Transcript - ABC Radio National - Breakfast with Alison Carabine

Senator the Hon Mathias Cormann
Minister for Finance


Date: Wednesday, 25 June 2014

Budget, Senate

JAMES CARLETON: Federal Parliament is set to blast another big hole in the Government’s Budget. Labor has finalised the list of welfare cuts that it will oppose including the scrapping of the $800 seniors supplement for self-funded retirees and the freezing of payment rates for Family Tax Benefits. Opposition Leader Bill Shorten says Labor is standing up for ordinary Australians. against an assault on fairness:

BILL SHORTEN EXTRACT: Tony Abbott most certainly has a fight on his hands with his rotten unfair Budget. If Tony Abbott wants to get at Australia’s pensioners, Australia’s families, he’ll have to come through me and the Labor party. 

JAMES CARLETON: Bill Shorten. And the social security measures facing defeat at his hand in the Senate now total at $11.5 billion. On top of that is the U-turn by the Greens on the indexation of petrol excise, that will cost the Budget another $2.2 billion. The Finance Minister Cormann in our Parliament House studio with our political editor Alison Carabine.

ALISON CARABINE: Mathias Cormann, good morning.

MATHIAS CORMANN: Good morning.
ALISON CARABINE: Minister, according to the Government’s own calculations, Labor will now block almost $22 billion in Budget measures. That’s the latest running total. Don’t you now face the prospect of your Budget being shredded in the Senate? Whatever you finally get passed will look nothing like the Budget you announced last month.

MATHIAS CORMANN: All up Labor is now opposing nearly $40 billion of savings measures...interrupted

ALISON CARABINE: That includes the carbon and mining taxes?

MATHIAS CORMANN: Indeed. And it also includes $5 billion of savings measures Labor initiated in their last Budget and banked in their last Budget, but never legislated. Look, Bill Shorten and the Labor party are in complete denial about the debt and deficit disaster they left behind. They created the Budget mess that we are setting out to fix. We are taking responsibility to fix the Budget mess they created. It is time that they replaced their reckless and irresponsible opposition with taking responsibility, facing up to the consequences of the mess that they have created.

ALISON CARABINE: Now Minister we have heard that line of argument many times before from the Government but it is having no impact on the Senate if anything. The Senate parties are more resolved than ever before to block big chunks of your Budget.

MATHIAS CORMANN: Well, let’s see what happens. These things seem to continue to chop and change. When we first announced the Temporary Budget Repair Levy, Bill Shorten and the Labor party were never going to be a party to it. They were going to be opposed to it and last week they quietly voted in favour of it. The Greens initially said they would support the increase in fuel indexation in order to keep pace with inflation in terms of the value of the fuel excise. Today they are telling us that they are opposed to it. We will engage constructively and positively with all parties and all Senators represented in the Senate. We will continue to make our case as to why there is no alternative to the Budget that we have delivered if we want to protect our living standards and if we want to build prosperity and opportunity for the future.

ALISON CARABINE: But apart from those change of hearts that you have mentioned on the deficit levy and also petrol excise, you don’t seem to be getting any love from anywhere, from anyone in the Senate. It is not just Labor and the Greens but also a number of the cross-benchers who will take their seats next month. If this stalemate continues, would an election really be your only option to try and reset the Parliament?

MATHIAS CORMANN: Right now we are focused on explaining the judgments we have made, the reasons for those judgments. What I would say to everyone represented in the Senate, Labor and the Greens want us to continue to borrow from our children and grandchildren in order to fund our lifestyle and our consumption today. That will reduce opportunity for our children and grandchildren because they will end up having to pay higher taxes in order to pay for the cost of our living standards today with interest. The decisions required to repair our Budget will become harder not easier as we move forward. If we don’t adopt the measures in the Budget that we have delivered, the impact on families and others across the community will become more difficult. If we don’t make the difficult decisions now, it will not become easier, it will only become harder into the future and that is something that everyone represented in the Senate ought to keep in mind.

ALISON CARABINE: But that message is just not resonating with the Senate parties. Your Budget will be marked ‘epic fail’ unless you can get some of these Senators on board.

MATHIAS CORMANN: Let’s see what happens. We will do what governments always do and that is we will introduce our Budget measures into Parliament and into the Senate in an orderly and methodical fashion. We will make our case and in the end the Senate will have the opportunity to vote on those measures. If we don’t get these measures through the first time around, we will reintroduce them a second time around. All I would say is that so far we have had one Budget measure into the Senate last week and that was passed when the initial indications were that that might not be the case. We continue to call on the Labor party to face up to the consequences of their actions in Government, to take responsibility for the Budget mess that they have created when they were in Government.

ALISON CARABINE: But Labor are not going to support these measures which takes us to the cross bench and Palmer United. The Prime Minister is going to meet Clive Palmer tomorrow. Clive Palmer has already stated his opposition to a range of Budget measures. Why has it taken so long for Tony Abbott to meet Clive Palmer? You have known since last September that you’re going to need him in the Senate. Have you been derelict in dealing with Palmer United? 

MATHIAS CORMANN: No these sorts of things are done in a proper and orderly fashion and they are certainly not done by communicating with each other through the media...interrupted  

ALISON CARABINE: Like you are doing now?

MATHIAS CORMANN: I am not communicating on specific measures with Mr. Palmer through the media. It is very good that the Prime Minister is having a meeting with Mr. Palmer and obviously that will be a great opportunity to exchange views on why, in our view, the Budget that we delivered was the Budget that Australia needs if we want to protect our living standards and if we want to build opportunity and prosperity for the future.

ALISON CARABINE: But Clive Palmer is very much his own man. How much chance does the Prime Minister realistically have of changing his mind on measures such as the Medicare co-payment and the university higher education fees?

MATHIAS CORMANN: Well I am not going to speculate on the outcomes of their conversations. What I would say though is that it is very important for everyone in the Parliament to be very conscious of the fact that if we continue to kick the can down the road, if we don’t make the difficult decisions now, the decisions will only become more difficult. That includes when it comes to ensuring that our health care system is sustainable into the future so that our children and grandchildren can continue to benefit from affordable access to world class health care. It includes of course the reforms that we have announced to ensure that our universities continue to be among the best in the world.

ALISON CARABINE: Minister, you have mentioned the change of heart by the Greens on petrol indexation. They have now decided not to support the reintroduction of indexation of petrol excise. Now that will blow about $2.2 billion hold in your Budget. Christine Milne says there was not point talking with the Government because you were taking an all or nothing approach. Is she right? Was there any room at all for negotiating with the Greens?

MATHIAS CORMANN: Christine Milne is totally wrong. She has lost all credibility today. The Greens now are the party that stands for real cuts in the tax on petrol. The truth is that since 2001, ever since indexation of fuel excise was frozen, fuel excise in real terms has been falling. So the Greens are now the political party that stand for reductions, real reductions, in the value of the fuel excise. That is completely inconsistent with everything that they have said they stood for. What we propose to do, responsibly, is to reintroduce indexation so that the fuel excise, the value of the fuel excise, would keep pace with inflation and of course what we did say is that we would invest the proceeds from that particular measure into growing a stronger, more prosperous economy into the future.

ALISON CARABINE: And Minister, petrol indexation is just one of many measures that will be put to the Senate but yesterday in the lower house there was less than three hours debate on the two big omnibus Bills which contain a number of the welfare changes. No fewer than eight gag motions moved by the Government. Can you guarantee a proper debate, proper scrutiny when these Budget Bills hit the Senate?

MATHIAS CORMANN: As is self-evident, the Government doesn’t have the numbers in the Senate and the Senate is in charge of its own destiny, as always happens. We have just gone through two very intensive weeks of Budget estimates in the Senate...interrupted

ALISON CARABINE: So you will be forced to consider these measures line by line?

MATHIAS CORMANN: We will be going through the process in an orderly and methodical fashion as is usual. Budget estimates were very intensive of course from nine in the morning to 11 o’clock at night for two weeks. We have got various committees that are investigating specific Budget measures and of course the Senate itself is in charge of its own destiny.

ALISON CARABINE: Now Minister, if I could ask you about the efficiency review of the ABC which has reportedly recommended that the broadcaster charge viewers to watch programs on the catch up service i-view. As the Finance Minister, would it be fair enough to impose a pay-per-view charge for programs which have already been broadcast free to air?

MATHIAS CORMANN: The first point to make is that this is a report to Government not a report from the Government. Malcolm Turnbull as the Communications Minister did commission an efficiency review because of course the first responsibility of Government when it comes to spending is to ensure that spending across all taxpayer funded organisations is as efficient and as well targeted as possible. What we are interested in is to ensure that the same level of service can be maintained while also ensuring that spending on back office operations in particular is as efficient as possible...interrupted  

ALISON CARABINE: I take it that’s a yes.

MATHIAS CORMANN: No that is not a yes. This is not a policy of the Government. This is not something we have put out there. It is something that somebody put to the Government who has conducted an efficiency review for Government. I am not going to announce policy in relation to this, it is a matter for Malcolm Turnbull. The point I would make though is that the ABC is the only taxpayer funded organisation in Australia that has been exempt from efficiency dividends for nearly 20 years. There is no other such organisation. 

ALISON CARABINE: Minister, would you pay to watch the ABC?

MATHIAS CORMANN: Well I am a regular watcher of the ABC and that is obviously not something that is on the table right now.

ALISON CARABINE: Mathias Cormann, thanks so much for your time.

MATHIAS CORMANN: Always good to be here.