Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 9 February 2018
KIERAN GILBERT: Will the Government take its full corporate tax cut plan to the next election if it is again blocked by the Senate? Let’s get an answer from the Finance Minister. He joins me live from Canberra. So what is that answer? There is a view that the Prime Minister left a bit of wiggle room in his response in question time yesterday. Will the Government commit to take the full corporate tax plan as proposed now to the next election and fight it then?
MATHIAS CORMANN: The Prime Minister did not leave any wiggle room at all. We are completely and utterly committed to our business tax cuts. They were very necessary at the last election. We took them to the last election. They will be even more important by the time of the next election. As the Prime Minister indicated very clearly again last night, if the Senate were not to pass these very important business tax cuts, yes we will fight for them at the next election.
KIERAN GILBERT: Fight for them as proposed now?
MATHIAS CORMANN: Yes. The situation is this, we want to secure more jobs and higher wages in the economy. More jobs and higher wages do not grow on trees. More jobs are created by successful, profitable businesses. Higher wages are paid for by successful, profitable businesses. Our businesses compete with businesses around the world. Our economy competes with economies around the world. If our taxes are higher than in other parts of the world, we will lose jobs and investment to other parts of the world. It is as simple as that. Bill Shorten has made a cynical, political judgement that it is in his political interest to hold Australia back. We are focused on taking Australia forward. We will continue to ensure that businesses across Australia have the best possible opportunity to be successful and profitable so they can hire more Australians and pay them better wages. Every additional dollar that the Australian Government takes out of a business by way of higher taxes is a dollar that is not available to pay for higher wages. We want businesses across Australia to be more successful so they can hire more people and pay them higher wages. That is why we are totally and utterly committed to these business tax cuts. At the last election we were actually still, in terms of our business tax rate, below the tax rate in the US. At the next election, the business tax rate in Australia if we have not made any decisions in the meantime to reduce ours, our business tax rate will be 9 per cent higher than that in the United States. That is untenable to put Australian businesses in that position.
KIERAN GILBERT: Would you like the idea of an accord with big business if they say they committed to providing a specific increase in wages? That would help you sell this plan.
MATHIAS CORMANN: We certainly want to see business do the right thing. If business are given the opportunity to invest more in their future profitability and success, we would want to see them invest more and we would like them to show that they would hire more Australians and pay them better wages over time. The evidence in the United States was immediate. As soon as the reduction in business tax rates was passed through the Congress, business after business was providing wage increases and additional bonuses to their workers. Nine out of ten Australian workers work in a private sector business. It is self-evident that if we want those workers working in those businesses to have job security, to have better career prospects, to get higher wages over time, then we need to ensure that the businesses that employ them have the best possible opportunity to be successful and profitable into the future … interrupted
KIERAN GILBERT: Do you still have scope for significant income tax cuts? Is there still enough there to provide a substantial income tax cut because obviously you have been talking that up as a Government.
MATHIAS CORMANN: The Prime Minister, the Treasurer and myself, all of us have made very clear, we need both. We need to ensure that our business tax rate is internationally competitive and we need to ensure that we deliver personal income tax relief, in particular to low and middle income earners. As I have indicated many, many times, we already substantially over the medium term have factored future personal income tax cuts into our revenue forecasts. Our revenue forecasts are based on an assumption that we would not let tax as a share of GDP go past 23.9 per cent. That means that we must reduce personal income tax rates in the future, as otherwise we would go past that cap, which is underpinning our revenue forecasts. That is just one example. We are continuing to work to ensure that spending is under control. We are continuing to work to get the Budget back onto a more sustainable foundation. All of that will make room to deliver personal income tax cuts, in particular to low and middle income earners.
KIERAN GILBERT: Just in relation to the income tax cuts though because you obviously have got this increase in the Medicare levy as of July 1 this year. You have got to make up that before you can even make any dent on the real tax rate being paid by those low and middle income earners that you refer to.
MATHIAS CORMANN: It is not from 1 July this year. It is from 1 July 2019… interrupted
KIERAN GILBERT: Apologies, but still it is going to be there.
MATHIAS CORMANN: It is to fund a very specific purpose, it is to fund the National Disability Insurance Scheme which is currently unfunded … interrupted
KIERAN GILBERT: You are still paying more.
MATHIAS CORMANN: What our feedback is out of the Australian community is that they support the National Disability Insurance Scheme and that they understand that the way this is structured is eminently fair. The more you earn, the more you pay, the less you earn, the less you pay. If you are a very low income earner, you are completely exempted from paying the Medicare levy. The Medicare levy is a very fair way to structure funding for a scheme like the NDIS, which is why the Gillard Government went down this path, even though they only went down this path in part… interrupted
KIERAN GILBERT: But your tax cuts will have to be worth more than that, they would have to be, surely.
MATHIAS CORMANN: The Gillard Government always envisaged that the time would come as the NDIS would be rolled out fully when we would have to go this further step when it comes to the Medicare levy.
KIERAN GILBERT: But the bottom line is, if you are going to deliver tax cuts, it has got to be more then this impost that as you pointed out and corrected me, which kicks in as of July 1 next year.
MATHIAS CORMANN: Kieran, I know that you would like me to deliver the Budget today but the Budget will be delivered on the second Tuesday in May. There is a lot of work to be done between now and then by the Prime Minister, the Treasurer and the whole Cabinet. When we are in a position to announce the quantity and the volume and the size of the tax cuts, we will be able to do that and we will do it.
KIERAN GILBERT: On to a couple of other issues, obviously the story around Barnaby Joyce and there has been a lot of debate about whether it was appropriate or not to be talking about his private life and a lot of the concerns around that are fair. But when it gets to reports today of dysfunction within the office and the fact that his Chief of Staff quit over apparent dysfunction in the office. That is more substantial isn’t it because it goes to whether or not it is affecting his role as the Deputy Prime Minister and at times acting Prime Minister. Does he need to provide more clarity as to what has gone on in terms of the management of his office, because that is not personal that is his job.
MATHIAS CORMANN: I am not going to go into private matters. Barnaby is a friend and a valued colleague. It is a very difficult personal circumstance for him and everyone involved. My heart goes out to them all. In relation to these other matters, I am not a commentator. I am not going to provide a running commentary on other colleagues offices, as I would not expect them to provide a commentary on mine. I am sure that to the extent that there is anything to say, he will say so. Barnaby is an incredibly open and transparent person. Nobody can accuse him of not making himself available to explain himself.
KIERAN GILBERT: But Matt Canavan might have some explaining to do as well according to the suggestions today about the way offices were structured and so on?
MATHIAS CORMANN: I am not going to get into commentary on staffing arrangements. If there is something to be said I am sure that the responsible colleagues will talk about it.
KIERAN GILBERT: Okay, let’s talk about Susan Lamb, the final issue I want to raise with you, in terms of the report in the Courier mail suggesting she did not formerly seek that marriage certificate via the Queensland Births, Deaths and Marriages. What is your view on this and would it be better if the Government did not push this to a by-election anyway because you are unlikely to win it, certainly with a sympathy vote to her given the heart wrenching circumstances which she outlined to Parliament this week.
MATHIAS CORMANN: A couple of things, firstly, yes the circumstances are sad and the circumstances were sad for Fiona Nash and for Stephen Parry and for John Alexander and for Larissa Waters and for Scott Ludlam. But sad circumstances are not a valid defence against a breach of section 44 of the Constitution. If you pare it all back, the bottom line of what Susan Lamb said to the Parliament earlier this week was yes I am still a British citizen. That is a clear and objective breach of the Constitution. It is not a matter of what we feel and what we think. It is a clear cut breach of the Constitution. The reasonable steps defence that Bill Shorten is trying to hide behind, that is a defence that was developed by the High Court in circumstances were countries did not allow renunciation of their citizenship. In relation to the United Kingdom, there is a clear process available. It is just not believable that there would not have been a way to obtain the relevant documentation in order to complete the renunciation process through the United Kingdom. The story in the Courier Mail today is just another confirmation that yes there would have been processes available to Susan Lamb if she had chosen to effectively complete that renunciation. It is sad, but she is in breach. She is not entitled, not eligible to be a Member of the House of Representatives. It is as clear cut as that.
KIERAN GILBERT: Mathias Cormann, we will talk to you next week. Finance Minister thanks for your time as always.