Senator the Hon Mathias Cormann
Minister for Finance
Date: Wednesday, 3 September 2014
MATHIAS CORMANN: Yesterday the Senate helped the Government build a stronger, more prosperous economy and to repair the Budget. The repeal of the mining tax is good news for Australia. It will help attract more investment. It will help build a stronger economy. It will create more jobs. Yesterday, we were able to lock in more than $10 billion in savings over the forward estimates and about $50 billion in savings over the next decade. The question for Bill Shorten today is what will he do? Will he accept our savings or will he commit to keep the spending going over the long term. Will he commit to keep the Schoolkids Bonus going past 31 December 2016? Will he commit to keep the Low Income Super Contribution going? Will he commit to keep the Low Income Support Bonus going? Because if Bill Shorten doesn't commit to that today and he doesn't tell us today how he would pay for it, then all of his criticism so far is just noise, which doesn't matter and which is of no consequence.
JOURNALIST: Minister, under your policy, what's to stop employers from pocketing the money?
MATHIAS CORMANN: As Bill Shorten said when he was the Minister for Financial Services and Superannuation, increases in compulsory super come out of people's wages. Peter Martin from Fairfax made the very accurate point today that if the past trajectory in terms of increasing compulsory super had stayed in place, what it would have meant is a 0.5 per cent reduction in people's wages come 1 July next year. What we've done is in order to deal with the costs of the amendments that the Senate agreed to yesterday is, we've delayed further increases to compulsory super to 1 July 2021. That will leave people with more of their own money pre-retirement. People will be free to decide if they want to use that money to pay for cost of living expenses, to pay off their mortgage faster or to save it voluntarily through superannuation, taking advantage of the relevant tax concessions that are available.
JOURNALIST: Minister, as a Western Australian were you shocked by Joe Hockey's attack on Premier Colin Barnett in the Party Room yesterday?
MATHIAS CORMANN: Firstly, I was not in the Party Room yesterday. I was negotiating the final details of the mining tax deal. Secondly, I would never talk about what happens in the Party Room anyway. Thirdly, Joe Hockey and I have a very great regard for Colin Barnett who is an outstanding Premier for Western Australia. We will continue to work closely with Colin Barnett on issues of national and Western Australian interest.
JOURNALIST: So Minister, just back on my question then. So you've mentioned Bill Shorten, the Opposition Leader and his comments, but what's to guarantee that the workers will get all of that money in their pocket?
MATHIAS CORMANN: The guarantee is that not more money will come out of people's pockets. Instead of having another 0.5 per cent pay cut to pay for Bill Shorten's increase in compulsory super, what we'll get is the current rate of compulsory super staying at 9.5 per cent. The next increase to 10 per cent will not take place until 1 July 2021. What that means is that people, over that period, will keep more of their own money in their pockets to decide what they want to do with it. This proposition that somehow increases in compulsory super come out of thin air, they don't. Increases in compulsory super come out of people's pockets. When Bill Shorten was the Minister responsible for this area he made that point again and again. It was true then and it is true now. Bill Shorten is just doing what he always does ever since he has become the Leader of the Opposition. He is playing politics. He is putting politics ahead of the national interest. He has become completely irrelevant. Because the only way that we can achieve a public policy consensus in Australia now is by working with crossbench Senators. The Labor party and the Greens have become completely irrelevant in Australian politics today.
JOURNALIST: Minister by that logic then why are you putting in place an increase to 12 per cent by 2025?
MATHIAS CORMANN: We've said that we would support that increase. We have supported it phased in over a longer time period and of course we will get to the 12 per cent by 1 July 2025. But in the short term, over the short and the medium term, what it means is that people will keep more of their own money in their pockets now in order to make their own decisions on whether they want to use it to deal with increasing cost of living pressures, whether they want to use it to pay off their mortgage faster or whether they want to use it save more voluntarily through superannuation and take advantage of the tax concessions that are available there.
JOURNALIST: Coles has confirmed hundreds of job losses just in the last couple of minutes. This is a further blow to one of your key election promises isn't it?
MATHIAS CORMANN: Any job loss is always disappointing. But if you look at the record since the beginning of this year, employment growth has been very strong. Employment growth has been much stronger than over the same period the previous year. Of course what these sorts of examples show is how important it is that we continue to implement our agenda to build a stronger, more prosperous economy where everyone can get ahead. The decision by the Senate yesterday is a significant milestone in helping us achieve that stronger, more prosperous economy, but of course we still have more work to do. We have scrapped the carbon tax, we have scrapped the mining tax, we are building the roads of the 21st Century, we are engaging with our partners in the region in relation to trade deals in order to boost trade. All of these things are designed to build a stronger economy, create more jobs to ensure that the sorts of decisions that have been announced this morning can be absorbed in the wider economy.
JOURNALIST: It's a bit concerning isn't it that hundreds of jobs go from an industry and a company that is as strong as Coles?
MATHIAS CORMANN: At any one point in time new jobs are created and some jobs disappear. The key is to ensure that more new jobs are created than disappear. If you look at the record since the beginning of this year, employment growth in Australia has been much stronger than it was over the same period last year. When we came into Government in September last year, we inherited an economy growing below trend, we inherited growing and rising unemployment, we inherited low consumer confidence, we inherited business investment which had plateaued. We are working in an orderly and methodical fashion to turn that situation around and of course it is work in progress. We continue to do everything we can to build a stronger, more prosperous economy where everyone has a chance to get ahead. Thank you very much.
JOURNALIST: Can we just get a comment on the situation in Iraq just some ...
MATHIAS CORMANN: I'll leave that to Julie Bishop.