Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 28 October 2014
LYNDAL CURTIS: Welcome to Capital Hill, I am Lyndal Curtis. Now to another Government announcement today, the Automobile Association has called it "sneaky, tricky and gutless". That's the Government's move to get around Parliament for the time being, at least, and use tariff proposals to get an increase in fuel excise indexation. The Finance Minister Mathias Cormann made the announcement today and joins me now. Mathias Cormann, welcome to Capital Hill. Are you being sneaky, tricky and gutless by not having a mature debate in Parliament about this?
MATHIAS CORMANN: Not at all. We are doing what we said we would do all the way through, and that is focus on building a stronger, more prosperous economy and repair the Budget mess that we have inherited from our predecessors. This is a measure that we announced in the Budget back in May. All we announced today is revised implementation arrangements. The measure was obviously due to take effect on 1 August. 1 August has come and gone. We are now at the end of October and we were focused on making sure that what we announced in the Budget would take effect as soon as possible.
LYNDAL CURTIS: This will need parliamentary approval within 12 months. What convinces you that Labor or the Greens or other crossbenchers you may need will change their minds?
MATHIAS CORMANN: I am very confident after this measure has been in place for about 12 months that it will be validated by the Parliament.
LYNDAL CURTIS: Why?
MATHIAS CORMANN: The tax office and customs will now be able to collect the adjusted rate of excise and customs duty from 10 November onwards. The decision that Bill Shorten and Christine Milne will have to make, within 12 months, is whether they want to see that revenue that has been collected returned to fuel manufacturers and fuel importers or whether they want it invested for the benefit of economic growth into the future.
LYNDAL CURTIS: Isn't that, though, your political problem, they could argue they are in favour of lower taxes they want the fuel excise to go back down, and it is your problem that the consumers don't get their tax back?
MATHIAS CORMANN: Well, let's just see what happens. We have been very transparent in the Budget that as part of our strategy to increase investment in job creating productivity enhancing infrastructure we would reintroduce biannual indexation of the fuel excise. We have been very transparent about this. It will have a modest impact on households. A typical household using 50 litres of fuel a week will pay about 40 cents a week by the end of 2014/15. But it will have a very significant impact on our capacity to grow a stronger, more prosperous economy.
LYNDAL CURTIS: You found ways with the carbon tax to make sure that the cut to that was passed on to consumers. Could you not also find ways with this to make sure that the fuel companies passed their savings to consumers?
MATHIAS CORMANN: You are asking a hypothetical question based and a false premise. You are asking me what would happen if fuel excise indexation, which we have reintroduced, which we believe needs to be in place, which we believe the Parliament will validate within 12 months, you are asking me what will happen if it didn't.
LYNDAL CURTIS: You are operating on a hypothetical that it will be validated.
MATHIAS CORMANN: We are confident it will be validated. I can't think for one second that Bill Shorten, who has promised to repair the Budget mess Labor created more quickly than the Coalition, would want to give away $19 billion dollars in additional revenue over the next decade.
LYNDAL CURTIS: It is a hope isn't it? Not a certainty.
MATHIAS CORMANN: Bill Shorten has to make his own decisions. He has to show he has what it takes to repair the Budget mess that Labor left behind, that he was a part of creating, and obviously supporting within 12 months a validation of this very sensible and appropriate structural reform to the Budget would be a good start to that.
LYNDAL CURTIS: What happens or does anything happen with farmers and miners who get a diesel fuel tax rebate? Will they still get their fuel cost rebate?
MATHIAS CORMANN: What we will do is we will amend the necessary legislation in order to ensure that there is no impact, no negative impact on those that are eligible for the Fuel Tax Credit or the Clean Fuels Grant Scheme or the Ethanol Production Grants. So our objective is to ensure that essentially the status quo remains for them and that the full fuel excise and that the full fuel duty amount will be creditable or paid by way of...interrupted
LYNDAL CURTIS: That will need legislation and that will need to be legislated soon, if the excise is going up on 10 November?
MATHIAS CORMANN: Our intention is for it to be legislated by the end of the spring session. Fuel Tax Credits, for example, are claimed through the BAS statement and the next BAS statement after the change in fuel excise comes into effect will be due by 21 December. So our advice is as long as the legislation has passed by the end of the spring session there will be no impact at all on those that receive the fuel excise, the tax credit.
LYNDAL CURTIS: Why should the Senate agree to do this? To ameliorate a fuel excise that it wasn't going to approve in the first place?
MATHIAS CORMANN: This is about making sure that there is no negative impact on farmers, regional communities, mining businesses, transport, relevant transport businesses and the like. We are confident that there will be support for this in the Senate.
LYNDAL CURTIS: Are there any other Budget measures you can't currently get through the Parliament, say the GP co-payment, or your higher education changes, that could be done through regulation, or administratively?
MATHIAS CORMANN: As we have said all the way through, we are very focused on repairing the Budget mess that we have inherited. We are focused on delivering all our Budget measures because they are required to ensure that we protect our living standards and that we build opportunity and prosperity into the future.
LYNDAL CURTIS: So have you been looking at another way to get those things through?
MATHIAS CORMANN: Today we have announced revised implementation arrangements for the Budget measure in relation to fuel excise indexation. Obviously we are always looking at making sure that the Budget measures that Australia needs are implemented in the most efficient and effective way possible.
LYNDAL CURTIS: Are there other measures that could be done by bypassing Parliament at least for a time in this way?
MATHIAS CORMANN: It is not a matter of bypassing Parliament. What we are doing in relation to the fuel excise arrangements, we are exercising the authority Government has under the relevant legislation and Parliament will have the opportunity consistent with the legislation to validate that decision by Government within 12 months. Now, obviously in relation to a number of Budget measures, we are looking at how best to implement them. We are continuing to have conversations with relevant crossbenchers and party leaders representing crossbench senators and if we are in a position to make further announcements we will make them.
LYNDAL CURTIS: Mathias Cormann, thank you very much for your time.
MATHIAS CORMANN: Always good to be here.