Should you be asking for a pay rise?
Ross Greenwood speaks to Treasurer Scott Morrison about the citizenship crisis, the banking royal commission and whether people should be asking for a pay rise?
Ross Greenwood: Welcome back to Money News, right across Australia. Well, while the citizenship crisis continues to boil through the parliament, trying to work out who’s in, who’s out, is there a Super Saturday of by-elections. Of course, the Government has got to get on with the business of trying to run the country. And, indeed, trying to get legislation through a somewhat fractious parliament. Now, the point is, as we sit here right now, there are signs that the Australian economy is starting to pick up. So in the September quarter, you saw economic growth of .6%, which was probably a little lower than expected.
Annual growth now sitting at 2.8%, so it’s not really where the Reserve Bank, even the government, would like it, around about at 3% mark, but it’s getting back there. But they are some concerns inside the national accounts that were out today. That is, it would appear that though there are signs that wages might be slowly starting to pick up, there’s evidence of that. There’s also evidence that Australian families have dramatically cut their spending. Now, this is an important part about this, because if you look at the current quarterly growth in a range of different areas, that is, spending in household goods and consumption, basically the lowest since the March quarter of 2005.
So what you sense is happening is that as wages have been squeezed and not growing, and as mortgages have got bigger, therefore families still had to cut back their spending. And, on top of that, they’ve had higher electricity prices, private health insurance premiums, a range of different things. All these things sort of meld into the one. Let’s now go to our treasurer, Scott Morrison, who’s on the line, many thanks for your time, treasurer.
Interview with: Scott Morrison, Treasurer
Scott Morrison: Good day, Ross.
Ross Greenwood: Okay, so first up, do you believe you can actually try and manage the economy, manage the parliament, given the citizenship crisis going through it right now?
Scott Morrison: Oh absolutely. I mean, Barnaby Joyce returned to the parliament today. We’ve been settling these issues, we’ve had that by-election and he was returned with a thumping big majority. The swing to Barnaby was actually bigger than the Labor vote on its own. And then on top of that, we’ve got the Bennelong by-election, we’re very focused on that as well. That will happen before the end of the year and they’re all that matters for our members. And the problem today is Bill Shorten.
He made all these big promises, talked the big game, the Labor system was perfect and all this sort of thing, and I think he’s been caught out today looking like a complete “fool.”
Ross Greenwood: Okay, there could be as many as four of the Labor members that will be referred to the High Court. That’s how it seems as we sit here right now. Do you believe there’ll be more members of the coalition that could be referred to the High Court as well?
Scott Morrison: No, I don’t believe so. They’ve all put forward their declarations today. The problem Labor has is what they’ve admitted in their declarations. What they’ve admitted in their declarations is that people hadn’t been able to confirm their citizenship, as not being a dual-citizenship, before the close of nominations. And that’s not me alleging that. That’s what they’ve admitted to, on the facts, in their own submissions. But, I mean, in your introduction, Ross, you made the right point. We’ve focused on getting on with running the country. Last night in the Parliament, we passed the bill, which will give first home savers for their deposit a tax cut.
A very significant tax cut, which will mean they’ll be able to save for their first home deposit 30% faster, which means that they can take from their wage before they pay any tax. They will be able to put up to $30,000 that they save in their extra savings, into their superannuation account, on top of their normal superannuation contributions, and they’ll only have to pay those lower rates of tax. Now we got that through the Senate last night, with the support of the crossbench. No surprise that Labor party voted against it.
So if you’re trying to buy a house in Epping, or Eastwood or Ermington or Eastwood of any of these places up in Bennelong, don’t forget, the Labor party voted against giving you a tax cut last night. So, remember that when you go to vote in the Bennelong by-elections.
Ross Greenwood: Okay, but then again, this whole dislocation of the Parliament as a result of the citizenship crisis that saw Barnaby Joyce, and also John Alexander, out of the Parliament, really allowed what you’d have to call a fracture inside the coalition. The Nationals clearly got the bill through that ultimately resulted in the Royal Commission. But even before then.
Scott Morrison: But they didn’t get the bill through. I mean, there was no bill passed.
Ross Greenwood: No, but they were actually able to get it into the Parliament to try and bring it through.
Scott Morrison: They put in the bill but the bill was never passed and the bill was dropped, and we resolved that issue last week.
Ross Greenwood: By having a Royal Commission, which the former Prime Minister, John Howard said this about.
John Howard: I would be staggered if the coalition proposed a banking Royal Commission. That is rank socialism.
Ross Greenwood: So, rank socialism from a former prime minister and obviously a government great. So, is it rank socialism or not?
Scott Morrison: At the end of the day, as I said last week, this was regrettably necessary because what was going to come out of the Senate would have been far worse and would have undermined confidence in our banking and financial system, upon which every job in the country depends. We took the decision in the right interests of the national economy, at the end of the day. You’ve got to deal with what’s in front of you, you can’t deal with it as you’d like it to be. You’ve got to deal with it as it is.
Ross Greenwood: On the banking Royal Commission, who wrote the terms of reference?
Scott Morrison: That’s been developed now over some period of time.
Ross Greenwood: Okay, but hang on, if that’s been developed over a period of time- [crosstalk]
Scott Morrison: A for long period of time.
Ross Greenwood: -why was it that you and the prime minister had continually said that there will be no Royal Commission if you’d written- [crosstalk]
Scott Morrison: Well, we had no plans.
Ross Greenwood: the terms of reference over a period of time?
Scott Morrison: We had no plans to have a Royal Commission at all, Ross. And the prime minister said just last Tuesday week that we would not be doing that and that was absolutely the government’s position.
Ross Greenwood: But you’d written the terms of reference is tha–?
Scott Morrison: No, we hadn’t written the terms of reference.
Ross Greenwood: So they were written just the day before when you announced them, is that right?
Scott Morrison: The terms of reference are still being finalised with letters with the Governor-General even as we speak.
Ross Greenwood: Right.
Scott Morrison: And so that was a big brouhaha story in the media, which frankly was [crosstalk].
Ross Greenwood: No, I’m trying to get to the bottom of that. Because the terms of reference obviously say that the Royal Commission cannot cut across and investigate where there is already an investigation or a legal proceeding underway, which would be, say, for example, the Commonwealth Bank and Austrac. It will look at regulation and, as you have pointed out previously, there has been moves made to improve the lot of regulators and their ability to inquire. What I’m wondering is, when we come back in 12 months’ time, or 18 months’ time, whatever it might be, the Royal Commission hands it down.
It could very well be a big tick for the banking system, a big tick for the regulators, in other words, nothing to see. Is that what we might get out of a Royal Commission?
Scott Morrison: Well, that could be very much the result, Ross. I’m not going to pre-empt the result of it. We’ve been taking action, as you know, on the issues within the banking and financial sector now for last two years. Everything from increasing the powers and resources of the banking executive accountability regime, the new Complaints Authority, which has binding decisions on the banks. We’ve just been getting on with it. Now, if we’d gone along with what Bill Shorten said we should have done two years ago, none of that would have happened.
So, this Royal Commission will proceed. It became regrettably necessary because of the damage politics was doing, and so that’s regrettable. But at the end of the day, you’ve got to deal with what’s in front of you in the best interests of the national economy. The government had no plans at all to have a Royal Commission but events proved that became necessary, regrettably, at the end of last week.
Ross Greenwood: Okay, you often tell me proudly when we last spoke. More than, almost 360,000 jobs created in Australia over the past 12 months. What we can see is there’s some small evidence that maybe salaries are starting to move a little. Do you think that people around Australia over the next week or so should walk into their bosses’ office and demand a pay rise?
Scott Morrison: Well, the labor market is certainly tightening. In the September quarter, in the National Accounts they were saying came down today, for the September quarter. What happened in the September quarter is more than 100,000 jobs were created, that’s more than 1,000 jobs a day. The growth rate for the year lifted from 1.9% to 2.8%. And what was driving that was the very strong growth in new private business investment, which hit 7.5%. Just two years ago, that was going backwards by 11%. We’ve turned the investment ship around in the national economy, and that’s what’s driving that growth, despite, as you rightly say, the very soft figures we’ve had on consumption.
Householders were very cautious in that September quarter and now are concerned about rising costs of living, particularly on things, on energy prices and the like. And you could see that in the numbers. They really pulled back to the essentials. So I was pleased that in the budget that I guaranteed essentials around Medicare and the pharmaceutical benefits scheme, and the funding we put in for public school education, and education more broadly. I understand that consumers were very, very concerned in that quarter. And look, some of that remains today, but the October retail figures were much more stronger than what we saw in the September quarter. In the September quarter, we saw jobs and growth. That’s what we promised at the last elections.
Ross Greenwood: Jobs and growth should- [crosstalk]
Scott Morrison: And that’s what people say.
Ross Greenwood: -equal a pay rise. So should people in Australia go in and have a chat to their boss and say, “Look, we think the labor market’s tightening. There’s plenty of jobs out there right now, the treasurer tells me so. I need a pay rise.” Should [crosstalk] people be asking for them?
Scott Morrison: Ultimately, that’s between them and their employer. But what I can tell you is in those sectors where the labor market is getting much tighter, then we’re seeing those outcomes on wages already. But the wages bill totally in the country lifted by 3% over the last year and a key reason for that was just that the highest growth on record, in jobs and on full-time jobs, over that period of time. So there’s a lot of jobs being created in the economy. We’ve seen unemployment fall now to 5.4%.
When I became treasurer a couple of years ago, it was up over 6%. And over 500,000 jobs have been created over that period of time. We’ve seen private business investment turn around. We’re on track for our projected balance on the budget.
Ross Greenwood: And tax cuts, they’re on the agenda as well?
Scott Morrison: Tax cuts are on the agenda and tax cuts for businesses have already been delivered, as have tax cuts for people on middle incomes by lifting that threshold on the tax system from 80,000 to 87,000. The deficit levy, which gave us one of the highest top marginal tax rates in the world, that’s come down 2%. So, anywhere and every time
I get the opportunity to cut taxes for Australians, I’ll do it. Because I know if I can put more money in their pockets, it’s going to go further than in the pockets of the government.
Ross Greenwood: Okay, before I let you go, just one thing, and this has come out today from the Chinese embassy in Australia. The spokesperson there has issued a statement, which I think is quite astonishing in some ways. Talks about some Australian media repeatedly fabricated news stories about the “so-called Chinese influence and infiltration in Australia.” “Those reports, which were made up out of thin air and filled with Cold War mentality and ideological bias, reflected a typical anti-China hysteria and paranoia.” “The relevant reports not only made unjustifiable accusations against the Chinese government, but also unscrupulously vilified the Chinese students as well as the Chinese community in Australia with racial prejudice.”
Their words, not mine. Do you believe that this type of accusations against Chinese influence in Australia economy is justified or not?
Scott Morrison: All I know is that Sam Dastyari has betrayed his country, that’s what I know. I know we got a member– The first pick of Bill Shorten in the senate for flaws is Sam Dastyari. This is a bloke who has been caught out cheating on his country.
I have said this in the parliament this week. Metaphorically like being caught between the sheets, the guy should pack his bags, get out of the house and never come back. We had Chris Bowen, this is a bloke who wants to be treasury of this country. He is on record as saying that Sam Dastyari is this loyal and wonderful Australian. And he’s totally vested all of his credibility on Sam Dastyari.
Ross Greenwood: Importantly, though, on the other side, do you believe that the Chinese government or its agents seek to have political or other influence in Australia?
Scott Morrison: They’ve never had that on me. That doesn’t really concern me because it just has never been an issue for me. But I do think it’s important that we have the likes of transparent rules in place to protect against these things and that’s what we announced we were introducing and that the Prime Minister said this week.
We have a fantastic Chinese community here in Australia who are passionately loyal Australians great things for Australia. I think we should celebrate that. The Chinese New Year these days has become an Australian celebration. I think that is one of the evidences of the fact of the intermingling of that just being part of the Australian life. But at the same time we are a sovereign country, China is a sovereign country and they should both stick to their side of the fence. If any Australian thinks that they can somehow betray their country, well, they got another thing coming.
Sam Dastyari should have another thing coming. And Bill Shorten, if he had any, he’d sack him out of the labor party and remove the shame and stain that Dastyari puts on the labor party in the Australian parliament.
Ross Greenwood: Treasury Scott Morrison, we appreciate your time.
Scott Morrison: Thanks
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