HOST:
Welcome to our studio Prime Minister, take a seat.
PRIME MINISTER:
How are you?
HOST:
Very well. Do you have your phone with you, were you tweeting on the way in?
PRIME MINISTER:
(Laughter)
No not so much, I’ve got the Naval Ship Building Plan here though.
HOST:
Okay we’ll talk about that in a moment because, you’re on air by the way. We’re rolling, thank you for coming in.
PRIME MINISTER:
Very good. No, it’s good to be here.
HOST:
Thank you for coming in, and we are streaming this live on our Facebook feed as well.
Prime Minister welcome to ABC Radio Adelaide.
PRIME MINISTER:
Great to be with you. Good to be back in Adelaide.
HOST:
Prime Minister you come to a town which has been told that we’re being duded by you and your Treasurer Scott Morrison. Conspicuously left off the list of new infrastructure spending. What’s your response to that?
PRIME MINISTER:
Well I’m just about to announce, release the Naval Ship Building Plan today, which as you know is a $90 billion plan, the bulk of which, the vast bulk of which, is going to be spent in South Australia. We’re announcing $1 billion of additional infrastructure investment in Osbourne which is getting underway right now. This is the largest single Commonwealth investment in any single state. The largest single investment in any single state, the Naval Shipbuilding Plan, it’s going to create another 5,000 jobs in shipbuilding directly. Again, almost all of which are in South Australia, additional jobs. And another 10,000 in sustainment, so this is a massive commitment and I commend everyone to read the Naval Shipbuilding Plan released by me and Marise Payne and Christopher Pyne today.
HOST:
It may be cold comfort for people listening right now to you who are stuck at the Oaklands Crossing, an infamous crossing in Adelaide that needs money to fix it. It would be cold comfort for the people of the northern suburbs who are waiting on the electrification, a long-awaited electrification of our rail line that basically you’ve had yours and don’t be greedy. Is that the message?
PRIME MINISTER:
No that’s not the message. We have got over $3 billion going into infrastructure in South Australia, we have additional funds available particularly for rail. As far as our commitment to the state, as I said, the Naval Shipbuilding Plan in – look, let’s just wind back a bit.
One of the big concerns that South Australians have had – and I understand that, I’ve been coming here for many, many years – is about losing jobs from manufacturing. You know, people have talked about is South Australia becoming deindustrialised? That has been the big anxiety. Are my children going to be able to get a job in Adelaide? So many people have said that to me. Now what we’re doing here is ensuring that you have jobs and thousands of them, at the cutting edge of technology, in the most advanced disciplines. Which will not only create the 5,000 direct, another 10,0000 in sustainment, jobs directly associated with shipbuilding, but of course, all of the spin offs that that develops.
So this is a massive commitment to South Australia. You know the proposition that the Federal Government is neglecting South Australia, is frankly nonsense. It defies the reality of this incredibly substantial nation-building commitment. I mean as the Naval Shipbuilding Plan says, our shipbuilding in the past has had a boom-and-bust cycle.
HOST:
Well it’s going to as well. We’re still going to have that irrespective of this.
PRIME MINISTER:
Well it’s coming to an end and it’s coming to an end because of my Government, my leadership, my commitment, six years -
HOST:
So what’s -
PRIME MINISTER:
Six years of Labor, do you know how many ships they commissioned from an Australian yard? Not one. Zero. That’s how much commitment they had to you. This is the same Labor Party that is trying to say that the Federal Government is neglecting South Australia. They had six years in government and did nothing. We have committed to a continuous shipbuilding program in government and it’s underway already.
HOST:
So is your message to Jay Weatherill and Tom Koutsantonis: “Stop grizzling?”
PRIME MINISTER:
My message to them is they should start governing their state and stop blaming all of their failures on somebody else. I mean the fact is, we are making the largest single Commonwealth investment in any state, in South Australia, as the naval shipbuilding commitment.
HOST:
The state government says they haven’t got nearly enough from the Federal Government to make the Oaklands Crossing – which has been a long running -
PRIME MINISTER:
Well how much do they need to do that?
HOST:
Well I think they need a lot more than 40.
PRIME MINISTER:
Well it’s their crossing, I mean it is in South Australia so it’s conventional for state governments to fund infrastructure. That’s what they do. I’m just saying to you that far from neglecting it, we have $40 million we’ve offered, $40 million to go towards it.
HOST:
Now there’s been a lot of controversy about South Australia not preparing its plans and they say: “Well look, hang on, we put in a mountain of plans for various projects whether it be Oaklands Crossing or the Gawler Rail Line being electrified. These seem to languish while the Federal Government is very generous handing over money to other states which have not produced business cases for their projects.
PRIME MINISTER:
Well that’s not right. That’s actually not true. Certainly for example, a good example here is the AdeLINK proposal. Now we have a $10 billion rail fund in the budget, so AdeLINK would certainly be eligible for that.
HOST:
That’s a Liberal proposal?
PRIME MINISTER:
Yes, I’m just saying to you that at this stage, we don’t have a business case provided to us, with respect to AdeLINK. So what states need to do is to get their business case together, submit it to Infrastructure Australia and it gets assessed. Then decisions can be taken.
HOST:
Prime Minister if we can move on to some national issues.
PRIME MINISTER:
Yes
HOST:
The budget’s tax on banks which seems to have come as a surprise to the banks. The National Party on AM this morning, Mia Davies Nationals WA leader has called you a hypocrite for condemning her party’s plan for a mining tax on Rio Tinto and BHP during the WA state election, and now you’re proposing a bank levy on the big five banks. Are you a hypocrite?
PRIME MINISTER:
Certainly not. No, what we’re proposing, what’s been presented in the budget is a levy that represents a fair contribution from the big banks which are among the most profitable banks in the world, to budget repair. Now we have sought to bring the budget back into balance through savings and cutting spending. We’ve had a fair bit of success I have to say, about $25 billion we’ve been able to get through the Senate. But we haven’t been able to get everything we sought to through. So in order to ensure we don’t throw a mountain of debt on the shoulders of our children and grandchildren, we have to raise revenue. So this bank levy is pretty conventional. You know, I can see there’s obviously complaints about it from the big banks. You’d expect that. But it’s very similar to levies of this kind in other countries including of course, the United Kingdom.
HOST:
Well Mia Davies, the quote from you from last September was: “It’s a state issue of course, but we view with great concern, as does the business community, the imposition of substantially increased taxes on particular nominated companies.” So you’ve picked out five banks.
PRIME MINISTER:
Well this is a situation where you have the big banks have the benefit of very substantial financial and commercial benefit from the security that is provided by the very stable financial system in Australia backed up by government regulation and leadership and so it is fair that they make a contribution to budget repair and I think most Australians would agree with that.
HOST:
What if Ken Henry is right and your bank levy will weaken the industry, making it more vulnerable to a future crisis?
PRIME MINISTER:
Well look he is talking his own book right, he is the Chairman of a bank, he knows as well as I do that the banks can well afford to pay this. I mean they have, we are talking about a levy that would cost the big banks about $1.5 billion a year. They have $33 billion of after tax profits. So this is a very, they are the most profitable banks in the world, I think there’s a couple in Canada that are comparably profitable. But their return on equity is in some cases double that of comparable banks in Europe and the rest of North America.
HOST:
But as a matter of principle, what’s the difference between this on the banks and what Labor were proposing on the mining companies during the mining boom?
PRIME MINISTER:
Well it’s very different this is a, this is not a super profits tax, this is a levy on liabilities which reflects the advantage that is conferred on the big banks by the community, by Australia. Our strong financial stability, underpinned by the commitment of the government to maintaining that financial stability.
HOST:
But when challenged on this your answer is the banks have got a lot of money, they’re making these huge profits. But you just did, you said that they’ve made this huge profit so they can well afford to pay this levy. And that was exactly the argument that was used for the mining companies.
PRIME MINISTER:
Well it is a different context, mining companies pay royalties you know they pay royalties for the minerals they extract and state governments are able to, and from time to time do, increase or change royalties. But here what we have is a need to repair the budget, we need to raise more revenue, the banks do get a very distinct advantage from the support of our very stable financial system and the support of government. So it is fair for them to make a contribution. As indeed banks do in many other parts of the world, including the United Kingdom and other countries including in Europe.
HOST:
You’re listening to Prime Minister Malcolm Turnbull in our studio here on ABC Radio Adelaide.
How do you respond to criticism from people such as Peta Credlin yesterday, the headline on her comment piece saying that the Liberal Party now is polls driven and that this budget is a poll driven policy, it’s a sign of a spineless party?
PRIME MINISTER:
Well look, she is a frequent and consistent critic of the government.
HOST:
Well she got you into Government though didn’t she?
PRIME MINISTER:
Well, so she asserts yes, in 2013 she’s taken credit for that. I think, look I don’t want to-
HOST:
How do you think you got into government in 2013?
(Laughter)
PRIME MINISTER:
Well we got in, you’re talking about political history here-
HOST:
Short term we’re not goldfish, I think we can remember back that far.
PRIME MINISTER:
No, no exactly well I mean governments are, every election is a choice of alternatives, we presented a better alternative in 2013 to the Labor Party and we were rewarded with government, we presented a better alternative to the Labor Party in 2016 and were rewarded with government again.
So that is the reality, now just in terms of the budget, I’ll just make a couple of observations about the sort of criticisms that it is excessively political, which I assume is was Peta Credlin is saying. Firstly, all new spending has been offset by savings – fact. Now the last election Labor sort to increase the deficit by $16.5 billion over the next four years, we are improving the budget bottom line, we are improving it from what it was in MYEFO at the end of last year, and indeed in our last budget. What we’re doing is returning to surplus in 2021 with $7.4 billion in the black. And what that shows is responsible economic management. I meant the fact is we are bringing the budget back into surplus, yes we are raising revenue but we are doing that as we have been very open and realistic about because we have not been able to secure all of our savings measures through the Senate.
HOST:
That is based on pretty heroic assumptions isn’t it? I think eight of the last nine budgets the Treasury projections on revenue and spending haven’t been met.
PRIME MINISTER:
Well no-
HOST:
And you’re predicting three per cent of growth in the out years. I mean this is all pretty optimistic is it not?
PRIME MINISTER:
They are actually more conservative than the forecasts of the Reserve Bank and the IMF. So you know everyone is entitled to express a view about whether forecasts are optimistic or not but these are conservative relative to those of other respected forecasters.
And can I just make another point, by 2020-21 spending will fall to 25 per cent of GDP which is only slightly higher than the 30-year average of 24.8 per cent. Real spending is growing at 1.9 per cent on average over the forward estimates, the same paces it was in the budget last year, and we’re spending $26.1 billion less over the period than we were than we were forecast to do in the 2015-16 budget. So it is a very responsible budget but yes we do have to raise additional revenue because we’ve not been able to achieve the savings that we sought through the senate.
HOST:
Now, just finally we know you’re a computer geek and I think that’s how you made a lot of your money. An internet pioneer.
PRIME MINISTER:
Well I’m moderately literate, but I don’t claim to be a-
HOST:
Well you’ve got an iPad.
PRIME MINISTER:
Yes I do have an iPad, yes, yes that’s true.
HOST:
The WannaCry virus, do you have any information the latest information on whether our defence systems are running XP, as I think the trident missile system is in the UK, and whether they’re vulnerable? And if not are you able to get that information to us?
PRIME MINISTER:
I wouldn’t comment on systems that are run by Defence, naturally. But I can say that at this stage and this is literally at this moment, at 8.26am in Adelaide we have had a relatively small number of businesses, small business to date, is my latest update, that have been affected by the WannaCry virus. So large business, large companies and of course governments have not been affected to date. But of course it is important to make sure that all of your patches and updates are installed on time. The Microsoft did put out a patch in March to address the vulnerability that the WannaCry attack has sought to exploit.
HOST:
And Defence sites appear to be safe?
PRIME MINISTER:
We have not had any reports of any vulnerabilities or consequences of this virus with Defence at this stage. So I’m just reporting to you on the situation but we are very vigilant but I just want to say it is a very dynamic environment in terms of cyber security. I have a top team on cyber security, Alastair MacGibbon as you know, as you’ve seen in the media, is my cyber security adviser we’ve put, we have a cybersecurity strategy. We’ve put a lot of resources behind it. But I have to say the people that seek to undermine our cybersecurity are often very agile and very energetic in their efforts to do us harm. So vigilance is absolutely critical but so far I’ve given you the update on where we are at the moment.
HOST:
Okay, Prime Minister we thank you for coming into our studio.
PRIME MINISTER:
It’s great to be here.
HOST:
We appreciate it, Prime Minister Malcolm Turnbull on ABC Radio Adelaide.
[ENDS]