Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
GEORGE ROBERTS: The Federal Finance Minister Mathias Cormann joins us on the line. Senator Cormann, welcome to ABC Radio Brisbane.
MATHIAS CORMANN: Good morning.
GEORGE ROBERTS: So how many interviews have you done this morning, are you getting a bit sick of delivering the lines?
MATHIAS CORMANN: This is my ninth.
GEORGE ROBERTS: The ninth interview. Well, feel free to throw the lines book out.
MATHIAS CORMANN: Well I will answer your questions.
GEORGE ROBERTS: So look, let us start with the tax cuts. You are offering, or pledging, $140 billion in tax cuts for almost everyone, nearly or more than 90 per cent of taxpayers, by ten years’ time. But how can you guarantee that even in two, three, four years’ time, you will still be able to afford that?
MATHIAS CORMANN: If you look at the progress that we have made so far, we inherited a weakening economy, rising unemployment and a Budget position that was rapidly deteriorating. Today, the economic growth outlook is stronger, employment growth is much stronger and the Budget is on a believable track to surplus, projected to return to surplus from 2019-20 and to remain in surplus all the way over the medium term to 2028-29 and to return to a surplus above one per cent as a share of GDP from 2026-27 onwards. So this income tax relief is affordable, it is responsible and it is fully accounted for in our Budget bottom line. It is all about encouraging and rewarding hard-working Australians, helping them with their cost of living pressures. We are prioritising low and middle-income earners and it helps address bracket creep which is a drag on economic growth and it simplifies the tax system.
GEORGE ROBERTS: Senator Cormann, though, you are in a position at the moment that was not even predictable six months ago. So how do you know that the Government is going to be in the same Budget position in seven to ten years’ time? That is predicting something that no Government has ever been able to accurately predict.
MATHIAS CORMANN: We are in this position because of the work we have done, because of the plan that we have implemented for a stronger economy and more jobs. Our plan for a stronger economy and more jobs is working. 415,000 additional jobs in 2017 alone and overwhelmingly the additional revenue coming into Government coffers is on the back of additional personal income tax paid by people who have gone from welfare into work or who have found a job.
GEORGE ROBERTS: Standard and Poor’s has maintained its negative outlook for Australia’s Triple A credit rating and says that your plan for an earlier return to surplus could easily be derailed, though. So you are saying that you are completely confident in your projections?
MATHIAS CORMANN: Our economic forecasts and our assumptions underpinning our forecasts are absolutely credible. They are broadly in line with those of the Reserve Bank of Australia and international organisations like the International Monetary Fund. In fact, across a range of areas we are more conservative than those organisations. Over the last few years, various commentators and the Opposition have tried to suggest that somehow our economic forecast assumptions and our various other assumptions were too optimistic. Well guess what, we have been out-performing our Budget forecasts. Again this year, if you look at the progress that we have made on the 2017-18 Budget, we are spending less and we are raising more. In the final outcome for 2016-17, when people said that we were being too optimistic, the Budget bottom line was four billion dollars better than what was anticipated at Budget time. Compare that to the situation we inherited four and a half years ago. When Chris Bowen retired as Treasurer of the Rudd Labor Government, the Budget position, the Budget bottom line, was deteriorating by three billion dollars a week. We are now outperforming our forecasts.
GEORGE ROBERTS: Okay, so, you mention the Opposition. Even if global economic conditions stay in your favour, the first seven years of the cuts that you have announced are to be enshrined in one single legislation. Without Labor’s full support, how will you get that through the Senate given that you would need at least nine out of the remaining 11 Senators, or the 11 Crossbenchers?
MATHIAS CORMANN: Bill Shorten and the Labor Party will have to decide whether they want to stand in the way of income tax relief for hard-working Australians. We believe that hard-working Australians deserve income tax relief. We believe that they need support with cost of living pressures, that we do need to address bracket creep and that we need to simplify the tax system. In the end, if the Labor Party wants to stand in the way, it will be a matter for the Australian people to decide.
REBECCA LIVINGSTON: You are listening to the Federal Finance Minister Mathias Cormann on ABC Radio Brisbane. It is 21 minutes to 10, my name is Rebecca Livingstone and George Roberts in this morning. Minister, let me bring you to a specifically Queensland focus, because we spoke to the Deputy Premier and Treasurer Jackie Trad earlier this morning and we discussed the $5.2 billion allocated for infrastructure contributions for major Queensland projects. However, Jackie Trad is not sold.
MATHIAS CORMANN: Surprise, surprise.
JACKIE TRAD [EXCERPT]: When you add up all of the infrastructure dollars on the rail and road projects that the Federal Government has talked about, $5.2 billion. That is equivalent to one project that they have announced funding for in Victoria, so that is the rail line from Melbourne to the airport. So, $5.2 billion for all of Queensland and five billion dollars for one project in Melbourne.
REBECCA LIVINGSTON: Are you short-changing Queensland?
MATHIAS CORMANN: Not at all. We have committed $15.5 billion worth of infrastructure funding, Federal infrastructure funding for Queensland and a $5.2 billion additional in this Budget. So, this is a very substantial Federal investment in productivity-enhancing and economic infrastructure in Queensland and also congestion-busting infrastructure in Queensland.
GEORGE ROBERTS: RACQ Queensland says that, in fact, what you are offering for Queensland infrastructure is $400 million less than last year or down about 20 per cent.
MATHIAS CORMANN: Well that is not right. We have made a $5.2 billion additional investment, which brings our total Federal commitment to Queensland since 2013-14 to $15.5 billion.
GEORGE ROBERTS: So if Queensland has, as the Deputy Premier Jackie Trad says, has 20 per cent of the population but it is only getting $5.2 billion out of the $75 billion you are spending on infrastructure…interrupted
MATHIAS CORMANN: Well that is wrong. That is actually not right. The $75 billion is the overall ten year plan, so Queensland, the $5.2 billion is only the new allocation in this year’s Budget out of a $24.5 billion allocation nationally, so that is about 20 per cent.
GEORGE ROBERTS: Okay, sorry. Rebecca?
REBECCA LIVINGSTON: On Cross River Rail, I could not get a straight response from the Treasurer this morning in terms of why there has not been support from the Federal Government on that particular project. Mathias Cormann, can you answer that?
MATHIAS CORMANN: Because the Queensland State Labor Government has failed to do its homework. With any infrastructure project that is worth more than $100 million, it needs to be subject to a rigorous assessment, an independent assessment, by Infrastructure Australia, which at a Federal level is actually a bipartisan proposition. The Labor Party federally says that they support the rigorous, independent assessment by Infrastructure Australia of any infrastructure project of more than $100 million. Infrastructure Australia assessed the Cross River Rail project in July 2017 and they found that the project benefits were less than the project costs. Instead, Infrastructure Australia indicated that the Brisbane Metro project was the better short-term solution for Brisbane’s existing transport system. We keep Cross River Rail on the books as a medium-term priority and if the State Labor Government in Queensland does some more homework and they want to resubmit a better, higher quality business case to Infrastructure Australia then we would welcome that and that would be a matter for Infrastructure Australia to review.
REBECCA LIVINGSTONSo perhaps, next time around with the Budget, indeed that will be when your Government promises to have a surplus for the country. Can I just put to you the other issue that was raised by Jackie Trad in response to the question of how the Federal Budget would affect the Queensland Budget. This is what the Deputy Premier had to say.
JACKIE TRAD [EXCERPT]: Queenslanders living in remote Indigenous communities, for the first time in half a century, the Federal Government will not be putting one single cent on the table to build new houses in remote Indigenous communities. $500 million over five years for the Northern Territory, not one single cent for Indigenous Queenslanders living in remote communities. That will have an impact on our Budget.
REBECCA LIVINGSTON: Your response, Mathias Cormann?
MATHIAS CORMANN: Well the response is and the Deputy Premier in Queensland knows this very well, this is a core state responsibility. The Federal Government stepped in, essentially, to help on a transitional basis through a time-limited program, to help bring the States back up to a higher, better standard. It was never designed to be an ongoing Federal program and really it is a matter for the State Government in Queensland to take responsibility for what is a core area of State responsibility.
REBECCA LIVINGSTON: On that though, Reconciliation Australia has also weighed in, saying that they are concerned that an opportunity to reset the Closing the Gap strategy has been lost. Have you not done enough in terms of Reconciliation in this Budget?
MATHIAS CORMANN: We disagree. We are making very substantial investments into our Closing the Gap commitments across a whole range of areas, but this particular area has always been an area of State responsibility. The Federal Government made a time-limited contribution, which was always meant to be a time-limited additional contribution supporting the states and of course now, as always happens in these circumstances, as soon as the Federal Government steps in to help on a temporary basis, they want to make that permanent.
GEORGE ROBERTS: Finally, Senator Cormann, you are cutting $84 million from the ABC. That is on top of $290 million already cut since you came to Government in 2013, despite promising not to cut anything from the SBS or the ABC. It is not an efficiency divided, as you have said on television this morning, it is a funding freeze. Why have you done that?
MATHIAS CORMANN: It is an efficiency dividend…interrupted
GEORGE ROBERTS: Well a cut is a cut, with respect sir.
MATHIAS CORMANN: Let me explain it to you, let me explain it to you very clearly and every ABC outlet has asked me this question which, I understand why you are interested. The ABC has been exempted from the efficiency dividend that applies to nearly all other taxpayer funded organisations…interrupted
GEORGE ROBERTS: But we have had $290 million…interrupted
MATHIAS CORMANN: …for most of the last few decades. Now over the next three year funding agreement, the ABC will receive $3.2 billion from taxpayers and the $84 million is equivalent to the efficiency dividend that applies to nearly all other taxpayer funded organisations. We believe that the ABC, like every other taxpayer-funded organisation, should be as efficient as it can be, should find the opportunity for productivity and operational improvements, operational efficiencies, and we believe out of a $3.2 billion budget, there is the opportunity to achieve $84 million worth of efficiencies.
GEORGE ROBERTS: Okay, so $48 million of that has been redirected towards commemorating the landing of Captain Cook and it is being spent in the electorate of Scott Morrison. Do you think it is a good look?
MATHIAS CORMANN: We have got 150 electorates around Australia and in 150 electorates around Australia the Federal Government is making investments. The arrival of Captain Cook in Australia is a very significant and very important part of our history, which appropriately should be and will be commemorated in the appropriate way.
REBECCA LIVINGSTON: But to be clear Mathias Cormann, you would rather that money was spent on commemorating Captain Cook than put into the public broadcaster?
MATHIAS CORMANN: I believe that the ABC like any other taxpayer funded organisation needs to ensure that it is as productive and as efficient as possible and out of a $3.2 billion budget, we believe it is entirely appropriate for the same level of efficiencies to be found that most other taxpayer funded organisations have to find on an ongoing basis. The ABC, for the most part, has been exempted from these efficiency requirements nearly all other taxpayer funded organisations have to find. It is not beyond the ABC to do the same.
REBECCA LIVINGSTON: We will do our best. Senator, thanks for your time this morning.
MATHIAS CORMANN: Always good to talk to you.