Interview with Deborah Knight, Today

03 Apr 2019
Prime Minister
A strong Budget for a secure future; congestion-busting infrastructure; Labor’s higher taxes;

DEBORAH KNIGHT: Scott Morrison joins me now. Good morning.


KNIGHT: I thought Tina Arena was your singer of choice and yet we’ve got ACDC Back in Black - not quite back in the black though, we're still back the red at the moment this year, aren’t we? 

PRIME MINISTER: No we’ll be back in the black in 2019/20, that’s what the Budget is, it’s 2019/20. I'm pleased that in the current year we’ve actually beat what I said the Budget would be last year by $10 billion. So we’re $10 billion better off than last year, just like we were last year.

We have form on actually bettering what we put in the Budget. That's what we put in for next year's Budget, we’ll be back in surplus for the first time in 12 years. It's been a long way back, from when we had a surplus under Peter Costello and John Howard. We had those Labor years where the surpluses turned into deficits. We've been able to turn it around over these last six years. We are now back in surplus, which means we can invest in things like tackling youth suicide, which is a great passion of my Government.

KNIGHT: Surpluses have been promised though and not delivered in the past. Labor's Wayne Swan failed to deliver four of them, very famously. Can you guarantee that this surplus will eventuate?

PRIME MINISTER: Absolutely, as I just said, in the last two budgets we bettered what we said we would do, by $10 billion each year.

Wayne Swan put a Budget together, that you’re talking about, that assumed an iron ore price at $175 US a tonne. I mean, he probably still thinks it's that price and it's not anything near that. So our forecasts, particularly when it comes to commodities, are very, very conservative. Always have been. That's why we have outperformed each year, on our Budget. That’s why we are further ahead than where a couple of years ago, we said we would be.

But a surplus is the first step, then you’ve got to pay down the debt. It took John Howard and Peter Costello decade to do that and we’ve set out a plan to do exactly the same thing. Paying down the debt and now using the surplus to invest in critical services. We have already increased hospitals and Medicare funding, 60 per cent more for hospitals, 27 per cent for Medicare, more than 60 per cent for state and public schools. That’s what we’ve already done, now I'm looking forward to investing more, to keep the economy strong and the services where Australians can rely on them.

KNIGHT: In the Budget though, last night the Treasurer did point out that there were headwinds the economy is facing - the slowdown in the global economy, the housing market is in a slump and forecasts of further house price falls to come?


KNIGHT: Those are beyond your control, a lot of those factors, commodity prices too. So how can you guarantee a surplus when you can't control those factors?

PRIME MINISTER: Well our commodity price forecasts for example are well below, right now, what the price is. So we've been very conservative about those things, as we have in the past, which is why we have outperformed.

But the other thing I would say is, in facing those headwinds, you have to actually release the economy to perform. That's why we're getting taxes down. That’s why for small and family businesses, we’ve given them further tax relief in this Budget. That’s why we’re giving Australians, whether they’re on low and middle incomes, they’re getting that immediate relief. Millions and millions of Australians are benefiting from that right now and also, having a tax system over the next decade which means that most Australians will never see bracket creep in their life. Now I think that is a major change that gives Australians incentive for effort.

We want Australians out there having a go. This is a Budget which is a fair go for those who have a go. If Australians keep having a go like they have been under our Government, then we’re only going to get stronger. That’s how we can deal with the pressures ahead.

You cannot have higher wages by having higher taxes, that equation just doesn’t add up.

KNIGHT: Budgets are always political documents but this is especially so with the election looming, do you think that this will be enough to win votes?

PRIME MINISTER: This is a plan, an economic plan, that's what Budgets are. I’ve done quite a number of these and that’s what the Budget is, it’s your economic plan for how you’re going to see an economy over the next decade that’s going to be the economy Australians want to live in.

KNIGHT: But will it win votes though? Because you need those.

PRIME MINISTER: Well that's for Australian to decide, but what I believe they’re looking for is for unemployment to stay low, for investments in infrastructure and investment in services – as I said – already, 60 per cent increases in funding for hospitals and for schools. That will continue and even more so into the future. Why? Because we are driving a stronger economy, keeping taxes under control, keeping spending under control and investing the dividend of the hard work of Australians, back into the services they rely on.

A critical one of those is busting-congestion in our cities. Our population management plan, which I announced a few weeks ago, is about having sensible migration intake backed up by strong infrastructure investment, dealing with the little chokepoints all across the country, in our cities –

KNIGHT: A lot have been in marginal seats.

PRIME MINISTER: They’re right across the country, they’re in Labor seats, they’re in Liberal seats, they’re all across the country. Because a whole city functions better when you deal with these chokepoints in the city.

When I was Treasurer, I had the Productivity Commission look at this and they said cities have got to function better for Australia to be more productive. So I want an economy over the next ten years that has lower taxes and is more productive, not one that has higher taxes, which is what our opponents are suggesting. Because higher taxes slow growth, it means lower wages and higher unemployment.

KNIGHT: Is it wise though to be spending the extra money that we do have when there are those headwinds that are facing our economy? Should we be putting this surplus in the bank?

PRIME MINISTER: What we’re doing is allowing Australians to keep more of what they earn. I don’t consider tax relief to be spending a dollar. Tax relief is saying to a small business that is working hard; “You get to keep more of what you’ve earned.”

KNIGHT: Well it’s spending our dollars to give the dollars though.

PRIME MINISTER: No, it’s not. No, it's their money. Tax relief is people being able to keep their own money. I think that's a really important distinction.

The Labor Party thinks that tax relief is spending money. It's not. It's Australians keeping their own money. I want Australians to earn more in a stronger economy and I want them to keep more of what they earn in a stronger economy. So they have the incentive to keep doing what they’ve been doing - making Australia stronger, making our economy stronger and I want to keep that incentive there for them. So, if you’re going out to work today, good on you, you're building a stronger country.

KNIGHT: The tax cuts you’ve announced equate to about $19 a week extra for the average Australian income. Do you think that will be enough to sway voters, do you think that amount of money in the pocket will be enough to make people think that’s a good policy?

PRIME MINISTER: This is the biggest tax relief we have seen since the Howard Government. For a middle income family, that's more than $2,000 a year. I mean, that's a power bill for the entire year on average in Sydney for example, for many families. So this does provide that relief.

But it does more than that Deb; what it does is say; “If you do better, you'll keep more of it.” That's the incentive. You cannot run a stronger economy where people have no incentive to actually go out there and work hard, take risks, run businesses and put the investment in. That’s what creates a stronger economy. We’ve got more than half a billion dollars in this Budget which is focused on skilling u’ Australians, not just those who are coming out of school, but for people leaving a job when they’re 55. People need skills across their whole lives and they need to be able to adapt and change and there’s more than half a billion dollars we’ve put into that very task here in Australia.

KNIGHT: To get that tax cut though, they will have to vote for you in the election because it won’t be introduced into Parliament this week, will it?

PRIME MINISTER: Well it won't make a difference whether it’s introduced this week or not. What Labor did last year –

KNIGHT: Well the election is looming, so?

PRIME MINISTER: But the Tax Office – if the Labor Party says they support our tax cuts, then the Tax Office can administer it on that basis. Last year, when I put a full tax plan into the Budget, Labor tried to play games with it, break it up and try to strip it away. Because you see, Labor's plan is to tax some people more, to pretend they’re helping other people. That's not how we do things. We think all Australians who work hard deserve tax relief. The Labor Party wants to punish some and engage in this class envy, which has no place in Australia. I think all Australians want to see all Australians do better. They don't think some people have to do worse, for them to do better.

KNIGHT: Will you be visiting the Governor-General this weekend to call the election?

PRIME MINISTER: There’s three dates for the election, the 11th, 18th or 25th, they're the options we have.

KNIGHT: Have you decided? 

PRIME MINISTER: When I decide to go out to the Governor-General, the people will see that car drive to Yarralumla.

KNIGHT: Have you made a decision yet on the date though?


KNIGHT: Not yet?


KNIGHT: And what are the factors you’re considering?

PRIME MINISTER: Well, they’re matters for a Prime Minister to determine.

KNIGHT: Mother's Day is on May 12th.


KNIGHT: So will you and the girls be delivering Jenny breakfast in bed, or will you perhaps be too busy on the campaign trial?

PRIME MINISTER: Well, we’ll all be together, I can assure you of that.

KNIGHT: I’m trying! I'm trying to get the date out of you.


Of course ultimately voters will be judging you on performance, that’s the ultimate guide.

PRIME MINISTER: Absolutely, as they should.

KNIGHT: If you've been a good government though, how do you respond when people say why have you needed three Prime Ministers?

PRIME MINISTER: The real choice is who is going to be the Prime Minister after the next election. My Party changed its rules, so if at this election the Liberal Party and National Party are returned, then I will be returned as the Prime Minister and I will serve as Prime Minister over the next parliamentary term. That's what  our rule changes in the Liberal Party say. So the real choice is at the next election, do you want Bill Shorten and the Labor Party or do you want myself and the Liberal and National Parties? And our record is one that has brought the Budget back into balance for the first time in 12 years.

The last time Australians voted Labor and switched to the Labor Party, they’ve paid for it for the last decade and more. You vote Labor once, you pay for it for a decade. Now is not the time to hand over the economic wheel to a party that doesn't know how to drive.

KNIGHT: Alright, and Sunday? Should I put a mark around Sunday and expect to be on air announcing an election?

PRIME MINISTER: I’m sure you’ll always be on air, I’m sure your viewers will be demanding that you be on air all the time.


KNIGHT: Prime Minister, we thank you for your time this week.