Transcripts → 2016


Sky News - AM Agenda

Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate 


Date: Friday, 4 March 2016

Tax reform, Budget

KIERAN GILBERT: Good morning and welcome to the program, it has been another messy week for the Government and central to its issues, a leak of an earlier version of the Defence White Paper earlier in the week, a national security document this was. While the former Prime Minister Tony Abbott has denied being responsible, he did comment on the leak in The Australian just a few days ago. That has been seen to have validated the report and he has come in for some flak from his fellow Liberals for doing so. Coming up on the program this morning, Graham Richardson and Peter Reith to look at that and the other issues of the day. First though, I’m joined by the Finance Minister Mathias Cormann and a lot to talk about in terms of tax and electoral reform as Special Minister of State of course you have got carriage of that as well. But first on this leak from someone who had access to a National Security Committee document, the former Prime Minster says he wasn’t responsible but he did comment on it. Was that appropriate then to do that?  

MATHIAS CORMANN: Firstly, I accept Tony Abbott’s word that he is not responsible for the leak. Whoever did leak that document was incredibly reckless with our national security. It is absolutely deplorable that somebody would leak that sort of information with all of the implications that has, potentially, for our national security. In relation to the public commentary, I would have preferred if Tony had chosen not to comment publicly, but he has, we are where we are, we move on.  

KIERAN GILBERT: Are we seeing some destabilising, some undermining, just as we saw with Kevin Rudd and Labor? In fact the front page of The Age in Melbourne has Kevin Rudd and Tony Abbott morphing on the front page. 

MATHIAS CORMANN: Tony Abbott is no Kevin Rudd. You don’t see the same at this stage and I don’t expect that we would ever be like the Labor Party. We are a very united team. Yes, there obviously are some issues that are still being worked through in the wake of the leadership transition that took place in the second half of last year, but to compare it with the battles between Julia Gillard and Kevin Rudd would not be right.  

KIERAN GILBERT: Some issues to work through, is it only a small section of the party room now that still have those issues? Is the vast majority behind Mr Turnbull? 

MATHIAS CORMANN: Overwhelmingly the party is united. Overwhelmingly the party is united behind Malcolm Turnbull. Overwhelmingly we are all focussed on providing good government and on doing everything we can to be successful at the next election under Malcolm Turnbull’s leadership. 

KIERAN GILBERT: So how many are you talking about?  

MATHIAS CORMANN: I’m not going to get into that. 


MATHIAS CORMANN: I’m not going to get into that sort of speculation, I’ll leave that to you.  

KIERAN GILBERT: The BIS Shrapnel report yesterday, it has come in for a lot of flak, saying it was not even modelling Labor’s policy. Was the Treasurer wrong to have seized that as strongly as he did yesterday, given the flaws in it? 

MATHIAS CORMANN: Not at all. It was a damning reflection on Labor’s policy, because it actually underestimates the negative impact of Labor’s policy in that it didn’t take into account Labor plans to increase, by 50 per cent, capital gains tax. What the BIS Shrapnel report shows is that the sort of policy promoted by the Labor party on negative gearing would have a terrible effect on property values. It would have a terrible effect in pushing up the cost of rental accommodation, something that we have said for some time. It would have a terrible effect on the economy overall.   

KIERAN GILBERT: But Labor says that it is flawed at the very heart of the report because it suggested that negative gearing would continue for shares and so on, and then you would get a flight out of property into shares. But that is not the case, that’s not Labor’s plan.   

MATHIAS CORMANN: Its main flaw is that it underestimates the damage that Labor’s policy would actually do to the property market, to the economy and to people across Australia looking for rental accommodation. It actually underestimates the disastrous and negative impact that Labor’s policy would have if it was implemented.   

KIERAN GILBERT: Are you doing separate modelling of Labor’s policy, to check this and to have some substance behind your argument? 

MATHIAS CORMANN: We are working on our own policy in an orderly and methodical fashion. We are considering all of the information and all of the advice, all of the expert advice and we ...interrupted 

KIERAN GILBERT: Are you modelling Labor’s too? 

MATHIAS CORMANN: I’m not modelling Labor’s policy, I’m not interested in modelling Labor’s policy. I observe that BIS Shrapnel, a highly regarded consultancy firm in this space has come out with some very interesting information and it is very damning on what Labor is trying to do in this space.   

KIERAN GILBERT: Was this a Government commissioned report? 


KIERAN GILBERT: The Government wasn’t behind it? 

MATHIAS CORMANN: We were not behind it, no.  

KIERAN GILBERT: Let’s look at your policy now, what is there going to be to announce? It seems you look at Jennifer Hewitt in the Australian Financial Review this morning; the Prime Minister is going cold on some of the elements to superannuation reform. As I understand it the tax plan is going to be announced just after Easter, early April is when the tax plan is going to be announced, but what’s going to be in it? 

MATHIAS CORMANN: I’ll let you and Jennifer Hewitt and everybody else speculate. The Government continues to work through all of the information in front of us. We work continuing to consider all of the expert advice in front of us, including from external stakeholders. At some point we will be making some decisions on the best way forward.  

KIERAN GILBERT: Will there be something substantial in it? 

MATHIAS CORMANN: The Prime Minister and the Treasurer will be announcing our tax policy for the next election at the time of their choosing, when the Government is ready to make those announcements.  

KIERAN GILBERT: But are you confident that there will still be something of substance? Because at the moment it looks like everything has been ruled out and that really leaves you with not a lot. 

MATHIAS CORMANN: I’m confident that we will have the tax policy that best helps us strengthen growth and create more jobs. I’m confident that the policy that we put forward will help make our tax system more growth friendly, building on the tax cuts for small business that we delivered in last year’s Budget, building on the abolition of the carbon tax and the mining tax which helped make us more competitive internationally, which helped attract investment at the time when Labor was trying to make it harder to attract investment and generate growth.  

KIERAN GILBERT: If it’s incremental this time, does it mean that tax reform is dead? Or in a second term is it possible that you look further, for substantial changes? 

MATHIAS CORMANN: What I was trying to put to you just now is that tax reform is an ongoing process. Tax reform is not something that happens in one big bang and then it is over. You always have to keep looking at whether there are opportunities to raise the necessary revenue for Government in a better, more efficient, less distorting way in the economy and in a way that is also fair.  

KIERAN GILBERT: So it is possible that you go further in a second term but ...interrupted 

MATHIAS CORMANN: Well, it is an ongoing process. Every Budget, you look at the expenditure side of the Budget to make sure that the expenditure is efficient, well targeted, as high as necessary, as low as possible and you look at the revenue side of the Budget. You look for opportunities for improvement. 

KIERAN GILBERT: I want to ask you just quickly before I go to Peter Reith and Graham Richardson, the Building and Construction Commission legislation, it is not on the program of the notice paper heading into the final sitting week before the pre-Budget break. Does that mean that as a prospect for a double dissolution trigger is now dead?  

MATHIAS CORMANN: It is on the Notice Paper, it’s just not on the list of bills to be dealt with in that one short sitting week in March. The legislation to re-establish the Australian Building and Construction Commission remains a high priority for the Government, but in this next sitting week our highest priority is to secure passage of the Senate voting reform. Our judgement is that this will take all of the usually available Government time in the Senate that week and more. That is why we have quite openly and transparently said that we don’t expect, we won’t be able to deal with it in that week in March, but we will deal with it as soon as we get back after the Easter break.   

KIERAN GILBERT: The question is, will it still serve as a trigger? I guess that’s a matter for the constitutional experts? 

MATHIAS CORMANN: That’s a matter for other people to speculate.  

KIERAN GILBERT: Minister, thank you for your time.