Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
LEON COMPTON: In a moment our panel of experts on Federal Budget 2016, but first let’s say good morning to Federal Finance Minister Mathias Cormann, Minister good morning to you.
MATHIAS CORMANN: Good morning Leon.
LEON COMPTON: In all the talkback we have taken this morning it seems that the $840 million you advocated last night to get youth chaperoned into the workplace is attracting much of the attention. Minister, what do your projections tell you that will do for youth unemployment in Australia?
MATHIAS CORMANN: Youth unemployment is too high at present, in excess of 12 per cent, against an overall unemployment rate of 5.7 per cent. This is very much a measure designed to focus on disadvantaged young job seekers and what we are wanting to do here is to provide very intensive support to get them job ready. To make it easier for employers to take on these job seekers by effectively going through a trial period, where the Commonwealth continues to provide income support to the job seeker, with additional benefits and incentives both for the employee and the employer, then to come to a position where more experienced and more job ready, trialled, tried out job seekers hopefully will get hired by that same employer.
LEON COMPTON: Okay that is how the project works. Do you have projections on what $840 million will actually do for youth unemployment in the country?
MATHIAS CORMANN: We want to see about 120,000 odd young people get into a job as a result of this program. Over time we are keen to reduce the unemployment rate, the youth unemployment rate, by as much as possible. This is only one component. Our Budget last night was an overall plan for jobs and growth. We want to bring down the unemployment rate overall across the economy. In the Budget we predict to about 5.5 per cent and we are making a particular focus on making sure that disadvantaged young people across Australia can take advantage of our jobs and growth opportunities.
LEON COMPTON: Will money come out of Work for the Dole? Work for the Dole is an often criticised program, will money come out of that to pay for this?
MATHIAS CORMANN: We are restructuring some existing programs which we don’t believe work well enough in order to invest in this program. We are restructuring some of the wage subsidy programs that are currently in place and we believe that this prepare, trial and hire approach has got a much better opportunity for success.
LEON COMPTON: One of our texters earlier made the point that for all of the talk and some excitement amongst small business people in Australia that many, maybe even most businesses in Australia are either sole traders or partnerships. They pay personal tax rates on their businesses. They won’t actually get the business tax cuts that you are proposing will they?
MATHIAS CORMANN: Well that is not quite right. In relation to unincorporated small businesses with a turnover of up to $5 million, which covers most of the unincorporated small businesses, we are increasing the tax discount from 5 per cent to 16 per cent over the next decade. So there is a measure that aligns with the corporate tax cut which also gets prioritised to small and medium sized businesses before applying to all businesses over a 10 year period. Our enterprise tax plan is very much designed to give us a more competitive tax rate for business, which will help us attract additional investment, which will help us improve productivity, which will help to create more jobs and importantly, to over time, increase real wages and living standards. That is exactly what people across Australia, wanting to get ahead, are looking for.
LEON COMPTON: Mathias Cormann I’ll just play you a little bit of audio from Rob, a truck driver who talked to us a bit earlier this morning, this is him talking about, well his hopes that there isn’t too much cash getting splashed around in the upcoming election campaign.
ROB (LISTENER): The thing that worries me about what we are seeing at the moment is this Budget, to me, has been a bit wishy-washy and if this is where our means lay, well and good. I just hope we don’t see now over the next eight weeks a big cash splash that then we have to go through this three-year cycle again, of a really critical cut Budget in the middle of the next term to pay for the cash splash.
LEON COMPTON: Minister that was Rocket Rob a little earlier this morning. What about the big ticket projects that Tasmania want to invest in, in infrastructure like the University of Tasmania or the big tourism infrastructure projects that people want funded and think will help the economy. Is there going to be money for those in the lead-up to the election?
MATHIAS CORMANN: Firstly, responding to the concerns of your listener there, there is no cash splash in this Budget and we won’t be able to afford a cash splash in the lead up to the election either. What we have done in this Budget is wherever we were required to increase spending in higher priority areas, we paid for that by spending reductions in other parts of the Budget. The same discipline will apply in the lead up to this election. If we want to increase investment in some areas we will have to pay for that by spending less in other areas. The election commitments will be announced between now and the second of July. In the meantime, right now, the Commonwealth Government is investing about $400 million in the Midland Highway upgrade, improving road access between Hobart and Launceston. We are making a series of other investments across Tasmania... interrupted
LEON COMPTON: Will there be money for announcements for the funding of the U-TAS Campus expansion in the lead up to the election or the big tourism infrastructure projects on that are on the books here that people would like to see built?
MATHIAS CORMANN: I will not be making election policy announcements here today. I am here today to talk about the Budget. The election commitments will be announced in good time before the next election so that people across Tasmania and indeed people across Australia can inform judgement on who they want to support at the next election.
LEON COMPTON: On ABC local radio around Tasmania, Mathias Cormann, good to talk to you this morning.
MATHIAS CORMANN: Always good to talk to you.