DAVID KOCH:
Well there’s something for everyone in this year's Federal Budget. Working Aussies will get a tax cut over the next seven years. For those earning $30,000 - a saving of $200 a year.
Workers on $50,000 will receive a $530 tax rebate. While workers on $90,000 will receive over $600. From 2022, tax brackets will simplify. One will go entirely, putting middle-income earners on just one income tax rate. This means tax cuts of $13.4 billion in total.
The Budget favours older Australians; the pension threshold will increase, allowing pensioners to earn an extra $50 a fortnight in extra income.
$1.6 billion will go towards 14,000 new aged-care places. $41.5 million will be set aside to ensure secure energy and reduce electricity bills. Schools across the country will get a boost of $24.5 billion.
Alright, Prime Minister Malcolm Turnbull joins me now from Canberra. Prime Minister, thanks for joining us. Millions of Australians will get a tax cut. Obviously a pre-election budget.
Mark Riley just told us – he reckons you’ll go to the polls in August. Is that the plan?
PRIME MINISTER:
Well the economic plan is to deliver stronger economic growth. That's the plan we're working on.
And what that’s doing is ensuring that more hard-working Australian families can keep more of what they earn.
You’ve just described the benefits of the plan, a lump sum payment with your tax return after next year, $530 for middle income Australians. So if you’ve got a couple, a nurse and a teacher together, that’ll be over $1,000. That is a significant improvement in their disposable income, enabling them better to deal with rising cost of living pressures.
DAVID KOCH:
Look Prime Minister, Peter Costello earlier in the week gave you a bit of whack, saying it should be used to pay down more debt, forget the tax cuts. For the average Australian, when Peter Costello says: “Oh we’re sort of putting our children in hoc and we’re passing it on,” it's a really motherhood statement. Just put our government debt in perspective, for us older Australian or average Australians, who are thinking: “Well why haven't you paid down more debt?”
PRIME MINISTER:
Well, the net debt is going to actually peak this year as a percentage of our economy, of GDP and then it will starts to decline. So we have actually turned the corner on debt. Then after a decade, it will be down to about 3.8 per cent of GDP. So we’re both paying down debt and once we get back into balance, which is in 2019/20 of course, we're not adding to the debt. So the debt declines in dollar terms and absolute terms and it also declines of course, because it’s not growing and the economy is growing.
So we are bringing down the debt, we’ve turned the corner on debt.
DAVID KOCH:
So net debt, correct me if I'm wrong, is about 20 per cent of our economy, the value of the economy? Which is like -
PRIME MINISTER:
It’ll peak at 18.6 per cent of our economy.
DAVID KOCH:
Okay.
PRIME MINISTER:
And it will start coming down after this year.
DAVID KOCH:
So that’s like having a mortgage equivalent to 18 per cent of the value of your house with low interest rates, that seems pretty affordable, doesn't it?
PRIME MINISTER:
Well look, it’s higher than we’d like it to be and we’re determined to keep bringing it down.
But it's vitally important that Australian families are respected and supported. Australian families have more of the money they’ve earned.
I hear Bill Shorten talking about tax giveaways. This is Australian's hard earned money that we are ensuring they’ll be able to keep more of. That is where this tax relief is going. It is going to hardworking Australian families.
DAVID KOCH:
But even conservative economists are saying you’re a bit stingy with the unemployment benefits, that they haven't changed much over the years. We’re all grumpy, we all keep saying: “Oh, if you are unemployed, go get a job”, but it’s important to have a safety net isn’t it? Why haven't you increased unemployment benefits?
PRIME MINISTER:
Well, Kochie they are increased every year with inflation and you’ve got to remember it is a safety net to support people while they’re looking for a job. It’s not intended to be an alternative to a job.
Now the best form of welfare is a job. Here’s the good news right now; not only last year did we have the largest number of new jobs created in Australia, in our history, but also we had the lowest percentage in 25 years of working aged Australians on welfare.
So that shows what a stronger economy delivers. That’s the reason the Budget is in better shape and why we’re able to turn the corner on debt, while we’re able to guarantee essential services and why we’re able to ensure that hardworking Australian families keep more of what they earn.
DAVID KOCH:
A central pillar of this budget is to older Australians to keep them working in an ageing population. That's a really important issue to tackle, obviously one you’re very aware of?
PRIME MINISTER:
Well it’s very important that all Australian’s have choice and particularly older Australians have respect, support and choice, of course, the encouragement to work longer. Indeed one of the changes we’ve made is the income threshold before which it starts to affect your pension, is going to apply to people who are self-employed. Why shouldn't an older Australian at pension age be able to be self-employed and start a business?
We want people to be starting businesses and having a go and getting on with enterprise, regardless of their age. So this is all about respect, support and choice.
Again, it's something we are able to do because we’ve got a stronger economy. We have made our own luck. We’re made out own luck here. This is the result of the hard work of thousands, millions of Australian families and businesses, in terms of this stronger economy and of course, the support we’ve given.
Look at all the trade opportunities we have opened up. That has been hard work, hard negotiations, and that’s one of the many factors that is driving a stronger economy and more jobs.
DAVID KOCH:
Yeah it is a purple patch for the economy. Can the economy keep going the way it is? You know, our biggest customer China - who takes a third of our exports – they’re a bit grumpy with us. Relations are pretty frosty. It all depends on China continuing to take our exports, doesn't it?
PRIME MINISTER:
Well China is a very big market and the Chinese economy is growing strongly. We’ve got very good relations, economic relations, personal, family relations there in China.
But right across the region, we’re negotiating a free trade agreement with Indonesia at the moment. We’ve just entered into the Trans-Pacific Partnership with another ten nations. So we have a very diverse set of international arrangements and trade deals and we’re building on them all the time. Only this year, we negotiated a new free trade agreement with Peru, for example.
We will constantly focus on opening more doors for Australian exporters, whether it’s of agriculture, of manufacturers, goods and services, to run on to, because it creates jobs here.
We’ve proved it, with record jobs growth last year.
DAVID KOCH:
I love the changes to superannuation, particularly the impact for young Australians.
A cap on fees, no exit fees when you switch super funds and the Tax Office tracking you down if you have lost superannuation in accounts you’ve forgotten about.
PRIME MINISTER:
David, I knew you’d love those, because you’ve talked about this for years; how so much of people’s savings have been whittled away by fees and exit fees. So this is a very important part of the Budget.
This is going to ensure that millions of Australians are reunited with their savings sooner and they’re not whittled away by fees from fund managers.
DAVID KOCH:
Exactly, and young Australians won’t get hit with those life insurance premiums they don’t need. Prime Minister, thank you very much for your time this morning, appreciate it.