Senator the Hon Mathias Cormann
Minister for Finance
JOURNALIST: Joining us now is Mathias Cormann, Finance Minister. The mid-year economic update due tomorrow, financial year we are talking being mid-year right now. What will be announced tomorrow? Mathias thanks for joining us.
MATHIAS CORMANN: Good to be here, good morning.
JOURNALIST: Good morning.
JOURNALIST: So Minister it has been reported and basically confirmed by the Government that 175 government agencies will be axed tomorrow, how many jobs will that involve?
MATHIAS CORMANN: This is part of an ongoing program which we started when we came into Government last year, which is focused on making sure that the operations of Government are as efficient as possible, that we spend taxpayers’ money wisely and that we deliver services as effectively as possible for people across Australia. In the Budget we already indicated that the number of public servants across the Federal public service would be going down by about 16,500 over the forward estimates. Our intention is to bring the number of public servants back down to the level of the last year of the Howard Government. In the current environment where we are still in significant deficit, where we are continuing to borrow to fund our recurrent expenditure we just need to make sure that we get all of that under control.
JOURNALIST: Mr Shorten says you’re putting the brakes on too hard, too quickly at the moment and what you planned to do tomorrow and down the track and with some of the budgetary measures will in fact have a very bad effect on the economy.
MATHIAS CORMANN: He is wrong. What we need is stronger private sector growth. We are working very hard on implementing our strategy to build a stronger, more prosperous economy. We have been getting rid of some bad taxes like the Carbon Tax and the mining tax, which will help us boost investment and boost business because we will be more competitive internationally. We have been reducing red tape costs for business by about $2 billion already. We have been pursuing free trade agreements with China, Japan and South Korea. We have been making more than $1 trillion in new environmental approvals in order to ensure that projects come off the ground. We have been rolling out our record investment in job creating, productivity enhancing infrastructure. So all of these things are designed to boost private sector jobs growth. What we need to ensure when it comes to the public sector is that the public sector operates as efficiently and as effectively as possible and that there is no unnecessary overlap, duplication and waste and that is what we are focused on.
JOURNALIST: What do you think of the drop in oil prices will have? What effect will it have on the economy?
MATHIAS CORMANN: There are a range of developments. There are a range of global economic headwinds that are impacting on us here in Australia. The Australian economy has actually held up very well over the last year and we are very optimistic for the Australian economy into 2015. There are always a range of moving parts internationally that are not under our direct control. The most immediate impact of falling oil prices will be a fall in prices at the petrol pump, which I am sure your listeners will be quite happy about. But the most significant impact on our Budget bottom line when it comes to commodity prices has been the significant fall in the price of iron ore. At the time of Labor’s last Budget the price of iron ore was between $120 and $130 a tonne, it is now down to about $63 a tonne. 20 per cent of our export income in Australia comes from iron ore production so that is quite a significant impact for us.
JOURNALIST: The big four bank bosses are in the papers today saying your Budget problems and your Budget getting through your Budget are really starting to hurt the economy.
MATHIAS CORMANN: We don’t agree with that. From our point of view, we’ve got a clear plan to repair the Budget situation that we inherited. We did inherit a situation with $123 billion worth of projected deficits over the forward estimates. Government debt heading for $667 billion. We were put in a situation where we are forced to pay $1 billion a month in interest to service the debt the previous government left behind. But we are implementing a plan to address all that. Three-quarters of our Budget measures have gone through the Parliament. We’re in a much better position today than we would have been if we hadn’t made the difficult but necessary decisions we’ve made over the past twelve months.
JOURNALIST: Well it could be that the bank people consider the fact that there have been this blockade by the Labor Party and the Greens preventing the Budget things going forward that’s had the effect. Not what you’re tyring to do, but what they’re doing.
MATHIAS CORMANN: The Labor Party and the Greens are being quite reckless. They left behind the problem that we’re now dealing with and they have opposed most of the savings that we’ve put forward. We’ve got a situation right now, where the Greens are even opposing our proposal to reintroduce fuel excise indexation. Christine Milne right now is wanting to make us believe that she is in favour of regular reductions in the real value of the excise on fuel. That is a political position she’s taking and the Labor Party similarly. The Labor Party right now is opposing more than $5 billion in savings that they themselves initiated and banked in their last Budget. So you’re quite right, Labor and the Greens have taken a very destructive approach. But since 1 July, there is a new Senate, with a new crossbench. We need six out of those eight crossbenchers in order to get any particular measure through the Parliament. We have actually been able to get quite a bit through the Parliament over the last few months. The mining tax repeal, which comes with a saving over the forward estimates of about $10 billion and a $50 billion saving over the next decade. That went through. The carbon tax repeal went through. A whole range of other savings measures went through. The reintroduction of temporary protection visas went through the other day. So now that Labor and the Greens no longer have total control of the Senate there is an opportunity for us to get good policy through the Parliament.
JOURNALIST: Minister, Warren Entsch and Ian Macdonald are both quoted in the paper today saying they’re outraged at Mr Abbott’s allegations of sexism being behind the attacks on Peta Credlin. They say they’re going to go to the Whip. They’re going to make an official complaint. What’s your reaction to that?
MATHIAS CORMANN: I’m not a commentator on internal party matters. We’ve got a job to do. I’m focussed on the job I have, which is to work with Joe Hockey on repairing the Budget and implementing our strategy to build a stronger, more prosperous economy.
JOURNALIST: Do you agree with Mr Abbott that there is sexism within the Cabinet and that’s what’s led to these problems?
MATHIAS CORMANN: As I’ve just said, I’m not a commentator on internal party matters. As far as I’m concerned, my office and I work very closely with the Prime Minister’s Office. They are a very good office. They work exceptionally hard. They do the best they can everyday, as do all of us. I think all of us ought to focus on the job we have, which is to build a stronger, more prosperous Australia.
JOURNALIST: Why these problems then? Why has it emerged do you think?
MATHIAS CORMANN: Again, I’m not a commentator.
JOURNALIST: Alright thanks.
JOURNALIST: Wait, can I just go back to the GP co-payment? Yeah, ‘cause that’s also in the papers today. We should get a comment on that. The Doctor’s Reform Society says because of the rebate you have, are trying to introduce, eventually non-concession card holders will have to pay about $100 to actually go to the doctor. What’s your reaction to that?
JOURNALIST: Oh come on.
JOURNALIST: Well I’m asking the question, John Michael it is...
MATHIAS CORMANN: The challenge that we have as a nation, is to ensure that all Australians can have timely and affordable access to high quality health care. Making that access available in an affordable and timely fashion has also got to be affordable for the taxpayer in the medium to long term. The truth is, we do have an ageing population. We do have significant growth in demand for health care services. The expenditure on health has been growing faster than the economy and will continue to grow faster than the economy in the foreseeable future. We do have to ensure that the limited resources that we have available from taxpayers are allocated as efficiently as possible. So in that context, we don’t think it is inappropriate for non-concession card holders to make a contribution towards the cost of their health care. What we have proposed is a $5 co-payment at the discretion of the doctor. So it’s going to be doctor’s decision on whether or not to impose a co-payment and how much that co-payment will be, up to $5.
JOURNALIST: Alright Mathias, thanks for joining us.
JOURNALIST: Thanks very much.