PRIME MINISTER:
Good morning to you all. As you know, this is a Government which is fixing Labor’s mess. We scrapped the carbon tax and that meant that every Australian household on average was $550 a year better off. We scrapped the mining tax and that restored Australia’s reputation as a safe place to invest. We’ve stopped the boats and that’s meant that hundreds of people are no longer dying at sea. We’re getting the National Broadband Network to roll out on schedule and on budget. We’ve got a Royal Commission that is sorting out the Pink Batts disaster. We’ve got another Royal Commission that’s looking at the rorts, rackets and rip offs that the Labor Party presided over in our workplace system.
We are fixing Labor’s mess and one particular mess which is the unique responsibility of Bill Shorten is Labor’s crash grab on the savings accounts of the Australian people.
It was always outrageous for the Labor Party to say, “We will fix our budget disaster by raiding your inactive bank accounts,” but that didn’t stop them, off they went and did it.
Mr Shorten, as Financial Services Minister, was responsible for this legislation – legislation that meant that some 156,000 accounts were confiscated in the first year of operation, $550 million that belonged to other people was seized by the government. Well, that won’t happen under us. As of this year, that practice will stop.
It’s extraordinary isn’t it – absolutely extraordinary – but it’s so typical of the Labor Party. They’ve got a cash problem, so they go out and grab your money and then make you go through months and months of bureaucracy to get back what is yours.
I noticed a quote from Mr Shorten, who last year was asked about this particular policy, and he said extraordinarily that the cash grab on inactive bank accounts was about “protecting people’s savings to ensure that it’s not eroded by bank fees and charges.” So, in order to stop you losing some of your money to the banks, he took it all. He took it all. So, because it was all in the government’s pockets, the bank wasn’t able to put a little bit of it in the banks’ pockets.
So, this is so typical of the way the former government operated and it shows why you just can’t trust people like Mr Shorten near your money – near anyone’s money.
The Assistant Treasurer has done an outstanding job in this area and in so many other areas and I might ask him to add to these remarks.
ASSISTANT TREASURER:
Thank you, Prime Minister. At the end of 2012 in a rush to a surplus that never eventuated, Bill Shorten as Financial Services Minister changed the rules around unclaimed moneys. It’s now our time to fix his mess.
We are doing it in three ways. Firstly, money that is in inactive bank accounts will now be declared to be unclaimed after seven years has passed as opposed to the current three years. This is also a recommendation of David Murray’s Financial Systems Inquiry.
Secondly, children’s bank accounts – that is those of people under the age of 18 – as well as bank accounts that are in foreign currencies will also be exempt from this unclaimed monies regime.
Thirdly, we are protecting the privacy of Australians with unclaimed monies, because we are no longer requiring ASIC to produce a register of people’s details who have been subject to the unclaimed monies regime, because the advice to us is that information has been used by unscrupulous players to charge exorbitant charges to people to recover their money which is rightly theirs. Also, there has been the advice that there is the chance of identity theft by having that information publicly provided.
So, these are important changes. They’re absolutely fixing Bill Shorten’s mess, there was no consultation, it was produced in a rush as a policy, as I said, to get a surplus in 2012-13 which never, ever eventuated.
QUESTION:
Can I ask you a question about the nation’s finances? Do you still want to return the budget to balance in five years and can you do that with a dull budget in May?
PRIME MINISTER:
The Budget will be prudent, frugal and responsible, but all of you, I’m sure, have been closely studying the Intergenerational Report. I certainly would recommend that you all do, because what the Intergenerational Report did was it gave us three scenarios: where the budget situation was going under Labor, and it was going to Mediterranean proportions of debt and deficit; what last year’s proposed restructuring would have delivered, which is a generation of strong surpluses; and what is currently legislated. Now, what is currently legislated takes us very close to budget balance in 2020.
So, I was simply making the point that, again, if you look at this, that’s the empty glass, that’s the full glass, we’re about half way and I’d rather take a glass half-full than a glass half-empty approach to the achievements of this Government when it comes to budget repair.
QUESTION:
You called the Senate ‘feral’. How is that possibly going to help your negotiation skills or ability to get Bills through, like your third attempt to get university deregulation through?
PRIME MINISTER:
Matt, look, we have a very constructive relationship with the crossbenchers and three of the crossbenchers voted for our very important higher education reforms that are supported by John Dawkins and Peter Beattie and people like Professor Brian Schmidt, the Nobel laureate. But the Labor Party and The Greens are completely feral. They are obstructing for obstruction’s sake on most issues, certainly on economic and budget issues, they’re obstructing for obstruction’s sake and I invite the Labor Party that caused these problems to now contribute to the solution. Fair enough, you might be a little embarrassed about the budgetary disaster that you left your successors, but I am inviting the Labor Party to atone for its errors and to actually be part of the solution.
QUESTION:
Prime Minister, the IGR chart that you cited there shows the Budget balance heading south again from 2020. When you described the Budget – coming Budget – as dull and routine, what's your response to people who may fear that that means you're easing up and resting on your laurels rather than doing more on structural reform?
PRIME MINISTER:
Well, this Budget certainly will be much less exciting than last year's Budget because the task this year is at least 50 per cent reduced from the task last year. So, inevitably, it will be a much less exhilarating budget for those who are budget devotees and structural reform enthusiasts. But nevertheless this will be a Budget that is prudent, frugal, responsible, there'll be something in it for families, a better childcare deal in particular, and there'll be much in it for small business, particularly the tax cut that small business is yearning for because we want to unleash the creativity of our small business people and the best way to do that is for the dead hand of Government to rest less heavily upon them.
QUESTION:
Any further cuts to the public service in the incoming Budget or are you done for this term in terms of public service cuts?
PRIME MINISTER:
I don't think anyone should expect major changes, because there have been some significant downsizings already. You might remember that the former government went into the election accusing us of planning to take an axe to the public service and when we got into office we discovered that Labor had an unannounced 14,500 redundancies, most of them have gone ahead, there's been a few others in other areas, and we will continue to run an efficient and effective public service with no more and no less people than we need to do a good job.
QUESTION:
Just on your comments regarding the Budget, you've resurrected this line that we're heading towards Mediterranean style levels of debt. You mentioned Greece again today on radio. Isn't this just alarmism and it's not consistent either with stoking confidence and it's also inconsistent, is it not, with this notion that you should allow households to get off scot-free when in fact tens of billions of dollars of your last Budget haven't got through?
PRIME MINISTER:
Andrew, there's no cause for alarm under this Government because we have got the budget situation from out of control to manageable. Look, again, I refer you to the document and the document shows that we have halved Labor's debt and deficit going forward. Debt as a percentage of GDP which would have been 120 per cent under the policies of the former government is about 60 per cent under the policies of this Government. Now, that's too high. We want to get it in a much, much better situation than that. We'd like over time to achieve this green line, but a ratio of debt to GDP at about 50 or 60 per cent is a pretty good result looking around the world, 120 per cent is a dire result and that's what we were going to have under the policies of the former government.
Josh, I sense you wish to add to this answer.
ASSISTANT TREASURER:
Well, Andrew, actually that's not right about the iron ore projections. In fact, the IGA document is based on MYEFO and there was a significant downgrade in our revenue projections from iron ore. I think the key point is nearly 80 per cent of our Budget measures have actually gone through. Now, we still have around $30 billion worth of savings that are stuck in the Senate, including around $5 billion worth of savings that Labor took to the last election that they are now blocking. That's the key issue.
Now, when we talk about Greece, we're talking about the net debt to GDP ratio which was heading to 122 per cent, $5.6 trillion was going to be our net debt under the Labor Party's trajectory. The Prime Minister's absolutely right, as a result of our legislated measures, not even our proposed measures, our legislated measures, that trajectory has been halved.
QUESTION:
Prime Minister, just on that graph that you showed us too, isn’t it true that when you look at it at no stage do you reach a surplus in the next 40 years?
PRIME MINISTER:
We get very close to balance.
QUESTION:
Close to.
PRIME MINISTER:
We get very close to balance, well within one per cent of GDP, we get very close to balance in 2020. Look, again, I say to you, there was a devastating situation under the former government, a budget emergency we called it in opposition. But as an emergency services worker, as an emergency services volunteer, I know what it's like to get to the scene of an emergency. If you get to the scene of the fire, immediately the situation starts to ease once the fire brigade is there. Labor were the fire; we are the fire brigade.
QUESTION:
Just a follow up on Chris’ question, if you're saying we're getting very close to a balanced budget essentially within five years, why is it then the case that you're saying that there'll be few structural changes in this Budget?
PRIME MINISTER:
Well, there will be significant changes to childcare, which will be factored into this year's Budget. There will be significant changes for small business, including a small business tax cut which will be factored into this Budget. So, this is a Budget that will involve structural change, but they will be much less drastic, they’ll be much less drastic structural changes than the ones that were in last year's Budget. Again I say, this is a Government which has very substantially addressed the budgetary situation that we inherited. And yes you can look at this and say that this glass is half empty, but you won't mind if I look at you and say that the glass is half full.
QUESTION:
Aren't you merely delaying the smash and grab from three years to seven years, with these changes you announce today?
PRIME MINISTER:
Well, what typically happened in the Howard years is that something like $70 million of accounts went to ASIC, what happened in the first of the Labor years was that half a billion dollars of accounts went to ASIC. If something has been inactive for seven years there usually is a legitimate reason if something has merely been inactive for three years, there's much less likely to be a good reason for the inactivity and that's why there was massive complaint against this measure, legitimate complaint against this measure when it was introduced. This is why we fiercely opposed it at the time and this is why we're reversing it now.
QUESTION:
Prime Minister, could you please give an update on the negotiations over the amendment for metadata regarding journalists, why won't you allow the warrant process to be contestable and isn’t it the case that you can go after sources by targeting their metadata and get around this exemption?
PRIME MINISTER:
Well, what I'm not going to do is give a running commentary on what are constructive and collegial discussions between the Government and the Opposition and again I say if the Opposition was as constructive on economic security as it has by and large been on national security our country would be in much better shape.
On the metadata retention legislation, what we are proposing is a level of protection for journalists' metadata which simply doesn't exist now. There is no special protection for journalists' metadata right now. So, we are proposing much greater protection for journalists' metadata than is currently the case, than has ever been the case, but I think there's a misunderstanding about the warrant process. I've never practiced as a lawyer but my understanding is that where the police or security agencies want a warrant, they go before the relevant judicial officer, they make a case, the judicial officer considers the case and says yes or no to the activity for which a warrant is proposed. These things are never contested. A contested warrant is more like a court case and if you had to have a court case to access metadata, well, the whole process would absolutely gum up.
QUESTION:
[Inaudible] not being able to contest the metadata, either, sorry, either your own metadata or that of your sources being accessed.
PRIME MINISTER:
In the days when I was a journalist, there were no metadata protections for journalists and if any agency, including the RSPCA or the local council had wanted my metadata they could have just gone and got it on authorisation. I was perfectly comfortable as a journalist, I believe that Australian police and security agencies operate in a fair and reasonable and responsible manner and this is an unprecedented additional level of protection for journalists and I'm pleased that we're able to offer it.
QUESTION:
Another tax change put to the Party Room yesterday about disclosing the tax paid by wealthy individuals, private companies, are you serious that there's a kidnap threat against wealthy Australians, that warrants keeping those tax details secret?
PRIME MINISTER:
There was a discussion in the Party Room and I dare say Senator Brandis briefed you on that yesterday. It was pretty clear that there is a lot of antagonism in the community and among members of the Coalition Party Room about this particular legislation. It purported to be a way of preventing large multinational companies from hiding their affairs but in fact it's become, it seems, an invasion of privacy and intrusion for Australian private companies. So, we are looking closely at this. I'll ask Josh to add to that.
ASSISTANT TREASURER:
Well, Prime Minister all of that is absolutely right and just to add, every company, whether it's a private or a multinational, has tax obligations which we expect them to meet. This information whether it's a tax payable or taxable income or total income is already in the hands of the ATO and we are questioning whether there is a real justification for releasing the details about privately owned Australian companies, as opposed to multinationals, into the arena where there could be serious commercial and personal risk.
QUESTION:
If $30 billion of measures in your first Budget can be frustrated by the Senate, and you can then say of your second Budget that it can be almost dull and routine and won't hit households, doesn't that tell us that your first Budget was dramatic overreach?
PRIME MINISTER:
No, again, I refer you to the Intergenerational Report. This is where things were going under Labor. We were going to southern European levels of debt and deficit. This is what we propose to do with our restructuring last year which would have done 40 years of work, if you like, in our first Budget, and this is where we've got to which is a very substantial improvement. There's still work to do. There is absolutely still work to do. There's always work to do. budget repair is an ongoing business, budget repair requires constant vigilance. It requires the kind of respect for taxpayers' money which is in the DNA of the Coalition but which unfortunately is almost entirely absent on the other side of the parliament. So look, this will be a prudent, frugal, responsible Budget, there will be things in it that people don't like, but there'll be things in it that people do like and I obviously want to particularly flag the child-care improvements that are coming up and the tax cut for small business that's coming up because in the end the whole point of budget repair is to create a stronger economy because as long as we are in substantial debt and deficit, there's billions of dollars a month in dead money. A billion dollars a month, that could produce a major teaching hospital. Right now going out in interest and we would rather not pay the interest as a nation, we would prefer to invest the money in services, and infrastructure that the Australian people will enjoy.
So, that's why it's necessary to get this budget under control and we will.
Thank you.
[ends]