The Conversation – Politics Podcast

Senator the Hon Mathias Cormann
Minister for Finance
Special Minister of State






Senate voting reform, Tax reform, Budget

MICHELLE GRATTAN: Mathias Cormann is about to be the Minister who secures a major change in the Senate voting system. There is a dash of chance in this; he has become Special Minister of State in addition to his Finance Minister job after the former minister, Mal Brough, quit the front bench because he is the subject of a police investigation. The Government has done a deal with the Greens which will enable a basic change to the system. In future there will be optional preferential voting which will replace the present group tickets for those who vote above the line and in a last minute change, as the Bill is going through Parliament, this will apply to below the line voters as well. The new system will better reflect voters’ wishes than the present arrangements. But, it will also squeeze out micro-players whether micro-parties or individuals. So we won’t be getting the Ricky Muirs in the future. Mathias Cormann, thank you for joining us.

MATHIAS CORMANN: Good to be here.

MICHELLE GRATTAN: You’ve made a last minute change to the Senate reform Bill, can you explain what you have done?

MATHIAS CORMANN: The announcement that we made today, responding to the recommendations of the Joint Standing Committee on Electoral Matters into our Senate voting reform proposal is that as well as introducing optional preferential voting above the line, we are proposing to introduce a form of optional preferential voting below the line as well, which is broadly consistent with the original recommendations of this committee. The way we propose to do so, is that there will be guidance on the Senate ballot paper, instructing voters to vote below the line by numbering boxes one to twelve in order of their preference. There will be a savings provision to ensure that any ballot paper where at least six boxes are numbered from one to six below the line, that vote would still be considered formal.

MICHELLE GRATTAN: This was in the original recommendation of that committee a couple of years ago. Why wasn’t it taken up in your Bill initially?

MATHIAS CORMANN: What we sought to do and our priority in our reform proposal as originally proposed, was to empower voters to determine what happens with their preferences after they vote ‘one’ above the line. The problem at the moment is that if you vote ‘one’ above the line you lose control of what happens to your preferences to group voting ticket arrangements negotiated by backroom operators in political parties. The same problem doesn’t exist below the line. Above the line, it is not possible for voters to express a preference and to determine what happens to their preferences. Below the line, right now, voters can express a preference and direct their preferences according to their wishes. So, our initial view, based on consultation on the original Joint Standing Committee on Electoral Matters report, was that the priority was to abolish group and individual voting tickets, to give voters the power to determine preferences above the line and to make a slight improvement to the savings provision below the line, which would have led to less than one per cent of informal votes based on the results at the last election. But, on reflection, and this is the Parliamentary process at work, having considered the submissions that were made by very distinguished Australians to the Joint Standing Committee on Electoral Matters, having considered the recommendations of that committee to put forward this opportunity for below the line voting as well, we have made a decision to go along with that recommendation.

MICHELLE GRATTAN: That inquiry was a very short one, as you say it got lots of submissions, but only half a day of hearings. That was yesterday, report was out first thing this morning. Do you think in retrospect it would have been better to bring this legislation forward earlier in the term? Obviously it was delayed so you didn’t upset the crossbenchers too much, but they were always going to be upset when it happened.

MATHIAS CORMANN: I don’t agree with your characterisation. The Joint Standing Committee on Electoral Matters started this process some years ago, indeed, very soon after the 2013 election. That Committee considered the conduct of the last election, in particular the conduct of the Senate election, made a series of recommendations which the Government has been considering and which the Government has been consulting on with interested parties in the Parliament. We acted on these and put forward our proposal when we were ready to do so, given what was happening with those discussions. This is not a complicated reform proposal. What the Government is seeking to do, is to ensure that in future elections the result of the Senate election reflects the will of the people. The way we are proposing to do that, is by empowering voters to determine what they want to happen to their preferences above the line as well as below the line. That is something that has been recommended by a cross party committee of the Parliament, with the support of Labor, the Greens and the Coalition for many, many years. The suggestion by some that this is rushed is just part of political games being played now, given that Labor has changed their position at the last minute.

MICHELLE GRATTAN: What do you say to the critics who argue that this will stifle the rise of serious small parties, that this really puts a corset on the system if you like?

MATHIAS CORMANN: Well it doesn’t. What it does is it empowers the Australian people to determine what happens to their votes and to their preferences. What it does, is it will help ensure that the result at the next Senate election, and at any subsequent Senate election, reflects the will of the people. What the makeup of the next Senate is, what the result is at the next election, is a matter for the Australian people. Our job, as members of Parliament now considering this issue, is to ensure that the electoral process helps deliver a result which genuinely reflects the will of the Australian people. That is what we are doing based on the recommendations some years ago, put forward by a cross party committee of the Parliament with unanimous recommendations. Incidentally, it wasn’t just Labor’s shadow minister Gary Gray who endorsed that approach and indeed was a strong advocate for what we are proposing. The then Senator John Faulkner was part of this inquiry, the deputy chair of that inquiry is a long serving Labor member of Parliament in Alan Griffin. All of them supported and advocated for this position and indeed the national secretary of the Labor Party advocated for what we are now proposing to do in his submission to this inquiry some two years ago. Bill Shorten was put under pressure by some of his most discredited backroom operators and he has succumbed to that pressure instead of taking the considered advice of highly regarded long serving members of Parliament like his shadow minister Gary Gray.

MICHELLE GRATTAN: As one of the main negotiators for the Coalition in the Senate, you have had more to do with the crossbench Senators than many people. You are a man of considerable patience, but what has it been like? Has it been a really frustrating job to have to do that?

MATHIAS CORMANN: Not at all. I have enjoyed my engagement with the crossbench. Every day when I come into this office and do this job I give it the best I can on behalf of Australia. I have enjoyed working with crossbench members of Parliament, but ...interrupted

MICHELLE GRATTAN: I thought you were going to say I invite one or two in for breakfast!

MATHIAS CORMANN: I’ve had regular meetings with a number of crossbench Senators for some time now. The point here though is, that if you look at the public interest in relation to elections, it is in the public interest for the result of an election to reflect the will of the Australian people. At the last election, 97 per cent of Australian voters voted above the line in the Senate. Those 97 per cent of Australian voters, voting above the line immediately lost control of their preferences after they put the number one into that box above the line. What we are enabling them to do, is to determine where their preferences go, instead of having the Stephen Conroy’s and the Sam Dastyari’s of this world trade and direct those preferences in exchange and in return for favours for other political parties. This is about making sure that the Australian people are empowered to determine what they want to happen with their vote and with their preferences, and who they ultimately help to elect into the Senate.

MICHELLE GRATTAN: As you say, we don’t know how an election will go, how the next Senate election will go, what sort of result it will produce. But it was interesting this week that John Howard said that principal winners he thought in future would be the Greens, and he sort of said in a way, that he hoped this had been thought through. He was suggesting if the Greens do end up long term principal winners, won’t it be more difficult for a future Coalition Government to try and deal with one bloc that is ideologically hostile, than a range of people who are all over the place?

MATHIAS CORMANN: I’m not a speculator and my job is not to speculate on what the Australian people may or may not decide down the track. The result at the next election and any election after that is entirely a matter for the Australian people. Our job as public policy makers, as we consider the most appropriate process to facilitate elections into the future, is to ensure that that process delivers the result that the Australian people intended to deliver. That the election result in the Senate and indeed in the Parliament, reflects the will of the Australian people. That is what we are working to do and we are grateful that other Senators and other parties in the Senate have agreed with the Government on these matters.

MICHELLE GRATTAN: Now you’re about to get this change through, wouldn’t it be foolish not to go to a double dissolution and get a Senate that reflected the will of the people better?

MATHIAS CORMANN: These matters are not related. The truth is, whenever the election is and whatever the form of that election, from a public interest point of view, it is important that that election result reflects the will of the Australian people. When it comes to double dissolution elections, there is obviously a lot of speculation. Our intention is to serve, in the ordinary course of events, until an election which is due in August, September or October this year. Subject to certain conditions, double dissolution elections are options available to Government under our constitution at any time, irrespective of what happens to this legislation to resolve deadlocks between the House of Representatives and the Senate. The two are not linked.

MICHELLE GRATTAN: Except that this Government has been complaining for a very long time that the Senate has not acted responsibly in many cases, so if you’ve got ...interrupted

MATHIAS CORMANN: What we have complained about is that the Labor Party has not acted responsibly. If the Labor Party had acted responsibly, we would have been able to get all of our legislation through the Senate.

MICHELLE GRATTAN: And if the crossbenchers had been more amenable you would have too.

MATHIAS CORMANN: The blame here is very much on Bill Shorten and the Labor Party. Bill Shorten and the Labor Party left the Budget in a mess. They burdened our economy with lead in our saddlebag, things like the carbon tax and the mining tax which were bad for jobs and investment, and bad for economic growth. They have fought us every step of the way, as we have worked to put Australia on a stronger economic and fiscal foundation for the future. It was their responsibility having created the fiscal and economic challenges for our country at the worst possible time, arguably, given what was happening in the global economy, it was their responsibility as the alternative party of Government to work with us to put Australia on the strongest possible economic and fiscal foundation for the future.

MICHELLE GRATTAN: Now just turning then to budgetary matters, it’s a particularly busy time obviously for economic Ministers. The Budget is being prepared, the tax changes are being crafted, now I know that you’ve made the point this week that they are mainly the Treasurer’s responsibility, but all the economic Ministers are in that mix. It now seems that the tax package is going to be much more modest than had been first expected. Is there a risk that if it’s much more modest, or when it’s much more modest, we miss a once in a generation chance to get major tax reform?

MATHIAS CORMANN: I’ll let the commentators and the analysts make judgements on what their assessment is of our tax policy package when it is released by the Prime Minister and the Treasurer. But let me make this broader point. As a Government, ever since our election in September 2013, we’ve been working very hard to strengthen growth, create more jobs and to pursue and implement our plan for stronger growth and more jobs. Now that has involved making our tax system more growth friendly. That is why we got rid of the mining tax and the carbon tax. That is why we delivered tax cuts for small business in the last Budget and that is why we are looking at further opportunities to make our tax system more growth friendly. But that is also why we’ve pursued an ambitious deregulation agenda, an ambitious infrastructure investment agenda, an ambitious free trade agenda, an ambitious innovation agenda. That is why we’re pursuing media reform and Senate reform. We are dealing with all of the big issues and tax is one of these very important issues. As we usually do, in the context of the Budget, there will be a series of announcements on what the Government’s intentions are moving forward.

MICHELLE GRATTAN: We are hearing a lot from the backbench on tax and on spending. Do you think that this is a useful reality check coming from the electorate, or does it in fact inhibit making major reforms?

MATHIAS CORMANN: It is a very important part of our democratic process of course. As a Government, we engage always with our backbench. Indeed, we work through the issues and through all of the different options in front of us in an orderly and methodical fashion within the team. There is a level of conversation within the Cabinet as you’d expect and there is a level of conversation within our Party Room, which is appropriate and necessary. That is what contributes to good and strong and sound decision-making.

MICHELLE GRATTAN: This conversation is particularly focusing in some cases on spending cuts. We heard from Tony Abbott yesterday that there should be a tough approach on spending. It does seem though a big ask before an election to say that spending should be looked at again in a major way.

MATHIAS CORMANN: We have never stopped looking at the spending side of the Budget. When we came into Government in 2013, we inherited a rapidly deteriorating Budget position, principally because of an unsustainable and unfunded spending growth trajectory that had been locked in by the previous Government. In particular in the period beyond the published forward estimates at the time, that is, beyond the period the previous Government was going to be the Government. We have been working our way through that. We have made significant progress in the period of the Abbott Government. We are building on that progress in the period of the Turnbull Government. We’ve already made very clear that the fiscal discipline that we are imposing on ourselves in the lead up to this Budget, but this is an ongoing process. We have to at all times ensure that we only spend as much as necessary and as little as possible, that we spend taxpayers money wisely, as efficiently and as effectively as possible. That is necessary for us to ensure that we can limit the money that we have to raise out of the community by way of taxes in a way that means that taxes can be as low as possible while also being as efficient and the least distorting in the economy possible.

MICHELLE GRATTAN: Is there a lot of fat left on the spending side though?

MATHIAS CORMANN: The job to ensure that spending is as low as possible, as well targeted as possible, as high as necessary, but as low as possible, as efficient and as effective as possible continues. We certainly inherited a very challenging and a very negative trajectory from the previous Government. We’ve done a lot of work to get on top of that and we’re heading in the right direction now. We’ve made progress heading in the right direction but there is more work to be done and the specifics will be announced in the Budget.

MICHELLE GRATTAN: Can you just clarify though as we go into this Budget whether, on the spending side, it’s a matter of a new fresh assault or whether it’s a matter of housekeeping, offsetting new programs, just making sure that there are nips and tucks where you can?

MATHIAS CORMANN: In any Budget you have a comprehensive look at the spending side of your Budget, you have a comprehensive look at the revenue side of your Budget. You have a look at where the opportunities are to ensure that you spend as much as necessary but not more, that you spend as little as possible, that you spend it as wisely and as effectively and as efficiently as possible and that you raise the revenue in the best possible way. That is a process that is currently underway as it is in the lead up to any and every Budget.

MICHELLE GRATTAN: Just finally, as Finance Minister, you’re the Government’s nuts and bolts money man. We don’t know whether there’ll be a double dissolution but we do know that if the Government went down that road, timing is very tight. The Budget is May 10, the last day for announcing such an election is May 11. We also know that you have to have supply to get through a double dissolution. Can you just tell me the mechanism for getting supply in such circumstances?

MATHIAS CORMANN: There are a lot of hypotheticals and a lot of ‘if’s’ in that question. I don’t know what the precise timing of the election is going to be. If there was such a decision down the track, we would cross that bridge at that time.

MICHELLE GRATTAN: But you must’ve done a bit of work ahead of time?

MATHIAS CORMANN: From where I sit, our intention is to go to the election August, September or October. If that were to change and that is of course entirely a matter for the Prime Minister to make a judgement in the national interest on the timing and the form of the election, you would expect that all of the necessary work would be done if that is required at that point in time.

MICHELLE GRATTAN: Mathias Cormann, thank you very much for talking with us again. Thank you to my Producer Pat Hutchins and that’s all from The Conversation’s Politics Podcast for today, we’ll be back with another interview soon. Thanks very much.


Senator the Hon Mathias Cormann, Minister for Finance, Perth