Senator the Hon Mathias Cormann
Minister for Finance
Date: Thursday, 19 March 2015
KIERAN GILBERT: Good morning, thanks for your company. It is understood that the prospect of a double dissolution election was raised at a dinner of Cabinet Ministers on Monday. The idea has been described privately to me as lunacy by some senior liberals. For more I am joined by Finance Minister Mathias Cormann. Minister thanks so much for your time.
MATHIAS CORMANN: Good to be here.
KIERAN GILBERT: So was that issue discussed on Monday?
MATHIAS CORMANN: I wasn’t at that particular dinner on Monday. I can assure you that all of us are focused on doing the job that we have to do. We are only just halfway through our first term. Our intention absolutely is to serve our full term. The election isn’t due until the second half of 2016. So there is a job to be done and we are focused on doing the job to strengthen the economy, create more jobs, help families and ensure that Australians are safe and secure.
KIERAN GILBERT: Is this talk the normal sort of thing that is considered by Governments from time to time?
MATHIAS CORMANN: I can assure you that I have not been a part of any meeting where any such discussion has taken place and as far as I am concerned, we just have to continue to get on with it, doing the job that we were elected to do.
KIERAN GILBERT: So it has never been to a cabinet meeting?
MATHIAS CORMANN: I have never been part of any discussion where that proposition has been put forward.
KIERAN GILBERT: Do you think it is ridiculous to be considering that, given what you say, that we are only half way through the first term?
MATHIAS CORMANN: I’m not a commentator, but what I would say is that obviously we still have a lot of work to do. We came into Government in a situation where the economy was weakening, unemployment was rising, the Budget position was rapidly deteriorating. We have already been able to make a lot of progress. The economy is now strengthening, jobs growth is strengthening and the Budget position is in much better shape now than what it was when we came into Government. But there is much more work to be done. So we are all focused on doing the job that needs doing.
KIERAN GILBERT: Are you comfortable with the Prime Minister’s language when he talks about the Intergenerational Report saying that it is a glass half full outlook when beyond the next five years, that legislated trajectory that I am looking at here and in the report there are the three trajectories, the legislated trajectory has us at six per cent of GDP in terms of deficits by 2055. That is a terrible outlook.
MATHIAS CORMANN: It is a glass half full outlook though, because the previous Labor Government put us on a trajectory where we were headed for a 12 percent deficit as a share of GDP. We have been able to halve that over the next few decades as a result of the actions so far. Obviously, our commitment is to get back to surplus as soon as possible. Our commitment is to ensure that the important benefits and services provided by the Australian Government are sustainable and affordable in the economy over the medium to long term and indeed forever. If all of the measures in our Budget had been passed, we would essentially have been in surplus continuously for the 40 years to 2054-55, from 2019-20 onwards, all other things being equal. We haven’t made as much progress as we might have liked, but we have made significant progress nevertheless and that was the point the Prime Minister was making yesterday.
KIERAN GILBERT: Confused messages though aren’t they?
MATHIAS CORMANN: I don’t think it is a confused message at all. We inherited a very challenging situation. We have a plan to get Australia on a stronger foundation for the future. We have made significant progress, but there is much more work to be done. We should reflect on the fact that we are now in a much stronger position than we would have been if we hadn’t made some of the difficult but necessary decisions to put Australia on a stronger foundation for the future.
KIERAN GILBERT: You would accept and argue I guess with your colleagues that inevitably, eventually some of those tough decisions that have been stalled this time have to be addressed.
MATHIAS CORMANN: The task of reform will continue to be pursued and have to be pursued. The point is that in our first Budget we did make a very significant effort and most of our first Budget has been dealt with. We are now in a much stronger position than we were this time last year. We are now in a much stronger position than what we would have been had we remained on Labor’s forward trajectory. That is the important point that the Prime Minister was making. Yes we need to continue to focus on keeping spending growth under control. Yes we have to continue to focus on getting back to surplus as soon as possible. But we have made a lot of progress and we can continue now to focus on making progress in the most reasonable way possible.
KIERAN GILBERT: But with a dull Budget as the Prime Minister says. Is that really a way to sell the second Hockey Budget, that is going to be dull?
MATHIAS CORMANN: It is a Budget building on the achievements of the first Budget. It is a Budget that essentially is a continuation of the effort …interrupted
KIERAN GILBERT: Would you say it is going to be dull?
MATHIAS CORMANN: It is going to be our four year plan from 2015-16 onwards. Last year’s Budget was a bit exciting. The first Budget of a new Government is always a very significant Budget, because it is the Budget where you change direction. We inherited a trajectory that was taking the country into an ever weaker position. We have worked to turn that trajectory around. We are now on a better trajectory and the key is to continue to make progress heading in the right direction and not to go back to the bad ways of the past, where Labor was taking us to deeper and deeper deficits and deeper and deeper debt. The key is to continue to make progress in the right direction.
KIERAN GILBERT: But to say it is a dull Budget, frugal, prudent but dull. This does not say like the greatest marketing exercise that I have heard.
MATHIAS CORMANN: Some people get excited about Budgets. Finance Ministers get excited about Budgets. Other people don’t find Budgets that exciting. Clearly, it is a planning document for Government and it is the plan that we are putting forward once a year to the Australian people to explain where we are headed over the next four years and what we are proposing to do to put the country on a stronger foundation for the future.
KIERAN GILBERT: One final question in relation to the higher education reforms, they have been blocked in the Senate. I guess the question is, did the Prime Minister do enough here? Because if you think back to the Howard years, when there was a problem in the Senate, at the last moment, coming in to negotiate, would be John Howard. He would sit down with the crossbench. Today we see on the front page of The Australian, Lambie and Leyonhjelm saying that the Prime Minister has only met them twice. Why would he not engage in this?
MATHIAS CORMANN: Again I am not a commentator. But the Government, we work as a team. Christopher Pyne was doing an outstanding job. I have been working of course alongside Christopher Pyne supporting his efforts. Other colleagues have been working to support Christopher’s efforts. There is nothing new under the sun. Significant structural reform often throughout Australian history has been the subject of intensive conversations, sometimes over a number of years. That was the case under the previous government, it was the case under the government before that. There is nothing new under the sun when it comes to having to put significant structural reforms to the Senate on more than one occasion or even more than two occasions ...interrupted
KIERAN GILBERT: The Prime Minister’s engaged normally, the PM isn’t engaged at all.
MATHIAS CORMANN: The Prime Minister has engaged on this occasion. It is a very important reform for our universities ...interrupted
KIERAN GILBERT: He should sit down with the crossbench. Why not?
MATHIAS CORMANN: I think that he does sit down with the crossbench.
KIERAN GILBERT: Not from what they are saying.
MATHIAS CORMANN: I have read that article and all of them are suggesting that they have had meetings with the Prime Minister. So I don’t think that that is quite right.
KIERAN GILBERT: Two in a year and a half.
MATHIAS CORMANN: Again, I am not going to be a commentator on every aspect of the interaction with crossbenchers but suffice to say, there is nothing unusual about important structural reforms taking more than one or two or even three attempts to get through the Parliament. Because people want to make sure that we get this right. There is an intensive public conversation that we will now continue. We are going to bring those reforms back to the Senate down the track and let’s hope that we will be able to get them through next time.
KIERAN GILBERT: Minister thanks for your time.
MATHIAS CORMANN: Always good to be here.