Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Thursday, 16 February 2017
LAURA PARR: Minister, just tell me what do you make of Mark McGowan’s comments?
MATHIAS CORMANN: So yesterday in Perth, we had WA Labor leader Mark McGowan promise people across Western Australia that there would be no state-based renewable energy target under any government he leads. Now, where have we heard that before? That’s right, Julia Gillard promised in 2010 that there would be no carbon tax under a government she leads, only to introduce a carbon tax straight after the election. The truth is that Labor in Western Australia is committed to a fifty per cent renewable energy target. They were within five minutes of announcing it. They had already dropped the announcement to The Australian that day. This is just now a pre-election con, trying to hide from the West Australian people what Labor would do after the election.
A fifty per cent renewable energy target in Western Australia is even worse than it is for South Australia. Western Australia is an energy island. Western Australia is not connected to the national electricity market. Western Australia needs to be energy self-sufficient. If there was any problem because of excessive reliance on wind energy and the like, there wouldn’t be a capacity to rely on energy supplies from other states. This would seriously threaten Western Australia’s energy security. It would push up the cost of electricity across Western Australia. It would hurt families. It would hurt business. It would cost jobs. That is why the Labor leader in Western Australia is hiding his true intentions from the people of Western Australia before the election, knowing full well that should he be successful on March 11 that he would immediately move to introduce a fifty per cent renewable energy target. The same as Julia Gillard immediately moved to introduce a carbon tax after promising that there would be no carbon tax under a government she leads.
LAURA PARR: Minister, just onto something else, Labor is accusing the Government of having the wrong priorities by giving business tax cuts and cutting welfare payments in the omnibus bill. What do you make of that?
MATHIAS CORMANN: Our business tax rates are very high by international standards. We are an open trading economy. We compete for investment with countries around the world. If we want to continue to grow our economy, if we want to continue to ensure that Australians and our children and grandchildren have the best possible opportunity to get ahead and be successful, then we need to be successful in attracting more investment, so that we can grow the economy more strongly and create more jobs. In order to achieve that, we need to ensure that we are internationally competitive, competing for investments from around the world. Our company tax rate today is too high. If we were to have a more competitive business tax rate, we would be able to boost investment, boost productivity, create more jobs and over time increase real wages. A business tax cut is good for workers, it is good for families, it is good for those that are keen to get ahead, because it will help businesses across Australia to be more successful.
LAURA PARR: There are different figures being floated around today from the different parties in terms of what they think the business tax cut should be. Would the Government consider changing at all?
MATHIAS CORMANN: We are committed to the ten year enterprise tax plan that we took to the last election. That is to reduce the business tax rate from thirty per cent to twenty-five per cent over a ten year period for all businesses. That will help boost investment, it will help us create more jobs and it will help increase real wages over time. Don’t take our word for it, that is what Labor used to argue. They know that it is true. Right now, in the United States there are plans to reduce their corporate tax rate down to fifteen per cent. Even if we go down to twenty-five per cent, we will still only be middle of the road. We won’t be leading the world in terms of our international competitiveness. We will be middle of the road. Right now, we are an outlier at the high end. We need to get back into the middle of the pack.
LAURA PARR: This omnibus bill rolls a lot of different measures into one, sixteen different ones, because there is so much opposition to it, would the Government consider splitting it up to get some parts through?
MATHIAS CORMANN: Our objective is to get as much of our agenda through as we possibly can. That is always our objective. We understand that we do not have the numbers in the Senate. We are realistic and we are pragmatic. We are engaging with all parties in the Senate to reach a consensus with a majority of Senators around as much of our agenda to repair the Budget as possible.
LAURA PARR: So you would consider splitting up?
MATHIAS CORMANN: Our commitment is to get one hundred per cent of it through. But we know that we have to engage with others in the Senate. What we are focussed on at present is to get majority support across the Senate for as much of our Budget repair agenda as possible.
LAURA PARR: Are you particularly anxious given the Budget is not that far away?
MATHIAS CORMANN: We are working on putting the 2017-18 Budget together. After every Budget is before the next Budget. We are continuously working to put Australia on the strongest possible economic and fiscal foundation for the future. That is just business as usual, continuing to focus on what else we can do to put Australia in a stronger, better position.
LAURA PARR: And in terms of the topic yesterday, was Scott Morrison saying he might have to resort to raising taxes. Obviously the Government doesn’t want to do that. One of the suggestions from Nick Xenophon was about raising the Medicare levy. Is that a sensible idea?
MATHIAS CORMANN: Scott Morrison and all of us, were very explicit. We do not want to increase taxes. Our commitment is to lower taxes. We want to repair the Budget by reducing spending and reducing the spending growth trajectory to a more affordable and sustainable level. That is what we are focussed on. All Scott Morrison and others have been saying is that as a consequence of Labor blocking sensible proposals to reduce spending, the only other way to balance the Budget if we were not to be successful in cutting expenditure would be to look at the revenue side of the Budget. But that is not what we want to do. We want to continue to repair the Budget by reducing expenditure.
LAURA PARR: So in the circumstance that it doesn’t get through at all and you do have to resort to increasing taxes, do we know what they would be?
MATHIAS CORMANN: Our focus is on reducing expenditure and implementing the measures reflected in our Budget. We have proven in the past that against expectations we can get measures through the Parliament. In July last year, nobody thought that by the end of the year we could get our superannuation reforms through, that we could get our $6.3 billion omnibus savings bill through, that we could get all sorts of measures through that were contested at the time, but we did.
LAURA PARR: So you are clearly still optimistic?
MATHIAS CORMANN: We are always optimistic. We are always focussed on doing the best we can to get as much of our positive agenda through as possible.