Senator the Hon Mathias Cormann
Minister for Finance
Date: Wednesday, 16 July 2014
LYNDAL CURTIS: I am joined in the studio now by the Finance Minister Mathias Cormann. Senator Cormann welcome to Capital Hill.
MATHIAS CORMANN: Good to be here.
LYNDAL CURTIS: What other options are on the table if you can’t get many of your Budget measures through?
MATHIAS CORMANN: What is on the table right now is the Budget that we delivered about two months ago. The Senate should pass the Budget we delivered because it is the Budget Australia needs to ...interrupted
LYNDAL CURTIS: But the Treasurer did mention that you could look into other areas at things that don’t require legislation so presumably that’s payments to the States, payments to local governments, payments you make such as the Chaplaincy program.
MATHIAS CORMANN: It is not our preferred option to look at other options. Our preferred option is for the Senate to pass the Budget Australia needs to protect living standards and to build opportunity for the future. As the Treasurer has indicated this morning, if the Senate doesn’t leave us with any choice, if the Senate doesn’t leave us with any alternative, we might not have any option other that than to look at other options. Now ...interrupted
LYNDAL CURTIS: So what could be those other options?
MATHIAS CORMANN: I am not going to speculate here and now. What I would say though is that the Labor Party and the Greens right now want the Australian Government to keep borrowing from our children and grandchildren to fund consumption today. Can you just imagine, there would not be a single parent in Australia that would expect their children to pay off their credit card after they have put a large chunk of their grocery bills on that credit card year in year out. Taken out a second credit card to pay the on the interest first. Not a single parent would expect their children to pay off that credit card in those circumstances. Neither should the Australian Government.
LYNDAL CURTIS: You have made those arguments before. I just want to get an idea of what the possible options are. Are they the things I mentioned? Things like payments to the States, payments to local governments, things that come under the heading of grants.
MATHIAS CORMANN: We want the Australian Senate to be very clear that they might think that the measures in our Budget were tough, but if we don’t make those decisions now, the decisions will only become tougher. Because our overarching commitment is to do what we promised the Australian people we would do and that is to repair the Budget. Wayne Swan...interrupted
LYNDAL CURTIS: Is this a real threat or is it just bluster, just trying to pressure the Senate?
MATHIAS CORMANN: It is not a threat it is a reality. Wayne Swan year in year out kept telling us why a budget surplus was so important for Australia, why it was so important for families around the kitchen table. At least he was a believer. He never quite managed to deliver a budget surplus. He delivered $191 billion in Budget deficits in his first five Budgets and another $123 billion in projected deficits in his last Budget. But at least Wayne Swan believed in a surplus. Bill Shorten and Chris Bowen are just playing politics with the national interest. They are completely reckless and irresponsible. Even worse than the Rudd and Gillard governments ...interrupted
LYNDAL CURTIS: Just for clarity, are things like grants to the States, grants for local government, payments for things like the chaplaincy program, they’re things you don’t need to legislate are they? They are the sorts of things you could look at.
MATHIAS CORMANN: Lyndal you can ask that question however many ways you like. We are not going to speculate today. All we are saying...interrupted
LYNDAL CURTIS: You’re just going to raise the general option but not say what, exactly what the result might look like if you go ahead with it.
MATHIAS CORMANN: What we are putting to you and to the Australian people is that if the Senate doesn’t allow us to fix the Budget in the way that was put forward in the Budget, because Labor right now is blocking, blocking nearly $40 billion in savings measures including $5 billion in savings measure they themselves initiated and banked in their last Budget ...interrupted
LYNDAL CURTIS: Although you’ve got an outcome on ...
MATHIAS CORMANN: ... So if you want any further evidence that Labor under Bill Shorten is playing politics with the national interest, look no further than the $5 billion in Labor savings that they are now blocking in the Senate. They are being reckless and irresponsible.
LYNDAL CURTIS: Although you’ve got Labor, you’ve been able to negotiate a deal on the Qantas Sales Act. Labor will support something like the change to the Family Tax Benefit, I think Part B threshold going from $150,000 to $100,000. So Labor’s supporting some of the things aren’t they?
MATHIAS CORMANN: Labor left behind a debt and deficit disaster after completely mismanaging public money over six years in government. We are taking responsibility to fixing up the mess they left behind. Instead of helping clean up the Labor mess, Bill Shorten is making things worse. He’s even more reckless and irresponsible than Kevin Rudd, Wayne Swan and Julia Gillard.
LYNDAL CURTIS: If I could go quickly to a couple of other matters. Under the Future of Financial Advice changes, under those rules, including the Palmer United Party changes, can a financial adviser providing general or individual advice get a form of payment, be it a commission, an incentive, a bonus or a top up for recommending a particular product or set of products that the person getting the advice does not know about?
MATHIAS CORMANN: They cannot receive any conflicted remuneration. All of the disclosure ...interrupted
LYNDAL CURTIS: Not in any case, not for general advice, not for personal advice...
MATHIAS CORMANN: Conflicted remuneration was banned. It is a ban that we supported. It continues to be banned. In our Regulations, we’re not suggesting that banks and others should not be allowed to sell product. We’re not suggesting that banks and others should not be able to pay their employees for providing services. What we are saying and what we have made extremely clear and put beyond doubt in our Regulations is that any such payment cannot be made in a form that conflict the advice given. That is explicit in our Regulations and in our improvements.
LYNDAL CURTIS: Should one of the options raised by the Financial Systems Inquiry yesterday of saying, calling financial advice ‘sales’ be taken up, to make it clear that distinction?
MATHIAS CORMANN: The definition in relation to general advice now is the exact same definition as existed under the previous government. Whatever recommendations the Financial Systems Inquiry puts forward we will obviously consider them the ordinary course of events and provide a proper and considered response. But the important point here is though, we have always supported the ban on conflicted remuneration. That ban remains in place, irrespective of the inaccurate and dishonest assertions that are made by the Labor Party at various times.
LYNDAL CURTIS: On carbon tax, if, when the carbon tax goes, how much will the economy grow, how many jobs will be created by getting rid of it?
MATHIAS CORMANN: The Parliamentary Budget Office showed in their pre-election costing that there will be a significant growth dividend from scrapping the carbon tax. They estimated that just the revenue impact for the Government on the back of stronger economic growth to be $1.1 billion over the forward estimates. If you get rid of the tax that reduces our international competitiveness, if you get rid of a tax that reduces the cost of doing business, if you get rid of a tax that helps business in Australia compete better with businesses in other parts of the world, they will be able to attract more investment and create more jobs and that is why we’re doing it.
LYNDAL CURTIS: And one final question very quickly because we are out of time. Will you at any stage move this week to gag debate on the carbon tax in the Senate?
MATHIAS CORMANN: What we see in the Senate right now is yet another Labor-Green filibuster... interrupted
LYNDAL CURTIS: Will you seek to bring it to an end, Minister?
MATHIAS CORMANN: We have not put any time management motions in place. These are matters for others. Right now, what we have said is we will continue this debate. We will persist with this debate until the carbon tax is gone. The Labor Party and the Greens want to continue to defy the will of the Australian people that is a matter for them.
LYNDAL CURTIS: Mathias Cormann thank you very much for your time.
MATHIAS CORMANN: Always good to be here.