Transcripts → 2017


Sky News - Bolt Report

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

Capital gains tax, negative gearing, Budget repair, WA Liberal party preferences, WA Labor’s 50% RET

ANDREW BOLT: Now there aren’t many politicians who do believe in slashing spending even if they can’t always get their way. One at least is Finance Minister Mathias Cormann who joined me a short while ago.

Mathias Cormann, thank you so much for your time. The Prime Minister today in Question Time refused six times to simply rule out any change in negative gearing tax concessions under the Government he leads. Can you at least say definitively there will be no change full stop.

MATHIAS CORMANN: I don’t agree with your characterisation. Our statements today have been very clear. The story on the front page of the Australian Financial Review is wrong. There is no proposal before the Government. The Government has absolutely no intention to reduce the capital gains tax discount or to make changes to negative gearing. We were opposed to Labor’s policy in relation to these matters before the last election. We remain opposed to those polices today.

ANDREW BOLT: Yeah, but I am just saying you might not have Labor’s plans in front of you, but you could have your own. You might not have an intention, but you could tomorrow. I am just wondering will there be a change in negative gearing this term of Parliament. Can you say flat out no there won’t?

MATHIAS CORMANN: I have been very clear, we don’t have any plans to make any changes to negative gearing. We took a commitment to the last election not to make changes to negative gearing. We are committed to delivering on our pre-election commitments. I understand that journalists and commentators and even outstanding commentators like yourself will always dissect every single sentence and every single comma to see whether there is a hidden meaning, but what I would say is that the Government’s statements today have been extremely clear. 

ANDREW BOLT: Well they haven’t because that’s why I am asking. If they were I wouldn’t be asking. The whole point is there is a fairly easy piece of English language I would have thought, to say there will be no changes in this term of government. I don’t know why that simply can’t be said in a definitive way. 

MATHIAS CORMANN: I have been very definitive. We went to the last election opposing changes to negative gearing. We absolutely have no plans to make any changes to negative gearing. There will be no changes to negative gearing in this term of Parliament. 

ANDREW BOLT: Fantastic, that is the first time it has been said and I appreciate you being so definitive then. Will there in fact be any rises in taxes in this term of government, do you believe? 

MATHIAS CORMANN: We are in a position at the moment where we are working very hard to continue to repair the damage that Labor in government did to the Budget, which was structural damage, which put the Budget on a bad trajectory over the medium to long term. Our efforts are on the spending side of the Budget, to reduce expenditure growth, to put it on a more sustainable and a more affordable trajectory. There is still $13 billion worth of Budget improvement measures that are yet to be legislated, where Labor and others are refusing to support those very important Budget improvement measures on the spending side of the Budget. What we have said this week is not something that we want to do, or intend to do, but is an ultimate consequence. That is if you need to get your Budget back into balance and spending exceeds revenue and people stand in your way in terms of your efforts to reduce expenditure, then at some point that will lead to tax increases. That is not something that we are planning to do. That is not something that we are intending to do. But that is a consequence of Labor’s reckless opposition to sensible savings measures, sensible proposals to reduce expenditure.  

ANDREW BOLT: So you are saying you don’t have an intention to do it, you don’t want to do it, but you might have to do it.

MATHIAS CORMANN: Andrew, the Budget will be delivered on the second Tuesday in May. That is the time that the Budget is delivered every year. Every year in the lead up to every Budget there is a lot of speculation. We have said this in previous years and it has been true in previous years, you always look at what more you can do on the spending side of the Budget. You consider the policy settings on the revenue side of the Budget. Our commitment always has been not to increase the overall tax burden on the economy as a result of the decisions that are made on the revenue side. That is a commitment that we have kept. In fact if you look at last year’s Budget, the taxes as a share of GDP if anything, as a result of the policy decisions that we have made, reduced. It was the decisions to reduce expenditure that more than paid for any decisions to spend more on higher priority areas.

ANDREW BOLT: Now the Government is about to write off the $13 billion of savings that the Senate, Labor, Greens and crossbenchers have blocked for years, but they still appear in the Budget figures as savings. If you do now write them off what is the real state of the deficit this year and next, do you know?

MATHIAS CORMANN: Andrew, firstly you should never believe everything you read in the newspaper. The Government remains fully committed to all of the Budget improvement measures that are reflected in our Budget. We will continue to pursue legislation through the Parliament in relation to those Budget improvement measures. Incidentally a number of them are not yet due. A number of them are yet to be introduced to be legislated. So I think some journalists and some commentators are getting way ahead of themselves by making these sorts of blanket assertions which are wrong. The Government continues to work very hard to get as much of our agenda legislated including through the Senate, get as much of our Budget repair agenda legislated through the Senate. If a particular savings measure is not able to be legislated in one form, then we will have to keep working on achieving the same level of savings in another way. The Government remains absolutely committed to all of the Budget improvement measures that are reflected in the Budget.

ANDREW BOLT: But listen, you reportedly, turning to the West Australian election next month, to start with you reportedly helped make the preference deal between One Nation and the West Australian Liberals. Does it worry you that the party is giving preference to a party with candidates like Richard Eldridge who once advocated on Twitter killing Indonesian journalists or killing journalists, attack Muslims and pardon the language again, poofters he said. Does that worry you much? 

MATHIAS CORMANN: Firstly, preference arrangements for the WA Liberal Party are a matter for the WA Liberal Party organisation. What I would say as Liberals in Western Australia we are working to encourage as many West Australians as possible to vote Liberal. We do not endorse the policies of other parties. We want people to support Liberal candidates because we believe that a Liberal-National Alliance in Western Australia is the best possible option for people in Western Australia. We would like as many people as possible to give us their first preference but a number of people will vote for other parties and those West Australians who vote for other parties, we would like as many of them as possible to preference us. We think there are unfortunate and objectionable things that are said by candidates running for the Greens. We think that there are objectionable things said by people running for all sorts of other parties. But in the end, we would like to get as many West Australians as possible to support their Liberal or National party candidates in this election. If they don’t support us with their first preference, we would like them to give us their second, third or fourth preference. As long as they put us ahead of Labor and the Greens. 

ANDREW BOLT: Speaking of the WA election, it is clear that the debate you have been prosecuting about renewable energy driving electricity prices through the roof is starting to bite. I was amused to see the WA Labor leader Mark McGowan dumping his own fifty per cent renewable energy target, in words Mathias that sounded very familiar. Have a listen.  

MARK McGOWAN (EXCERPT): There will be no renewable energy target, at a state level, under any government I lead. 

JULIA GILLARD (EXCERPT): There will be no carbon tax under a government I lead.

ANDREW BOLT: Now Mathias, the public is starting to recognise clearly that renewable energy targets hurt, they increase power prices without cutting the temperature, correct, and we’re seeing Mark McGowan crumble. 

MATHIAS CORMANN: The first thing I would say is that when I heard Mark McGowan say that, I knew that Labor was dead serious about introducing a fifty per cent renewable energy target in Western Australia should they win the election on the 11 March. Because we know the history. The fact that he has chosen to use those words is the clearest indication yet that Labor would introduce that disastrous policy. His Shadow Energy Minister, Bill Johnson, has been on the record for some time to assert that Labor would introduce a fifty per cent renewable energy target in Western Australia. In WA it’s very important to understand that a fifty per cent renewable energy target would be even more disastrous in terms of its impact than in South Australia when it comes to energy security and electricity prices. That is because Western Australia is an energy island. We need to be energy self-sufficient. There is no interconnector that can come to our rescue when the wind doesn’t blow and we have too much reliance on wind. Under the previous Labor governments, the Carpenter and Gallop Labor Governments, there was blackout after blackout. Families, businesses and hospitals were without power again and again. This is clearly not what Western Australia needs. This sort of policy that Mark McGowan would pursue if he was elected would drive up the cost of electricity, it would hurt families, it would hurt business, it would cost jobs and it would seriously put at risk the energy security across Western Australia and people should vote against it. 

ANDREW BOLT: But even if Labor in Western Australia does scrap its renewable energy target, we still have the Federal one of 23 per cent. Obviously it’s not as bad as the Labor one which is fifty per cent but it is still there. Now I’ve argued often scrap it. You guys should just scrap it and clean up the argument, you know, because it makes no sense, it just drives up power prices. Can you take us through the argument of why you can’t do that?

MATHIAS CORMANN: Firstly fifty per cent is higher than what we have got here and with all these ad hoc state arrangements, which complicate the investment environment for renewable energy. When it comes to the renewable energy target federally, this has been legislated some time ago, more than 18 months ago, as a result of a bipartisan consensus at the time. It was set effectively at 23 per cent. There is absolutely no prospect that any proposal to amend relevant legislation to reduce or scrap the renewable energy target from that level would be successful in the Senate. Absolutely no prospect at all. However, what any such Government pronouncement would do is, it would create unnecessary and additional uncertainty for that sector. It would force up the cost of electricity by more because any investor considering investment in renewable energy would have to factor in an additional risk premium. There is absolutely no prospect that any proposal to reduce or scrap the nationally legislated renewable energy target would pass through the Senate. It would be quite irresponsible for the Government at a Federal level to seek to revisit that. For state Labor governments to … interrupted

ANDREW BOLT: It’s a shame, you can’t actually make the argument for a rational policy. That’s what surprised me and we’re out of time. I know you’ve got to go. Can I just ask you one last question quickly. After the break I’m talking to Rowan Dean about this strange decision about the Department of Foreign Affairs to send Muslim activist Yassmin Abdel-Magied to tour hard line countries like Saudi Arabia and Iran. Now I know this is nickel and dime stuff. We’re talking tens of thousands of dollars when you’re dealing with tens of billions. But do you wonder why, when you’re having to cut welfare spending to even struggling families, that we still get this freebie being handed out to activists by the Government?

MATHIAS CORMANN: I have to say that I am reluctant to comment because I am not aware of all the facts. I’m sure that my good friend and colleague Julia Bishop would be better equipped to provide you a proper answer to that. 

ANDREW BOLT: Mathias Cormann, thank you for coming on.

MATHIAS CORMANN: Always good to talk to you.