Prime Minister Interview with David Koch
- Written by David Koch
DAVID KOCH: Prime Minister Scott Morrison joins me now from Canberra. Prime Minister, I appreciate your time this morning.
KOCH: Big night of the Budget.
PRIME MINISTER: Good morning David.
KOCH: Tax cuts for 11 million Australians, in part, how are you going to convince all of us to spend that extra money instead of sort of paying it off against our debt and saving it?
PRIME MINISTER: Well, that's why we've targeted all the measures in this Budget, particularly the income tax cuts and the additional payments to pensioners, both this year and next year to people on low and middle incomes. Because we know that people on lower and middle incomes will be more likely to spend it. But I'll tell you one thing we'll never do as a government Kochie, we'll never tell people how to spend their own money. It's their money. And particularly when you're talking about tax cuts, this is money that Australians have earned and we're going to let them keep more of what they earn. And that's what we're focussed on.
KOCH: Ok. Business, no doubt happy with more now able to write-off assets, as well as offsetting the losses against past profits. Um, what sort of difference will that make for them?
PRIME MINISTER: Well it's a real game changer. I mean, you can take the COVID losses of this year and you can set it off against the profits that you might on previous years. And that means you're going to be able to supercharge what you can do to keep people in jobs now and to invest more in your future. And when you take that into account with the super-sizing of the instant asset write off, that means all of that capital investment can be expensed this year. What this is basically doing is saying we're backing businesses to get through this, to come out the other side and to grow in the future. Now, when business is doing better, then there'll be more jobs. And this is what this budget is all about, more jobs. And so down the road. That means more people in jobs. They'll be paying income taxes. Businesses will be paying corporate taxes because they'll be making profits. But that's that's the destination we've got to get to. And that's why this budget's plan is about getting businesses in that shape.
KOCH: Employers are also being subsidised to hire young people on JobSeeker through this hiring credit. Now, a lot of older Australians are saying to themselves, "Hey, where's the safety net to make sure the boss doesn't get rid of me and then hire a younger person with this with this subsidy?"
PRIME MINISTER: Well, the subsidy only applies for new places over and above what your current level of employment is. So if they drop the level of employment to take on other workers, they won't get the subsidy. So it's got to be new jobs over and above what's there now. And so if you're if you're over 35 and you're in that position, in many cases, you would have been still in that position because of the support of JobKeeper. And so JobKeeper has kept these jobs attached to these businesses. Going forward we know, though, that the biggest impact on people as a result of the COVID recession has been on women and on younger people. And we know we've got to get younger people back into jobs. Because I know as a former Social Services Minister, you don't get a young person into a job after they come out of school, and those first few years, their risk of living a life on welfare goes through the roof. So older workers are in those jobs, those who've sadly lost their jobs that's why the 340,000 training places that are in this year is part of JobTrainer that's available for older workers as well. For those who are having to transition between what they may have done in one sector heavily impacted by COVID to go into another sector. So there's training support for those workers. And of course, there's the general supports that are provided through the system.
KOCH: You recently said there'd be a focus on women and getting women back into the workforce. No free childcare in this Budget. Did you consider it at any stage?
PRIME MINISTER: $9bn a year is what we spend on supporting child care. And those on low and middle incomes, they can get up to 85 per cent of their childcare rebated. I mean, free childcare is not something we're proposing. What that does is basically give massive subsidies to those on much higher incomes. And what we're focussed on is the Women's Economic Security Statement. And that's everything from entrepreneurship. As you know, David, very, very well. Some of our greatest and best entrepreneurs, particularly our emerging entrepreneurs, are women as they're really moving out and busting out into the workforce. And as we come out of this COVID recession, women are going to play a huge role. But already, 60 per cent of the jobs that have already come back into the workforce have been for women. And that's pleasing to see. But we've got to continue to guarantee women's economic security and there is $240m in this budget focussed on exactly that entrepreneurship skills training skills, particularly in the new technology areas. Yet there's plenty of jobs for tradies in this Budget. But there's plenty of jobs for techies too. Right across the board, this Budget is about getting people into work because that's how you balance a Budget ultimately in the future.
KOCH: Aged pensioners receive another $500. Good news. But there are 2 million people who are either fully or partially self-funded retirees. Have they been forgotten this Budget? They've paid their taxes. They're now independent.
PRIME MINISTER: Well, as you know, David, we already changed the compulsory drawdown rates, and that was done earlier during the COVID crisis. And there's also been the updating and changes to deeming rates as well. But as you know, self-funded retirees live off the returns that come from the businesses that are in this recession. And so the best way to improve the returns and their incomes is to ensure that the businesses they've invested in are doing better. And that's why the tax cuts that will drive investment and support these businesses, that loss carry backs for the COVID losses of this year. All of that is going to ensure a stronger economy in Australia, which will mean better returns for those self-funded retirees.
KOCH: Yep. All of this has come at a cost and many Australians would be saying, "Hell, that deficit is huge." That government debt over the next couple of years heading to a trillion dollars. What do you say to the average Australian that's saying, "Well, are we just leaving this to our children? We're never gonna get out of this."
PRIME MINISTER: There'd be nothing to leave to our children if we didn't act now David. This is the worst recession we've seen since the Great Depression. This is 45 times worse, an impact on the global economy, than we saw during the Global Financial Crisis. Global growth will fall by about 4.5 per cent this year. During the GFC, it fell by 0.1 per cent. So our response is scaled to the size of the challenge here. And I think the resilience of the Australian people and that's why our government has stepped up to step into that breach. Over the next two years, the spending, that's where the spending is in the next two years. 90 per cent of the additional spending in this budget is in the next two years. We've targeted it. It's proportionate, it's scalable and it's temporary. And that's to enable us to get back on our feet and get going again. The debt is, of course, significantly less than what you see around the world, half what you see in the United Kingdom, even even less than that compared to Japan and the United States. And that is a product of the fact that we came into this far better than most of the countries around the world. We've balanced the Budget, 1.5 million jobs have been created, our AAA credit rating had been restored and maintained over that entire period. Now, that is essential to have responded in the way we have. And the way we're going to pay it back, David, is not by increasing taxes, not by threatening essential services, but in what we've put in this Budget to get people into work. It's the classic, simple response. If you get someone off welfare where they are taking down from taxpayers money and you get them into a job, or in a successful business that they're running, then they're paying taxes. That's how you balance a Budget and you keep a good control on expenditure as we've already demonstrated, we know how to do it.
KOCH: And it's fascinating to read in the Budget that while government debt is skyrocketing, the interest bill is actually falling because you're borrowing at less than 1 per cent and you're locking in that rate for the next 20 or 30 years.
PRIME MINISTER: Well, that's right. In some cases where we have had 30 year bonds. And this is why the Reserve Bank Governor, Phil Lowe, during the course of this crisis, both advising us in the Federal Government as well as the states and territories, because interest costs are so low, that does enable us to move in the way they would have without the interest bill becoming more damaging. And so keen to see the states go down a similar way. I mean, there's a lot of talk about social housing. States do social housing. They're the ones who build it. They're the ones who run the system. I would encourage them to invest in that. We've increased our funding for affordable housing from one billion to three billion through it through the National Housing Finance Investment Corporation. But there's plenty for states to do. There's a lot of money in this budget for infrastructure. Three billion on making roads safer and getting those basic repair works down on roads and other projects by local councils, whether in outback shires or down in my own Shire, down in Sutherland.
KOCH: All right. There's a challenge for the states with the Prime Minister. Really appreciate your time. Thank you.
PRIME MINISTER: Thank you very much, David.
