Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Sunday, 25 March 2018
MATHIAS CORMANN: If the Senate were not to pass our business tax cuts in full, it would be a deliberate move to put our businesses here in Australia at a competitive disadvantage compared to businesses in other parts of the world. That would mean less investment, fewer jobs, which would mean over time higher unemployment, which would mean less competition for workers here across Australia, which would mean a drop in wages over time.
We want working families across Australia to have the best possible opportunity to get ahead. That is why working families across Australia need their Senate to pass our business tax cuts in full. We want to ensure that our businesses can successfully compete so they can be more successful and more profitable into the future, so they can hire more Australians and pay them better wages over time. Nine out of ten working Australians work for a private sector business. Their future job opportunities, their future job security, their future career opportunities and their future wage increases depend on the future success and profitability of the businesses that employ them.
Our message to the Senate this week is very clear. This is very important economic reform. This is even more important now than what it was last year. Because since we legislated the first three years of our ten year enterprise tax plan, the United States has legislated a business tax cut for American businesses from 35 per cent to 21 per cent. Even France decided to reduce their business tax rate from 33 per cent to 25 per cent, by 2022.
This is incredibly important for an economy like Australia. We are an open trading economy. We compete with the world. We need to ensure that our businesses are in the best possible position to compete successfully. Any decision to keep our taxes higher than they are in other parts of the world would be a deliberate decision to put our businesses at a competitive disadvantage, which will cost jobs, which will mean higher unemployment and, over time, lower wages when we need the precise opposite.
Happy to take questions.
QUESTION: So what work have you done over the weekend to secure the remaining votes needed?
MATHIAS CORMANN: Everybody knows the maths. The Government has 30 seats in the Senate. We need 39 in order to pass legislation and we continue to talk to all non-Government Senators that are prepared to talk with us. The Labor party has taken an incredibly reckless position in relation to this. Bill Shorten knows that ensuring that we have a globally-competitive business tax rate is the right thing to do by Australians. Bill Shorten knows that we must reduce our business tax rate to 25 per cent to protect jobs, to protect investment, to ensure families around Australia have the best possible opportunity to get ahead. He made a reckless political decision instead of acting in the national interest. Quite frankly, if Bill Shorten really cared about the future prosperity of Australia he would change his mind.
QUESTION: So there have been no developments with Senators Storer or Hinch over the weekend?
MATHIAS CORMANN: I do not provide a running commentary on conversations with crossbench Senators. I never do. I never talk on behalf of anybody else. If any of my colleagues want to make public statements, I am sure they will do so at a time that suits them.
QUESTION: But do you think you are closer to getting the numbers now than when you left Canberra on Friday?
MATHIAS CORMANN: I do not provide a running commentary. I continue, all of us in the Government continue to put our case on the merits of our argument as to why it is important for Australia to have a globally competitive business tax rate, because we want to protect jobs and we want to facilitate stronger job creation into the future. We want to ensure that more successful and more profitable businesses around Australia end up hiring more Australians and paying them better wages.
QUESTION: Are deals a good way to deliver results in the Senate? Clearly you are talking to Senators Hinch and Storer and he is making certain demands of you. Are such deal-makings good?
MATHIAS CORMANN: It is incredibly important that we reduce our business tax rate in Australia to ensure it can be globally competitive. To put our Australian businesses at a competitive disadvantage, making it harder for them to successful compete, would be incredibly risky for our economy, it would do harm to our economy. So this is a very serious matter. It is very seriously important that we get this legislation through.
QUESTION: But Senator …
MATHIAS CORMANN: If I may finish, you have asked me a question. If I may finish. So we respect that every individual Senator has been elected to the Senate in their own right, including every single Senator on the crossbench. We believe it is the responsibility of the Government to engage in good faith and constructively with non-Government Senators. Senators on the crossbench have engaged positively and constructively with us. What we are trying to do is achieve common ground. What we are trying to do is to see whether there is an opportunity for consensus to ensure that this very important economic reform can successfully pass the Senate. That is what the Australian people expect us to do.
QUESTION: Senator Hinch wants to see, in a constructive mood no doubt, he wants to see the big banks exempt from the tax cuts and he also wants a promise businesses will lift wages. What are you promising him?
MATHIAS CORMANN: I have already indicated to you we do not conduct discussions with crossbench Senators through the media. In relation to the issue that you are raising in relation to the banks, we have been very clear, the Government is not prepared to exempt the banks from our business tax cut. You would be well aware that we introduced a major bank levy in the Budget last year. That is a pretty clear position that the Government has adopted.
QUESTION: And you also sent a letter to him overnight saying that you were addressing his concerns over sluggish wages. What did you say to him to reassure him?
MATHIAS CORMANN: It is very simple. If we want stronger wages growth, we need to ensure that there is stronger competition for workers. The only way we are going to get stronger competition for workers in the Australian economy is if there are more Australian businesses being more successful, more profitable, more confident to invest in their future growth and in a position to hire more Australians. If you have more successful, more profitable businesses hiring more Australians, increasing the level of competition, that is what will drive up wages in a way that is sustainable in the economy. That is of course precisely why we want to reduce our business tax rate, to ensure that we don’t lose investment to other parts of the world, that we can keep that investment here, so that we can keep those jobs here. Additional investment means increases in productivity, it means that we actually are able to deliver wage increases in a way that is sustainable and affordable in the economy.
QUESTION: How confident are you that the Bill will pass before the Senate rises this week?
MATHIAS CORMANN: I never take anything for granted. We will continue to talk to our colleagues. In the end, we have 30 Senators in the Senate. We need 39. So we need to persuade 9 non-Government Senators to support what we believe is a very important piece of economic legislation.
QUESTION: In these negotiations though, are you pursuing the tax cuts at any cost, or at an unlimited cost to the budget?
MATHIAS CORMANN: We are always focused on making judgements in the public interest. We believe this is a very important reform. We are exploring whether there is a sensible opportunity to find common ground, whether there is a sensible opportunity to achieve a consensus across the Senate. We are doing that respecting that individual crossbench Senators have all been elected in their own right. That they are entitled to pursue their policy priorities in the same way as the Government needs to continue to pursue what we consider to be important policy priorities in the national interest.
QUESTION: In terms of that common ground, Senator Hinch has also floated the idea of retaining the energy supplement for pensioners to deal with cost of living pressures. Are you open to that at all?
MATHIAS CORMANN: I am not going to run discussions with Senator Hinch or other non-Government Senators through the media, I have already made that point. We will continue to have conversations. If we reach a consensus, which I hope we do, I genuinely hope that we are able to reach a consensus in the public interest, because the Australian people need us to be successful here, because the future job opportunities, the future job security, the future career opportunities, the future wage increases of people across Australia depend on the future success and the future profitability of Australian businesses. If we make it harder for businesses to be successful instead of making it easier for businesses to be successful, then there will be less investment, less growth, fewer jobs, more unemployment and, as a result of the lessening in competition for workers, lower wages over time. That is not what we want. That is clearly what Bill Shorten is quite happy to accept as a consequence of his reckless decision.
QUESTION: How can you be confident that companies will reinvest their savings in the community?
MATHAS CORMANN: Instinctively businesses want to grow and be more successful. If you look at our big businesses in Australia, every single big business in Australia started as a small business. You look at Qantas, they started with three employees in a regional town in Queensland, in Longreach. Today they employ 30,000 people and purchase goods and services from 3,000 small and medium sized businesses. Qantas is a business that operates globally in a fiercely competitive industry. If we make it harder for them to be profitable into the future because we force them to compete with businesses in other parts of the world who pay less tax. If we deliberately make a decision to make it harder for them to compete, that will have an immediate negative effect on the job security of the people in those sorts of businesses. It will have an immediate effect on the opportunity for small and medium sized businesses to supply more goods and services to businesses like Qantas. Every business instinctively wants to be more successful into the future, but if we hold them back, if we impose burdens on them that are not faced by businesses in other parts of the world, of course that would cost jobs, there would be consequences of that. That is something we want the Senate to very carefully reflect on. That is something quite frankly that Bill Shorten should reflect on. Let me just remind everyone, I refer you to an article in the Australian Financial Review on the 22 September 2015. That was two years after we were elected to Government. Google Chris Bowen and company tax cuts and look at the 22 September 2015, two years into Opposition, just seven months before we included our business tax cuts in the 2016-17 Budget. What you will see there, is Chris Bowen the Shadow Treasurer saying that the burden of company tax falls most heavily on the worker, that the burden of higher company taxes falls most heavily on the worker and that Labor is in favour of reducing business taxes to 25 per cent. That is September 2015. That is not 10 years ago. That is not in the previous Government. That is during the period of the current opposition, the current Shadow Treasurer. Labor in their heart of hearts knows that what the Government is proposing to do, a 25 per cent business tax rate for all businesses in Australia, is the right decision. It is the right policy. Not to do it will do harm to our economy. It is incredibly reckless and irresponsible what Bill Shorten is doing here. He is putting politics ahead of the public interest. He should stand condemned for it.
QUESTION: It has cost you $60 million to get the One Nation votes by promising to fund their pilot project for apprenticeships, that sits well with you? Perhaps I can come back to that point, is this the kind of deal making that is appropriate?
MATHAS CORMANN: You are making assertions. I have not confirmed any agreements that may or may not have been reached. What I am saying to you in a general sense though is that people across Australia would be very disappointed if the Government did not make an effort to reach a consensus with a sufficient number of Senators in order to get a very high priority piece of economic legislation through the Senate. It is incumbent on us to sit down in good faith with those Senators who are able to help us secure a majority for this important legislation, to see on what basis we might be able to reach a consensus across the Senate and successfully pass this piece of legislation.
QUESTION: What do you make of the cricketing scandal?
MATHAS CORMANN: It is very disappointing. As Australians we are all very proud of our elite sports men and women. We expect them to engage in competition with fair play. It is very disappointing to read the reports of what happened.
QUESTION: Should Steve Smith resign as Australian captain?
MATHAS CORMANN: That is a matter for Cricket Australia I am not going to get myself in the middle of that.
QUESTION: It is arguably the second most important position in the country.
MATHAS CORMANN: Sure, and that is not a position over which I have any authority in any way shape or form. As I say I think it is very disappointing what has emerged there. Australians expect better. Australians rightly expect better. What that means in terms of his position that is really a matter for Cricket Australia.
Senator the Hon Mathias Cormann, Minister for Finance, Perth