Senator the Hon Mathias Cormann
Minister for Finance
PATRICIA KARVELAS: And what a remarkable political weekend it has been. And the repercussions of the historic swing against the LNP in Queensland are still being felt by the Abbott Government. Today at the National Press Club, Tony Abbott said he will relinquish his so called captain’s picks.
PRIME MINISTER [EXCERPT]: I just want to make it clear that all awards in the Order of Australia will henceforth be entirely a matter for the Order of Australia Council.
PATRICIA KARVELAS: He also confirmed that the Federal Government would be dropping its paid parental leave scheme, instead channelling that money into childcare. What impact will this have on the Budget and leadership. Joining me now to discuss this and more is Finance Minister, Mathias Cormann. Welcome to RN Drive.
MATHIAS CORMANN: Good evening Patricia. Good evening to your listeners.
PATRICIA KARVELAS: Thank you. Thanks for joining us. The speech was billed as one that would save the Prime Minister’s political skin. Has it done that?
MATHIAS CORMANN: It was a strong speech by a strong Prime Minister about our priorities for 2015, to strengthen the economy, to create more jobs, to help families, to maintain our national security and to build on the progress we made in 2014. It was also a very candid speech. It was timely.
PATRICIA KARVELAS: Let’s move to the leadership. The Prime Minister has said it’s the people who hire and fire the leader. Do you agree with that?
MATHIAS CORMANN: It is the people that hire and fire Prime Ministers... interrupted
PATRICIA KARVELAS: But isn’t it up to the party room? We live in a Westminster system, the party room decides the leader.
MATHIAS CORMANN: Indeed and the party room decided on the leader that we went to the last election with. We are sixteen months in from the last election... interrupted
PATRICIA KARVELAS: So does that not mean that the party room is also entitled to sack the leader, if the leader is underperforming?
MATHIAS CORMANN: But that is not what should happen right now. We are ... interrupted
PATRICIA KARVELAS: Should it happen at all before the next election?
MATHIAS CORMANN: My very strong view is that Tony Abbott is a strong leader, is a strong Prime Minister. We took a strong agenda to the last election with Tony Abbott as our leader. Tony Abbott should have the opportunity of taking us to the next election to be accountable for our performance in our first term and to take our second term agenda to the next election.
PATRICIA KARVELAS: I’ll ask it in another way. Are there any circumstances at which you think that the Liberal Coalition party room, the Liberal party room, is entitled to sack the leader if the leader is underperforming?
MATHIAS CORMANN: I’m not going to go into hypotheticals. My point is ... interrupted
PATRICIA KARVELAS: It’s not hypothetical, it might happen.
MATHIAS CORMANN: I’m just telling you my view. My very strong view is that we should all support Tony Abbott, who is a strong leader, a strong Prime Minister, who took us to the last election when we were successful after a comparatively short period in opposition. We went to the last election with a strong agenda, which we are continuing to implement. We are not in a circumstance, in my view, where the party room should be entertaining a change in leadership.
PATRICIA KARVELAS: But are they entitled to? I’m interested in your views about the convention. Are they entitled to change the leader?
MATHIAS CORMANN: The leadership is something that ultimately is determined by the party room. The point is that the party room determined our leadership in the lead up to the last election. The Australian people elected us, elected Tony Abbott as Prime Minister. In the lead up to the next election we ought to be accountable for our performance as a Government, the Abbott Government. We ought to be putting forward our agenda for Australia into the future.
PATRICIA KARVELAS: Okay, let’s move to Knights and Dames, which is how the latest speculation around the leadership all began last week. I’m sure it was a day that’s marked in your mind forever. The Prime Minister has said that he will no longer make any captain’s picks over Knights and Dames, but the backbench already, Andrew Laming has said he is going to push for a Private Members bill. Warren Entsch another backbench MP has said he will support the bill. How can they be undermining the Prime Minister within hours of his speech? That’s quite remarkable isn’t it?
MATHIAS CORMANN: I don’t believe that they are undermining the Prime Minister…interrupted
PATRICIA KARVELAS: But they said they were going to have a Private Members Bill which overrides his decision he has announced today.
MATHIAS CORMANN: Backbench Members of Parliament in the Liberal Party are entitled to take certain courses of action. In the Liberal Party we are not some sort of Stalinist organisation, where individual members are not entitled to their views and indeed would not be entitled to take action consistent with their views.
PATRICIA KARVELAS: But Mathias Cormann, clearly their views are that the Prime Minister did not move far enough today. They wanted him, well at least these two MPs, and I am sure there are others, wanted him to dump Knights and Dames as a concept, to get rid of it, but he didn’t.
MATHIAS CORMANN: I don’t agree with your characterisation. The Prime Minister today made certain announcements. He listened, he learned and he took action. He made very clear that in future these sorts of honours would be determined by the Order of Australia Council…interrupted
PATRICIA KARVELAS: So does this mean there will be an open vote on this? A conscience vote? Anyone can vote how they want on this Private Members Bill?
MATHIAS CORMANN: No. The Government is the Government and there is a process. At all times individual Members of Parliament are entitled to take action consistent with their own views. Having said that, it is important that we all start focusing on...interrupted
PATRICIA KARVELAS: If I can just get clarity on this, will there be a conscience vote? A free vote on Knights and Dames on this Private Members Bill?
MATHIAS CORMANN: You are getting way ahead of yourself. I’m not focused on Knights and Dames, I’m focused on what we need to do to help build a stronger, more prosperous economy, to create more jobs, to help families and to ensure that Australia remains safe and secure. That is what I am working on. That is my job as part of the economic team to continue to work on. I am supporting the Prime Minister strongly and unequivocally and I believe the Prime Minister has the overwhelming support of the party room... interrupted
PATRICIA KARVELAS: On RN Drive, I am speaking with Finance Minister Mathias Cormann. Mathias Cormann were you surprised that backbench MP’s would be undermining the Prime Ministers decision within hours of that announcement?
MATHIAS CORMANN: I don’t agree with your characterisation. I believe…interrupted
PATRICIA KARVELAS: Well they are disagreeing with him, I can’t see it any other way.
MATHIAS CORMANN: Disagreeing with somebody on a particular issue is not…interrupted
PATRICIA KARVELAS: But he is the Prime Minister, he isn’t somebody, he is the Prime Minister.
MATHIAS CORMANN: You are entitled to your view. I don’t share your view. My view is that the Prime Minister has the overwhelming support of the party room. In relation to this particular issue, he has announced some changes today. I believe that those changes will be welcomed across the party room. Now individual Members of Parliament are entitled to their view.
PATRICIA KARVELAS: Let’s move on to another issue, here is what Mr. Abbott had to say today about the Paid Parental Leave Scheme.
TONY ABBOTT [EXCERPT]: I accept that what’s desirable is not always doable, especially when times are tough and budgets are tight. The Productivity Commission has said, and as mums and dads right around Australia have reminded me, the focus really does have to be on childcare if we want higher participation and a stronger economy. So that bigger Paid Parental Leave Scheme is off the table.
PATRICIA KARVELAS: Now business says you must dump the levy on big business that went with that Paid Parental Leave Scheme, that levy of 1.5 per cent. Will you dump it?
MATHIAS CORMANN: The Government will announce the details of the families package over coming months and that includes the related funding arrangements. The principle that we will be working with is that in relation to company tax arrangements, large businesses will be no worse off and small and medium sized companies will be the big winners.
PATRICIA KARVELAS: Isn’t business entitled to some certainty about this levy? If you are leaving it open to the Budget, that is months of uncertainty.
MATHIAS CORMANN: I don’t agree with you again. There is an orderly process to be followed. Like every year we are working on putting the 2015-16 Budget together and like every year the Budget is released on the second Tuesday in May.
PATRICIA KARVELAS: Alright well the 1.5 per cent levy on big business was on this basis that it was a workplace entitlement, this is Paid Parental Leave, that it was part of workplaces should be offering all of their female workers. Is childcare a workplace entitlement? Why should big business be funding it potentially?
MATHIAS CORMANN: I think you’re slightly shifting the emphasis. What we’ve always said is that the Paid Parental Leave Scheme that we put forward was part of our efforts to help lift workforce participation by women, to help build a stronger, more prosperous economy. What the Prime Minister has announced today is that the Paid Parental Leave Scheme that we put forward is off the table. That we are prioritising an additional investment in childcare instead, as part of our efforts to lift workforce participation by women and build a stronger economy. The detail of all of that will be announced over the coming months and ultimately will be reflected in the next Budget.
PATRICIA KARVELAS: This was the absolute signature policy for the Prime Minister, he’s taken it to two elections, it’s been 18 months of Government all the time sticking to the policy in the most strong terms. Do you regret that you didn’t dump it earlier?
MATHIAS CORMANN: He has spoken to a lot of people over the Christmas break. He has reflected on this and other matters and having the benefit of, in particular, the Productivity Commission Review into how best to improve childcare arrangements, he has come to the view that was part of his announcement today.
PATRICIA KARVELAS: Will there be more cuts in the May Budget? Obviously the cuts have been hurting since last Budget. Will there be more cuts in this Budget or are you going to move away from that strategy?
MATHIAS CORMANN: We inherited a very challenging Budget position from our predecessors and in last year’s Budget we put forward a significant number of structural reforms, which will continue to work their way through. In next year’s Budget, as the Prime Minister indicated today, the emphasis will be on making sure that we get back to surplus by offsetting any new expenditure by reductions in lower priority areas but not by repairing the Federal Budget by targeting household budgets.
PATRICIA KARVELAS: On a couple of specific policies: on higher education reform, how will you progress on deregulation? Are you still going to move forward on this?
MATHIAS CORMANN: Absolutely. It is a very important reform. It’s very…interrupted
PATRICIA KARVELAS: But this has been one of the things that has been quite unpopular with the public.
MATHIAS CORMANN: I disagree with you. It’s a very important reform to ensure that our universities are as competitive as they can be internationally, that we’ve got universities that are world class, that our students can have access to the best possible university education. In the lead-up, just before Christmas, Christopher Pyne was able to persuade four out of the six cross-bench senators we need to support our reforms. We need to persuade two more and that work is continuing.
PATRICIA KARVELAS: And on another policy I haven’t heard much about recently so I need to ask somebody. There was a policy that people on the Newstart Allowance, the Dole, do not get it if they’re under 30 for six months. Is that now off the agenda?
MATHIAS CORMANN: That is well and truly outside my area of responsibility…interrupted
PATRICIA KARVELAS: Do you have a view about that one, it’s $1.2 billion over the Forward Estimates.
MATHIAS CORMANN: I’m not a commentator, I will encourage you…interrupted
PATRICIA KARVELAS: No, you’re a minister.
MATHIAS CORMANN: Indeed, I’m not a commentator and I encourage you to talk to the Minister for Employment, Senator Abetz, in relation to these matters.
PATRICIA KARVELAS: Final question, how do you respond to these rumours that haven’t been dampened, that’s for sure, that Queensland Coalition Backbencher, Mal Brough, has been urged to challenge to sort of create the environment where a spill is created in the Liberal Party.
MATHIAS CORMANN: I’m not a commentator on rumours. Nobody has raised that with me…interrupted
PATRICIA KARVELAS: Well Mal Brough hasn’t denied it when it’s been put to him.
MATHIAS CORMANN: Nobody has raised that with me. As far as I’m concerned, I support the Prime Minister strongly and unequivocally and I believe he has the overwhelming support of the party room.
PATRICIA KARVELAS: Mathias Cormann, Finance Minister, thank you so much for joining me on RN Drive.
MATHIAS CORMANN: Always good to talk to you.
PATRICIA KARVELAS: Thanks so much.