Press Conference
Parliament House, Canberra
8 September 2010
SUBJECTS: Re-elected Gillard Government; Responsible economic management; Minerals Resource Rent Tax; Tax forum; National Broadband Network
TREASURER:
I'll make a few comments and I'm happy to take questions. So, look I wanted to first of all pay tribute to the spirit that was shown by the Independents in our discussions. They entered those discussions from a national interest point of view, they were very productive, and I think we've seen a very good outcome from that last night and through today. I want to make the point that there is an open line of communication with the Independents, and it has been built on the basis of very good discussions and engagement over the previous Parliament over a three year period.
I want to emphasise that we'll be working with all of the Independents and the minor parties in the Parliament, irrespective of the decisions that they took yesterday. We see this as a very important part of consensus building as we move forward. Because, I think as the Prime Minister has underlined, it's very important that we do build a consensus behind major reforms so essential for the future of our country.
This Government's commitment to responsible economic management, strong economic management, is in no way affected by the discussions of recent days. You will see that we have stuck absolutely to our fiscal rules whilst maintaining our commitment to essential investments – essential investments in broadband, essential investments in health and education. The objective here was to make sure that regional Australia gets a fair share, and that is why we have enshrined new processes to ensure that these judgments can be made – that all Australians are getting a fair share.
So, the Independents entered those discussions from that perspective – the national interest perspective. From our perspective, we do now have the basis for very strong and stable government throughout this term. We need that and we need the consensus to implement our plans for a strong economy – for a National Broadband Network, for tax breaks for business, especially small business, for our boost to superannuation, to build national savings, for new transport infrastructure, and of course for essential investments in education and training.
Now, we've had great success with our national economy compared to other advanced economies, but we also understand that not all Australians are necessarily sharing in that success. And as the Government has said repeatedly, we as a nation need to grow together – we don't want to grow apart. And that is why the commitments we have made in our agreements with the Independents are so important. Because what they emphasise is a renewed focus – a renewed focus on regional Australia. But we also recognise that Australians have sent us a message in the recent election and that we do need to build a broader consensus not just in the Parliament for our national economic plan, but also in the community. Over to you.
JOURNALIST:
Mr Swan, what is the status of the mining tax. Would it (inaudible). And if there are any changes, what does that do to the other policies that are tied to it?
TREASURER:
No, the mining tax is going through the process that we outlined prior to the election. We agreed with the mining companies a tax design to produce the MRRT. We then established the Argus Committee to work with the industry to further refine that design. That process is going on now. Of course the Independents will talk to the Government about their attitude to the mining tax, because it is legislation which is yet to come to the Parliament and we will require the support of the Parliament in both the House of Representatives and the Senate for the MRRT.
JOURNALIST:
But Tony Windsor's made it clear at least that he wants it to go through the tax summit.
TREASURER:
Could I just finish my answer, then I'll come to that. Because I've also had a discussion prior to today and again today with Tony Windsor about a number of these issues as part of our open line of communication. But the fact is that the MRRT is critical to funding our investments in superannuation, in regional infrastructure, and lower corporate tax. So the Independents will want to be informed about the final design of the tax and we will be seeking their support for the final design of the tax and for the revenue stream that it is providing for those fundamental investments in our economy. Now-
JOURNALIST:
So are you saying-
TREASURER:
Could I just finish, because this is very important. Now, when we announced on the 2nd of May our response to the Henry report we said the following things: we said on that day we were committed to a number of measures in Henry of which a resource rent tax was one, and there were others that we outlined. We said there were some things that we as a government would never do, and we said there were many other recommendations of Henry on which we wanted to see a community debate and discussion in the next term of Parliament.
Well we are now in that next term of Parliament, and there will be, and I hope there will be, a very substantial discussion about all of those other recommendations. And what we agreed with the Independents was that we would find a structure to facilitate, or put in place a structure to facilitate, that discussion. But in short, the MRRT – its design is being refined through the Argus Committee, it will be put in legislative form, and we will be seeking the support of both the House of Representatives and the Senate for this very essential measure which is important to ensure that Australians get fair value for the mineral resources they own 100 per cent and which can only be dug up once.
JOURNALIST:
And you told Tony Windsor that and he's happy with your explanation?
TREASURER:
Yes, I've had a very productive discussion with Tony Windsor. In fact I talked to Tony Windsor about this on a number of occasions prior to today. Tony has some views and wants to be consulted on the MRRT, and would in the normal course of events anyway irrespective of anything that we've agreed to because we need to get a majority in the House of Representatives and the Senate. And the same applies to all other Members of Parliament and any piece of legislation that goes through.
JOURNALIST:
But at this point in time you don't know whether you have the numbers to pass that legislation?
TREASURER:
There's nothing new about that. We didn't necessarily know before the election that we had the numbers to pass the legislation either, except to make the point that I think during the campaign the Greens made the point in the Senate that they would I think back the Government's design.
JOURNALIST:
Will the tax summit be able to discuss ideas in Henry that you have ruled out, or will you only discuss the ideas that you're open to?
TREASURER:
Well I think, I'm sure that there will be discussion of a whole lot of ideas and not necessarily exclusive to Henry, and I guess some people will wish to raise things that we have ruled out. The Government has made its attitude very clear on some issues of Henry, a relatively small number which we've ruled out absolutely. Others may wish to raise that and I wouldn't seek to impede that.
JOURNALIST:
If the Independents insist on that minerals tax going to the tax summit, would you accept that?
TREASURER:
No, I don't think you'll find that the Independents were insisting on that at all, and that's not my interpretation of Mr Windsor's comments this morning.
JOURNALIST:
Mr Swan, just on the mining tax. What timetable would you have to get it to Parliament, excluding one or two days when it gets there?
TREASURER:
For any new piece of legislation, particularly one of this importance, there is a process that is gone through that takes some time. It can rarely be done in less than six months.
JOURNALIST:
Mr Swan, when you announced the RSPT, before you changed it, you said that it would be the second half of 2011, after (inaudible). Does that still apply?
TREASURER:
Well, as I said, it can rarely be done in less than six months. So, whether it can be done and into legislative form by the end of this year, I couldn't tell you. We're in caretaker mode at the moment. The consequence of that has been that the Argus Committee has not been operating fully. It can now commence that as the Government is re-formed. To some extent we're in the hands of the time that the Argus Committee takes, but we will be seeking to do it as quickly as we can, consistent with making good public policy. And with any piece of legislation such as this, there is also an extensive public consultation that happens as a matter of course.
JOURNALIST:
Mr Swan, by bringing forward health and education for regional Australia, which city areas are going to have to wait longer?
TREASURER:
Well, I don't think you can necessarily draw the conclusion that a priority for regional Australia means that there is less for the city, because there are a number of rounds or bids that go into these funds. We've just said we'll do a regional round under the Health and Hospitals Fund. We've set out an education fund that will take $500 million exclusively for regional areas.
What we would want to see over time is a roughly proportional distribution, and that's what we have agreed to with the Independents – their fair share, not necessarily a lot more, their fair share. So what we've done is put in place a process through a variety of mechanisms whereby there could be open scrutiny of the distribution of health and education funding, so that all people can be confident that all Australians are getting their fair share.
JOURNALIST:
Are you going to spend more money up front, or are you going to make other areas wait longer?
TREASURER:
It depends. Some areas have already done very well out of this. It's not one or the other. Because there are a number of rounds, there'll be swings and roundabouts.
JOURNALIST:
Were there any costings done of the promise made on broadband yesterday? Because there's a reference in the document to a cross subsidy, you know by definition a cross subsidy means that one group of people are subsidising another, and in this case the same price is going to be offered to rural people. So is it a fact that city people will be subsidising broadband prices paid in the country?
TREASURER:
Well, we've said that there will be a uniform wholesale price. As I understand it, that is within the provisions that we have made in terms of the funding of the NBN. But those are decisions that are taken by the NBN themselves, and what we announced yesterday the NBN is entirely comfortable with and that is the way it's proceeding.
JOURNALIST:
This $10 billion deal – how much of it is ultimately funded by the proceeds of the mining tax?
TREASURER:
Well, it depends which bits you're talking about. There are…
JOURNALIST:
The overall $10 billion package.
TREASURER:
There is about, I think, $500 million that comes out of the proceeds of the mining tax.
JOURNALIST:
So $9.5 billion is from other…
TREASURER:
Yeah, well we distributed for you all the table yesterday that takes you through the commitments that have been made. In terms of total new spending, aside from the funds, total new spending of $763 million and total savings of $806 million, which gives you the overall save of $43 million over the forward estimates.
JOURNALIST:
Because Warren Truss is saying $6 billion of this $10 billion is coming from the proceeds of the mining tax.
TREASURER:
No, it's not. I mean, look, fair dinkum, when it comes to numbers you can't listen to the Liberal Party or the National Party. I mean, they got $9 out of $10 wrong in their net savings. That is they got $1 out of $10 right.
JOURNALIST:
(Inaudible)
TREASURER:
No, there's not.
JOURNALIST:
(Inaudible)
TREASURER:
No, but I'm talking about new money – $500 million of new money.
JOURNALIST:
How much of the $10 billion?
TREASURER:
Of the $6 billion?
JOURNALIST:
(Inaudible)
TREASURER:
Well, let me go through the $10 billion in a sec. There you go. There's the Health and Hospitals Fund – potentially up to $1.8 [billion]. The Education Investment Fund – $500 [million]. Then you've got all those others where there's one third. And then you come down to the Regional Infrastructure Fund – $5.4 [million]. Tele-health – $392 [million]. And building better cities – $200 [million]. But of new money, $500 [million] into regional infrastructure.
JOURNALIST:
But overall how much is funded from the mining tax? Are all those things coming from the mining tax?
TREASURER:
Well, the $6 billion all goes to regional. No, not all of them, I just went through them. The $6 billion goes to regional areas, or $5.4 [billion] according to this table.
JOURNALIST:
Mr Swan, it sounds like you're going to put off the MRRT until Labor has a friendlier Senate. Is that correct?
TREASURER:
No, I didn't say that at all.
JOURNALIST:
And secondly, in the spirit of minority government, openness, alliances – will Labor reach out to Steve Fielding? Because Fielding combined with the Coalition can block your entire legislative program for the next 11 months or 10 months.
TREASURER:
We're happy to talk to any Independent or anyone in the Parliament about…
JOURNALIST:
I asked though if you will reach out to them, because Labor (inaudible)…
TREASURER:
Well, we already do. There's an implication in your question that we haven't reached out to Steve Fielding. As someone who's spent a lot of time with Steve Fielding when I was trying to get the stimulus package through, and other members of the Government have done the same on numerous occasions, we'll continue to do that.
JOURNALIST:
And on my first question about putting off the MRRT until you get a friendly Senate…
TREASURER:
No, I wasn't suggesting that at all. I'd like to get this into legislative shape as quickly as we possibly can. So there's no notion – let's be really clear – there's no notion in my mind of delaying the considerations that are so important for this tax until we get a change in the Senate numbers – just none.
JOURNALIST:
Treasurer, will the consensus building you talk about, and which the Prime Minister yesterday said the message of the election seems to be what the Australian electorate want, will that extend to the Opposition? Would you seek to cooperate with them, talk to them as you are with the crossbenchers?
TREASURER:
Certainly, because I think one of the messages out of this election is that the Australian people do want us to find more common ground. Now, that doesn't mean to say we are going to agree on everything. There are going to be – I think Tony Abbott made this point yesterday, and I agree with him – there are going to be vigorous debates, and the mining tax is one where we do disagree. I can't for the life of me understand why they would actually knock it back, but they've made their position clear. But we will continue to reach out to find common ground.
Australia has a unique opportunity at the moment. We have come through the global recession in good shape, in just about better shape than any other advanced economy. And that means we're not wading through the rubble of a recession, of high unemployment. We're not wading through the rubble of all the capital destruction and so on that comes from high unemployment. We've got a unique advantage to maximise the opportunities which will flow from growth in our region as we go forward. And what that's going to require is a degree of consensus not just in our Parliament but in our community, about how we maximise those opportunities. That's what the Government is focusing on.
I express it this way: the things that we do together are the things that make us strong. I think that is something the Australian people believe and they want us to try and find common ground where we can find common ground. And Prime Minister Gillard's great strength is that she's very good at doing this. She did this in terms of the Fair Work Act. She's done it in the case of the mining tax. And she understands absolutely that this is important for us to maximise all the great opportunities that can flow to this country from mining boom mark II, but I'm going to leave it at that.
JOURNALIST:
In terms of getting the mining tax through the House of Representatives…
TREASURER:
Sorry I couldn't see you.
JOURNALIST:
That's okay. Forget about the Senate for a minute – (inaudible) get the mining tax through the House of Representatives first. Bob Katter's, you're not going to have his vote. Has Tony Windsor and Rob Oakeshott given you any indication – they've suggested that they're happy with a resource rent tax in some way – of what the changes (inaudible)?
TREASURER:
The sensible thing is to get the design finalised – that's what the Argus Committee is doing. And then to engage in a round of consultations and discussion – that's what we're going to do. Thanks a lot.
