ABC 774 – Drive

Senator the Hon Mathias Cormann
Minister for Finance






National Reform Summit, Higher Education Reforms

FRANCIS LEACH: Prime Minister Malcolm Turnbull, determined to be a big picture man has called his snap summit which was held today amongst Australia's business leaders, unionists and welfare organisations to discuss the big picture issues. It was only a starting point, but it was a conversation which has produced a whole range of ideas, some which are diametrically opposed to one another but at least people are talking. Senator Mathias Cormann is the Finance Minster in the Federal Government, with us here on 774 ABC Melbourne this afternoon. Senator, welcome to 774 ABC Melbourne.

MATHIAS CORMANN: Good afternoon. Good to be here.

FRANCIS LEACH: What was your experience of the summit today, was it a fairly cordial event?

MATHIAS CORMANN: It was a very good meeting. It was a very open, very positive and very constructive discussion with a range of very senior community, business and union leaders and the Prime Minister, the Treasurer and a number of Federal Ministers, talking about the challenges and the opportunities for Australia in the years ahead.

FRANCIS LEACH: Why has it taken two years for this sort of conversation to happen?

MATHIAS CORMANN: Over the past two years a lot of work has been done to put Australia on a stronger economic and fiscal foundation for the future. We are now going into the next phase. We have had a change in leadership in the national Government. This is a good opportunity, given the work that was undertaken by the National Reform Summit a few weeks ago. It was a very good opportunity for the Government to sit down and listen to the views of the leaders of that summit and to try and explore a bit more, to better understand the areas of consensus and the areas where there is the need for some more work to be done.

FRANCIS LEACH: From your own perspective in there, what were the key things that came out of it that might have pricked your ears up to think well okay, this is where we need to go and do some hard work?

MATHIAS CORMANN: The really great thing out of the meeting this morning is that there was a broad consensus, indeed there was unanimity, that Australia needed to pursue stronger growth, needed to be more productive, needed to be more competitive internationally and needed to be more innovative. Under that broad aspiration, which all of us agreed with there was a conversation about some specifics in terms of measures to boost workforce participation, to ensure that people have adequate income in retirement and a whole range of other issues. Today was the beginning of a process of engagement. There will be next steps, there will be further meetings and further discussions. When we have reached relevant conclusions and when we are in a position to make decisions, they will be announced in due course and it will be a matter of pressing ahead at that time.

FRANCIS LEACH: I can't help but feel a little bit flummoxed that these conversation which you're now saying were vital and produced interesting and great and sustainable ideas that might lead to really good outcomes, weren't held before the 2014 Budget which basically was the first step towards the end of Tony Abbott's time in office and was fundamentally rejected by the Senate and was universally disliked it would seem by the rest of the community who walked away from the Coalition in poll after poll after poll after poll as a result of it.

MATHIAS CORMANN: You have to look back to what the context was at the time. When we came into Government in September 2013, we did face some particular challenges. The economy was weakening, unemployment was rising, the Budget position was rapidly deteriorating. We did make a whole series of decisions to put Australia on a stronger economic and fiscal foundation. About 80 per cent ...interrupted

FRANCIS LEACH: They were rejected.

MATHIAS CORMANN: That is actually not right. About 80 per cent of the measures that we've been putting forward in Budgets and Budget updates since the last election have been implemented. We are of course about$85 billion better off than we would have been if we hadn't made some of these decisions.

FRANCIS LEACH: So, some tough calls made today and these have been ongoing ones from the likes of Mike Baird and James Weatherill who want a discussion on the GST being raised from 10 to 15 per cent. Is there any prospect that your side of politics will be able to take that to an election and convince the electorate that that was in their best interests.

MATHIAS CORMANN: What we want to take to the next election is a set of proposals to improve our tax system so it can facilitate stronger growth and better productivity across ... interrupted

FRANCIS LEACH: Is that the way to do it?

MATHIAS CORMANN: The ways and means and the process, that is what we're currently talking about and no final decisions have been made. The key though out of the conversation today is that the Government has been very clear that we're not taking anything off the table, we will have an open-minded conversation, we will keep an open mind and obviously over the next few weeks and months we will reach landing points on a number of these issues.

FRANCIS LEACH: But Mathias Cormann, let's be honest. You've been in the role for two years, you must have considered the pros and cons of an increase in the GST or else you wouldn't be in the job you're in. What's your position on it?

MATHIAS CORMANN: In the last two years, it's not like we didn't have anything to do. We always said in the lead up to the last election that our first priority would be to get rid of some of the burdens that were, in our view, inappropriately imposed on the economy by the previous Labor Government. That's why we got rid of the carbon tax and the mining tax, that's why we've been focussing on reducing red tape costs for business, that's why we've delivered a tax cut for ...interrupted

FRANCIS LEACH: With all respect Minister, this is finance 101, GST to increase or not to increase? It's absolutely core business for you, why don't you have a position on it?

MATHIAS CORMANN: I disagree with you. It is not finance 101. What is our objective and what we need to very carefully weigh up in terms of what the right way and the best way forward is, is how we can ensure that our tax system is the simplest, most efficient, least distorting in the economy. How can we ensure that we have a tax system that provides the right incentives for people to work more, to save more, to invest more, so we can strengthen growth. It's not just a matter of flicking a switch. You've got to take the community with you. There is a process currently underway through the tax reform discussion paper, which will be followed up in the next little while with a Green Paper, which is essentially a draft set of proposals to improve the system. Ultimately the intention being that between now and the next election we will be putting forward a set of reform proposals to pursue as part of a second term agenda. It is very important for us to go through a proper, orderly and considered process with this. It's very important that we continue to engage in the conversation with the community, so that the community understands what it is that we are doing and why.

FRANCIS LEACH: Mathias Cormann's with us, Finance Minister in the Federal Government, Malcolm Turnbull's Government. At a quarter past four on774 ABC Melbourne. Francis Leach with you as well. Just one of the other issues which has been something of concern for those in the Labor movement and beyond, the growing number of unions and business lobby groups and welfare organisations have been talking for a long time about superannuation tax concessions for wealthier people and the Government having the stomach to actually close some loop holes and make that fairer in terms of what they deliver to the tax return.

MATHIAS CORMANN: What we have said all the way through is that we are committed to looking at our tax system and how the overall tax system can be improved. These are the sorts of issues that were raised by representatives at the meeting this morning. The Government this morning was very much in listening mode. We didn't put any proposals forward. Our commitment today was to have an open mind and to keep everything on the table for discussion, but these sorts of matters will have to be very carefully considered in terms of all of the implications that would have on the community and on our economy.

FRANCIS LEACH: Senator Cormann, the former Prime Minister said on Macquarie Radio here in Melbourne today that he was disappointed that more people didn't get behind the 2014 Budget. He called it a gutsy and landmark Budget which the country needed and one of the key proposals to uncap university fees has been put on the shelf, Simon Birmingham the Education Minister doing that today. Do you think it is the right time to dump it considering you fought so hard as a Government to try and get these changes past?

: It hasn't been dumped. It hasn't been put on the shelf. It has been deferred by one year in order to facilitate more consultation with relevant stakeholders. It is a very important reform. It is one where the former Education Minister Christopher Pyne did a lot of excellent work and most of the actual stakeholders in the university sector were very supportive of the reform proposals that Minister Pyne had put forward.

FRANCIS LEACH: Can I just clarify this, it has been a moratorium for I guess one year, so this is the policy that you will take to the next election and ask people to judge you on?

MATHIAS CORMANN: I am not going to pre-empt what will come out of the consultation process over the next year. That is what you are inviting me to do. That is not something I am going to do. The point here though is, what I have said to you earlier, since we have come into Government about 80 per cent of our Budget repair measures have been implemented to the tune of about $85 billion worth of improvements in our underlying cash balance. Without that we would be in a weaker ...interrupted

FRANCIS LEACH: But with respect Minister, we are not looking back now, we want you to look forward to…

MATHIAS CORMANN: You asked me about the 2014 Budget, that was looking back if I may say so.

FRANCIS LEACH: One other thing that was said today by the former Prime Minister was that there was a lot of dirty water that had gone under the bridge with Malcolm Turnbull becoming Prime Minister and that he has received, mostly text messages from those who had changed their mind in their support of Tony Abbott and saying the reason why was despite the good policies that change was inevitable. Did you send the Prime Minister a text message? 

MATHIAS CORMANN: Say that again?

FRANCIS LEACH: Did you send the Prime Minister a text message to explain how you voted in the recent ballot?

MATHIAS CORMANN: Everyone knows how I voted in the recent leadership ballot. Malcolm Turnbull knew how I voted. Tony Abbott knew how I voted. I think that everyone across Australia who took an interest in these matters knew how I voted. I have been very transparent. This is all ancient history to be honest. The party made a decision to change leaders. The party made a decision to elect Malcolm Turnbull as our leader and our Prime Minister. I fully support our new Prime Minister. I am doing everything I can to help him be the most successful Prime Minister he can be and to help him lead the most successful Government that we can be for Australia.

FRANCIS LEACH: When do you think we will see from outcomes from what was discussed today?

MATHIAS CORMANN: Again, as I said earlier, today was the beginning of a process of engagement. There will be further engagement in the weeks and months ahead. When we are in a position to make decisions on various aspects on what is on the table we will be making those announcements in due course.

FRANCIS LEACH: Thanks for talking to us today.

MATHIAS CORMANN: Always good to talk to you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth