Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 26 May 2014
LYNDAL CURTIS: The Finance Minister Mathias Cormann is one of the chief sales people for a Budget he helped put together. He joins me now. Mathias Cormann, welcome to Capital Hill.
MATHIAS CORMANN: Good to be here.
LYNDAL CURTIS: Is life easier in Opposition than it is in Government?
MATHIAS CORMANN: Life in Government is all about making sure that we build better opportunity for the future, that we strengthen our country for the future. It is obviously a great privilege to be taking responsibility to ensure that we can address the challenges we have inherited and put ourselves on the best possible foundation for the future.
LYNDAL CURTIS: Do you think though that the sales pitch for this Budget was begun too late? That right after the election was won, you didn't begin early enough telling people that tough action would be required. So they weren't expecting what they saw in the Budget.
MATHIAS CORMANN: We have been telling people for a very long time, indeed all throughout the last term of the parliament, that Labor's spending was unsustainable, that the Labor legacy of debt and deficits was damaging our economic prospects for the future. In the lead up to the last election we identified $42 billion worth of savings that we took to the last election and we also said that we...interrupted
LYNDAL CURTIS: You also promised no surprises and it is true that people have been quite surprised by the scale of the cuts in this Budget.
MATHIAS CORMANN: What we did say before the last election is that we would repair the Budget mess that we have inherited. We also said that we would have a national Commission of Audit look right across government for opportunities to achieve efficiencies and ensure that government spending, taxpayer funded government spending is as efficient and well-targeted as possible. That's what we are doing. We have inherited a spending trajectory that was unsustainable. After Labor delivered $191 billion of deficits in their first five Budgets, another $123 of projected deficits in their last Budget, debt heading for $667 billion of spending growth trajectory taking us to 26.5 per cent of spending as a share of GDP, a completely unsustainable...interrupted
LYNDAL CURTIS: But you made all those arguments saying that you didn't believe the Budget figures, that there was a Budget emergency before the election, you weren't telling people that their family payments would need to be cut, that pensions would eventually need to grow at a slower rate, that schools and education spending would need to grow at a slower rate and people would have to spend extra money on top of the Medicare levy to visit a GP.
MATHIAS CORMANN: We said very clearly that we would repair the Budget mess that we have inherited, that we would put the Budget back onto a believable path to surplus and of course the only way you can do that in a realistic fashion is by adjusting the spending growth trajectory to make sure it is a more realistic, more affordable, a more sustainable spending growth trajectory into the future. What we have done is to spread that as carefully and as equitably and as fairly as possible across all of the Government spending programs.
LYNDAL CURTIS: Do you accept that you will need to compromise on some measures in order to get them through the Senate?
MATHIAS CORMANN: We have presented the Budget that Australia needs if we want to protect our living standards and if we want to build more opportunity and a stronger, more prosperous and more resilient economy for the future. What we are putting to the Parliament and what we would expect the Parliament to adopt is the Budget that in our judgment Australia needs right now.
LYNDAL CURTIS: But you're not in a majority in the Senate, you will have to compromise on some measurers, won't you?
MATHIAS CORMANN: You are making assumptions there because I mean two weeks ago…interrupted.
LYNDAL CURTIS: Assumptions based on most of the last 30 years in Senate history, governments have had to compromise to get things through.
MATHIAS CORMANN: Except that two weeks ago, and we have a Leader of the Opposition in Bill Shorten that just continues to flip and flop and chop and change, two weeks ago he said that he wasn't prepared to entertain a temporary Budget Repair Levy to address the Budget mess that they have left behind...interrupted
LYNDAL CURTIS: So they have compromised?
MATHIAS CORMANN: I don't think that he has compromised. He has adopted our position, because on reflection he realised that what we were proposing was appropriate and fair and we will continue to make the case and we will continue to calmly explain the judgments that we have made, the reason for those judgments. We are hopeful and confident in fact that people across Australia over time will accept that what we are putting forward is what Australia needs after six years of Labor debt and deficit disasters and we are hopeful that Labor, eventually will take responsibility for the mess that they have left behind and decide to be part of the solution rather than to be…interrupted
LYNDAL CURTIS: Will you be a part of the negotiating team that tries to convince other Senators that they need to pass this Budget?
MATHIAS CORMANN: We will participate obviously as you would expect us to do through the parliamentary process as appropriate...interrupted
LYNDAL CURTIS: And will you be prepared to talk to other Senators including the Greens?
MATHIAS CORMANN: We always talk to other Senators and the Leader in the Senate is Senator Eric Abetz. He will take the lead for us in the Senate, but obviously any of us with responsibilities in various portfolios will be involved wherever we can help.
LYNDAL CURTIS: Finally, have you modelled other figures for the GP co-payment? Possibly a lower figure?
MATHIAS CORMANN: At any time, when you make judgments in relation to the best way forward, you assess the various options and potential ways forward and the option that we have decided is the best option to ensure that our world class health system remains sustainable and remains affordable into the future. The objective is to ensure that patients across Australia can continue to have affordable access to high quality care, high quality health care that is also affordable for the taxpayer.
LYNDAL CURTIS: But could you have a lower figure and that would just mean that the Medical Research Fund, the money goes into, grows more slowly over time. That doesn't affect the Budget bottom line, because the money isn't going there.
MATHIAS CORMANN: Obviously the decisions that we made do affect the sustainability of the health system and they do affect the health of the balance sheet. Obviously when you shift from recurrent spending and make these savings available, capital savings that improves the balance sheet. If you ask people to make a contribution by way of a co-payment, which is a part fee for service to help fund the services that are accessed and obviously that also helps to improve the balance sheet by building up a capital base which we invest in the Medical Research Future Fund.
LYNDAL CURTIS: So you are not willing to move on that at all?
MATHIAS CORMANN: We are putting forward the Budget that in our judgment Australia needs right now, which includes the measure in relation to the co-payment as we have announced on Budget night.
LYNDAL CURTIS: Mathias Cormann, thank you very much for your time.
MATHIAS CORMANN: Always good to be here.