Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 4 February 2014
DAVID SPEERS: Hardline on industry support. On Thursday last week Cabinet rejected the request from SPC Ardmona for $25 million in Commonwealth taxpayer support. The Industry Minister called it a defining moment. Joe Hockey has again been talking about an end to the age of entitlement, for corporate Australia as much as anyone else, but the government did of course prior to the election promise $16 million to Cadbury and only yesterday $3.5 million to Huon Aquaculture in Tasmania to provide more fish processing facilities there. So where does the Government stand on this, I spoke a little earlier to the Finance Minister Mathias Cormann about this and also his announcement today that the former Treasurer Peter Costello is to become the permanent Chair of the Future Fund, Cabinet decided on that today. Let’s take a look.
DAVID SPEERS: Minister, thank you for your time. The Future Fund firstly. Peter Costello, the new permanent Chairman, will there be any change of direction for the Future Fund under his stewardship?
MATHIAS CORMANN: Well that’s really going to be a matter for the Future Fund, because appropriately, the Future Fund operates at arm’s length from the government. Our interest was to ensure that there was a high quality individual leading the Future Fund moving forward. In our judgement, Peter Costello is uniquely qualified and has the skills and the experience at senior levels of government and in business and can provide strong leadership to the Future Fund and that is what we were interested in.
DAVID SPEERS: There’s no denying that. Now his experience on the Future Fund and as Treasurer is there for all to see. But does it worry you at all that some might see this as jobs for the boys?
MATHIAS CORMANN: Obviously you make these judgements on a case by case basis. Peter Costello is a great Australian. He provided distinguished service to Australia, nearly 12 years as Federal Treasurer. He set up the Future Fund, investing Budget surpluses after he had paid off the $96 billion worth of Labor debt that he inherited. And of course he has been on the Future Fund Board of Guardians since 2009, having being appointed by the previous government. He has a unique set of skills and experiences and we are very confident that he will make a great contribution.
DAVID SPEERS: Can I tell you the issue of industry assistance, last week Cabinet rejected the request from SPC Ardmona for $25 million, what’s your position now on industry assistance where is it ok and where is it not?
MATHIAS CORMANN: Obviously you make these judgments on a case by case basis, but the most important job for government is to set the conditions, to set the climate where we can have stronger growth, create more jobs and where businesses can prosper and be successful. That is of course why we committed to scrap the carbon tax, scrap the mining tax and reduce red tape so that we can…
DAVID SPEERS: They’re not gone yet so in the case of SPC why was that rejected?
MATHIAS CORMANN: Well in the case of SPC we had a request before us from an individual commercial business asking for an ad hoc grant from the tax payer of $25 million. SPC Ardmona is a company that is wholly owned by Coca-Cola Amatil who has paid $750 million for that particular business. Coca-Cola Amatil is a company that has a strong balance sheet, they’re well cashed up and they have the necessary reserves and wherewithal to make the necessary investments in the restructure of SPC Ardmona.
DAVID SPEERS: But you can say the same for Cadbury and you did give them money.
MATHIAS CORMANN: In relation to Cadbury that was a very different circumstance. We made a commitment in the lead up to the last election to make an investment in some tourism infrastructure in Tasmania. That is something that was made before the last election.
DAVID SPEERS: Well this is the announcement from Tony Abbott at the time yes part of it was for re-establishing Cadbury’s tour there but also a portion of his commitment will go towards a trial to grow cocoa trees in Northern Australia, part of it was to enhance manufacturing through a new barcode tracking technology, it wasn’t just about the tours.
MATHIAS CORMANN: Well in the lead up to the last election I mean you’ve just read out the commitment we made in the lead up to last election – we are in government now and we have to make judgements in the context of the Budget position. We have a Budget in very bad shape …interrupted
DAVID SPEERS: So that was then, this is now?
MATHIAS CORMANN: Well it was then. It was a commitment we made in the lead up to the last election. We inherited a Budget with a $47 billion deficit this year, $123 billion worth of deficits over the forward estimates…
DAVID SPEERS: So you wouldn’t make that sort of commitment again? Knowing what you know about the Budget.
MATHIAS CORMANN: All of our commitments in the lead up to the election were fully funded because of course we identified $42 billion worth of savings to more than offset all of the commitments that we made. But in relation to the request before it was an individual business asking the Government to provide a grant towards a commercial investment when that business has got all of the necessary resources and the necessary cash to make that investment on its own.
DAVID SPEERS: Its parent company does but in announcing this decision the Prime Minister did point to the conditions for the workforce there. He said amongst other things that sick leave is cashed out each year; the company today have said that’s not the case, that relevant provision was negotiated out in 2012. He also said that workers receive a wet places allowance; the company said that hasn’t been paid since 2012. Was the Prime Minister wrong?
MATHIAS CORMANN: The Prime Minister was absolutely right in everything that he said. We had all of the facts before us as a Cabinet; we made the judgement with all of the facts before us as a Cabinet, I’m now not going into a detailed discussion through the media …
DAVID SPEERS: Explain to me how that can be if you’re saying that the fact before Cabinet was that they can cash out sick leave and the company is saying no they can’t?
MATHIAS CORMANN: Well we have all of the advice before us including the enterprise bargaining agreement of course that was signed by the company concerned and indeed part of the discussions the company had with the government was to promise that they would deal with all of the workplace relations related legacy issues, that they would focus on improving productivity, that they would ensure that the workplace relations arrangements were more appropriate in the circumstances.
DAVID SPEERS: So did the company not give you the accurate information?
MATHIAS CORMANN: Well again, fundamentally, and I have to always bring it back to the most important point. The most important point here is that Coca-Cola Amatil as the owner of this business has the balance sheet and the cash reserves to fund the investment that they say is required.
DAVID SPEERS: I’m just asking why the Prime Minister raised these conditions issues for the workers.
MATHIAS CORMANN: That was one of the issues that was put to us by the company itself. It was obviously one of the issues before us, but fundamentally the most important point here is that the business concerned, that was looking for an individual grant from the tax payer, was looking at a government which doesn’t have the balance sheet, which doesn’t have the cash reserves to provide that grant. We would have to borrow that money in order to provide that money to a company which has got the cash.
DAVID SPEERS: The local member Sharman Stone as you know, the Liberal MP, has accused the Prime Minister of lying over this; can she really stay in the party?
MATHIAS CORMANN: Well look, I disagree with her in relation to the comments that she made today. She’s a passionate advocate for her local community… interrupted
DAVID SPEERS: It’s a pretty big call though to say the PM’s lied about this.
MATHIAS CORMANN: I’m disappointed that she’s made that particular statement, but you know in the heat of the moment. Look I’m sure that on reflection she’s probably disappointed that she made that statement.
DAVID SPEERS: And just finally with this hard line on industry assistance where does it leave farmers as we know they’ve been struggling with drought in Queensland, Northern Territory, New South Wales, South Australia, what would you say to them?
MATHIAS CORMANN: Well look, governments of both persuasions for many years have had policies and programs in place to support farmers through exceptional circumstances or through a drought condition. The government is very conscious of the fact they there are very difficult conditions right now in particular in western Queensland and in northern New South Wales. Barnaby Joyce as the Minister for Agriculture is talking to farmers and relevant farm groups as we speak and we’ll continue to monitor it and provide support as appropriate through the programs that are currently there.
DAVID SPEERS: Is farming just not sustainable?
MATHIAS CORMANN: Well I don’t believe so. Farming is a business where you know you are exposed to the vagaries of the climate and at any one point in time there are going to be good times, there are going to be bad times and obviously it’s important to provide appropriate assistance through the more challenging times, because you know things keep changing as the weather keeps changing.
DAVID SPEERS: Finance Minister Mathias Cormann thank you.
MATHIAS CORMANN: Good to talk to you.