Doorstop, Ulladulla, NSW

 

PRIME MINISTER:

Such impressive technology, cutting edge technology defending Australia and such a key part of our national economic plan for jobs and growth.

Our defence industry plan, investing $300 million into this base this financial year, delivering as the Commander said $400 million into this community every year. Every element of our national economic plan is driving jobs and growth right across Australia.

And you’ve seen today the Labor Party produce a glossy brochure full of unfunded promises. Omitting any indication of how they can pay for the promises that they have made. Omitting any defence, for the way in which they are setting out new taxes that will restrain investment, and slow employment.

We have a plan, every element of which will deliver stronger economic growth, and more jobs. You’ve seen today the report by Chris Murphy’s independent economic analysis which says that for every dollar of company tax cut, there is $2.39 benefit to consumers. Just as we’ve said, the bulk of the benefits from a company tax cut go to employees, go to labour. That is accepted by economists. That used to be accepted by the Labor party, it certainly accepted by Paul Keating, it used to be accepted as we’ve seen by Bill Shorten himself, and all of his colleagues, Chris Bowen and so forth. They have all accepted that. But now they want to stand in the way of economic growth. They want to stand in the way of small and medium businesses. There are in this region, in this Shoalhaven-Illawarra region, there are 11 per cent of all private sector employees, are working for businesses with a turnover of between $2 million and $10 million that will get a tax cut on July 1 if we are returned to government but will not get a tax cut if Labor wins the election. There are over 50,000 businesses, small businesses up and down this region which will benefit from the tax cut on July 1if we are returned to government.

So we have a very clear plan for jobs and growth - it’s detailed, it’s funded, it’s paid for.

What Labor has is a glossy brochure. That’s all they have, another pamphlet, another glossy pamphlet which sets out a list of promises, a list of complaints, no way to pay for them and no demonstration as to how they are going to drive the economic growth that we need, that our children and our grandchildren need to secure their future.

JOURNALIST:

Just on the choppers. Many of these choppers may eventually be deployed to the South China Sea. We’re seeing European nations agitate for more freedom of navigation, a push back against Beijing. Is Australia doing enough?

PRIME MINISTER:

Yes we support freedom of navigation and overflight in the South China Sea, and it’s an issue. We’ve demonstrated that - it’s an issue that I have raised robustly and frankly with the Chinese leaders with whom I have met - President Xi on four occasions now.

JOURNALIST:

Prime Minister do you anticipate Australia will increase its commitment to Afghanistan in the near future?

PRIME MINISTER:

We will consider requests for additional support. Obviously we stand shoulder to shoulder with our allies in Afghanistan.

JOURNALIST:

Has there been any requests so far?

PRIME MINISTER:

I can't comment on any recent requests. I can assure you that we're staying in close and constant contact with our allies, in particular of course the United States.

JOURNALIST:

A Chinese foreign affairs official has said that there might have been bias involved in the Kidman decision. Do we need a clearer framework on foreign investment decisions and how they're made?

PRIME MINISTER:

The Chinese people and the Chinese leaders understand very clearly that Australia's Government has the sovereign right to determine who invests in Australia. That is our right. That's the right of the Australian people through their elected representatives. We have a very clear foreign investment arrangement or regulations. They're well understood. The vast majority of foreign acquisitions and

Investments are approved, as indeed are the vast majority of investments from Chinese investors so nobody has anything to complain about.

JOURNALIST:

Do you admit that not going ahead with company tax cuts has basically allowed Labor to make all these big-ticket promises that you can't do during this election campaign?

PRIME MINISTER:

The Labor Party has given us no indication of how they are going to fund their promises. They've indicated about $100 billion of new taxes over the next 10 years. They are proposing taxes which will actively slow economic growth.

Let's be quite clear about this. This is not that complex. We know that if you want more investment you lower taxes on investment. That is why we recently all voted to provide capital gains tax relief and tax offsets to encourage people to invest in start-up companies. You want more investment, you lower the tax on investment.

What is Labor doing? Labor's increasing the tax on investment. They're going to increase capital gains tax by 50 per cent. That can have only one result - less investment. They're going to ban negative gearing - the ability of ordinary working people to invest and offset losses against their personal income - they're banning negative gearing on every asset class - shares, business, property, commercial property, residential property except for new dwellings. What is that going to do? That will also restrict and reduce investment.

Now if you reduce investment, you reduce employment. There is an absolutely direct connection. That is why reducing company tax - this is why Governments have reduced company taxes here and around the world - you reduce company tax, you increase the return on investment, hence you get more investment, hence you get more employment. We have a very clear plan to promote more economic growth and more jobs. It is all paid for. It's set out in the Budget. Labor does not. What it has is a glossy brochure and a series of taxes which will slow economic growth, put jobs at risk, put our future at risk.

JOURNALIST:

Labor's 10-year plan on the glossy brochure you speak of has them returning to surplus at the same time the budget paper has you returning to surplus in 2020/2021. Can you honestly tell Australians that anyone is going to return the budget to surplus in 2020 or 2021?

PRIME MINISTER:

We have set out a path to do so. It's been set out in the budget and it has been confirmed by the Secretaries of Finance and the Treasury in the PEFO. We have very clear plan.

Labor has not produced its numbers. I see Mr Bowen made some assertions this morning but what he's got is a glossy brochure that is absolutely - from which is absent the type of detailed financials that you would expect from somebody who wants to be the Treasurer.

JOURNALIST:

Can you promise the Australian people if they vote in a Coalition Government the budget will be returned to surplus be it a couple of elections away, by anyone near 2020/21?

PRIME MINISTER:

What I can promise them is we have set out and they know and it's been confirmed objectively by Finance and Treasury, that we have a responsible budget that sets out a path to coming back into balance with declining deficits and reaching balance in 2021, as you said, and we have that set in place. But - and this is a very important but - as the Secretaries observed, in order to achieve those objectives you need strong and disciplined economic leadership. My Government is the only Government that can deliver that strong leadership because we have a plan, we have the discipline, we have the detailed economic plan that will restore the budget, live within our means, increase spending for education and health and above all, drive the economic growth on which everything depends.

See the fundamental flaw in the Labor Party's thinking is that they assume economic growth and take it as a given. They just assume good times are going to roll and that they don't have to do anything about it, and that they can increase taxes, rake in more money, rack up more debt, spend more and it is not going to have any effect on the economy. The truth is governments have a responsibility to provide the environment in which business can grow, business will invest and employ and that's exactly what we're doing and it's been confirmed yet again by Mr Murphy - Dr Murphy's research today.

JOURNALIST:

Glossy brochures as you know aren't very rare in campaigns. There was one in the last campaign, in fact it had your photo on there as well as Tony Abbott's and it was ‘Our Plan.’ It also didn't have costings in it. So that's what Oppositions do. Oppositions ask Governments to release their detailed costings which they've done today. Will you do that? Your detailed 10 year costings?

PRIME MINISTER:

What we have released in the budget, we've released all of the figures in the budget in great detail. Above all they're confirmed by the Treasury and the Department of Finance. From budget night all of our numbers have been set out and they have been set out and confirmed in the PEFO independently, objectively, by the Secretaries of Finance and Treasury.

JOURNALIST:

Prime Minister you've criticised the fact that Labor's economic plan is outlined over 10 years, claiming it is speculative, but are you picking and choosing considering your company tax cut plan is over that same time frame?

PRIME MINISTER:

The reality is that forecasts - there are always risks with forecasts. I think everyone understand that. The further out you go, the more speculative those assumptions are. Let’s go back 10 years. 10 years ago, 2006, there wasn't an iPhone. People didn't have smartphones. Facebook was 1-year-old. It was a different world. A very very different world. It’s a long list. You can think of all the differences yourselves. Ten years hence is a long way out and that is why in the Budget we set out four years, that's why we have a 4-year forward estimate, and we recognise that there are risks associated with that.

What will the iron ore price be? What will the foreign exchange rate be? What will be happening in the Chinese economy? What will be happening in Europe? These are all risks. Let's not kid ourselves. There are plenty of economic risks on the horizon particularly in the global economy. There are risks in the things that we can't control, but what I do know, what I know for sure is that we are best able to deal with those challenges if we have a strong and resilient economy, if we have a Government with strong economic leadership which understands business, which understands what makes business hum and is putting in place the policies that will encourage investment and employment.

The stronger and more resilient our economy is, the better we are able to deal with the unexpected and with changes that have not been anticipated. And of course there will be plenty of those. But for anyone to say that they know what the economy's outcomes will be in 10 years’ time, we know that the best you can do is make a very long-term forecast or projection, there's plenty of risk associated with it but a strong economy, a resilient economy, one that is backing the enterprise and the commitment of Australians, of thousands of Australian businesses. That's the Government I lead, that's the plan I lay out and that's the plan that will deliver us the jobs and growth in the years ahead.

JOURNALIST:

ASIC has moved against NAB. It follows on from what happened with ANZ. What would you say to bank customers and shareholders who are getting increasingly nervous about what’s happening here with the industry and the behaviour in the industry?

PRIME MINISTER:

What we see there is that ASIC, the corporate watchdog is doing its job. ASIC is doing its job. It has the resources to do so. We've increased its resource as you know. It's doing its job and it’s dealing with wrongdoing or suspected wrongdoing right now, in the here and now, that's what we need. We have the banking sector, the financial sector, the corporate sector in fact is well regulated. There are strong regulators with strong powers. We have beefed them up. We have given them additional resources and they're getting on to the case and doing the job and that's exactly what they should be doing. The watchdog is on the job. The watchdog is sinking it’s fangs into a few suspected culprits and doing his job. That's what he should do.

JOURNALIST:

Just on the RBA decision, they've said that house prices are likely to come under downward pressure as a result of the construction boom. Do you expect even without Labor's negative gearing changes that house prices will come down?

PRIME MINISTER:

Thank you for that question. Firstly, we talk a lot - we - and I really mean the economists - talk a lot about house prices and average house prices. The truth is that nobody's house price is the average house price and there are lot of differences between house prices in different cities, in different parts of cities. House prices have been or house values have been coming back for some time in many parts of Australia already. They've obviously been growing strongly close to the CBD, particularly in my city of Sydney but, for example, in Western Australia they've been going backwards - in Perth they have been going backwards for the last few years and so there's lot of variation. There is real softness as the bankers observe in several sectors of the market, particularly in the apartment sector of the market. So I would say that the housing market, there are many parts of the housing market that are delicately poised and where growth has either stopped or is going backwards.

Now, what do you think Labor's ban on negative gearing will do to that market? The Labor Party wants us to believe that its ban on negative gearing is about housing affordability. Let me tell you, it will not make housing more affordable. What it will do – it will drive up rents because it will reduce the amount of rental property being built. It will reduce the amount of rental property that’s available. It will reduce the return to landlords so they'll seek higher rents. So for all of those Australians who are renting, Labor's policy will make it harder for them to rent the home in which they are living.

As far as home owners are concerned, at this point, by pulling so much of the buyers out of the market in a market that is at best soft, it can have only one result and that is a very significant reduction in home values as John Symonds and so many other leaders in the real estate industry have said.

It is a good question to raise. Labor is a real threat to investment, to jobs –it’s a threat to the value of every home and it is a threat to rental availability and tenants because its policies will only send rents one way and that’s up.

Thank you very much.