Senator the Hon Mathias Cormann
Minister for Finance
DAVID LIPSON: ...joining me now from our Sydney Sky News Centre is the Finance Minister Senator Mathias Cormann. Thanks for your time today.
MATHIAS CORMANN: Good to be here.
DAVID LIPSON: I want to start with that target that Joe Hockey inferred there. He wants to set a growth target and there’s key support from very important figures, but Germany for one doesn’t seem keen on this. They have described such a target as antiquated, how confident are you that this will get through by the end of the weekend?
MATHIAS CORMANN: Well that’s obviously our objective. We are committed to an objective where the G20 ambitiously drives stronger global economic growth, which will be required to drive stronger job creation. Obviously there will be discussions this weekend involving all of the Finance Ministers and Central Bank Governors. Our objective is on the table, let’s see what happens.
DAVID LIPSON: What is the objective? What figure are you aiming for?
MATHIAS CORMANN: Well we are not going to pre-empt the outcomes of the meetings on the weekend, but suffice to say that…interrupted
DAVID LIPSON: Is that 2 per cent figure in the ball park?
MATHIAS CORMANN: I am not going to comment on that, but suffice to say that we want the G20 to be more ambitious than business as usual when it comes to economic growth. That is the only way that we will be able to strengthen job creation and that of course is an objective for all of us.
DAVID LIPSON: Okay, well setting the target is one thing, achieving it is something entirely different. Joe Hockey is pushing this idea of selling off assets, recycling the money through infrastructure bonds that can potentially then be sold off in the future, the infrastructure that’s built potentially. But Sydney’s East-West tunnel for example, Brisbane’s Clem7 show that infrastructure isn’t always a silver bullet.
MATHIAS CORMANN: Well in Australia domestically, we do have a plan to build a stronger economy and create more jobs. Investing in productivity enhancing infrastructure is one part of it, reducing the tax burden on the economy by scrapping the carbon tax and the mining tax is another part, reducing the regulatory burden by getting rid of unnecessary, costly red tape is another part of it and of course providing regulatory certainty. Now there is a lot of opportunity to be more creative, more innovative in the way that we leverage both public sector and private sector investment in productivity enhancing infrastructure and of course that is a conversation domestically that the Treasurer has been having with his State and Territory counterparts over the past few months. We have already put a significant infrastructure growth package on the table in the lead up to the last election, which we have started to roll out and there will be more to say about this in the Budget later this year.
DAVID LIPSON: Okay well what then sits around this plan though, what I’m interested in what is the industry in Australia in the future? Manufacturing is on the decline, there’s not a whole lot of attention on science and innovation, and so what is the industry of the future?
MATHIAS CORMANN: Well you are quite right. We have inherited an economy which is growing below trend, with rising unemployment, with consumer confidence still too low and with business investment, which has plateaued. All of us, the Government, business, the community, we have got to work to turn that situation around and to build a stronger economy where we can create more jobs. Now the key here is to improve our international competitiveness, to bring down the cost of doing business in Australia. Over the last 6 or 7 years, we have added too much additional lead into our saddlebag. Imposing things like the carbon tax, pushing up the cost of doing business, imposing excessive additional red tape at a time when we were already facing significant global economic headwinds was a very bad move and we have got to correct some of those decisions. We’ve got to turn around that trajectory that we are on at the moment. Then the spirit of enterprise across Australia will find the opportunities where we will be best able to compete in a global economic environment.
DAVID LIPSON: Okay well Joe Hockey has warned also that we are on an unsustainable pathway when it comes to health, education. He wants a mature debate about the quality of life for all Australians into the future. I want to give that a go, what’s your view on lifting the retirement age to 70 or even beyond.
MATHIAS CORMANN: Well Joe Hockey pointed to the fact that when the aged pension age was set, more than 100 years ago at 65, the life expectancy was about 55. Today the life expectancy is about 30 years longer, which is great. But of course it does come with some challenges for the system. That is why, for example, the previous government over the last term, decided to lift the retirement age from 65 to 67, something that we supported as a sensible reform, which comes into effect in 2023. So before Bill Shorten gets too hysterical, I just point him back to the fact that the government that he was a part of made that decision that we supported at the time.
DAVID LIPSON: Well should it go further?
MATHIAS CORMANN: Well these are the sorts of issues that we’ve got to consider in a calm, methodical and careful fashion. We do have to have a conversation about these things. Obviously these are not changes that you make from one day to the next. You consider these things carefully. But the truth is, we do have an ageing population, people do live much longer, that does have implications for our economy and for our capacity to sustainably fund a range of services. If we want to keep spending more, at the end of the day we’d have to tax more. If you want to be able to keep taxes at a competitive level, you’ve got to have a conversation about how you can ensure that your spending is as efficient and as well targeted as possible.
DAVID LIPSON: Okay, well let’s turn to that issue of tax and I’m not trying to catch you out here, just have a discussion about the GST which you have said many times that this is a no surprises Government when it comes to this and other issues and the Productivity Commission as well is looking into this but isn’t the GST really, if we need more revenue, the most simple lever in order to do that, and that’s what we want isn’t, a simple tax system?
MATHIAS CORMANN: We will be a no surprises Government and we are a Government that delivers on the commitments we made before the last election. What we said very clearly is that there will be no change to the rate or the base of the GST under this Government. Full stop, end of story.
DAVID LIPSON: But can’t we have a sensible discussion about it, is that something that you are not prepared to discuss, is it just too politically hot? I mean you talk about retirement, but not this other pretty important area as well.
MATHIAS CORMANN: Well David we are having a discussion. I’d like to think that it’s a sensible discussion. But in the lead up to the last election we made certain commitments and we are a Government that sticks to the commitments we made to the Australian people before the last election. The commitment in relation to the rate and the base of the GST was crystal clear. People voted for us…interrupted
DAVID LIPSON: What about the next term, is this something that we should talk about and look towards and I know the next election is a way off, but the GST is that something that we should at next term?
MATHIAS CORMANN: Again David, it’s a very good try, but the commitment that we made was very clear. People voted for us in September last year on the basis of our promise that there will be no change to the rate and the base of the GST. Full stop, end of story.
DAVID LIPSON: Okay, a few other quick issues. Qantas is readying for severe job cuts, some suggestions as many as 3000, which is 2000 more than they have previously indicated. Your hands, as a government are pretty tied now on the Sales Act, relaxing that, what else is the Government doing and what else can the Government do?
MATHIAS CORMANN: Well firstly, I’ve seen those reports, but it is speculation and I’m not in a position to comment on speculation. In relation to the Qantas Sale Act, we do consider that there are restrictions imposed on Qantas in the Qantas Sale Act, which make it harder for Qantas to compete in what is a very competitive market. Our view is that those restrictions should be removed and it will be up to the Parliament eventually no doubt to form a formal view in relation to this. In the meantime, we’ve got some propositions in front of us from Qantas, which we are considering carefully and when we are in a position to make an announcement, we’ll make it.
DAVID LIPSON: Okay, let’s just turn to asylum seekers briefly, Manus Island. Are you personally comfortable with Australia continuing to send asylum seekers to Manus Island at this time?
MATHIAS CORMANN: Well offshore processing is a very important part of our policy to stop the boats. The previous Labor Government in 2008 dismantled the successful border protections policies of the Howard Government and that lead to chaos and dysfunction at our borders. 50,000 illegal arrivals and about 800 boats…interrupted
DAVID LIPSON: Sure but just at this time, sending asylum seekers when there clearly is a pretty unstable environment on Manus Island. Is it appropriate now or should they be stalled?
MATHIAS CORMANN: Well David, let me just point that right now we actually have not had an illegal boat arrival for more than 2 months. It is the first time since the previous government dismantled the border protection policies of the Howard Government in 2008 that that has been the case. So, we are totally focussed on delivering on what was another very clear and very firm election commitment, which was to stop the boats and the boats are stopping and offshore processing including through Manus Island and Nauru is an important part of that.
DAVID LIPSON: Finance Minister Mathias Cormann thanks for that.
MATHIAS CORMANN: Good to talk to you.