left two hostages dead. his speech to the nation came one day after he released a joint report on the investigation into the event. from the australian federal police headquarters in canberra, this is 25 minutes. >> i welcome you here to headquarters of the australian federal police from the important national security statement from our prime minister. and i welcome the prime minister and ministers, particularly those sitting on the national security cabinet thank you for being here. we find ourselves in australia in a radically different security environment than when we came to office inwxfy 2013. international events, particularly those in the middle east, have unleashed threats that have resulted in the terror alert in australia being assessed as being high for the first time. we can not allow a situation where our freedoms in australia and the generosity of the

australian way are used against us. the government is required to respond to these new threats and to make sure that our agencies have the resources and the powers that they need to do so. that's why we've committed $630 million for our counterterrorism package, as well as introducing to the parliament three trenches of legislation that strengthens the ability of our agencies such as the australian federal police to deal with these increased threats. we're also working very hard with vulnerable communities to counter violent ideologies and encourage social harmony. our law enforcement and intelligence communities have for years since 9/11 been very effective about keeping australia and australians safe. but we need to constantly refine the way they operate and seek to make improvements when we can. as many in this room know today.

the prime minister has been very focussed on this challenge and he's shown great leadership in these areas. his government takes national security seriously. whether it's facing the threat of homegrown extremism or dealing with the mood of our citizens on mh-17. the safety and security of the australian population is a top priority of this government and i'm very pleased to be able to welcome the prime minister to the australian federal police headquarters and to make this statement today. [ applause ] >> thanks. it's great to be here at the australian federal police, good to be in the companies of so many of my parliamentary

colleagues and in the company of so many of the senior people who are responsible for our counterterrorism efforts. today i want to speak to you about keeping our country safe. i want to speak to you about the threat that we face, the work done already to keep you as safe as we humanly can, and the things still needed to prevent further terrorist attacks. today my colleagues and i are joined by representatives of the australian federal police, the australian defense force and agencies like crim-track which helps police and other law enforcement bodies to share information. the men and women in this room are on the front line of australia's fight against terrorism. there is no greater responsibility on me, on the government than keeping you safe. we know that these are testing

times for everyone here and for everyone stworn protect democratic freedoms. the terrorist threat is rising at home and abroad and is becoming harder to combat. we've seen on our tv screens and in our newspapers the evidence with a new dark age that has settled over syria and iraq. we have and seen the beheadings, the mass executions, the crucifixes and the sexual slavery in the name of religion. there is no grievance here that can be addressed. there's no cause here that can be satisfied. it's the demand to submit or die. we've seen our fellow australian, people born and bred we believed, to live and let live succumb to the lure of this death cult. we've heard the exhortation of their so-called caliphate to

kill all or any of the unbeliever s unbelievers and we know that this message of the most primitive savagery is being spread through most sophisticated modern technology. by any measure the threat to australia is worsening. the number of foreign fighters is up. the number of known sympathizers of extremism is up. the number of potential homegrown terrorists is rising. the number of serious investigations continues to increase. during 2014 the government consulted with our experts, many of whom are in this room today. we talked with our allies and we worked with the opposition to improve australia's preparedness for any eventuality. last september the national terrorist threat level was

lifted to high, which means that a terrorist attack is likely. critics said we were exaggerating. but since then we've witnessed the frenzied attack on two police officers in melbourne and the horror of the martin police siege. 20 people have been arrested and charged as a result of six counterterrorism operations conducted around australia. this that's one-third of all the terrorism related arrests since 2001 within the space of justice six months. so the judgment to lift the terror threat level was correct. in proclaiming this caliphate, the islamist death cult has declared war on the world. not only has australia suffered at the hands of terrorists but so have canada france, denmark iraq egypt libya nigeria,

japan, jordan, the united kingdom and the united states. and we have seen the tactics of terrorists evolve in the decade after 9/11 our agencies disrupted elaborate conspiracies to attack our shrek tristy supplies, the grand final of the mcg and the army barracks in sydney. now in addition to the larger more complex plots that tipified the post 9/11 world such as the atrocities in bali and london, sick individuals are acting on the caliphate's instructions to seize people at random and kill them. today's terrorism requires little more than a camera phone a knife and a victim. these lone actor attacks are not new but they do pose a unique

set of problems. all too often alienated and unhappy people brood quietly feeling persecuted and looking for meaning. they self-radicalize online. then they plan attacks which require little preparation, training or capability a short lead time from the moment they disside they're going to strike and then undertake the attack makes it hard to disrupt their activities. police do not have the luxury to watch and wait. they apply their best judgment and do so aware that the armchair critics will find fault. still, police act because they have enough facts to make informed judgment ss some of these may not result in prosecutions

but, frankly i'd rather lose a case than lose a life. the protection of life must always rank ahead of the prospects in the successful prosecution. the arrest of two men in sydney earlier this month who'd already recorded a pre-attack message is just one example of how quickly a threat can develop. and i should add without our foreign fighters legislation it's highly unlikely that these arrests could have been made. this new terrorist environment is uniquely shaped by the way that extremist ideology cans now spread online. every single day the islamist death cult and its supporters churn out up to 100,000 social media messages in a variety of languages, often they are slick and well-produced. that's the contagion that's

infecting people and grooming them for terrorism. already at least 110 australians have traveled overseas to join the death cult in iraq and syria. at least 20 of them so far are dead. even if the flow of foreign fighters to syria and iraq stopped today, there's now an australian cohort of hardened jihadists who are intent on radicalizing and influencing others. the number of australians with hands on terrorist experience is now several times larger than it was with those who trained earlier in afghanistan and pakistan and of that group two-thirds became involved in terrorist activity back here in australia the signs are ominous.

azo currently has over 400 high priority counterterrorism investigations and that's more than double the number a year ago but we are not alone in facing such challenges. the same phenomenon is evident across europe, in the united states, and in southeast asia. many of those involved in anti-western attacks in indonesia over the last decade are now being released from prison. some neither reformed nor rehabilitated. australian and indonesian agencies will continue to work closely together to tackle extremist extremists because it's in both our interests to do so. in australia and elsewhere this threat of terrorism has become a terrible fact of life that government must do all in its power to combat. so far, this is what we've done.

within weeks of taking office, i asked the attorney general to develop a government response to foreign fighters. last august, the government invested $630 million in a range of new counterterrorism measures. this funding gives our security agencys the resources they asked for to combat homegrown terrorism and to help prevent australians participating in terrorism overseas. the effects of these new measures are already being felt. counterterrorism teams now operate at all eight major international airports. 62 additional biometric screening gates are being fast tracked for passengers at airports to detect and deal with people leaving unforced passports. 49 extra afp members are working in sydney, melbourne and canberra on the foreign fighter

threat. seven new financial analysts have been engaged to help crack down on terrorist financing. a new violent jihadist network mapping unit has been created to improve intelligence agencies' understanding of the threat facing australia. a foreign fighter's task force has been established in the australian crime commission with access to the commission's coercive powers. and last thursday the attorney general announced a series of measures designed to combat terrorist propaganda online. we have legislated to cancel the welfare payments of individuals assessed to be a threat to security. this is not window dressing. as of last september 55 of the 57 australians then fighting with terrorist groups in syria and iraq had been on welfare. we have made it easier to ban

terrorist organizations which promote and encourage terrorist acts. we have strengthened the offenses of training with, recruiting for, and funding terrorist organizations. we have made it easier to prosecute foreign fighters by making it illegal to travel to a declared area overseas. last december we prescribed travel to syria's al raqqa province where the death cult is based without a legitimate purpose. we are now looking at listing mosul in nineveh province in iraq which the death cult also controls and we have given asia the power to request an australian passport pending further security assessment and that's happened eight times so far. this year we will consider what further legislation is needed to combat terrorism and keep

australians safe but we can not do it alone. the government is working with local communities to combat violent extremism. i acknowledge the readiness of parents, siblings and community leaders to let the police know about people they think are falling under the death cult's spell our agencies could not help without their help. by acknowledging, too, the cooperation that the commonwealth enjoys with all the states and territories on counterterrorism issues, that cooperation was highlighted by the martin place siege yesterday we released the martin place siege joint commonwealth new south wales review. what we learned was that there were no major filings of intelligence or process in the leadup to martin place.

but there is much more to do. it's clear that in too many instances the threshold for action was set to high and that the only beneficiary of that was the martin police murderer himself. for too long we have given those who might be a threat to our country the benefit of the doubt the perpetrator was given the benefit of the doubt when he applied far visa. he was given the benefit of the doubt for residency and citizen ship he was given the benefit of the doubt at center link. he was given the benefit of the doubt when he applied for legal aid and in the courts there's been bail when there should have been jail. this report marks a line in the

sand. there is always a tradeoff between the rights of an individual and the safety of our community. but we will never sacrifice our freedoms in order to defend them but we will not let our enemies exploit our decency either. if immigration and border protection faces a chase to led in or keep out people with security questions over them we should choose to keep them out. if there's a choice between latitude for suspects or more powers to police and security agencies, more often we should choose to support our agencies. and if we can stop hate preachers from grooming gullible young people for terrorism, we should. we have already made a start on removing the benefit of the doubt for people who are taking advantage of us. we've introduced legislation to refuse a protection visa to

people who destroyed evidence of their identity and the same applies if you present a bonus document. this bill, i'm afraid, is currently stalled in the senate. it's reasonable it's in our country's best interests and i call on all senators to support it. the government's bill being reviewed by the particle system the vital next step in giving our agency the tools to keep australia safe. access to metadata is the common element to most successful counterterrorism investigations. it's essential in fighting most major crimes including the most abhorrent of all crimes against children. again, i call on the parliament to support this imimportant legislation. we need to give our agencies these powers to protect our

community. today i am releasing the count terrorism review that the government commissioned last august. this review finds that we face a new long-term era of heightened terrorism threat with a much more significant homegrown element. while there is t review did not recommend major structural changes, it did recommend strengthening our counterterrorism strategy and improving our cooperation with at-risk communities. the government will carefully consider the findings and act as quickly as possible but in fact, some recommendations have already been acted upon. we will ensure that returning foreignkzq(ñ fighters are prosecuted or closely monitored using strengthened control orders. we will appoint a national counterterrorism coordinator.

we want to bring the same drive, focus, and results to our counterterrorism efforts that's worked so well in operation sovereign borders and operation bring them home. now, over recent months i've spent many many hours listening to australians from all walks of life. clearly people are anxious about the national security threats we face. and many are angry. they're very angry because all too often this threat comes from someone who has enjoyed the hospitality and the generosity of the australian people. when it comes to someone like the martin place murderer people feel like we have been taken mugs. australian citizenship is an extraordinary privilege that should involve a solemn and life

long commitment to australia. people who come to this country are free to live as they choose provided by -- provided by -- they don't steal that same freedom from others. we are one of the most diverse nations on earth and celebrating that is at the heart of what it means to be an australian. we are a country built on immigration and are much the richer for it. always australia will continue to welcome people who want to make this country their home. we will help them and support them to settle in, but this is not a one-way street. those who come here must be as open and as accepting of their adopted country as we are of them. those who live here must be as tolerant of others as we are of them. no one should live in our

country while denying our values or rejecting the very idea of a free and open society. it's worth recalling the citizenship pledge that all of us have been encouraged to recite. "i pledge my commitment to australia and its people whose democratic believes i share whose rights and liberties i respect, and whose laws i will uphold and obey." this has to mean something. especially now that we face a how many grown threat from people who do reject our values today i am announcing that the government will look at new measures to strengthen immigration laws as well as new options for dealing with australian citizens who are involved in terrorism. we can not allow bad people to use our good nature against us.

the government will develop amendments to the australian citizenship act so that we can revoke or suspend australian citizenship in the case of duel nationals. it has long been the case that people who fight against australia forfeit their citizenship. so australians who take up arms with terrorist groups especially while australian military personnel are engaged in afghanistan and iraq have sided against our country and should be treated accordingly. for australian nationals we are examining suspending some of the privileges of citizenship for individuals involved in terrorism. these could include restricting the ability to leave or return to australia and access to consular services overseas as well as access to welfare payments. we will also clamp down on those organizations that incite religious or racial hatred.

no one should make excuses for islamist fanatics in the middle east or their imitators here in australia. for too long, successive governments have been concerned about organizations that breed hatred and sometimes incite violence. these organizations and individuals blatantly spreading discord and division -- such as hizb ut-tahrir -- should not do so with impunity. today i can confirm the government will be taking action against hate preachers. this includes enforcing our strengthened terrorism advocacy laws. it includes new programs to challenge terrorist propaganda and to provide alternative online material based on australian values. and it will include stronger prohibitions on vilifying

intimidating, or inciting hatred. these changes should empower community members to directly challenge terrorist propaganda. now, i've often heard western leaders describe islam as a religion of peace. i wish more muslim leaders would say that more often and mean it. i've often cited prime minister najib of malaysia who has described the islamist death cult as against god, against islam and against our common humanity. in january, president al sisi told the imams at egypt's al azhar university that islam needed a religious revolution to sweep away centuries of false thinking. everybody, including muslim community leaders, needs to speak up clearly because no matter what the grievance violence against innocents must

shorely be a blasphemy against all religion. now, i can't promise that terrorist atrocities won't ever again take place on australian soil. but let me give you this assurance. my government will never underestimate the terror threat. we will make the difficult decisions that must be taken to keep you and your family safe. we have the best national security agencies and the best police forces in the world. our agencies are working together, all levels of government are working together we are doing our duty. that's why in coming years you will see a stronger and more secure australia. this is what you have a right to expect and to demand of me and

all of us and we will deliver for the people of australia. thanks very much. [ applause ] unless a funding deal is reached, the department of homeland security will partially shut down by the end of the week. we'll get an update on our next "washington journal" with congressman henry cuellar. the texas democrat serves on the appropriation subcommittee on homeland security. we'll also talk to house foreign affairs committee member mark meadows of north carolina about homeland security funding and immigration. later, a conversation about the recent evacuation of the u.s. embassy in yemen. john hudson of "foreign policy" magazine, will join us. that's part of our spotlight on magazine series. you can also join the conversation by phone facebook and twitter. "washington journal" is live each morning at 7:00 a.m.

eastern on c-span. live coverage of the senate foreign relations committee hearing on vie leblt extremism starts at 1:30 p.m. eastern here on c-span 3. >> this sunday on "q&a" baltimore police commissioner anthony bats on the challenges of policing the city. >> it was very clear to me that i still had an issue with public trust and people believing things that were said. regardless of the fact that i stand in front and say use of force is down 46%, that complaints are 53%, that lawsuits are down, that officer-involved shootings are dramatically down and we're moving in all the positive ways, people in communities say "we don't believe it." >> sunday night at 8:00 eastern and pacific on c-span's "q&a."

now governor john kasich delivers the ohio state of the state address. the governor has made a practice of moving his address out of the the capital city of columbus and is speaking from wilmington the in southwest ohio. his remarks are an hour and fifteen minutes. [ applause ] >> ladies and gentlemen, governor john kasich. [ applause ] . thank you. thank you mr. president. thank you, mr. speaker cliff. little nervous tonight? first time?

yeah. [ laughter ] give him a great round of applause. our brand new speaker. [ applause ] i want to thank you, members of the general assembly, thanks for coming here tonight. i want to thank the members of my cabinet who had a fantastic day in wilmington. i'm told over 80 meetings, including a meeting with 200 veterans at a jobs fair. that's why we do this so we can come into the community and help. and my staff. my cabinet and my staff, god bless you. i'm just one person that gets to direct but without you we can't do it so i want to thank you. and, of course, to my special wife karen kasich. karen, would you stand and let

them recognize you? [ applause ] yes, that's right, she has to live with me. that's worth that standing ovation. and i want to thank the roberts family for hosting us. it's really a unique spot and we are just so thrilled to be here. some of you may wonder why i asked the general assembly to come right here to wilmington tonight. i want to tell you why i am here. allot would think it's just because cliff and i love cliff and i'll tell you about cliff and wilmington and me further along but i came near wilmington

during my campaign in 2010 and i saw the devastationing that this town had suffered. it was written on the faces of the people of wilmington these are people who played by the rules. they didn't do anything wrong. so much reminds me of stories across the country, including in my old hometown. they worked hard but one day the rug was pulled from under them. people lost their savings people lost their homes. a lot of people were losing hope in what their future was going to be. and many of them were only able to feed their families thanks to the good work of the people at food pantries like sugar tree ministries. what a great operation it was. yes, you can applaud for sugar

tree ministries. [ applause ] in 2010, i visited sugar tree with my campaign staff and my wife. you remember sweetheart, when we were here. we left the pantry and we got back on the bus and i was getting pretty emotional. i turned to the people who were with me the people on my campaign staff many of whom have been with me for many years and i said "you better understand this is not just another political campaign. did you see what was happening in that pantry? did you see the pain? the anguish on their faces? you know, i told them that day, our mission is to help fix this

community and the-to-restore some hope. our mission is to help get people back on their feet in places like will wilmington. and you know, folks i have very good news to report. the state of the state is getting stronger and we have regained our footing but we must act decisively now to seize the greater opportunities that await all of us. we are better today than we were and we are rising. [ applause ] wilmington is, in many ways, a reflection of ohio. we are doing better as shown by going from -- think about this -- 89 cents in our rainy day fund. and an $8 billion budget shortfall to a balanced budget

today and a $1.5 billion surplus. from 89 cents and $8 billion in the hole to a balanced budget and a $1.5 billion surplus and we are looking forward to adding another $400 million to that piggy bank to that surplus for ohio. and i have to tell you not half but nearly half the states are not structurally balanced. they're struggling now to try to figure out how to bring their books in line. and you know ha that's light? when you have to go and do major surgery? when you don't know how you're going to put it all together? and it happened because we've all agreed to use conservative economics and act like a good old ohio family that says we've got to be conservative with the

money that we have. we've gone from losing -- the record is really frankly amazing that we should feel proud of. we went from losing 350,000 jobs. that's 3.5 times ohio stadium to where we are up almost 300,000 new private sector jobs over the period of the last four years. it's amazing. [ applause ] we've gone from very high taxes across the board to the largest tax cuts in america including tax cuts for the working poor, which is a very important part of our philosophy. we're seeing wages grow faster than the national average and the unemployment rate has dropped to the lowest level in more than a decade. that is something for all of us to feel good about and to share with our friends and neighbors

across ohio. this is all really great stuff. but if i were to leave this hall tonight and say that our mission is accomplished there's no way i would be doing my job. we haven't finished our mission we have a lot more bats to wage and i cannot wage them without you. my colleagues in the general assembly. i can't do it unless we all work together. earlier this month i proposed a budget for the next two years. and while people may think budgets are about numbers and dollars, it's not really it. i've been working on budgets since i was just a kid. but they were never just about numbers, they are about people. budgets are about vision. they're about economic growth, a 21st century education system and not leaving anybody behind.

particularly those people who live in the shadows. we're starting to get a glimpse where we can take ohio where we work hard and make the tough and right choices. but we have more work to do we need to win more battles against the status quo. we can't drift. we can not drift. we have to continue to win battles against the status quo if we want to take ohio where we want it to be, where we need to be, and that means we have to continue to battle special interests that want to lock us in where we are today. and the plan my administration has made out provides a path that i believe will propel us high higher and higher. i'm proud of what we've done so far and i'm grateful that we have the chance to serve alongside leaders with vision and a certain sense of toughness

because leadership the willingness that walk a lonely path. leadership not a finger in the air to figure out who's going to be with you. it's not about who likes you, it's about using your judgment to deliver the best results and i've been able to serve with leaders just like this. two i want to mention. former senate president tom neehouse. is he in the audience tonight? i want him to stand. give him a round of applause. [ applause ] and, of course former speaker of the house bill batchelder. i'm told he's here tonight as well. where is bill? stand and be recognized. [ applause ] you know, i'm grateful to serve one w someone like keith faber. keith and i are buddies.

that's a wonderful line that you can cross where you can ties and kid. keith's my buddy. and what can i say about cliff? i first understood the passion that burns inside of cliff when he came constantly to see me about the things that we needed to do to get wilmington on its feet. always thinking differently. always thinking outside the box, inside the box, with such great passion to the people of wilmington, to the people of clinton county but most particularly here in wilmington you could not have a better friend than cliff rosenberger. he is heart and soul committed to you. and how about bob peterson? he's one of the great ones too. bob, stand up, get recognized.

he's also a great leader here. so i've said that i'm proud about what we've been doing but let me be clear about what is making a difference. it's a balanced budget, it's surpluses, it's smart management, it's common sense regulations, thank you mary taylor for all of your work on common sense regulations. it's tax cuts. yeah, give mary a round of applause. she's terrific. [ applause ] these are the ideas that are producing the economic growth that which is make so many of the other good things possible. these accomplishments are sending a message to job creators around the state, around the country and around the globe that ohio is open for business and let me tell you, i talk to them all the time. when i tell them we were $8 billion in the hole now we're $2

billion in the black, that we've got $3 billion worth of tax cuts, that we've got a private sector entity that can respond to them quickly when it comes to the need to give them answers on the opportunities for job growth, i talk to them all the time, every week almost everyday. it's hard for them to believe. but now we're starting to get a reputation because what we celebrate here tonight is for real. and particularly when compared to others, it's impressive. from here we're poised to now take what i believe are major leaps forward. so we can begin locking in the progress we've made and preparing for the challenges that are looming all too close on the horizon. challenges like the aging of our work force as baby bombers retire. we're getting older in ohio. understand the implications of

not being able to refill those jobs with the young people. we face the inevitable next economic downturn, one minute we're up, the next minute we're down. just look at the stock market. look at the economic news and the unexpected crises that always seem to strike. they always seem to strike when we least expect it. i believe the most important thing that we can do to plan ahead is to continue strengthening ohio's economy by further cutting taxes mean we must restrain government spending. we need to cut taxes and reneed to restrain the growth of goth. i'm proposing we cut taxes by $500 million on top of the $3 billion in tax cuts we've already made because high income taxes punish risk taking. high income taxes punish risk taking.

investment and job creation and they drive some of our best and some of our brightest to other states in search of lower taxes and better opportunities and you all know what i mean. i don't care what part of ohio you come from, you know that some of our best and brightest and most successful they leave. those are our jewels. and yet they go other places. so we've got to continue to do the things we need to do to cut their taxes. the budget i've proposed holds growth to below historic inflation. it's only 2% the first year and 2% the next -- 2.5% the next year so think about this. we want to restrain the growth in government spending and it is critical that we grow at a level where we can meet our priorities but at the same time can have the space for tax cuts. that doesn't mean we don't invest in some priorities like

education. but we're always looking for ways to innovate and improve and reduce because our administration has been successful in doing that. we have been able to keep growth in check so that there's money to give back to ohioans in the form of a $500 million tax cut. because we have restrained ourself, we're able to give a half billion dollars back to the people of this state. so -- [ applause ] is. >> so now we're going to have a little bit of an explanation of all this so to make sure we're all on the same page, let's remember what tax cuts do to strengthen ohio. when people get to keep more of their money, the money they earn they have more control over their lives. when they come to keep more they've got more control. they have more power to decide their futures, more flexibility

to respond to the changes in their lives or changes in the economy. folks, it's not the government's money that we let them keep it's ohioans money. it's our money and we want them keep as much of it as possible because what they do they will always know how to spend it better than government ever could. in other words when they've got the money they're going to do a bet job of exercising choice than any government will ever do for them. don't forget that. [ applause ] but here's another thing you need to understand. low taxes singh pool in job creators that ohio is a safe and attractive police to invest. when you're looking at investing, you want to go where things are solid where budgets are balanced, where you know that government is being restrained and you also know that that is a government where a group of leaders who

understand the philosophy of reducing taxes and empowering people from the bottom up. it sends you a signal of strength and that's exactly what we want to do. let's take small business owner, for example. a small business that has more money can hire more people. they can buy more machinery and equipment to increase production and therefore have a better chance to thrive. small businesses get healthier, they can higher, they can be stronger. this is not a republican philosophy, this is just a simple fact. high taxes discourage it. high taxes, especially the income tax pun arab small business owner's willingness to take the risk to hire more people. to invest in improvementments and work harder to be successful. lower taxes incentivize all of those things and when small businesses across this state take risks when they invest and expand it echoes throughout our

economy it's called growth it's called job creation and it lifts ohio. that's one reason why we work so hard to cut workers' compensation premiums about 12% and $409 million in savings and we have given employers $1.75 billion back in rebits in worker's comp while investing in worker safety. you they doesn't free up money? call your small business and ask them. it's also why i want to eliminate income taxes for virtually every small business in our state to help fuel and accelerate both i want to send a message that if you want to start a small business with no income taxes on a small business up to $2 million, if you want to start a small business, if you want to be a entrepreneur, if

you're a young person coming out of college do it in ohio. think about it. do in the ohio. come here. stay here or come here because we're going to give you the help you need to open the doors. and that helps with us the population drain that we've seen in this state. we see similar -- right, exactly right, tim. [ applause ] we see similar good things happen when families get to keep more of their own money. they've got more power and control over their own lives. they have the freedom to direct their own futures. they can save for a rainy day or for college education or make needed home repairs. maybe they can go into business or maybe take a special trip, like my mom and dad used to take us when they had a little bit more money in their pockets. i want to give families this kind of power over their own lives and that's why i'm proposing to cut the income tax rates by 23%.

we've already cut ohio's tax rate from 57.9% to 5.33% and our budget will take it all the way down to 4.1% over the next two years. i want you to think about it and i would love you to support it. [ applause ] let's keep going and let the common sense grow strategy of cutting more to strengthen ohio as well as help attract the best and bright toast our state. don't forget, many of our most successful job creators entrepreneurs, ceos and innovators leave ohio for states with zero north korea taxes and when they do they take their good ideas their philanthropy with them. let me put this in simple terms. so you work a whole lifetime, maybe you build a business you become successful, my dad carried mail on his back. i used to say dad, how do we feel about the rich? he said, johnny we don't hate

the rich we want to be one of them. the fact is, in ohio punishing success will drive people out. so these folks many of whom we all know whether we live stubenville, whether we live in young town cleveland toledo, cincinnati or columbus, somebody has an opportunity to cash in what they earned. and they wanted to sell some stock. i want y'all to think about this for a second. they want to sell some stock. if they go to florida and live they pay the federal capital gains rate 20%. they don't pay anything else. if they live in ohio, they fay federal capital gains rate plus an additional 5.3%. now, what would you rather pay? 25.3% in taxes or 20%? and for many of these people who are successful, it's a large amount of money.

so that's why when you go to naples and drive around down there you keep bumping into ohioans. because they've all moved and with the savings they make by not paying ohio's income tax they can buy another house down there. this is not complicated. we can not lose our best and brightest. i'm just pleading with you to understand that we drive them out and that go down there and when they go down there to florida they're building a new performing arts center down in naples. they're down there hanging out, creating jobs down there. i want art centers in wilmington ohio, not naples florida. i want to keep them here. >> so that's the easy part of it. and you can debate about how you want to do it. that $500 million gets paid for by the savings that we've been able to generate.

but i've got to tell you something that frankly i think is almost as important. i believe we can achieve even more if we start fundamentally changing the way that ohio's tax system works so that taxes have less of a drag on the private economy. look no tax is great but some are worse than others. i don't know if you've ever studied that, some taxes have a greater drag on economic growth than other taxes. so if we're going to raise taxes or have taxes let's have the taxes that have the least negative impact on the private economy so we can create jobs. a certain level of taxes of course, is inevitable. to pave the roads, to pay for schools, care for the needy government's got to make that money go as far as it can and those taxes must be generated in the least harmful way. this mean we must reduce ohio's traditional overreliance on income taxes and lean more on consumption taxes.

now let me finish this. i think we should lean less on income tax which is punish the invest in the growth we all seek and lean more on consumption taxes. the states that have followed that formula they're going faster than we are, they're younger than we are. where are they? florida, texas. look what's happening in tennessee. i have to deal with these when i make calls to the ceos. the fact is, that state that have had lower and no income tax, nevada. people are moving, playing with fire and may raise taxes people are moving from california to nevada. this is happening because money flows to the place that has the lower taxes. our income taxes are a severe drag on economic growth. they punish those who go out and work harder. we're supposed to celebrate hard work. we want more of it more hard work. we all say we want to create

more good middle-class jobs and bolster family income bus it can't happen without growing, drive thriving businesses and they can't grow and they can't thrive without new investment. this is just simple stuff. investment should be nourished, not discouraged and by cutting income taxes we're freeing up more capital to be invested in businesses so they can grow and create more good paying jobs. new jobs need new businesses. think about what's happening over there in steubenville. new jobs need new businesses. and new businesses need new investments. and let's encourage investment by cutting taxes. it's common sense. it's a process that begins with investment and ends with higher family incomes. folks, this isn't republican, this isn't democrat. it's a lot of what we've been trying to do over the last four years and look at our results. it's not like stop, let's do more of it.

more of it so we can have more jobs so we can secure our place here in america if in addition to keeping our spending in check we move away from income taxes and more towards consumption taxes, we're encouraging hard work and we're also giving more people control over the amount of taxes they ultimately pay. you see, in a consumption tax model you're in control. you only pay taxes on the purchases you choose to make you're the one who decides what you buy and how much you spend and for the poorest ohioans, we're providing additional income tax relief so they're not disproportionately impacted by the change in consumption taxes. our philosophy is to bring the top rate down and help people who are the working poor. that's why we created for the first time in ohio the earned income tax credit. it's not refundable but it's breath taking that we -- i wouldn't say breathtaking, but it's certainly new. never happened before, the communities that represent the poor, the working poor were for it, we created it now we're

significantly increasing the personal exemptions so that the working poor can have incentives. but you have to remember, the best help for a low income ohioan is a better job, which they have a better chance of getting when we improve ohio's tax climate. you know, the single biggest cure for poverty? a job. and when we are growing jobs -- [ applause ] okay. so we're talking about not just saving money in government spending, but we're talking about tax reform. some things go up other things go down. but to provide the incentive for the least negative impact on the private economy. severance taxes. that's another place where we need tax reform. the reason is simple. our current system doesn't reflect our current reality. ohio's severance tax was created

decades ago, long before ohio's shale boom was ever envisioned. itszrg current low rate, 20 cents on a barrel of oil, i don't know anybody who lives in ohio who would not like to sign up for this. 20 cents on a barrel of oil. it's unconscionable as far as i'm concerned. it's not right. it isn't fair to ohioans because these resources are being depleted depleted. they're never coming back. ohio's being made poorer as a result of the depletion of our resources. it's like oil and gas itself. much of the wealth the shale boom is generating is being shipped out of our state. being shipped out of ohio. we need to change that while at the same time making sure that ohio's long-time small drillers, the ones who have been around for years, the ones that don't make a little -- make very little money, we want to get rid

of their taxes their income taxes all together. but we also want to make sure that local governments are supported when their costs for first responders and infrastructure or other essential services are forced to go up because of oil and gas activity. okay? all of it. [ applause ] the prosperity created by our oil and gas deposits can be great, but not just for shale country. this is not just for part of ohio but for all of ohio because it makes possible the income tax cuts that provide an economic boost statewide. i'm disappointed by those that say the severance tax reform will kill the industry. that's a joke. that's a big fat joke because i've talked to them in private and i'll tell you what, our severance taxes will still be competitive with other

energy-rich states and you know what? let's reform the severance tax so all ohioan cans have lower income taxes and we all ben it from this whole industry. that's what it should be all about. [ applause ] i want to tell you a story. i'm out in wyoming, i'm meeting with governor meade in wyoming. i said who's the greatest governor? he said maybe the greatest one is governor hathaway.