Senator the Hon Mathias Cormann
Minister for Finance
MICHAEL ROWLAND: Tax reform will be very high on the agenda when Federal Parliament resumes today. Here to talk about that as well as other issues is the Finance Minister Mathias Cormann who joins us from Parliament House in Canberra. Mathias Cormann, good morning to you.
MATHIAS CORMANN: Good morning. Good to be here.
MICHAEL ROWLAND: Firstly let’s go to reports this morning of significant unrest at the Christmas Island Detention Centre following the death of an asylum seeker who escaped from the centre over the weekend, have you been able to confirm reports of unrest?
MATHIAS CORMANN: No. These are matters that are most appropriately dealt with by Peter Dutton the Immigration Minister. I’ve got to say I'm not aware of the official detail in relation to these matters.
MICHAEL ROWLAND: Do you know how this man's death is going to be investigated?
MATHIAS CORMANN: No, I don't. As I say, these are really matters that are best addressed by Peter Dutton.
MICHAEL ROWLAND: We'll chase it up with him. Let’s go to tax reform now and Dan Tehan the head of the Coalition Economics Committee has written a piece in the Financial Review this morning saying that argument should be made about the GST being extended to financial services, bank products and the like is there a case for that?
MATHIAS CORMANN: Well at the moment there is a public conversation underway about how our tax system can be improved. The focus for the Government really is on pursuing tax reform that will help us strengthen productivity, that will help us strengthen economic growth, that will help to encourage people to work more, save more and invest more. At the moment we are exploring all sorts of different options and scenarios and at some point in the next few months we will be making decisions in relation to the best way forward.
MICHAEL ROWLAND: Should banks be immune from any move to either broaden or increase the GST?
MATHIAS CORMANN: I’m not going to lock ourselves into specifics at the moment. At the moment we are in good faith engaging with the states and territories. We are in good faith engaged in an open-minded conversation about how our tax mix can best be improved without increasing the overall tax burden in the economy. Obviously over the next few weeks and months we will be making decisions at the right time, once we've got all of the information, all of the facts and figures in front of us.
MICHAEL ROWLAND: How will the Government guarantee the tax burden won't be increased?
MATHIAS CORMANN: Ultimately once you make decisions on possible ways forward there is modelling that will be undertaken in order to give ourselves comfort that the reform that we are pursuing is reform to make the tax system more efficient, less distorting, fairer and obviously with a view of making sure that the overall tax burden in the economy is not increased. Because in the end, the purpose of all of this is to ensure that our tax system is designed such that we can have the strongest possible economic growth moving forward, because in the end, the best way to increase revenue for Government is on the back of stronger growth and not on the back of new or increased taxes overall.
MICHAEL ROWLAND: Will potential income tax cuts be part of the reform plan being considered?
MATHIAS CORMANN: That is obviously what we're focused on. In Australia our personal income tax rates are comparatively high. Our reliance on personal income tax is too significant. Our company tax rate is pretty high by international standards. So obviously we're focusing on how we can provide better incentives for people to work more, save more and invest more. At the moment through bracket creep, more and more middle income earners are getting into the higher income tax brackets, paying more tax and obviously at some point that becomes a disincentive to work. Really our focus is how can we improve productivity, on the back of a better tax system which includes a goal to pursue material personal income tax cuts and company tax cuts - but in the end you've got to find a way to pay for that.
MICHAEL ROWLAND: What did you make of the Greens' argument over the weekend that the cost of reimposing the carbon tax would be less than making any change to the GST?
MATHIAS CORMANN: Well, it's wrong. I don't understand their maths. They were suggesting that somehow you could collect more in tax with less of an impact. Well, that's just voodoo economics. The truth is that the carbon tax seriously undermined our international competitiveness. It was imposing a cost on our economy, on families, as well as business, a cost that wasn't faced by our competitors in other parts of the world. As such, not only was it having an impact on families' electricity bill, it was also having an impact on the capacity of business to be successful moving forward and as such to employ people across Australia. That is why we took that lead out of our saddle bag, so that business in Australia can be more successful, employ more people and give more people an opportunity to get ahead.
MICHAEL ROWLAND: The Trade Union Royal Commission Counsel Assisting the inquiry has found that Bill Shorten the opposition leader did not engage in any unlawful or criminal conduct. Why did the commission bring it upon itself to release that finding at 8 o'clock on a Friday night?
MATHIAS CORMANN: Well, I'm not sure that’s it’s true to say that the Commission has made a finding. I think as I understand it ...interrupted
MICHAEL ROWLAND: That’s what I said that the Counsel Assisting the commission?
MATHIAS CORMANN: You would have to ask them that question. I don’t know why they decided ...interrupted
MICHAEL ROWLAND: Is it a good look - excuse me for interrupting, but is it a good look to release such a statement affecting a senior political figure so late on a Friday night?
MATHIAS CORMANN: I'm not a commentator. That’s really a matter for them to answer. It’s really not a matter for me.
MICHAEL ROWLAND: Does it potentially distract from the commission's work?
MATHIAS CORMANN: You can ask me that question as many ways and different times as you like, in the end, that is really a matter that is appropriately addressed by them.
MICHAEL ROWLAND: Can you think of any other statement, a media release affecting a senior political figure in the past that has been released at such a time?
MATHIAS CORMANN: If you want me to go back through history and do some research and I will be back.
MICHAEL ROWLAND: Can you understand how voters would see this as potentially not being above board - releasing such an important statement at a time when nobody is paying attention?
MATHIAS CORMANN: Well, you would have to ask them the question as to why they released the statement at that point in time. I really can't add anything to that.
MICHAEL ROWLAND: Mathias Cormann, we hope you will be back with us at some time in the future. Thanks for your time.
MATHIAS CORMANN: Always good to talk to you.