Senator the Hon Mathias Cormann
Minister for Finance
Special Minister of State
PRIME MINISTER: Let me put this to the honourable member, who like me living in Sydney, that increasing capital gains tax is no part of our thinking whatsoever. It is a threat to residential housing values and it's a threat to the economy.
VIRGINIA TRIOLI: That was the Prime Minister in Parliament House yesterday. The Finance Minister Mathias Cormann joins us now from Parliament House. Minister, good morning and welcome to News Breakfast.
MATHIAS CORMANN :Good morning.
VIRGINIA TRIOLI: Any changes to the capital gains tax discount, yes or no?
MATHIAS CORMANN: I won't be announcing our tax policy today. I will leave that to the Prime Minister and to the Treasurer, when we're in a position to announce it in good time before the next election.
VIRGINIA TRIOLI: So why do we have you here, Finance Minister, if you are not prepared to speak about this stuff?
MATHIAS CORMANN: I was asked to come and speak about our proposal to reform the Senate electoral system and that is why I am here.
VIRGINIA TRIOLI: And of course we will get to speak about that, but as Finance Minister, this is a topic of conversation that is now completely confusing to the Australian public. Let's clarify that question, we will refine it a little bit more and see if you can manage this one. Are you at least considering any changes to that discount regime either as it affects superannuation or indeed housing and negative gearing?
MATHIAS CORMANN: Firstly as Finance Minister my focus is on ensuring that we spend as much as necessary but as little as possible. That we spend taxpayers' money wisely, efficiently and effectively and that we make sure that spending is under control so we don't have to increase taxes the way Labor is proposing to do. Our focus on the revenue side of the Budget is to ensure that we raise the revenue for Government in the most growth friendly, the most efficient and least distorting way in the economy, in a way that is also fair, so that we don't detract from economic growth opportunities into the future. We are currently going through an orderly process, assessing all of the options to build on the work that we have done since we came into Government. Last year, in last year’s Budget, we delivered tax cuts for small business. Before that, we abolished the carbon tax and the mining tax which were having a bad effect on investment into Australia and were having a bad effect on growth and jobs. In the lead-up to this year's Budget, we are looking again at opportunities to improve our tax system to make it more growth friendly and to do so in a way that is fair.
VIRGINIA TRIOLI: Is that a yes or a no then, to contemplating changes to the tax discount regime?
MATHIAS CORMANN: It’s a matter of public record that we have been looking right across all of the tax system to assess opportunities for improvements. The announcement, the specific announcements will be made when we have finished that work. I’m not going to add to the speculation ...interrupted
VIRGINIA TRIOLI: But on that matter of record then, let's at least try and clarify this, because this is how our political editor Chris Uhlmann is reporting it today, that you are at least contemplating halving the capital gains tax discount for superannuation funds. Is that at least under contemplation at the moment?
MATHIAS CORMANN: You can ask me that question whatever way you like. I will not add to the ...interrupted
VIRGINIA TRIOLI: I am asking it straight.
MATHIAS CORMANN: I have explained to you what we are doing. We are looking at the whole tax system, to ensure that the tax system is as growth friendly as possible, that we raise the necessary revenue for Government in the most efficient, least distorting way possible in the economy. We are looking right across the system to assess opportunities for improvements and to raise the revenue for Government in a better way, that is also fair. When we have some specific announcements to make, the Prime Minister and the Treasurer will make them.
VIRGINIA TRIOLI: I guess the problem though, for everyone to try and understand both the rhetoric that you are using then the eventual actuality is that you say, and as you have this morning, you are looking right across the tax system, yet no changes to the GST, potentially no changes to what we are discussing this morning, no changes to negative gearing. If the Prime Minister's rhetoric in the House is to be believed then, what does that leave you with for comprehensive tax reform?
MATHIAS CORMANN: Nobody can say that we didn't actually properly assess the opportunity to make changes in relation to the GST and to pursue related ...interrupted
VIRGINIA TRIOLI: Sure, I fully accept that ...interrupted
MATHIAS CORMANN: But you say you fully accept it but then you don't.
VIRGINIA TRIOLI: What I don't accept is that you can't then go on and say, “And we're going to have comprehensive tax reform and we are looking right across the system”. You are not, if you are ruled out a whole big part of it.
MATHIAS CORMANN: We are looking across the whole system. We have been looking across the whole system and obviously, as we work our way through the issues, as we work our way through all the information, we make judgments on what might work and what might not work. When we have completed that work, relevant announcements will be made. That is the way you run an orderly policy development process.
VIRGINIA TRIOLI: So what is the plan for growth then?
MATHIAS CORMANN: We have a very comprehensive plan for growth. Since we came into government we have been focused on improving our competitiveness and on improving our productivity. That is why we have pursued an ambitious free trade agenda, an ambitious infrastructure investment program, an ambitious innovation agenda. That is why we have pursued reforms to our tax system, to make it more growth friendly. With tax cuts for small business in last year’s Budget ...interrupted
VIRGINIA TRIOLI: Whatever they turn out to be.
MATHIAS CORMANN: Getting rid of the carbon tax and the mining tax before that, making a whole series of other changes, pursuing an ambitious deregulation agenda. We have a very comprehensive plan for stronger growth and more jobs to encourage people across Australia to get ahead.
VIRGINIA TRIOLI: Mathias Cormann the Senate deal of micro party reform does seem a done deal now the Greens are on board. How concerned are you that in the future it would allow the Greens to hold the balance of power in future Senates?
MATHIAS CORMANN: The future election results are a matter for the Australian people. What we are seeking to do, responding to the unanimous recommendations of the Committee of the Parliament tasked to review the conduct of the last election, is that elections should reflect the will of the people. In the Senate, the reforms that we have put on the table will empower individual voters across Australia to determine exactly what happens not just with their primary vote, but also with their second, third and subsequent preferences, instead of having those preferences directed in a secretive way by political parties.
VIRGINIA TRIOLI: In hindsight then, are the Greens easier to deal with than this lot, despite all the very many critical things that your side of politics has had to say about that party?
MATHIAS CORMANN: What we have done is, we have considered the recommendations by the Joint Standing Committee ...interrupted
VIRGINIA TRIOLI: That wasn't my question.
MATHIAS CORMANN: Well, I am answering your question directly. We considered the recommendations of the Joint Standing Committee on Electoral Matters, which was a unanimous report supported by Labor, the Greens, and the Coalition. We consulted further, including with the Greens, including with Labor, including with a range of other parties represented in the Parliament and we put forward a proposal based on those consultations, which we believe will appropriately empower voters to determine what happens with their preferences when they vote for the Senate. It’s a matter for other parties to determine how they respond to the proposal that we have put on the table.
VIRGINIA TRIOLI: But it turns out you can actually dance better with the Greens than you can with, say, the PUPs.
MATHIAS CORMANN: We always put forward what we believe in our judgment is the best way forward and then it's a matter for other parties to determine how they approach it from their point of view.
VIRGINIA TRIOLI: Just quickly and finally, how likely is an early election, do you think?
MATHIAS CORMANN: The timing of the election is entirely a matter for the Prime Minister. Our timetable is to go full term and to have the election take place in August or September this year.
VIRGINIA TRIOLI: Mathias Cormann, always good to talk to you, thank you.
MATHIAS CORMANN: Always good to talk to you.