POLITICS

Scott Morrison Doesn't Want To Talk About The S-Word Following MYEFO Release

MYEFO shows Australia's deficit is $36.5 billion.

19/12/2016 4:54 PM AEDT | Updated 19/12/2016 9:10 PM AEDT
Fairfax: Alex Ellinghausen

Treasurer Scott Morrison really doesn't want to talk about the S-word after the Mid-Year Economic and Fiscal Outlook (MYEFO) was released on Monday.

No, it's not 'surplus' -- even though MYEFO showed Australia's budget will be $10.4 billion worse off over four years with lower wages and profits causing a $30.5 billion write off of government revenue.

(However, in some good news this year's budget deficit has narrowed by $600 million since May, from $37.1 billion to $36.5 billion)

I don't think handing out cheques to dead people is a good way to do that."

On the 7:30 Report on Monday night, Morrison would not be drawn into discussing stimulus to bring the budget back into balance. He suggested that such measures had been ineffective in the past, citing the Rudd Government's $900 handouts to Australians during the global financial crisis as part of a stimulus package.

When Leigh Sales asked whether the Coalition had boxed themselves into a corner after turning 'stimulus' into a dirty political word, Morrison said the move of the Labor government was "overinflated and didn't get the job done".

"There are two different issues here. If you're looking for stimulus, fiscal stimulus, you're wanting to inject cash into the economy through any which way you can," Morrison said.

"Now what I'm a fan of is investing in an economy to boost its productive capacity. And I don't think handing out cheques to dead people is a good way to do that."

Morrison argued investment was key and considered stimulus as a useful policy option, although he wouldn't use the word.

"I think what we can produce -- look, you use the words you wanted to use and I'll use the words I want to use -- investment in infrastructure that boosts our capability," Morrison said.

"The projects have to be right, they have to deliver long-term gains. You don't throw the cash out the door at anyone asking to build something."

The treasurer pushed the Coalition's hopeful $50 billion company tax cut -- which has been vehemently opposed by Labor -- as a major investment to boost the Australian economy. But on Monday night, shadow treasurer Chris Bowen would not budge on Labor's refusal to support the policy.

"They say we can't afford more money for schools and investment in education but they can afford a $50 billion tax cut," Bowen said.

The Coalition want to lower Australia's corporate tax rate from 30 percent to 27.5 percent. This compares to a corporate tax rate in New Zealand of 28 percent.

"It will boost the economy by one percent in two decades time, they say. That doesn't stimulate activity now and doesn't have the answers to the challenges we're facing in the economy now," Bowen argued.

"It somehow stimulates more business investment. And it's a massive cost to the budget."

More On This Topic