Senator the Hon Mathias Cormann
Minister for Finance
PAUL MURRAY: Well in terms of Tony Abbott's pre-election promises, those three word slogans, another one of them fell into place today. The Government can say that it's stopped the boats and in terms of axing the taxes that it has in its sights, it's done away with the carbon tax and today the mining tax died. Finance Minister Mathias Cormann joins me now, good afternoon Mathias.
MATHIAS CORMANN: Good afternoon Paul.
PAUL MURRAY: So Mathias tell us, who were the winners from this deal, axing the mining tax?
MATHIAS CORMANN: Australia is the winner because axing the mining tax will help us build a stronger economy, attract more investment and create more jobs. The mining tax was always a bad tax. It was complex, it was distorting, it was inefficient, it was costly to comply with, costly to administer and of course it didn't raise any meaningful revenue when the previous Government had already recklessly and irresponsibly spent all the money they thought it would raise and more on a whole range of unfunded promises.
PAUL MURRAY: Do you concede there are a plenty of losers as well? I mean, workers are going to have their superannuation increases, employers contributions delayed an extra seven years.
MATHIAS CORMANN: Firstly what is very important to understand here is the money we're talking about is people's own money. So increases in compulsory super contributions don't come out of thin air. They actually come out of people's own pockets. Bill Shorten when he was the Minister for Financial Services and Superannuation often used to say that super increases, which Labor legislated, would come out of people's wages. So the effect of what we've done today is that people will be able to keep more of their own money pre-retirement and decide for themselves whether they want to use that on paying off their mortgage faster or if they want to save it through increased superannuation savings voluntarily, attracting the taxation benefits that come with that. So that is really up to people themselves. The final point here is, our preference was to implement the mining tax repeal in the form as we put it to the Australian people at the last election. That was to get rid of the mining tax and all of the associated unfunded promises that Labor attached to it, with the exception of the increase in compulsory super. We were committed at the last election to delay increases in super by two years, but then go back to the original increasing trajectory. But Labor really, by taking such a negative and destructive attitude in the Senate really didn't leave us with any choice. We were committed to get rid of the mining tax because that is important to build a stronger economy. We were also determined to ensure we would continue to repair the Budget and that the repeal of the mining tax would not detract from our efforts to repair the Budget. The legislation that passed the Senate today was the best agreement that we could reach with the majority of Senators represented in the Australian Senate.
PAUL MURRAY: The reality, you know that most workers don't reach meaningful superannuation balances on the current rate of employer contributions and you've pushed that out an extra 7 years.
MATHIAS CORMANN: Again, the effect of that means that people will be able to keep more of their own money pre-retirement. Some people will use that to respond to increasing cost of living pressures, others will use it to pay off their mortgage more quickly and others again will decide to put that money into superannuation savings voluntarily. Up to the various concessional contribution caps that apply, people will be able to attract the lower concessional tax rate in relation to any money they decide, their own money they decide to put into superannuation savings. The Government hasn't decided today that people shouldn't be allowed to save more. What the Government has decided today is that we will not compel people to save more than the 9.5 percent that is currently in place until 1 July 2021. Look, at the end of the day, politics is the art of the achievable. We needed to achieve a majority in the Australian Senate. So we needed to make some compromises. If the Labor Party had supported the policy that we took to the last election, we would not be having this conversation today.
PAUL MURRAY: Yep. You achieved it because you got the Palmer United Party on side and clearly Clive Palmer personally is a big winner from the repeal of this tax. Was he directly involved in the negotiations to get the repeal done?
MATHIAS CORMANN: I don't know why you would say that he is a direct winner of this tax repeal. I think that all Australians are winners when you have a stronger mining industry and a stronger economy. We have negotiated the agreement that was endorsed by the Senate today, which is…interrupted
PAUL MURRAY: Mathias he's a direct winner because…interrupted
MATHIAS CORMANN: How?
PAUL MURRAY: Because he's a coal miner and the mining tax as structured now is payable by coal miners.
MATHIAS CORMANN: Paul, not a single coal miner around Australia has paid a single cent in mining tax. The mining tax that the Labor Party came up with was a complete fiasco. It is actually costing us money. Wayne Swan when he…interrupted
PAUL MURRAY: He's also an iron ore miner and they have paid the mining tax.
MATHIAS CORMANN: I'm not sure what Mr Palmer's individual tax arrangements are, but I would be surprised because I can tell you now that in year one, and you've got to bear with me here, Wayne Swan said the mining tax would raise $4 billion. Instead it raised 95 per cent less in pre-payments, $200 million. That $200 million under Labor's mining tax is being refunded now because of the deductions that Wayne Swan put into Labor's mining tax arrangements. Now the truth is that nobody has in actual fact being paying mining tax at all after all of the refunds have been processed and in the meantime, we are forced to keep paying for all these unfunded promises Labor attached to it. But the important point here is…interrupted
PAUL MURRAY: Mathias, you know that Clive Palmer has a direct conflict of interest. It's a simple question, was he directly involved in the negotiations for the repeal?
MATHIAS CORMANN: Number one I don't agree that he has a direct conflict. Number two, yes of course. He is a leader of a political party represented in the Australian Parliament. I personally negotiated on behalf of the Government…interrupted
PAUL MURRAY: With him?
MATHIAS CORMANN: Can I finish my answer? I negotiated with all crossbenchers. I negotiated with the Palmer United Party, with the Australian Motoring Enthusiasts Party, with the Liberal Democrats, with Family First and also had conversations with the Democratic Labor Party and with Independent Senator Xenophon. Now the truth of the matter is that the Palmer United Party and the Australian Motoring Enthusiasts Party have got four Senators represented in the Australian Senate. All sorts of people come into the Parliament with all sorts of backgrounds. Every single member of the Labor Party is a member of a union. I have never seen Labor Members and Senators not participate in legislation on industrial relations…interrupted
PAUL MURRAY: You've always said that was wrong….
MATHIAS CORMANN: Well actually…interrupted
PAUL MURRAY: But you have done a grubby deal here with Clive Palmer.
MATHIAS CORMANN: I totally disagree with that. What we have done today is deliver on the election commitment we took to the last election to repeal the mining tax and to continue to repair the Budget. We have achieved the best possible arrangements, the best possible legislation, the best possible consensus that we could achieve as a Government given the numbers in the Australian Senate and that is our responsibility. Our responsibility is to keep building a stronger economy, which repealing the mining tax will help us to do and also to continue to repair the Budget, which the $10 billion in savings over the current forward estimates that we've locked in will help us achieve and the $50 billion of savings over the next decade that the Australian Parliament has locked in today will help us achieve. So we are acting in the national interest and we are working with all Members and Senators represented in the Australian Parliament, duly elected by the Australian people as we must.
PAUL MURRAY: Why is the Schoolkids Bonus means tested? That would appear to only hurt your own supporters and you promised to axe it?
MATHIAS CORMANN: We are axing it from 31 December 2016, which means that it will stay in place on a means tested basis until after the next election. We went to the last election promising that we would axe it, but there wasn't majority support for that in the Senate, so we had to pragmatically make a decision on how much we could achieve, given the views of individual Senators represented in the Australian Senate. We did that today. We gave effect to a piece of legislation to repeal the mining tax and various unfunded promises attached to it and it received majority support in the Senate.
PAUL MURRAY: Okay, last question. Was your colleague Joe Hockey out of line today when he attached Premier Colin Barnett over WA's demands on the GST?
MATHIAS CORMANN: I'm actually not aware what you're referring to because I was not in the party room today. I was dealing with the mining tax repeal bill so I'm not aware of what you're referring to.
PAUL MURRAY: Okay, good to talk to you, thanks a lot.
MATHIAS CORMANN: Good to talk with you.