Sky News – Sunday Agenda

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






Government achievements, Finkel review, G20, Helmut Kohl

KIERAN GILBERT: Senator Cormann thanks so much for your time. Let’s get to this issue, on the week of school reforms, you have had a big win in Parliament, there has been more focus Minister on Tony Abbott’s policy manifesto. How does the Prime Minister, how does the Government manage the Tony Abbott issue, Minister?

MATHIAS CORMANN: The Government continues to deliver. We continue to implement the plan that we took to the last election. You are quite right, we were able to get these school reforms through the Parliament. As we have been able to get tax cuts for business through the Parliament. As we have been able to get the restoration of the Australian Building and Construction Commission through the Parliament. As we have been able to get a whole range of other elements of our plan for the economy and jobs through the Parliament, including $34 billion worth of Budget repair measures that we have legislated since the last election. 

KIERAN GILBERT: But this latest intervention dominated the focus this week. You talk about and quite rightly, the Parliamentary wins but there doesn’t look like there is going to be any political gain from this because of what has really been a debacle around the internal divisions this week Minister. 

MATHIAS CORMANN: We have won the election twelve months ago. In the last twelve months we have worked for the Australian people. We have worked to deliver the plan for the economy and jobs and national security that we took to the last election. We will continue to do so. The next election is still two years away.

PAUL KELLY: Can I just go Minister to some of the points that Tony Abbott is campaigning on. He says there should be no new spending apart from security and infrastructure and that the RET should be frozen at fifteen per cent. Are those viable policies do you think for the Turnbull Government? 

MATHIAS CORMANN: These are not things that he pursued when he was Prime Minister. That is an important thing to remember. Tony Abbott as Prime Minister, the same as Malcolm Turnbull as Prime Minister today, needs to focus on what is achievable, what can be delivered. If you look at spending as a proportion of the economy today, it is lower than what it was in our first two years in Government. We have continued to focus on delivering spending reductions. Spending as a share of GDP over the current forward estimates is projected to go down to 25 per cent, when two years ago we were just below 26 per cent. We have got to continue to implement our agenda. That includes spending reductions. The spending reductions that we have been able to implement since we came into Government in 2013 have improved the Budget bottom line over the next ten years by more than $250 billion. So the net effect of all of the spending decisions that we have made is a reduction in expenditure of more than $250 billion. That is $250 billion we either don’t have to borrow or that we can use to reduce debt once we are back in surplus.     

PAUL KELLY:Now I know Minister you have been concerned about the role of Tony Abbott to the extent that it is damaging for the Government. Can I ask you what can be done about this? What is the potential solution to this tension between the Turnbull Government and Tony Abbott? Is one possible solution recalling Tony Abbott to the Cabinet? Or is that simply unrealistic?

MATHIAS CORMANN: The composition of the Cabinet is a matter for the Prime Minister. That is well and truly beyond my pay grade. There is nothing wrong with discussing policy within the Coalition, of course not. But there are processes through which that ought to be done. Anyone who has got a particular view that might be at variance with the views that are being put forward by the Government ought to do so through the relevant party room processes and the like and must seek to persuade others in the party room of a particular way forward. That is the way the process works. Ultimately we have got to focus on delivering for the Australian people. We have to focus on making sure that at the next election we do not inadvertently inflict a Bill Shorten led government on the Australian people. That would be bad for the economy, it would be bad for business, it would be bad for jobs and it would be bad for all of us who want the Australian people to have the best possible opportunity to get ahead. 

KIERAN GILBERT: In February you said, on AM Agenda, you said that Mr Abbott’s intervention at the time was self indulgent and deliberately destructive. Do you see the latest intervention in the same light?

MATHIAS CORMANN: Our focus is on delivering for​ the Australian people. I would say to all of my colleagues, we have a responsibility to ensure that we make the right decisions for Australia's future, that we make the right decisions to put Australians on the best possible foundation and trajectory for the future. We also all have a responsibility to ensure that, after the next election, we can continue to provide good government for the Australian people, and that the Australian people are not going to have inflicted on them a return to a high-taxing, high-spending Labor government, which would put our borders at risk and which, by Bill Shorten's own admission, increase taxes again and spend more.

KIERAN GILBERT: As someone who is regularly consulting with the Prime Minister, along with Peter Dutton, a senior conservative in the Cabinet, what do you say to the suggestion by some, including Tony Abbott, that there has been too much of a drift to the left by the Turnbull Government?​

MATHIAS CORMANN: I just do no​t accept that. We continue to implement our plan for the economy and jobs. We have ​delivered business tax cuts for​ small and medium-​sized businesses. We remain committed to bringing down the corporate tax rate for all businesses to 25 per cent, as part of our ten year plan, which is designed to attract more investment, boost productivity, create more jobs and help increase real wages over time. We have been able to legislate the restoration of the Australian Building and Construction Commission, to restore law and order on our building sites and help bring down the cost of construction over time. We are implementing good public policy for our economy, for jobs, for better wages, productivity improvements, for our national security, right across the board. We are implementing a Liberal-National party agenda, we are implementing the agenda that we took to the last election.​

PAUL KELLY: In terms of philosophy though, h​ow would you brand or describe the Turnbull Government? Because essentially, what Tony Abbott is saying he is saying Malcolm Turnbull is not a legitimate leader, he is not committed to conservative values, he is going to preside over a massive loss in the voting base to Pauline Hanson and Cory Bernardi. Now, this goes to the identity and character of the Turnbull Government. In philosophical terms, how would you describe the Government?​

MATHIAS CORMANN: The Government is a Liberal National p​arty Coalition Government. The Liberal p​arty is a broad church, which covers both the liberal and conservative traditions of the Liberal party, as we have done ever since Menzies founded the Liberal party in 1944. That is the way the Government operates under the leadership of Malcolm Turnbull. Malcolm Turnbull very much runs a Cabinet Government where all parts of the party work together. In the Cabinet. I heard you say this before and it is true, we operate as a very good team. Conservatives, moderates, we all work together, considering the facts, making judgements about what is in the best interests of Australia and implementing the commitments that we made in the lead up to the last election. ​

PAUL KELLY: The Finkel report recommended a clean energy target. Do you think it is going to be possible for the Government to commit to that recommendation and proceed on that basis?​

MATHIAS CORMANN: Our commitment as a Government is to​ deliver a policy framework which will put downward pressure on energy prices and which will ensure a stable, secure, reliable energy supply and for us to be able to do all of that consistent with our commitments to reduce emissions that we have signed up to in Paris. We have already announced that we have accepted, in principle, all but one of the recommendations out of the Finkel review. In relation to the recommendation on the clean energy target, we are doing some more work to consider the issues properly. In due course we will make a judgement on the right way, the best way forward. As soon as that happens, we will be able to make relevant announcements, but there is a process that we have yet to go through, through the Cabinet, through the party room. The way the Prime Minister handled this whole energy policy issue, the Finkel report, was very respectful of the party room. At the earliest opportunity, a briefing was provided to the party room by the Minister for the Environment and Energy, Josh Frydenberg. He was able to explain and provide answers and provide information. Issues were raised and all of those things are now being considered, taken on board by the Cabinet, as we put together the Government's response to that particular recommendation.​

KIERAN GILBERT: In relation to Mr Abbott’s alternative manifesto, including the freeze on​ the Renewable E​nergy T​arget and the rest of his alternative proposals, they would not have generated as much heat, certainly, if there was not that speech by Christopher Pyne to moderates at Federal Liberal Council.​ Can you reflect on that, was it a poor lack of discipline from your colleague?

MATHIAS CORMANN: Christopher Pyne has said that he regrets the statements that he made. He has apologised. We just move on. It was not an accurate reflection of how the Government operates. The Government does operate as a Cabinet team. The Liberal party is a broad church. All parts of the Liberal party are properly part of the decision making processes. As far as Tony Abbott is concerned, the things that he is advocating now are not consistent with what he did when he was the Prime Minister. If the proposition is that the Government is now supposedly more leftwing than he would like, then that would have applied equally to his government at the time. I don’t think that these are useful observations incidentally. Our responsibility is to consider the issues, to consider the challenges and the opportunities and to make the right judgements for Australia’s future. To make the right judgements for families across Australia to have the best possible opportunity to get ahead, to ensure that Australians can continue to enjoy prosperity and freedom and security in the way that we have in years gone by. 

KIERAN GILBERT: No one has questioned your loyalty to the former Prime Minister. You were very much loyal to him while he was in that role to the very end. Does it frustrate you now and are you worried that this is more than something about the direction or the heart and soul of the party but more about personal vengeance here, that he wants to tear Turnbull down?

MATHIAS CORMANN: Kieran, I don’t get distracted. The Prime Minister doesn’t get distracted. Those of us in the Cabinet, we are focused on doing the right thing by Australia. We are focussed on making the right judgements for our future. We are focused on implementing the plan that we took to the last election. We have been able to, very successfully, implement that plan since the last election. If you look objectively at all of the things that we have been able to achieve and successfully pass through the Parliament, against expectations I might say. People did not think that we would be able to legislate the restoration of the Australian Building and Construction Commission. People did not think that we would be able to legislate the establishment of the Registered Organisations Commission, forcing unions and other registered organisations to comply with the same accountability in governance standards as company directors. People did not think that we would be able to pass our superannuation reforms, making the tax policy settings for superannuation fairer and more sustainable for the future. They did not think that we would be able to pass another $34 billion worth of Budget repair measures. People did not think that we would be able to legislate, but we did, tax cuts down to 25 per cent for all businesses with up to a turnover of $50 million. We remain committed to legislating the remainder of those tax cuts that we took to the last election. We have already been able to legislate 100 per cent of the business tax cuts that were due in this term of Parliament. We will keep going. If you look at the progress that we have been able to make since the last election, it is there for all to see, it is very significant. We just get on with the job and continue to focus on delivering for the Australian people. 

PAUL KELLY: The upcoming G20 meeting in Germany is an epic event for global politics. Chancellor Merkel has gone on the record indicating her deep concern about the position of US President Trump. The Chancellor has warned that the Paris Agreement must continue. She has warned protectionism and isolationism is not the answer. We go into this G20 meeting with very significant divisions in the western world between the United States and Europe. How concerned in Australia about this division between the Europeans and the Americans and whose side are we on Minister?

MATHIAS CORMANN: Australia is an outward looking open trading economy. We will continue to promote the case for more freer and open trade as an engine for prosperity and the lifting of living standards. That is what the Prime Minister argued for very eloquently at previous G20 heads of government meetings. That is what Australia will be pursuing in this G20 meeting coming up right now. As far as the Paris Agreement is concerned, we remain committed to the commitments that we have signed up to in relation to the Paris Agreement.

PAUL KELLY: How concerned are we about the messages coming out of Washington that President Trump wants protection of the United States steel industry and that this is likely to have global ramifications? How worried is Australia about this aspect of President Trump’s commitment to put America first?

MATHIAS CORMANN: All governments will consider what is best for their respective economies. Our point of view and our perspective is that the best way to continue to drive sustainable, strong economic growth, to continue to drive lifting of living standards in Australia and around the world is by engaging in free and open trade or in trade that is as free and open as possible. Enabling our exporting businesses to sell our goods and services in as many markets around the world as possible is good for jobs in Australia. Being able to access good and services that are competitively priced from other parts of the world is good for Australian consumers. The same would apply in our view for other jurisdictions. These are the sorts of conversations that will no doubt continue at this G20 meeting and at future meetings. We will continue to make the case that the world is going to be a better place if all of us engage in as much free and open trade as possible.

KIERAN GILBERT: We have seen reports out of Washington as Paul alluded to from the Trump Cabinet. At 22 of 25 of the Cabinet oppose tariffs, the three that support them include Trump and that is the problem that he is the one forcefully pushing this America first line. If he does introduce tariffs of 20 per cent against Chinese steel it is going to lead to a trade war and enormous ramifications for our country, our region.

MATHIAS CORMANN: Let us not get ahead of ourselves. We will continue to engage with our friends in the United States as we will continue to engage with our friends and partners in other parts of the world. We will continue to put forward our view. I am very confident that when it is all said and done America like Australia will want to continue to have the best piece of the action when it comes to selling as much into a growing global economy as possible. It is in the interest of trading nations to be able to sell as many of our products, of their products and services as possible into a growing global economy. 

KIERAN GILBERT: Final question before we let you go, it is very early in the morning in Frankfurt. You have been attending on behalf of our nation the funeral services for Helmut Kohl, the father of German reunification, one of the architects of the unified Europe. What is the mood like about the future of Europe from those you have spoken to as they farewell a titan of Europe? 

MATHIAS CORMANN: You are right, Helmut Kohl was an absolute political giant. A giant in Germany and a political giant in Europe. He was not only the father of German unity, but he was also a key driving force in bringing the west and the east in Europe back together. From that point of view today there was very much reflection about the significant historic contribution that Helmut Kohl has made to Germany, to Europe and to the world. Right now in Europe there is a lot of optimism. Yes you have Brexit which from the European point of view is a very challenging issue that will have to be worked through. But across continental Europe with the election of Emmanuel Macron as the President of France, and the axis between Germany and France seems to be as strong as ever with the perceived beneficial impact across Europe and the optimism that comes with it. 

KIERAN GILBERT: Minister appreciate your time after a marathon day for you there in Germany attending those services. We will talk to you soon. 


Senator the Hon Mathias Cormann, Minister for Finance, Perth