Subjects: cyber-security; Budget 2017-18
EO&E…………………………………………………………………………………………………………………………
PETER VAN ONSELEN:
As flagged a little earlier I’m joined by the Special Minister of State live from Melbourne, Senator Scott Ryan thanks for your company.
SCOTT RYAN:
Good afternoon Peter.
VAN ONSELEN:
Let’s go to this cyber-attack issue, well some of these cyber-attack issues first up. I know it’s been Australian business that have been the focus, but as Special Minister of State you’ve got purview over a host of areas where this would be of concern or interest, you would think, particularly around elections. Have you got any update on that for us?
RYAN:
No. Look I don’t have anything to update from what the Minister Assisting the Prime Minister, Dan Tehan, said this morning. This Government has a whole-of-government approach to these matters and without going into a great deal of detail, it’s sort of outside my area of technical expertise, it is something to which the agencies I work with and that I am responsible for have given priority to.
VAN ONSELEN:
All right let’s get into the Budget sell. Are you surprised that there was a downturn rather than an upturn in the first Newspoll? I’m not asking you to comment on the polls, but I’m talking about surprise, whether or not you thought it might be better accepted?
RYAN:
I think the Budget has been well accepted. I spent the weekend, caught up with some friends on Saturday and was at Auskick yesterday, and the people I talked to were actually – hadn’t read all the Budget papers, they hadn’t drilled down into the portfolio budget statements – but they were aware of what the Government announced on Tuesday night, what the media covered on Wednesday and they were very happy with it. People are happy with the fact that there is now a credible and near path back to surplus. They are happy that we are funding the National Disability Insurance Scheme because that has such overwhelming public support. People are happy, some of my friends for example, are happy that the deficit levy was allowed to expire. So I think this Budget has struck the balance. Without commenting specifically on the polls, look nothing I saw this morning surprised me.
VAN ONSELEN:
Is that because you just think it will take time? I mean at some point presumably, if, as you say, the Budget is being well received, you would think that at some point that would have to translate into the polls, surely?
RYAN:
Well look over the last 20 years when I’ve been involved on and off with politics Peter, governments have often been behind the polls between elections. It’s never particularly concerned me. What this Budget reflects is the fact that the Government has now ensured that the measures that we couldn’t get through the Senate are off the books, so the Budget papers are absolutely credible; that we’ve actually addressed some of the issues that have caused us a political challenge, but also addressed the future of Australia, like schools funding. The clearness, the transparency, the fairness of that formula that Simon Birmingham so eloquently outlined, actually appeals to people. It is important that people can actually understand the rationale for government policy and how it works, not let it be so complex that 27 separate deals and different money for different kids at different schools in each state. That can’t be explained and that’s why Labor’s policy had no credibility. It’s the compilation of all those measures that makes this Budget so important and I think over time as we continue to implement them, as we have our election promises since the second of July last year, that the Government will get credit from the public for doing so when we seek their endorsement in a couple of years.
VAN ONSELEN:
The Treasurer will be fronting voters up at Gosford on Paul Murray Live later tonight in a Q&A session at 9pm eastern time.
One of the things that he’s said before now, as have others, is that the bank levy – or we can call it a tax, whichever word suits – will help to ensure greater competition between big banks and small banks. Do you agree with that?
RYAN:
I think it has a pro-competitive effect. The historical example of seven or eight years ago makes a point here, Peter, when the Commonwealth was asked to provide a guarantee for banks into bank lending during and in the immediate aftermath of the GFC, the Commonwealth provided that, but it was at a different level and at a different cost. And the bigger banks got it less expensively. It was cheaper for the bigger banks to do that than for the smaller banks because the bigger banks had larger balance sheets and better credit ratings. And at the time, the smaller banks and a lot of commentators also thought ‘well that’s going to make it a little bit harder for the smaller banks to continue to compete with the big banks’. So the reverse I think actually has to stand true as well.
VAN ONSELEN:
So what does it do then? I mean, for it to translate in effect that it increases competition between big and small banks, what has to change as a result of this tax?
RYAN:
As the Treasurer has outlined – I’m not going to go into the intricacies of bank operations, it’s far outside my level of technical expertise as well – but there’s a marginal cost here imposed on the five largest banks, the four consumer banks and an investment bank, and so it definitely won’t hurt competition and if anything would allow the smaller banks by encouraging people to look around.
VAN ONSELEN:
But Senator, realistically, to achieve what the Treasurer and others have said, which is that this will create more competition in the banking sector, there’s only one way for that to happen, with a few strands to it which is for the tax to be passed on. Because if it’s not passed on, if it’s just absorbed, then that doesn’t increase competition.
RYAN:
Well no Peter. What it could do is actually encourage consumers to have a look. Banking is bit like health insurance. It’s a very sticky policy – sorry, a very sticky product –
VAN ONSELEN:
(interrupts) But how does it encourage people to have a look? I mean if the banks come out and say what the Treasurer wants them to say, ‘we will absorb this, it will have no impact on our operations’, how in that context does it encourage people to have a look?
RYAN:
Because Peter I know people who over the last week since the banks have made a bit of noise – I mean, I think it’s fair to say that a few of them have expressed the fact that they’re not happy with the measure – I know people who have actually said that they’re going to have a look at the smaller banks. I think competition can also be about reminding consumers that they can move. Banking is not an easy product to move, I mean no-one likes changing their bank accounts, their direct debits, their mortgages if they have one. So I think one of the mechanisms that could work here is that people are going to be encouraged to have a look at the smaller banks, whether they be the Bendigo Bank, which is prominent here in Victoria, or other building societies or credit unions.
VAN ONSELEN:
So that is all the Treasurer meant, you reckon, when he and others are telling us pretty emphatically that this will create more competition between big and small lenders, it’s just that people are – I mean you could have then just had someone in a clown suit run past the Treasurer saying think about, you know, a wider ambit of banks when doing your banking rather than tax their profits by five per cent.
RYAN:
Peter if you want to ask what the Treasurer meant I suppose you could ask the Treasurer. I’m actually explaining I think this is one of the non-economic factors, or the non-, the factors you can’t specify in numeric terms, that can actually lead to greater competition in the sector.
VAN ONSELEN:
All right let’s move to some other measures in the budget. The accusation in various quarters that this is a Labor-lite Budget – help me understand the consistency though, between this Budget and 2014, or am I right in assuming that there’s little by way of consistency and we can maybe just chalk that up to the intransigence of the Senate?
RYAN:
The budgets share an objective to bring the Budget back into balance and stop accruing debt. I mean, the observation has been made before one can pay debt, one needs to stop accruing it. And while there have been changes to various forecasts and parameters, the key thing that’s happened over the last two or three years, has been that the Senate has blocked substantial savings measures both short-term and long-term, that the Government has put forward. So what this Budget does is stick to that core Coalition principle which is, the Budget needs to be balanced.
VAN ONSELEN:
The Budget needs to be balanced. What about this one – there’s no doubt that in the medium to long-term you might take issue with this, but realistically in the medium- to long-term, Labor have more structural saves in their Budget blueprint than your side does. You would hope that your company tax cut for example, were it able to be fully implemented, would spur growth, I accept that. But in terms of structural saves, they’ve got negative gearing, capital gains tax reform. Economists agree over the long-term they will have a profound, profound impact. In the short term though, from the last election Senator, you guys in Government were a mile ahead of the Labor Party, I think to the tune of $16 billion dollars in terms of what your costings said versus what their costings said. That said though, $13 billion dollars of zombie measures have now been ripped out of the budget so there’s about a $3 billion dollar difference at the moment.
RYAN:
Well look Peter I don’t remember all the numbers from the last election off the top of my head, but I will say one thing. This idea, this so-called term of ‘structural saves’, I mean tax increases aren’t savings. I’ve made that point, Mathias Cormann has made that point, Malcolm Turnbull has made that point and so has Scott Morrison. Labor always proposes tax increases and they call them savings. Savings are when the government says ‘how do we actually best use the resources we have’? And we do that because, not only do we fulfil our promises and try and balance the books, but when Labor leaves massive spending holes, like they did in education and particularly like they’ve done with the National Disability Insurance Scheme, we are willing to make the difficult choices and explain to the public that these promises need to be paid for if they’re important. On schools, we’ve struck a balance between extra resourcing, transparency and also ensuring it is spent well. On the NDIS, where we agree with Labor that that policy needs to be delivered, we have filled the funding hole that Labor left.
VAN ONSELEN:
We appreciate your time as always, Special Minister of State Scott Ryan, thanks very much for your company.
RYAN:
Thanks Peter.
[ENDS]