ABC 936 Hobart Mornings with Leon Compton

Senator the Hon Mathias Cormann
Minister for Finance


Date: Tuesday, 3 February 2015

Youth unemployment, GP co-payment, Budget, Families package, Leadership

LEON COMPTON: Well Tony Abbott stood in front of the Press Club yesterday, justified his continued leadership of the country and talked about his agenda for 2015. Of course, still questions about the May Budget delivered by a first term Government. Questions around its fairness, a question that we continually ask on Mornings. Given that the north west of this State, Brett Whiteley’s seat has the highest youth unemployment in the country and then in the lead up to the election, Brett Whiteley was arguing the issue was the lack of jobs. Does the Government continue to justify the idea that they will cut unemployment benefits for under 30s into the future. Mathias Cormann is the Federal Finance Minister. Minister good morning to you.

MATHIAS CORMANN: Good morning.

LEON COMPTON: Brett Whiteley in Braddon has the highest youth unemployment in the country. Is it fair to cut the dole for people under 30 there who lose their job?

MATHIAS CORMANN: What is fair is to work on building on a stronger, more prosperous economy so that everyone has got the best possible opportunity to get a job and get ahead including the young people across Braddon. 

LEON COMPTON: And so that would be the challenge for the Government of creating jobs there. Your policy seems to argue in fact that it is the unemployed who are the problem. That they just shouldn’t be entitled to any unemployment benefit if they lose their job, they don’t have kids and they are younger than 30. Are you planning to stick with that policy?

MATHIAS CORMANN: Our policy is to get everyone into a job that is able to work. That is our policy. Our policy is to create more jobs, to create better opportunities, to put Australia on a stronger foundation for the future. We inherited a very challenging situation. When we came into Government, the economy and the Budget were heading in the wrong direction. We have been working very hard to turn that situation around, to ensure that young people, families, older Australians, all Australians end up with better opportunities for the future.  

LEON COMPTON: Mr Cormann, I suppose the question essentially is do you think it is fair to deny unemployment benefits to people under 30 who lose their job, particularly in a place with chronic youth unemployment issues?

MATHIAS CORMANN: Again, the fairest thing that we can do is to do everything we can to build a stronger economy, to make sure that everyone who wants to work can work. What is fair to ensure that our generation today doesn’t live at the expense of our children and grandchildren. That we don’t fund our lifestyle today by borrowing from our children and grandchildren, because that was the situation we found ourselves in after six years of bad Labor Government.

LEON COMPTON: I am not sure you have answered the question. Do you think it is fair to young people to cut access to the dole?

MATHIAS CORMANN: Young people who are able to work should work. We don’t want to have a culture where people go straight from school onto the dole. We want a culture where people, young people either are earning or learning. There are a whole range of very important protections in place for vulnerable young people, for young people with family responsibilities and the like. But it is very important that in Australia we don’t end up with a culture where people think it is appropriate to just move straight from school onto the dole. What we want to do is create better opportunities for everyone across Australia to get ahead, in particular to create better opportunities for our younger Australians.

LEON COMPTON: And so you will be sticking with that policy? That is written in stone?

MATHIAS CORMANN: We are continuing to progress implementation of all of the measures that were in the Budget. That is where we are at.

LEON COMPTON: You have abandoned a lot of those measures though. Is this one that you plan to stick with?

MATHIAS CORMANN: We haven’t abandoned a lot of measures. We have made some adjustments to some measures and that is the normal thing to happen as part of the democratic process.

LEON COMPTON: Can we talk about the idea that your policies to some people create the impression you see rather than an intergenerational issue, an inter-class issue in this country, that poor people are a threat to rich people when it comes to the nation’s finances. I sight your Medicare policy I suppose, designed to send a price signal to poor people to go to the doctor less.

MATHIAS CORMANN: That is actually wrong. I completely reject the assertion that you have just made. This is not about rich people versus poor people. This is about making sure that we protect Medicare for the long term. This is about making sure that vulnerable patients can continue to have access to bulk billing when they visit the doctor, but that those of us who can afford to make a small contribution when accessing a medical service do so. At the end of the day medical services do not come free. When you go to a GP it is not a costless service. It is, at present, in the context of bulk billing arrangements, paid for wholly and totally by the taxpayer. The proposition that we’re putting forward is that bulk billing should be maintained and protected for pensioners and concession card holders, children. But when it comes to those of us who are able to make a small contribution towards paying for the cost of that service, then why shouldn’t we be required to do so?

LEON COMPTON: The Australian Council of Social Services made some interesting suggestions in terms of helping the Federal Budget a week or so ago. They suggested amongst other things, getting rid of negative gearing. It inflates the cost of housing and it overwhelming benefits the rich. It’s worth billions to the economy. Will you consider it?

MATHIAS CORMANN: We will be considering all the submissions being brought forward by all organisations and stakeholders that put forward submissions as part of the Budget process. But let me just say here again, we’re not going to get into this class warfare type rhetoric that you seem to be suggesting this morning, of rich people versus poor people. The truth is when people invest in generating income, then it is an established principle in our taxation system that you’re able to deduct the cost of investing to generate that income, subject to appropriate conditions. I’m not going to make ad hoc statements today, responding to particular suggestions. We will continue to review all of the propositions that have been put forward to us. There will be a tax white paper review process this year as well, which will look at our tax system more broadly. But the key here is to ensure that we give ourselves the room to have lower, simpler, fairer, more efficient taxes and to facilitate stronger growth, which in turn will generate stronger revenue for Government.

LEON COMPTON: The Prime Minister announced yesterday he would abandon the paid parental leave scheme. That was to be funded by a 1.5 per cent tax on the largest companies in Australia. I think the Business Council out this morning saying, well if you’re not going to do the PPL, we’re don’t want to pay the extra tax. Finance Minister what is going to happen to that 1.5 per cent tax that was proposed? 

MATHIAS CORMANN: As we stated very clearly yesterday, the paid parental leave scheme is off the table, but the details of our families package is yet to be announced. That will happen in the next few months in the lead up to Budget. At that time we will be providing all of the detail of the related funding arrangements. But the principle we will be working on is that big businesses will not be any worse off and that small and medium sized businesses will be the big winners.

LEON COMPTON: So what does that... so you’re saying you don’t know yet what happens to that 1.5 per cent that was proposed to go onto large companies.

MATHIAS CORMANN: I couldn’t be any more clear. What I said explicitly and very clearly is that we are yet to make that announcement and that announcement will be made in the next few months in the lead up to the next Budget.

LEON COMPTON: It’s been interesting to look at some of the major banks and their expectations of as much as half a per cent cut in interest rates over the course of this year. How do you see the issue as the Reserve Bank gets ready to meet? What are you expecting as you try and set sails for the prevailing financial winds in Australia.

MATHIAS CORMANN: The Reserve Bank is independent and makes its decisions independently, based on its analysis of the economic circumstances and it is appropriate that the Reserve Bank does exactly that.

LEON COMPTON: On the leadership issue, as far as you’re concerned, is the leadership issue now at rest after the Prime Minister’s speech to the Press Club yesterday?

MATHIAS CORMANN: The Prime Minister gave a strong speech yesterday. He set out our priorities for 2015 to strengthen the economy, to create more jobs, to help families and to maintain our national security. The agenda that he laid out for 2015 very much builds on the progress that we made in 2014. From my point of view it is now time after the events of the last week that all of us focus on the job at hand, which is to implement our agenda for the benefit of the Australian people.

LEON COMPTON: Look without wanting to dwell too much on the polls, I mean they certainly suggest at the moment you make a decision to stick with this Prime Minister and you become a one-term Government. What are you going to do differently if you are not going to change the leader to turn the perception of your party around at the moment?

MATHIAS CORMANN: The next election is still more than 18 months away. Last year as you indicated as well we’ve had to make some difficult, but we would say necessary, decisions to put Australia on a stronger foundation for the future. That is not always popular. We will need to continue to explain better what we are doing and why and why what we are doing is necessary if we want to protect our living standards and build better opportunity for the future. But from where I sit, Tony Abbott is the best person to lead the Liberal party, he is the best person to lead the country and he is the best person to take us to the next election.

LEON COMPTON: Good to talk to you this morning, we appreciate you coming on.

MATHIAS CORMANN: Always good to talk to you.