Defence Minister. BEN FORDHAM: Marise Payne? PRIME MINISTER: I’ll catch her. It is, yeah - BEN FORDHAM: She never comes on the show when we want to talk to her, you should have taken that call. Can you have a yarn to the Minister about coming on the program? PRIME MINISTER: I’ll speak to her, we talk a lot as you know, there’s a lot going on. A lot going on with Defence by the way and Defence procurement. That what I’ve just been doing today. BEN FORDHAM: Let me just focus on company tax cuts first PM. PRIME MINISTER:

Okay. BEN FORDHAM: Because Pauline Hanson starts warming to the whole thing and I made the point the other day, she once ran a fish and chips shop. She should understand this more than anyone, the value of company tax cuts. However now we’ve got a problem - and you’ve been busy doing other things, but Derryn Hinch came on board saying: “Okay, I’ll support them, if the big four banks are exempt from that tax relief.” But then you’ve got David Leyonhjelm and John “Wacka” Williams who we just spoke to, who said if they do that, if they dud the big four banks, then we won’t support it! PRIME MINISTER: Well we’ve just hit the big banks with a major banks levy so you know, really - BEN FORDHAM: Which is what, six billion or something like that? PRIME MINISTER: Yes, yes. Derryn could not, or no one could accuse us of not raising revenue from the banks, so I think the argument is very simple. If you have a company tax rate, it should be uniform across all businesses otherwise you get into incredible problems about defining which businesses are in and which are out. But in terms of the major bank levy, that’s been imposed, that’s the law of the land. We’re collecting it. BEN FORDHAM: So if a question is asked about whether or not you’re for or against the idea of excluding the big four banks from company tax cuts, it sounds to me like your answer is ‘no’? You’re not going to make exclusions? PRIME MINISTER: No, no, because we have, in terms of raising money from the big banks, we’ve already done that in a very targeted way with the major bank levy. That was in the last Budget. BEN FORDHAM: So Derryn Hinch, what do you say to Derryn Hinch? Because you need him. PRIME MINISTER: Well, what we say to Derryn is that we’ve already raised a lot of money from the big banks. We’ve done that in order to support the Budget and bring it back into surplus. But what we need is, we need that reduction in company tax across the board, to keep our economy competitive. As I was saying down at Bisalloy today in Unanderra, down near Wollongong, you’ve got there a company that is competitive that is making the best steel in the world. It’s making steel that is keeping our soldiers safe, it’s keeping soldiers in other countries around the world, safe. It’s really the best steel and the most competitive market. But they’ve got to have a competitive tax rate to compete and that’s what we’ve got to do. We’ve got to set up our businesses to succeed in a very competitive world. BEN FORDHAM: Some of these businesses could be forgiven for thinking: “You know what, I’ll just do business somewhere else. If I’m going to deal with company tax at the level they are in Australia, I’ll go and do business elsewhere.” That’s not good for all of us. PRIME MINISTER: Ben, people, some of the big companies and big investors are saying that already. I mean if you have a company tax rate in Australia at 30 per cent and it’s 21 per cent in the US and you’ve got two investments that are opportunities, otherwise comparable, you’re going to go to the place with the 21 per cent tax rate. So what we’re seeking to do is, to progressively bring it down to 25 per cent. We’ve already done that for companies, to 25 per cent, up to $50 million I should say. So we’ve got that happening. But we need to do it for all of our businesses and this protects jobs. I was listening to the news here at Macquarie just a moment ago, I mean we’re in a position now where we’ve had record jobs growth on an annual basis and on a monthly basis, 17 months of continuous jobs growth. 420,700 jobs created in the last 12 months. 78 per cent of them full time.

Highest female participation rate in our history. We’re getting on with the jobs, but they require more investment to keep that momentum going. BEN FORDHAM: Just on those jobs figures, when Tony Abbott was Prime Minister he set a goal of creating 1 million jobs in 5 years. Since the Coalition was elected in September 2013, the figures out today show 997,800 new jobs have been created. PRIME MINISTER: Getting close. BEN FORDHAM: So you’re getting very close to achieving Tony Abbott’s dream. PRIME MINISTER: Well, we’re certainly getting very close to fulfilling that promise and well before the five year timetable. BEN FORDHAM: Alright, how many of those jobs - and I don’t expect you to have exact figures in relation to these numbers out today, but how many of these jobs are in the public service? Because often when we talk about jobs being created, I often have people emailing me and saying on the open line: “Yeah, but how many of those jobs are government jobs that are created in the public service?” PRIME MINISTER: Well you’re right, I don’t have that figure right in front of me but I can tell you the strongest jobs growth is in small and medium Australian companies. I’ll give you an example, the company that we were with today, Bisalloy, the steel maker. They have added nearly 20 per cent to their workforce in the last year and just this week, Greg Albert the CEO said that they had three causals who they’ve moved over to full time. Now this is happening all over the country. That’s why you saw last month, 64,000 increase in full time jobs, 47,000 decline in part time jobs. So what you’re seeing is, as the economy grows, people are getting new jobs but also are getting people who are working part time, becoming full time. BEN FORDHAM: Governments like to take credit for these jobs being created when really it’s private businesses largely that are creating the jobs. PRIME MINISTER: Well, totally. Mate, I know that, believe me. BEN FORDHAM: That’s not pointed directly at you. PRIME MINISTER: As a former businessman, someone who got into politics at the ripe old age of 50, I know that jobs are created by the enterprise, the courage, the determination of hard- working Australians and their businesses. BEN FORDHAM: So, I’m keen to know, what does this government, the Abbott and then Turnbull government - PRIME MINISTER: So, what does the government have to do with it - BEN FORDHAM: What have you done to create the right circumstances for this jobs growth, when you consider that, well, for starters company tax cuts haven’t moved so far, I know you’re trying to do it. PRIME MINISTER: Well, no they have actually. BEN FORDHAM: Wages have been sitting still, so what have you guys done as a Government to allow you to claim some of the credit for all these jobs being created? PRIME MINISTER:

Right, well a whole lot of things. Firstly, company tax has come down for companies up to $50 million turnover and while that’s not a big business, companies up to that level employ about over half the private sector workforce. So a lot of people work for firms that size and they’re the ones that are responding most rapidly. Secondly you’ve got the big export trade deals. I mean this is massive, particularly for regional Australia. The China Australia Free Trade Agreement, the Korean Free Trade Agreement, Japan, the TPP, Peru just recently, Singapore; everywhere we go, we are seeking to prize open the doors of opportunity in international trade for Australian businesses. We’re seeing that, whether it’s in tourism, whether it’s in education, whether it’s in agriculture, whether it’s in resources, that’s a big part of it. Another big part of it of course is, is the investments we’re making in infrastructure. Massive investments whether it’s building an airport in Western Sydney, whether it’s $70 billion in road and rail infrastructure in our total infrastructure budget over the coming years. It’s a big, big investment in infrastructure. That itself creates jobs, but of course having the right economic infrastructure enables businesses to get on, invest and grow themselves. BEN FORDHAM: Prime Minister Malcolm Turnbull live in the studio with us this afternoon. Now from some happy numbers to some not so happy numbers. We hit an interesting milestone just recently when it comes to gross national debt. It now stands at $518 billion, now Mr Turnbull, that is double what it was at the end of the Labor Government when it was $257 billion. So there’s been more debt added by the Coalition in five years than the Labor Party in six years, so some might now say that the Coalition is now the party of debt and deficit? PRIME MINISTER: Well that would be wrong to say that. The net debt which is the important figure to focus on - because obviously the Government has a lot of financial assets as well, you’ve got to offset them - the net debt was about $340 billion, that will peak, we forecast, in 2019/20 in a couple of years at $365. Then by 2020/21 it will have come down by 10 billion as we go back into surplus and it’ll start coming down, coming down. BEN FORDHAM: So we have some comparisons, where was it when Labor left office? PRIME MINISTER: I don’t have that figure in front of me, but it was obviously lower because we’ve run deficits since we came into government. But I have to say to you the rate of spending has been reduced dramatically, so we are spending a lot less and spending is growing a lot less. BEN FORDHAM: You don’t sound like you’re too worried about the level of debt in this country. PRIME MINISTER: Now, hang on. Wait a minute. BEN FORDHAM: No, no, no - I’m - hey, hey - PRIME MINISTER: I am, I’m very worried about it, that’s what we’re doing to bring it down. BEN FORDHAM: Prime Minister, you might be but I’m saying you don’t sound like you’re too worried about it. Does it worry you as it worries many of my listeners? PRIME MINISTER: Well it should worry all of us because every dollar of debt - I remember back when I was Opposition Leader, when Rudd started going on his crazy spending spree, I said to him: “You’re building a mountain of debt that we are going to have to end up paying for in the future”. Now, what we’re doing is we’re bringing the Budget back into balance by 2020/21. It will be back into balance, so we’ll no longer have a deficit. Then you’ll see the debt coming down. Now just one interesting point, an important point; we’ve updated the Budget over the last five budgets and MYEFOs - so five updates - and we’ve remained on track for surplus in 2020/21, all that time. So we are increasingly confident

that by 2020/21, we will be back into surplus. Of course, once you get back there Ben, then your debt starts to go down. But there’s two things that happen; your debt starts to go down in dollar terms, but because it’s no longer going up and the economy is still growing, it goes down even faster as a percentage of GDP, as a percentage of the economy. BEN FORDHAM: I want to ask you about Bill Shorten’s tax plan, but I’ve got a gentleman calling in who wants to ask you about the cost of living. Are you happy to take a question? PRIME MINISTER: Sure, yeah I’m happy to do that. Better put the cans on. BEN FORDHAM: Might be better to just grab those headphones for just one moment. Mark, you’ve got Prime Minister Malcolm Turnbull live in the studio. You can ask your question of the PM right now, good afternoon Mark? CALLER: I’m a bit nervous, I’ve never spoken to a Prime Minister. PRIME MINISTER: Yeah good on you Mark, how are you? CALLER: Very good. Look, I just, in AFL football, when you go and play in Sydney, they get a cost of living allowance because it’s more expensive to live in Sydney than in Melbourne. I just think it’s got to the point where Australians need a cost of living allowance for living in this country. I mean every January we get an electricity price rise. Every April, private health insurance goes up. I think as a retail, a bit of a suggestion, why not talk about cost of living? Because that’s the greatest issue facing the majority of Australians. PRIME MINISTER: It is Mark, you’re absolutely right and that’s where the rubber hits the road doesn’t it. I mean at the end of the day, this is what you need to be able to do; put more money into the pockets of hard working Australian families. That’s why we want to have more jobs and better paid jobs. That’s why we’re doing everything we can to bring down energy prices. That’s why we’re doing everything we can to ensure that all of the costs that we’re all paying for and you’re paying for and your neighbors are paying for, that we put downward pressure on them, But the big one, that has really taken off in recent times has been energy and our National Energy Guarantee - don’t take my word for it, take the expert’s word - that is going to reduce the cost of energy and electricity over the next decade and that’s critically important. BEN FORDHAM: What assurances can you give people, Prime Minister, when it comes to those power prices. Because obviously you’ve made some bold promises about what we were going to see as far as gas prices coming down and electricity prices going down. PRIME MINISTER: And they did, by the way they did come down, the gas prices. They did. BEN FORDHAM: Okay, so they did. Are they going to continue to come down? PRIME MINISTER: Yeah, gas, okay I’ll tell you. BEN FORDHAM: Is there anything tangible you can say to people about that? PRIME MINISTER: I can, I’ll explain it very simply. In 2012 we started exporting gas from the east coast of Australia, which had never happened before. We produced a lot of gas, but never had sold it overseas. The Labor Government in Canberra and in Queensland did nothing to protect the Australian domestic market and we got to the point about year ago, where clearly, we were exporting more gas than we

had, more gas than we could afford and we had a shortage in the east coast market. I intervened, fairly bluntly and brutally, some people said. I got lots of criticism for it, and threatened to impose export controls. Anyway, we came to a satisfactory and happy agreement and there’s now plenty of gas being provided by the gas producers for domestic demand here. So, the gas price, domestically, locally, reflects the international price, which it should. But because a year ago, it was way, way above, it was completely out of step. So that’s been a big factor on energy prices. Obviously it saves - BEN FORDHAM: What about looking forward? For this moment on? PRIME MINISTER: Looking forward, going forward, you’re going to see a reduction in the cost of generation. The National Energy Guarantee is forecast to reduce it by 23 per cent, that’s the wholesale price of generation. Josh Frydenberg has done a fantastic job in stopping the people that own the poles and wires, the transmission and distribution, from overdoing their claims for payment for that, by abolishing their ability to keep on appealing and appealing against the regulator’s decision. Again, that will relieve consumers of the burden of billions of dollars that had been whacked on them in the past. So, every single aspect of the energy business - you’ve got to remember that your energy bill is made up of a lot of pieces - you know, there’s generation, there’s transmission, there’s the retail piece, all of that, we’re working on every single one of them to bring that cost down. My determination, everything I’m doing, is designed to put more money into the pockets of hard working Australian families and so far as we can put downward pressure on the cost of living. Particularly energy which has been growing, costs have been growing far too quickly, as we all know. BEN FORDHAM: Well let me ask you about something else. It’s been nearly four years since 38 Australian were killed by a Russian missile on Flight MH17. We whacked some sanctions on Russia soon after, but in terms of seeking justice for the families of those killed, the official line from your Government is that we need to wait for the investigation to conclude. Is that a tough enough position nearly four years from the murder of 38 Australians? PRIME MINISTER: Well, what we’re doing is that we are working with the Dutch, who are going to conduct a prosecution. We’re helping them and contributing to the cost of it, that prosecution will investigate and bring to trial the people that they allege that are found to have been responsible. Then of course those people will have to be very, very careful about where they go. BEN FORDHAM: Well the word out of there today is that they are not even sure who they are, or who they’re going to be prosecuting, or whether they can even put them before a court. But you understand why, 38 Australians murdered and they feel like: “Okay it’s been four years”. PRIME MINISTER: Ben, I knew one of them. A beautiful, beautiful nun actually, who taught my daughter. BEN FORDHAM: Can you see for their families, they’re think, hang on a moment we don’t feel like we’ve got justice here…. PRIME MINISTER: Of course, they have not got justice yet. We’re doing everything we can to deliver it, but the justice is being denied by the Russian government. That’s the reality. So all of those people - BEN FORDHAM: So can we not take a tougher line with the Russian regime? PRIME MINISTER: We have imposed sanctions Ben, we have imposed sanctions and we’re seeking, we are supporting the investigation to identify the people that were responsible and then bring them to justice. BEN FORDHAM:

Okay a couple of quick ones because I know you busy. Bill Shorten has been hammered from pillar to post over his tax plan, is he going to going to back down on this? Is he going to offer sweeteners to those who have been hit the hardest, in the lower tax brackets? PRIME MINISTER: Well who knows? But what he is doing is he is robbing pensioners. He is robbing people on low and lower-middle incomes. He’s not going after millionaires or multi-millionaires, these are people, overwhelmingly over the age of 65, overwhelmingly on lower incomes, who have chosen to put their savings - whether it’s their super or just their personal savings - into Australian blue chip shares, paying franked dividends and they have been quite justifiably and appropriately and in accordance with the law they’ve been getting the cash back from the franking dividends, if they didn’t have other taxable income to offset it against. So obviously, someone with a big portfolio is going to have interest and rents and other things. They will be able to off-set it. So Bill Shorten says the person with the big portfolio and lots of other income, he will be ok. But the person on a very modest income, the retiree who has just got those shares and that’s what they have put their money into, he’s going to take that money off them. I was with an old couple in their late eighties yesterday, right, in Port Macquarie. They’re frugal, you know, like a lot of old people are, who’ve saved and they have got everything sorted out. They don’t want to be a burden on their kids and this will cost them $3500 a year, they had it all worked out. You know what they are going to have to do? Cut their private health insurance. So that’s Bill Shorten. He’s going after people who are older, who are on lower incomes and who are vulnerable. Who have worked all their lives and deserve to be supported, not disrespected and fleeced, which is what Labor wants to do to them. BEN FORDHAM: Because we took Mark’s call, now there is a whole board of calls. I’m not going to go to all of them because we don’t have time really and we haven’t arranged to do it. I’m just going read you what they are all asking. PRIME MINISTER: Ok, alright. BEN FORDHAM: I’ll read them out to you and if you want to answer any, then you can. I’ll just read them all, you can pick and choose what you want to do. Teresa says, why is the PM against coal-fired power stations? Richard says, can the PM guarantee the Snowy River Scheme won’t be sold? Shane says, why are we spending so much on renewable energy? PRIME MINISTER: Hang on, slow down, slow down, slow down. I’m not against coal-fired power stations, I believe every technology should play its role. BEN FORDHAM: Why are we spending so much on renewable energy? PRIME MINISTER: Hang on, hang on and yes, we have guaranteed the Snowy Hydro will never be privatized. Three, why are we spending so much on renewables? Well you know, I think a large part of that is, you may as well ask your neighbor why are they are putting solar panels on their roof? The reality is that the cost of renewables, of solar in particular, has dramatically come down. But there is a renewable energy target scheme, but we are not extending that and it will expire in 2020 because the target will be reached. BEN FORDHAM: Okay, really quick ones and I appreciate the fast answers! Why not start building a new coal fired plant, says Vince?

PRIME MINISTER: Well, you have to really ask the energy companies that. I mean it’s really up to them. The National Energy Guarantee will priorities dispatchability, which means the ability to deliver the power when someone turns on the lights or turns on the switch. BEN FORDHAM: So it’s up to the power companies? PRIME MINISTER: Yeah, but the National Energy Guarantee does not discriminate against coal fired power or gas or hydro or anything else. So if we get that agreed and approved in April, which is our goal, then there will be a level playing field and each technology can compete, on its’ own merits. BEN FORDHAM: Why not scrap the Paris Accord, from Anthony. PRIME MINISTER: Oh we’ve entered into it and we’re committed to it. We’re a country that enters into agreements and sticks with them. BEN FORDHAM: Just lastly, we have added 388,000 people to our population in the past year, that’s the equivalent of Canberra. I spoke to Tony Abbott yesterday and we spoke about the idea of having a population portfolio, a Population Minister. I think Labor had one at one stage and then they kind of watered it down by mixing it with environment and water and everything else. I put it to Tony Abbott yesterday that if you were to have a reshuffle and if you were to actually have a Population Minister, that Mr Abbott might make a good Population Minister. Now he’s suggested I was being cheeky in suggesting that. He said you would have to put that to the Prime Minister. PRIME MINISTER: Yeah, fair enough. BEN FORDHAM: How’s my luck? You walk into the studios the following day. PRIME MINISTER: I know, “Deidre Chambers, what a surprise.” BEN FORDHAM: What do you think of the idea, Tony Abbott, Population Minister? PRIME MINISTER: Well look, I never speculate about the future composition of the ministry. But I’d just say this to you -

BEN FORDHAM: So you are not ruling it out, that’s interesting. PRIME MINISTER: Come on Ben. BEN FORDHAM: [Laughter] PRIME MINISTER: The important thing that I would say is every minister is focused on the population, because our job is to serve and deliver for 25 million Australian. So you know, that is across every aspect, whether it’s health, whether it’s education, whether it’s infrastructure, whether it’s ensuring businesses have the right incentives. So that’s our job, to deliver for the whole community. In terms of our immigration policy which I know is a big issue, I just want to reassure your listeners of this; that I regard our immigration policy as one that should be operated solely in the national interest of Australia. Full stop. Right? So we have a skills-based immigration policy, so we bring in people where the skills are in short supply, businesses can’t operate unless they bring in some skills that we don’t currently

have. That’s the test. We’ve tightened it up but I can assure you that every aspect of our migration policy is run in our national interest. BEN FORDHAM: Why not, why not bring those numbers down, as so many of my listeners who are listing in south-western Sydney, north-western Sydney, western Sydney, Greater Western Sydney, they think about the roads and the jobs and the housing and everything else. Why not bring those numbers down? PRIME MINISTER: Well you talk about roads and jobs and housing, the answer is - BEN FORDHAM: Just on the numbers, why not bring them down? PRIME MINISTER: Well the answer is, say you cut your skilled migration in half, you’d basically have to say: “Which projects are we going to cancel? Which businesses are going to have to close because they can’t get the skilled people they want? Which abattoirs are going to close because they can’t get “ - BEN FORDHAM: That’s not skilled migration. PRIME MINISTER: But migration Ben - this is really important to understand - the migration program consists of a humanitarian segment, a refugee segment which is about 18,000. It consists of family reunion which is overwhelmingly spouses, so if an Aussie goes overseas and marries a foreign person, well obviously they’re going to come home with them. That’s fine. The bulk of it though is skilled migration. That was rorted under Labor. It was rorted by Bill Shorten. He had people coming here on 457 to work in Kentucky Fried and MacDonald’s, which was ridiculous. We’ve cleaned all that up, we’ve tightened it up. I just want to reassure your listeners, the focus of our migration policy is on Australia’s national interest. That’s what it’s all about. I see it is as essentially a recruitment exercise. We want to make sure we get the best and brightest that we need. That we need where we don’t have the skills here. Obviously do our utmost to train Australians to do all those jobs, but are we going to say - let’s say we’re short of a number of engineers, are we going to stop building the Western Sydney Airport because of that? Of course not. We’ve got to get on with the job, we’ve got to get on with the job of training our own and then making sure that we don’t bring people in on the skilled program unless they’re the best we can find and that they meet the skills requirement in Australia. BEN FORDHAM: I appreciate your time this afternoon, let’s do it again soon. PRIME MINISTER: Okay, will do, thanks very much. BEN FORDHAM: Prime Minister Malcolm Turnbull live on 2GB. [ENDS]