Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
CAMPO: River 94.9 Marnie and Campo for Breakfast. Marns is on maternity leave. My special guest co-host is Jess Hogan from The Block and Reno Rumble. Mathias Cormann joins us now. Budget handed down last night. Good morning Mathias.
MATHIAS CORMANN: Good morning.
CAMPO: The Minister for Finance, I dare say you’ve not slept for at least the last 48 hours.
MATHIAS CORMANN: Not much.
CAMPO: Hands down, who’s the biggest winners and who’s the biggest losers out of this Budget?
MATHIAS CORMANN: Our focus is on making sure that Australia overall is the biggest winner. What we delivered last night is our plan for jobs and growth and our plan to ensure that as we continue to face global economic headwinds and as we continue to transition from resources investment driven growth to broader drivers of growth in a more diversified economy that we continue to do that successfully. That is very important for all Australians wanting to get ahead.
CAMPO: There are a few tax cuts and there is a windfall for businesses as well.
MATHIAS CORMANN: We have targeted tax cuts to ensure that people on average full time wages are not moving into the second highest tax bracket for the next three years. So we’ve lifted that tax bracket from $80,000 to $87,000, which means that those people, instead of paying 37 per cent tax will pay 32.5 per cent tax, which we hope will encourage people to work more and earn more without being hit by more tax. On the corporate tax front, we have announced a 10 year enterprise tax plan, which will bring down the company tax rate over the next decade to about 25 per cent. That will help us attract more investment, it will help us improve productivity, it will help us create more jobs and over time it will help us increase real wages and living standards and that is very much what our economy needs. We need a more competitive tax rate, we need to get back into the middle of the pack of countries around the world.
CAMPO: Okay. Say good morning to Jess, she’s my co-host this morning Mathias
MATHIAS CORMANN: Good morning Jess.
JESS HOGAN: Good morning, just a quick one. Anything for small business on this Budget?
MATHIAS CORMANN: There is a lot for small business in this Budget. We’re building on all of the tax incentives for small business that we announced in last year’s Budget by increasing the turnover threshold that defines a small business for tax purposes from $2 million to $10 million. So many more small businesses will be able to take advantage of our accelerated depreciation opportunities and so on. And we’re reducing the tax rate that applies to small businesses of up to $10 million in annual turnover from 1 July 2016 to 27.5 per cent, down from 30 per cent before last year’s Budget and we’re putting small businesses on a trajectory of reducing taxes over the next decade to about 25 per cent.
CAMPO: And Mathias, if you needed more incentive to quit smoking now is the time. A packet of cigarettes has gone through the roof.
MATHIAS CORMANN: Yes obviously there is a health benefit from people quitting smoking and that is one of the desirable policy outcomes from increasing taxes on tobacco.
CAMPO: That’s all well and good, but your Medicare and Medibank Private’s and all these, they’re going way up. Costs a fortune to get private health these days.
MATHIAS CORMANN: That is why we’ve got to continue to pursue sensible reforms in our health space to ensure we keep downward pressure on health insurance premiums, which is exactly what the Health Minister Sussan Ley is doing.
CAMPO: Full coverage this time of year it’s about $400. It’s tough. Thank you very much Mathias.
MATHIAS CORMANN: Always good to talk to you.