Senator the Hon Mathias Cormann
Minister for Finance
Date: Saturday, 18 October 2014
DAVID LIPSON: G’day, welcome to the program, I am David Lipson. It is six months since the Budget was handed down and there are still more than $28 billion in savings being held up in the Senate. And though the House of Representatives returns next week, the crucial Senate has only three sitting weeks left before the summer break. The Government insists it hasn’t given up the fight but each day that passes equates to savings lost. And Labor which along with the cross bench is blocking the savings even claimed this week, rather flippantly; it could deliver a surplus sooner than the Coalition. Here is Bill Shorten with David Speers earlier this week:
DAVID SPEERS (EXCERPT): When will we get back to surplus? When do you think we should get back to surplus?
BILL SHORTERN (EXCERPT): Well we are more likely back to surplus under a Labor government than this current mob.
DAVID LIPSON: The Finance Minister Senator Mathias Cormann joins me now from Perth. Thanks for your company today.
MATHIAS CORMANN: Good to be here.
DAVID LIPSON: Is Bill Shorten right?
MATHIAS CORMANN: He’s dreaming. I mean the Labor Party has not delivered a surplus in Australia for 25 years. The problem that the Labor Party has today is that Bill Shorten is an economic girlie man. He doesn’t have what it takes to repair the Budget mess that they have left behind. He doesn’t even have what it takes to get Labor to support their own savings, savings that they themselves initiated and banked in their last Budget in government under Julia Gillard and Kevin Rudd. The truth is that the Labor caucus rolled Bill Shorten, forced Bill Shorten to oppose Labor’s own savings. So what hope do we have for Labor under Bill Shorten’s leadership ever to repair the Budget? Because if Bill Shorten is now telling us that he will bring the Budget back into surplus more quickly given that he is starting from way behind on the back of opposing our Budget savings measures to a large degree, well he really has to tell us what he is going to do? Where is he going to cut deeper? Where is he going to increase taxes in order to not only make up that ground, but to get into surplus more quickly. We can’t take what he says seriously in any way, shape or form.
DAVID LIPSON: Labor is blocking the savings or some of the savings it took to the election and that is reprehensible, but you are trying to legislate some things that you specifically ruled out before the election as well, for example cuts to higher education. Is that any better?
MATHIAS CORMANN: We are not doing anything that we ruled out before the last election. Before the last election we said we would keep the same funding envelope in place for health and for education as was in place at the time of the last election and we are. What we are doing is we are ensuring that we are putting in place the necessary efficiencies to ensure that, for example, access to high quality health care, timely and affordable access to high quality health care, remains sustainable and remains affordable for taxpayers over the medium to long term. In higher education we are working very hard to ensure that students across Australia can have access to the best possible universities and that the universities are given the best possible opportunity to be responsive to student needs, to be responsive to the needs of the economy and to be responsive to the needs of the Australian labour market as it evolves from time to time.
DAVID LIPSON: Well it is not just Labor of course blocking these savings measures, it is also the Palmer United Party. And it has been reported that you met with Clive Palmer for a couple of days this week in Queensland as part of a sort of charm offensive. How are negotiations going with the leader of the Palmer United Party?
MATHIAS CORMANN: The first point I would make is that there is nothing new about me having conversations on behalf of the Government with Mr Palmer. We have been doing so ever since the Senate changed on 1 July this year. Mr Palmer is the leader of a political party which has got three Senators in the Australian Senate. He has got an alliance with another Senator from the Australian Motoring Enthusiasts’ Party. We need six Senators in order to get any legislation through and given that Labor and the Greens are putting politics ahead of the national interest, of course we’ve got to have conversations with Mr Palmer and other Senators on the crossbench in relation to our Budget measures. Now what I would say is that I’ve found Mr Palmer very good to deal with. He’s clearly an impressive individual. He is, unlike Labor and the Greens, unlike Bill Shorten and Christine Milne, he is focussed on engaging constructively with the Government around finding common ground on some of the structural reforms that Australia needs in order to put ourselves on a stronger foundation for the future.
DAVID LIPSON: Have you not found him to be somewhat erratic? Because that seems to be the reputation that he’s gained here in Canberra for you know, saying one thing and doing something pretty different within weeks.
MATHIAS CORMANN: Look at the outcomes. Up until 30 June 2014, we were not able to get any of our important economic reforms that we had taken to the last election through the Senate. The Senate controlled by Labor and the Greens until 30 June this year blocked our commitment to scrap the carbon tax, blocked our commitment to scrap the mining tax. Both the carbon tax and the mining tax are now gone. We’ve been able to deliver about $50 billion in savings by getting rid of the unfunded promises that Labor had attached to their failed mining tax. Most of the Budget has gone through the Parliament. Most of the Budget has gone through the Senate. What we’re now talking about are structural reforms, many of which don’t take effect until 2015, 2016, 2017 and even beyond. We’ve got a four year plan in our Budget and we’re implementing it, we’re pursuing those measures in the Parliament in a sequential and prioritised way as is entirely rational for us to do.
DAVID LIPSON: Clive Palmer’s been adamant that he won’t support co-payment, a GP co-payment in any form. He’s also not a fan at all of the changes to university funding and arrangements there as well. What about the fuel excise though? Have you had any progress in discussions there?
MATHIAS CORMANN: Let me just reconfirm again, the Government remains committed to all of the Budget measures that we delivered in May. We’re pursuing implementation of all the Budget measures and we’re having conversations with relevant crossbenchers represented in the Senate, in particular, the leader of the Palmer United Party, Mr Palmer in relation to all of these measures. So we are continuing to pursue our policy to introduce a price signal when it comes to accessing medical services and that is because we want to ensure that access to medical services remains affordable and sustainable over the medium to long term. We continue to pursue important reforms to our higher education system and we’re continuing to pursue our policy to reintroduce indexation of the fuel excise in order to ensure that the real value of the excise on fuel keeps pace with inflation and doesn’t continue to fall on an ongoing basis.
DAVID LIPSON: But is that the next cab off the rank, I mean to me it seems like a no-brainer, you know that saving, it is still being blocked though by the Greens and Labor and no sign off light or an opening from Clive Palmer there either.
MATHIAS CORMANN: It is a completely unbelievable situation that the Greens under Christine Milne’s leadership now are standing for a policy which leads to regular reductions in the real value of the excise on fuel. It just shows you to what degree Christine Milne and the Greens are putting politics ahead of the national interest, to what degree they’re putting politics ahead of their own convictions. This is not about what the Greens believe in, this is about playing politics in the Senate and trying to exercise power for the sake of power, rather than to do what is right.
DAVID LIPSON: Okay, so do you still stand by then the Budget estimate that the Government could wipe off $20 billion from the deficit by the time, by the end of the financial year because Joe Hockey has said that the Budget will take a hit and we’ll see that in MYEFO. But does that sort of deficit reduction still stand?
MATHIAS CORMANN: We’ve made significant progress when it comes to repairing the Budget mess that we’ve inherited from the Labor Party. But having said that, since the Budget was delivered there have been a series of events that were not predicted at the time of the Budget. We’ve had to boost investment in our national security, $630 million in additional expenditure on national security. We have become engaged in global efforts in Iraq and that comes with a cost. There has been some impact from delays in Budget savings, not as significant as people might think but there have been some impacts. And yes, everybody knows that commodity prices have fallen much deeper, much more significantly than what was predicted at Budget time. But having said all of that, at any one point in time in any Budget there are movements up and down in various parts of the Budget and we do have an orderly process to provide updates on the state of the Budget and the next update on the state of the Budget will be the Mid-Year Economic and Fiscal Outlook to be released in December.
DAVID LIPSON: Okay well we have got some pictures here of the Foreign Minister Julie Bishop meeting with the Russian President Vladimir Putin in Milan at the ASEM Summit which was held there. She was seeking assurances on the crash site of MH17 and it seems she did get some sort of assurance from the Russian President despite the comments that were fairly robust you would have to say from the Prime Minister Tony Abbott that he would ‘shirtfront’ Vladimir Putin at the G20 in Brisbane next month or later this year. Could all this chest beating Minister actually derail or at least overshadow in any way the Agenda that is set down for the G20?
MATHIAS CORMANN: No, I think that the Prime Minister’s comments were entirely appropriate. They reflected the mood of the nation given the terrible events from earlier this year when Russian-backed rebels shot down a plane with 38 Australians on it. But of course what we want Mr Putin to do is we want Mr Putin to use his influence to ensure that those that are guilty of what happened there are brought to justice. And we want Mr Putin to use his influence to help ensure that there is appropriate further access to the crash site. As Foreign Minister Bishop has said, we do believe and Malaysia and our friends in the Netherlands believe that it would be useful for one more access to the crash site and these are all matters which need to be resolved and Mr Putin should be exercising his influence in order to make that happen.
DAVID LIPSON: And he has given an assurance that he will do that. How seriously does the Government take an assurance like that from President Putin?
MATHIAS CORMANN: Let’s see what happens. I’m not going to provide a running commentary. Obviously it is good that he has given that assurance and we would like to see that that is followed through.
DAVID LIPSON: Okay and just finally, the Good Weekend in Fairfax papers today has a feature article on Arthur Sinodinos. It has been seven months now since he stepped aside from the Assistant Treasurer role. Are you still confident that he will become Assistant Treasurer again?
MATHIAS CORMANN: Yes I am. Everything is running according to what was said back in March. Arthur Sinodinos is a very good man. He himself made the decision to step aside from the Assistant Treasurer role while there is an ICAC investigation ongoing, in which he is participating as a witness. Obviously as soon as the ICAC inquiry has reported, that is the time when Arthur Sinodinos will hopefully be able to come back and assume his responsibilities as Assistant Treasurer.
DAVID LIPSON: Finance Minister Mathias Cormann, thanks so much for your time today.
MATHIAS CORMANN: Always good to talk to you.