Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
STEVE PRICE: Finance Minister, Mathias Cormann, welcome to the program.
MATHIAS CORMANN: Good evening Steve. Good evening Andrew.
STEVE PRICE: Did you feel a bit ambushed today when Bill Shorten announced your package of Budget savings?
MATHIAS CORMANN: Not at all. I knew that Labor was going to make the announcement when they did. I knew that we would come out and make relevant comments afterwards. The truth is the Government’s objective this week was to bank about $6 billion worth of savings through the Omnibus Savings Bill. We are now able to bank, as a result of this agreement with the Opposition, more than $6 billion in savings. So mission accomplished. I know that the press gallery in Canberra at times get themselves all excited by the sequence of these things. From my point of view and from our point of view as a Government, we are focussed on achieving the outcome. We are not so worried about these sorts of observer interests. It is not really that relevant to the outcome that is being achieved.
ANDREW BOLT: Mathias, this is the outcome from what Labor promised before the election it would cut and what you wanted cut. But they have actually gone back on a few things, but to suggest other savings, whatever. But anyway, $6 billion. Do you get the feeling that that is it for savings for the term of the Government. Given that Labor essentially, unless you get some amazing deal from all the other crossbenchers, the bar scene from Star Wars, that’s it for savings?
MATHIAS CORMANN: No. It can’t be. What I would say is, when we went to the last election we had about $18 billion in unlegislated net savings. This agreement today banks a further $6.3 billion. Some of them are unlegislated savings that Labor had opposed for some time. But in the course of the election campaign had to finally decide to support. There is now another $1.2 billion in savings that will be able to be delivered through the Appropriation Bills, which we would expect to pass the Parliament. Then there is another $11 billion or so in net savings from what was the status at pre-election time, that we would need to achieve over the next little while. It was important to us to bank quickly and efficiently that which both Labor and the Coalition agreed on in the lead up to the election. We are doing that this week. Then in our view, we have got to keep at it. We have got to keep working to find consensus to ensure that we get the Budget back into balance as soon as possible.
ANDREW BOLT: Now the $6 billion that you, $6.3 billion to be precise, over four years, that you have got them to agree to pass through the Senate, that is already banked in the sense of where your Budget deficits were, $37 billion this year ...
MATHIAS CORMANN: It is reflected in the Budget bottom line that’s right.
ANDREW BOLT: Right, so in the Budget, how much is still left, you’ve got to get through the Senate that they are blocking in order for you to achieve those targets?
MATHIAS CORMANN: I just mentioned that. When we went to the election we had about $18 billion in unlegislated net savings. That reduces now by about $6.3 billion.
ANDREW BOLT: But with that other stuff you seemed to suggest that you didn’t need a vote in the Senate for.
MATHIAS CORMANN: Then there is another $1.2 billion, which will be passed through the Appropriation Bills, which we would expect to pass. So there is another $10 billion or $11 billion in net savings over the current forward estimates that we need to secure support for through the Parliament ... interrupted
ANDREW BOLT: Oh okay.
STEVE PRICE: So what is the biggest ticket item in that $12 billion.
MATHIAS CORMANN: For example, one of the measures in our Budget is to phase out the Family Tax Benefit end of year supplement. Today, what we have done is to effectively means test it for families with less than $80,000 in household income. That achieves $1.7 billion out of a $3.85 billion save.
STEVE PRICE: But Labor would die in a ditch before they say yes to that.
MATHIAS CORMANN: This is part of a broader families package. We will be having conversations with other Senators and other parties in the Parliament. Also today, in relation to our decision that we should prospectively remove carbon tax compensation, given that the carbon tax has been abolished, in relation to various welfare payments, where compensation was provided for a tax which is no longer in place, that is a matter that we will continue to pursue. There is another $1 billion there. There is a range of other savings measures. Our approach is that we have got to continue to make ... interrupted
STEVE PRICE: That carbon tax compensation was your government’s idea though wasn’t it.
MATHIAS CORMANN: No it was not.
ANDREW BOLT: No, no. That was Labor. Labor brought it in with the carbon tax. Mathias, with this though, is the broader picture here, you have got your deficits going from $37 billion this year to $6 billion in four years time, provided nothing changes. But they will. Who knows which way. You are arguing for the cuts that you have still got to get through with the Senate. They are just to reach those targets. There’s not actually, there’s not much prospect at this stage of actually, you know getting those deficits, those prospective deficits down from what you predicted in the May Budget.
MATHIAS CORMANN: The discipline that we have imposed on ourselves is to make sure that we don’t go backwards as a result of policy decisions. That we continue on our trajectory to get back into balance within five years. That is number one... interrupted
ANDREW BOLT: How are you holding to that? How is that tracking?
MATHIAS CORMANN: We are making progress. $6.3 billion worth of savings to be banked this week helps. There is more work to be done. We will keep at it... interrupted
ANDREW BOLT: But you reckon you will make it? You will make those targets you have set? Six...
MATHIAS CORMANN: We will give it our absolute best every single day to get there. But it is a matter ... inteerrupted
ANDREW BOLT: But no guarantee obviously.
MATHIAS CORMANN: We have got to. You know what I know. The Government is... interrupted
ANDREW BOLT: Mate if I knew what you knew I wouldn’t be this poor.
STEVE PRICE: Oh yeah Andrew’s got three jobs Mathias. He’s not poor.
MATHIAS CORMANN: You are a very popular man. The Government doesn’t have a majority in the Senate. We all know that. So we do need to convince others, enough others, to support our agenda and we will keep working to help secure the support of others to ... interrupted
ANDREW BOLT: Mathias, hang on, one thing that I missed in my TV show and I am really embarrassed about, thought of it half way through the panel discussion but I can’t really go back to it. Maybe I can ask you. There are actually real world consequences of the decisions that you and Labor made. And Labor fought for, you know, almost died in a ditch over blocking these savings before today agreeing with them because there’s a political pain to pay, to feel here. That you are actually cutting some of the benefits going to people that got very used to getting them thank you very much. Are you worried at all about the political consequence of reducing people’s from the government income?
MATHIAS CORMANN: Andrew, there are not any easy savings left to be done. Our spending growth trajectory is unsustainable and unaffordable. So we have got to bring our spending growth trajectory down.
ANDREW BOLT: Mathias you and I are on the absolutely same line, I am cheering you on with this you know that. But what I am worried about is sneaky Labor buggers here, right they made a deal with you. You have both agreed that these cuts will be made but it will be government of the day that gets it in the neck for making them.
MATHIAS CORMANN: The Government is responsible. We do take responsibility. If I can take the family tax benefits supplements as an example. When they were introduced they were introduced for a particular circumstance. That is because of a lack of efficient information about families’ incomes in any year, over payments were made from time to time which led to debts by families to the Commonwealth. As time has gone by there is now much better and more immediate information available to the Tax Office so the original reason for the end of year supplement which was to help families to reconcile essentially debts that they were owing to the Commonwealth, is now no longer the same. So we are able to make that adjustment. And It was the same with the carbon tax compensation. Once we removed the impost well you... interrupted
ANDREW BOLT: I know. But people got used to it. But anyway look...
MATHIAS CORMANN: On this one when you say... interrupted
ANDREW BOLT: You know you are going to have to campaign on this. You are going to have to really explain this because Labor will...
MATHIAS CORMANN: The important point here though is that people who got used to it and who currently get it will continue to get it. It is only for new recipients that the compensation will no longer be available.
ANDREW BOLT: Righty-o.
STEVE PRICE: Well the baby bonus is one cut that you have made. And that was an agreement you had with the Nationals. How much arm twisting was required there?
MATHIAS CORMANN: This is actually a measure that hadn’t been implemented yet. That is the spending measure hadn’t been legislated or implemented. So nobody actually had been getting this payment. It was actually something that was initially started in the context of negotiations with the Senate crossbench in the past Parliament. In the context of wanting to land a pragmatic agreement to bank $6.3 billion worth of savings we needed to make some concessions as part of that exercise ... interrupted
STEVE PRICE: Arm twisting?
ANDREW BOLT: So Barnaby Joyce’s face that really is his skin cancer medication? It wasn’t you and Morrison belting him to submission?
MATHIAS CORMANN: Barnaby Joyce understands that we as a nation need to get our Budget back into balance. That we need to ensure that we get our spending growth trajectory down. We make these decisions as a team. The Liberal-National Party Coalition works as a team.
ANDREW BOLT: Okay, last question there Mathias I know you have got to get away. Mathias, the Labor party is making every single sound of saying no to the plebiscite. I had Anthony Albanese on my show earlier saying the same thing. So it’s not going to get through the Senate. Plan B if it doesn’t get through the Senate are you going to say no vote, no way, no how, whether it’s the politicians or nothing for the rest of this term?
MATHIAS CORMANN: I remember when Labor said they would oppose the temporary budget repair levy. Then they voted for it and at the last election Bill Shorten wanted to make it permanent. I remember when Bill Shorten said he would oppose the reintroduction of the fuel excise indexation and then he voted for it. Let’s just see what happens. I am not assuming at all that what Labor says today is what they ultimately will do when it’s all said and done. We want to give the Australian people the opportunity to have their say on this. The Parliament will act in accordance with whatever the outcome of the plebiscite would be. I am very confident of that and the question for Bill Shorten really is does he really want to prevent the Australian people from having their say on an important issue like this? Why does he not trust the Australian people?
STEVE PRICE: Well exactly if Bill Shorten wants gay marriage, let us have a plebiscite.
MATHIAS CORMANN: This issue of the definition of marriage has come before Parliament on a number of occasions in recent years. On every occasion the Parliament has reconfirmed the existing definition of marriage. So what we have said in order to facilitate a more permanent resolution of this issue, let’s put this to the Australian people. Let’s accept and respect whatever they say.
STEVE PRICE: We know how busy you are. Thanks a lot.
MATHIAS CORMANN: Always good to talk to you.