A great morning in Brisbane, and it’s wonderful to be here with David Kingston, environmental engineer and now candidate for Lilley. And what we’ve seen this morning are great examples of the importance of our national economic plan. We saw at Loganholme small businesses, family-owned businesses who were looking forward to getting the backing and the support from our enterprise tax plan and enterprise tax cuts, coming up in the Budget. And they're asking of course why the Labor Party doesn't want to back them, but we do, because we reckon that those enterprising Australians, that enterprise, that determination to get in and have a go and invest, as the couple with the plastic injection business were saying, that couple, that couple will, with our support, be able to expand, take on more employees and grow their business. And here we are, seeing the importance of innovation. Its practical application.
One of the key elements in our national economic plan is our innovation and science agenda, which as you know was launched last December. And a key part of that, is ensuring that we get greater collaboration between primary research, universities, business, industry, and of course here at the hospital.
And we're seeing a, with professor Crawford's work, collaboration with QUT, where he works, the hospital and Stryker, the developers of the robot, you're seeing a novel application for this robotic technology, first in the world, 35,000 hip replacement operations in Australia a year, close to 100,000 hip and knee operations, all of which can be affected more efficiently, better patient outcomes, and over time at lower cost, by the use of this technology.
Truly cutting edge, excuse the surgical pun. But this is really important and it's an example of what we are committed to doing more of, because we know that a successful Australia, a confident Australia, will be more innovative, more technology, more science, more collaboration of this kind, and of course a win-win here in the hospital environment, better outcomes for patients and more cost effective, so ultimately lower costs per procedure for the taxpayer and indeed the patient that is contributing to paying for it.
So it's a great outcome. It's wonderful to be here. Our national economic plan is driving jobs and growth, and you can see the spirit of it here in Queensland. The confidence, the optimism, the determination to get ahead, that's what we're backing. We're backing Australia. We're backing the imaginative, the innovative, the enterprising Australians we've been with today, because we know as we support them, their businesses will grow, their enterprises will grow, and they will provide more and better jobs to young Australians, Australians of all ages, right across the board.
Jobs and growth, our national economic plan - Australia's future. That's what the choice in this election is all about.
Prime Minister, how worried are you about the prospect of a hung parliament, and are the Liberals going to be preferencing the Greens over Labor candidates in Victoria?
Well can I say to you we've heard from Adam Bandt from the Greens, that he's looking forward to a hung Parliament. He said the three years between 2010 and 2013 were effectively a golden era. He looked back to that with affection.
Most Australians look back to it with a degree of horror, let's face it. What will be the price of the Greens' pending deal with Labor, which they've been promoting? It will be much higher taxes - he set out his agenda - a relaxation of our border protection rules so we'll have the people smugglers back in business, and of course he wants even higher carbon taxes than Bill Shorten is proposing.
So if you doubt Bill Shorten's ability to keep our borders secure given the dissension in his back bench and in his own party, consider what it would be like if we have the same old Labor with the same old deal with the Greens. Remember, nobody in the Labor Party did more to create the Julia Gillard Prime Ministership than Bill Shorten. Right now he looks as though he wants to re-enact it.
Do you rule out any informal arrangements in Victoria or elsewhere with the Greens?
If you're asking about preferences, the Federal Director will decide how preferences are allocated. Obviously when we know who's nominated. And that will be done in the usual way, in consultation with the organisation.
If there was a hung parliament, would you rule out doing a deal with the Greens to form Government?
There is absolutely no chance that – yes I can rule out any collaboration with the Greens to form a Government, but I can tell you Labor won't and Labor can't and if they did no-one would believe them because they are on the same page, Labor and the Greens, let's face it.
The Greens drove the Julia Gillard agenda, and she welcomed it, and if we have another hung parliament it will be the Greens and Labor back into business - it will be same old Labor, same old deal with the Greens, Julia Gillard's government being re-enacted by Bill Shorten.
Prime Minister, Labor has launched an attack on the Government's tax cuts for higher income earners. What do you make of those advertisements and are they fair given they don't take into consideration the changes to superannuation?
Let's be quite clear - the only cuts to personal income tax in our Budget is the increase of the $80,000 threshold to $87,000 to ensure that Australians in the middle income bracket are not going to move into the second-top tax bracket.
What Bill Shorten is proposing is to increase personal income tax. He is proposing to add another 2% after the deficit levy expires - he's proposing to add another 2% to the top marginal rate. He's got a commitment to higher personal income tax, whereas we are reducing it by that threshold change.
And of course, you're right, in terms of the changes to superannuation, they, 96% of people in super and Australians who are contributing to super - 96% will either be better off, particularly older Australians and women and people on low incomes, they'll be better off and only 4% will be affected by the changes in any way that they would find adverse. And in terms of the change to the retirement phase, of course it affects around 1%, that is people with a superannuation account in retirement of over $1.6 million which is about 1%.
What's your response to this Reserve Bank note which seems to suggest that changes to negative gearing won't make the housing market collapse in the way that you say it will?
Firstly, I'd say the note is two years old and it was directed at a different issue which was the amount of lending banks were making to investors to invest in residential real estate, and that issue has been addressed by the financial regulators who, as you will recall, last year, dialled back the risk weighting so that the amount of money you can borrow to buy an investment property is less, and that's why, as Glenn Stevens observed only last week, the growth in property prices is moderating.
Can I just make this point, though, about housing affordability more generally - the Labor Party claims they have a policy on housing affordability. They don't. What they've got is a tax grab. They've got a tax grab. Their proposal to ban negative gearing against personal income applies to every single asset class, not just residential property, it applies to commercial property, it applies to shares, it applies to everything except new dwellings. It is purely and simply a tax grab, another Labor tax grab. And they're now saying it is not actually going to cause housing prices to come down, which of course it will. It's a tax grab.
Can I just say to you that in respect of the way the property market works, we have to recognise that residential real estate is the largest asset class in Australia, by far, as the head of Stockland was observing this morning, you may have read, when he talked about how what Labor is proposing could trigger a recession. Now Mr Steinert, he runs one of the largest property developers in Australia so he understands the economics of the market. Now, it is the largest asset class.
We are at a time of economic transition - a time of great opportunities, about which I am so enthusiastic. But, there are plenty of uncertainties and challenges too. That's why we've got to be smart. That’s why we’ve got to have a national economic plan for jobs and growth.
What Labor is proposing is a massive experiment, a huge experiment with the largest asset class in Australia right at this time of transition and that puts at risk not just people, the value of people's homes, but it puts at risk our successful transition from an economy that was fired up by the mining construction boom to one that is more diverse.
Can I just clarify in terms of your national economic plan, the franchisee at the Mitre 10 store this morning said when he gets his tax cut he might put on another staff member, he might buy more stock or he might make more money. I can see how the first two helps jobs and growth but the last one, how do you know that your company tax cuts won't just become higher profits for the businesses that get them? And to clarify your earlier answer, you didn't rule out, as I understand it, a deal between the Victorian party and the Greens?
No going back to the preference issue, I’ll repeat what I said. Preferences are determined, as they are in every election, by the Federal Director in consultation with the organisation. So that is, you know very well, the position we have with respect to the Greens, and the relevant question is this; Why would we run the risk of having another Labor-Greens-independent government? Another hung Parliament? Which is plainly within the contemplation of the Labor Party. It is plainly within the enthusiastic contemplation of the Greens, and we know what the price will be. People smugglers back in business, much higher taxes even than those already contemplated by Labor, and a much higher carbon tax even than that already contemplated by Labor and we have Mr Bandt’s word for it.
And on the question of the franchisee?
Well Lenore, in terms of cutting company tax, it is well understood and well accepted. If you reduce the level of business taxes, company taxes, then you will get a better return on investment. You will see more investment and you will see more employment. That is the inevitable consequence of it. Obviously different firms will react in different ways. But that is why of course Mr Bowen has previously advocated cutting company taxes, and of course that's been a global trend. You see our company tax at 30% was more in the middle of the pack when we went down to 30%. But now of course it's very high. So we've got to compete. We back business and they will then invest and employ, and that is the consequence of what they'll do.
On the point from Lenore, you've got the $48.2 billion figure when it comes to the cost of two parts of that tax cut plan, you've also got the Budget returning to surplus in that 10-year period. Presumably that means there's also a figure that has also been costed of that benefit. What's that that figure? How much will the tax cut actually benefit the economy, and are you going to release the figure?
Can I just say to you that the figures in terms of the response to the economy has been identified by the Treasury as being a growth in GDP by 1% overall. So that is over the long-term. But you see you get the growth, the response begins and it builds up. One of the -
If I can just finish. One of the reasons we have calibrated the tax cut to business in the way we have, so it starts with smaller firms like the businesses we were talking to this morning and then builds up until finally, after a decade, every company, including the largest, is paying 25% tax, is that you will get an investment reaction in advance of the tax cut. Because firms will see that there is a tax cut coming down the track and they will say, "right, we can invest now, and then when we make the profit we anticipate on that investment, we'll be paying tax at a lower rate." So we have very carefully designed this company tax cut, this enterprise tax plan so, so that we get the maximum outcome in terms of investment and in employment. That is what will drive it.
I remind you of this fundamental reality of policy. If you want people to do more of something, you lower the tax on it. If you want them to do less of something, you increase the tax.
So what do we want people to do? What does the Government, the Coalition, want people to do? We want them to invest more and employ more. That’s why we’re bringing back business taxes, we are driving jobs and growth. What does Labor want? They want people to invest less. They are increasing the tax on investment. They're increasing capital gains tax by 50%. They're banning negative gearing, except for new dwellings, which will obviously reduce investment in every single asset class where people would borrow money to invest in, which is basically every asset class except for new dwellings. So Labor's policies are absolutely calculated to slow growth and deter employment.
Every single thing in our national economic plan - from our defence industry plan, from our innovation plan, from our enterprise tax cuts, every single element, the big trade export deals, the free trade deals that we've done, - all of them, every single one of them, will drive stronger growth and more jobs. That is the direction and that's our commitment.
Thank you all very much.