Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
OLIVER PETERSON: We are going to go to Canberra now. Because Mathias Cormann is the Finance Minister and we do know that the Federal Government is trying to force the Senate’s hands to reduce the company tax rate from thirty per cent to twenty-five per cent. What will that do for you and for me? How much money will we have in our back pocket if the Government is successful in company tax cuts? Mathias Cormann is the Finance Minister and he joins me on the program. Good afternoon.
MATHIAS CORMANN: Good to be here.
OLIVER PETERSON: First of all I do need to ask you about Barnaby Joyce though, because Question Time has been dominated again by the Deputy Prime Minister. Is he the right person to still serve as the Deputy Prime Minister?
MATHIAS CORMANN: Yes, absolutely.
OLIVER PETERSON: Okay, so no preferential treatment was given to the mother of his new expecting child, Vikki Campion?
MATHIAS CORMANN: She was recruited into his office before there was any relationship. Whatever happened, happened. She was recruited on merit when she was first hired. Then decisions were made where she was redeployed to other offices. It was always within the overall National party staffing allocation. She was eminently qualified for the positions. She obtained those jobs on merit. That is all there is to it .... interrupted
OLIVER PETERSON: So she wasn’t given any preferential treatment being a love interest of the Deputy Prime Minister?
MATHIAS CORMANN: She did not start off that way. My advice was that she was hired entirely on merit. What developed, developed. That is now a matter of public record. She did her job entirely on merit.
OLIVER PETERSON: Okay, it is obviously a distraction though for the Government though, because you would rather be talking to me this afternoon about company tax cuts.
MATHIAS CORMANN: I do want to talk to you about business tax cuts, and why they are so important to boost jobs and wages.
OLIVER PETERSON: Okay, how are you going to navigate through the Senate? Because at the moment it does not appear as though you will have support of all of the crossbenchers and perhaps the Greens. It is not a surprise you would not have the support of the Greens. But, how are you going to get this through the Senate?
MATHIAS CORMANN: The business tax cuts legislation has only just arrived in the Senate from the House of Representatives. So the conversations are now starting in earnest. We want to secure more jobs and higher wages. More jobs and higher wages do not grow on trees. They are created and paid for by successful, profitable businesses. Unless we make it easier for business to be successful and profitable into the future, they will not be able to hire more Australians and pay them better wages. We have countries like the US, France, the UK and others reducing their tax rates down. The UK to seventeen per cent. The US to twenty-one per cent. Even France from thirty-three to twenty-five per cent. Our businesses and our economy compete with businesses and economies around the world. We need to ensure that our businesses are in a position where they can successfully compete. If we don’t do this, we will lose jobs and investment to other parts of the world. So that is the case that I will continue to make to my colleagues. I am hopeful that I will be able to persuade them of the merit of our argument.
OLIVER PETERSON: Because ultimately Mathias Cormann, if we leave the company tax rate at thirty per cent, we would be pricing ourselves out of the market. We wouldn’t be competitive with these other countries you have just mentioned.
MATHIAS CORMANN: That is precisely what would happen. We would lose investment and jobs overseas. That is not what we want. We want Australia to remain as an attractive destination for investment. We want Australia to remain as an attractive destination to do business. More successful, more profitable businesses are able to hire more people and pay them better wages. That is what we want. We want more successful businesses competing for Australian workers, because stronger demand for workers means that business will have to pay more in order to secure their services.
OLIVER PETERSON: And for those listening to us this afternoon, your own constituents here in Western Australia, who are saying well how am I going to get a pay rise in 2018, how am I going to be able make sure I can put a better meal on the dinner table tomorrow night. Does this form part of your argument to cut company taxes because ultimately everybody will end up with more money in their back pocket?
MATHIAS CORMANN:Absolutely. Every dollar that the Government takes away from businesses employing people is a dollar that they cannot deploy either to invest in their future success or on pay rises. Nine out of ten working Australians, nine out of ten working West Australians work in a private sector business. Their future job security, their future career prospects, their future wage increases depend on the future success and profitability of the businesses that employ them. We want to ensure that businesses across Australia, including and in particular across Western Australia have the best possible opportunity to be successful. Reducing the corporate tax rate to the OECD average of 25 per cent. We are not proposing to lead the world in terms of having the lowest corporate tax rate in the world. We are proposing to ensure that Australia is not left behind when significant countries that we compete with directly are making the decisions that they have made including the United States.
OLIVER PETERSON: Of course the difficulty for yourself and Treasurer Scott Morrison is balancing the Budget books. When you have the Medicare levy set to increase 1 July 2019 with the introduction of the National Disability Insurance Scheme, is all of this affordable? Will it all add up?
MATHIAS CORMANN: We have already factored business tax cuts into our Budget bottom line. We are projected to return to surplus by 2020-21, after having accommodated the cost of business tax cuts in our Budget bottom line. In relation to personal income tax and the Medicare levy, we have already indicated that our intention is to deliver personal income tax cuts for hard working Australian families in the Budget and we want to do both. We want to be able to ensure that businesses employing Australians can be internationally competitive, can hire more Australians and pay them better wages, as well as making sure that our personal income tax rates are not a disincentive for people to work harder.
OLIVER PETERSON: Alright, Finance Minister Mathias Cormann, if you are unable to navigate through the Senate at the moment with company tax cuts, is this something you would take to the election?
MATHIAS CORMANN: We have already said yes. This is a very important policy in our national interest. This goes beyond the day to day political games that the Canberra press gallery so likes to report on. This is a serious issue of national interest. This is about making sure that our economy and families around Australia have the best possible opportunity to get ahead today and in the future. This was an important commitment we took to the last election. It will be even more important at the time of the next election if we have not legislated those business tax cuts in the meantime. At the last election the Australian business tax rate was lower than the United States business tax rate. At the next election, if we do not pass this legislation, our business tax rate will be nine per cent higher than that which applies to American businesses. That is just not a position that we can leave Australian businesses in.
OLIVER PETERSON: Alright, Finance Minister Mathias Cormann really appreciate your time this afternoon on Perth Live, thank you very much.
MATHIAS CORMANN: Always good to talk to you.