Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
QUESTION: Are you generally disappointed that 18C has gone down?
MATHIAS CORMANN: We are disappointed that the Senate did not see fit to strengthen our anti-vilification laws. That they didn’t see fit to deal with the very serious issue of harassment. The debate continues this morning. We are focused on improving the relevant procedures and processes that are underpinning the Human Rights Commission activities in this space. Let’s see where we land.
QUESTION: What is more important company tax or 18C?
MATHIAS CORMANN: We have to deal with both of these issues this week. In relation to company tax, it is a central plank of our national economic plan that we took to the last election. We do want to deal with company tax cuts this week in order to ensure that we can boost investment, boost productivity, create more jobs and over time increase real wages. That is what we want the Senate to do today. That is to legislate the enterprise tax plan that we took to the last election.
QUESTION: Is it a sign that you haven’t yet got a deal on company tax that you haven’t brought it on?
MATHIAS CORMANN: We are working through the remaining legislative program for this week, sequentially in a prioritised fashion. That is what you would expect us to do and that is quite appropriate.
QUESTION: But how close are you to a deal on company tax.
MATHIAS CORMANN: Lyndal, you should know me better than this. I don’t provide a running commentary on discussions between the Government and non-Government Senators. Clearly the Government is committed to passing its ten year enterprise tax plan in full. We do not have a majority in our own right. That means that we need to reach a consensus with a sufficient number of non-Government Senators. Everybody understands that. We want to get as much of our agenda legislated through the Senate as possible, in order to ensure that our economy can be as successful and prosperous in the future as possible.
QUESTION: You say that you are going to sit until it is done. Or you want to get it done this week. Does this mean that the Senate sits today until it deals with it one way or another?
MATHIAS CORMANN: It is not just a matter of what I want. The Senate has already resolved to sit until both the Human Rights legislation and the company tax cuts legislation has been dealt with. It is a matter for the Senate as to how long those debates will take.
QUESTION: If you do have to negotiate your company tax cut down, if it does end up that you have it only to $50 million or even down to $10 million, does the rest of the company tax plan stay on the Budget books for you to hopefully do it again in the future?
MATHIAS CORMANN: I do not accept the premise of your question. The Government is committed to legislating our full enterprise tax plan. We are committed to the policy that we took to the last election and that is reflected in our Budget, in full. We do understand that we do need to continue to work with relevant Senators to get as much of our agenda through as possible. Let’s see how we go.
QUESTION: Minister what is the cost to the economy for settling at $10 million as compared to $50 million?
MATHIAS CORMANN: I am not going to go into hypotheticals. The Government is committed to our full ten year enterprise tax plan. That is what in the Government’s judgement the Australian economy needs to ensure that we can be prosperous and successful in the future. The thing that the Turnbull Government understands, which Bill Shorten used to understand but clearly no longer does, is that if we want individual Australians to be as successful as possible, we need the businesses that employ them to be as successful and as profitable as possible. A more competitive business tax rate, a lower company tax rate leaves those businesses with more of their own money to invest in their future success, which means that they can hire more Australians and pay them better wages over time. That is what Australia needs. We are becoming less and less competitive internationally, when it comes to attracting investment. If we are able to reduce our company tax rate to twenty-five per cent over a ten year period for all businesses, it means that we are middle of the road among OCED countries. It would not mean that we are leading the pack. It would mean that we would preserve our competitive position in the middle of the pack of OECD countries.
QUESTION: Is that the evidence from the previous times that company tax has been cut? That jobs are created, that the economy is boosted. Is there a direct line from company tax cuts to an improvement in the economy?
MATHIAS CORMANN: That is self evidently, that is absolutely self evidently the evidence. If you look at what the Hawke and Keating Governments did, if you look at what the Howard Government did. We are in to our twenty-sixth year of continuous growth. Now some people are taking our past performance for granted. They assume that past performance is a guarantee of future performance. It is not. Australia is an open trading economy. We compete with economies all around the world. We have to be mindful of the policy settings in other parts of the world to ensure that we are in the strongest possible position to be successful. If you look at the evidence when the Hawke and Keating Governments reduced corporate tax, when the Howard Government reduced corporate tax, it was a central part of underpinning the economic prosperity and success that we have enjoyed over the last twenty six years. The truth is that Bill Shorten actually knows this. Bill Shorten has given eloquent speeches about the importance of company tax cuts. I would refer you to a speech by Mr Shorten to ACOSS in March 2011, when not only was he arguing for company tax cuts, he was making the case very eloquently that company tax cuts should not be limited just to the smallest companies. Making the point that we did not want to provide an incentive for businesses to be less successful, to be smaller. That we wanted to ensure that all businesses should have a lower company tax rate. Bill Shorten knows that that is good policy. Bill Shorten knows that that is what is in the interests of our economy. He is pursuing a cynical political line that he knows is not in the interests of our economy, that is not in the interests of hard working Australian families.
QUESTION: How does it help the big businesses though, if the big businesses isn’t really paying tax now?
MATHIAS CORMANN: Any profitable business will pay tax under our tax laws. Everybody knows and again this week, we have passed more legislation that we crack down on any attempts of tax avoidance, any attempts of multinational tax avoidance. The Government is committed to take effective action on multinational tax avoidance as we should. We have some of the strongest anti-avoidance laws in the world here in Australia. Don’t be distracted. Unless our tax policy settings, our business tax policy settings are internationally competitive we are weakening our economic prospects into the future, we are weakening prospects of Australians wanting to get ahead.
QUESTION: Given that the Senate was scheduled to rise last night, is there a plan B if a deal can’t be struck today?
MATHIAS CORMANN: The Senate resolved to sit until the 18C reforms and the company tax cuts are dealt with. That is still the position.
QUESTION: Any chance of being here tomorrow?
MATHIAS CORMANN: I repeat my answer. The Senate resolved to sit until the 18C reforms and the company tax cuts have been resolved. That is still the position.
QUESTION: Why is company tax last time on the agenda?
MATHIAS CORMANN: The Senate can only deal with one piece of legislation at a time. We are dealing with legislation sequentially.