Sky News AM Agenda
KIERAN GILBERT: Mr Morrison thanks very much for your time, is this report right?
MINISTER MORRISON: Well it’s more speculation which you expect before a Budget, but I don’t think there’s any secret about the fact that for the last several months I’ve been in discussions with crossbenchers, with my own back benchers, of course with stakeholders, National Seniors, COTA, ACOSS put forward I think a very interesting proposal some weeks ago now. If you’re not going to go forward with one measure I’ve always said if something comes off the table something has to go on, because we cannot walk away from the Budget task. Labor has left us a fiscal mess and we need to continue to lean forward into that task every single year and that’s what we’re doing. If we’re considering taking measures off, then new measures must come on.
GILBERT: With the taper rate it was made more generous, as I mentioned in the introduction by Peter Costello and John Howard, is that something that was good during the boom but now has to be rethought?
MINISTER MORRISON: Well, the historical reference is right. In 2007 there was a $20 billion surplus and $40 billion in the bank. Now thanks to Wayne Swan and Chris Bowen that’s no longer the case and we have to deal with the reality of that situation. Measures were put up in last year’s Budget, despite what Bill Shorten said yesterday about saying he was interested in the Budget, he’s actually been the principle blocker of measures. Crossbenchers often get the blame for this in various commentary but it’s actually the Labor Party who is blocking savings measures in the Senate – even some of their own savings measures that they put forward. So we’re looking forward to ensure we have the right saves for new investments, say in childcare we’re looking to invest more in childcare, but not at additional cost to the taxpayer because we have saves that will pay for that investment.
GILBERT: Is it fair to assume though that the vast bulk of pensioners will be unscathed by this Budget?
MINISTER MORRISON: Well if we were to change the sorts of things in the discussions that are out there then obviously over four million pensions or pension linked payments recipients would have their indexation measures just go on as they were previously. So they would certainly have the same arrangements they’ve had now for some years. But it is important that you get the balance, you can’t just withdraw a measure and walk away from the Budget task, you have to step up to that task. That’s what we’re continuing to do, that’s how we have a credible path to surplus, because we keep trying to move forward.
GILBERT: Is this a fairer approach? The Prime Minister says it’s going to be a fair Budget, is this what you’re talking about in the sense that it won’t be the indexation for all four million plus pensioners but this will be something that will be more targeted?
MINISTER MORRISON: Well, being fair is first about consultation and we’ve had a lot of consultation around this discussion over the last many many months. I don’t think what is fair is this though, what is not fair is if you save for your retirement and you create yourself a superannuation nest egg and the Government then comes along and taxes that income; which is what Labor are proposing to do. It’s not fair where you’ve sort of got yourself involved in providing your future for negative gearing or you want to do that to get yourself ahead that Labor comes and pulls the rug away from you on that, which is what they are proposing to do. Now if you are having a discussion about constraining the eligibility of the pension for those who have assets of over one million dollars on top of the family home then, and you’re asking people to support themselves who are on higher assets then you don’t go and tax them as well, which is what the Labor Party are going to do.
GILBERT: Bill Shorten describes the upper end of the treatment of super tax as an onshore tax haven. What do you say to that description of that treatment of wealthy superannuants?
MINISTER MORRISON: Bill Shorten thinks people who save for their retirement and provide for themselves are the problem. They are not the problem, they’re the actual solution. You want to have incentives through the tax system for superannuation. The pension is a different matter. The pension is a safety net for people who may not have had superannuation.
GILBERT: But it all comes from the same pool though doesn’t it? The tax and transfer system is all part of the same thing?
MINISTER MORRISON: I understand that, but it is not the same thing in principle. In this respect someone holding on to their own money that they have worked hard to provide a nest egg for is an entitlement to your own money. Labor equates taxing that with someone’s perceived entitlement for a Government welfare payment. Now I think they’re two very different things. I think this is a real difference between Labor and the Coalition; we believe that people should be rewarded through the tax system, through superannuation for providing for their future. But the pension is not a reward, it’s a safety net. It’s a safety net for those who haven’t been able to make the other decisions. Now we know that in the last five years of someone being on the pension over 50% of pensioners either still have the same amount of assets or they’re increasing, they’re actually increasing. So modest changes here if we were to do them along the lines of reversing what was done in 2007 that would mean that those who could be affected by that would have to draw down on their assets by less than two per cent.
GILBERT: Ok, but when you talk about the treatment of superannuation vis-a-vis the pension, when you’re talking about the tax treatment of those with multimillion dollar superannuation nest eggs aren’t you talking about foregone Government revenue, in the sense that they’re taxed very low on the way in and not taxed at all on the way out. Shouldn’t there be some mechanism there to make the treatment of that income fairer? Given the rest of our system is a progressive taxation system?
MINISTER MORRISON: What I find interesting about the argument is everyone leaps to millions and millions and millions. But the truth is we are talking about people who are not on millions we are talking about people drawing down $75,000 in superannuation income that they’ve provide for and that’s what Bill Shorten wants to tax. Bill Shorten wants to hit superannuants. We want to have a modest and responsible Budget that ensures that we don’t have the entitlement creep in the pension or other things like that and that we have a pension that is fair and sustainable. But equally if you’re going to do that and if you are going to have a more constrained pension then you don’t take the sledgehammer to superannuation as Bill Shorten’s proposing to do.
GILBERT: Not even at the top end?
MINISTER MORRISON: Well if there are loopholes there are loopholes and they should be closed. But you don’t allow the loopholes to be seen as some sort of broader rule to justify what Bill Shorten and Chris Bowen want to do. They want to expand the tax base because they don’t want to deal with welfare entitlement and they want to do that by hitting superannuants. Now we want to have a fair pension, a pension that is sustainable. Changes that were made in 2007 when there was money in the bank would no longer be affordable with the fiscal mess we inherited from the Labor Party.
GILBERT: Now to Philip Coorey’s report in the Financial Review that the wealthier workers won’t lose the childcare rebate at 50 per cent, the suggestion – the assumption has been that the Productivity Commission recommendation that the 50 per cent rebate be reduced to 20 per cent that that was something the Government would adopt, now it doesn’t seem that’s the case.
MINISTER MORRISON: Well the Productivity Commission report were their recommendations, and we always said that’s their report and we would consider our response. What has been guiding us on childcare has been the objective of workforce participation. It’s not a welfare payment. It’s not an income support payment or anything like that. It is there to encourage people to be in work, stay in work, so families can have choices. Now, we don’t want to do things in making changes to this area which could risk eroding workforce participation, particularly for women, and it’s important that we ensure an integrity in that process to ensure that we keep families in work. Because a family in work isn’t on welfare, a family in work is paying taxes, a family in work is one that has choices for their family and doesn’t have those choices defined by the Government because they’re locked in a welfare trap.
GILBERT: Now the suggestion is that you’re going to actually boost the rebate for, rather than remove it for the upper income levels, you’re going to boost it for the low to middle. But you want, as your principle was from earlier that you mentioned, that you need to fund it from somewhere i.e. the five billion from family payments. Is that what you want Labor to get on board with?
MINISTER MORRISON: Well absolutely. You can’t go and load up the taxpayer if you’re making increased investments. You have to offset it by better spending the welfare dollar you have within the whole portfolio and that’s what we’re doing. We put forward measures last year to make family tax benefits more sustainable and fairer at the end of the day in terms of the whole package of measures. Because what we want is families to be in work, we have over 600,000 families in this country where either both parents aren’t working or they’re single parent families where that parent isn’t working. Children who grow up in jobless families are 40 per cent more likely to be on welfare by the time they’re in their early twenties.
GILBERT: Would that be a more equitable arrangement as well to have a targeted childcare increased rebate for low to middle – as opposed to the family payments?
MINISTER MORRISON: I’ve said all along that we want to increase the support in childcare for those on middle to low incomes, because that’s where the equation is financially critical. That’s the kitchen table conversation you’ve got to change and we want to do that. We don’t want to see workforce participation lost in other areas because that’s important for economic growth and the economy. So that’s why we’re proposing an increased investment but that has to be offset. You have to be able to have a programme that washes its face fiscally and that’s what we’re doing responsibly.
GILBERT: Minister Morrison I appreciate your time.
MINISTER MORRISON: Thanks a lot Kieran.