Senator the Hon Mathias Cormann
Minister for Finance
Date: Saturday, 14 June 2014
DAVID LIPSON: Let’s go now to Perth where the Finance Minister Mathias Cormann is standing by. Thanks for your time today.
MATHIAS CORMANN: Good to be back.
DAVID LIPSON: I want to start with the carbon tax. You have talked about scrapping it so often, on this program, well for years and we can expect perhaps that the bill to repeal the carbon tax would be reintroduced some time in the next few weeks, is that right?
MATHIAS CORMANN: That is absolutely right. We are totally committed to getting rid of the carbon tax. It’s a bad tax, which hurts families, which is bad for pensioners, business, jobs and which doesn’t do anything to help reduce global greenhouse gas emissions. So we are absolutely determined to get rid of it, to strengthen our economy and to create more jobs.
DAVID LIPSON: So it will sail through the House of Representatives once again, but the Senate is where the business end is. Clive Palmer this week softened his position somewhat, in terms of giving support for the repeal of the carbon tax. He no longer is asking for retrospective legislation that would see companies that have paid the carbon tax be refunded. But he did say this, the savings by law, he wants transferred into lower energy costs for everyday Australians. Can the Government implement legislation that does actually force those savings to be passed on?
MATHIAS CORMANN: Firstly, we welcome the statements that the Palmer United Party made earlier this week in expressing support for our plan to scrap the carbon tax. It’s obviously much better than what Bill Shorten and the Labor Party have done so far, because we are totally committed to reduce cost of living pressures on Australian families. Scrapping the carbon tax will help reduce the average cost for your average family by about $550 a year. What we have done... interrupted
DAVID LIPSON: But can you meet Clive Palmer’s demands?
MATHIAS CORMANN: We will continue to talk to the Palmer United Party and their representatives in the Senate in particular, in relation to our objective to scrap the carbon tax and our commitment to ensure that these reduced costs that come with scrapping the carbon tax are appropriately passed through. We are already committed to provide additional resources to the ACCC for example, to ensure that the ACCC is appropriately resourced to drive those cost reductions through the system, those cost reductions linked to scrapping the carbon tax. But we’ll continue to have conversations with Palmer United Party representatives on how best to achieve the objective.
DAVID LIPSON: But Clive Palmer was very specific. He said the savings by law must be transferred. The ACCC can look at this stuff but that’s not as far as what he’s asking for.
MATHIAS CORMANN: Again, we are not going to be conducting these discussions with the Palmer United Party through the media. What I can say is that we are cautiously optimistic and we welcome the comments that were made by Clive Palmer earlier this week. We think that it is absolutely in the national interest to get rid of the carbon tax, which is a bad tax for families, pensioners, business, jobs, pushes up the cost of living and makes us less competitive internationally without doing anything to reduce greenhouse gas emissions or help the environment. So we are hopeful, given the statements that the Palmer United Party has made earlier this week that we’ll be able to achieve a resolution there.
DAVID LIPSON: So you’re betting that he’ll soften his position even further?
MATHIAS CORMANN: I’m not betting at all. I’m just saying that we share a common commitment. Our commitment is that the scrapping of the carbon tax will lead to reductions in cost of living pressures, will lead to reductions in the cost of electricity and the cost of gas compared to what the price would have been with the carbon tax. We will continue to have the necessary conversations on giving practical effect to that.
DAVID LIPSON: Tony Abbott this week in Washington conceded that his fuel excise hike would act like a carbon tax because it was a method of lowering carbon emissions along with direct action. Do you agree with that?
MATHIAS CORMANN: I don’t think these are actually the words he used and I don’t think that that’s actually what he said. The policy that we implemented in the Budget is there for all to see. Up until the Budget effectively, the fuel excise was reducing year on year as inflation essentially undermined the level of fuel excise that was charged. By making the change that we are proposing in the Budget and reintroducing regular indexation what we’re making sure of is that the value of the fuel excise keeps pace with inflation and essentially remains constant in real terms. That is the policy that is there for all to see. It is a policy that we think is important, particularly as we are making record investments in productivity enhancing infrastructure.
DAVID LIPSON: Okay, I want to move onto Joe Hockey’s speech this week. He said that criticism of the Budget was akin to 1970s style class warfare. We saw in recent polls that more than 60 per cent of Australian’s polled thought that the Budget was unfair. Are all of them really engaging in class warfare?
MATHIAS CORMANN: It’s incumbent upon us to continue to explain the decisions that we’ve made and the reasons for those decisions. We inherited a very difficult Budget position. Not only had Labor delivered $191 billion in deficits in their first five Budgets, they also left behind $123 billion in projected deficits in their last budget and were taking us to Government gross debt of $667 billion within the decade and rising. Assuming that there was not going to be any tax cut to adjust for bracket creep. We are in a situation now where we’re forced to pay $1 billion a month in interest just to service the debt that Labor has accumulated so far in their first six years. That is after we were in a situation in 2007 where we were collecting more than $1 billion a year in net interest payments on the back of a positive net asset position. The point is, we’re not pursuing the changes that we’ve put forward in the Budget for fun. It doesn’t give us any pleasure. But if we want to protect our living standards, if we want to build opportunity and prosperity for the future then there really is no alternative to the plan that we’ve put forward.
DAVID LIPSON: Joe Hockey also said that over half of Australian households receive a taxpayer funded payment from the Government. Is that too much? Is the Government seeking to wind back that figure?
MATHIAS CORMANN: Joe Hockey made a statement of fact. What we’re saying in relation to welfare, is that taxpayer funded welfare payments should be targeted at those most in need of our support. We can’t afford to spend welfare payments on people essentially that are not in that category of most in need of our support. Really the objective ought to be to support and assist as many people that are currently receiving welfare as possible, back into the workforce. That’s what we surely ought to be able to achieve and what we should be aiming for.
DAVID LIPSON: So should then, as reports have suggested that the McClure Report will recommend the NDIS be formally linked with the carer payment and the disability support pension in your eyes?
MATHIAS CORMANN: I’ve seen speculation but I haven’t actually seen the McClure Report just yet. It hasn’t been put before Government for consideration, Government as a whole. I personally haven’t seen it. So I’m not going to speculate on what may or may not be in that report. The general point I would make is that our welfare system is very complex. There is a great diversity and a great spread of different payments, supplements, allowances and the like. There ought to be scope to simplify the system to ensure that welfare support is targeted at families and individuals most in need. That wherever possible people who are currently receiving welfare, if they are capable and able, that as many people on welfare today should be supported back into work. That is at a high level, that is the policy framework that we’re focussed on.
DAVID LIPSON: It seems clear that the Government wants to simplify the welfare system to make it more efficient and to save money. But this week the families Minister Kevin Andrews wouldn’t rule out as part of any simplification, reduced funding for welfare recipients, ie the overall funding envelope if you like, for payments being reduced as part of any simplification. Can you rule that out?
MATHIAS CORMANN: Well David, it’s very hard to have a hypothetical rule in, rule out conversation in relation to things, to be honest I haven’t actually seen. What I can say is that in the Budget we’ve pursued a number of reforms to our welfare system, which are structural reforms, which will help make our welfare system more sustainable into the future. So that we can make sure that those Australians most in need of our support will continue to be able to benefit from that support over the medium to long term. Whatever reforms we will pursue as a Government into the future will focus on making sure that our welfare system, which currently draws 35 per cent of our federal Budget that that is sustainable and affordable over the medium to long term. That is what we’re focussed on.
DAVID LIPSON: But if you can’t rule out any funding reduction for welfare recipients, isn’t that why your opponents in the Labor Party can say that simplification of welfare is code for cuts?
MATHIAS CORMANN: The Labor Party can run their political strategy and continue to jump up and down. It doesn’t matter. We’re focussed on good public policy. It is not productive to make a running commentary in relation to hypotheticals that are not supported by evidence or by facts. We will continue to go through an orderly, methodical process, consider all of the information about where we are and where we’re heading without reform, where we should be heading and what changes may or may not be required in order to ensure that system is more efficient, that welfare support is targeted towards those Australians most in need of our support. We’ll continue to do that in a steady fashion and the Labor Party can continue to bark from the sidelines as much as they like. We are focussed on the job that needs to be done.
DAVID LIPSON: Finance Minister Mathias Cormann, we’ll have to leave it there. Thanks for your time.
MATHIAS CORMANN: Always good to talk to you.