Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
SAMANTHA MAIDEN: Joining me now live to discuss all of this is the Finance Minister and dad, Mathias Cormann. If I could just start with that, some people have been a bit brutal about this and they have said, look there is FIFO workers, fly in, fly out in WA that do not always see their kids. Should we really be sobbing into our Weet-bix for politicians? But at the end of the day if good people are walking away from politics, that hurts all of us doesn’t it?
MATHIAS CORMANN: I was saddened to see Tim make that decision, but I do understand the pressures on families, in particular those of us I guess from faraway places like Western Australia, who choose to pursue a federal political career. It is tough on our families, as it is tough on families of workers in other professions. I do not take away from that in any way shape or form, that is true. But in the end, all of us, we have to make decisions about what is right for us and for our families. I understand and respect the decision that he has made.
SAMANTHA MAIDEN: Did it make you have, I am sorry we are just going to have to interrupt.
We are going to return now to the Finance Minister Mathias Cormann, who has very patiently waited during that. Are you a cricket fan?
MATHIAS CORMANN: Yes I am. Congratulations to Justin Langer, a great West Australian and a great Australian and we wish him all the very best.
SAMANTHA MAIDEN: All right that is good. Talking of great West Australians, we were talking there about this issue of families. When you heard Tim Hammond making that call yesterday, did it give you pause for thought about your own parenting, being a dad, how often you miss out on seeing your kids. Did it prompt any conversations do you think or will it prompt any conversations between partners and their spouses?
MATHIAS CORMANN: Hayley and I we talk about this all the time. We talked about it before I put my hand up. We talked about it on the way through. I guess our circumstance was a bit different. I started this job before we were either married or had kids and it sort of all evolved from there. Every family has its own circumstance and every family makes their own decisions that suit their circumstance. As far as we are concerned, we have made a decision that this is something which is an amazing opportunity for me to be able to serve in this capacity. We know that it is not forever, but while I have this opportunity, we are going to give it our best crack as a team.
SAMANTHA MAIDEN: When does it end?
MATHIAS CORMANN: That is very much a matter for either the Prime Minister or the Australian people. As long as I have the confidence of the Prime Minister and the Prime Minister and the Government have the confidence of the Australian people, I will continue to give it my best.
SAMANTHA MAIDEN: I wanted to ask you one last family question before we go on to your substantive issue of the Budget. You have spoken before quite movingly about growing up, that you are really proud of your dad, because he had a problem with alcohol abuse, with substance abuse, he lost his job and you had to really step up in the family and really have a lot of responsibility in that family as a kid. What was that like for you as a child and a teenager having to play that role in your family and helping your mum, a lot of kids have that background, but do you think….interrupted
MATHIAS CORMANN: It was a long time ago. It was a difficult period in our family’s life, but we came out the other end. My parents are about to celebrate their 50th wedding anniversary in two years from now. This was a long time ago.
SAMANTHA MAIDEN: Let us talk about this breach in relation to the Commonwealth Bank and the data breach. We are told that the Information Commissioner knew about this years ago. Did the Government know that this has occurred?
MATHIAS CORMANN: I am advised that the Attorney-General was advised on this last night and he is seeking urgent briefings. I am not across all of the ins and outs of it, but the Attorney-General was advised last night and is receiving briefings as we speak.
SAMANTHA MAIDEN: Does it concern you that the CBA did not bother to tell its customers if this material could have literally fallen off the back of the truck?
MATHIAS CORMANN: Since February there is a mandatory reporting requirement. So this could not happen now. I am not aware of all of the ins and outs of it, but the Attorney-General is receiving briefings as we speak.
SAMANTHA MAIDEN: Now you have ruled out the idea of carving big banks out of the company tax cut. There still seem to be a bit of debate though about whether you could find a different wat of doing that, set up a compensation fund. Why not put the GST on financial services?
MATHIAS CORMANN: The issues that have emerged and may continue to emerge through the Bank Royal Commission have to be addressed on their own merits. You do not make decisions on tax policy settings based on the conduct of individual businesses. You make decisions on the appropriate tax policy settings based on what is in the interest of Australian workers, what is in the interest of Australian shareholders, what is in the interest of the economy as a whole. If we do not reduce our business tax rate for all businesses, we will do harm to the economy, we will send investment and jobs overseas. If we want to protect investment into Australia, if we want to protect Australian jobs, if we want to ensure that we can create more jobs and secure higher wages into the future, we need to ensure that the businesses that have to create those jobs and pay those wages have the best possible opportunity to be more successful and more profitable into the future. On current policy settings, we are putting our businesses at a competitive disadvantage with other businesses in other parts of the world. That will send investment and jobs overseas and that will do harm to both shareholders, employees and customers here in Australia.
SAMANTHA MAIDEN: Are you still committed to a target of running a surplus that is one per cent of GDP?
MATHIAS CORMANN: We have been committed to getting the Budget back into surplus as soon as possible. We will get the Budget into surplus of one per cent as a share of GDP as soon as possible….interrupted
SAMANTHA MAIDEN: What about the target?
MATHIAS CORMANN: We have been on the record for some time now, we will get the Budget back into surplus as soon as possible. The most recent forecast and projections are for a return to surplus in 2020-21. The Treasurer will provide an update in relation to the trajectory, the expected trajectory on Tuesday night when he delivers the Budget.
SAMANTHA MAIDEN: Okay because you are now talking about a different measure, which is keeping tax to revenue to 23.9 per cent of GDP….interrupted
MATHIAS CORMANN: That is not a different measure, that is a measure that has been a feature of our Budget ever since we came into Government. In fact….interrupted
SAMANTHA MAIDEN: There is an argument, is there not, that that is a break on getting to the one per cent of GDP for the surplus? That is Labor’s argument, that they can tax and spend their way to a surplus that is bigger than yours.
MATHIAS CORMANN: Labor is reckless and irresponsible. I would encourage you to have a look at Chris Bowen’s speech, his first speech to the Press Club as Shadow Treasurer in December 2013, when he actually said the Government must stick to a 23.7 per cent tax as a share of GDP cap. Now Labor is saying we will just increase the overall tax burden on the economy, which will cost jobs. Increasing the overall tax burden on the economy will lead to lower growth, fewer jobs, higher unemployment and lower wages….interrupted
SAMANTHA MAIDEN: Correct me if I am wrong here, I am happy to be corrected. If you keep this cap on tax of 23.9 per cent of GDP and then you have to then offer tax cuts, surely that makes it harder for you to run bigger surpluses?
MATHIAS CORMANN: No, you have to live within your means as a Government. The way to sustainably fund the services that Australians expect is by securing stronger economic growth. By securing stronger economic growth, 23.9 per cent of a bigger pie is a more significant dollar number than 23.9 per cent of a smaller pie. What Labor is proposing to do is to increase the overall tax burden on the economy, which will lead to lower growth, fewer jobs and lower wages….interrupted
SAMANTHA MAIDEN: Isn’t it the case of if you do not run bigger surpluses, you never pay down debt?
MATHIAS CORMANN: You are making an assumption….interrupted
SAMANTHA MAIDEN: You tell me, you are the Finance Minister.
MATHIAS CORMANN: We will be delivering the next Budget on Tuesday….interrupted
SAMANTHA MAIDEN: But surely it is just a matter of logic isn’t it? Just explain it to me, I did modern European history and drama in year 12, I stopped doing maths in year ten, so you explain it to me. My understanding has always been that if you do not run bigger surpluses, you do not pay down debt. Is that wrong or right?
MATHIAS CORMANN: Let me explain to you the situation we are in. When we came into Government, the economy was weakening, unemployment was rising, the Budget position was rapidly deteriorating. In the 11 weeks from Labor’s last Budget to the pre-election economic and fiscal outlook, the Budget position deteriorated by $3 billion a week. We have implemented a plan for stronger economic growth, for more jobs and to get the Budget back into surplus as soon as possible and that plan is working….interrupted
SAMANTHA MAIDEN: So keep it simple for people like me, yes or no, if you do not run bigger surpluses, do you never pay down debt?
MATHIAS CORMANN: You can ask the questions and I answer them and we are….interrupted
SAMANTHA MAIDEN: Is it yes or no?
MATHIAS CORMANN: You ask the questions, I will answer them. We are on track….interrupted
SAMANTHA MAIDEN: I will ask the question again, if you do not run bigger surpluses, do you never pay down debt?
MATHIAS CORMANN: We are on track to get back to surplus. If you look at our debt position as per our last Budget and half-yearly Budget update, it is projected to peak as a share of GDP next financial year. That is in the last update and there will be a further update on Tuesday.
SAMANTHA MAIDEN: I am not sure if I got a yes or no answer, I will have to keep studying….interrupted
MATHIAS CORMANN: You are just going to hypotheticals….interrupted
SAMANTHA MAIDEN: It is not really a hypothetical, I am asking you as principle, unless you run bigger surpluses, do you ever pay down debt?
MATHIAS CORMANN: We are committed to run surpluses as soon as possible and we will pay off debt in that context.
SAMANTHA MAIDEN: Chris Richardson has suggested and there have been briefings by the Government as well that revenue is great. That is good isn’t it? So revenue is better than expected. I think Chris Richardson used the word “humungous, humungous”, now does that mean that you are going to be able to get to surplus a little faster?
MATHIAS CORMANN: We let commentators put characterisations around it….interrupted
SAMANTHA MAIDEN: How would you describe it? Not humungous?
MATHIAS CORMANN: I provide monthly financial statements, which provide updates on how we are tracking both on the expenditure and on the revenue front. People can see that compared to what was forecast, expenditure is less and revenue is higher. That is because our plan and our prudent economic and fiscal management is working. The economic growth outlook is better, employment growth is much stronger than what it was when we came into Government and the Budget is on track to a believable surplus. The Treasurer on Tuesday will provide a further update. The key here is, this is not the time to change direction. Our plan is working. We have to continue to press ahead. We will continue to make the decisions to put our economy and our Budget on the strongest foundation and trajectory for the future.
SAMANTHA MAIDEN: If the revenue is humongous, as Christ Richardson suggested, you are on track to have a deficit of $2.6 billion, wafer thin, in 2019-20 according to MYEFO. If you have got all that revenue, wouldn’t that be a surplus? $2.6 billion that is just a tiny amount isn’t it….interrupted
MATHIAS CORMANN: You can ask me the question….interrupted
SAMANTHA MAIDEN: Okay I am asking.
MATHIAS CORMANN: You can ask me the question to deliver the Budget for you today in whatever way you want, I will not do it. The Budget will be delivered on Tuesday at 7:30pm by the Treasurer. I will not be delivering the Budget for you today.
SAMANTHA MAIDEN: I do not want you to let the cat out of the bag, but I am wondering….interrupted
MATHIAS CORMANN: You are entitled to wonder.
SAMANTHA MAIDEN: … if the deficit is only $2.6 billion 2019-20, if you might just have a little rabbit in your hat?
MATHIAS CORMANN: Again, you can wonder whatever way you want. You will not have to wait much longer. Quite right, we have made significant progress in repairing the Budget since we came into Government. We inherited a deteriorating situation and we are now on an improving trajectory with the most recent forecast and projection that we would return to surplus by 2020-21. The Treasurer will be providing an update on how we are tracking and the impact of our decisions in this Budget on Tuesday night.
SAMANTHA MAIDEN: Are you planning to offset removing the Medicare levy increases you have announced recently or will you simply use the revenue uptick to pay for it?
MATHIAS CORMANN: That detail will be reflected in the Budget. What we have said is, in all of the circumstances, including the fact that the Medicare levy increase was not going to go through the Senate, we have made a judgement that we could afford to fully fund the NDIS without increasing the Medicare Levy. It is also a matter of public record that we will deliver personal income tax cuts in this Budget. Now the detail and the specifics will be part of the Budget.
SAMANTHA MAIDEN: We have got a poll today, Sky News ReachTEL poll reflecting the change that is in Labor Party platform that they would like to see asylum seekers processed within 90 days or released into community detention. Do you think that is a fair efficiency method to say 90 days and then released?
MATHIAS CORMANN: No. I saw Penny Wong earlier on your program. It is clear that Labor would again go soft on border protection. It is clear that Labor would again open the floodgates. If we were to put arbitrary time limits on offshore detention, as is suggested by the Labor Party, as was suggested by Penny Wong and as appears to be reflected in that poll, we would open the floodgates again. We would put people smugglers back into business and what happened under Labor when they were last in Government would happen again. It is clear that Labor still has not learnt their lesson. They are still playing with fire. They are still wanting to put people smugglers back into business should they have the opportunity to get into Government.
SAMANTHA MAIDEN: Finance Minister Mathias Cormann, I think we are going to have to leave it there. Good luck and Godspeed on your 5th Budget, may there be many more. Thank you very much for your time today.
MATHIAS CORMANN: Thank you.
SAMANTHA MAIDEN: Thank you and good luck to your family as well.