Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
SABRA LANE: The Federal Government is tweaking its sale pitch to pass its corporate tax package. It now says the only thing standing in the way of a wage rise for Australians is the Labor Party. The package was introduced into the Senate late yesterday. The legislation aims to cut the tax rate from 30 to 25 per cent for companies with a turnover of more than $50 million a year. But it is unlikely to pass the Chamber as it stands as the Government has not yet persuaded the Nick Xenophon Team or One Nation to vote for it and Labor and the Greens are vehemently opposed. Joining us now is the man who the Government now is relying on to get the numbers, he is the Finance Minister, Mathias Cormann. Minister, good morning, welcome to AM.
MATHIAS CORMANN: Good morning, good to be here.
SABRA LANE: Now the Government argues if this cut was passed it would lead to a wage boost. By when and how much would workers expect?
MATHIAS CORMANN: If you have more businesses being more successful and more profitable, hiring more Australians, competing for workers, if there is stronger demand for workers out in the Australian community, business will have to pay more for them. Look no further than the United States, the effect after the Trump Administration was able to pass their tax cuts through the US congress was as immediate as it was dramatic. Immediately a long list of businesses in America provided wage increases and additional bonuses to their workers.
SABRA LANE: Alright, so in theory if this tax package passed this week, which would be a minor miracle for this Parliament, passing something as quickly as that. When would you expect to see wages go up?
MATHIAS CORMANN: We would expect the effects to be immediate. You have remember we want to secure more jobs and higher wages. Last year in the economy we were able to secure more than 400,000 new jobs, so more jobs are being created, wages have started to go up, but if we want to secure even more jobs and higher wages, they do not grow on trees. More jobs and higher wages are paid for, they are created and they are paid for by successful, profitable businesses. If we want more jobs and if we want higher wages, we need to ensure that more businesses have the opportunity to be more successful and more profitable.
SABRA LANE: And the quantum? How much could workers expect?
MATHIAS CORMANN: In the end, these are things that are worked out in the market and that is how we would want it to be. If we want to have wage increases in the way that is sustainable in the economy, if we want Australian families today and Australian families in the future to have the best possible opportunity to get ahead, to get a good job, a better job, a better paid job, then of course we need the businesses that employ them to have the opportunity to be as successful and as profitable as possible. Right now, businesses in Australia are held back because they have to pay more in tax than businesses they compete with around the world. If we want businesses in Australia to be more successful and more profitable, then we need to ensure that they can successfully compete with businesses around the world
SABRA LANE: One Nation wants the Government to demonstrate that this cut will boost wages and profits and it is asking for modelling. Will you provide that?
MATHIAS CORMANN: We are engaging with the Crossbench and the door remains open to the Labor Party. Bill Shorten has been a very eloquent advocate for the need of a more competitive business tax rate in Australia. He knows that Australia needs a more competitive business tax rate. He has made a cynical, political judgment to put his perceived self-interest in the short term ahead of the national interest and that is a very serious matter.
SABRA LANE: One Nation and the Nick Xenophon Team are the Senators now that you need on board, so will you give them that modelling?
MATHIAS CORMANN: The reckless, irresponsible person that aspires to be Prime Minister of Australia is Bill Shorten. This is really a matter that needs to be put at his…interrupted.
SABRA LANE: My question is not about Bill Shorten, it is about One Nation and Nick Xenophon.
MATHIAS CORMANN: I have already indicated to you, we will continue to engage with One Nation, with the Nick Xenophon Team and with all Crossbench Senators. But Bill Shorten cannot be let off the hook here. When he was Minister in the Gillard Government, he was advocating very eloquently for the need to ensure that business tax cuts were provided, not just to small business as the Greens were proposing at the time, but also to larger businesses. He was making that point very strongly. He is being reckless and irresponsible and he has made a judgement to hold Australia back because he believes it will help him politically.
SABRA LANE: What happens if this does not pass? What is next? Will the focus turn to delivering personal income tax cuts and making this then a central point of difference at the next campaign?
MATHIAS CORMANN: Firstly, we need both, we need business tax cuts, we need businesses in Australia to be able to compete successfully with businesses from around the world so they can hire more Australians and pay them better wages and we also need personal income tax cuts. Now as far as the contest is concerned in the lead up to the next election, Labor is the party of higher taxes. Labor has already said they want to increase the overall tax burden in the economy. That will lead to less investment, lower growth, fewer jobs and lower wages. This is a very important distinction, Bill Shorten stands for less investment, lower growth, fewer jobs, higher unemployment and lower wages.
SABRA LANE: And to my question, will it be a central plank of your election campaign?
MATHIAS CORMANN: Well the central plank of our election campaign will be that we stand for lower taxes and Labor stands for higher taxes. We stand for stronger growth, more jobs and higher wages. Bill Shorten stands for lower growth, fewer jobs and lower wages.
SABRA LANE: One issue that is centre stage is Barnaby Joyce. The Government argues that ministerial standards regarding the employment of Mr Joyce’s now partner Vicki Campion were not breached because she was not a partner at the time. Does that pass the pub test?
MATHIAS CORMANN: Self-evidently she was recruited on merit as somebody who had worked in the media into a media advisory position. As far as I am aware, they were not in a relationship when she was recruited into his office and the rest really is a matter for Barnaby to explain.
SABRA LANE: The Coalition had clean air at the start of last week, this has swamped all of that. Mr Joyce is poised to be acting Prime Minister next week, amid ridicule now. How damaging is this for the Government?
MATHIAS CORMANN: It is distracting. People do not want us to be talking about this sort of stuff. I can only imagine how distressing this must be for all involved, for Barnaby’s wife and his kids, but also for that matter for his new partner and for him. It is a matter that is personally distressing for him and for all in his family that are connected to him. But it is clearly a distraction for the Government, we want to be talking about our plans to secure more jobs and higher wages, we do not want to be talking about this.
SABRA LANE: Would it be best if he stood aside?
MATHIAS CORMANN: The leadership of the National Party is a matter for the National Party. These are not matters for me.
SABRA LANE: Mathias Cormann, thank you very much for joining AM this morning.
MATHIAS CORMANN: Always good to talk to you.