Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
MICHAEL ROWLAND: The unofficial Federal election campaign ramps up another notch today with the Treasurer Scott Morrison set to announce measures to cut corporate crime. The Turnbull Government will reveal plans to tax big banks $120 million, giving more resources to the corporate regulator ASIC to crack down on financial industry scandals. But Labor and some Coalition backbenchers are calling for a Royal Commission into the banks. We are joined from Canberra now by the Finance Minister Mathias Cormann.
MATHIAS CORMANN: Good morning.
MICHAEL ROWLAND: Mathias Cormann good morning. Why is the Government doing this?
MATHIAS CORMANN: The Government has been going through an orderly and methodical process assessing how we can further strengthen the powers and the resources of the corporate regulator. You have to remember we initiated the Financial Systems Inquiry, which had a major focus on the banking system. Something Labor opposed. That inquiry chaired by David Murray recommended a capability review of ASIC. Something we did in the second half of last year. It is something that we have been working our way through in recent months, to ensure that ASIC has got the appropriate powers and adequate resources to do its job.
MICHAEL ROWLAND: You also back in 2014 cut $120 million from ASIC's Budget. Was that a mistake in hindsight?
MATHIAS CORMANN: At various times we have increased funding to ASIC. The Howard Government increased funding by about $130 million. The Rudd Opposition promised to reverse that...interrupted
MICHAEL ROWLAND: Excuse me for interrupting but we are talking about what the Turnbull-Abbott government has done in 2014.
MATHIAS CORMANN: The point I was making is that at various times resources to ASIC have been increased and the resources of ASIC have been subject like other parts of Government to savings measures and efficiency dividends. What I was saying is, we make decisions at a particular point in time about what is appropriate for the circumstances. The Treasurer and the Assistant Treasurer today will be making an announcement about further resources and further powers for ASIC, which directly responds to a capability review that we have undertaken of ASIC over the second half of last year.
MICHAEL ROWLAND: Quite a few Government backbenchers along with the Labor party of course are pushing for a fully blown Royal Commission into the banking sector. Are you playing catch-up here with the Opposition?
MATHIAS CORMANN: No, we're not. The Opposition is playing politics. The Opposition is pursuing quite a reckless approach to all of this. The truth is that a Royal Commission would not tell us anything new. A Royal Commission wouldn't have the power to take action. A Royal Commission is essentially like a more substantial inquiry investigating certain facts. We have had several inquiries. We have had inquiries in the Senate. We have had the Financial Systems Inquiry. We have had now the ASIC capability review. People across Australia are not looking for yet another inquiry. They want us to take action. ASIC does have all of the investigative powers of a Royal Commission, but on top of that has the power to take action to prosecute, to pursue anything that has been done wrong anywhere in the financial system.
MICHAEL ROWLAND: Minister, going back to what you say the people want, the people want a Royal Commission. Opinion polls show that quite clearly.
MATHIAS CORMANN: Some people seem to think that a Royal Commission is able to do something which it is not. A Royal Commission is not able to prosecute wrong doing. A Royal Commission essentially would be a repeat of various inquiries that have been taking place in the past. The Senate has run several very comprehensive inquiries into the banking system and into ASIC. We have also had the Financial Systems Inquiry. If we now started a Royal Commission, it would go for a couple of years. It would undermine confidence in the banking system, something that the Opposition Leader clearly is quite happy to do, when the banks number one are actually very well regulated in Australia. There is always scope for improvement, but they are actually very well regulated in Australia. And, the banks are a very central part of our economy. They are a central and important part of our economic infrastructure.
MICHAEL ROWLAND: Minister, Fairfax is this morning reporting the government is looking at cutting the income threshold at which that 30 per cent superannuation contribution tax kicks in from $300,000 down to $180,000. Is that the plan?
MATHIAS CORMANN: There is always a lot of pre-Budget speculation. The Budget will be delivered on the 3rd of May. That is when we will be making relevant announcements.
MICHAEL ROWLAND: Is there an argument in that favour, though?
MATHIAS CORMANN: I am not going to add to the pre-Budget speculation.
MICHAEL ROWLAND: Okay, but the Government says it will tackle superannuation concessions for high income earners. What is the Government doing?
MATHIAS CORMANN: What the Government has said is that we will work to make our tax system more growth friendly to see whether we can say raise the necessary revenue for Government in a more efficient way and in a way that helps us to successfully transition from resource investment driven growth to broader drivers of growth. In terms of the specifics on how we propose to do that, the Budget will be delivered on the 3rd of May.
MICHAEL ROWLAND: The Government is stuck in a bit of a twilight zone isn’t it Mathias Cormann. We know the election will be on Saturday July 2, although the official writs won't be issued for another fortnight. How would you describe this period?
MATHIAS CORMANN: The Government continues to govern. We are focused on making decisions. There is a Budget to be delivered on the 3rd of May. There will be a Senate estimates hearing after the Budget has been delivered, where the Opposition will have the opportunity to ask questions of the Government and comprehensively go through the Budget that we deliver on the 3rd of May. There will be an election called some time thereafter.
MICHAEL ROWLAND: But we know the election date. What do you believe the election date will be?
MATHIAS CORMANN: The Prime Minister has made very clear that his intention is at the appropriate time to advise the Governor-General to dissolve the Parliament and to call the election for the 2nd of July.
MICHAEL ROWLAND: And yet we had that confusion yesterday again the Prime Minister was talking about it was his intention, his expectation although we all know it is vice regal protocol for the Governor-General to agree to an election request. We also had your Cabinet colleagues Christopher Pyne and Julie Bishop speculating that well July 2 was only one option. Minister, if you can't get your lines right at this stage is it going to get messy for the Government during the campaign isn’t it?
MATHIAS CORMANN: That is an interesting political line that you put there, but ... interrupted
MICHAEL ROWLAND: It is not a political line. It is just a question, it’s an observation from what happened yesterday.
MATHIAS CORMANN: I completely reject your assertion. There was no confusion. Obviously there is appropriate courtesy to be extended to the Governor-General. The Government advises the Governor-General. The Governor-General makes the decision. The way that was put yesterday is a reflection of that.
MICHAEL ROWLAND: We do know the Budget is going to be on May the 3rd and we do know supply bills necessary for the functioning of the public service will pass Parliament. But there won't be much time, if any time at all, for debate on the Budget measures will there?
MATHIAS CORMANN: The Budget will be delivered on the 3rd of May. There will be the opportunity for the Leader of the Opposition to make his Budget reply speech in the usual way. As I have indicated, there will be a Senate Estimates process in the second part of that Budget week. The Government will do all of the things that need to be done to ensure the appropriate resourcing of the Government.
MICHAEL ROWLAND: Mathias Cormann in Canberra, thank you very much for your time this morning.
MATHIAS CORMANN: Always good to talk to you.