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Transcript 40949

Radio interview with Neil Mitchell, 3AW

Photo of Turnbull, Malcolm

Turnbull, Malcolm

Period of Service: 15/09/2015 to 24/08/2018

More information about Turnbull, Malcolm on The National Archive website.

Release Date: 12/05/2017

Release Type: Transcript

Transcript ID: 40949

Subject(s): Neil Prakash; Federal Budget; Victorian infrastructure funding; US Visit

NEIL MITCHELL:

Prime Minister Malcolm Turnbull, good morning.

PRIME MINISTER:

Good morning Neil, great to be with you.

NEIL MITCHELL:

Thank you for your time. Now, Neil Prakash - I know you’ve said, the ISIS fighter, you want to get him back to Australia. Why? Why not leave him there?

PRIME MINISTER:

Well you don’t seriously suggest we want to leave him there and being at large again, and raising money for ISIL?

NEIL MITCHELL:

No he’s in custody though, he’s in jail.

PRIME MINISTER:

Yeah but how long will he remain there? I mean he’s -

NEIL MITCHELL:

I dunno.

PRIME MINISTER:

Well that’s the whole point! Here’s the thing - Neil Prakash has been arrested in Turkey. He’s in custody. We believe he will face some charges in Turkey. We don’t know whether they’ll proceed or whether they’ll be successful. We have an extradition request. So as soon as we can – so either when the proceedings in Turkey stop, or if any sentence he gets is completed - we want him back here to face the music in a court in Australia. That’s the objective. Then for the full weight of the law to be brought upon him.

He’s a very dangerous person, Neil, and we do not want him out and about anywhere in the world raising money and directing the operations of ISIL. We want to destroy ISIL in the Middle East and everywhere in the world. It’s one of the most dangerous terrorist groups ever.

NEIL MITCHELL:

Presumably he’s facing serious charges in Turkey so it could be some time, he could have some time to serve. Do you want to bring him back before he serves that time?

PRIME MINISTER:

Well you have to respect the legal processes of the country he’s in. So the bottom line is, he’s in custody, the Turks will decide whether to charge him, whether to proceed for charges, and then they’ll go through whatever process they have. But as soon as that’s complete, we want him back – the one thing we don’t want is for him to be released.

NEIL MITCHELL:

I agree.

PRIME MINISTER:

He’s a very dangerous man.

NEIL MITCHELL:

But there’s no proposition of that is there?

PRIME MINISTER:

Well if we did not have an extradition treaty with Turkey and for example, the charge that they had against him was not sustainable or for whatever reason he was not convicted or they didn’t proceed, he would walk free. So we’ve got to be very – this is a reason why we have extradition treaties, so that when somebody like Prakash is picked up somewhere else, we can get him back, get him back here and he should remain behind bars for as long, for a very, very long time. A very long time.

NEIL MITCHELL:

You’re not prejudging there? What’s he going to be charged with?

PRIME MINISTER:

He’ll be charged with terrorism offences, plainly. Look, Neil -

NEIL MITCHELL:

Oh, I don’t-

PRIME MINISTER:

Neil, I don’t want to be mealy-mouthed about Neil Prakash. He is one of the most dangerous people associated with ISIL. You know, he happens to be an Australian but he is somebody that we need to keep off the streets.

NEIL MITCHELL:

Okay so he’ll come back here and be tried here?

PRIME MINISTER:

Correct. Well, he would be. Yes, of course.

NEIL MITCHELL:

Okay. Bill Shorten is offering 49.5 per cent top tax rate - the OECD average is 42.6 per cent. But you’ve offered no tax relief in this budget. You’ve creed money back through bracket creep and continue to do that. Income tax projections are to be increased by 30 per cent – income tax - in the next couple of years. Will you aim to give some tax relief to the average Australian before the next election?

PRIME MINISTER:

It is always our aim to have taxes that are lower.

NEIL MITCHELL:

Well it wasn’t in this budget, was it?

PRIME MINISTER:

Neil, because as you know, we have sought, we have achieved a lot of savings through the Senate, reductions in spending. We’ve not been able to achieve everything we sought for. We’ve got to live with the Parliament the people elected. We’ve got to balance the budget.

NEIL MITCHELL:

Okay.

PRIME MINISTER:

We can’t throw a mountain of debt onto the kids and the grandkids and we’ve got to pay for essential services.

NEIL MITCHELL:

But do we have any hope, do we have any genuine hope of tax relief for the average person in the next few years?

PRIME MINISTER:

Well it will depend on the state of the economy and the state of the government’s finances.

We are absolutely committed to delivering on the National Disability Insurance Scheme and fully funding it.

We’re absolutely committed to fair schools funding.

We’re absolutely committed to guaranteeing Medicare.

We’re committed to investing in the infrastructure we need for the future.

And we’re committed to bringing the budget back into balance.

You can see that we’ve done that with this Budget - this is a responsible and fair budget.

NEIL MITCHELL:

Do you agree though the tax burden is just too onerous for average Australians? It’s too heavy. It’s not fair. 

PRIME MINISTER:

Well it is high.

NEIL MITCHELL:

Is it fair?

PRIME MINISTER:

Well the question is, is it fair, is it fair to live within your means? The fact is if we want to have the level of government services that we do, and Australians plainly do, then they have to be paid for. That’s the reality.

You can’t say: ‘I want more government services and lower taxes.’

You’ve got to make sure that you have budget that delivers strong economic growth because without that everyone loses. And you’ve got to have a budget that pays the bills.

NEIL MITCHELL:

Yeah, we’ve got a situation where the average person gets a tax rise, and the corporate end of town gets a tax cut. How is that fair? Now I know why you’re doing it but how is it fair? If I’m driving in from Cranbourne today, I’d say: ‘Oh to hell with that. Why should I pay more and they pay less?’

PRIME MINISTER:

Well the bottom line is this - do you want Australian businesses to be competitive? Now if you believe Bill Shorten, he believes - that when the Americans, the United States has a company tax rate of 15 per cent, which is where Donald Trump is taking it, and Britain has got a tax rate of 18 per cent, which is where it’s headed right now - he believes that we can be competitive at 30 per cent. Forget it. Do you really think people are going to say: ‘Oh, let’s invest in Australia and pay twice as much company tax’? Of course they’re not.

The reason we have an Enterprise Tax Plan, the reason we’re already reducing company tax for the small and medium businesses – which employ, by the way, half of Australians in the private sector already – the reason we’re doing that is not because we want to do a favour for companies large or small as a matter of affection – it is because they need to be competitive. Because if you have a lower business tax, you get more investment and business - you get more investment, you get more employment.

It’s a very competitive world and we need to make sure that those kids that we’re delivering fair school funding for have got great jobs to go to when they go into the workforce.

NEIL MITCHELL:

Have you worked out what the corporate tax cuts is going to cost? I’ve been trying to find out for a year. Budget, the day after budget last year, Scott Morrison wouldn’t tell me. I notice both of you sort of mucking around in Parliament yesterday, a bit contradicting each other, how much-

PRIME MINISTER:

Well that’s not right. We were asked about two different-

NEIL MITCHELL:

Okay.

PRIME MINISTER:

He asked about two different periods, so he got two different answers.

NEIL MITCHELL:

Okay how much is it going to cost?

PRIME MINISTER:

Well over the next four years, the full Enterprise Tax Plan, assuming it was all legislated, costs $7.5 billion. Over the period to the ten years from the beginning in 2016, it’s about $50 billion. If you take it out another year, so then by which you’d assume this would be 2027/28 - by which stage you’d assume all Australian companies were paying 25 per cent tax - the cost, the additional cost is around $15 billion. But- 

NEIL MITCHELL:

So what’s that, $65 billion?

PRIME MINISTER:

65 yeah-

NEIL MITCHELL:

$65 billion?

PRIME MINISTER:

Yeah, but Neil you’ve got to focus on this this - there is an air, there is an element – you’ve got to be realistic about this – do you really believe that in a world where company taxes are coming down all over the world, in a world where the US company tax rate is headed to 15 per cent, do you really believe that we can maintain our company tax rate at twice that level? Now you and I know and your listeners know, we can’t. So I’m facing up to the reality here as your Prime Minister of ensuring that our businesses are competitive, so people will continue to invest in them and they’ll continue to employ Australians.

NEIL MITCHELL:

Yep, understand that. All I’m saying is we need some tax relief for the average person as well and urgently.

PRIME MINISTER:

Yeah, well we’ve already delivered that, you know we did that in the last budget, as you know, we-

NEIL MITCHELL:

Yeah but you’ve increased our income tax now in this budget.

PRIME MINISTER:

Well,

NEIL MITCHELL:

The Medicare levy.

PRIME MINISTER:

Look that is true and it is true that it will raise over $4 billion a year and what that will do, it will mean the National Disability Insurance Scheme is fully paid for. So it’s not as though that is a tax, an increase in tax you know to pay for something else, that is a direct benefit. You and I and every single one of your listeners’ benefits either directly or potentially from the National Disability Insurance Scheme. It is fair that we all make a contribution and obviously people on higher incomes pay a lot more than people on lower incomes from that half per cent.

NEIL MITCHELL:

Two former icons of the party - John Howard and Peter Costello, and one former leader, not quite an icon, John Hewson - they’ve all had a go at you. They’ve all criticized the budget. It’s sort of not a Liberal budget. It’s high taxing, high spending. It’s not getting the deficit down. They all wrong?

PRIME MINISTER:

Well it is a highly, it is a very Liberal budget, Liberal National budget and it is-

NEIL MITCHELL:

High spending, high taxing - that’s a Labor budget isn’t it?

PRIME MINISTER:

Well, actually as it happens - spending is actually growing at a much lower rate than what we inherited and taxes are at a lower rate than they’ve been in the past. But the bottom line is it is responsible. The fundamental-

NEIL MITCHELL:

When was the tax take lower?

PRIME MINISTER:

Sorry?

NEIL MITCHELL:

When was the tax take lower than it is now?

PRIME MINISTER:

Well just a few years ago, because receipts were higher but the-

NEIL MITCHELL:

Higher (inaudible)

PRIME MINISTER:

That’s right but look, I don’t know, Neil I don’t want, let’s not get, sort of have a technical argument, yes we are increasing tax on the banks and we’re proposing an increase in Medicare Levy. We are also cracking down on multinational tax avoidance and we’re recovering tax there. But the fundamental question is, do you want to have a balanced budget? You see you can have a fantasy budget. You can have a whole lot of measures that may be very valuable but if you can’t get them through the Senate then they’re not going to achieve their purpose so we have to live with the Parliament the people elected - that is responsible, this is a fair budget, it’s clear-eyed and it sets us up for the future because its gives incentives to business to invest and employ and it guarantees schools, Medicare, National Disability Insurance Scheme, infrastructure, national security.

NEIL MITCHELL:

Okay, there is no way is there that you can guarantee that banks won’t pass on that tax to us?

PRIME MINISTER:

Well the banks Neil - you know there aren’t many guarantees in life as they say except for death and taxes I think is the common saying-

NEIL MITCHELL:

And you’re responsible for one of those.

(Laughter)

PRIME MINISTER:

Well that’s true, that is true.

(Laughter)

But I want to say to you that the banks have nearly $33 billion of after tax profits. They can well absorb this. This is a-

NEIL MITCHELL:

But how do you absorb it? It comes off the bottom-line if you absorb it does it?

PRIME MINISTER:

Well they just, they could, it would make, if they chose not to pass on one cent of this-

NEIL MITCHELL:

Yeah.

PRIME MINISTER:

Not one cent, they would and it all went, it affected their bottom line, their profit would be diminished very modestly. Very, very, very modestly.

NEIL MITCHELL:

Okay. But we know that the-

PRIME MINISTER:

And that’s the point

NEIL MITCHELL:

We know that the bank shares make up the base of the superannuation system, if you start reducing their profitability and potentially their share price, surely, you’re putting your superannuation system under some stress?

PRIME MINISTER:

No you’re not Neil.

NEIL MITCHELL:

Why not?

PRIME MINISTER:

I mean, well Neil, seriously, Neil-

NEIL MITCHELL:

Why doesn’t that make sense?

PRIME MINISTER:

Neil - I don’t want to minimize the importance of the bank levy. Now it is fair that the banks who have been such massive beneficiaries of government support - you know, explicit and implicit - its fair that they with their massive profits make a contribution to budget repair.

But I do want to say this, that the impact of this bank levy is far less, much less than the impact of a 25 basis point, a quarter of a per cent move by the Reserve Bank on interest rates, which as you know they do regularly from time to time.

NEIL MITCHELL:

Alright, well, is there any guarantee, and so there aren’t many guarantees in life-

PRIME MINISTER:

There are not.

NEIL MITCHELL:

There won’t be another industry that you target that’s making big profits, and say here is a super tax for you too?

PRIME MINISTER:

Well we don’t believe in super taxes of that kind.

NEIL MITCHELL:

Well alright, an additional tax?

PRIME MINISTER:

Look, some people have said - let’s cut right to the chase here - some people have said why don’t you do what the British have done and impose a higher company tax on banks. We believe, and that’s what the Brits did-

NEIL MITCHELL:

But that’s beside the point, I’m talking about other industries.

PRIME MINISTER:

Correct.

NEIL MITCHELL:

Why would other industries not be sitting there saying hang on we’re next?

PRIME MINISTER:

And that is why it is important to focus on the specific matter here, which is that the banks, the major banks here pay less in interest for their borrowings - you know, from big institutional lenders and the commercial lenders, wholesale lenders - they pay less because of the fact that they have the backing of this very secure financial system here to back them up in really bad times, it backs them up in good times, and its fair that they – as they do in other countries – they do this in the UK, they do this in Europe - this is a perfectly fair ask of them and they can absolutely afford it.

NEIL MITCHELL:

You may have covered it but Andrew Thorburn, head of the NAB, had a message for you, you may feel you’ve answered. This is what he said.

ANDREW THORBURN:

Firstly, a tax Prime Minister, is borne by people, customers and shareholders of any company. Normal folk. Secondly, let’s work together, let’s look forward, let’s build a plan that can make a better Australia. I and we want to be part of that. Let’s not make this us versus them and adversarial. Let’s work together.

NEIL MITCHELL:

Talked to him yesterday. Do you want to answer it or do you feel that you have?

PRIME MINISTER:

I would say that’s precisely what we’re doing. We’re asking our biggest most profitable businesses, the most profitable banks in the world, massive beneficiaries of the financial system that we’ve got and the support of the government - we’re asking them to work with us and to pay what for them, it’s a lot of money in terms of the budget, for them it is, it is a relatively small amount of money compared to their $33 billion of annual after tax profits.

NEIL MITCHELL

Okay. Do you think there should be drug testing of politicians?

PRIME MINISTER:

(Laughter)

Well I’m not sure whether there should be, but I’m certainly happy to submit myself to one. But I think it’s a you know, again there a lots of areas and industries where drug testing is done. But I think in terms of the issue with welfare recipients you’re doing them a big favor. I mean seriously - do we really believe that welfare payments should be spent on drugs? I don’t think so.

NEIL MITCHELL:

Now, Victoria – we’ve got 25 per cent of the population, 24 per cent of the country’s bottom-line, 8-9 per cent federal infrastructure funding, why?

PRIME MINISTER:

Well I don’t agree with that. There is a lot of money being spent in Victoria.

NEIL MITCHELL:

So what percentage of infrastructure do we get funded?

PRIME MINISTER:

Well, I can tell you, I mean the real question that we’ve got in Victoria, the real issue is that we have made billions of dollars available. You’ve seen a state government that of course spent a billion dollars not building a road. I mean in this budget, there is additional funding of more than $1 billion and you’ve heard about it all - you know, spending $100 million on upgrading the Geelong Rail Line-

NEIL MITCHELL:

But Prime Minister, if those figures are wrong where are they wrong?

PRIME MINISTER:

Well what I’m saying to you is that overall, around 20 per cent of our road funding is going into Victoria, there is additional funding available to them.

NEIL MITCHELL:

But are these wrong? 25 per cent of the population, 24 per cent of the country’s bottom-line, 9 per cent of federal infrastructure funding. Is that wrong?

PRIME MINISTER:

That figure is not right. I can say to you my understanding is that we have about 20 per cent of our road funding is going to Victoria. We have $3 billion still allocated for the East West Link.

But you know Neil the vital thing to remember is that we want to do work with Victoria. We offered money for the Melbourne Metro and they knocked us back. They said no - its fully funded.

You know if you’re on the Monash freeway at the moment there is half a billion dollars of federal money going into that upgrade.

We’re putting this year, we’re putting $120 million, $112 million I should say to complete the work from Melrose Drive to the Melbourne Airport, Tullamarine.

So you know what we’re doing, we are putting a lot of money to work in Victoria. We’ve announced money for the North East rail line upgrade in the budget, Gippsland rail line upgrades. And we’ve got $10 billion rail fund and we will commit a least $1 billion of that to Victoria. I’d like to do more but we need the good projects to work on them with.

Now what I’m optimistic about, I just want to make this point. Is we put $30 million to develop a business case for the Melbourne Airport Rail Link. And what I’d say to Dan Andrews is let’s stop the partisan sniping, that he’s so good at and let’s focus on that. A project that we can work with together, that we can invest in.

And I might add there’s potentially a lot of money coming Victoria’s way when they sell, if and when they sell, their share in Snowy Hydro to the federal government.

NEIL MITCHELL:

So why wouldn’t you and Daniel Andrews just sit down and sort it out behind closed doors?

PRIME MINISTER:

Well, you know something Neil, I’d like to.

NEIL MITCHELL:

Well I’ll put it to him, maybe we can get him to agree.

PRIME MINISTER:

Well you should put it to him. But it is, I have to say, it is a very, privately I have always had a very civilized, you know, discussions and relationship with Daniel Andrews but the public posturing of the Victorian Government is pretty extreme.

NEIL MITCHELL:

Okay we’ll put to him.

PRIME MINISTER:

And you see that with their reaction on Melbourne Metro. But I think that the important thing is you know we have made constructive proposals there-

NEIL MITCHELL:

Okay.

PRIME MINISTER:

For the federal government to invest in infrastructure which have been knocked back.

NEIL MITCHELL:

Okay, Donald Trump, first time we’ve spoken since you met him. Did he ask you - one of your Ministers famously called him a drop kick - did he ask you what that was?

PRIME MINISTER:

(Laughter)

No we didn’t get onto football, we talked about a lot of things but not football.

NEIL MITCHELL:

(Laughter)

Football. Okay sum him up. He’s talking in Time magazine today about how the refugee deal is not your fault and he got on well with you. Sum him up in a sentence. What sort of man?

PRIME MINISTER:

Very warm. Big, big personality. A very powerful salesman. Clearly very, very smart businessmen. Big, larger than life, businessmen, property developer. He could not have received us with more warmth. As I’ve said it was more family than formal. You know he was very welcoming to Lucy and you know our son was in New York at the time, and our son-in-law was there and introduced them to his daughter. Look - it couldn’t have gone better.

NEIL MITCHELL:

Thank you very much for your time.

[ENDS]

Transcript 40949