Australian Government coat of arms

Prime Minister of Australia

The Hon Malcolm Turnbull MP

Interview with Ticky Fullerton – SKY News Business Channel

16 February 2017

Prime Minister


TICKY FULLERTON: Prime Minister, I know you’re shortly off to Queenstown – thank you very much for joining us.

PRIME MINISTER: It’s great to be with you.

TICKY FULLERTON: You are going to New Zealand which is an economy with a budget surplus. Why can’t we do that?

PRIME MINISTER: New Zealand has been very well governed for a long time. They’ve been able to grow their economy faster than their expenditure. And that is basically the key. That has been John Key and Bill English, as his Treasurer – that is what they have done, Ticky, they have been able to, they’ve made some savings, but above all what they have done is ensured their economy has grown faster than their expenditure and over time, of course, that means you move into balance.

TICKY FULLERTON: Now, I know they haven’t had say $50 billion to spend on defence but equally, they have put a GST with a very broad base in for example, now sitting at 15 per cent. Isn’t it about broadening the tax base?

PRIME MINISTER: Well, New Zealand has a different tax system to us in many respects and you can’t just take one piece of it and compare it to ours. They have always had a very broad GST. Their GST includes pretty much everything and that has always been the case and a point of contrast. But they also have an income tax system that is different – that taxes from the first dollar, so New Zealanders pay -

TICKY FULLERTON: Do you think it is a better system than ours?

PRIME MINISTER: Well, it is a different system. Just let me go on. So what New Zealanders do is they have a, they pay a similar average rate of tax but they have lower marginal tax rates.

So, look, it is a different system.

I have always admired New Zealand. You know, I don’t think Australians pay enough attention to the success of New Zealand. I’ve been a great fan of John Key and Bill English and the government that they have led.

John Key always used to say to me that one of the reasons they did things with less expense and less regulation was because they didn’t have the same, you know, as many billions as we did from the mining boom. And so they had to cut their cloth. Well, the mining boom is not as big as it used to be and you know, when you look at it – if I go back to my time in business, if you look at corporate regulation in New Zealand, it is a lighter touch. Generally, I think it helps just having one level of government, just having a national government and it is obviously a smaller economy.

TICKY FULLERTON: Well indeed, that takes us to of course the senate here. Your Omnibus Bill of savings seems thwarted there now. You’ve ruled out today changes to capital gains tax. What about the principles of tax increases in the May Budget, if the senate continues to block savings measures?

PRIME MINISTER: We are focused on our task at hand which is to persuade the senate to support the saving measures in the Omnibus Bill and in a number other items of legislation. I mean, Ticky, everyone -

TICKY FULLERTON: But if you don’t succeed - would you consider tax increases?

PRIME MINISTER: Ticky, let me get something straight with you. I am often asked by distinguished members of the press, like yourself: ‘If you can’t get this through the Senate, what will you do then?’ And my answer is, I am focused on getting it through the senate.

I can’t tell you how many times I was told by the press gallery here in Canberra that we had no chance of getting the Australian Building and Construction Commission restored. I was told, they would say: ‘Prime Minister, come on, you haven’t got the numbers, you’ll never get it through.’ It has passed. It is a law of the land. We’ve done that.

We work through these issues. We negotiate with the crossbench. We seek the support of Labor and the Greens. We are often disappointed there. But the bottom line is that we seek to deliver our agenda and I am not going to get into a hypothetical discussion about what might happen if something doesn’t occur, or if something else doesn’t occur.

TICKY FULLERTON: What about compromise? Because it is a situation of compromise now on taxing and savings. Would you be open to a modest increase in the Medicare levy?

PRIME MINISTER: Ticky, I am not going to get into a debate about hypotheticals and as far as negotiations, again, I’ve always been invited engage in public negotiations about legislations - we don’t do that. We negotiate with the members of the Senate. We respect every member of the Senate from every party and we seek to negotiate with them and you’ve seen we’ve had success.

Here is the fact, this is the fact, over the last six months we have got more legislation through this Senate, this Parliament, the 45th Parliament then we did in the three years of the previous Parliament. Despite having fewer seats in the House and fewer seats in the Senate. So what I am doing and my team are doing is focusing on constructive negotiation and we’ve found we’ve had a fair bit of success with that and some disappointment that’s true, but we’ll continue to work on it. Because that is what Australians expect me to do. They want me to do everything I can to make the 45th Parliament they’ve elected work.

TICKY FULLERTON: Clearly the issue of company tax is a challenging one for you but for business, many would see delivering energy security is now and even more important priority? Business is calling for a raft of reforms to support flexibility through the system now. As the leader, can you cut through the politics and deliver reform?

PRIME MINISTER: Well that is certainly what we’re doing and the first thing to do is to focus on what your objective is and our objectives are to deliver affordable and reliable energy and to do so while we cut our emissions in accordance with our international target, our international commitments – the Paris Treaty right. Now what Labor has done and you see this graphically in South Australia, is set these very big renewable targets – without any plan to integrate that variable renewable energy into the grid –

TICKY FULLERTON: This is already bringing in politics. For example, would you -

PRIME MINISTER: Well it’s a fact-

TICKY FULLERTON: …in subsiding a coal power station in Queensland however clean it could be?


PRIME MINISTER: The Australian Government – starting with Labor Governments I might say – have already spent nearly half a billion dollars on clean coal research and technology. There isn’t a country in the world that has a bigger vested interest in demonstrating that clean coal can play a part in a global low emissions future then we do. We are the biggest coal exporter in the world. Equally, you’ve got to be technology agnostic. This is not a religious debate, we are talking about engineering –

TICKY FULLERTON: But would you really subsidise one? Would you really subsidise a coal power station?

PRIME MINISTER: Ticky we have a number of funds – the Northern Australia Fund, the Clean Energy Finance Cooperation. People with clean energy projects can approach them. Indeed, with the Northern Australia Fund, projects in Northern Australia are eligible. But the real point is, what is your plan? What we have said is that the plan must be one that delivers reliability, security and affordability as well as emissions reduction. Let me give you a very good example of the mindless complacency of the Labor Party. Labor wants to have a massive share of renewables in our mix, they want to go to 50 per cent. In Queensland, Labor wants to go from 4 per cent renewables to 50 per cent. If you’re going to have more renewables, you’ve got to say how you are going to maintain baseload. How you are going to back that up? They have no plan for that. They have not lifted a finger on energy storage and look what we are doing - we are already financing and supporting pumped hydro, massive, large-scale, industrial-scale energy storage. That’s the type of thinking, the type of innovation you need.

TICKY FULLERTON: Can I move on to housing because investor loan growth in this country is under pressure, the limits are under pressure. David Murray says the regulation is not enough. What are your thoughts on this New Zealand idea at the moment about debt to income limits?

PRIME MINISTER: As I understand it, what the New Zealanders have said, that their central bank essentially has said, is that banks must maintain only a small percentage of borrowers, whether they’re investors or owner-occupiers, with high LVRs, loan value ratios. So I think with investors a bank can’t have more than 5 per cent of the loans with an LVR of higher than 60. I think with homeowners, it’s an LVR of 80, they can’t have more than ten percent there. Our APRA, which is our prudential regulator has created or imposed new rules on banks in terms of their –

TICKY FULLERTON: But are they strong enough. Do you think they’re strong enough?

PRIME MINISTER: Well they’ve certainly had some effect, but this is really a matter for the regulator. Can I just make this point to you, Ticky; if you want to improve the affordability of housing, it is very clear what you need to do. You need to build more houses. Now whether it’s Sydney or Auckland or London or Melbourne of New York, wherever you are in the world, where housing is very expensive, people complain of housing affordability, the problem is that supply is not meeting demand. Now what we’ve seen particularly in Sydney – this is the case in Sydney, and you’re right London has got a very similar problem. I might say, most of my discussion with Ministers in the UK is that what you’ve seen over the years is restrictions on planning. Planning restrictions, zoning restrictions which have not allowed the market, the developers, to meet demand. If you look around Australia, and you get a developer on your show, he or she will say to you that housing is more affordable, for example, in Brisbane than it is in Sydney. Why is that? It’s because it’s easier to get a DA in Brisbane than it is in Sydney.

TICKY FULLERTON: Closer economic relations with New Zealand. On the New Zealand side, might there be any broader announcement on the pathway to citizenship laws for Kiwis in Australia, over the next couple of days?

PRIME MINISTER: The Pathways to Citizenship Program, as you know, which we estimate will apply to around 60,000 New Zealanders who are residents in Australia, who came here between 2001 and 2016 and meet the various requirements, that program will commence from 1 July this year. So very shortly.

TICKY FULLERTON: Will you broaden it at all?

PRIME MINISTER:Ticky, we’re not, no. John Key and I reached an agreement on that. We announced that and that’s what will be opening up, commencing, on 1 July.

TICKY FULLERTON: Finally, Prime Minister, Israeli Prime Minister Benjamin Netanyahu is going to come to Australia. I wondered what your response was to the comments by Donald Trump appearing to back away from the long-held position of America and the two state solution in the Middle East?

PRIME MINISTER: Our position has not changed. Our position is that there should be a two state solution negotiated between Israel and the Palestinian Authority. That there should be a two state solution, and that will best secure the interests and indeed the security of both peoples.

TICKY FULLERTON: Were you surprised at his comment?

PRIME MINISTER: I don’t run a commentary on US politics. I’ll leave that to others. Australia’s position remains, as it has been for many, many years, that we support a two state solution and indeed that is the official policy of the Israeli Government as well.

TICKY FULLERTON: Prime Minister thank you very much for your time.

PRIME MINISTER: Thanks so much Ticky.