Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 23 March 2015
JOURNALIST: So Mathias, this week I assume is all going to be about the Budget. What more can you tell us about what will be discussed this week? What will you be trying to encourage the Opposition and the Greens to get through?
MATHIAS CORMANN: The Budget will be delivered on the second Tuesday in May as it always is. This week the Government continues to work on our plans to strengthen the economy, create more jobs, help families and make sure that Australia is safe and secure. In looking at the Budget, our focus is on making sure that as a country we can live within our means, that we are on the strongest possible foundation for the future. In that context we need to ensure that our spending is sustainable and affordable in the economy in the medium to long term. That is the work that we are progressing.
JOURNALIST: But can we expect further Budget cuts or spending clamps? Josh Frydenberg yesterday seemed to suggest that even though the Prime Minister says that it will be a dull Budget that doesn’t mean there won’t be any spending cuts.
MATHIAS CORMANN: What we have said all the way through is that whenever there is new spending on higher priority areas given changes in circumstances, that has to be fully offset by savings in relation to spending on comparatively lower priority areas. We did do a lot of the heavy lifting in last year’s Budget. We did introduce and implement a lot of structural reforms in last year’s Budget. When you have a new Government, the first Budget of the new Government is always a very significant Budget because it is a significant change in direction. Really, this year’s Budget is building on the progress that we have made last year in strengthening the economy, creating more jobs and getting the Budget under control. As such, it will be a continuation document rather than the same as what we had to pursue last year.
JOURNALIST: What do you make about Tony Burke’s comments that he’d like to work with the Government on trying to fix the economy, but says that there needs to be a ten year plan to do it?
MATHIAS CORMANN: The Labor Party created the mess that we are now dealing with. The Labor Party, not only did they leave behind $123 billion worth of projected deficits and Government debt heading for $667 billion within the decade and rising beyond that. The Labor Party right now is opposing our plan to fix their mess without putting forward any alternative plan. I have noted in the past how Bill Shorten told the world that not only would they bring the Budget back into surplus, but they would bring the Budget back into surplus more quickly than the Coalition. Yet not only is Bill Shorten opposing a large chunk of our proposed sensible savings measures, Bill Shorten can’t even get Labor to agree to Labor’s own savings which they themselves initiated and banked in their last Budget. They have not given us any indication whatsoever, if they don’t like the savings that we’ve put forward, what alternative savings they will put forward. So what I would say to Bill Shorten and to Chris Bowen and to Tony Burke, if you are telling us that you would bring the Budget back to surplus more quickly, tell us where you will cut more deeply and where you will increases taxes, given that you’re starting from way behind as a result of the very negative approach that you have taken so far.
JOURNALIST: Minister isn’t there now a contradiction in the Government’s message. You talk about the terrible mess that Labor has left, yet at the same time, we’re now talking about a dull Budget that won’t have to hit households after just one year of Coalition Government. Don’t those messages jar?
MATHIAS CORMANN: Not at all. We did inherit a mess from the previous Government. Not only did we inherit a very challenging starting position, but the forward trajectory that Labor put Australia on was manifestly unsustainable. The Intergenerational Report shows that very clearly. Every Budget is a four year planning document of government. Obviously compared to last year’s Budget, three of those years are going to be part of next year’s Budget and we’re going to have one more year come into the forward estimates. We run Government in an orderly and methodical fashion. Last year we had a four year plan that we put forward to Australia and now we’ve got another year coming into the Budget forward estimates period and it will really be a matter of building on the progress that we have made in last year’s Budget, but continuing to head in the right direction.
JOURNALIST: And Minister, the front page of The Australian today suggesting that your Government has now received some more bad numbers in terms of the Budget document, in making the settings tougher. Is that fair?
MATHIAS CORMANN: The article in the Australian today relates to information that was published at the time of the Mid-Year Economic and Fiscal Outlook in December last year. At the time, we explained very clearly the pressures in terms of revenue write downs and in terms of additional expenditure for example on family tax benefit payments, childcare and we also pointed out very clearly the cost of decisions and delays in the Senate. So what we said at the time that we released the Mid-Year Economic and Fiscal Outlook, yes we did face a series of additional challenges along the way, but we are now heading in the right direction. We have been able to control spending growth down to just 1 per cent above inflation on average per annum over the forward estimates. We have been able to get the Budget into a much stronger position than it would have been if we had stayed on the forward trajectory that Labor put Australia on.
JOURNALIST: So no surprises?
MATHIAS CORMANN: There is nothing surprising in what was reported in The Australian today. That really relates to information that was previously published in the Government’s Mid-Year Economic and Fiscal Outlook.
JOURNALIST: Thank you Senator.
MATHIAS CORMANN: Thank you.