Senator the Hon Mathias Cormann
Minister for Finance
Special Minister of State
Date: Thursday, 7 April 2016
DAVID KOCH: A series of corruption scandals in the finance sector have led PM Malcolm Turnbull to rebuke the banks over their treatment of customers.
PRIME MINISTER [EXCERPT]: The truth is that despite the public support offered at their time of need, our bankers have not always treated their customers as they should.
DAVID KOCH: Those comments were made after ASIC, the corporate watchdog, accused Westpac of interest rate rigging and the comments were made at a Westpac function yesterday. Similar allegations were made against the ANZ last month. Finance Minister Mathias Cormann is with us this morning. Minister, good morning to you.
MATHIAS CORMANN: Good morning.
DAVID KOCH: It is a worry, these allegations. Do you see the Government launching an investigation like the Royal Commission into the unions on corruption.
MATHIAS CORMANN: No we don't.
DAVID KOCH: Why?
MATHIAS CORMANN: Broadly our banking system is very well regulated. There are issues that arise from time to time. They are being addressed through the proper processes. What the Prime Minister said yesterday is of course right. He was reminding the banks that they don't only have a banking licence, they also have to be mindful of their social licence. But our regulation in Australia of our banking system is very robust and by international standards is very strong.
DAVID KOCH: But the average Australian would be sitting there thinking, well you reckon it's right to weed out corruption in the union movement and make a big song and dance about it, a Royal Commission but then you let white collar corruption get off easy.
MATHIAS CORMANN: That's not right. We are not ... interrupted
DAVID KOCH: We are talking about much bigger dollars there.
MATHIAS CORMANN: I would completely reject the proposition that we are letting white collar crime get off easy. There are legal processes, there are law enforcement processes underway. The reason we are having this conversation is because the system is working. That is not the case in relation to the construction industry. The system used to work. We used to have a regulator for the construction industry called the Australian Building and Construction Commission, which we want to bring back for that purpose.
DAVID KOCH: Okay, so this corruption within the banks, you match that up with these new Panama leaks that have 800 wealthy Australians using Panama to dodge tax. The average Australian goes I am paying my hard earned cash, doing the right thing, to get the Budget back into surplus and the big end of town, they are fiddling interest rates, they are dodging tax by putting their money overseas. They are getting off easy.
MATHIAS CORMANN: That is not true. Whenever anybody does anything wrong, they have got to have the book thrown at them. In relation to the information that came out of the so-called Panama documents, the Tax Office is working very hard to crack down on anyone that has done anything wrong. That is what we would expect them to do.
DAVID KOCH: Right, but you have in previous budgets cut back resources to the Tax Office.
MATHIAS CORMANN: That is not actually right. We inherited what is called an efficiency dividend from the previous government, which led to certain consequences when it comes to staff right across Government. We are actually ... interrupted
DAVID KOCH: Efficiency, that’s is a cut. That's politics for a cut.
MATHIAS CORMANN: Our Government has actually significantly increased the powers of the Tax Commissioner. We have significantly increased the penalties when it comes to multinational tax avoidance. We are doing everything ... interrupted
DAVID KOCH: What about resources to find out these tax cheats at the top end of the town.
MATHIAS CORMANN: The Tax Commissioner has got all of the resources that he needs to fight multinational tax avoidance. That is what he says again and again in relevant Parliamentary inquiries.
DAVID KOCH: Right, news out today that uni student loan debts expected to blow out to $180 billion within the next decade. Can you confirm there will be changes to higher education funding in the Budget?
MATHIAS CORMANN: The Budget will be delivered on the 3rd of May. There is an exposure here, which is the result of two decisions of the previous government. Namely, they expanded student loans to the vocational education and training sector. They have also introduced what is called a demand driven formula into the higher education sector more broadly. We have been grappling with these issues. We have been focussing on how we can ensure that what we do in this space as we do across Government is affordable and sustainable for the future.
DAVID KOCH: Okay, how is work on the Budget going? Because you would be working your backside off at the moment. It is only a month away to go. It looks as though the current Budget forecast for this year is on track.
MATHIAS CORMANN: The numbers will be revealed on the 3rd of May. We are currently making decisions on Budget measures, decisions on spending reductions and spending increases, revenue adjustments and all of these sorts of matters. There are things always in any Budget that are outside our control. We are focussed on making every post a winner in relation to those things that are in our direct control.
DAVID KOCH: What is your role in selling the Budget? Because Joe Hockey's last Budget was sold badly. He lost his job as a result of it. A Fairfax media article has said we are going to be a seeing a said we are going to be a seeing a lot more to you in the lead up to the election, suggesting that by staying on message, you could bore for Australia. Are we going to get sick of your face?
MATHIAS CORMANN: I will let other ... interrupted
DAVID KOCH:Are you going to be the chief seller rather than the spruiker
MATHIAS CORMANN: I am one of many sellers in the Government. From the Prime Minister down, all of us are focussed on explaining what it is that we are doing and why. How we are working ... .interrupted
DAVID KOCH: How are you going to do it differently? Because you basically botched the last message, the Government didn’t it?
MATHIAS CORMANN: I disagree with that. Last year's Budget was actually quite popular. That is when we delivered tax cuts for small business.
DAVID KOCH: The Treasurer has gone, the Prime Minister has gone. The fall out was pretty big.
MATHIAS CORMANN: I am quite happy for you to keep dissecting the history. As a Government over the last two and half years, we have been focussed on strengthening growth, creating more jobs and helping Australia be as successful as possible as we work through the transition from resource investment driven growth to broader drivers of growth.
DAVID KOCH: Okay, maybe I am a finance nerd, but I can't wait for May the third. It is going to be a cracker. All right. Thank you. Good luck with it.
MATHIAS CORMANN: Thank you.