Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 3 March 2015
MICHAEL BRISSENDEN: The Finance Minister Mathias Cormann joins me in the studio now.
MATHIAS CORMANN: Good morning.
MICHAEL BRISSENDEN: Good morning Senator Cormann. Business Council of Australia there warning against making savage cuts in this year’s Budget. In hindsight, do you look back at last year’s Budget and think now that you overstepped?
MATHIAS CORMANN: We agree with the Business Council that we need to look at the medium to long term trajectory. When we came into Government, the trajectory that we were on within the decade was $667 billion of Government debt and rising. As a result of the decisions that we have made so far, we have been able to bring that down by nearly $170 billion and Government debt falling beyond that. Our focus always has been and again will be in this Budget on the structural reforms which start low and slow, which build over time and which control growth in spending rather than imposing savage cuts.
MICHAEL BRISSENDEN: You heard Jennifer Westacott there though saying that she didn’t think you got the policy framework right. Is she correct?
MATHIAS CORMANN: With the benefit of hindsight and I have said this before, with the benefit of hindsight in last year’s Budget we tried to do too much at once. There is no doubt about that. Obviously that is part of the reason why we have gone through some of the debates the way that we have in recent months and some corrective action in relation to these matters has already been taken. The truth though is that what we have done so far and what we will continue to do in this year’s Budget is to get spending under control, to work on repairing the Budget over time because of our total commitment to strengthen the economy, create more jobs and ensure that help for families is sustainable and affordable into the future.
MICHAEL BRISSENDEN: Okay, presumably there is some corrective measures yet to come. I understand Cabinet obviously met last night and you have been discussing the GP co-payment – that is one thing. Is that about to be scratched?
MATHIAS CORMANN: The Health Minister has been conducting consultations with the medical profession and other stakeholders on how we can best protect Medicare for the long term, how we can best ensure that Medicare remains affordable for taxpayers over the medium to long term. Those findings were considered by the Government and will be considered by the party room this morning and no doubt there will be some announcements after that.
MICHAEL BRISSENDEN: Do you think that there is merit though as Jennifer Westacott says of taking it out of the political debate because clearly it was something that became a very hot political issue that a lot of people found very difficult?
MATHIAS CORMANN: Certainly, we are always interested in getting away from the politics and focusing on good public policy. The truth remains that the conversation that we need to have in Australia is how can we ensure that all Australians irrespective of their background and income can have affordable and timely access to high quality healthcare in a way that is also affordable for taxpayers over the long term in the context of an ageing population, in the context of growing demand for healthcare services. The question will need to continue to be asked and we will need to continue to engage in how best to ensure that that system is strong and sustainable over the long term for our children and grandchildren.
MICHAEL BRISSENDEN: Sure, this was a co-payment that was suggested, that wasn’t going to have an impact on the Budget bottom line to start with, it was going to fund the Medical Research Fund that you put in place. What happens to that if you don’t get the GP co-payment?
MATHIAS CORMANN: Again, the way you present that is not quite right, because what it was designed to do was to achieve recurrent efficiencies which were then saved into a capital fund with the returns, the net returns from that capital fund reinvested in medical research.
MICHAEL BRISSENDEN: Well that is how you sold it.
MATHIAS CORMANN: That capital fund reduces Government net debt. Having said all of this, there will be some announcements in the not too distant future about how we move forward. But the principle remains, the principle is that we are committed to protecting Medicare, we are committed to ensuring that vulnerable patients and pensioners, concession cardholders and the like can continue to have access to bulk billing arrangements. In order to ensure that we can do so in a way that is affordable for taxpayers we have got to continue to have a conversation about how efficient taxpayer resources can be deployed in the most efficient way possible.
MICHAEL BRISSENDEN: What about other measures? We understand that there’s also discussion about the six month waiting period for the dole. The BCA as you heard there said that was too harsh, a lot of people agreed that that was too harsh. Is that about to be scrapped too?
MATHIAS CORMANN: We’ve got a whole range of Budget measures in the social services space that are still in the Senate. As Scott Morrison the Minister has said everything remains on the table until it is replaced with something else. We are engaged in conversations and keen to engage with anyone in the Senate that is prepared to work with us on a package that can get the support in the Senate.
MICHAEL BRISSENDEN: Well, the Parliamentary Budget Office says that a $112 billion of savings are still stuck in the Senate and haven’t been passed. That’s not going to do much for the budget bottom line?
MATHIAS CORMANN: A lot of savings have passed. Only last night another $740 million …interrupted
MICHAEL BRISSENDEN: But you’ve got 112 that haven’t.
MATHIAS CORMANN: Last night another $740 million passed. Last sitting week $1.3 billion passed and that came on top of $10 billion from the mining tax repeal. The truth is that over the decade there is still a lot of work to be done. What the Intergenerational Report later this week will show is, one, the challenge that we face as a nation in terms of the cost pressures over the next few decades. It will also show how much progress has already been made and it will show that there is still quite a lot of work to be done and we don’t shy away from that.
MICHAEL BRISSENDEN: Okay, just finally. This Budget, you’ve already said, it’s going to be a family friendly Budget. Childcare is clearly going to be part of this Budget, commodity prices are falling, company tax receipts are falling, you’re going to spend money on childcare. Where are you going to find the savings?
MATHIAS CORMANN: The commitment that we have is that wherever there is new spending on higher priority areas, it has to be fully offset by reductions in spending in comparatively lower priority areas in the circumstances. That is the work that we’re currently doing, that’s what we’re focused on. Ultimately our objective is to pursue the policies that help strengthen growth, create more jobs, help families.
MICHAEL BRISSENDEN: Mathias Cormann thanks very much for joining us.
MATHIAS CORMANN: Always good to talk to you.