ROSS GREENWOOD: But first up tonight, obviously the Henry tax report, the recommendations that have come from it, and of course, those that the Government has taken up, including, of course, the 12 per cent superannuation coming over the next eight to 10 years, which clearly will push those superannuation contributions from nine to 12 per cent. That wasn't even in the Henry review. So what should we make of it, and what does it leave for us as Australians? Lindsay Tanner as the Finance Minister joins us on Money News. Good evening to you, Lindsay.
LINDSAY TANNER: Good evening, Ross.
ROSS GREENWOOD: I note that your colleague, the Treasurer, Wayne Swan, went toe to toe, head-to-head with the - with my colleague here, Ray Hadley, this morning. I wonder whether we're going to get the same result ourselves today.
LINDSAY TANNER: Well, I'm sure Wayne survived, but I hope you won't do too much damage to me, Ross [laughs].
ROSS GREENWOOD: Well, I don't know. Look, I'll tell you one thing, where people clearly will be raising questions - and in particular, you and I have talked about this many times, and that is, the Henry tax review does not raise a single dollar to help pay off the nation's debts. Why not?
LINDSAY TANNER: Well, it's not about raising money for specific purposes, Ross. It's about getting a more efficient tax system and ensuring that the wealth that we generate from our natural resources is spread more evenly across the community and we don't end up with all the traps of a two-speed economy. It's not that long ago that the tax take from the profits of the big mining companies was 30 to 40 per cent, and now it's dropped as low as 14 per cent because the prices for those major minerals have just gone through the roof internationally. And it's really important that the Australian community, who are ultimately the owners of these resources, get the benefits that they deserve. And what we're putting forward here is a package that recycles those benefits into wealth creation by cutting other business taxes and by enabling an expansion of our superannuation system.
ROSS GREENWOOD: But of course, many people would suggest that the Henry tax review now was totally unnecessary because, quite clearly, these measures that you have taken, the superannuation, the increase in the resources tax, the cut in company tax, all of these things could have been done in next week's Budget. My question to you is, what's left for the Budget?
LINDSAY TANNER: Oh, look, you'll obviously have to wait and see with respect to the Budget, Ross. But one of the things you should take note of is that we've indicated in our response to the Henry tax review that we've got an initial response of a number of key measures, that there are a number of things that we simply have no intention of doing, and there are other things that are potentially open for future consideration but not necessarily right now. So I can't speculate on what might occur in the Budget, but these are fundamental changes and they're very important for setting Australia's economy up for the future and making sure that we've got balanced economic growth and good opportunity across the nation. We know that they'll be controversial, that we're going to get a fair bit of flak from parts of the mining sector, but I'd point out that there are also some real positives in this for the mining sector, some big improvements for the riskier and less obvious ventures and the prospect of, I think, greater exploration and greater investment in the long term in the mining sector.
ROSS GREENWOOD: But if you do look at the headlines this morning - and I mean, these are all commentators from all parts of the media, have basically felt collectively that the Government has missed an opportunity, that it has not grabbed, if you like, the big reforms that are inside Ken Henry's report, that Australia's tax system is no easier than what it was previously, that really, in many cases, the Government has in many ways perhaps wasted its very strong political capital in not, if you like, taking some of the hard decisions to improve our tax system. Would you agree with that?
LINDSAY TANNER: Look, I don't think that's a fair assessment, Ross, particularly noting that this is not the absolute, final end to our response to the Henry tax review. We have indicated there's a number of things like land taxes on the family home and the inheritance taxes and various other recommendations that we just simply responded by saying, no, we are not doing that, full stop. But there are a variety of themes and issues that we think have some potential merit for the future and what we put in place today are the key parts of the Government's response, and I don't think people should downplay the significance of these changes. Getting our company tax rate lower and getting back into the middle ranking levels internationally is very important for Australian business. Getting our superannuation industry stronger, the nine per cent rate up to 12 per cent, and particularly tackling the problems that a lot of people in the older age bracket in the workforce have got in terms of having inadequate super, so extending the tax concessions for them and also the $500 pay - up to $500 a year contribution to low-income workers' super, those things are all very, very important initiatives. So I know that people will be looking for other things to occur and it's very easy when you're sitting on the sidelines to say, why didn't you do this or why didn't you do that, but I think the initial package we've put forward is very substantial and it's going to be a big boost to our economy.
ROSS GREENWOOD: But there was always the issue of the 125 taxes versus the UK's 25 taxes, and the fact that Ken Henry wanted to bring it back to four broad taxes. And also, of course, flatten out the personal scales of tax so that therefore people would not pay any tax up to $25,000. I just wonder whether these are some of the initiatives that have been missed to really make people's lives much simpler and to make their affairs much easier, and so as a result, to make the whole system easy to engage with and to understand.
LINDSAY TANNER: Look, we certainly haven't ruled out some of the options that do head in that direction. And simplification and making it easier for people to deal with the tax system obviously remains an important objective. So I think it is, again, necessary to note that this is not the absolute end of the tax reform story. The Treasurer has, of course, referred to this as being a decade-long agenda in terms of addressing these things. And it's a very difficult and complicated task to undertake, but we've chosen to basically focus our immediate efforts on what I would refer to as wealth creation. So, yes, there are efficiency measures that do matter both to individuals and companies, but really, what we've chosen to address initially is a broad package that is all about restructuring the tax burden to maximise our whole economy's opportunities for the future, our entire nation's ability to benefit from the wealth that we get from the mining and resources boom, and to spread that across our entire economy.
ROSS GREENWOOD: Is it of concern to you as the Finance Minister and obviously as senior member of the Government that your own Prime Minister over the last week or so has been labelled in a variety of mediums as being weak, lacking spine, being not courageous in political will since the dropping of the ETS, now seeing as this is being labelled as, you know, picking the low-hanging fruit but not really making the hard decisions. Is it a problem for your Government that it may be labelled as taking the easy option and not necessarily really risking, if you like, the political capital, as I called it earlier, in terms of getting some of the long-term right decisions in place?
LINDSAY TANNER: Look, I don't believe so, Ross, but time will tell, of course, because you never quite know how the electorate perceives government decisions. And you can rest assured that we could just as easily be being attack for being foolhardy or making what they used to describe on Yes Minister as courageous decisions. So typically, the commentators will always default to what they see as the most obvious point of attack and politicians, governments have got to make judgement calls about what's in the interest of the nation and obviously, we want to get re-elected, you know. We make decisions that are, as we see it, the best decisions for the nation, but we're not about committing political suicide based on some fine [indistinct] either. Now, there'll always be different perspectives on these things, different views. I think this Government's done an awful lot of very substantial things, very important economic reform things and important decisions that require courage. And somehow the notion that the package we've put forward is some kind of soft option I find very hard to believe. We are going to get hit with the kitchen sink by sections of the mining industry, there will be a lot of criticism on that front. We're going to have to wear that and it will be politically challenging for us. So I don't accept the suggestion somehow this is an easy option package. The increase for the superannuation guarantee from nine per cent to 12 per cent, there will be criticism about that, so I'd suggest that it's a balanced package that does involve a fair bit of political courage on a number of fronts.
ROSS GREENWOOD: And as we now go through this whole process, the ETS has been put to one side. The insulation situation, that's been tucked away. You've got the Building the Education Revolution, that's all now coming to an end. Of course, now you've got the Henry review, you've got the Cooper review that have all come in, they've all been tucked away. The federal Budget happens next week. It would seem you've pretty much cleared the decks now for the next election. It must be fairly close.
LINDSAY TANNER: Look, I don't know when the election will be held, Ross, but I think if you actually go through the list, you'll find that there are specific factors driving some of those considerations. We were due to have the emissions trading scheme come back to the Parliament and the Senate in the session that's about to start, and so clearly, we had to form a view about whether it was simply worth proceeding with that battle, given how things have unfolded. If you look across some of the different issues that have emerged that you referred to, there are things there that had to be dealt with. We couldn't just sit around and say, well, maybe later in the year. So I don't agree with the assessment that somehow there's a very orchestrated clearing of the decks going on here. There's just a range of issues being dealt with one way or another, you know, at some point pretty soon were going to have be addressed.
ROSS GREENWOOD: Lindsay Tanner, the Finance Minister, many thanks for joining us on Money News tonight.
LINDSAY TANNER: My pleasure. Thanks very much, Ross.
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