Senator the Hon Mathias Cormann
Minister for Finance
Deupty Leader of the Government in the Senate
Date: Monday, 4 April 2016
JANE MARWICK: Well the Prime Minister has told us we need to live within our means. To discuss this and last week’s COAG and income tax proposals, I am joined by the Minister for Finance, the Deputy Leader of the Government in the Senate, West Australian Mathias Cormann. Good afternoon.
MATHIAS CORMANN: Good afternoon. Good afternoon to your listeners.
JANE MARWICK: Mathias Cormann was last week’s announcement about income tax before COAG designed to make this point to State and Territory leaders and perhaps the electorate that we need to live within our means?
MATHIAS CORMANN: We’ve always been of the view as a Government that we need to live within our means. That is generally true for all governments, as it is true for any of us in our private lives. We have to live within our means. The proposal that was put to the State and Territory governments last week was a continuation of a process that started before Christmas, when at the Council of Australian Governments meeting in December it was agreed that proposals in relation to revenue sharing between the Commonwealth and the States would be explored and would be discussed around about this time. That is exactly what happened.
JANE MARWICK: It did seem sudden and I note that Paul Kelly in The Australian wrote on the weekend, ‘giving the States an operating income tax power was never going to fly. It was theoretically sound but in practical terms deeply flawed, badly unveiled and guaranteed to be rejected.’ Is Paul Kelly right?
MATHIAS CORMANN: I don’t know that it was guaranteed to be rejected. But history tells us and with the benefit of hindsight, we now know that it was overwhelmingly opposed by State and Territory Premiers. The Premier of Western Australia was an enthusiastic supporter of course and ... interrupted
JANE MARWICK: I have, just let the producers know, I have just made a terrible error there and pressed the wrong button. And we will get the Minister, Mathias Cormann back in just a moment. And we might just take a song in the interim. No, he’s very, very adept and has called back very, very quickly. So my guest this afternoon on 720 Drive is the Minister for Finance, the Special Minister of State, Deputy Leader of the Government, Mathias Cormann. My apologies Mathias Cormann, that was an operating error here. I will invite you to answer that question once again.
MATHIAS CORMANN: It was a proposal that we felt needed to be put. The advantages of it is that it would have given the State and Territory governments around Australia a direct stake in their future economic success. It would have given them access to a revenue growth dividend. The stronger their economies grow, the more jobs and the more well paying jobs will be created, the more revenue they would be able to generate to fund the services that State and Territory governments provide. It would also have helped us make the system more efficient. At present a lot of administration is involved both on the Federal Government side and on the State Government side, to manage the money flows from the Commonwealth to the States. There is a lot of inefficiency that we believe can be addressed. The proposal we put forward wasn’t supported, so we are now looking at an alternative way of achieving a similar outcome.
JANE MARWICK: I wonder and I am probably not talking about people listening to this program this afternoon Mathias Cormann, but in general, does the electorate make the distinction between State and Commonwealth funding, or do people just think at a very fundamental level, I’m paying a lot of tax and with bracket creep I might be paying even more, I just want good systems of education, good education for my children and to be able to get good medical care. Do you think that political point scoring is well accepted in the community?
MATHIAS CORMANN: This is not about political point scoring. The point that you make, that people who pay tax expect high quality services and timely access to high quality health care and good education for their children and so on is of course right. That is exactly right. That is why it is important to have the right governance arrangements in place. One of the structural problems we have in Australia is that there is a very significant imbalance between the revenue raising capacity of the Federal Government, as opposed to the revenue raising capacity of State governments. In general, if you want to get the best possible decisions around spending taxpayers’ money wisely, making sure that spending is as efficient and as effective as possible and gives the best possible outcomes, then it is better for the level of Government which spends the money to also be responsible for raising the money. It just improves the level of accountability. It improves the level of focus on making sure that spending decisions are made wisely and spending is allocated efficiently. That is why we have been focussing on these issues.
JANE MARWICK: But not much headway after COAG. I’d like to ask you, how likely is a double dissolution election in your mind?
MATHIAS CORMANN: It is entirely a matter now for the Senate to decide. We have two pieces of legislation, which we will put before the Senate in April, from the 18th of April onwards. The re-establishment of the Australian Building and Construction Commission and also the legislation to improve governance in unions around Australia. These are Bills that have previously been considered and rejected by the Senate. In our judgement they are very important to our future economic success. So the Senate will have three weeks to consider them. If these Bills are passed, then the election will take place in the ordinary course of events. If these Bills are again rejected, then there would be an election, a double dissolution election, on the 2nd of July. The reason being, is that our Constitution provides for the double dissolution mechanism to resolve any deadlock between two Houses of Parliament on key legislation.
JANE MARWICK: I’d like to ask you, Mathias Cormann, what do you think? You speak to a lot of people, what do you think people listening to the ABC this afternoon and more generally the electorate want and expect from politicians?
MATHIAS CORMANN: The public want politicians to do the best that they can every day to put our State and to put our country on the strongest possible foundation for the future. To ensure that the economy is strong. To ensure that people have the best possible opportunities to get ahead and build successful lives and also to ensure that as a country we are safe and secure. These are certainly the sorts of decisions that we are involved in every single day.
JANE MARWICK: Yesterday the Prime Minister was on Australian Agenda, you of course were on the ABC’s Insiders. Mr Turnbull was asked about distractions, primarily from the camp of the former Prime Minister, Mr Abbott, let’s have a listen as to what he had to say.
PETER VAN ONSELEN: Are you worried or concerned that that distraction, even if unintentional by him, is something that is going to get in the road of the campaign?
PRIME MINISTER: I am utterly undistracted.
PETER VAN ONSELEN: And is your view on Tony Abbott that there will be no concern by him around conservative issues, where he starts to feel like the Government is perhaps drifting into a more liberal course?
PRIME MINISTER: I am... our course is set to the election. The choice is between me and Bill Shorten.
JANE MARWICK: Mathias Cormann, your thoughts on that?
MATHIAS CORMANN: The Prime Minister is right. We are not distracted. We are focused on the job at hand. The job at hand is to provide good Government. The job at hand from the Liberal National party’s point of view is to do the best job we can to win the trust and confidence of the Australian people at the next election. That is what the Prime Minister is focused on. That is what everyone from the Prime Minister down in the Coalition team is focused on.
JANE MARWICK: I would like to end on a lighter note this afternoon, given the Deputy Prime Minister’s dab hand at changing a tyre, helping a couple of people in distress. Mathias Cormann can you change a tyre.
MATHIAS CORMANN: Absolutely. I can prove it. A year or two ago I was on my way to my parents-in-law’s farm up in Mullewa. I had a flat tyre and a baby, wife and luggage in tow. I changed it on the side of the road in the middle of nowhere in about 40 degrees heat. So, I definitely know how to do it.
JANE MARWICK: And quickly?
MATHIAS CORMANN: Quickly enough, yes.
JANE MARWICK: Okay, good to speak to you this afternoon.
MATHIAS CORMANN: Always good to talk to you.