Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
DEAN CLAIRS: We are speaking to the Minister for Finance, Mathias Cormann, after last night’s Budget. Good morning Senator, how are you?
MATHIAS CORMANN: Good morning.
KYMBA CAHILL: Now, Mr Cormann, saying Mr Cormann, sounds very official doesn’t it?
MATHIAS CORMANN: Say Mathias, please.
KYMBA CAHILL: There is going to be a tax on the banks, trying to raise $6.2 billion over the next four years. Can you explain succinctly how that tax will work given that the banks will just push the fees onto us as consumers. Like how are we going to benefit?
MATHIAS CORMANN: Well, there is no reason why the banks should pass that onto consumers. The banks make about $30 billion in after-tax profits a year and this is a $1.5 billion levy that just applies to the major banks. It is designed in such a way that it excludes day to day bank accounts, mortgage accounts, deposit accounts. It essentially excludes anything that is included in what is called the financial claims scheme. So this is a fair and proportionate contribution that we’re asking the banks to make towards Budget repair.
MATT DYKTYNSKI: Mr Cormann, or Mathias, as you’ve allowed us to talk to you. I hate to segue away from the sexy stuff about banking and tax, but I’m probably going to get labelled as a bit of a bleeding heart lefty here but personally I find the idea of people being drug tested because they’re unlucky enough to find themselves on welfare is a bit of an unjustifiable intrusion in their private life. Am I wrong?
MATHIAS CORMANN: Well I disagree. Obviously if somebody is unemployed and has a problem with a drug addiction then what we need to do is we need to get them help to get off drugs, so that they can be in a better position to get a job. It’s not a matter of penalising anyone. It’s making sure that we use the fact that they are able to get unemployment benefits from taxpayers to channel them into better support and treatment services so that they can get themselves into the best possible position to get a job.
MATT DYKTYNSKI: Sure, I mean plenty of people out there, including your good self are paid by the taxpayer and have control of some very important things. Should we all be getting drug tested?
MATHIAS CORMANN: Well in many jobs people are drug tested. Depending on where you work that’s a day-to-day part of your job.
DEAN CLAIRS: Mathias, here in The West, we talk about the GST. Look we have been banging on about the GST share for a long time, it is a very hot topic. I know that this Budget says it is going to improve over the next three to four years, but critics are already saying that it is falling short of you know, the 70 cents in the dollar promised by the PM. How do you feel about it?
MATHIAS CORMANN: What the PM promised is a process on how we can set a floor below which the GST can’t fall in the future. In the meantime, the Federal Government has recognised for some time that WA’s share of the GST is too low, which is why we have made additional federal payments to Western Australia towards WA infrastructure. We have done that again this year. On top of that we have commissioned a review through the Productivity Commission to look at how GST sharing arrangements are impacting on our national economy and on productivity and growth. That is going to report in a few months’ time. So we have made top up payments to WA in recognition of the fact that WA’s share of the GST is too low and we are looking at other things that can sensibly be done over the medium term.
KYMBA CAHILL: Now there are some changes to housing affordability to help that. How will the superannuation savings help homebuyers get into the market?
MATHIAS CORMANN: This is an opportunity for tax-effective savings towards a home deposit for first home buyers. You will be able to, from 1 July 2017, if you are a first homebuyer, you will be able to make additional voluntary savings through your superannuation account with the same tax concessions on the way in, in terms of the income that you direct into that savings account, the same tax concessions on earnings on the way through and when you take the money out, you get a 30% discount on your marginal tax rate. So it is a tax-effective way for you to save towards a deposit. It is up to $30,000 in savings per individual. So a couple could save up to $60,000 tax-effectively through their Superannuation account for the express purpose of putting a deposit together.
DEAN CLAIRS: Well it is that time where everything from last night’s Budget delivery gets pulled apart throughout the day. Mathias Cormann, thank you for your time this morning. We know that you have got a lot on your plate.
MATHIAS CORMANN: Always good to talk to you.