Transcripts → 2013


Transcript of Interview - Sky News - Saturday Agenda with David Lipson

Senator the Hon. Mathias Cormann
Minister for Finance


Date: Saturday, 28 September 2013

Boat Tragedy, Budget, Asset Sales, Carbon Tax

DAVID LIPSON: G'day, welcome to the program. I'm David Lipson. Another tragedy at sea and simmering tensions over asylum seeker policy will frame Tony Abbott's first trip overseas as Prime Minister. He's headed to Jakarta on Monday to meet with the Indonesia President Susilo Bambang Yudhoyono and no doubt the boats issue will overshadow his preferred focus on trade and security.

Joining me now to discuss this and the rest of the day's issues, the Finance Minister Senator Mathias Cormann. Thanks for your time today.

MATHIAS CORMANN: Good to be here.

DAVID LIPSON: This tragedy at sea surely is a terrible milestone, the first deaths at sea under the Coalition Government.

MATHIAS CORMANN: It is always terribly distressing when people die at sea in these sorts of circumstances, which of course is why it is so important that we stop the boats, because while the boats keep coming, sadly people will continue to die.

We do have Operation Sovereign Borders underway. We are working very constructively with the Indonesian Government and of course it's very important that our efforts, together with the Indonesian Government's, are going to be successful.

DAVID LIPSON: We understand that there's also been two other rescues by Australians in the last forty-eight hours or so. One of them saw asylum seekers returned to Indonesia and the other we understand there are attempts to have the asylum seekers returned to Indonesia.

Now, I appreciate that this is not your portfolio area and it is a sensitive issue as well, but are you aware of any hardening on that stance, because even though this was available under the previous government, it only happened once.

MATHIAS CORMANN: Look, you're right, this is not my area of portfolio responsibility. Scott Morrison as the Minister for Immigration will of course be providing a proper and detailed briefing as part of Operation Sovereign Borders at the appropriate time.

Suffice to say, it is very important that we stop the boats. In order to achieve that it is very important that we continue to work constructively and positively with Indonesian authorities and the Indonesian Government and we will continue to do that, from the highest levels of the Government down.

DAVID LIPSON: But is that really happening? Because this week we saw that extraordinary step of the release of the account of a private meeting between Julie Bishop and Marty Natalegawa on Monday in New York. Now, that was released to the media what is normally private.

It was later sort of retracted as a mistake; it was said to be never intended for a press release. But does this simmering tension you'd have to say threaten to sideline some of the issues that Tony Abbott wants to focus on, like trade with Indonesia?

MATHIAS CORMANN: Well I can assure you that we are having very positive and very constructive engagement with the Indonesian Government in relation to the important issue of needing to stop the boats.

But of course it is also true to say that while this is an important issue it should not be the defining issue of our relationship with Indonesia.

Our relationship with Indonesia is clearly one of the most important relationships we have as a nation and there are many, many facets to it and of course the Prime Minister will visit Indonesia very soon.

DAVID LIPSON: So you're confident that the focus can remain on trade and on other issues? You don't believe that the boats issue will overshadow?

MATHIAS CORMANN: I'm confident that while this is one issue that of course we have to continue to deal with constructively, that all of the other very important parts of the relationship, in particular our trade relationship of course, will be appropriately high profile.

DAVID LIPSON: Okay. Well look, on budget matters, we saw the news conference yesterday by you and the Treasurer Joe Hockey where you really confirmed the PEFO numbers for the year 2012-2013.

Joe Hockey though yesterday said that the budget was deteriorating further since then. He wouldn't say by how much, it wasn't a big deterioration but a deterioration nonetheless. Will the Coalition consider selling assets like Australia Post to bring the budget back into line?

MATHIAS CORMANN: Well firstly, when the Pre-Election Economic and Fiscal Outlook was released in August, the 2012-13 financial year for which we released the final budget outcome yesterday was of course already finished. So you wouldn't have expected there to be much of a difference in relation to the 2012-13 financial year.

The point I would make though is that what the final budget outcome did show was that there was a massive deterioration from the original 12/13 budget which promised a one-and-a-half billion dollar surplus to the final budget outcome which showed an eighteen-point-eight billion dollar deficit.

And of course that's been the story under Labor. It's been a story of deteriorating budget positions. There is no doubt…

DAVID LIPSON: Yeah, but we knew that. As you said, we knew that before the election and during the election it was confirmed.

MATHIAS CORMANN: Well, we knew before the election and we pointed out before the election that Labor made a mess of the budget. When Labor won government in 2007 they inherited a position with a twenty billion dollar surplus with no government net debt, with fifty billion dollars' worth of cash in the bank collecting more than one billion dollars in net interest payments.

Fast forward to 2013 and of course the position that we've inherited is a thirty billion dollar deficit this year and growing, two-hundred billion dollars' worth of government net debt and growing, a gross debt heading for three-hundred billion dollars, and beyond. So clearly…

DAVID LIPSON: So will you sell off assets to bring it back into line then?

MATHIAS CORMANN: Well, the Government has got a policy to sell Medibank Private and we'll do that at the right time following proper methodical process. We are not going to speculate…

DAVID LIPSON: What about Australia Post?

MATHIAS CORMANN: We have a policy to sell Medibank Private, that's it. I'm not going to speculate about any other potential decisions down the track as was done in the media today. As far as we're concerned the sole policy that we have in terms of…

DAVID LIPSON:  Can you rule it out though? Can you rule it out for us now?

MATHIAS CORMANN: Well again, we have a policy to sell Medibank Private. We don't have any plans whatsoever to sell any other assets. Now, the Commission of Audit will start its work soon.

The Commission of Audit, its job will be to ensure that the operations of government are as efficient and as cost effective as possible, that taxpayers get maximum value for their money.

And once we receive the report from the Commission of Audit, not wanting to pre-empt what it may or may not recommend, but once we receive the report from the Commission of Audit we will consider whatever recommendations they put to the Government and we'll take action in the appropriate way at that time.

DAVID LIPSON: You've flagged raising the debt ceiling when Parliament returns before the end of this year. Can you say how much you will raise it by?

MATHIAS CORMANN: Well, we have to raise the debt ceiling as a result of the mess Labor made of the budget. The truth of the matter is that Labor really should have raised the debt ceiling before the election was called.

They knew this because when the budget was released in May, Treasury officials told me in Senate Estimates then that the level of gross debt was expected to reach two-hundred-and-ninety billion dollars by December this year.

Since then of course just for this financial year the budget position has deteriorated by a further twelve billion dollars under the previous government, which, you don't have to be Einstein to add that up. That is three-hundred-and-two billion dollars. The current debt ceiling is three-hundred billion dollars.

So at this stage, we are on track as a result of Labor's budget mismanagement, to reach the three-hundred billion dollar debt cap by Christmas.

So obviously we will need to make some decisions here. Yes, we will have to lift the debt ceiling and we're going through a methodical structured process in order to make the decision exactly by how much that will be.

I'm not going to make an announcement here today but we will continue to consider all of the relevant advice from Treasury officials and others and when we've got something to announce we'll tell you.

DAVID LIPSON: Okay. And just finally, overnight the IPCC has released another report on climate change which really outlines that it's even more certain than ever that humans are causing the climate to change, at dangerous levels if the projections are right.

It really underlines the need for a global deal. Is direct action the right policy to sort of point us towards a global deal, or was an ETS, which you've promised to get rid of, more likely to see some sort of global action?

MATHIAS CORMANN: Well, firstly we are not questioning the science. What we have questioned is - and what we have said is that we should not be hurting our economy without doing anything to reduce emissions, which is what the carbon tax and before that the CPRS would have done and which the carbon tax is now still doing.

You've got to remember the carbon tax pushes up the cost of electricity, which pushes up the cost of living but also pushes up the cost of doing business here in Australia making environmentally more efficient businesses in Australia less competitive than more polluting businesses in other parts of the world.

So arguably not only does it shift emissions to other parts of the world, it actually leads to increased emissions in other parts of the world. So the carbon tax is a policy under Labor and the Greens which imposes sacrifices on families and pensioners and business here in Australia without actually doing anything to reduce emissions.

Whereas direct action and our emissions reduction fund actually will lead to effective emission reductions in Australia which also then translate into effective reductions, net reductions in emissions globally.

DAVID LIPSON: Okay. Mathias Cormann, the Finance Minister. Thanks so much for your time this morning.

MATHIAS CORMANN: Always good to be here.

DAVID LIPSON: After the break we'll speak to the Shadow Parliamentary Secretary Matt Thistlethwaite and also Professor Will Steffen from the Climate Council for more on that IPCC report. Don't go away.