Senator the Hon Mathias Cormann
Minister for Finance
Date: Thursday, 14 May 2015
ROSS GREENWOOD: Let’s go now and pick up some Budget reaction and also try and find out exactly where the Government is sitting in terms of its long term goals to try and balance the Budget and repair the deficit. That man who is charged with doing that and also trying to frankly look into the dark holes of the Budget and the Government and find out ways to save money is Mathias Cormann, our Finance Minister who is with me now. Many thanks for your time Mathias.
MATHIAS CORMANN: Good evening.
ROSS GREENWOOD: Good evening to you. I want to say to you, the Budget reaction as I have indicated in the introduction seems to have been fairly positive, I think you have had a pretty good reaction to the Budget so far. From your point of view, how do you think it is going down?
MATHIAS CORMANN: From our point of view, what we are trying to do is to press ahead with our plan to strengthen growth, create more jobs and get the Budget back to surplus as soon as possible. When we came into Government, we inherited a very challenging situation, a weakening economy, rising unemployment, a Budget position that was rapidly deteriorating. Last year we made an initial effort to turn that situation around and this the next step. The economy is now strengthening, jobs growth is strengthening and the Budget is heading in the right direction with the timetable to surplus the same as in last year’s Budget. In this year’s Budget there are certainly a series of things that we have done better than last year and it is good that the reception has been better than last year.
ROSS GREENWOOD: Okay, coming into this philosophically, did you feel as though there was a U-turn in the Budget process? Where last year it was clearly all about austerity, cutting, trying to repair it very quickly. This year it is about trying to provide some, some growth to the economy and trying to really, if you like, get the economy moving so that ultimately you can get the sort of tax dollars back in the door that you require. Many people would sort of quite clearly see the different between these two Budgets.
MATHIAS CORMANN: I don’t believe that there was a U-turn at all. We have since when we came into Government been strengthening growth right from the start. That is why we got rid of the carbon tax and the mining tax. That is why we focused on reducing red tape costs for business by more than $2 billion a year so far. That is why we focus on investing infrastructure. That is why we focused on finalising Free Trade Agreements. We have focused on driving stronger growth and creating more jobs as well as repairing the Budget right from the word ‘go’. I guess in this year’s Budget we sort to build on the progress that we have made since last year, recognising that we have made some progress in some areas, not as much progress as we might have liked in other areas. But we continue to focus on the task at hand which is to strengthen growth, create more jobs and repair the Budget.
ROSS GREENWOOD: Okay, one issue that has come up in the last day or so is the talk about the paid parental leave scheme and the reaction to it. Now this is something that could divert a bit of attention from if you like some of the positive work that has been done, particularly in that small business sector. The whole question about the double-dipping is pretty important here. It sorted started with Scott Morrison, Social Services Minister talked about this. Here is what Scott Morrison said, I think it was Sunday that he actually made this comment:
SCOTT MORRISON [EXTRACT]: We are getting rid of what is an inequity. And frankly, in many cases, I think it a rort.
ROSS GREENWOOD: Yeah, so that is Scott Morrison really kicking it off. He says it is a rort. Now, just explain to me, can you tell me Mathias Cormann, was it a rort, is it a rort?
MATHIAS CORMANN: The way we looked at this in the Expenditure Review Committee is that essentially, most women can only access one paid parental leave scheme whereas some women through their private or public sector employer were able to access two, one more generous scheme through their employer and then an additional scheme through the taxpayer. And given what we are trying to do in terms of strengthening, improving the access to more affordable, more flexible, simpler childcare, given what we were trying to do in the context of the broader Budget, we thought that as a fairness and equity measure, that this is something that needed to be changed into the future.
ROSS GREENWOOD: Okay, fairness and equity. But let’s be honest, it was the system wasn’t it? Say for example and we should explain to people here, that the parental leave pay was currently $641 per week, give or take before tax for a minimum of 18 weeks, which was the hourly rate, the national minimum wage times 7.6 hours in a standard working day, times five days in a standard working week. Now that is a taxable payment that can be paid by your employer or by us directly.
MATHIAS CORMANN: In every interview that I have done on the Budget and in relation to this measure, I have always said that that was the system. I always said though that that is a system that we thought we needed to change into the future. When people who access
MATHIAS CORMANN: People who have accessed this in the past have accessed it in the system as it operated at that time.
ROSS GREENWOOD: So it was a rort or it wasn’t a rort do you think?
MATHIAS CORMANN: It is something that needed to be changed into the future.
ROSS GREENWOOD: Okay because even if I go as I’ve got right here in front of me now. I’ve got the Fair Work Ombudsman’s website, I’ve got it open right now and it says: Employer funded paid parental leave doesn’t affect an employee’s eligibility for the Australian Government’s paid parental leave scheme. An employee can be paid both. In other words, the Fair Work Ombudsman has actually saying right there in black and white, you can get both of these. So that doesn’t sound like a rort to me. That sounds like the law.
MATHIAS CORMANN: What we’re saying is that this something that we believe should be changed when it comes to prioritising limited resources into the most important investment right now. In the Budget what we’ve focused on through our job for families package is on how we can best help families get into work, stay in work and be in work. And the decision that we’ve made is the best thing we can do is to prioritise our investment in facilitating better access to more affordable, simpler, more flexible childcare and that’s what we’ve done in this Budget.
ROSS GREENWOOD: You have no argument with me about that but there is the semantics on the words here. Let’s go to your colleague, the Minister Assisting the Treasurer of course it’s Josh Frydenberg. Here is what he’s had to say about this today.
JOSH FRYDENBERG [EXTRACT]: My wife like many women accessed both schemes as my wife was entitled to and there are many people I’m sure on both sides of the House who have done that. As I’ve also said, there is a need to end this entitlement. We think it’s fairer for the taxpayer.
ROSS GREENWOOD: Because you Mathias Cormann, I don’t know whether you’ve admitted it, but you’ve gone very close to admitting that you’re family has done a very similar thing. Which as we both agreed has been well within the law.
MATHIAS CORMANN: Ross what I would say and I’ve said this to some people here in Canberra today. I’m a public figure but I’m very protective of my wife and my child’s privacy and quite frankly I think that my wife as an independent, professional person. Her professional and employment arrangements are really a private matter for her. What I have said in the Senate today is that my family has worked within the system that was in place at the time as we will work within whatever system will be in place in the future if we are fortunate enough to be in the same circumstance again down the track. I understand that those of us in public life, we’re fair game. But I’ve got to say, I’m not all that happy about my wife’s privacy being dragged into this like this.
ROSS GREENWOOD: Could all of this been averted had the language been the language been a little bit more modest in the beginning Mathias Cormann, that’s what I’m trying to get at.
MATHIAS CORMANN: I can only speak for myself. My language has focused all the way through on what we were trying to achieve. In the circumstances we’re in, our judgment was that when you are able to access a more generous paid parental leave scheme through your private or public sector employer, then really in the circumstances of the Budget, we didn’t think it was appropriate into the future to continue to provide a taxpayer funded scheme on top of that. That’s all.
ROSS GREENWOOD: Okay. Bill Shorten when he comes out tonight, it seems as though he is in favour of many of your spending measures such as some of the small business measures that have been announced. He doesn’t seem so happy in the ongoing cuts that need to be made to try and balance the Budget. What do you think he’s going to come out with?
MATHIAS CORMANN: Tonight Bill Shorten has got the opportunity to show that he has got what it takes to stand up for the national interest. Right now under Bill Shorten, the Budget would be $52 billion worse off because of the savings that he’s opposing. Because of the savings that they themselves initiated in Government which he is now opposing and because of the spending that he wants to see restored. So he is starting $52 billion behind. He hasn’t identified so far a single saving, not a single spending reduction has been identified by Bill Shorten and the Labor Party since September 2013. They have identified about $3.8 billion worth of tax increases over the current forward estimates wanting to target Australians saving for their retirement in particular. So what I’m saying to Bill Shorten, show us the money. Show us how you’re going to pay for your increased spending proposals and how you’re going to pay for not proceeding with the savings that you continue to oppose.
ROSS GREENWOOD: Mathias Cormann our Finance Minister. We appreciate your time.
MATHIAS CORMANN: Always good to talk to you.