New budget cuts will fund Malcolm Turnbull's innovation package: Scott Morrison
Date: Dec 7, 2015
Prime Minister Malcolm Turnbull's pet project, a $1 billion innovation announcement, will be funded by spending cuts in other areas to be announced later this month.
Treasurer Scott Morrison said the government's razor gang, the Expenditure Review Committee, had spent the past three months finding new cuts to offset the innovation statement as well as new imposts from the reversal of Labor's bank deposits tax, changes to fuel excise and the expected $600 million cost of resettling 12,000 Syrian refugees.
"We've had to go and find it," Mr Morrison told 2GB when asked how the $1 billion to be spent over four years - including an extra $100 million in funding to the CSIRO - would be funded.
"All of this has been funded through MYEFO [the mid-year Economic and Fiscal Outlook]," he said.
"What [Finance Minister] Mathias Cormann and I and the rest of the ERC have been doing for the last three months has been continuing to work on savings to ensure we can get the budget back to at least where it was in terms of the level it was [at the last budget] in May."
The $1 billion to be announced by Mr Turnbull and Innovation Minister Christopher Pyne will provide capital tax gains exemptions for new business ventures if they are sold after being held for more than three years.
Treasurer Scott Morrison. Photo: Andrew Meares
Among 24 measures to be announced, there will be generous income tax rebates for retail investors who back start-ups, a new system to align university research with business outcomes, immigration changes to lure talent to Australia and changes to bankruptcy laws to make them more conducive to risk-taking without promoting recklessness.
Mr Morrison said his immediate objective was to rein in spending to GDP ration from 26.2 per cent – the level it was on the day of the leadership change in September – to 25.9 per cent – where it was at May's budget.
Ahead of COAG meetings later this week, Mr Morrison flagged pressure coming on the states to find tax savings if the GST is raised or broadened.
"Changing the tax system is not just about federal taxes, $85 million are raised every year through state and territory taxes and I'd like to know how they think they can make those taxes work better. It's not just about federal taxes," he said.