Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 22 December 2017
KIERAN GILBERT: Let’s get some reaction now from the Finance Minister Mathias Cormann, Leader of the Government in the Senate. This is another shocking incident for Melbourne, Minister.
MATHIAS CORMANN: It was an absolutely appalling, despicable act of violence. Our hearts go out to those who are injured and their families. It is awful to see what happened on the streets of Melbourne there yesterday. Victoria Police responded heroically and federal authorities are working with Victoria Police as appropriate.
KIERAN GILBERT: It is the message from the Premier and others that people should carry on with their businesses as always, but it is a very difficult thing to do isn’t it, given what we have seen on Bourke Street, now Flinders Street there.
MATHIAS CORMANN: The thing is, on the face on it and your interview just now confirmed that as well, on the face of it, it was somebody quite deranged, who was acting on his own, which puts it in a different context than if it was a broader more organised event. Nevertheless it was an absolutely appalling, shocking, despicable act of violence. It is just awful.
KIERAN GILBERT: Let’s move onto some other news, I will get some more reaction to those developments throughout the morning and more with our reporters at the scene as we get any breaking news for you on that atrocity in Melbourne. We are going to turn our attention now to the political issues of the day and the year. Minister, how do you reflect on this year. There have been some wins, but it has been a year where you have had to battle through some difficult times as a Government, in terms of internal divisions and so on. As you conclude 2017, how do you reflect on this political year for the Turnbull Government?
MATHIAS CORMANN: It is a year where we made a lot of progress in implementing our plan for the economy and jobs. The results are starting to be very clearly in front of us. Very strong employment growth, more than 350,000 jobs created in 2017. We were able to pass the first three years of our business tax cuts earlier in the year. We were able to pass our childcare reforms, our very significant schools funding reforms. In the second half of the year, we were able to finally resolve the long standing marriage issue. We have been able to put forward a very significant reform to our energy policy framework. So we continue to make progress implementing our plan to put the Australian economy on the strongest possible foundation and trajectory for the future and to repair the Budget. If you look at the Final Budget Outcome earlier this year, which showed an improvement compared to what was previously anticipated. The Mid-Year Economic and Fiscal Outlook again showing an improvement compared to Budget. You have to remember, before we came to Government, we inherited an economy which was weakening, rising unemployment and a Budget position that was rapidly deteriorating. When we came into Government, the previous eleven weeks, the Budget deteriorated by $3 billion a week. We have been able to turn that around. There is always a lot of noise, but we just keep pressing ahead, doing the best we can … interrupted
KIERAN GILBERT: Do you feel that the wins in Bennelong and of course the big swing to the Deputy Prime Minister in New England, does that help foster the discipline that as you know, you have been around politics for a long time now, discipline it is so crucial to the prospects of a government. You can get all those runs on the board and there is a lot of that, very hard to argue with but when you don’t have discipline of the team, that diminishes all that.
MATHIAS CORMANN: Discipline and unity is important and a win is always better than the alternative. We have been able to get a lot of issues dealt with in 2017. 2018 will very much be about taking our economic reform agenda forward. The Australian people will have in front of them two competing plans, two competing agendas. Our plan to strengthen the economy, create more jobs by helping business be more successful and more profitable, because nine out of ten Australians, working Australians work in private sector businesses. Then on the other hand Bill Shorten’s plan to hit businesses with higher taxes and pursue all sorts of other initiatives that make it more difficult for business to be successful, which would lead to less investment, lower growth, fewer jobs and lower wages. So our approach will be focused on attracting more investment, strengthening growth, creating more jobs and achieving higher wages in a way that is sustainable and affordable in the economy. Bill Shorten stands for lower growth, fewer jobs, lower wages.
KIERAN GILBERT: Is it risky though when the reaction from the Government, from the Treasurer and others in the wake of the tax cuts in the US is that this warning that companies will move offshore, will leave Australia because of the tax rate. Shouldn’t the Treasure be making the counter argument to that regardless of what the tax rate, people should be investing here. And secondly isn’t there also the context that needs to be seen when you talk about our corporate tax rate, that we have dividend imputation, which needs to be factored in compared to our competitors?
MATHIAS CORMANN: Kieran, this is now a very serious situation, a very serious matter of national interest. If Bill Shorten continues to stand in the way of making the Australian business tax rate more internationally competitive by bringing it down to 25 per cent for all businesses, then he will be making a decision to wilfully damage the Australian economy. He will make a decision to drive investment in Australia down, which would lead to fewer jobs and lower wages. Australia is an outward looking, open trading economy. We compete with businesses in countries around the world. When you have countries all around the world brining their business tax rate down and here in Australia we still sit at 30 per cent. That is not sustainable. That will do harm to our economy. We must act and we must act swiftly.
KIERAN GILBERT: But the tax treatment of dividends, is that something that you need to factor in as Labor would argue?
MATHIAS CORMANN: We do have some features that are different in Australia than in other parts of the world. But nevertheless a headline tax rate of 30 per cent is too high. Even France is reducing their business tax rate from 33.5 per cent down to 25 per cent. You have the United Kingdom heading to 17 per cent. You have the US now at 21 per cent. You have Canada at 15 per cent. You have Ireland at 12.5 per cent. Ours is one of the highest business tax rates in the world now. If we cannot as a country address this, it would do us serious harm in years to come and we will live to regret it … interrupted
KIERAN GILBERT: But shouldn’t you and the Treasurer still be saying that companies should invest here regardless, rather than make the counter argument?
MATHIAS CORMANN: Of course we want companies to invest here. What we are saying is, we in Australia have to give ourselves the best chance to be successful. We want more investment. We want more jobs. We want higher wages. So if we want to be able to secure all of that, the future job security, the future career prospects, the future wages growth of nine out of ten working Australians, working in private sector businesses depend on Australia having a more competitive business tax rate. Bill Shorten has to be very careful on whether he wants to stand in the way of stronger growth and higher wages and whether he wants to be responsible for exposing Australia to the risk of higher unemployment and lower wages.
KIERAN GILBERT: As we head into 2018, now obviously so much rests on the strength of the economy, do you feel that, obviously much of it is underpinned by growth in China. Are you optimistic about the prospects in that particular country? Are they undertaking enough reform to ensure that that is sustainable or we just keeping our fingers crossed?
MATHIAS CORMANN: Our outlook for the Australian economy is positive. Our outlook for the global economy has markedly improved since Budget. That was our message out of the Mid-Year Economic and Fiscal Outlook. Again Australia is an open trading economy. Stronger global growth is good for us. We still need to ensure that we are in the strongest possible position to take advantage of opportunities. That means that our policy settings have to be internationally competitive. In the end, jobs do not grow on trees. Jobs are created by successful, profitable businesses. It stands to reason that if Government helps business be more successful by having a more growth friendly tax system, by helping business get better access to key markets around the world through our ambitious free-trade agenda, by helping business get products to market more efficiently and more safely by investing in productivity enhancing infrastructure, by helping business get better access to more affordable, reliable energy supplies. These are all the things that we are doing to help ensure business can be as successful, as profitable as possible, so they can hire more Australians and pay them better wages.
KIERAN GILBERT: Minister, I appreciate your time this morning and throughout 2017. We look forward to catching up with you regularly throughout the new year. Thanks very much for that, all the best.
MATHIAS CORMANN: Merry Christmas to you and your family Kieran.