Senator the Hon Mathias Cormann
Minister for Finance
Date: Thursday, 25 June 2015
KIERAN GILBERT: Good morning, Kieran Gilbert here from Canberra. With me this half hour I’m joined by the Finance Minister, Mathias Cormann on First Edition. Minister thanks very much for your time. I want to ask you first of all about this IMF report. It’s been covered in a number of the papers today. It’s quite a gloomy outlook for the Australian economy says that our growth forecast are too ambitious.
MATHIAS CORMANN: We don’t believe they are. We are facing a series of challenges, global economic headwinds, but we are pressing ahead, implementing our plan for stronger growth, more jobs and to repair the budget. This past fortnight we have been able to get our small business and jobs package through the Senate. We have implemented a whole range of other economic reforms over the past two years. We are very confident that our estimates are based on realistic assumptions. There is always going to be a level of commentary. Last year people were saying we were being too pessimistic. Some people now are saying we are too optimistic, but we are pretty confident we have got it about right.
KIERAN GILBERT: But this is the International Monetary Fund, it is not just some random economist. They are saying our long term trajectory is not at the 3.5 per cent mark, it is closer to 2.5 per cent.
MATHIAS CORMANN: In the end, everyone that looks into the future makes an estimate based on assumptions. We believe that we are using realistic assumptions. The proof will be in the pudding down the track.
KIERAN GILBERT: Their reference to interest rates and more rates cuts being necessary, have you got any reaction?
MATHIAS CORMANN: The official cash rate is a matter for the Reserve Bank. It is a matter of objective fact that our interest rates are very low by historical standards and that is one of the reasons why we are confident about economic growth into the future.
KIERAN GILBERT: The number or the savings from last year’s Budget that you have not been able to get through, that has been reduced now to just over $10 billion. Quite some progress made with a more pragmatic Labor party. Do you welcome that pragmatism?
MATHIAS CORMANN: We have always been prepared to work with all the parties and all the individual Senators in the Senate on repairing the Budget. It is true that in this fortnight we have been able to pass more than $14 billion in Budget repair measures. That now takes the Budget improvements legislated through the Senate to more than $50 billion since last year’s Budget. So we’re continuing to make progress ... interrupted
KIERAN GILBERT: It must be a relief for you?
MATHIAS CORMANN: It is important for the country. It’s important for the country because this is all part of putting Australia on a stronger foundation for the future, protecting our living standards and building better opportunity for the future.
KIERAN GILBERT: This fuel tax, the excise that Labor has agreed to now, it caused a lot of political pain and now Labor also gets to bank the saving - I guess they get the best of both worlds?
MATHIAS CORMANN: We were always confident that when it was all said and done that Labor, and the Greens for that matter, would have no choice but to support what was a very important structural reform. This reform will have a small impact on individual Australians but it will provide a significant opportunity for the Australian Government to invest in productivity enhancing, job creating, road infrastructure for the future.
KIERAN GILBERT: In terms of the remaining $10 billion or so in savings, you confident on that, on the remainder?
MATHIAS CORMANN: We will continue to work our way through the list of jobs that remain to be done. We will do so in a prioritised and sequential manner. We will continue to talk to all parties and all individual Senators represented in the Senate and we hope that everyone will continue to focus on the national interest ... interrupted
KIERAN GILBERT: The family payment reduction, I can’t see that ever getting through. In terms of funding your childcare plan you’ll have to come up with money elsewhere to provide for that?
MATHIAS CORMANN: We think it is very important to help families get better access to simpler, more affordable, more flexible childcare arrangements. But if you want to pay more on a comparatively higher priority then you need to make sure that you identify savings elsewhere. That is a conversation that we will continue to have with the Senate and let’s see where we end up. But the fundamental point here is that our families package, our childcare package, is also an important part of strengthening growth and creating better opportunity because it helps families get into work, stay into work and be in work.
KIERAN GILBERT: Let’s look at a couple of other issues. A report in Fairfax today that at the Federal Executive this weekend there will be a number of party members, Liberal party members, seek to reign in the Government, I guess, in terms of the post 2020 carbon emissions targets. They want to quote ‘examine the evidence around climate change’ before any post 2020 agreement is agreed to. What is your reaction to that? Coming from a Cabinet Ministers perspective?
MATHIAS CORMANN: Australia is on track to meet and exceed our 2020 target of a five per cent emissions reduction. There will be an arrangement for the post Kyoto period and Australia will participate in that conversation internationally. These processes are currently underway. There is absolutely no doubt that there will be a further target and there will be a conversation about what the appropriate target will be.
KIERAN GILBERT: And your message to counterparts in the Liberal Party who want to examine the evidence further, will you agree to any such commitment?
MATHIAS CORMANN: I’ll let the Federal Council of the Liberal Party have these discussions and let’s see what is decided after that discussion has been had.
KIERAN GILBERT: So Greg Hunt is constantly having to pull elements of the party with him, isn’t he, because he obviously believes in the science and wants some credible targets set, but there are still elements of your party that still don’t accept it.
MATHIAS CORMANN: From the Government’s point of view, the Government is committed to effective action on climate change. We just took the view that the Labor - Greens Carbon Tax was not effective action on climate change. The Labor - Green Carbon Tax just pushed up the cost of living, pushed up the cost of doing business, for no benefit when it came to emissions reductions. Now the discussion in Australia is about what is the most effective policy response, not about whether or not we do need a policy response.
KIERAN GILBERT: Let’s finish off on this uproar that has emerged out of the ‘Q &A’ program earlier on in the week. Kevin Andrews apparently, is going to implement a personal boycott of the show. What is your take on all of that? Will you follow suit?
MATHIAS CORMANN: I haven’t been on ‘Q&A’ for a very long time, mostly because I haven’t been invited for a very long time. There are some issues with the …interrupted
KIERAN GILBERT: But you’re on the ABC quite a bit.
MATHIAS CORMANN: I talk to all journalists on all platforms …interrupted
KIERAN GILBERT: But not just journalists, what is that other program where you feature regularly.
MATHIAS CORMANN: I don’t know, you tell me
KIERAN GILBERT: Micallef, is it? Shaun Micallef?
MATHIAS CORMANN: I haven’t been invited there either, I wouldn’t mind going there one day.
KIERAN GILBERT: Well there’s a scoop, Mathias Cormann, thanks for your time.
MATHIAS CORMANN: No worries. Good to be here.