Senator the Hon Mathias Cormann
Minister for Finance
GARY ADSHEAD: You’ve all had time, you’ve all had time surely to digest some of what was contained in the Commission of Audit Report, it’s a bit like a fiscal horror movie where around every corner is that bloke wearing the ghost mask from Scream, pay to go to the doctor, lose some of your welfare, lower the minimum wage, force people to take out private health insurance and so on. But is some of it true? Are there too many freeloaders in Australia? Do we just take free health and education for granted? Do we go to the doctor too much? Have we all become a bit soft, maligned of the view that the Government will provide? Well that’s the debate or the ‘Pandora’s Box’ depending on which way you look at it that this report has opened up. Is it a debate we should be having or just part of an Abbott Government strategy to ease us into some of the pain from this month’s Budget. I’d like you to have your say this morning on what you make on all of this, this Commission of Audit Report, 9221 1882 is the number.
One of the Ministers that is overseeing the Budget and out there talking about this Commission of Audit Report is Mathias Cormann. Western Australia’s own Federal Minister for Finance and he joins me on the line. Thanks for your time.
MATHIAS CORMANN: Good to be here Gary.
GARY ADSHEAD: Do you think Australia has too many freeloaders?
MATHIAS CORMANN: Well we think that the Federal Government is on a spending growth trajectory that is unsustainable and that we need to address it.
GARY ADSHEAD: You accept then that some of the welfare issues that are out there, the payments that are being made to people, they are all the Government’s making, successive governments, and it’s not the people’s fault?
MATHIAS CORMANN: The previous government has put Australia onto an unsustainable spending growth trajectory. When we came into Government, we inherited $123 billion worth of projected deficits, debt heading for $667 billion, but what the Commission of Audit found is that beyond the current Budget forward estimates, that Budget spending trajectory continues to deteriorate so we need to do something about it.
GARY ADSHEAD: Now you’re from WA, Minister so if you don’t mind, I’ll ask you a very colloquial and self-centred question. Will any of what this Commission of Audit has put out there make living in this State less expensive?
MATHIAS CORMANN: Obviously what the people of Western Australia and indeed the people right across Australia are interested in is what the Government is going to do in the Budget. Now we will be releasing the Budget on the second Tuesday in May. The most important thing that we are doing to ensure that living in Western Australia is less expensive is to proceed with our commitment to scrap the carbon tax. We are very confident that in 2014-15, the carbon tax will be gone and that will have a significant beneficial impact when it comes to cost of living pressures. There will be other things that will be in the Budget that will be very good for Western Australia.
GARY ADSHEAD: But you must understand that in terms of just this Commission of Audit, it takes money from people but it doesn’t make the place that we live any less expensive, does it?
MATHIAS CORMANN: Well the thing to understand is that the Commission of Audit Report is not the Budget.
GARY ADSHEAD: Thank goodness for that Minister.
MATHIAS CORMANN: The Commission of Audit Report is a report to Government, it’s not a report from the Government. It was one of the inputs that we have considered throughout the Budget process and invariably what happens with these sorts of reports, there are some recommendations that we will accept and implement immediately in the Budget, there will be other things that will take some further work and some more thinking and there will be some things that we will reject out of hand.
GARY ADSHEAD: Do you see this report in any way being able to stimulate an economy, do you think?
MATHIAS CORMANN: What we think will help stimulate the economy is the Government getting the Budget back under control. We can’t as a Government continue to spend money that we haven’t got. We can’t as a Government continue to spend more than we raise in revenue and part of our effort to build a stronger more prosperous economy necessarily has to involve fixing the Budget mess that we’ve inherited from our predecessors.
GARY ADSHEAD: Some of the details that are out there from this report will no doubt scare the ‘bejesus out of people’. Is that why there has been some selective leaks about what could be in your Budget, to soften people up?
MATHIAS CORMANN: Well there haven’t been selective leaks. What invariably happens in the lead-up to Budgets is that journalists get into overdrive and start speculating and are desperately trying to figure out, reading the tea leaves, on what may or may not happen. The Budget will be released on the second Tuesday in May, it will be a growth Budget and it will be a Budget focused on replacing the old age of entitlement with a new age of opportunity, where people in a more prosperous, more resilient, stronger economy have the opportunity to get ahead.
GARY ADSHEAD: If we talk about this Commission of Audit Report though, can I just say, I’m not asking you to tell me what bits of it you would weave into a Budget in any way, shape or form, but ideologically from that viewpoint, is there things in there that you appreciate, you like?
MATHIAS CORMANN: Well the thing that is important from our point of view is the very clear outline of where we’re at and where we are heading without corrective action. The Commission of Audit very clearly spells out the challenge that we are facing as a nation and it makes some suggestions for structural reforms and structural savings. In the Budget, the Government will be pursuing structural reforms and structural savings. The good thing and the bad thing though about structural savings is that they start low and build over time, which is why the Government has flagged that in our view, there is a need for a more immediate special effort in the short term to put us in a stronger starting position as we embark on this journey to fix the Budget and in anticipation of these structural reforms taking effect.
GARY ADSHEAD: In order to do that it, hard and fast decisions have to be made. Do you support taking back welfare support from single mums for example?
MATHIAS CORMANN: I am not going to go into individual measures. We will be releasing the Budget on the second Tuesday in May. As a matter of principle we have got to ensure that Government spending is in line with the revenue that we are able to raise. You can’t continue to live beyond your means, you can’t continue to borrow money to give it away for consumption. The only good borrowing is if you are directing it into productivity enhancing and economic infrastructure.
GARY ADSHEAD: For example though, do you think that a Government could force people to take out private health insurance? Force them to.
MATHIAS CORMANN: We are supportive of private health insurance and we have in a previous period in Government, in the Howard Government years, we have put a very strong policy framework in place to encourage people who have the capacity, to take additional responsibility for their own healthcare need by taking out private health insurance. The Commission of Audit has made some recommendations and I’ve said before we are not accepting all of their recommendations, we are mulling over all of the things that they have put to us and our final conclusions in relation to all these matters will be reflected in the Budget.
GARY ADSHEAD: You would say that nothing is finalised yet? Because you have had this report for some months.
MATHIAS CORMANN: We have had the first part of the report since the middle of February and we got the final part of the report at the end of March and you are quite right, we’ve been having very lengthy discussions within our Expenditure Review Committee to ensure that in terms of the decisions we make about where to go from here, that we get things right. That we have the balance right and that we spread the effort to put the Budget back on track evenly and fairly and equitably across the whole community.
GARY ADSHEAD: Thank you for your time I understand you will be back in WA for the weekend.
MATHIAS CORMANN: Indeed can’t wait.