Senator the Hon Mathias Cormann
Minister for Finance
Date: Thursday, 19 March 2015
FIONA ELLIS-JONES: To politics now, the Federal Government’s senior economic Ministers met last night for the second successive night as the Abbott Government continues to work on its second Budget. Yesterday the Prime Minister was promising a dull and routine Budget, saying that there would be no repeat of the harsh savings measures introduced last year. Well, at the same time the Government has reportedly been considering calling an early election. For a review from the Government’s economic engine room this morning, we are joined now by the Finance Mathias Cormann, he is speaking to Marius Benson.
MARIUS BENSON: Mathias Cormann, good morning.
MATHIAS CORMANN: Good morning Marius.
MARIUS BENSON: You were part of the Expenditure Review Committee last night. Was it a late night?
MATHIAS CORMANN: They are always very good meetings. It was a good meeting.
MARIUS BENSON: Can you say whether it was late?
MATHIAS CORMANN: Well that’s all relative. It was a good meeting.
MARIUS BENSON: How much of the Budget is now settled?
MATHIAS CORMANN: We have made quite a bit of progress, but there is still a bit more work to be done.
MARIUS BENSON: Could you be a little more precise?
MATHIAS CORMANN: The Budget will be delivered on the second Tuesday in May. By then it will all be done.
MARIUS BENSON: Excellent. The Government spent more than a year speaking of a Budget emergency and a debt and deficit disaster. Is the Budget emergency now over and if so, when did it end?
MATHIAS CORMANN: When we came into Government, we inherited a weakening economy, rising unemployment and a Budget position that was rapidly deteriorating. The economy now is strengthening, jobs growth is strengthening and the Budget position is improving. We did make...interrupted
MARIUS BENSON: Unemployment is up.
MATHIAS CORMANN: The number of jobs in the economy has grown at three times the rate of the year before. It is still not growing strongly enough to absorb the effect of population growth, but we have created in the economy in the last year, about 600 jobs a day which is three times the rate of the year before. So we are heading in the right direction. We are making progress. There is more work to be done, but we just have got to keep at it.
MARIUS BENSON: So the Budget emergency is over?
MATHIAS CORMANN: We have certainly made a lot of progress over the last year. We have been able to reduce the Government net debt growth trajectory by half...interrupted
MARIUS BENSON: Sure but all that talk of an emergency, is it still appropriate to talk about an emergency? Is the emergency finished?
MATHIAS CORMANN: We did inherit an emergency, but we have addressed it. We have got a plan to deal with it and over the last 18 months we have made significant progress. We were heading under the previous Government’s policy settings to about 122 per cent of Government net debt as a share of GDP within a few decades and we have already been able to bring that down by half. We have got further to go in order to ensure that our spending and our debt is under control but we are on track.
MARIUS BENSON: You have stressed the need to return to surplus and the Prime Minister however now says he is happy with the Intergenerational Report projection which shows you come close surplus, close to being in the black in 2019-20 and then you dip back down into deficit. Are you now content, you the Government now content with deficit for decades?
MATHIAS CORMANN: That is not what the Prime Minister said. The Prime Minister pointed out that we have made a lot of progress and of course we understand that we have more work to do and we are focused on that. Moving forward, clearly we need to ensure that government expenditure on important benefits and services are sustainable and affordable in the economy over the long term. That continues to be our focus. But the key is that over the last 18 months, significant progress has been made. Is there more work to be done? Yes of course. But we can continue to focus on that work now in an orderly and methodical fashion moving forward.
MARIUS BENSON: Obviously everyone would prefer to be in surplus. But is it now the Governments position that you are content with deficit for decades?
MATHIAS CORMANN: No it is not. The government is committed to getting back into surplus as soon as possible. We obviously have a plan to get there as soon as possible. But what we are saying is that we inherited a very challenging situation, we inherited a Budget position that was rapidly deteriorating, we inherited a situation where Government spending as a share of the economy was heading for 37 per cent and where the Government deficit was heading for 12 per cent as a share of the economy. We have been able to reduce the deficit trajectory by half already. There is more work to be done, but we are now heading in the right direction.
MARIUS BENSON: This talk of a double dissolution, were you one of the Ministers who shared dinner with Tony Abbott on Monday night when it was reportedly discussed?
MATHIAS CORMANN: I was quite bemused by those stories. I have not been part of any meetings where there were any such discussions about double dissolution elections. We are focused on doing the job we were elected to do. We are getting on with it. Our intention is to serve our full term. There is a job to be done and I am not quite sure where all of that came from.
MARIUS BENSON: Were you at that Monday night dinner?
MATHIAS CORMANN: I am in a lot of meetings, but I can tell you that I’ve not been in any meetings where any such proposition…interrupted
MARIUS BENSON: But it was specifically said that it was at this Monday night dinner. Were you at that dinner?
MATHIAS CORMANN: I’m telling you I have not been in any meetings where… interrupted
MARIUS BENSON: Can you not say that you were at the dinner?
MATHIAS CORMANN: I’ve been at a range of dinners and a range of meetings. I am not going to go into the specifics of my diary with you Marius. But what I am saying to you is that I haven’t been in any meeting where any such discussion about a double dissolution election has taken place.
MARIUS BENSON: What if the Budget goes down well? Will you consider something then or are you prepared to guarantee there will be no early election?
MATHIAS CORMANN: What I am prepared to tell you is that we have a job to do. We are focused on the job of putting Australia on a stronger foundation for the future, to strengthen the economy, create more jobs, help families, ensure our nation is safe and secure and our intention is to serve our full term.
MARIUS BENSON: On that narrow point, can you guarantee there will be no early election?
MATHIAS CORMANN: These are not my calls, but what I am saying to you is that very clearly our intention is to serve our full term and very clearly we are focused on doing the job that needs to be done.
MARIUS BENSON: Mathias Cormann, thank you very much.
MATHIAS CORMANN: Always good to talk to you.