HOST:
He’ll be in Adelaide and he’s with us on 5AA Breakfast now, Prime Minister good morning.
PRIME MINISTER:
Good morning, good to be with you.
HOST:
Thanks for your time PM. Now your presence here today is it a recognition in part that you needed to quickly get to Adelaide to extinguish the local perception that we’ve missed out on infrastructure spending in last week’s budget?
PRIME MINISTER:
I’m here with Marise Payne, and Christopher Pyne to release the Naval Ship Building Plan. It is the largest investment in our defence capability in peacetime. The largest in [inaudible] terms at any time. And it is the largest commitment of federal investment in any one state. So this is a massive commitment into the future of South Australia, the provision of 5,000 jobs as you know. That’s in construction alone. Then another 10,000 in sustainment, the vast bulk of which will be here in South Australia where the major ships are all going to be built, the frigates, the submarines and the first two Offshore Patrol Vessels. So it’s a very big commitment.
HOST:
Are you clear Prime Minister, when you say the vast majority of which will be in South Australia, are you clear on what proportion of the money expended will be spent here in South Australia? Because the state government is suggesting it could be as little as between ten and 15 per cent.
PRIME MINISTER:
Oh well, that is absurd. The ships are going to be constructed here, but of course there is a supply chain throughout Australia. But the actual construction of the frigates and the submarines and as I said, the first two of the offshore patrol vessels, will be here in South Australia at Osborne, where I’m just about to go.
HOST:
Can I just ask you bluntly Prime Minister, do you think that we are whingers here in South Australia?
PRIME MINISTER:
Look, no. You know the reality is that every state is ambitious, every state, every city, every community wants to do well and that’s great. What I can say to you is that in terms of our commitment, my government’s commitment to South Australia, as you can see from the naval ship building plan, we have a massive investment here. As you know, as you just said, it’s a $90 billion investment in total. It is going to drive the type of advanced manufacturing, highly technologically skilled jobs and occupations that we need to secure the future for our kids and grandkids. Here in South Australia, as I always say, the future is not somewhere else, it’s right here. It’s here because of my government’s commitment to naval shipbuilding, to the Defence Industry Plan, which of course is in stark contrast to the neglect of the Labor Party which did not commission one ship, one naval ship, from one Australian yard, in six years of Government.
HOST:
The reason I asked you that question that way is that there was a lot of negativity here last week when it did feel to some people locally that the vast bulk, indeed all of the infrastructure money that was announced was being expended in states other than ours. Do you think though that South Australia would do better to take a much more front-foot approach and start trying to carve out its own future, rather than engaging in this constant: “What can Canberra do for us?” stuff that seems to be the vibe of politics here locally.
PRIME MINISTER:
Well again, I’ll leave you to do the local commentary David. But the reality is we are making a massive commitment. The whole naval shipbuilding plan dwarfs everything else of course and it is a massive commitment. But in terms of transport infrastructure, there’s $3.1 billion committed there. There’s $1.6 billion for the North South Corridor, we’ve committed money to the Flinders Rail Link, we’ve committed money to the Oaklands Crossing. We have a $10 billion rail plan which South Australian projects could be eligible for, but obviously they have to get their business case and proposal together.
But you know in terms of the long term future of this state and this city, the revival of shipbuilding, the end of the boom-and-bust phenomenon that we’ve seen, the commitment to continuous naval ship building is truly revolutionary. That is going to secure Adelaide’s future as a high-tech, advanced manufacturing hub at the very cutting edge of technology, for generations to come.
HOST:
Prime Minister, before we turn our attention to the budget, how concerned are you about a report in the Washington Post today that US President Donald Trump shared classified information with Russian officials about Islamic State that he hasn’t even seen fit to share with allies including Australia?
PRIME MINISTER:
Well look, I can’t comment, I won’t comment on issues about classified information for obvious reasons. So I’ll leave that to the commentators and maintain my normal circumspection and discretion on matters of that kind, if you don’t mind.
HOST:
(Laughter)
Can we ask, you had to wait around forever when you caught up with Donald Trump, he was tied up celebrating the death of Obamacare.
PRIME MINISTER:
No, that’s not quite true. He was in Washington, I was in New York.
HOST:
What’s the guy like to deal with? What’s he like to deal with?
PRIME MINISTER:
No, he was very warm. He was very warm and welcoming, as I said the reception was more family than formal. We got on very well. It was a wonderful event and a wonderful commemoration and appropriate of the Battle of the Coral Sea and great to welcome and honour the veterans, both Australians and Americans who were in their nineties who turned the tide of war in the Pacific when they were teenagers.
HOST:
Let me have another crack Prime Minister; are you confident that the US is fulfilling its obligations as an Australian ally, and you’re being told all you need to when it comes to intelligence sharing?
PRIME MINISTER:
I have great confidence in our Alliance. It is the bedrock of our national security. It was reinforced, yet again, when President Trump and I met on the Intrepid in New York just a few days ago.
HOST:
So on the specifics of the federal budget, the headline-grabbing measure, the centrepiece of it Mr Turnbull was the $6 billion bank levy. Just in terms of the Government’s ability to make sure that the banks don’t sneakily pass this on to the average punter, you were saying and Scott Morrison was saying last week the ACCC is sort of turbo-charged, consumer watchdog ready to pounce on any wrongdoing by the banks. Yet yesterday, you were urging consumers to shop around, which seemed to be an admission that banks might try.
PRIME MINISTER:
No, no, no look the banks are free to price their products as they wish but you’ve got to remember, this is a 0.06 per cent levy. So it is much smaller for example, than a typical interest rate movement which is typically 25 basis points. So it is a large amount of money in aggregate, but relative to the banks business, relative to their profits, it is much smaller.
Now the banks will clearly be monitored by the ACCC in terms of what they claim it’s costing and what they claim its impact will be. But they are more than capable of bearing this cost, because they are - as we know - the most profitable banks in the world. I’m not criticising them for that I’m just saying that they are, that’s a fact, and they do benefit, the big banks do benefit mightily from the support and security from our financial system and system of regulation. So it is fair, given that we need to bring the budget back into balance for them to make this contribution to that.
Now you know, I don’t raise taxes with any joy or pleasure, quite the contrary, but we have cut spending as far as we are able in terms of the Senate. We have to deal with the Senate and the Parliament that the people elected. So what we’re seeking to do here, is to bring the budget back into balance and we owe that for our children and grandchildren just as we are securing their future with our investment in the ADF’s capabilities and our commitment to our Defence Industry Plan. Just as we’re securing their future with our investments in infrastructure and defending schools funding.
Now I might just say, Mr Shorten is in Adelaide today visiting a school whose funding will increase under our Education Policy by $3 million over the next decade. Increasing every year. So people can look that up on the web, on the Education Department’s website, he‘s going to the Cowandilla Primary school and they can see all of the numbers there. Our system of school funding, which again secures the future, is transparent, it’s equitable, it’s needs-based just as David Gonski recommended. It’s not part of a whole series of secret deals, as Mr Shorten did those years ago.
HOST:
Just quickly and finally Mr Turnbull, your response to the call by the former Treasury boss - now working for the NAB obviously - Ken Henry who said that there should be an open public inquiry into the banks levy on account of what he thinks will be the negative impact that it has on the nation’s economy.
PRIME MINISTER:
Well I can understand Mr Henry doesn’t want the bank to have to pay the tax. But the tax will come into operation on the 1st of July there will be plenty of opportunity for the Parliament to discuss it.
We’ve got Senate Estimates next week where it will no doubt be the subject of questioning. You know, Dr Henry understands the process very well but he should also understand as a former Secretary of the Treasury that my obligation and my responsibility as Prime Minister, is to ensure that the budget is brought back into balance. That is what we are doing. We are doing that very emphatically and as you know by 2021 we will have a surplus of $7.4 billion.
All new spending has been offset by savings, we’ve inherited a lot of entrenched deficit from the Labor years and we are addressing that and bringing the budget back into balance as is our responsibility.
HOST:
Prime Minister Malcolm Turnbull, thank you very much for joining us on 5AA Breakfast.
PRIME MINISTER:
Thanks very much.
[ENDS]