Senator the Hon Mathias Cormann
Minister for Finance
DAVID SPEERS: Well for more on this I’m joined by the Finance Minister Mathias Cormann. Minister, thanks for your time this afternoon.
MATHIAS CORMANN: Good to be here.
DAVID SPEERS: Labor have now agreed to back the automatic indexation of fuel excise. When did you think they might do this? Did you have an inkling that they would have a change of heart?
MATHIAS CORMANN: We were informed by the Shadow Treasurer today that Labor had decided to back the Government’s measure. We were always quietly confident that this was where we would end up. This is why we initiated the process that we did in October last year, through the tabling of tariff proposals.
DAVID SPEERS: So what is the process from here? How quickly will this actually be legislated?
MATHIAS CORMANN: The Treasurer will be introducing the legislation to the House of Representatives later today. We expect that it will come before the Senate tomorrow.
DAVID SPEERS: So it will all be done by tomorrow?
MATHIAS CORMANN: You would expect that it would be, yes.
DAVID SPEERS: Is this in your view a more responsible approach from Labor, because it’s not just the fuel excise they have backed a number of other, about seven and a half billion dollars worth of savings measures over the past couple of weeks?
MATHIAS CORMANN: We welcome Labor’s change of heart in relation to some measures. Last week they decided to support a measure from their last budget, the 2013-14 Budget, which was the reversal of the second round of income tax cuts linked to the carbon tax. They had voted against it twice and last week they decided to vote for it. So that is certainly welcome. This week Labor decided to support our reform in relation to fuel excise, making sure the value of the fuel excise remains constant in real terms. We hope that Labor will continue to support all other parts of our economic plan for stronger growth, more jobs and to repair the Budget.
DAVID SPEERS: Chris Bowen was just arguing that one of the big reasons they have done this is because of the deterioration of in the Budget bottom line, the deficit has doubled.
MATHIAS CORMANN: The Budget position is much better than it would be if we had stayed on Labor’s trajectory. It is true, we have been able to collect about $92 billion less in revenue than expected at the time of the last election, because among other things, the dramatic fall in the price of iron ore. That would have happened irrespective of who was in Government. But we have certainly got spending growth much more under control than the previous government. We have been able to bring spending down compared to where it was headed under Labor. There are still around $31 billion worth of savings that we have already passed where Labor wants spending restored. There are still about $15 billion or so in Budget measures that we have initiated that Labor continues to oppose. There are still some Budget measures that Labor initiated and banked in their last budget that they continue to oppose. So there is still a bit further to go for Labor to help us repair their mess.
DAVID SPEERS: One of the conditions Labor attached to this particular measure is $1.1 billion being spent by local councils on roads, you’ve accepted that condition? You think that is a good idea?
MATHIAS CORMANN: We always intended to boost investment in infrastructure. We have always said that this measure to reintroduce the regular indexation of the fuel excise was to help the Government invest in productivity enhancing, job creating infrastructure for the future. This will raise about $23 billion over the next decade and we have agreed to invest $1.1 billion in roads projects through the Roads to Recovery program, which incidentally is a Howard Government initiative. This is entirely consistent with the Government’s underlying philosophy with this budget measure in the first place. It is boosting support for a program that we put in place in the first place.
DAVID SPEERS: Finance Mathias Cormann we’ll have to leave it there thank you very much for joining us this afternoon.
MATHIAS CORMANN: Always good to talk to you.