Hockey coy on surplus

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International affairs: Treasurer Joe Hockey shakes hands with Turkey's Central Bank Governor Erdem Basci at the G20 meeting with the International Monetary Fund and World Bank in Washington. Picture: AP
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Treasurer Joe Hockey has refused to put a firm date on when the Budget would return to surplus, arguing a "quality trajectory" to eroding the deficit was his aim.

Mr Hockey said he was optimistic about the global economy after meeting world finance ministers and policymakers in the US. He also announced a joint crackdown with Britain on tax avoidance by multinational companies.

Mr Hockey ruled out big tax rises to make up for the revenue shortfall caused by the plunging iron ore price, saying his focus was on speeding up the economy and creating jobs.

Asked whether the Budget would show a date to get it back in the black, Mr Hockey said it would show the deficit was shrinking as a proportion of gross domestic product.

"We never put a date on returning to surplus," he told ABC TV from Washington.

"We just need to show that we have a quality trajectory, a quality trajectory back to surplus and we are getting the Budget under control."

But the midyear Budget update in December had projected a small surplus in 2019-20.

And Tony Abbott told the coalition party room last month he expected the Budget would broadly be balanced in five years.

Mr Hockey said after the UK election, senior officials from both countries would work together to stop multinationals from shifting profits away from their host countries to reduce their tax bills.

It will build on the UK’s diverted profit tax, the so-called “Google tax” which levies companies on profits shifted to tax havens.

“Both the UK and Australia have sought to put in place competitive business tax regimes in order to encourage enterprise and investment, but those tax rates should be paid, not avoided through artificial structures,” Mr Hockey said.

Shadow treasurer Chris Bowen said the Government should embrace Labor’s policy to tackle crack down on company tax deductions and profit shifting by foreign-based companies, which would improve the Budget bottom line by $7.2 billion over 10 years.

“With all the resources of government at his disposal, the best Joe Hockey can do is come up with a plan to have a plan,” he said.

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