MICHELLE LANDRY MP:
Look, it is fantastic to have the Prime Minister in Rockhampton today. We are very pleased to have him here, as well as the Deputy Prime Minister and Assistant Minister to Prime Minister and the new Minister for Northern Australia. We have had some discussions with business people about different projects we are looking at in Rockhampton, particularly the water projects like Eden Bann and Rookwood.
We have been discussing the issues about unemployment in this area and I know that my colleagues in the North have been discussing about maybe we can do some packages or innovation programs or anything like that. So, I think it is very important that we get our leadership team here in Central Queensland, just so that they actually know what we are facing here.
I think that Rockhampton is the gateway to the North and it is a very important place in the whole scheme of things. I call my electorate of Capricornia the ‘Powerhouse of the Nation’. We are the beef capital of Australia, we have coalmining we have sugarcane, so, there is a lot of different industries that we actually have here.
So it is a great pleasure that we have had the Prime Minister out here today. That beautiful Central Queensland University, opening Building 34, we are actually going to do a flyover today of the Eden Bann and Rookwood, and, we are meeting up with some volunteers from the SES. It is just about 12 months since we had Cyclone Marcia strike this area and I think that we are coming along well. So it is a great way for some of our volunteers to catch up with the Prime Minister today.
So thank you very much and I will now hand over to the Prime Minister. Thank you.
PRIME MINISTER:
Well, thank you very much Michelle, Michelle Landry and Ken O'Dowd, our redoubtable local Members here in Central Queensland. Barnaby and I are delighted to be here at Central Queensland University. And, we are just about to go and look at some important proposed water projects here. We share a great passion for the development of Central Queensland and the development of its water resources.
Most of the water in Australia falls in the north but there is very little water infrastructure in northern Australia, relative to the vast water resource. It is the key, it is the source of life as Wade said when he gave the wonderful Welcome to Country earlier today.
It is the source of life. It is the source of prosperity. It is the source of a further diversification of Australia's economy so that we continue to be resilient as we transition from the mining boom to take up the huge opportunities offered to us by the phenomenal economic growth in East Asia. The doors to which have been flung open much wider by the great efforts of Andrew Robb, in particular, our Trade Minister with the big free trade agreements.
It is an exciting time to be here in Central Queensland with my colleagues and look forward to your questions.
JOURNALIST:
Can I get a response to reports today that taxpayers are likely to be paying a greater share of the tax burden as proportion of the economy over the next four years as you embark on tax reform, do you undertake to address that and where will you rein in spending to be able to pay for that?
PRIME MINISTER:
Let me deal with that answer - deal with that question carefully. Over time, as with inflation and wage increases, people move into higher tax brackets, this is called bracket creep.
What we are seeing is, if this isn’t addressed, each person on average earnings will be moving into the second highest tax bracket. That is one of the reasons why addressing spending curtailing government spending is absolutely critical.
Yes, we can make changes to the tax system and we are looking at a number of them, in terms of making the tax system more efficient so that we have - so that we can close loopholes that are unproductive, so that we can ensure that overall the dollars we are raising are raised with the least distortion to the economy.
But, if you want to reduce the total net burden of taxation and we do, and I believe Australians do too, then Government spending has to either reduce or grow at a lesser rate, a slower rate than the overall economy.
We need prudent spending, prudent control over spending, we need the Senate to support the savings that the Labor Party is currently blocking and they are blocking tens of billions of them at the moment. And we also need, above all, to grow the economy here in Central Queensland and right across Australia because if the economy grows faster than Government spending, then over time, that Government spending will become a smaller share of the overall economy, the overall GDP.
JOURNALIST:
Where do you think the Government is spending too much at the moment?
PRIME MINISTER:
Right across the board, we need a better bang for our buck and that is why we have been seeking to improve the efficiency with which Government is doing its work.
JOURNALIST:
Michaelia Cash has been in the media overnight, suggesting that perhaps GST reform is not necessarily off the table. Has she got that wrong or is it still an option?
PRIME MINISTER:
Well, I can assure you that the Government will not be taking a proposal to increase the GST to the election.
Now, many governments have kicked the - have said they don't want to touch the GST for political reasons. I just note that decision. That was something previous governments have done. What we did which was different is that we looked very carefully at every angle, every possible change to the tax system and we are examining that. We looked very carefully at several proposals to increase the GST and use the money, if you listen to the Business Council of Australia to reduce company tax, if you listen to the States to give it to them and others to say to use it to offset, to reduce personal income tax and address the issue that was just raised with me.
We looked at all of those. We had them modelled and the reality is that you do not get the economic growth dividend that people had assumed there would be. The growth dividend is somewhere between nil and very small. So we are not a Government, we’ve not said 'oh it is all too hard, we are putting it into the political too hard basket. We have looked at it carefully and diligently, as Australians expect us to do. And it has been demonstrated to us that increasing the GST and then reducing income tax, after you take into account all of the compensation that you would need to ensure the change was equitable, simply is not justified in economic terms.
We take the business of government very seriously and I know that there are people who will say, "You should make a snap decision on this and that, and something else". I don't believe that is the way Australians expect their government to govern. They want us to examine these issues carefully and diligently and make decisions that are based on the evidence. And that is exactly what we have done.
So I have got no doubt people will be talking about GST for a long time. But the work we’ve done demonstrates that the so-called GST tax mix switch does not give you the economic dividend, the growth dividend, that would justify doing it.
So there will be no GST increase taken to the election.
JOURNALIST:
There is nervousness on your backbench about changes to negative gearing. Should they be nervous?
PRIME MINISTER:
Let me just say that there – negative gearing is a subject that is being debated at the moment. I can say that I think Labor's plan is a poor one. I think it will work against many people on average earnings. You know, Bill Shorten tried to ignite a bit of class war yesterday. The reality is the vast majority of people, who have got an investment property and are claiming a net interest loss against their income, are not millionaires or on big incomes. The vast majority of net interest losses claimed are less than $20,000, for example. So the idea that this is a massive rort for the rich is simply not right.
Now, we are looking at every aspect of negative gearing. Can I tell you, that what Labor has proposed, I think would result in a very significant distortion of the housing market. Let me explain. Labor has said that they believe negative gearing should be wiped out for all residential properties other than new properties. And they claim this would result in more people wanting to invest in new properties. The problem with that proposition, and clearly they have not thought this through, is that the value of a new property is obviously a function of what you can sell it for. And so if you say you can negative gear a new apartment, for example, but you can't negative gear that apartment at all, at any rate – it could be $10 of net interest loss, you can't negative gear that apartment when it is sold, that obviously reduces the number of people considerably who would be potential buyers of it.
So, the impact on the value of new properties, and therefore the viability of developments, will be affected. This is yet again an example of Labor rushing out with an announcement that they thought sounded good, they thought they could get a headline for but they haven't thought it through. That’s why it’s very important to examine all of these things with great care and thoughtfulness. All suggestions are gratefully received, but we will look at these issues, as we did with the GST, very carefully and very thoroughly.
JOURNALIST:
On the dams, you have just talked about having to look at what putting into a community, land value rises and so forth. Does that make it easier to make the economic argument for these things stack up and will there be money in the budget [indistinct] this dam?
PRIME MINISTER:
The answer is there is a $500 million program already. That is a grants program for water and there is also the $5 billion Northern Australia Infrastructure fund which is of course $5 billion for investing. That is for loans in particular. With these projects we will look at them and Matt in particular who is standing here with us, will look at them in a rigorous economic manner.
My simple point is - you make the same observation about public transport in cities by the way, is that a piece of infrastructure affects - when a piece of infrastructure affects property values as widely as a dam would or water infrastructure would, that is something that should be taken into account. Just as you would with a new light rail line or railway line.
You have got to look at these - this infrastructure in a holistic way, look at all of the value it is creating, not all of it can be measured but much of it can, that has got to be taken into account as you assess the economic viability.
JOURNALIST:
Prime Minister, Stuart Robert has been criticised for using taxpayers' money, do you support him, for personal flights, do you support him?
PRIME MINISTER:
You are asking me about a Member's claim to travel expenses in 2013, I think, while we were in opposition. I don't know the circumstances of the matter. But it is, these things are dealt with by the Department of Finance in the ordinary way. It is not appropriate for me to make a comment on something that has happened at that time. Stuart has paid a heavy price for - around the circumstances of his China trip.
The matter that has been raised in the media today will no doubt be addressed by the Department of Finance in the normal way. Thank you very much.
JOURNALIST:
Are you comfortable with the current foreign investment regime In Australia or do you need it needs to be tightened and can I also ask your response to reports that all the front runners for the Kidman sale are currently offshore buyers.
MINISTER JOYCE:
Well on the first issue I would just like to say that we’ve had a substantial change in the Foreign Investment Review Board guidelines that have been bought in by the Coalition and this just goes to show that we believe in foreign investment but we do want the proper oversight. We want to make sure that the Australian people have absolute confidence that we’re running the show and that we have control over the show and that’s precisely what we’re doing. And, the second part of your question obviously I’m aware of a whole range of buyers and that is now under close observation by the Treasurer and I look forward to hearing back from the Treasurer on that issue.
There are Australian buyers in there, I would just like to correct the record, you have got Australian buyers in there.
JOURNALIST:
If it is a foreign buyer who is a successful bidder and there are no security concerns, will you be supportive of that sale?
MINISTER JOYCE:
Well I’ll be – that’s a question for the Treasurer. This is not something that goes across my desk. But there are Australian buyers in there.
JOURNALIST:
Michelle Landry has dropped some unsubtle hints about Rookwood Weir, the Prime Minister has spoken about the importance of water but how high up the priority list would these local projects be?
MINISTER JOYCE:
Well let’s just go through exactly what we’ve got here. We’ve got a Prime Minister of Australia who started his political career as the Minister for Water, I think that was his first job. We have the current Deputy Prime Minister of Australia, as of Thursday who is the Minister for Water Resources, we have the Minister for Northern Australia Matt Canavan with a $5 billion investment fund at his disposal, we have half a billion dollars on the table to get the program going we have a river which has the biggest outfall on the eastern coast, that’s aside from the Murray-Darling Basin we have, just for the Prime Minister’s benefit, a flood, which is now going down the river. Well done.
PRIME MINISTER:
It’s hard to miss actually.
MINISTER JOYCE:
It’s amazing how you can make things move! And so we have an environment where we clearly understand that it wouldn’t matter where you are in the world, where you are in history, water is wealth. And those who effectively and efficiently use it are benefactors of that wealth. Now it is up to us, all of us, to make the case so that we can prove to the Australian people that our investment is beneficial, not just in the short term but in the longer term. I’m absolutely certain we can do that. If you’re asking for a specific case of exactly what we’re going to do that would be an announcement and we’re not going to do it today.
Ends