ABC 774 – Drive with Rafael Epstein

Senator the Hon Mathias Cormann
Minister for Finance






Prime Minister’s address to the National Press Club, leadership, families package

RAFAEL EPSTEIN: The Minister for Finance is Senator Mathias Cormann. Senator thanks for joining us.

MATHIAS CORMANN: Good to be here. 

RAFAEL EPSTEIN: Just a brief one, was it perhaps unfortunate to call the Victorian and Queensland election results “absentmindedness”? 

MATHIAS CORMANN: The Prime Minister’s speech stands by itself. It was a strong speech by a strong Prime Minister. He presented our priorities for 2015 to strengthen the economy, to create more jobs, to help families, to maintain our national security and it is a speech that is very much built on the progress that we made in 2014. 

RAFAEL EPSTEIN: Did he do enough to stop the restive backbench?

MATHIAS CORMANN: We have got a job to do. All of us need to focus on the job at hand, which is to build a stronger, more prosperous economy, to ensure everyone across Australia has the best opportunity to get ahead. We didn’t get elected to talk about ourselves. So from here on in it is very important that all of us focus on the task at hand. 

RAFAEL EPSTEIN: Do you think he did enough though? I mean, whether or not his arguments are right or wrong, the arguments didn’t seem to be very new to me so did he do enough? It is clear that people in the party want change. 

MATHIAS CORMANN: The Prime Minister was very candid today, talking about the fact that we have had a couple of difficult weeks and indeed months. But he also made the point that you don’t improve on a difficult situation by making it more difficult. The truth is we were elected 16 months ago or so, with a strong agenda to build a stronger, more prosperous economy. We have a strong team with a strong Prime Minister and it really is incumbent on all of us to focus on the job we were elected to do.

RAFAEL EPSTEIN: I am not so sure being strong worked for Campbell Newman. He used the word “strong” a lot, it didn’t work for him. Is it a sign that you need to change your message in some way? 

MATHIAS CORMANN: Our job ultimately is to do the best we can to put Australia on a stronger foundation for the future. At times that does involve making difficult, but necessary decisions. There is no doubt that we can do better and that we must always work on doing things better than we have been doing them in the past. That is what we are committed to doing. 

RAFAEL EPSTEIN: I will get onto policy in a moment. But I do want to ask you, have any Liberal MP’s talked leadership change with you? 

MATHIAS CORMANN: No. As far as I am concerned, Tony Abbott is our leader. He has got my strong and unequivocal support and I am very confident that he has got the overwhelming support of the party room. 

RAFAEL EPSTEIN: Okay so no Liberal MP raised leadership change with you? 

MATHIAS CORMANN: No MP has said to me that we should change leader, that is right. 

RAFAEL EPSTEIN: Can I ask you about childcare? Clearly the PPL money, the money raised for that is now going to childcare. I just wonder if that is internally, logically consistent? I thought your own National Commission of Audit had identified the childcare payments as one of the fastest growing Government payments which seemed to me to be the sort of thing you would not want to add to. Why add to one of the fastest growing areas of expenditure? 

MATHIAS CORMANN: I think you are mixing up a few different things here. Firstly, yes childcare, the way it is currently structured is one of the fastest growing areas of expenditure but it is also an investment which helps us lift workforce participation, which helps us lift economic growth, which ultimately helps us lift Government revenue and helps us lift opportunity and jobs for people across Australia. Now one of the structural economic challenges that we have as a nation is the fact that with an ageing population we do have falling workforce participation and there is a lot of work to be done to ensure that we can encourage and retain more women in the workforce. More women participating in the workforce will help add to our GDP. Now the Productivity Commission which enquired extensively into all of this has come forward with some recommendations on how existing childcare policy settings can be improved and that will also involve an additional investment seeking to boost economic growth so that we can boost opportunity for everyone across Australia.

RAFAEL EPSTEIN: Let me ask you another question, because I think, perhaps one of the issues might be a lack of clarity from the Government with the GP co-payment. Again, the National Commission of Audit identified hospitals as one of the fastest growing, it is one of the fastest growing areas of government spending, that is a direct quote from the National Commission of Audit, yet you targeted GP payments and the money didn’t go into the Budget. Isn’t one of the issues, that your own arguments aren’t consistent?

MATHIAS CORMANN: Actually the Commission of Audit recommended a $15 GP co-payment, so I think you are selectively quoting with all due respect. Our objective when it comes to Medicare is to protect Medicare for the long term. What we have said very clearly is that we will ensure that vulnerable patients, pensioners, concession card holders and the like, will continue to have access to bulk billing, but for those of us who can afford to pay a little bit when we access a medical service, why shouldn’t we be required to help make a contribution towards the cost of accessing a medical service. That is through a price signal, through a value signal as the Health Minister has indicated before. It is a matter of making sure that Medicare remains sustainable over the medium to long term, because over the last decade it has been growing well ahead of inflation, well ahead of revenue, well ahead of the size of the economy. It is projected to continue to grow faster than inflation, faster than revenue is growing and faster than the size of our economy is growing. We used to spend about $8 billion on Medicare about 10 years ago, we are spending $20 billion now, we are on track to spend $34 billion by 2024. It is really a matter of making sure that we get the balance right, that we ensure there is access to bulk billing for vulnerable patients, but that those of us who can afford to make a contribution are asked to make a small contribution to ensure that Medicare continues to be strong and available over the long term. 

RAFAEL EPSTEIN: 1300 222 774 is the phone number, Mathias Cormann is the Finance Minister, Senator from WA in the Coalition, one of Tony Abbott’s key Ministers. I’ll get to your calls in a moment. Senator, do you think that consistency has been a problem? There have been many iterations of the Medicare co-payment. What you said to me before about childcare was wrapped up in a paternity leave scheme before, now it’s wrapped up in childcare. The fact that the Government’s plans have changed over time, one thing before an election, something else after. Is that one of the significant problems or not?

MATHIAS CORMANN: There is consistency in what we are trying to achieve. When it comes to Medicare, we want to ensure that Medicare is strong and sustainable over the long term so that our children and grandchildren can continue to have the benefit of a strong Medicare. When it comes to the economy, we have long identified that we need to lift workforce participation by women, we need to lift workforce participation in the context of an ageing population, which is also why we need to convince Australians to work longer. We are engaged in a conversation with the Australian people about specific proposals to deal with some of those challenges and through the democratic process, there are adjustments along the way. That is democracy at work. But fundamentally, the focus in terms of what we need to do in order to put Australia on a stronger foundation for the future, to protect living standards and to build better opportunity for the future, that focus is entirely consistent all the way through. 

RAFAEL EPSTEIN: We will see what everyone makes and what judgment they make of it. Thank you for your time. 

MATHIAS CORMANN: Always good to talk to you. 


Senator the Hon Mathias Cormann, Minister for Finance, Perth