Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 10 August 2015
FRAN KELLY: Our Federal politicians are back in Canberra today after the long winter break. No doubt many returning with an earful from voters angry over what they regard as overly generous entitlements for our elected representatives. This travel expenses storm has already cost Bronwyn Bishop the Speakership of course and she will be replaced this morning. But all parties are feeling the fury. Is it fair? And what can the Government do to shift focus and attention to its preferred ground of jobs and economy. Mathias Cormann is the Finance Minister, he is in our Parliament House studios, Minister, good morning.
MATHIAS CORMANN: Good morning Fran.
FRAN KELLY: Are politicians being unfairly criticised over the use of entitlements?
MATHIAS CORMANN: People are entitled to expect that politicians treat taxpayers’ money with respect. There is a comprehensive review now into the parliamentary entitlements framework which has been initiated by the Prime Minister. That is to report early next year and that will no doubt make recommendations on root and branch reform of the system as it currently is in place.
FRAN KELLY: Tony Abbott says we need a system that recognises that politicians not only have parliamentary business, they also have political business and party business. Should taxpayers subsidise politicians travelling to attend party business, party functions?
MATHIAS CORMANN: We do have in the Parliament represented a great diversity of men and women from right across Australia. People come to the Parliament with a great diversity of backgrounds. We need the Parliament to have members from a great diversity of backgrounds. We’ve got people who live so close to the Parliament that they can sleep in their own bed every night. We’ve got people who can drive to Canberra by car. We’ve got people who have to travel great distances to get here. The duties and responsibilities of Members of Parliament are also varied. They involve meeting with community organisations, party members, with stakeholders in any portfolio that you have responsibility for. It is very important for Members of Parliament to be accessible to the community, to be accessible to relevant stakeholder groups and that all feeds into better public policy development.
FRAN KELLY: Sometimes that accessibility you’re saying might be a function organised by the Liberal party, or functions organised by clearly partisan supporters of your party?
MATHIAS CORMANN: I’m not going to pre-empt what the recommendations of the review will be, which has only been initiated a few days ago. That is going to be a matter for the root and branch review of the Parliamentary entitlements system to consider.
FRAN KELLY: Your department is in charge of running the entitlements scheme, and it’s in charge of investigating Bronwyn Bishop’s $5000 helicopter flight from Melbourne to Geelong and other travel claims of hers. Will the findings of that investigation be made public?
MATHIAS CORMANN: That investigation is being conducted at arm’s length from the Government as it should. There is no political interference in relation to that enquiry at all. So that will be entirely a matter for the Secretary of the Department of Finance.
FRAN KELLY: Is there any reason in your view why it shouldn’t be made public?
MATHIAS CORMANN: No, there is no particular reason. The whole system as it currently operates is actually very open and transparent. For better or for worse, all of the travel untaken by Members of Parliament at taxpayers’ expense is regularly reported publicly, it is scrutinised, it is available for scrutiny and it is scrutinised. That is to a large degree why we are having the conversations that we are having at present.
FRAN KELLY: Minister, the Government wants to change the conversation to jobs and the economy in a hurry I’d imagine. Treasurer Joe Hockey is arguing the case to bring in personal tax cuts, how can Australia afford tax cuts? Is the only way relying on increasing or widening the GST?
MATHIAS CORMANN: The conversation that we need to have in Australia is on how we can improve our current tax system to facilitate stronger growth and stronger job creation and whether there is scope to improve the current mix of taxes. There is a very heavy reliance on income tax to fund the important and necessary services of Government. There is a conversation to be had on whether the system can be made fairer, simpler and more efficient, but at all times with a focus on being able to reduce the overall tax burden in the economy so we can strengthen growth and create more opportunity for people across Australia to get ahead.
FRAN KELLY: Meanwhile the revenue stream is decreasing though and making your job harder and this front, the Reserve Bank has revised down its growth estimate for next year to two and a half per cent. In fact, it says that may be the new normal now, to have a growth rate of around two and three quarter per cent. That makes your job a lot harder, doesn’t it?
MATHIAS CORMANN: Firstly stronger growth leads to stronger revenue for Government without having to increase taxes or bring in new taxes. So stronger growth isn’t only good for our prosperity as a nation and for our living standards as Australians, it is also good in terms of Government revenue. Now in terms of the Reserve Bank economic growth forecasts, it is true that they have weakened slightly, however our Budget forecasts remain within the range of what is forecast by the Reserve Bank ...interrupted
FRAN KELLY: Only just though, I think your forecasting three and a quarter percent by next year, it is barely in the range of 2.75 per cent which is what the Reserve Bank has come out with now isn’t it?
MATHIAS CORMANN: The Reserve Bank for 2015-16 is forecasting growth between two and three per cent. Our forecast is for two and three quarter per cent. In 2016-17 the Reserve Bank is forecasting growth between two and a half and three and a half per cent. Our forecast is for three percent and a quarter. The economic growth forecasts at the time of the Budget are based on the best available information at that time. The usual process is for those forecasts in the Budget to be updated twice a year. the next update will be in the Mid-Year Economic and Fiscal Outlook later this year.
FRAN KELLY: One way to get more revenue is to get companies paying their fair share, reports today that Shell has paid no company tax for two or three years in a row despite earning billions of dollars from its service stations. What are you going to do about that?
MATHIAS CORMANN: We are very focused on making sure that every business which generates profits in Australia pays their fair share of tax in Australia, consistent with our laws and on Budget night …interrupted
FRAN KELLY: That wouldn’t seem to be working though if Shell has been paying no tax.
MATHIAS CORMANN: And on Budget night the Treasurer, for example, announced a new, very significant measure where if multinational companies in particular enter into contrived business arrangements which are designed merely to avoid paying their fair share of tax here in Australia, we are giving powers to the Tax Commissioner to see through those arrangements and to impose tax as if those arrangements had not been put in place. That is work in progress. We are very confident that the Tax Commissioner will very effectively pursue every single business including the very large businesses operating in Australia, generating profits in Australia to ensure they pay tax in Australia consistent with the laws in Australia.
FRAN KELLY: Were you surprised to read that about Shell, not paying company tax for a few years in a row? Did you know that?
MATHIAS CORMANN: I’m not going to comment on the individual tax affairs of individual businesses. But let me make the general point, every single business generating profits in Australia must pay tax in Australia consistent with our laws and to the extent that our anti-avoidance provisions which are already among the most stringent in the world, to the extent that they can be strengthened further, we are already pursuing domestic initiatives to that effect and we are working internationally through the G20 and with the OECD on tightening that system internationally as well.
FRAN KELLY: Minister very shortly you have got some other business of the day in your Liberal Party room. You will be choosing the Parliament’s new Speaker, fellow Minister Josh Frydenberg, he’s told all of us that he is backing Victorian backbencher Tony Smith. What about you?
MATHIAS CORMANN: I am a Senator, I don’t get a vote …interrupted
FRAN KELLY: You still get a vote don’t you?
MATHIAS CORMANN: No I don’t. I will trust my colleagues in the House of Representatives to make the right choice in the same as they trust me and my colleagues in the Senate to make the choice of Senate President.
FRAN KELLY: Fair enough, can I just ask you finally both sides of the marriage equality debate are making their presence felt in Canberra today. This is ahead of a cross-party bill expected to be introduced into the Parliament next week. Should your party have a conscience vote on this issue?
MATHIAS CORMANN: That is a matter for the party room. But let me just say that I support our longstanding Coalition policy position which is to support the existing definition of marriage as between a man and a woman.
FRAN KELLY: Would you welcome the chance to have a conscience vote on that, to display your position?
MATHIAS CORMANN: I’ll leave that entirely up to the party room.
FRAN KELLY: Mathias Cormann, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.