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Budget 2018: transcript of interview with Neil Mitchell: 3AW Mornings: 9 May 2018

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The Hon. Scott Morrison MP Treasurer





Subjects: Budget 2018

NEIL MITCHELL: Treasurer, you’ve got a bright economic outlook, tax cuts down the track, is this all predicated on maintaining immigration levels at current levels?

TREASURER: Well, as you know, we have a cap on what the level of immigration intake is…

MITCHELL: 190,000.

TREASURER: …and it can rise to that but it doesn’t have to be at that…

MITCHELL: So are your figures predicated on that immigration level?

TREASURER: Well, it’s around about that mark.

MITCHELL: Ok, so what’s the point of having a debate about immigration if you’ve already decided?

TREASURER: Well that’s what the cap is and if there’s any reduction…

MITCHELL: Well you basing all your figures on that level of 190,000

TREASURER: Neil, it could be 10,000 less than it was last year…

MITCHELL: Ok, well what is the cut off? At what level does it blow your figures out of the water?

TREASURER: Well it doesn’t, that’s the point Neil.

MITCHELL: But you are predicating…

TREASURER: But it’s expected to be around about that level, that’s what we’d expect and if it’s anything less than that, then what you do is you have a variation to that and that’s included in the next update in the Budget. That’s how budgets work.

MITCHELL: I want to get this clear: this bright outlook is predicated at the moment on immigration levels such as we have today…

TREASURER: No, Neil that is an oversimplification and a gross misrepresentation of the Budget…

MITCHELL: Well explain to me because you’re giving us a very rosy outlook and immigration and growth seems part of it…


TREASURER: Yes, and I’m telling you why Neil. If you let me answer the question I’ll tell you why.

MITCHELL: I’ve only got seven minutes, Treasurer.

TREASURER: Yeah well let me answer the question, then, and the answer is: it’s because people are getting off welfare and into work. That’s what’s underpinning this Budget. We’ve got the lowest level of welfare dependency of working-age Australians in over 25 years; more than a 1,000 jobs have been created every day in the last year and that’s from the Australian Bureau of Statistics; and people who go from receiving welfare cheques to paying taxes because they’re in work, because of the strengthening of the economy, business investment turning around, is what’s underpinning this Budget. That’s what’s underpinning it, Neil.

MITCHELL: So what do your figures say about immigration over the next seven years?

TREASURER: Well we only do it over four years and then immigration is assumed at the permanent levels, but as I explained to you last time…

MITCHELL: Well, that’s all I wanted to know.

TREASURER: …only two out of a ten people increase in our population levels relates to our immigration intake. Only two out of ten. So the permanent immigration intake is not a big factor when it comes to population growth as I’ve explained to you before and temporary immigration and natural increases are 80 per cent of population increases.

MITCHELL: I raised it because your figures are based on immigration level as it now stands at the moment…

TREASURER: It is not based solely on that, Neil, it is a very small part of a very big picture and the Budget is based off people getting off welfare and into work.

MITCHELL: The $500 rebate - low income earners pay the tax through the year and get it in about 14 months. Well, it’s not a bad strategy but let’s be honest, in the real world they don’t get it until they’ve paid all the bills do they, in 14 months’ time?

TREASURER: Well first of all the $87,000 tax threshold goes to $90,000 on the 1st of July and that applies to those immediately and the targeted tax relief that we’re providing to low and middle income earners is done through their tax refund that’s correct. And that applies from next year’s tax year. The reason we do it that way, Neil, is if you did it another way, then it would cost far greater…

MITCHELL: Trickle down, yeah…

TREASURER: …and the tax relief would go all the way up the income scale and you wouldn’t be able to focus it solely on those low and middle income earners. So all the $4 billion a year impact of that for low and middle income earners, this is the way you do it and you target it and they can rely on it and we’ll be looking to legislate it as soon as possible.

MITCHELL: That’s what I’m saying it’s not a bad a strategy but let’s be honest, it’s not going to pay the bills for 14 months.


TREASURER: Well, Neil, it’s what’s affordable, it’s what’s responsible, I always said they were going to be the rules and this is way we can target it just for them and not see that relief extend further up the tax brackets. Because then we’d be accused of not targeting the relief to where it’s most needed, which is exactly what we’ve done.

MITCHELL: You keep going on about six tanks of petrol, we can’t wait until 14 months to buy six tanks of petrol…

TREASURER: Well it has to be done responsibly and affordably Neil, otherwise you’d be accusing me of being reckless. You can’t have it both ways.

MITCHELL: No it’s not a bad strategy, I just want to be honest about it.

TREASURER: Well I am being honest about it.

MITCHELL: Ok, so there will be an election before they get this money.

TREASURER: There will be election around this time next year, but you can legislate it right now and it can be guaranteed right now and the parliament can vote for all of the tax relief in this Budget all the way over the next seven years, right now.

MITCHELL: But how can you guarantee it? I mean Paul Keating…

TREASURER: It will be law

MITCHELL: L.A.W tax cuts…

TREASURER: We’re talking about Paul Keating, we’re not Paul Keating, Neil…

MITCHELL: And he moved it

TREASURER: Well that’s what Paul Keating did, that’s not what we do.

MITCHELL: So trust you?

TREASURER: Well, we’ve got the record on that, Neil.

MITCHELL: Ok, it sounds like…

TREASURER: We deliver lower taxes, we believe in lower taxes, we’ve got a speed limit on taxes on the Budget. The Labor Party wants to have $220 billion of higher taxes on the Australian economy which cost jobs and discourages investment. Not good for the economy. You can’t pay for hospitals and schools with a weaker economy which is what you’d have under Labor.

MITCHELL: Car tariffs, we’re told by the industry, is bringing in about $1.3 billion a year to car prices, add to car prices. Why have we got tariffs on to support an industry that no longer exists? Why didn’t you deal with that?

TREASURER: Well, we’re working through all those issues over time, Neil, it hasn’t been a priority in this Budget but we’ll look at these, I mean, in this Budget, Neil, we’re focusing on ensuring older


Australians can age with dignity and respect. We’ve provided 20,000 additional in-home care places which includes the 6,000 from last December. Over the forward estimates that’s more than 80 per cent increase in the highest level of aged care in-home care places on the current year. That’s a big change for older Australians. I think they would welcome us focusing on that.

MITCHELL: But you accept we’ve got a tariff to protect an industry that doesn’t exist?

TREASURER: We will continue to work through all of those issues, Neil, but it terms of what my focus is on in this Budget: it’s on delivering that relief for households, particularly middle incomes and ensuring that older Australians can age with dignity and respect and with more choices.

MITCHELL: What’s the growth in public service?

TREASURER: We’ve kept what’s called the average staffing limit flat. Our overall staffing levels in the public service has been kept constant at about 2009 levels throughout our entire term of Government.

MITCHELL: Has the wages bill gone up?

TREASURER: It has gone up sort of in line with what we’ve seen more generally in the economy.

MITCHELL: What, around the inflation rate?



TREASURER: We’ve been keeping a cap on that and Mathias Cormann has been overseeing that for the last five years. We’ve been keeping a cap on that. But as you know, Neil, the overwhelming majority of the Commonwealth Budget isn’t in the wages bill, that’s what you see in state governments because they’re the ones who employ teachers and nurses and police officers and what you’ve got also in this Budget is $4.5 billion of extra GST revenue, which will be going to states for all of those purposes.

MITCHELL: You’ve certainly seemed to help the baby-boomers, did you get a bit burnt by the boomers did you with that nonsense around superannuation?



TREASURER: I was happy to create a more fair retirement income country and I’m happy to ensure that Australians as they age can do so with dignity and respect now and preserve all of their choices.

MITCHELL: And are you happy not to touch superannuation again in the next four years?

TREASURER: Absolutely, that’s what I said when we made those last changes and I’m sticking to it.

MITCHELL: What about the next seven years, given that you’ve got this outlook for seven years?


TREASURER: Well, no. Neil, I’m done when it comes to those changes we made to superannuation. I said that at the time and I meant it.

MITCHELL: The state Government here says you’ve failed to fund the final year of Gonski which is going to put them $700 million worse off. Right or wrong?

TREASURER: Wrong. I mean, the Labor Party will want to play politics over schools’ funding. The fact is schools’ funding is about $18 billion this year, that’s record as rising to $30 billion over the next ten years. I mean the funding wars, they’re over. And they’ve really got to stop arguing about the funding and start focusing on how they spend the money. The average increase in funding per student is 50 per cent over that period of time. So the Labor party needs to focus a lot more on how they spend money rather than trying to grab more money from Australians and higher taxes.

MITCHELL: Thank you for your time, last Budget?


MITCHELL: Your last Budget?

TREASURER: No, I intend to deliver many more with the support of the Australian people.

MITCHELL: Seven years’ time?

TREASURER: [LAUGHS] Well, that’s see how we go, Neil. I’ve got a lot of endurance and a lot more to do.

MITCHELL: Certainly the last Budget before the election isn’t it?

TREASURER: Well, there is potential for the option for one but that’s all up to when the Prime Minister wishes to call the election.

MITCHELL: Will this win you an election?

TREASURER: Well that will be decided by the Australian people, not me, not you.

MITCHELL: Is that what it’s designed to do?

TREASURER: No, it’s designed to create a stronger economy because at the end of the day, Neil, that’s what delivers everything. A stronger economy is what’s delivering the Budget you saw that I handed down last night. That’s what’s delivering the jobs, that’s what’s guaranteeing the essential services, that’s what’s keeping Australians safe, that’s what’s providing the opportunities for business. It’s the stronger economy, and you damage that economy at your great peril and that’s what higher taxes do.

MITCHELL: Thank you for your time.

TREASURER: Thanks, Neil.



Further information: Kate Williams 0429 584 675, Sonia Gentile 0455 050 007 The Hon. Scott Morrison MP, Sydney