Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 14 July 2014
JAMES CARLETON: Finance Minister Mathias Cormann is in the thick of the action in the Senate and he is speaking with our political editor Alison Carabine.
ALISON CARABINE: Mathias Cormann good morning.
MATHIAS CORMANN: Good morning.
ALISON CARABINE: Minister will it be third time lucky this week? Do you now have the numbers to repeal the carbon tax?
MATHIAS CORMANN: We are determined to get rid of the carbon tax. We will persist until it is gone because that is the right thing to do for families and pensioners. It is the right thing to do for the economy as a whole.
ALISON CARABINE: Well it looks like David Leyonhjelm and Bob Day are back on side. But what about Palmer United? What assurances if any have you received from Clive Palmer?
MATHIAS CORMANN: I will let the Palmer United Party talk for itself. But the Coalition, Palmer United and a range of other cross bench Senators went to the election campaigning to scrap the carbon tax, so it is our job to deliver on the commitments that we made to the Australian people before the last election.
ALISON CARABINE: Does that mean Clive Palmer is still holding out? He is not giving you any assurances that he will support the revised amendment and indeed the repeal?
MATHIAS CORMANN: Look, I am not going to give a running commentary on discussions that we are having with Clive Palmer. Suffice to say that we are determined to get rid of the carbon tax. It is a tax which is bad for the economy, bad for families, it pushes up the cost of electricity, it pushes up the cost of living and the cost of doing business in Australia without doing anything for the environment, so we will persist until the job is done.
ALISON CARABINE: The Government has spent the weekend reworking the PUP amendment on price savings. David Leyonhjelm told us that the revised regime will only apply to energy suppliers. All other businesses will be excluded from the penalties and the compliance provisions. Is that correct?
MATHIAS CORMANN: That is what the Palmer United Party themselves have made very clear on the public record as well. Our intention as a Government has always been to ensure that electricity companies, energy suppliers would pass on the cost savings from the scrapping of the carbon tax to families and business and we had made certain provisions to ensure that happens. The Palmer United Party amendments seek to put that totally beyond doubt and as we said last week we are supportive of that.
ALISON CARABINE: But Minister, the original amendment or the third iteration of the original amendment, there was a lot of criticism from business that the scope was simply too broad, that many smaller and medium size businesses outside of energy retailing would also be caught up in this new compliance regime. Has that now been fixed?
MATHIAS CORMANN: I think there was a lot of misinformation spread by the Labor Party who quite frankly have no credibility at all when it comes to the carbon tax. It was the Labor Party who said that there would never be a carbon tax. In the lead up to the last election they said they had already removed it, yet they continue to vote to keep it. We have always been very clear. We want to get rid of the carbon tax and we want to ensure that families and business can benefit from the cost savings that are the result of scrapping the carbon tax.
ALISON CARABINE: But you still have to overcome this hurdle of the Palmer amendment. If the compliance rules only apply to electricity and gas companies and that’s what David Leyonhjelm has told us. Will the Government still be able to claim the savings for the average household from scrapping the carbon tax will be $550 a year?
MATHIAS CORMANN: Absolutely and an important point to make here is that Labor’s carbon tax comes with a massive compliance burden. It comes with massive red tape. It imposes incredible costs of compliance on business. We are getting rid of all of that. All we are doing now this week is to ensure and completely put beyond doubt any question mark around the proposition that these cost savings from scrapping the carbon tax might not be passed through to customers and business. We have always been committed to ensuring that they do and the Palmer United Party amendments, which we will support, put that completely beyond doubt.
ALISON CARABINE: But Minister, the Government is basing the $550 saving on Treasury modelling, which put the impact of electricity and gas prices at $250, the rest will come from smaller savings from items such as food and clothing. So isn’t the average saving per household closer to $250 not $550?
MATHIAS CORMANN: Not at all. What we’ve always said is that electricity prices in 2014-15 are assessed at being about $200 less than they would have been if the carbon tax stayed in place. Electricity costs flow through the whole economy. Increased gas costs flow through the whole economy. Getting rid of the carbon tax and bringing down the cost of electricity, bringing down the cost of gas, flows through the whole economy in terms of bringing down cost pressures. With all of the competitive tensions in the market that continue to play out, those costs will be passed onto consumers all the way through.
ALISON CARABINE: Well Minister, if we could just get back to the events of late last week, who is actually running this joint? Is it the Government or is it Clive Palmer?
MATHIAS CORMANN: The Government is running the Government. But in the Senate the Government hasn’t got the numbers, There is nothing new under the sun. There is nothing new with the Government having to work its way through a Senate where we don’t have a majority. That has happened for most of the last fifty years. You’ll find that governments of either persuasion have not had the numbers in the Senate.
ALISON CARABINE: But to look at recent history, the former Labor government had to deal with a hung Parliament in the lower house but still managed to pass legislation. So far that’s not something the Coalition Government seems capable of doing. You heard that cut we played of your colleague Ian Macdonald, he’s questioned the Government’s strategies dealing with Clive Palmer, surely you can’t afford a repeat of the carbon tax fiasco when it comes to the mining tax, which is up next or even more so the Budget. Don’t you have to rethink your entire approach?
MATHIAS CORMANN: The previous government had total control of the Senate because the Labor-Green... interrupted
ALISON CARABINE: Not of the lower house though.
MATHIAS CORMANN: This is my point though. The previous government might have had some challenges in the lower house. They had total control of the Senate because the Labor-Green coalition had the numbers in the Senate until 30 June this year. This has only been week one, last week. We will continue to process and put forward all of our various Budget measures and all of our pieces of legislation in an orderly and methodical fashion. We’ll continue to engage courteously and constructively with Mr Palmer and the Palmer United Party Senators and other crossbench Senators indeed. Let’s just see how this progresses in the weeks and months ahead.
ALISON CARABINE: Rupert Murdoch for one, he’s not impressed. He said much of what the Coalition is doing is confusing he’s not too sure the Government will be a success. Now considering the kind treatment by and large that the Government gets from Rupert Murdoch’s newspapers that must ring some alarm bells for the Government.
MATHIAS CORMANN: I don’t agree with any of what you’ve said there. So... interrupted
ALISON CARABINE: It’s what Rupert Murdoch has said.
MATHIAS CORMANN: I don’t agree with the characterisation of what you’ve put. I will let Rupert Murdoch talk for himself. I’m certainly not a commentator on commentators.
ALISON CARABINE: Okay Minister, if we could just go to the FOFA financial advice regulations, they will be disallowed by the Senate this week. Are you prepared to go back to the drawing board and start again or maybe junk them all together?
MATHIAS CORMANN: Again, I don’t accept your assertion. Let’s just see what happens.
ALISON CARABINE: So you don’t believe the Senate will disallow the regulations this week?
MATHIAS CORMANN: We are yet to have a debate in the Senate about it. Let’s just see what happens. You’re making an assertion about things that may or may not happen. I don’t accept the proposition you’ve put to me.
ALISON CARABINE: Well, it’s an assertion about what’s likely to happen considering the position of Labor and the Greens and some of the crossbenchers. The Government has a lot on its plate at the moment. Why is it so determined to wind back these financial advice laws when there is so much opposition to them in the community? Why are you putting the big banks’ desire for less red tape above those of the community, which want greater protection?
MATHIAS CORMANN: We’re not doing any of that. You’re believing Labor Party propaganda, which is driven by the commercial vested interest of industry funds. What we are doing is we’re keeping all of the consumer protections that matter. We are keeping the requirement for financial advisers to act in the best interests of their client. We’re keeping the ban on conflicted remuneration. You said earlier that the Senate will do x, y, z, well let’s just see what the Senate will do once the debate has properly taken place.
ALISON CARABINE: And there will be a debate now that the Labor Party forced you to table the regulations. Were you trying to avoid the debate in the first place?
MATHIAS CORMANN: Not at all. The Regulations were always going to be tabled and there was always going to be a debate this week. I wanted to ensure last week, that with the carbon tax debate and all the discussions around that going on that I had some space to talk to the crossbenches. I’ve been able to do that and I’m continuing to do that as we speak. So essentially everything is going according to plan. There was always going to be a debate about the FOFA regulations this week and that’s what will happen.
ALISON CARABINE: Minister, you’ve got a very busy week ahead. Thank you so much for joining RN Breakfast.
MATHIAS CORMANN: Always good to talk to you.
JAMES CARLETON: And that’s the Finance Minister, Mathias Cormann speaking with our political editor, Alison Carabine.