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Budget 2018: transcript of interview with Matt Taylor: CNBC: 8 May 2018

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The Hon. Scott Morrison MP Treasurer




Subjects: Budget 2018.

MATT TAYLOR: Treasurer, thank you so much for chatting to us, the rating agencies have called for a credible path, or return, to a surplus. Because you’re going to get there next year with a balanced Budget, do you believe that this Budget and its forward estimates provide that credible return to surplus that the rating agencies have been calling for?

TREASURER: Well, I believe it does and it has now for some years. I mean this is the sixth successive Budget update that has projected a surplus in 2020-21 and we are one of only ten counties to hold a AAA credit rating with the three major ratings agencies. And the fact that we’re getting to that balance one year ahead, albeit modest, and we’re not overstating that, I think we’re being very clear and transparent about that, I think that is ticking the boxes — certainly those who are taking out Australian bonds and things like that, have demonstrated their support because of the way they have continued to participate in those programs.

TAYLOR: Alright, this Budget is coming ahead of a likely election next year. How hard was it to show restraint and not provide too many electoral sweeteners? Because economists I’ve been speaking to do say that it shows a lot of restraint.

TREASURER: Restraint is what the Coalition Liberal-National Governments do. That’s why people respect us and trust us when it comes to managing the nation’s finances and supporting a stronger economy. I mean, this Budget is about creating an even stronger economy. Australia is now in its twenty seventh year of consecutive economic growth, which is an enviable record anywhere in the world. But it just doesn’t happen by accident, and it doesn’t stay that way by accident. And so we will keep making the decisions that double down on achieving growth.

TAYLOR: At the centre of the Budget is, of course, the income tax cuts for lower to middle income earners. Also some big reforms out over the next seven years of the taxation system on the income tax side of things. Is there more work to do there or are you satisfied with what you’ve outlined over the next seven years is really going to do the trick? Especially when it comes to things like bracket creep?

TREASURER: Look, wherever I can reduce taxes and create tax relief for Australians, I will do it every single time. And where there’s opportunities in the future, given that opportunity, then we would certainly seek to do that. But what this is about is we’ve got a speed limit on taxes in this country - 23.9 per cent of our economy. And what we’re saying is: “You go above that, you’ve got to give the money back.” It’s their money, they earned it. And if you want a strong economy, people who work in that economy, who run businesses in that economy, need to know that if they put in the effort, they will get the reward and you’ve got to have a tax system that does that.


TAYLOR: Corporate tax is still on the agenda, obviously working to get that package through the Senate. Do you hope, or think, that what you’ve outlined today in the Budget on the income tax side of things might help sway some of the Senators that are holding out and not wanting to support the corporate tax cut package?

TREASURER: Well, it can only help. Obviously, they’ve got to make their own decisions. I said last year that people on low and middle incomes would be getting tax relief before larger corporates would, and this Budget delivers on that. That was always our plan. The longer term Enterprise Tax Plan supports jobs in this country, it supports income, it supports wages, it supports businesses, it supports the economy that we all need to pay for the things that are essential in this country - hospitals, schools. So it’s integral to that plan, so that’s why we stuck to it.

TAYLOR: You’ve talked about jobs, obviously, the windfall that the Government has seen since the mid-year Budget update. As you’ve pointed out today, it’s on the back of 1,000 jobs being created every day over the last 12 months or so. What’s the Budget doing to ensure that trajectory, I guess, continues over the next 12 months, 18 months, two years?

TREASURER: Well, we have a more modest outlook than the record performance we’ve had over the last year, but the economy, and the plans we have for it, where we support it by, of course, the tax cuts, but also the new medical industry plan which seeks to make Australia even more competitive on that front. I mean, you know the minerals industry of Australia, the mining industry, has been incredibly successful for us, but it’s not the only thing that’s happening here in this country, and the medical industry is an area where we’ve seen great growth. And the health sector in particular is a big part of our economy and it’s getting bigger. So we’re backing in that sector with some key investments in research and support for research infrastructure in particular. But across the board, whether it’s farmers, whether it’s better GPS services for them, whether it’s the infrastructure program - a $75 billion rolling program. We are investing heavily in public infrastructure, with the State governments, and that underpins a stronger economy again. But it also busts congestion in cities, makes our roads safer, particularly in rural areas — we’re a big country — and it connects products to market.

TAYLOR: One final question, wages, of course, we’ve spoken about this before, remain stubbornly low, wages growth. What are you hoping the Budget might help improve the outlook for wages?

TREASURER: A stronger economy, businesses doing better and that’s what it comes down to. The money doesn’t fall from the sky, wages will improve as businesses continue to do well, and that’s what we’ve factored in the Budget.

TAYLOR: Treasurer, thank you so much.

TREASURER: Thank you.


Contacts: Andrew Carswell 0418 505 376, Kate Williams 0418 872 921, Sonia Gentile 0455 050 007 The Hon. Scott Morrison MP, Sydney