Aaron Morey:
My question for you, Treasurer, is given that the outcomes from this package of reforms will have a significant impact on the scope to get up future projects and generate royalties and revenue for the country, to what extent have you and Treasury had significant input into that process? Because it will have a significant impact on your portfolio if we end up with a set of reforms that means that it's harder to get projects up.
Jim Chalmers:
Deeply engaged and incredibly supportive of the great work that Murray is doing. Murray has basically moved here over the last few weeks in an effort to try and land this. It's a difficult policy area to land but I think he has and we have put a lot of effort into making sure that our objectives here - a regime which is better for our economy, better for our environment, more efficient and quicker, more robust, more transparent - that we can deliver those objectives in a way that takes into consideration all of the feedback that's been provided to us in good faith. And so I appreciate you mentioning Murray's good work, because it has been tireless.
And really, if I could push the friendship here and ask people for a favour, is if you think that we need to resolve this thing and get it bedded down and come up with a good, responsible way to get faster yeses and faster nos and a better system and capture these win‑wins which I think are available to us, the Senate is going to be - next week there's going to be a lot of negotiations. And if you want a good, sensible outcome here and you have a way to lobby our political opponents, I think that would be a very good use of your time. Because everyone in this room and I believe the country more broadly has an interest in us bedding this down as soon as we can.
It's why at the roundtable one of the key conclusions was let's not mess around into 2026 if we can avoid it, let's try and get this done in 2025. The Senate will determine whether that happens or not. There are a lot of influential voices in this room. I would encourage people, respectfully, to use them if they can.
Morey:
Thank you. Thank you, Treasurer. Going to Slido - there were some problems with Slido earlier, but we're all up and running now - now, a topic that I reckon that you thought you'd never get a question on, quite extraordinary. I was there last night - you've witnessed 2 Welcome to Countries in about 12 hours, and both of them included a bit of lobbying on the GST. So only in WA, right? So, look, I mean, you've been consistent - yourself, the Prime Minister - you are protecting WA's GST deal.
I see David Janetzki potentially announcing that Queensland will run its own PC inquiry into the GST deal, because they're not happy with the scope of your terms of reference to the PC. So, I mean, you've said that you'll protect WA's GST deal. I assume by that you mean particularly the 75 per cent floor.
The other significant reform that occurred in 2018 was changing the equalisation standard. So we used to bring everyone up to the strongest state. Now we bring everyone up to the strongest of New South Wales and Victoria due to their historical strength. Is that sort of fundamental architecture of the system on the table or not?
Chalmers:
Well, a couple of things about that. First of all, to be very clear we're committed to the deal and we've said that. I think when I come to WA, I think I probably end up saying it on 20 or 30 different occasions over 2 or 3 days, and happy to say again, we're committed to the deal.
The Prime Minister, and the Cabinet and I are big believers in the deal that was struck because it's important to us as it's important to you that you get a fair share of the GST. And so under this government - any government that Anthony's a part of and that I'm a part of - WA will receive its fair share.
When you go down a layer or two of technical detail, as you have, Aaron, what the Productivity Commission has tried to do in good faith - David's complaints notwithstanding - is to give all of the states and territories an opportunity to make their views known, including on some of those sorts of issues.
And what I've asked of the PC - obviously a very sensitive area, every state and territory has very strong views about it - what I've asked the PC to do is to put out an issues paper on some of these issues that you have talked about. And I would anticipate that that happens actually quite soon - certainly by the end of the year but hopefully quite soon and so people will have an opportunity to express a view about that.
But again, to finish where I started, we're committed to the deal. You will always get a fair share under us. And I admire, frankly, the extraordinary message discipline that has people Welcoming to Country also finding an opportunity to segue into the GST deal. And I will continue to engage with all of you in good faith on this because I believe in WA getting its fair share.
Morey:
Thank you, Treasurer. Another - yeah, another popular theme coming through on Slido is around our defence sector and a really important opportunity for WA's economic diversification and something that we're all incredibly excited about. A couple of popular questions around the funding of Henderson and when that starts.
And also, in particular, a lot of the recent press about Hanwha and Austal. My understanding is that there was a deadline to make a decision on this. There's a lot of questions coming through on when that uncertainty can be resolved, which is really important for industry. When can we expect a decision there Treasurer?
Chalmers:
So on both of those things, on Henderson funding, a lot of the discussions that we've been having over the last couple of days have been about that and the Prime Minister and the Premier will be talking about defence investment today as it turns out, so I don't want to kind of steal his thunder. But it's front of mind because we've made this important commitment at Henderson and we will do what we need to do to fund that commitment. So we've been grappling with that, almost in real time the last couple of days.
On your question about Austal and Hanwha, I want to be really clear and say that, yes, there was a deadline at the end of September, we missed the deadline, and that's on us. And the reason I put it like that is because when we're dealing with proposals which are this complex and have a number of issues associated with them, sometimes it takes us a bit more time to consult, whether it's internal to government or external to government, to make sure that we take the right decision.
Now, these are an extraordinarily limited number of cases where it takes us a bit longer. In fact, the first round of FIRB reforms that I put in place has actually dramatically quickened the pace of FIRB approvals but there is from time to time an exception like this one where we want to do some more work. So I've been very upfront about that.
We'll make a decision as soon as we can, we didn't make the end of September deadline. I've been upfront about that on earlier occasions as well and that's because I take my responsibilities as the decision maker in the FIRB system incredibly seriously and I want to make sure that I get this one right. It's a complex decision, as I've said before, we're taking a bit more time as I've said before, hopefully we can come to a decision soon.
Morey:
Thank you, Treasurer. Appreciate that. Appreciate that honesty. Another issue I wanted to touch on was something else that's come through the Productivity Commission in recent times, and that's their idea around cash flow tax. Now, the PC, they're basically proposing an additional 5 per cent on company cash flows while keeping the existing rate at 30 per cent for the business. But they basically admitted themselves that this will increase the tax burden on our biggest companies in our economy.
Unfortunately, generally those companies are the ones that are sort of weighing up whether they, you know, undertake a marginal investment in Australia or whether they invest in Africa or the Middle East or wherever it might be. So there's obviously deep concern around increasing that overall taxation burden and impacting on those marginal investment decisions. Is this something that you're willing to rule out, or where's your head at when it comes to that sort of idea being put forward?
Chalmers:
Well, I hope Matt from Rio doesn't mind me saying we've just been discussing this at our table along very similar lines, so maybe Matt has had a second dig on the app.
Morey:
We didn't plan this.
Chalmers:
I mean, I understand the issues that you've just raised, Aaron, and that Matt raised earlier as well. What the PC has done, we asked them to give us 5 pieces of work on productivity. We asked them to think about the role of the tax system in that. We also asked them to be conscious of - it's easy to think of great tax reforms that might cost $10 or $20 or $100 billion which doesn't take into consideration the very real fiscal pressures that we're under.
And so what the PC has done in its interim report - it hasn't released its final report yet on that, it will before long - what they've tried to do is to work out, okay, how do we incentivise investment over here and how would we fund it? And that's their model. Now, we haven't - we've tried to be respectful to their model, they've put it out there for all of you to interact with, and people have, in a good way. And they'll release a final report soon.
I think separate to the PC model - and Andew and Ben were part of these discussions in the Cabinet room as well - I am interested in trying to find a way, an affordable way, a responsible way, that we could incentivise more investment using the tax system. I'm up for that. But as we grappled with in the room and subsequently, we have to work out a way that that's fiscally sustainable and fiscally responsible. And so we're genuinely open to people's ideas. If you don't like the PC model, that's fine.
We're open to other ideas about is there an affordable way that we can incentivise more investment. Because if you think about our productivity challenge, probably the most important way that we can come at that is to try and attract more investment into our economy. We are becoming more and more attractive in the world for a lot of the reasons I ran through in my introduction before, but we're interested in finding ways to become even more attractive. If there's a way we can do that in the tax system, I'd love to hear your ideas.
Morey:
Great, thank you, Treasurer. And obviously, that productivity roundtable was quite the event. We've got an image from that roundtable that I was keen to bring up, if we can, DJ Flynn. So this is an image from the productivity roundtable. And, look, I'm obviously in a WhatsApp chat with my old boss. Gee whiz, what on earth is going on when you're carrying this bloke's coffees around? He won't stop talking about it. You've created a monster. Not sure what was going on there Treasurer. Just a nice guy?
Chalmers:
Well, first of all, I mean, the context for this is that Ben and I used to be mates.
Morey:
Used to be? Used to be? Yeah, used to be.
Chalmers:
And the reason why I use the past tense is I invite him to my roundtable, I give him a wonderful seat as far away from Ted O'Brien as I can, I buy him what looks like 8 coffees, I carry those coffees for him, and still I'm in Perth for 3 days and I can't get an invitation to his running club this morning. You'd think after I did all of those things for Ben I could get an invitation to run with the Pig Runners this morning, but that invitation never came. And so that's a question for Ben.
Morey:
He's become too big. Too big. All right. Let's get that on. So you got young kids, right, Treasurer? I mean, I remember talking to you on stage, we were talking about, you know, how much the tooth fairy pays and all this sort of thing, so I assume your kids are sort of getting to an age. Now, this question will be lost on those that do not have children between the ages of 4 and 14, but my question is - are you going slowly mad with this constant phrase, 6‑7?
Chalmers:
No, I think quickly mad.
Morey:
Yeah.
Chalmers:
It's so bizarre, isn't it. You discover in your life how many times the numbers 6 and 7 are next to each other, and you know, grinning like an idiot during a Treasury [inaudible] because a Treasury official has said, 6‑7. Look, the main thing I would say about this is if you were on the fence about our social media reforms - the ban on social media reforms for under‑16s - this is the most important reason I can think of, because it's maddening.
Morey:
Your heard it here first. And just finally, there's one other sound that supposedly - supposedly - follows you everywhere. Can we play that sting, DJ Flynn?
[Music played]
Morey:
We've omitted the words and the language - your very strict instructions not to have the lyrics. Can you confirm for the record, Treasurer, is this actually your ring tone?
Chalmers:
It is. It is. And it's Still DRE by Dr Dre and Snoop Dog. And you're very wise just to use the instrumental, as my ring tone does. But from time to time when I forget to switch the phone off in a meeting, people are a little surprised to learn that I'm a hip‑hop kid.
Morey:
Have you always been a badass?
Chalmers:
I don't know what to say to that.
Morey:
Okay. Well, in that case, let's leave it there. We really deeply appreciate your engagement.
