Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 1 August 2017
FRAN KELLY: Same sex marriage could be legal in this country very soon as the push for change in the Turnbull Government gathers steam. Liberal MPs who support marriage equality say they have the numbers to force a vote in the Parliament, which is at odds of course with the Government’s policy to hold a plebiscite. Queensland Liberal MP Trevor Evans who has hinted at crossing the floor in support of marriage reform says the issue must be dealt with without further delay.
TREVOR EVANS [EXTRACT]: This issue in particular has been distracting away from the Government, from my efforts to really get out and sell the very real achievements of this Government. When I think about the next twelve months going forward and I think about what might prevent us from continuing to sell the ongoing good work of the Government, I see this as a distraction.
FRAN KELLY: That is Trevor Evans, a Liberal MP speaking on RN Drive last night. Well this latest move on Marriage equality has infuriated some conservatives within in the Government. Some of whom, according to the Daily Telegraph are warning the Prime Minister’s authority, even his leadership is on the line. Mathias Cormann is the Finance Minister and the Deputy Government Leader in the Senate. He is a leading conservative within the Coalition. He joins us from Perth this morning. Senator Cormann, Minister, thank you very much for joining us.
MATHIAS CORMANN: Good morning Fran. Good to back.
FRAN KELLY: It appears Dean Smith’s private members bill on same sex marriage will be presented to the Liberal party room next week. Trevor Evans there point out how much of a distraction this continues to be. How many times can the Government afford this to come up and not be resolved once and for all.
MATHIAS CORMANN: The way that we have said we would resolve it once and for all is by giving the Australian people a say on whether or not the … interrupted
FRAN KELLY: Yes you can’t make that happen. You can’t get that through the Senate.
MATHIAS CORMANN: Let’s just wait and see. We went to the last election making a very clear and unequivocal promise that we would give the Australian people a say on whether or not the definition of marriage should be changed. That is a policy position that we remain committed to. We are considering how best to give effect to that.
FRAN KELLY: So are you considering re-presenting that, because at the moment there is no action on this. Dean Smith says the Government has upheld its end of the bargain. The Senate said no. The commitment has essentially expired. Does a no vote simply mean no more action? You wouldn’t accept that on other policies.
MATHIAS CORMANN: The commitment has not expired. The commitment that we took to the last election is that we would give the Australian people a say on whether or not the definition of marriage should be changed, that we would give the Australian people a say through a plebiscite. That is the very clear policy position that we took to the last election.
FRAN KELLY: But how do you plan to do that.
MATHIAS CORMANN: These are the matters that the Government is currently considering. There will be appropriate processes through the Cabinet and through the party room to progress how we best can give effect to that.
FRAN KELLY: There are real signs that if the Government sticks with that it could force the hand of some Liberal MPs who want this matter decided by a conscience vote in the Parliament. It will only take three Government MPs to cross the floor to bring on the debate on the Dean Smith bill. Did the PM give some kind of green light to that idea yesterday when he said in the Liberal party, quote Liberal party backbenchers have always had the right to cross the floor?
MATHIAS CORMANN: He was just making a statement of fact. We do have a great tradition in the Liberal party where backbenchers are able to cross the floor on specific issues if that is what they choose to do. I have done so myself in opposition some years back. That was just a statement of fact.
FRAN KELLY: Right, so there would be no penalty for these people if they did cross the floor, as there was no penalty against you.
MATHIAS CORMANN: It is a great tradition in the Liberal party that individual backbenchers can cross the floor if that is what they choose to do, subject to certain courtesies being displayed to the party room. What I would say, I think that we are getting way ahead of ourselves here. We took a policy to the last election to give the Australian people a say. We have presented legislation to the Parliament to give effect to that commitment. That legislation was rejected. We are now exploring other ways to keep faith with the Australian people, to give them the opportunity to have a say on whether or not the definition of marriage should be changed.
FRAN KELLY: There are real signs this could turn into a test on Malcolm Turnbull’s authority in the party room. There are warnings in the Daily Telegraph today as I mentioned from some of your conservative colleagues, unnamed, that if MPs cross the floor and try this on, the Prime Minister would face a spill motion. What do you say to them?
MATHIAS CORMANN: It is very hard to comment on anonymous comments. What I would say is that the Prime Minister enjoys the strong and united and unanimous support of his Cabinet. I believe he enjoys the overwhelming support of our party room. I do not know who has made those comments.
FRAN KELLY: You are listening to RN Breakfast. It is eighteen minutes to eight. Our guest is the Finance Minister, Mathias Cormann. Minister you are speaking to us in Perth. Cabinet is held there today. The Prime Minister is in WA all week. You are clearly worried about the Government’s prospects in the West. The Galaxy poll on the weekend showed that you could lose four or five seats on current polling. Can the Government regain its standing in the West without fixing WA’s share of the GST, which the PM admitted yesterday does not pass the pub test.
MATHIAS CORMANN: People in Western Australia like people around Australia want to ensure that the Australian Government delivers more jobs and better opportunities for families to get ahead. That is precisely what the Turnbull Government is working on. We are working on implementing our plan for stronger growth and more jobs. Whereas Labor by one tax attack after the other is reducing opportunity for people to get ahead. It would be damaging our economic prospects. It would be damaging our jobs prospects. That is the conversation between now and the next election. Who will provide better opportunities for families across Australia to get ahead. We believe that to be Coalition.
FRAN KELLY: What about though, WA’s share of the GST? It was an issue, it was a negative at the last State election. The Government, the Federal Government is providing top up payments, $1.6 billion worth so far. But you cannot provide a long term fix until you insert a floor which no state share of the GST could fall, and if you do that other States are going to lose a lot of money.
MATHIAS CORMANN: Firstly, the Federal Government has recognised that the WA share of the GST is inadequate, that WA’s share of the GST is unfair, which is precisely why we have made more than $1.2 billion worth of top up payments to Western Australia so far. It is also why we have commissioned a review by the Productivity Commission to assess the national productivity and growth implications of current GST sharing arrangements. The Prime Minister also has set out a process by which a floor could be established in the future by essentially putting in place a floor after WA’s share of the GST has exceeded certain levels, because that would be the way to set up a floor below which the GST can’t fall which would not require …interrupted
FRAN KELLY: But that would set State against State though won’t it?
MATHIAS CORMANN: That was my whole point, if I could finish? This would be setting a floor in a way which would not actually require to take any money away from any other States. By putting in place a floor after a certain threshold has been exceeded, which is expected to happen over the next few years, then you would not have to take any money away from any other State.
FRAN KELLY: So how many years does WA have to wait?
MATHIAS CORMANN: This is a process that is currently under way. We continue to make top up payments. We have essentially put in a floor now at the 37.4 per cent level of 2014-15. We through our top up payments, we have ensured that WA’s share of the GST cannot fall below 37.4 per cent. We have commissioned the Productivity Commission review as I have mentioned and through the Council of Australian Governments the Prime Minister has pursued a conversation on how a floor could be established in the future.
FRAN KELLY: Labor’s making strong gains in WA as I mentioned, according to that Galaxy poll anyway. Now it has come up with this policy to crack down on tax minimisation by targeting discretionary trusts, it has been generally well received. Can I ask you, do you have a trust?
MATHIAS CORMANN: I have a self-managed super fund, My family and I we have a self-managed super fund, as many Australians do. Let me just say though, I completely disagree with your characterisation of what Labor is doing. I also disagree with your comment that this has been well received. I am not quite sure what the basis is for that assertion …interrupted
FRAN KELLY: Well we had comments from the Tax Institute yesterday and I am looking at John Daley from the Grattan Institute who calls it perfectly sensible reform.
MATHIAS CORMANN: This is the latest Labor attack on small business. Bill Shorten has decided to reduce opportunity across the Australian economy for people who work hard and who take risks to get ahead. He hates success. He hates small business. He is already proposing to increase the corporate tax for small and medium sized business. He has now come up with another tax attack on small business. This is part of more than $100 billion worth of higher taxes that Labor has already put on the table which would damage investment, which would damage our economic prospects into the future and which would lead to fewer jobs and lower wages over time.
FRAN KELLY: Why does changing the capacity for people to use income splitting within trusts, why does that damage, to quote you economic prospects?
MATHIAS CORMANN: Many small businesses are family businesses, as Bill Shorten has said in the past before he discovered the politics of envy as a way of pursuing his own political opportunity. What Bill Shorten used to understand is that trusts are an entirely legitimate way for families to manage their financial affairs. In particular …interrupted
FRAN KELLY: But is it fair for people to split their incomes Minister? Do you believe it is?
MATHIAS CORMANN: Again, it can absolutely be appropriate in the context of a family run small business. It has been appropriate for many years for families for example, farmers, small businesses and others. Many people with a disability run their financial affairs through a trust in order to manage their financial circumstances. So there are many circumstances in which managing your financial affairs through a trust arrangement is entirely appropriate. Wherever these arrangements are abused then we need to take action. The Coalition Government through the Australian Taxation Office has a trust integrity taskforce. We do ensure that these arrangements are not inappropriately abused. Where there are integrity issues we would address them. What Bill Shorten is proposing here is a blanket attack on small business. What he is proposing is a blanket attack on family run small business and by increasing taxes on them and reducing their opportunity by working hard and taking risks to be successful.
FRAN KELLY: Okay Mathias Cormann, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.