Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 12 May 2015
EMMA ALBERICI: Along with the Treasurer the man who has been working hard behind the scenes to deliver tonight's budget is Finance Minister Mathias Cormann. He joined me just a short time ago from Parliament House in Canberra.
Mathias Cormann, welcome back to Lateline.
MATHIAS CORMANNL: Good to be back.
EMMA ALBERICI: Before the election the Prime Minister said the Budget position under the Coalition would always be better than with Labor. Was that just another broken promise?
MATHIAS CORMANN: Not at all. We are as a result of the decisions that we have made in a stronger position than we would have been if Labor had stayed in Government and if we had stayed on the same trajectory. The truth is that since last year’s Budget, a lot has changed in the world economy, a lot has changed in terms of economic conditions. We have lost $90 billion in expected tax revenue since we came into Government but ...interrupted
EMMA ALBERICI: But with respect, every time Wayne Swan made that excuse that's exactly what you called it, an excuse.
MATHIAS CORMANN: We are not making any excuses. We have an economic plan, a responsible, long term economic plan to strengthen growth, to create more jobs and to get the Budget back into surplus as soon as possible. What matters is the decisions that you make when you’re faced and confronted with certain challenges. Labor decided to boost spending unsustainably in the period beyond the forward estimates. We are working to get spending under control, to put us on a stronger foundation for the future.
EMMA ALBERICI: I'm wondering about that because you do talk about getting spending under control, you do talk about living within your means but amid your debt and deficit disaster you're spending more than you're saving?
MATHIAS CORMANN: That is not true. All of the additional spending decisions are more than fully offset by spending reductions ...interrupted
EMMA ALBERICI: Let me explain the question because out to the forwards, so for the next 4 years you've got $14.6 billion worth of new spending, $1.4 billion in tax cuts and savings of just $10.9 billion.
MATHIAS CORMANN: I think you omit there the $10.1 billion in savings that we have made from not proceeding with the paid parental leave scheme. My assertion absolutely stands. All of our new decisions to increase spending are more than fully offset by reductions in expenditure. In fact, if you look at the projected expenditure at MYEFO over the 2014-15 forward estimates, we are now spending $7.3 billion less than we predicted at that time. The really important point here is that despite having lost $90 billion in expected tax revenue, our timetable for a return to surplus remains the same as in last year’s Budget. That is because we have kept spending under control. That is because spending as a share of the economy continues to reduce over the forward estimates down to 25.3 per cent as a share of the economy.
EMMA ALBERICI: When Labor announced a deficit of $18 billion you called it a budget emergency so what do you call a deficit that is about double that at $35 billion?
MATHIAS CORMANN: Labor promising a deficit of $18 billion in May 2013 was a lie because it was …interrupted
EMMA ALBERICI: Can I draw you back to my question? If $18 billion is a budget emergency, Mathias Cormann what's $35 billion?
MATHIAS CORMANN: $18 billion wasn’t the truth because in the few weeks between the…interrupted
EMMA ALBERICI: When you thought it was the truth it was a budget emergency?
MATHIAS CORMANN: Because we knew that the position was rapidly deteriorating, because we knew that Labor had locked in expenditure that was unaffordable in the period beyond their last forward estimates. In years five, six and beyond, they had hidden expenditure that we knew was not affordable and that Labor was taking Australia to a debt of $667 billion within the decade …interrupted
EMMA ALBERICI: They were your figures. With respect that is a nonsense figure that you continue to trot out that you made up yourselves. In the PEFO figure, which is the one you really should be referring to it was about $370 billion. Let's move to some of your specific -
MATHIAS CORMANN: It was not a nonsense figure. We absolutely stand by it. You’re entitled to run the Labor argument but we stand by it...interrupted
EMMA ALBERICI: No, it's not a Labor argument.
MATHIAS CORMANN: It is absolutely a Labor argument. We stand by that figure.
EMMA ALBERICI: The $667 billion was a figure that you created.
MATHIAS CORMANN: No we didn’t. We absolutely didn’t.
EMMA ALBERICI: So tell us how much money will you get back from the 30 companies identified by the Treasurer that he says don't pay tax in Australia?
MATHIAS CORMANN: As the Treasurer indicated yesterday, we’ve been very cautious in not putting a revenue figure on it. We are committed to ensuring that these 30 companies pay their fair share of tax in Australia, that they pay the tax that is owed to Australia. The Labor party when they come up with a new tax or a tax integrity measure, not only do they exaggerate the revenue they think it will raise, they spend all the money they think it will raise before they have actually collected it as they did with the mining tax. We’re being cautious.
EMMA ALBERICI: Let's talk about your government rather than the previous ones.
MATHIAS CORMANN: Yes, I’m just comparing and contrasting.
EMMA ALBERICI: After all the discussion about reining in this money that wasn't being paid you can't give us a figure of how much tax you will make these multinationals pay in Australia?
MATHIAS CORMANN: We will get as much as we need to get in order to ensure that these companies pay their fair share of tax. There is a body of work to be done. We are committed to doing it. We will not put a figure on it at this point in time. That is a deliberate decision that we have made, because unlike Labor, we are being very cautious and very considered in the way we approach these things.
EMMA ALBERICI: Last year at budget time you told me a generous paid parental leave scheme was a very important productivity measure. So you were offering up to $75,000 per family. You said it was “a very important reform to build a strong economy. Every woman was supposed to get enough money to allow her to replace her wage for 6 months”. Now you're saying 79,000 women who get even a few weeks paid leave from their employers get nothing from you?
MATHIAS CORMANN: A couple of things here. Firstly I did say all of that in relation to our paid parental leave policy that we took to the last election. But the truth is that we were not able to obtain the support across the Parliament to get that particular paid parental leave scheme through the Parliament. We were not able to get the support, arguably, across the community. So we made a decision earlier this year not to proceed with it and to reprioritise the savings into other areas in the Budget. In relation to the decision not to allow double-dipping, that is actually something that we did raise in the lead up to the last election. We did say that we didn’t think it was fair that most women can access one paid parental leave scheme whereas some…interrupted
EMMA ALBERICI: But with respect, you thought it was fair to give 6 months. You clearly don't believe that's fair and you're using language about double dipping.
MATHIAS CORMANN: With respect and I was about to answer your question, we actually made this point when we were promoting our paid parental leave policy too. That as part of that approach we were also going to abolish so called double dipping. Most women across Australia can only access one paid parental leave scheme. Only some women can access two paid parental leave schemes, across the public sector at the replacement wage…interrupted
EMMA ALBERICI: The scheme they can access you previously called grossly inadequate.
MATHIAS CORMANN: That is why those women who can access a more generous scheme through their employer, private sector or public sector employer, will opt for that scheme. What we are saying is having opted for a more generous scheme through their private or public sector employer, we don’t believe that the taxpayer should have to fund an additional second scheme on top that.
EMMA ALBERICI: Why should parents trust you to deliver on the $3.5 billion in extra child care you've promised when you haven't been able to deliver this generous paid parental leave scheme?
MATHIAS CORMANN: We are committed to helping families access more affordable, simpler, more flexible childcare. We do believe that this is an important measure, not just for families but also for the economy, because it will help families get into work, stay in work and be in work. It is a jobs for families measure. What we have said is that we want to invest $3.5 billion in additional money, but we need to pay for it and that is why we also need to pass savings in order to ensure that the package is fully funded.
EMMA ALBERICI: Mathias Cormann, thank you very much.
MATHIAS CORMANN: Always good to talk to you.