Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 4 May 2016
KYLIE GILLIES: The Federal Budget is generating plenty of headlines this morning, as it always does. To help talk us talk through how it will affect you, Finance Minister Mathias Cormann joins us live from Parliament House in Canberra. Good morning.
MATHIAS CORMANN: Good morning.
KYLIE GILLIES: Firstly, there is $1.6 billion unallocated in the Budget. What will that be used for?
MATHIAS CORMANN: There is, in every Budget, I assume you're referring to the decisions taken not yet announced.
KYLIE GILLIES: Yes.
MATHIAS CORMANN: There is always a range of decisions where still a bit more work needs to be done before they're ready for public announcement. But by the time we get to the Pre-Election Economic and Fiscal Outlook, all of that information will be publicly revealed because it will be published in the Pre-Election Economic and Fiscal Outlook.
TODD MCKENNEY: Right, well let's move on to working parents. They've taken a hit with the childcare subsidies being put on hold. How long will families have to wait until this is turned around?
MATHIAS CORMANN: We are committed to providing increased support for families to get better, more affordable and more flexible access to childcare. But you might recall that the way we have proposed to pay for this is by making some reforms to the family tax benefit system in particular, to better target support that is available for families. Given that some of that legislation is delayed in the Senate, we have made a decision to delay the spending that was associated with the savings that are yet to pass the Parliament.
KYLIE GILLIES: OK. Toughest call you had to make in designing the Budget?
MATHIAS CORMANN: This Budget is our plan for jobs and growth. It's our plan to ensure our economy continues to successfully transition from mining and construction driven growth to broader drivers of growth in a diversified economy. But we've also been making decisions to put our Budget on a sustainable foundation for the future, controlling expenditure, cracking down on tax avoidance, but also making decisions to better target tax concessions available, in particular in superannuation. When you touch superannuation policy settings, when you make decisions bearing in mind that we are very conscious of the need for stability in policy settings there, you do that very carefully. We believe that we got the balance right when it came to recalibrating some of the tax concessions available in relation to superannuation.
TODD MCKENNEY: We've had some questions from some of the viewers. Here's one for you, Bec wants to know what benefits people on carers payments and allowances can get?
MATHIAS CORMANN: The Government does provide a whole series of benefits to carers. Carers provide a very important service for the community and for the cared ones that they look after. The commitment the government made in the lead up to the last election was not to reduce any of the allowances and benefits that are provided by government and we've stuck to that commitment in this Budget. We've also made decisions in this Budget to put the National Disability Insurance Scheme on a stronger, more sustainable foundation for the future by setting up the National Disability Insurance Scheme savings account, in which any savings out of the welfare system are directed to ensure that we can close that funding gap which currently exists when it comes to providing additional support for people with a disability.
KYLIE GILLIES: Kirsty, another question from one of our viewers wants to know what about those earning $30,000 a year? She calls herself one of the little people, ‘at the moment all we seem to be copping is losing Medicare and childcare benefits’.
MATHIAS CORMANN: What we've done in this Budget is to ensure that we've provided effectively a tax cut for them in terms of any savings that go into superannuation, making sure that they don't pay more tax on income that is directed into superannuation than on income that they take as take home pay. Beyond that, in our first Budget we abolished the carbon tax. When the carbon tax was introduced, there were significant income tax cuts delivered to people earning less than $80,000 a year. In particular, at the lower end of the scale the tax free threshold was nearly tripled to $18,200. In this Budget, we did as much as we could afford in terms of providing further tax cuts. We've decided to target them at people on full time average weekly earnings, people earning just below $80,000 wanting to avoid them getting into the second highest tax bracket. We don't think it's appropriate for people on full time average weekly earnings to end up in the second highest tax bracket. We thought that would be a disincentive to work more and earn more. Given that the Budget is all about jobs and growth, we have targeted the personal income tax cut at that level. The final point I would make, is that everything in our Budget when it comes to strengthening job creation, strengthening economic growth, is all about making sure that everyone across Australia, low and middle income earners and indeed everyone, has the best possible opportunity to get ahead, to have a secure job and a well-paying job.
KYLIE GILLIES:Mathias, thank you for all of that, but I was most excited to have you hear so we talk about the biggest losers in all of this in politics at the moment, which is the European carp. Let's have a listen from Barnaby Joyce.
BARNABY JOYCE: We don't want to have to deal with CARP. No. We don't want to deal with CARP. We're going to get rid of the CARP!
KYLIE GILLIES: One of the lighter moments.
TODD MCKENNEY: What do you think of that?
MATHIAS CORMANN: I've got to admit, until this proposition came to the Expenditure Review Committee of the Cabinet I hadn't been that conscious of what a pest carp apparently are. But I'm now convinced that, you know, carp is very bad and very unpopular and that it's a very good idea to take measures to eradicate carp in a sensible fashion.
KYLIE GILLIES: Clearly Mathias didn’t grow up around the Namoi region where I did where carp are a problem. Thank you so much for your time, we know it's a busy morning for you Finance Minister, thank you for your time this morning.
MATHIAS CORMANN: Thank you for having me on.