Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 19 August 2016
KIERAN GILBERT: Joining us now this Friday morning is the Finance Minister, Mathias Cormann. Some concerning numbers around this morning from Deloitte Access Economics mapping the outlook for debt in this country if there isn’t cooperation from the Senate and if growth comes in lower than what Treasury forecasts. What is your response to that report this morning?
MATHIAS CORMANN: It is as you have just indicated. If the savings don’t pass and if growth is lower than anticipated then certain outcomes, worse than what it is predicted in the Budget could eventuate. But the Government is committed to keep passing our savings measures through the Parliament. We certainly call on, in particular the Labor party, and every party represented in the Parliament to work with us, to ensure that we bring the Budget back into balance as soon as possible. We are ... interrupted
KIERAN GILBERT: But the noises from Labor aren’t encouraging are they?
MATHIAS CORMANN: Bill Shorten during the campaign committed to a whole series of savings. Certainly as a starting position, we expect him to be a man of his word. To deliver what he committed to deliver to the Australian people during the election campaign. When it comes to economic growth, that is the whole reason why we need to continue to implement our plan for a stronger economy, stronger growth and more jobs. When the Parliament comes back, we will be initiating, we will be introducing legislation to introduce our ten year enterprise tax plan to deliver a more competitive business tax rate, which will help strengthen growth, which will help improve productivity, which will help attract more investment and create more jobs, increase real wages over time. That is why we will be implementing all the aspects of our plan for stronger growth and more jobs.
KIERAN GILBERT: But the head of the Treasury’s tax division yesterday, in a speech spoke about the fact that our Treasury and others around the world, other governments, have been consistently overestimating the amount of revenue via tax that they would generate in the wake of the global financial crisis. That tax revenues just haven’t rebounded as treasury’s here and abroad have considered they would. So this isn’t that much of a hypothetical given the track record of the Treasury forecasts.
MATHIAS CORMANN: That is a different issue. It is self evident that if the economy grows more strongly and if businesses across Australia are more successful, generate higher profits, then this will among other things, mean more revenue for Government, which helps to fund the important services provided by Government. Stronger growth does deliver increased prosperity for people across Australia. It does help deliver increased opportunity for people to get ahead. But it also delivers increased revenue for Government. That is one of the important benefits of our plan for jobs and growth.
KIERAN GILBERT: But it is not really different in the sense that this really a core component of this Deloitte Access report, that half of the two real concerns for them in terms of the debt trajectory is growth. That it won’t match the Treasury forecast. That is half the problem.
MATHIAS CORMANN: There are always downside and upside risks for that matter in any Budget. We have spelt that out in the Budget at the time. You might remember, that in the course of the election campaign, in the Pre-Election Economic and Fiscal Outlook, the Secretaries of Treasury and Finance independently gave us their tick of approval for the economic parameters, the assumptions that we have made on economic growth parameters and other parameters and for the costings that underpin the Budget more generally.
KIERAN GILBERT: Onto the issue of the bank tribunal that some of your colleagues are pushing for. It sounds like you and Scott Morrison are quite open to this as an idea, to basically provide an avenue for victims of the big banks to attain compensation without having to spend hundreds of thousands of dollars on lawyers.
MATHIAS CORMANN: We are very happy to continue to pursue a conversation. The objective here clearly needs to be how do we best ensure that customers of banks or other financial services providers with a legitimate grievance can achieve a resolution in the most efficient affordable and accessible way. There are processes in place to help achieve this now. You do have processes through financial services providers themselves. But we also have the independent financial ombudsmans service, which is there specifically to provide accessible, free of charge, independent resolution of legitimate grievances that customers of banks might have with banks or other financial services providers. What Scott Morrison and what I have said is, if there are suggestions on how current arrangements can be further improved, then we are always prepared to consider any such suggestions.
KIERAN GILBERT: So we are seeing this question over the banks and now further reports on the debt problems. Graham Richardson writes quite cogently and convincingly in today s Australian that both the major parties will have to work together to deal with some of these problems, most importantly he points out the debt trajectory. Is the Government aware of the need to extend the olive branch to Labor, to get the savings measures through? Because with the crossbench the way it is, the two major parties have a lot more in common than some of those members of the crossbench. Do you concede and recognise the need that you have to work with the Opposition?
MATHIAS CORMANN: We do work with the Opposition. The Prime Minister in his speech to CEDA earlier in the week made it very clear that he is very prepared to reach across the aisle and work constructively with the Labor party. But the starting position has got to be that we can trust all of those commitments that Bill Shorten made to the Australian people in the course of the election campaign. When it comes to the proposal for an Omnibus Savings Bill to the tune of about $6.5 billion for example, that is a Bill which will bring together all of the savings that Bill Shorten indicated during the campaign that Labor did now support. We would have thought that when you have got a firm commitment during a campaign of support for various savings measures, then that is a piece of legislation that should pass the Senate very swiftly with bipartisan support. But yes, beyond that, we are very much looking to Labor to step up, to take responsibility and to focus on the national interest, which is to bring the Budget back into balance as soon as possible.
KIERAN GILBERT: Mathias Cormann, as always, appreciate your time. Finance Minister Mathias Cormann in Perth.