Senator the Hon Mathias Cormann
Minister for Finance
Date: Wednesday, 9 July 2014
DAVID SPEERS: Well as we have been reporting this afternoon, the Government had hoped to have the carbon tax repealed through the Senate today. It will have to wait another day. Along the way though the votes today while delaying the decision on that have also voted to keep another tax cut in place. It will kick in from July next year but the Government had hoped to do away with as well. Joining me now is the Finance Minister Mathias Cormann, thanks for your time.
MATHIAS CORMANN: Good to be here.
DAVID SPEERS: Now the Government was confident this morning the carbon tax would in fact be repealed through the Senate by lunch time. That still hasn’t happened. When will it go through?
MATHIAS CORMANN: The good news is that the carbon tax will go. Obviously the Senate will go through the appropriate process to deal with all of the various Bills and all of the considerations through the Committee stages. That is still taking place. The good news for Australian families and for Australian businesses is that the carbon tax will soon be history.
DAVID SPEERS: Were you expecting Ricky Muir of the Motoring Enthusiast Party to vote with you to bring on the vote this morning?
MATHIAS CORMANN: Every individual Senator makes their own judgments based on their own considerations. We totally respect that.
DAVID SPEERS: Can I ask you about the carbon tax? It’s meant to lower prices, energy prices, an average $550 for families. Will it lower things like airline ticket prices?
MATHIAS CORMANN: It will put downward pressure on prices across the board. What we have said is it will bring down electricity prices by about $200 a year in 2014/15.It will reduce overall cost of living for your average household by about $550 a year and of course the terrible thing with the carbon tax is that it pushes up the cost of energy across the board. Energy is an important input cost for business whether it is airlines, or whether it is manufacturing, whether it is agriculture, whether it is transport ...interrupted
DAVID SPEERS: And yet Qantas has this afternoon put out a statement saying the repeal of the carbon tax is not going to see ticket prices lowered.
MATHIAS CORMANN: That’s obviously a matter for Qantas. Qantas is engaged in some robust competition and I am sure that the prices that Qantas is able to charge will be determined by what the market will bear given the alternatives that are available...interrupted
DAVID SPEERS: Indeed that’s the reason they say that they didn’t actually put prices up, because of competition. When the carbon tax came in, they absorbed that. Now that the carbon tax is going though, they’re not going to pass on a saving.
MATHIAS CORMANN: The good news is that electricity prices will be lower than what they would have been. All of the regulators that set prices have already said that their cost reductions will be passed through. Some of the private generators...interrupted
DAVID SPEERS: So Qantas will be better off?
MATHIAS CORMANN: At the end of the day, the pricing for Qantas is a matter for Qantas. But what we do know based on Treasury modelling is that the average household as a result of scrapping the carbon tax will be...interrupted
DAVID SPEERS: I am asking about a big energy user like Qantas.
MATHIAS CORMANN: Obviously we would like to see Qantas do the right thing. If Qantas benefits from reductions in their costs of providing services as a result of the scrapping of the carbon tax, then clearly the ACCC is empowered to ensure that any reductions in the cost of providing that service are properly, as a result of scrapping the carbon tax, are properly passed through.
DAVID SPEERS: So you expect them?
MATHIAS CORMANN: I am not going to answer speculative questions here, let’s see what Qantas does once the carbon tax goes. Let’s see what their justification is for what they’re doing and obviously the mechanism is there for the ACCC to take action if people aren’t properly adjusting prices to reflect the scrapping of the carbon tax.
DAVID SPEERS: Let me ask you about the other Senate vote today. Along the way here, to keep the tax cut that was scheduled to go, well that Labor in Government said they would scrap from July next year; this is an increase in the tax free threshold worth about $2 billion to the Budget and the Senate has voted to keep that tax cut.
MATHIAS CORMANN: The Labor party today voted against their own measure to repair the Budget, which they initiated in their last Budget, which they banked in their last Budget, which they failed to legislate in their last Budget. But today as you’ve said, Labor voted to blow another $1.5 billion hole into the Budget or thereabouts. That is part of $40 billion in savings that the Labor party is currently opposing in the Senate. What I have to say ...interrupted
DAVID SPEERS: How are you going to find that money?
MATHIAS CORMANN: What I have to say here is Labor was very bad at managing money when Kevin Rudd and Julia Gillard were running the show. They are even more reckless and more irresponsible now that Bill Shorten and Chris Bowen are running the show. Bill Shorten will have to start explaining how he is going to pay for the debt and deficit disaster Labor left behind. How he is going to start to pay for these sorts of Budget black holes when he is starting to vote against Labor’s own Budget measures to repair the Budget.
DAVID SPEERS: And it’s not just Labor though is it? Clive Palmer is threatening to punch a $9 billion hole in the Budget by keeping the School Kids Bonus, low income super contribution; can you change his mind on that?
MATHIAS CORMANN: The important point here is that Labor right now is opposing nearly $40 billion in savings measures, measures to repair the Budget mess that they’ve created. They’re responsible for the debt and deficit disaster...interrupted
DAVID SPEERS: Clive Palmer out of this either and his party...interrupted
MATHIAS CORMANN: So Labor is opposing nearly $40 billion in savings including $5 billion in savings they themselves initiated in their last Budget. They themselves banked in their last Budget. They’ve put the numbers into their Budget papers and now they are voting against us implementing their savings measures. I mean that is as reckless and irresponsible as you can get.
DAVID SPEERS: As is the Palmer United Party, why are you so reluctant to have a crack at them?
MATHIAS CORMANN: The Palmer United Party is now represented in the Senate; they have been represented in the Senate for a number of days. The reason why I am focused on Bill Shorten and the Labor Party is because they created the mess that we’re dealing with. We’re taking responsibility for cleaning up Labor’s mess. Now Labor, which was bad at managing money in government is so reckless as to oppose their own savings measures that they banked in their last Budget. So Bill Shorten was part of a government that decided we were not going to have a second round of income tax cuts because they were going to get rid of the carbon tax and replace it with an Emissions Trading Scheme. We’re saying the carbon tax is going altogether. So if you thought it was right not to proceed with the second round of tax cuts given the state of the Budget then, it is even more right now.
DAVID SPEERS: You’re in Government though, you’ve got to negotiate with this Senate. That means Labor, the Greens, the Palmer United Party, the other crossbenchers as well. If you’re unable to convince them on all of these measures, is it possible that the Budget could in fact be in a worse position that it is now come next election?
MATHIAS CORMANN: We inherited a Budget in very bad shape from the Labor party and we’ve delivered the Budget that Australia needs if we are to protect our living standards and if we are to build opportunity into the future ...interrupted
DAVID SPEERS: You haven’t delivered it through the Senate though, that’s the point.
MATHIAS CORMANN: We are putting Budget measures to the Senate one by one. A number of the Budget measures, all of the Budget measures so far until today that we’ve put to the Senate have been passed by the Senate despite noises to the contrary in the lead up. We will continue to engage courteously and professionally with all of the Senators represented in the Senate, in particular crossbench Senators. But what we say to the Labor Party, is that it is time that you faced up to the mess that you have left behind. It is time that you stopped being in a state of denial about the Budget you left behind and about the fact that the carbon tax is actually going.
DAVID SPEERS: Ultimately though, will you have to give the Senators something they all seem to want? And that is scrapping the Paid Parental Leave scheme that the Government has planned.
MATHIAS CORMANN: We are delivering the election commitments that we took to the last election. We are delivering on the commitments to build a stronger, more prosperous economy where everyone can get ahead. The Paid Parental Leave scheme is an important part of that. We are delivering on the commitment to repair the Budget and right now we’ve only just started. The Budget was delivered less than two months ago. We only really started to put Budget measures to the Senate one by one for the first time. You have been around Parliament House for a long time. You know that for years and years and years many Budget measures have had to be put to the Senate a second time. If that has to be done, we will do it and let’s just see whether with time and with all of the good arguments on our side, we’ll eventually be able to convince Labor to take responsibility for the mess they created.
DAVID SPEERS: Finance Minister Mathias Cormann, thank you.
MATHIAS CORMANN: Always good to be here.