Senator the Hon Mathias Cormann
Minister for Finance
TICKY FULLERTON: Minister thank you for joining me.
MATHIAS CORMANN: Good to be here.
TICKY FULLERTON: The Prime Minister today said the deficit will decline every year now. How can you guarantee that with a write down of $30 billion over four years with this iron ore price drop?
MATHIAS CORMANN: With this year’s Budget, we are building on the progress that we have made since last year’s Budget and there is no doubt that we are now in a much stronger, more resilient position than we would have been if we hadn’t made some of the difficult though necessary decisions that have been implemented by the Parliament so far...interrupted
TICKY FULLERTON: But you can guarantee that can you? Even with this iron ore price fall?
MATHIAS CORMANN: We will be releasing the Budget on the second Tuesday in May. No doubt, global economic conditions, what has happened to iron ore prices, has added significantly to the challenge. We are currently working our way through how best to frame the Budget, building on the progress we have made in getting spending under control since last year’s Budget and making sure that we get back into surplus as soon as possible.
TICKY FULLERTON: Can I confirm from the Prime Minister’s speech today that small business will get a 1.5 drop in the corporate tax rate so 28.5 per cent?
MATHIAS CORMANN: We have been very clear about that for some time. The Prime Minister announced that in his speech to the Press Club earlier this year. He has again confirmed that. That is our commitment and of course the way we will be funding this is by identifying savings in other areas to make the space for it.
TICKY FULLERTON: So we will have two tiers of corporate tax? It is still unclear what the definition of a small business might be, where the cut off is. Doesn’t that fly in the face of the Prime Minister’s lower, simpler and fairer and really come back to Peter Costello’s morbid joke?
MATHIAS CORMANN: We will be focusing on strengthening the economy, strengthening economic growth, strengthening jobs growth and obviously we have limits in terms of how much we can do now. We would like to be able to do more. Our priority will be small business...interrupted
TICKY FULLERTON: But it is more complicated than that isn’t it?
MATHIAS CORMANN: It is a start and obviously the Tax White Paper review process will continue to identify opportunities for us to simplify the system and our focus will continue to be on lower, simpler, fairer taxes into the future.
TICKY FULLERTON: Tax avoidance, the Treasurer’s announced some sort of Netflix tax he is considering? Are we going to get a Google tax of some sort in the Budget as an outcome of the G20?
MATHIAS CORMANN: There are a couple of things that we can do at the same time. Firstly we already have one of the toughest tax anti-avoidance regimes in the world. We of course always as a Government, any Australian Government, will always focus on protecting its revenue base and pursuing initiatives, integrity measures, to protect its revenue base. We will be pursuing opportunities like that in this Budget. But of course we will continue to also pursue coordinated action internationally through the G20. One doesn’t exclude the other. These are complimentary initiatives.
TICKY FULLERTON: And any Google tax that comes in will be pinned against spending? It won’t be like a mining tax that suddenly disappears?
MATHIAS CORMANN: I am not here to announce specific revenue measures. What I am saying to you is that we will in the Budget build on the anti-avoidance scheme that is already in place to further protect our revenue base and that will be complimentary to the efforts that I have mentioned.
TICKY FULLERTON: So this fight over the GST, Western Australia wants more. You’re proposing a freeze. There is a big row brewing. Why hasn’t the Prime Minister taken responsibility to sort this all out?
MATHIAS CORMANN: The Prime Minister will be meeting with the State and Territory leaders on Friday. Let's see what comes out of...interrupted
TICKY FULLERTON: But he wants to leave it to the States to sort out?
MATHIAS CORMANN: The GST, the point that the Prime Minister is making is that the GST is a revenue for the States and that is of course right. The State and Territory leaders ought to reflect on the national interest here. The point that I’ve made is that the GST was always meant to be a reliable growth revenue for the States. In Western Australia in recent years, there have been successive actual cuts to the revenue from the GST. That is one thing when other revenue is growing but right now revenue for iron ore is in free fall and the Commonwealth Grants Commission is suggesting another 16 per cent cut to the GST revenue...interrupted
TICKY FULLERTON: Jay Weatherill from South Australia, he disagrees. He has called for fairer taxing on the super system, long overdue. Minister you have broken other promises on a needs must basis, why not look at tax on super?
MATHIAS CORMANN: We are moving very quickly from one issue to the other. We have said that in the Tax White Paper review process, we will be looking at all taxes and tax arrangements in relation to superannuation will be considered as part of that process.
TICKY FULLERTON: Minister, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.