Senator the Hon Mathias Cormann
Minister for Finance
SANDY ALIOSI: Well Federal Parliament is back today and the Government is sure to face questions from Labor on its plans for tax changes, specifically any move to increase the Goods and Services Tax. To look at tax reform in this election year, we are joined now by Finance Minister Mathias Cormann. He is speaking to Marius Benson.
MARIUS BENSON: Mathias Cormann, good morning.
MATHIAS CORMANN: Good morning Marius.
MARIUS BENSON: Now on tax reform, the Government, the Turnbull Government, specifically has been talking about tax reform for five months. It is all confusion, it is all speculation still. Can you provide anything definite in terms on clarity for the process for tax reform? The timing, the content of tax reform beyond the simple assertion that reform plan will be out before the next election? Just some clarity.
MATHIAS CORMANN: That is a very clear timetable. Our focus is on policy reform which helps deliver stronger growth and more jobs. That is why we are focused on reforms that can deliver a more growth friendly tax system. This is only part of an overall plan. We are focused on stronger growth and more jobs, which is why we are pursuing an ambitious deregulation agenda, an ambitious innovation agenda, an ambitious free trade agenda, an ambitious infrastructure investment program. It is why we are seeking to build on the work we have done in this term in making our tax system more growth friendly.
MARIUS BENSON: On tax, you promised a Green Paper, this is a discussion paper, then another discussion paper, a White Paper, is that still your promise to bring out these discussion papers? Because it has been reported that you’ve scrapped those plans for green papers, white papers. Have you scrapped those plans?
MATHIAS CORMANN: As you have indicated there has been a discussion now for some time. It was initiated through a tax reform discussion paper, which was released initially by Joe Hockey. There has been a conversation over the last five months or so under the Turnbull Government. Our intention is to make a very clear announcement about our tax reform package before the next election so people have the opportunity to pass judgement at the next election and about... interrupted
MARIUS BENSON: But what about that Green Paper and that White Paper, have they gone west?
MATHIAS CORMANN: In the end, what is important is that people across Australia will have a very clear indication of what the plans of the Turnbull Government are to improve our tax system so we can strengthen growth and create more jobs in good time before the next election, so people can pass judgement on whether they prefer our proposed way forward or whether they prefer an alternative approach.
MARIUS BENSON: Can you just clarify though, this promised Green Paper followed by a promised White Paper, they are no longer promised?
MATHIAS CORMANN: What I am saying to you is that, our promise is to make very clear before the next election ... interrupted
MARIUS BENSON: No, no, you’ve made that point Minister, but can you just directly reply to that. Will there be a Green Paper followed by a White Paper before your final reform package pitch?
MATHIAS CORMANN: The specific process is a matter for the Treasurer. What we have said very clearly, and the conversation about how best to improve our tax system has been going on for some time, between now and the next election we will, ... interrupted
MARIUS BENSON: Sure, but the specific process, to borrow your phrase was a Green Paper followed by a White Paper followed by a reform package. Is that no longer the specific process?
MATHIAS CORMANN: What I am saying to you is that what is important is that people across Australia have a very clear indication from the Government before the next election what our proposed tax reform policy will be for implementation in a second term so that people can pass judgement on it. What form that announcement takes, that is going to be a matter for the Treasurer. This will be finalised in good time before the next election.
MARIUS BENSON: Well it sounds like that Green and White Paper have gone west.
MATHIAS CORMANN: In the end, what matters is that people across Australia have a very clear indication of what it is that we are proposing to do and people will.
MARIUS BENSON: Sorry Minister are you still with us?
MATHIAS CORMANN: Yes, I’m here.
MARIUS BENSON: Good. Can I just go on to the proposal, the specific proposal which is the focus of most attention which is the GST. Now the proposal is, that were there to be a GST increase, this would not be to increase the overall tax burden but to be a trade off for income and company tax. So you’re sales pitch would be vote for a tax increase so we can give you a tax cut.
MATHIAS CORMANN: What we are focussing on is how we can make our tax system more growth friendly. How we can raise the necessary revenue for Government to fund the important benefits and services provided by Government in the most efficient, least distorting way in the economy. So yes we do want to deliver material personal income tax cuts., we do want to ensure that our company tax rate is internationally competitive as part of our focus on providing the right incentives for people to work, save and invest and as part of our focus on facilitating stronger growth. Now if you want to deliver material reductions in personal income tax and a cut in the company tax rate, then you have to find a way to pay for that by way of, among other things, a more efficient way of raising the revenue elsewhere. That is the conversation that we’re currently having.
MARIUS BENSON: Mathias Cormann, can I leave the economy there and ask you another question because talking points, these are papers issued by governments and oppositions to guide their members on what sort of things they should be saying in the media each day. The Government’s talking points were put out yesterday and you and other Government members were urged to be proactive and talk about jobs and economic growth, pretty obvious points. But the interesting thing is that the talking points themselves were leaked as soon as they were distributed which suggests to a reasonable observer that there is a degree of dissent within the Turnbull Government ranks. Are a few people unhappy in there?
MATHIAS CORMANN: I believe that the Turnbull Government is a strong and united team. I don’t think that there is anything unusual about a Government communicating with Members and Senators about its priorities and about why our approach is a better approach than the destructive approach put forward by Labor. To be frank, having that information disseminated widely, I think is a very good thing.
MARIUS BENSON: Mathias Cormann, thanks again.
MATHIAS CORMANN: Always good to talk to you.