Sky News – AM Agenda

Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia






US/China relations, Liberal Party report, Business tax cuts, Housing affordability,

KIERAN GILBERT: First let us get some reaction from our Finance Minister, Mathias Cormann joins us live from Perth. Important talks not just for China and the US but the rest of the world including us, they are our two biggest trading partners.

MATHIAS CORMANN: Well indeed, the United States and China are our two largest trading partners. We have a very good relationship with both the US and China. We are confident that the talks will go well and we look forward to the outcomes.

KIERAN GILBERT: Now this report to the Liberal Executive today. What do you hope comes of this? Obviously everyone will read what they want into the findings and who is to blame. It does not really matter does it now? You have got your Parliament you are dealing with it, you are leading talks in the Senate. Is there anything that you want to see come out of this process?

MATHIAS CORMANN: We went to the election last year and we won the election. Objective number one is to win. We did win. But there are always lessons to be learned and it is very important that as you go through an election campaign, last year’s election was a long and challenging election campaign, that you look through what was done, what happened, what went well, what did not go so well to make sure that we can give ourselves the best possible chance to win the next election so we can continue to deliver good Government for the people of Australia.

KIERAN GILBERT: From what I have read though and having not seen the report, but seen the various stories that we have had including my colleague Samantha Maiden’s this morning. There is not a lot in the findings that would surprise anyone. Most of us would have said that you should have gone harder in response to the Mediscare. Also more negative in terms of framing your opposition. I mean all of these things are quite obvious aren’t they?

MATHIAS CORMANN: Australia is a very open, transparent and robust democracy. Indeed everything that happens gets pulled apart and scrutinised and tested and challenged. There is a public conversation with all of these things. But still it is obviously good and proper and due process for the Liberal Party as an organisation to go specifically through the conduct of the campaign and to ensure that whatever lessons can be learned are learned, so that we give it the best possible crack next time to be successful so we can continue to deliver good Government. 

KIERAN GILBERT: Now the former Prime Minister Tony Abbott said that he does not want it to be “mealy- mouthed” were the words that he used. Are you confident it will not be from the former Trade Minister Mr Robb?

MATHIAS CORMANN: Andrew Robb is a distinguished Australian. He is a giant of the Liberal Party. Andrew Robb approaches everything and anything that he does with a very high level of competence and I am very confident that Andrew Robb has done a very good job.

KIERAN GILBERT: Doesn’t need the free advice?

MATHIAS CORMANN: I will let you provide the commentary.

KIERAN GILBERT: In terms of the way that the Government needs to form your strategic message. This is one of the things that apparently it is critical of in the last term of Government. Are you confident now with your company tax cuts in the build up to the Budget that this time around, that the Government has got it right in terms of the broader, strategic positioning for where you want to head?

MATHIAS CORMANN: The Government is very focused on making sure that our economy can be as strong and as successful as possible, because we want Australian families to have the best possible opportunity to get ahead. What the debate and the ultimate outcome in the Senate on the company tax cuts has revealed is that Bill Shorten doesn’t have a policy for growth. Last Friday he voted against the business tax cuts which passed the Senate. By Monday he didn’t have a position. He still cannot tell us whether he is for or against the tax cuts which were passed by the Senate. He is going back to his wibble wobble, wibble wobble jelly on a plate routine because he just doesn’t know what decisions to make in our national interest. People across Australia should be very concerned about the fact that to this day Bill Shorten cannot tell us whether he is in favour or against the business tax cuts that were passed by the Senate last Friday.

KIERAN GILBERT: They are saying that the Government has not provided enough detail. They want to look at where these are being funded and what the growth dividend would be if any?

MATHIAS CORMANN: Well that is a complete cop out. They know how they are funded because that is reflected in the Budget. What the Senate did last Friday was support 100 per cent of the business tax cuts that we undertook in the lead up to the last election to deliver in this term of Parliament, 100 per cent. So the growth dividend is as spelled out in the Budget, the cost is as spelled out in the Budget. What Labor knows is that these company tax cuts are fully funded because we are projected to return to surplus by 2020-21 and to remain in surplus all the way through to 2026-27, the period over which this ten year enterprise tax plan will be rolled out to bring every business in Australia down to a 25 per cent corporate tax rate, so that we can continue to successfully compete for international investment into Australia, to grow our economy, to help business be more successful so they can hire more Australians and pay them better wages over time.

KIERAN GILBERT: The Treasurer this week has urged the corporate world to get behind those tax cuts at the top end. Given it was you that led the compromise with the parliament to get it through, is it a bit rich for the Treasurer to be making those demands of the corporate sector when he needed to rely on you to get it through the Parliament?

MATHIAS CORMANN: No, I do not agree that is what the Treasurer did. The Government does work very closely with the business community. We work very closely with the Business Council. It is very important for our economy that over time consistent with our ten year enterprise tax plan that we are able to deliver a reduction of the corporate tax rate down to 25 per cent for all businesses. That is where we will get the biggest impact in terms of growth and future opportunity and increases in real wages over time. What we have been able to legislate so far will cover just over half the Australian workforce. We would like the whole Australian private sector workforce to be able to benefit from what flows when you improve the international competitiveness of your business tax rate.

KIERAN GILBERT: One of the big elements of the Budget will be the Government’s response on housing affordability. It is such a vexed issue right now when you have got competing states of the housing marketing. For example in WA compared to Sydney and Melbourne and then also the challenges that the Reserve Bank and the Government faced between the booming prices for homes and yet elsewhere wages growth is nowhere near as strong and also employment is soft. These are challenging times right now aren’t they in terms of balancing all of that?

MATHIAS CORMANN: The unemployment rate is lower than what had been anticipated in the past would be the case. Employment growth is relatively strong, certainly stronger than in other parts of the world. When it comes to housing affordability, yes you are quite right, it is not a uniform situation in every market across Australia. There are pockets where demand exceeds supply and that has an impact on prices. As the Prime Minister said the other day, as the Reserve Bank Governor pointed out the other day, the most important way to address housing affordability in those markets is by increasing supply so we can meet demand. These are all issues that are currently being fleshed out and will be addressed in the Budget.  

KIERAN GILBERT: Governor Lowe did not just say it was about supply, he said that is an important part that is true. But he also pointed to the tax treatment of housing didn’t he and there is scope to be moving on that too isn’t there? In terms of capital gains tax particularly?

MATHIAS CORMANN: We have made some commitments in the lead up to the last election. The Government’s position is very clear. If you want to increase supply, reducing the level of investment is not really the right way to go. If you want to increase supply, you do want to increase investment and that is part of the equation.

KIERAN GILBERT: So no inclination to move on that CGT issue?

MATHIAS CORMANN: We have all been on the record for some time. The Government’s position that we took to the last election was, and what is reflected in the Budget is we are not making these sorts of changes which Labor has been talking about for some time. The next Budget will be delivered on the second Tuesday in May.

KIERAN GILBERT: And will reflect the same sentiment?

MATHIAS CORMANN: I am not going to deliver the Budget for you today Kieran. I know you would like me to but I will not.

KIERAN GILBERT: I do not want you to be accused of wibble wobble on this issue. So why don’t you just tell us?

MATHIAS CORMANN: The Government’s position is very clear. We took a very clear position to the last election. The Prime Minister, the Treasurer, myself, we have all been very clear to say that the Government has got no plans or no intentions to change our position. That is a very clear and firm position.

KIERAN GILBERT: Okay that certainly sounds a lot firmer than others of your colleagues that have been. Alright, finally on the issue of commodity prices, this is going to be a boost to the bottom line but it is countered somewhat isn’t it by the fact that wages growth is not as strong as previously expected, so that have an implication for tax receipts and so on.

MATHIAS CORMANN: Between every Budget and Budget update, our last Budget update was MYEFO the half yearly Budget update in December, between every half yearly Budget update and the next Budget there are lots of moving parts and these get all reconciled at the same time in the next Budget. All of the numbers will be updated and everybody will be able to see how the different moving parts impact on the ultimate bottom line.

KIERAN GILBERT: Minister appreciate your time. We will talk to you next week. 


Senator the Hon Mathias Cormann, Minister for Finance, Perth