Senator the Hon Mathias Cormann
Minister for Finance
INTRODUCTION: The G20 meeting of Finance Ministers and Central Bank Governors ended in Sydney yesterday with agreement on a global drive for growth and a shared promise to crack down on global tax evasion. The agreement was contained in a final communiqué and to look at the action that will flow from those words Marius Benson is speaking to the Finance Minister, Mathias Cormann.
MARIUS BENSON: Mathias Cormann, the summit at the weekend, the ministerial summit has put a target of 2 per cent growth over five years, India’s finance minister who’s not very devoted to that target was pointing out, it’s just a goal, just a name, nothing more.
MATHIAS CORMANN: What happened on the weekend was really quite significant. The G20 as a whole committed itself to an ambitious target to drive stronger growth of more than 2 per cent above the business as usual trajectory. Obviously, in order to make that target a reality, individual member countries will now have to go away and develop their growth strategies domestically and when we have the Leaders’ Summit in November, countries will be expected to report back on how they’re going with that.
MARIUS BENSON: For Australia to meet that it would have to push growth from a forecast 2.5 per cent up to about 3 per cent, is that going to happen this financial year?
MATHIAS CORMANN: The Coalition of course has a plan to build a stronger economy and create more jobs. Our plan involves reducing the tax burden on the Australian economy, by scrapping the carbon tax and the mining tax, it involves reducing the regulatory burden, it involves providing regulatory certainty, it involves investing in productivity enhancing infrastructure. We’ve already started to roll out that plan, and we will continue to build on that in the months ahead. And of course, the second Tuesday in May, the Treasurer Joe Hockey will be releasing the Budget and all of the detail of our plan for the next four years will be there for all to see.
MARIUS BENSON: The elements you’ve mentioned in the Government’s plan of deregulation and removing some of the taxes are well known, is there anything more that flows from the commitment at the weekend to this higher goal?
MATHIAS CORMANN: The particularly important aspect moving forward is going to be the investment in productivity enhancing infrastructure. We already took a significantly enhanced and expanded commitment to the last election and we will build on that further in the Budget. You will see the detail at that point in time. But there is clearly significant opportunity there for Australia, in particular with the Commonwealth and State and Territory governments working closely together.
MARIUS BENSON: Tax was also a topic at the weekend and there was an emphasis on new measures to deal with corporations avoiding tax. Do the international tax dodgers have anything to fear now?
MATHIAS CORMANN: Clearly the basic premise is that companies that operate around the world should pay their fair share of tax where they make their profits. Clearly there are some serious challenges there and what makes it particularly difficult to deal with is if individual countries unilaterally take action it can have distorting effects in their domestic economies. So it is very important for countries to coordinate their efforts in this regard, to make sure that multi-national corporations pay their fair share of tax where they generate their profits.
MARIUS BENSON: But these corporations have been dancing around national regimes for a long time, do they have anything new to worry about after the weekend?
MATHIAS CORMANN: That is exactly the reason why it is so important for the G20 to effectively coordinate action in this regard. It’s very important for countries around the world to work with each other, to make sure that all of these corporations, which as you say dance around national regimes at the moment, appropriately are required to pay their fair share of tax where they generate profits.
MARIUS BENSON: Are Apple and Google good corporate citizens?
MATHIAS CORMANN: Look I’m not going to get into a conversation about individual tax payers, but the principle is that large corporations working in many jurisdictions around the world should pay their fair share of tax where ever they generate profits.
MARIUS BENSON: What would you say to an individual business in Australia saying ‘I should be dodging tax, the people I’m competing with, the international people I’m competing with, they’re dodging tax’?
MATHIAS CORMANN: Well I’m not sure how many other ways I can make this point. Every business, whether it is a domestic business or whether it’s a business that operates in many countries around the world should pay their fair share of tax in the location where they generate their profits. That is very much the effort that the G20 has progressed this weekend and we’re very hopeful that this will lead to some very tangible outcomes.
MARIUS BENSON: Mathias Cormann, thank you very much.
MATHIAS CORMANN: Always good to talk to you.
PRESENTER: The Finance Minister Mathias Cormann with Marius Benson.