Senator the Hon Mathias Cormann
Minister for Finance
DAVID SPEERS: As mentioned earlier, the Prime Minister moved to sure up his grip on the leadership. He had a Press Club speech here in Canberra today. He also signalled some policy shifts, most notably, the dumping finally of his generous Paid Parental Leave scheme. Handing the decision on Knights and Dames, yes they will stay, but handing the decision on who gets them to the Council on the Order of Australia. He then also signalled that there will be some policy changes targeting small business to offer them further tax relief on foreign investments to basically ensure there are stronger enforcements to the existing rules and also on Hizb-ut-Tahrir, the radical Islamic group that the Government hasn't been able to outlaw but clearly is concerned about. Joining me now is the Finance Minister Mathias Cormann, thank you for your time this afternoon.
MATHIAS CORMANN: Good to be back.
DAVID SPEERS: Can I start with the Paid Parental Leave scheme? It goes, but does the 1.5 per cent levy on big business stay?
MATHIAS CORMANN: So the detail of the families package will be released over the next few months. The principle that we will apply is that bigger businesses will be no worse off and smaller and medium sized businesses will be significantly better off as a result of the changes that we have announced today, that we will be making over the coming months.
DAVID SPEERS: But the line about business being no worse off, that was the line when you still had the Paid Parental Leave scheme right? Because they were going to get a company tax cut but then the levy was applied in its place, so they were no worse off. Why can you possibly keep the levy if you don't have the Paid Parental Leave scheme?
MATHIAS CORMANN: You are getting ahead of yourself. What we have announced today is that we are not proceeding with the Paid Parental Leave Scheme as we have previously announced it. That we will be prioritising an improved investment in childcare as part of our efforts to lift workforce participation and the detail of that will be announced over the coming months...interrupted
DAVID SPEERS: But this levy was specifically for the Paid Parental Leave scheme?
MATHIAS CORMANN: Yes and I understand why you are asking me the question. But the point I am making and the best answer I can give you today is that we will be announcing all of the detail of the families package when it is fully released. But the principle that we are working on is that bigger companies will be no worse off and that smaller and medium sized companies will be significantly better off.
DAVID SPEERS: Okay, but business already very worried about this. They didn't like this levy at all in the first place. Now you have got rid of what it was going to pay for. Can you understand that some big corporations already have their own paid – their own parental leave schemes that they bank roll themselves, now they could potentially still be paying a levy that is going to be spent on what, childcare.
MATHIAS CORMANN: The point that we've made today is that the Paid Parental Leave scheme that we took the last election is not proceeding. We are continuing though to roll out our agenda for a stronger, more prosperous economy, to create more jobs, to help families and to ensure that our nation remains secure...interrupted
DAVID SPEERS: That means getting rid of the tax burden, surely.
MATHIAS CORMANN: And of course a central part of all that is to continue with the work of Budget repair, getting our spending under control. Our instinct and our commitment always is for lower, simpler, fairer taxes. Indeed, for the lowest possible taxes given the circumstances that we have inherited from our predecessors. But as I have said to you, we will be announcing all of the detail when the whole families package will be released over the coming months.
DAVID SPEERS: What about small business? Now there is a suggestion from the Prime Minister that they will get at least a 1.5 per cent company tax cut. That is already meant to kick in from July. So could there be more?
MATHIAS CORMANN: We are working on putting the 2015-16 Budget together. That will be a Budget which builds on the progress that we made in 2014. Last year we were able to achieve stronger employment growth, we were able to achieve stronger economic growth on the back of scrapping the Carbon Tax, scrapping the mining tax, reducing red tape costs for business, signing up to three significant Free Trade Agreements with Japan, China and South Korea. We have started to roll out our infrastructure investment program. So the next Budget will be a continuation. We will build on the progress we have made last year and continue to focus on creating better opportunities for everyone across Australia to get ahead.
DAVID SPEERS: So could small business get a lower tax rate?
MATHIAS CORMANN: We will be announcing the Budget measures when we announce the Budget.
DAVID SPEERS: Would it be fair to pay for something like that through the levy on big business?
MATHIAS CORMANN: Let's not pre-empt the decisions that are yet to be made or yet to be announced. We are continuing to work through putting the 2015-16 Budget together in the orderly and methodical way that we go about these things. We will be making relevant announcements as part of the Budget.
DAVID SPEERS: You support foreign investment?
MATHIAS CORMANN: Very much so.
DAVID SPEERS: The Prime Minister said today the Government will shortly put in place better scrutiny and reporting of foreign purchases of agricultural land. Better enforcement of the rules on foreign purchase of existing homes. What is the problem at the moment?
MATHIAS CORMANN: We are committed to foreign investment. Foreign investment is in our national interest, but we are committed to foreign investment which is not contrary to our national interest. There are already certain rules in place today that are not adequately enforced. The previous government indeed was quite lax in relation to these matters. It is a matter of ensuring that there is appropriate transparency, appropriate scrutiny and that we are appropriately mindful of preventing any foreign investment which is contrary to the national interest. As a large country with a lot of potential, a small population, we will always rely on significant foreign investment to help us reach our full potential to grow the economy. But it is important to do it within the right framework.
DAVID SPEERS: How are people getting around the current rules, particularly with foreign purchases of existing homes. The big concern in Sydney is that it's a lot of Chinese buyers snapping up the property and pushing up the prices and they are often using, it is suggested, locals, Australian citizens, but the purchase is actually going to a foreigner.
MATHIAS CORMANN: It is very important to ensure that we have got access to the right information. Transparency is a very significant part of making sure that we can properly address any areas of concern.
DAVID SPEERS: Stepping back more broadly, there was no suggestion from the Prime Minister that you do need to slow down in terms of the pace of Budget repair. Do you acknowledge that has been a political problem for you? That voters are concerned about the speed at which you are trying to cut various things, take benefits away from them?
MATHIAS CORMANN: When we came into Government we came in with an agenda to strengthen the economy, to create jobs and to repair the Budget mess that we have inherited from our predecessors...interrupted
DAVID SPEERS: Then you did things people weren't expecting.
MATHIAS CORMANN: We always said in the lead up to the last election that we would have a Commission of Audit and that would provide some additional input into opportunities for Budget repair. Having said that the Prime Minister has also indicated in his speech today that a significant effort was made in last year's Budget and that this year we will not continue to repair the Federal Budget, the Federal Government's Budget, at the expense of household budgets...interrupted
DAVID SPEERS: So people don't need to worry about this Budget affecting them personally?
MATHIAS CORMANN: Our focus continues to be on making sure that Federal Government expenditure is put on a sustainable trajectory for the future, but significant efforts were made in last year's Budget and this year's Budget will be a continuation rather than another starting from scratch.
DAVID SPEERS: So the hard stuff was done in your first Budget? This one we are not going to see any surprise cuts?
MATHIAS CORMANN: There was a lot of structural reform in last year's Budget. Structural reforms can be difficult. Some of that structural reform debate is still ongoing in relation to our efforts to protect Medicare for the long term, in relation to our efforts to ensure that our universities are as competitive internationally as they can be and in terms of making sure that our investment in welfare support is as well targeted as possible.
DAVID SPEERS: Now, the leadership. The Prime Minister said that it is the Australian people who should hire and fire the Prime Minister. How does that leave you feeling as someone who actually under our system should have that right?
MATHIAS CORMANN: The Prime Minister has my strong and unequivocal support and I believe he has the overwhelming support of the party room. We did go to the last election with Tony Abbott as our leader and with a strong agenda to build a stronger, more prosperous economy, create more jobs, to ensure Australia is safe and secure and it is incumbent on all of us now to continue to get on with implementing that agenda in the national interest.
DAVID SPEERS: But should it be the party room who decides who the leader is?
MATHIAS CORMANN: The party room does decide who is the leader is. The point is that we did decide who the leader should be... interrupted
DAVID SPEERS: But not according to Tony Abbott. He says once elected Prime Minister, it is up to the Australian people.
MATHIAS CORMANN: The point I was making is, we did decide who the leader should be in the lead up to the last election. We went to the last election with Tony Abbott as our leader. The Australian people elected Tony Abbott as their Prime Minister and really it is now incumbent on us to stop focusing on ourselves and to start again focusing totally and completely on doing the best we can to put Australia on a stronger foundation for the future.
DAVID SPEERS: And do you think the Australian people want Tony Abbott as Prime Minister right now?
MATHIAS CORMANN: Tony Abbott is leading a Government which has had to make some difficult but necessary decisions to put Australia on a stronger foundation for the future. That comes with a price, it comes at a cost. There is no doubt that over the last few months we have had some difficult times. But as the Prime Minister rightly pointed out in his speech today, you don't make a difficult situation better by making it more difficult. All of us need to focus on the job at hand. The Prime Minister today gave a strong speech. He put forward our priorities for 2015, building on the progress we made last year and all of us should now get behind him and deliver the best possible outcomes for Australia.
DAVID SPEERS: Finance Minister Mathias Cormann thank you.
MATHIAS CORMANN: Always good to talk to you.