Senator the Hon Mathias Cormann
Minister for Finance
Date: Wednesday, 3 September 2014
JANINE PERRETT: Hello there, I'm Janine Perrett. I'm going to get right into it tonight because we have a special guest, a very busy man and a very happy man I would say after getting rid of his number one enemy the dreaded mining tax. Western Australian Senator and the Federal Minister for Finance, Senator Mathias Cormann joins me from Parliament House in Canberra. Welcome to the show Senator.
MATHIAS CORMANN: Good to be here.
JANINE PERRETT: I know you are under time constraints so I'm just going to say you must be a very happy man today. Not only you personally as a Western Australian Senator, you have campaigned long and hard against this tax, but also a much needed win for the Government and your second deal with Clive Palmer.
MATHIAS CORMANN: I'm very happy for Australia, because getting rid of the mining tax yesterday will help us build a stronger economy and create more jobs and of course getting rid of all of the unfunded promises that Labor recklessly and irresponsibly attached to this failed tax will help us press on with repairing the Budget mess that we've inherited from Labor. So it was a good day yesterday.
JANINE PERRETT: It was a good day and the Prime Minister said with glee that this tax had cost us many millions in lost investment, was a disaster, lost us thousands of jobs. So Senator can you tell me does that mean that as of now we will have a lot of investment coming into the mining sector, millions coming back and it will create thousands of jobs, 'cause the tax is gone?
MATHIAS CORMANN: There is no doubt that getting rid of the mining tax will help us attract more investment, will help us create more jobs and will put the mining industry on a stronger footing for the future. There is absolutely no doubt about that. That is exactly why we got rid of this very bad tax.
JANINE PERRETT: So it's not the end of the mining boom now that the mining tax is gone, the boom's back on or not quite yet?
MATHIAS CORMANN: You're mixing up a few concepts here. I'm sure that you know what you're doing.
JANINE PERRETT: I'm being mischievous.
MATHIAS CORMANN: In order for Australia to be able to take advantage of all of the opportunities that present themselves, in order for us to successfully compete in the pursuit of international investment into Australia, we have to put ourselves into the best possible position. Under the previous government, the previous government put more and more lead into our saddle bag. We are taking lead out of our saddle bag so that we can be more successful again in the race for international investment into Australia.
JANINE PERRETT: Well as you successfully argued for many years any impost on the mining industry was a disaster for that industry and Australia, yet we've seen Colin Barnett threaten to lift royalties which is exactly what a mining tax would've done, put more taxes on them. Are you against that then?
MATHIAS CORMANN: You're actually completely misquoting me and verballing me there. I have never said that any impost on the mining industry is bad. What I've said is that given the taxation arrangements already in place in Australia, with company tax on profits and royalties on production, that there was no need for another complex, ill-thought-out distorting tax like the mining tax. Because the more profitable a mining company is in Australia, the more company tax they pay. The more of our non-renewable resources they extract out of the ground the more mining companies pay in royalties. So Wayne Swan, the Labor Party was always completely misguided.
JANINE PERRETT: Okay, just so I don't verbal you then. Alright just so I don't, I'll just correct that then. So you don't have a problem then with Western Australia increasing royalties on the miners?
MATHIAS CORMANN: The level of royalties is appropriately a matter for the great state of Western Australia in relation to West Australian royalties. From my point of view, as a general comment, I would always say that in Australia, if we want to be as successful as we can be, if we want to continue to grow our economy as strongly as possible, as policy makers, we've always got to be mindful that our taxation arrangements ought to be internationally competitive. We need to ensure that we've got the balance right between ensuring an appropriate return for the community, while also making sure that we continue to grow what is an important industry for Australia's ongoing economic success.
JANINE PERRETT: You talked about the great State of Western Australia, been in the news this week, they're handling of their economy. Do you think the great State of Western Australia deserves to get a bigger share of the GST income?
MATHIAS CORMANN: Janine, I've been asked this question many times. My good friend Colin Barnett is an outstanding Premier for the great state of Western Australia. I work with him very closely on matters of national and Western Australian interests. Obviously it is very appropriate for him to make the strongest possible argument for Western Australia as the leader of the Western Australian Government. As Finance Minister in the national Government I have responsibilities to consider all of the legitimate perspectives from different States across Australia. And of course whatever we do on the tax front will have to be considered in the context of the Tax Review White Paper and will be considered in the lead up to the next election. But whatever we do on the policy front when it comes to tax has of course got to be nationally sustainable and fair.
JANINE PERRETT: Do you think Colin Barnett runs a responsible Government that's responsible with its Budget because reports this week claim that your colleague Joe Hockey questioned them and that there was seems to be a difference of opinion.
MATHIAS CORMANN: Never believe everything you read in the newspaper Janine, that would be my first point. Joe Hockey and I hold Colin Barnett in very high regard. Both of us work with him closely on important matters of mutual interest in the public interest and of course we will continue to do so. From my point of view as a Western Australian citizen I am very happy with the performance of the West Australian State Government and I think that Colin Barnett as I said earlier is doing an outstanding job as Premier. I hope that he will continue to serve as Premier for Western Australia for many years to come.
JANINE PERRETT: And this doesn't put you at odds with Treasurer Joe Hockey? No he is not being slapped down?
MATHIAS CORMANN: Not at all.
JANINE PERRETT: Okay.
MATHIAS CORMANN: Not at all. Joe Hockey is a very good friend of mine. We work very closely. Obviously he is the boss, the leader of the economic team in the Abbott Government. I'm working very closely with him and we are on the exact same page when it comes to these matters.
JANINE PERRETT: Well just on that about the economic team. It has been noted, I always ask you this question that you are down one leg, an Assistant Treasurer. You're having to do two jobs. This has dragged on for months. There seems to be no sign of any outcome of ICAC. When will you replace Arthur Sinodinos? Or reinstate him? How long can you go at this crucial time? It has been noted with the Budget and important it is; you're stretched. Perhaps another able hand would come in handy.
MATHIAS CORMANN: Well I don't feel stretched, I am enjoying the job I am doing and I am doing the best I can in the responsibilities that the Prime Minister has been kind enough to give me. As far as I am concerned, obviously there are some issues that are still to be resolved and as soon as they are, we are looking forward to Senator Sinodinos resuming his position. But in the meantime it is not right to say that we don't have an Assistant Treasurer, I am the Assistant Treasurer and unless you're saying that I am not doing a good job...interrupted
JANINE PERRETT: No, I think you're doing a fabulous job. I think you're stretched. In fact personally I would say given Senator Sinodinos' evidence to ICAC and his abilities as far as being a director, it would be far better if you kept the job. You can obviously do without him.
MATHIAS CORMANN: Senator Sinodinos is a great contributor, he is a great public servant in Australia, he has got a great track record as an amazing servant to Australia over many many years, all the way back to his many years as the Chief of Staff to one of if not the most successful Prime Minister in the history of the Commonwealth. There is lots that Senator Sinodinos will be able to contribute in the years to come.
JANINE PERRETT: I think you're doing the job. You talk a lot about productivity, you're leading by example there Senator Cormann. Anyway, let's move on. Today the Senate Financial Services Inquiry was announced. This grew out of the CBA scandal. It seemed initially that no one in the Government were overly keen on another inquiry. Do you welcome this or do you think it's not necessary?
MATHIAS CORMANN: I think you're getting a bit ahead of yourself here Janine. Again, you shouldn't believe everything that you read in the newspaper and John Durie is not usually a very good source on these matters. What Senator Dastyari has done today is give notice, a notice of motion in relation, essentially to a follow up inquiry. I am entirely relaxed about a follow up inquiry to the past Senate inquiry into the performance of ASIC to monitor how for example CBA performs in implementing the things that they said they would implement to deal with legitimate issues, outstanding issues for victims of past decisions, recommendations, by financial advisers. We of course will cooperate and work with that inquiry as we always would.
JANINE PERRETT: You've made a good point that it has just been proposed. We have all jumped the gun assuming it will. But you're quite okay if it does go ahead?
MATHIAS CORMANN: Well it will go ahead, because the Government will not stand in the way of it going ahead because as I have said I am entirely relaxed. What I said a few months ago is that I didn't think it was appropriate to initiate a Royal Commission into the Commonwealth Bank. That I thought it was more appropriate to give the Commonwealth Bank the opportunity to fix the issues that were identified by the previous Senate inquiry. The Commonwealth Bank I have to say has done a very good job in the last month or so in putting together the Open Advice Review Program which they announced about a month ago now and various other decisions in terms of appointing independent panels and so on. So from my point of view...interrupted
JANINE PERRETT: Just because we are running out of time, I just quickly want to ask you two quick questions. Recently David Murray came out and warned in his inquiry that he was concerned about confidence among financial advisers and that he might have to put in tougher recommendations because of it. That's hardly an endorsement of your recent FOFA changes is it?
MATHIAS CORMANN: I don't think it has anything to do with that at all. I completely agree with the proposition that we need to continue to lift professional ethical and education standards across the financial advice industry. A lot has been done in recent years and more will need to be done and we will continue to work with all stakeholders to do so. But to suggest that more red tape is always the answer and will necessarily lead to better outcomes is not true. Bad additional red tape just pushes up the cost of advice for no additional consumer protection benefit and none of us should support that.
JANINE PERRETT: Very last question. You've now got your major roll backs back. The FOFA legislation you got through, you got rid of the Carbon Tax, you got rid of the mining tax. Time to move forward as the PM said. What's your main priority in both your jobs?
MATHIAS CORMANN: Our priority continues to be what it has been all the way through and that is to repair the Budget mess that we have inherited from our predecessors. We're continuing to work in an orderly and methodical fashion, in a sequential and prioritised way in ticking off one Budget measure after the other and we will continue to do so as we have been ever since we delivered the Budget in May.
JANINE PERRETT: Okay, I am glad you are moving forward. The past is behind us now. You will be feeling better about that mining tax. We will have nothing to argue about anymore. We will have find something.
MATHIAS CORMANN: Always looking forward to that. I will be back.
JANINE PERRETT: You will be! Thank you very much Mathias Cormann.