Senator the Hon Mathias Cormann
Minister for Finance
Special Minister of State
Date: Monday, 21 March 2016
RAFAEL EPSTEIN: When the pollsters ask people who they think is going to win, most people by a large margin picked the Coalition. But polls are a little closer than that. The Minister for Finance and the Deputy Leader of the Government in the Senate is Mathias Cormann. Thanks for joining us.
MATHIAS CORMANN: Good evening.
RAFAEL EPSTEIN: When Malcolm Turnbull took over he spoke a lot about economic leadership and did not mention the building construction watchdog, workplace relations or union corruption. What happened? What’s changed?
MATHIAS CORMANN: Nothing has changed. This is clearly an important part of our economic plan. The Prime Minister, when he took over as Prime Minister, was very clear that we needed to ensure that our economy was as competitive, as productive and as innovative as possible. The re-establishment of the Australian Building and Construction Commission was an election commitment we took to the last election. It is squarely a central part of our plan to improve productivity across the economy... interrupted
RAFAEL EPSTEIN: Not as central as tax reform though surely.
MATHIAS CORMANN: Tax reform is important. Tax reform is something that will continue to be progressed. But this is a very central part to lifting productivity across the Australian economy and bringing down the cost of construction.
RAFAEL EPSTEIN: I just can’t find anything in the first few months of Malcolm Turnbull’s transcripts on the construction watchdog, on union corruption. I can find a lot on leadership. The focus, certainly, ‘my Government has a major focus on tax reform’. That is the Prime Minister in the first few days of winning office. It looks like you have run out of answers on economic reform.
MATHIAS CORMANN: I completely disagree with you. I remember very well the Prime Minister right up front making it very clear, that in order to manage the transition from mining construction driven growth to broader drivers of economic activity and growth we needed to ensure that the Australian economy was as competitive, as productive and as innovative as possible. This particular measure, the re-establishment of the Australian Building and Construction Commission always has been and will be until it is legislated, a core priority for the Government as part of our productivity agenda.
RAFAEL EPSTEIN: It is just that the Treasurer was talking up the GST, he had to back down. He talked up big tax cuts, he had to back down. Even today he was talking up a May 10 Budget and had to back down.
MATHIAS CORMANN: I will let you run the commentary. We are making decisions on how we can best advance our agenda for stronger growth and for more jobs. Our judgement is that the best way to secure the re-establishment of the Australian Building and Construction Commission, which is an important part of our productivity agenda, is to follow the steps that were announced by the Prime Minister today.
RAFAEL EPSTEIN: I wonder as a Senator, do you see a genuine chance of the Senate passing the legislation you are speaking about?
MATHIAS CORMANN: That is our hope. We are giving the Senate the opportunity to debate this legislation again. This is a Bill that has come before the Senate before. The Senate has sent it to three different inquiries so far. The most recent inquiry reported on the 15th of March, Tuesday a week ago. Now there will be an opportunity for the Senate to spend about three weeks debating the merits of this proposal. We are hopeful that the Senate will decide to pass it, but if it doesn’t then we will be fighting the next election over this. We would then intend to secure the re-establishment of the Australian Building and Construction Commission on the other side of the election.
RAFAEL EPSTEIN: How appealing is the argument on union corruption and the watchdog? It was a substantial feature in the Victorian election and did not appear to be an issue that won the Coalition the last state election here. Do those issues have more traction outside of Victoria?
MATHIAS CORMANN: This is a very important issue for our future economic prosperity, for our future economic success. Since the Australian Building and Construction Commission was abolished by the Gillard government in 2012, the number of days lost to industrial dispute has increased by 34 per cent. There is no doubt that there were significant productivity improvements across Australia and the cost of construction did come down compared to where it would have been as a result of the work of the Australian Building... interrupted
RAFAEL EPSTEIN: I suppose that question is an invitation. Maybe we vote more left in Victoria, maybe there are bigger construction corruption issues outside of Victoria. Would either of those be true?
MATHIAS CORMANN: I’m not going to provide a running commentary. The Australian Building and Construction Commission it is a very important initiative to bring down the cost of construction and to improve productivity right across the nation, including in Victoria. The way people decide to vote at the next election is a matter for them. We will be putting our argument at the next Federal election, as to why we believe this is an important measure, if the Senate hasn’t passed this legislation before then.
RAFSEL EPSTEIN: 1300 222 774 you can hear what is very much the preparation for an election campaign. Mathias Cormann is the Finance Minister in Malcolm Turnbull’s Government. Minister, I noticed that the Prime Minister very deliberately used the words, on Labor’s tax policies, that they would be ‘a handbrake on the economy’. He didn’t repeat his statement that Labor’s policies would smash house prices. He didn’t say what the Immigration Minster has said, that the economy would come to a ‘shuddering halt’. Is that a recognition that shuddering halt and smashing is a step too far?
MATHIAS CORMANN: My language in relation to this has been consistent all the way through. There is no doubt that Labor’s ill thought out policies when it comes to changes to negative gearing would be bad for the economy and bad for families trying to get ahead. The principle of families being able to leverage their existing income and their existing assets in order to invest in additional assets to generate additional income is a well established principle in our tax laws. It is one that helps to generate additional wealth and additional income. If the changes that Labor are proposing were to be made it would reduce the value of established properties. It would have an impact on the value of shares, given... interrupted
RAFAEL EPSTEIN: Just reduce not smash.
MATHIAS CORMANN: My language in relation to this has been consistent all the way through.
RAFAEL EPSTEIN: Company tax cut coming? People are interpreting that from Arthur Sinodinos’ interview yesterday. Company tax cut?
MATHIAS CORMANN: The Budget will be delivered on the 3rd of May. That is when the Government’s tax policies and the Government’s approach to spending will be revealed. But let me make the general point, we are currently working through a lot of information and a lot of data and a lot of advice. Our ambition is to ensure that we continue to make our tax system more growth friendly. That we raise the necessary revenue for Government in a way that is more efficient and less distorting in the economy and so that we can attract additional investment and help generate additional growth.
RAFAEL EPSTEIN: Labor has criticised the Government today for not mentioning schools, Medicare, universities, childcare. Is that a fair criticism?
MATHIAS CORMANN: No, it isn’t. In the lead up to the next election, whenever that will be, all of the issues will be canvassed. But right now, we are working through a list of prioritised items. Like last week we said our priority was to secure the passage of Senate voting reform. We have achieved that. We said then that our next priority after that would be to secure the passage of the re-establishment of the Australian Building and Construction Commission, the relevant legislation in relation to that. That is now our next objective and the Registered Organisation Commission legislation. We can walk and chew gum at the same time. It is not because you are focused on one particular priority today that you can’t actually focus at the same time on a whole range of other issues. In the lead up to the election, all these issues will be canvassed.
RAFAEL EPSTEIN: Labor hasn’t been ahead of you in the polls since Malcolm Turnbull took over. Are you confident?
MATHIAS CORMANN: We don’t take anything for granted. We will continue to work hard. There is a lot of work to do between now and the election.
RAFAEL EPSTEIN: Minister thanks for your time.
MATHIAS CORMANN: Always good to talk to you.