Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 11 May 2015
MICHAEL BRISSENDEN: The Budget papers are being printed this morning ahead of tomorrow night’s unveiling, although many key initiatives have already been announced. Mathias Cormann is the Finance Minister, he joins me now in our Canberra studio. Senator Cormann welcome to the program again.
MATHIAS CORMANN: Good to be here.
MICHAEL BRISSENDEN: We will get to childcare in a minute, but reports this morning that the Budget will include measures to sell of Government Assets, a number of public service buildings and Government departments will face more cuts, is that correct?
MATHIAS CORMANN: Yes. It is part of our rolling Smaller Government reform agenda. It is all about making sure that taxpayers get value for money from their public service. We’ve been focused ever since we come into Government on making sure the public service is as efficient, as effective and as well targeted as possible on those areas that Government should be involved in and we have been focused on getting rid of any waste and duplication and getting Government out of those areas where Government shouldn’t be involved in.
MICHAEL BRISSENDEN: Okay, ten Government departments facing functional reviews, how many Government jobs will go?
MATHIAS CORMANN: We don’t go into this process with a predetermined view. What we are going into this process with is to see where there are inefficiencies and when these inefficiencies have been identified we make judgements at that point in time. We have gone through such processes with the Departments of Health and Education and they have been quite effective in identifying areas of opportunity in terms of bringing down the size of the public service and in terms of making the public sector more efficient. This will be a rolling program across the whole of Government. Historically, the way efficiencies have been applied is through an efficiency dividend which is applied across the board. The size of that efficiency dividend has been larger in recent years than it historically has been.
MICHAEL BRISSENDEN: So what other Government departments … inaudible
MATHIAS CORMANN: These departments will be announced in the Budget, but there are a range of other departments that over the next financial year will go through a similar process that Health and Education have gone through in recent months.
MICHAEL BRISSENDEN: Because Andrew Barr, Chief Minister here in Canberra, got an assurance at the last COAG that the worst of the job losses in the public service were over. Does that assurance no longer stand?
MATHIAS CORMANN: We are always looking to ensure that the public service is as efficient as possible. We have made quite a bit of effort since we came into Government to ensure that the public service is at the right size and if you look at the progress that we have made, we are now back to…interrupted
MICHAEL BRISSENDEN: But you don’t have a functional review if you’re not considering losing more jobs, do you?
MATHIAS CORMANN: Unless you are suggesting we should continue to spend more money on things that we shouldn’t be doing then I don’t really understand the question.
MICHAEL BRISSENDEN: The question is simply about job losses.
MATHIAS CORMANN: We don’t keep people in jobs to do things that are no longer required if we…interrupted.
MICHAEL BRISSENDEN: …and assurances that were given about job losses…interrupted
MATHIAS CORMANN: If a functional review identifies that certain jobs are no longer required then you free up those people to do things that are required.
MICHAEL BRISSENDEN: Sure, so there are...
MATHIAS CORMANN: It is all about making sure that we can reprioritise the effort of Government to make sure that it aligns with the requirements in 2015 rather than with the requirements when certain functions were put in place some years ago.
MICHAEL BRISSENDEN: Let’s move on to some other measures the Paid Parental Leave changes announced by the Treasurer yesterday, the Government scheme that is in place is specifically designed to compliment workplace schemes, not to replace them. To make sure that new parents spend the recommended 26 weeks with their baby, now this change will mean presumably that women, primarily, will spend less time with their child and get less money, won’t they?
MATHIAS CORMANN: This is a fairness measure. Most women can only access one paid parental leave scheme and women for example across the federal public sector can get both, paid parental leave at their replacement wage, their full replacement wage, and then also access the legislated scheme provided by the Government to everyone. We don’t think that is fair. We think that women should be able to access one paid parental leave scheme. It is a matter of choice for them whether they access the Government scheme or the scheme that they have access to otherwise through their employer.
MICHAEL BRISSENDEN: Nevertheless the point remains, it was specifically designed to complement the workplace schemes.
MATHIAS CORMANN: That is not the way that we see it. It is an equity and fairness measure. It is an integrity measure. It is a matter of making sure that the opportunity available to all women is the same.
MICHAEL BRISSENDEN: You have got Kate Carnell from the Business Council now saying it is hard to see why employers would continue to pay people if it meant the Government stopped paying and they were simply footing the bill for the Government.
MATHIAS CORMANN: The truth is that many employers have paid very generous paid parental leave schemes before the Government came into this space and I can’t see why that would change. The truth is that many of these private or public sector paid parental leave arrangements at the full replacement wage, as I have mentioned, are actually much more generous than what is on the table from the public sector. What we are saying is that if you are accessing a more generous paid parental leave scheme elsewhere, we don’t believe it is fair that you also access the taxpayer funded scheme on top of that.
MICHAEL BRISSENDEN: Within a year this Government has gone from a rolled-gold crucial paid parental leave scheme that would have given the primary carer six month wage replacement and super to now that you are proposing something worse than what we already have for thousands of women. How did you get to this point?
MATHIAS CORMANN: It is a fairness question. We have made an announcement earlier this year that we wouldn’t be proceeding with the Paid Parental Leave scheme.
MICHAEL BRISSENDEN: Was it fair a year ago or not?
MATHIAS CORMANN: It is very clear that it is not fair for some women to be able to get access to a full replacement wage and on top of that a taxpayer funded paid parental leave scheme, whereas other women only get access to the taxpayer funded paid parental leave scheme. If you get access already to a very generous paid parental leave scheme, there is no reason why you should be able to double-dip. That is the argument.
MICHAEL BRISSENDEN: But do you concede that you have gone from a rolled-gold Paid Parental Leave Scheme to this situation now where some women are going to get less.
MATHIAS CORMANN: What I am conceding is that we are making sure that the taxpayer funded support that is provided for paid parental leave arrangements is properly targeted to those women who need it and not those women who are already getting a very generous paid parental leave arrangement through their workplace.
MICHAEL BRISSENDEN: Isn’t this also about trust? About what the Government tells you they are going to deliver and what they end up delivering.
MATHIAS CORMANN: You are the commentator. So I will leave the commentary to you.
MICHAEL BRISSENDEN: Okay. On childcare, a $3.5billion boost to childcare, but its tied to cuts to family payments, now Labor and the Greens have said they oppose the cuts to the Family Payments Benefit scheme. So this is never going to happen either is it?
MATHIAS CORMANN: Labor last year said that they would be opposed to our Budget Repair Levy, then they voted for it and now they are thinking about extending it beyond its three years of operation. So let’s just see what Labor says over the next few weeks rather than in the first 24 hours. The truth is ... interrupted
MICHAEL BRISSENDEN: And what about your Coalition colleagues, the Nationals, they aren’t happy.
MATHIAS CORMANN: Here is the principle. We want to help families get into work, stay in work, by getting better access to simpler, more affordable, flexible childcare. We think that it is an important reform, but when you need to spend more money in one area you need to be able to pay for it by making savings in other areas.
MICHAEL BRISSENDEN: And the Nationals understand that?
MATHIAS CORMANN: The Nationals are part of a very strong Coalition. They do understand that.
MICHAEL BRISSENDEN: Okay, this Budget, it is all about rebuilding the Government and rebuilding I guess, the credibility that you lost in the last Budget. Is it going to do it?
MATHIAS CORMANN: This Budget is our economic plan to help strengthen growth, to help strengthen jobs growth. It builds on the progress that we have made since last year in repairing the Budget mess that we inherited from our predecessors. It will show that we are on track, that we are making progress, that we are now heading in the right direction, that the economy is strengthening and the Budget is getting under control.
MICHAEL BRISSENDEN: Okay, Mathias Cormann, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.