Senator the Hon Mathias Cormann
Minister for Finance
Date: Saturday, 21 February 2015
DAVID LIPSON: Now to the Finance Minister, Senator Mathias Cormann in Perth thanks for your company as always.
MATHIAS CORMANN: Good to be here.
DAVID LIPSON: The Federal Government is helping out with these twin disasters. To what extent?
MATHIAS CORMANN: We stand ready to work with the State Government in Queensland and the Territory Government in the Northern Territory to do what needs to be done and what is appropriate.
DAVID LIPSON: And will that include funding for reconstruction?
MATHIAS CORMANN: The Prime Minister is in the Northern Territory today. He will have something more to say about that later today. But there are established processes in place and the Commonwealth Government will work with the State and Territory Governments in the usual way as is appropriate.
DAVID LIPSON: The Productivity Commission last year looked at disaster funding and in its draft report in September recommended a reduction in Commonwealth funding from 75 per cent of reconstruction costs to 50 per cent of reconstruction costs. Is the Government considering that?
MATHIAS CORMANN: That is not something that is under active consideration at the moment. I don’t think it is a conversation for us to have today. I think it is something that may or may not be considered down the track.
DAVID LIPSON: Okay well let’s move on. The Australian newspaper today reports that military planners were stunned last year at a suggestion by Tony Abbott of a unilateral invasion of Iraq, 3,500 Australian troops to combat Islamic State terrorists. Is that report correct?
MATHIAS CORMANN: That story is wrong. The Prime Minister never sought such advice. May I say that my advice is that the journalist who wrote that story actually never put that proposition to the Prime Minister’s office when seeking comment. That the question that was put to the Prime Minister’s office was a much more general question about whether the Government would ever entertain the proposition of increasing our efforts in Iraq. In the context of such a question, you provide a very different answer.
DAVID LIPSON: So the Prime Minister never made, as far as you’re aware, any such suggestion when it comes to the Australian military and their involvement in Iraq?
MATHIAS CORMANN: The Prime Minister never sought advice as is suggested in the article in The Australian today, that’s right.
DAVID LIPSON: Okay, what about the other elements of the article, which claim that the Prime Minister’s Chief of Staff Peta Credlin acted at times as chair of the Expenditure Review Committee. Now you are in a very good position to confirm or otherwise that because you’re on that committee. Did she ever at times step in when the Prime Minister wasn’t there?
MATHIAS CORMANN: David, it never happened. As you say I am on the Expenditure Review Committee. I was at every single meeting of the Expenditure Review Committee since our election to Government and that just never ever happened. That is completely wrong. It is a complete fabrication.
DAVID LIPSON: It suggests that at times she was determining the agenda, deciding which Ministers would prepare reports.
MATHIAS CORMANN: The Prime Minister’s Chief of Staff has a pretty central role at the heart of the Government. But as far as the operation of the Expenditure Review Committee is concerned, the assertions made in the article, in The Australian today are wrong. I am on the Expenditure Review Committee. What is proposed in that story never ever happened.
DAVID LIPSON: Have procedures changed in relation to the way the ERC runs? Perhaps from the lead up to last year’s Budget compared to the lead up to this year’s Budget?
MATHIAS CORMANN: We have learnt a few lessons from the way the Budget process and putting the Budget together worked last year. The Prime Minister, the Treasurer and myself, we have all indicated that with the benefit of hindsight that it is clear that last year perhaps we bit off more than we could chew. There have been adjustments to the internal processes of Government, to make sure that we have the broadest possible range of advice, that there is systemic consultation in a more thorough way than perhaps that happened last year and onwards and upwards.
DAVID LIPSON: Has Peta Credlin, the Chief of Staff’s role changed as far as you are aware?
MATHIAS CORMANN: I am not here to provide a running commentary on the internal workings of the Prime Minister’s office. Let me say that the Government, and it is ultimately the Ministers in the Government from the Prime Minister down that are responsible for the performance of the Government, the Government is working very hard to do the best we can to put Australia on a stronger foundation for the future. We did make some significant progress in 2014. There were some issues, clearly, and we are working to address those issues to make sure we are doing an even better job this year.
DAVID LIPSON: The other claim in this report by John Lyons in The Australian is that two nights after the Budget last year, a meeting was held for the key players, drinks and thank yous and Peta Credlin, before Joe Hockey could say anything stood up and said quote “I stand by every measure in the Budget”. Did that happen?
MATHIAS CORMANN: That is just a ridiculous assertion. I was at that function. The three people that spoke at that function were the Prime Minister, the Treasurer and myself, in that order as you would expect. So I don’t know where that sort of stuff comes from.
DAVID LIPSON: You’ve denied the three key elements of this story I suppose. Is The Australian on some sort of crusade against the Government? What’s going on here in your view?
MATHIAS CORMANN: I am not a commentator on commentators. We have a job to do and that is to do the best we can to put Australia on a stronger foundation for the future. We give it our best every single day. The media has a job to do to scrutinise how we perform and do whatever the media does. I will not provide a running commentary on how the media does its job.
DAVID LIPSON: I suppose the issue here though is that it seems that there are now senior members of the Government, Ministers, not just backbenchers leaking against Tony Abbott and his office. Is his leadership sustainable?
MATHIAS CORMANN: We’ve just had a vote in the party room. The result was clear. From where I sit, everyone in the party, in the Government, in the party room has pulled back together and we’re all strong and united behind the Prime Minister and doing the best we can to do the job we were elected to do and that is to strengthen the economy, create more jobs, help families and make sure that our nation is safe and secure.
DAVID LIPSON: And I suppose the key of this report really goes to Tony Abbott’s judgement, particularly the suggestion about Iraq and an invasion there. Do you believe that the Prime Minister has good judgement?
MATHIAS CORMANN: I absolutely believe that the Prime Minister has good judgement and I absolutely believe that the Prime Minister is the best person to lead the Liberal party and to lead our country. The story in today’s Australian is wrong. The Prime Minister never sought the advice that it is alleged that he sought. The journalist never put the proposition to the Prime Minister’s office that is reported today about what allegedly the Prime Minister asked to be explored. So it is very hard to really comment in relation to something that actually, it never happened.
DAVID LIPSON: Okay, well let’s move onto some of the other issues that the Government is facing in the lead up particularly to the Budget in May. Suggestions today that the preservation age for superannuation, which is already been raised from 55 to 60, that’s when people can start accessing their super, should be actually raised all the way to 65. What’s the Government’s view of a suggestion like that?
MATHIAS CORMANN: The Government took a very clear policy to the last election and that is that we would not make any unexpected, adverse changes to superannuation policy and taxation arrangements. We stand by that commitment. We will be having a national conversation in the context of the tax white paper review process about how our tax policy settings might be able to be improved over the medium to long term. That will ultimately lead to some policy positions we take to the next election. But from where we sit right now, in this term of Government, we will stick to the commitments we made in the lead up to the last election and that is not to make any adverse, unexpected changes to superannuation.
DAVID LIPSON: What about on childcare then? We saw the recommendations from the final report out this week. Will the Government accept those recommendations, it certainly seems that you are at the very least amenable to them?
MATHIAS CORMANN: Scott Morrison is doing a lot of work right now in the context of putting our families package together. As we have already said publicly, the paid parental leave scheme is not proceeding in its initially announced form. But we will seek to redirect some of the resources that were going to go into that into better, more affordable childcare arrangements. As part of making sure that that is an affordable package that makes a tangible difference in terms of lifting workforce participation by women, we are having some conversations within Government now about how that can best be done.
DAVID LIPSON: And the pension this week, we also heard Scott Morrison sort of spruiking the idea of removing disincentives for people who want to downsize their homes to move into smaller, more manageable accommodation and still retain the pension and perhaps even draw on some of the proceeds of selling their home. Would that cost the Budget money, a measure like that? As I understand it, it may.
MATHIAS CORMANN: Let’s just be very clear again. The Government does not have any plans and is not considering any proposition to include the family home into the asset test for the pension. Moving on from that, there are a range of considerations when it comes to making sure that our pension arrangements are strong and sustainable over the medium to long term. As you work your way through those things you do consider what the fiscal implications are, what the costs and benefits are and that work is ongoing. The outcomes of it will form part of the Budget, which I’m not in a position to announce on your program this morning.
DAVID LIPSON: Oh come on. Alright, let’s look at submarines. Japan, Sweden and France are now going to compete to build these submarines in collaboration with the Australian shipbuilders ASC and the Defence Minister has already guaranteed as a result of that five hundred new jobs will be created. Should South Australia though have expected more jobs than five hundred, because before the election the Coalition said that the ships would be built in Adelaide.
MATHIAS CORMANN: Let’s see what happens at the end of the process. We are going through a competitive evaluation process, which will assess the comparative strengths and weaknesses of each potential option that is on the table. What is ultimately the most important thing with this is that we end up with the best possible submarines at the best possible price to deliver the best possible outcomes from a defence and national security point of view. In the lead up to the last election we believed that some of the assertions and some of the statements that the previous Labor government had made in the public domain about where they were at in terms of the procurement of the next generation of submarines were accurate. When we came into Government we found they weren’t. Over six years in government they did nothing to progress the procurement of the next generation of submarines. So contrary to what we thought before the last election, we had to start with a clean sheet of paper. The good news for South Australia is, whatever option ultimately proceeds, there will be more jobs for South Australia. Depending on what the framework is going to be, depending on what the ultimate way forward is that could be more jobs, or many more jobs. We’re keen to ensure that the Australian industry has a fair go, a fair opportunity to have a crack at this project and that is the way the process will play out over the next couple of months.
DAVID LIPSON: What’s your view now of ASC, the Adelaide shipbuilders? We heard this week that they haven’t really reached out to the Government since this competitive evaluation process had been announced. Should they have?
MATHIAS CORMANN: I have regular conversations with Bruce Carter, the Chairman of the ASC. I have visited the ASC, as has the Defence Minister. I’m very conscious of where the ASC is at, what the ASC want to contribute to this project. I’m very aware that the ASC is doing a good job in particular when it comes to the submarine maintenance program. I’m also aware that we inherited a few legacy issues when it comes to the air warfare destroyer project that are currently being addressed. From my point of view, I think the ASC is doing the absolute best it can to do the things that Government expects it to do.
DAVID LIPSON: Finance Minister, Senator Mathias Cormann we’ll leave it there. Thanks for joining us.
MATHIAS CORMANN: Always good to talk to you.