Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 9 May 2018
ALI CLARKE: Good morning to Federal Finance Minister Mathias Cormann.
MATHIAS CORMANN: Good morning.
ALI CLARKE: Why didn’t the Government prioritise lowering debt over tax relief or is the simple answer you want to get elected?
MATHIAS CORMANN: We are lowering debt. Debt is peaking this year, a year early, at 18.6 per cent as a share of GDP and projected to fall by more than $230 billion over the decade down to 3.8 per cent as a share of the economy. The truth is we have a plan where we have to address a whole range of priorities. We want to keep the economy strong. We want to create more jobs. We want to ensure that funding for the essential services Australians rely on can be guaranteed within the Budget and we have been able to do that. The Budget is projected to return to surplus by 2019-20 and to remain in surplus all the way over the medium term, including a surplus in excess of one per cent as a share of the economy from 2026-27 onwards.
ALI CLARKE: Your opposition is labelling this plan as a hoax. They say well you are handing out this tax relief but it will not kick in for another four years or so and who knows what is going to be happening with the economy.
MATHIAS CORMANN: Firstly, when it comes to our income tax relief for hard-working Australians, we want to legislate all of that now, the whole seven year plan. In relation to our Opposition, I would just remind your listeners that when we came into Government and Bill Shorten and Chris Bowen lost Government, they left behind a weakening economy, rising unemployment and a rapidly deteriorating Budget position. When we came into Government and they lost Government, the Budget bottom line was deteriorating by three billion dollars a week. Now, the economy is stronger, employment growth is stronger and our Budget is in a stronger position and on track to get back into surplus. We are on track to pay down debt. We are making progress heading in the right direction and this is not the time to go back to the discredited ways of the Labor Party of the past.
ALI CLARKE: So then as you are the Finance Minister and good with numbers, can you may be put in percentage terms how much of this Budget and the positives of this Budget is due to your Government’s good management and how much of it is just you being able to harness that great economic upswing you are talking about.
MATHIAS CORMANN: The great economic upswing does not come by accident. The economy was weakening when Labor lost Government because they made terrible decisions, such as imposing a mining tax on the mining sector, imposing a carbon tax and a whole range of other very bad decisions that they made, including losing control of their expenditure. When Labor lost Government, the Government expenditure was increasing by four percent on average per year above inflation. We have made decisions to bring the spending growth trajectory down. We are controlling expenditure growth down to 1.6 per cent on average per year over the forward estimates. Spending as a share of the economy is projected to come down to 24.7 per cent below the 30-year average of 24.8 per cent. We have made decisions both on the revenue side and the spending side of the Budget that have put the Budget on a stronger foundation and trajectory for the future. We have made decisions that have helped strengthen economic growth and create more jobs. It is not by accident that 415,000 jobs were created in the economy last year. 3.5 per cent employment growth. It is because we have worked to make our tax system more growth-friendly, because we have worked to get Government spending under control, because we have worked to…interrupted
ALI CLARKE: But also other external international reasons that the economy is swinging.
MATHIAS CORMANN: When we came into Government there were significant falls in our terms of trade, significant falls in the global prices for our key commodity exports like iron ore and coal. Now the global economic growth outlook has improved and that is good news for the Australian economy. Of course it helps. But we also needed to make sure that Australia was in the best possible position to take advantage of these opportunities. That is always the challenge for Government to make sure you are in the best possible position to take advantage of opportunities coming your way, but also to ensure you are as resilient as possible to deal with the head winds coming your way. Whereas Labor in Government was putting more and more lead into our saddleback, we have worked on making sure that we are in the most competitive, best possible position so that families around Australia today and into the future have the best possible opportunity to get ahead.
ALI CLARKE: You talk about the best possible opportunity but in our news service may be you have just heard, that some of the most vulnerable have been left out, pensioners. What do you say to them?
MATHIAS CORMANN: We are providing benefits for pensioners in this Budget. For example, we are facilitating pensioners earning $50 a fortnight extra before losing any of their pension. This is an opportunity for them and there are a whole lot of other opportunities in our Budget. We are enabling pensioners to draw down on some of the equity in their homes to supplement their yearly income. We are providing additional support for high in-home care for Australians as they get older and need additional support so they can stay in their homes longer.
ALI CLARKE: But no increase in their pension itself. What about those pensioners that cannot work?
MATHIAS CORMANN: You have to make decisions across the board based on what is affordable. There is a regular indexation of pension arrangements. The indexation arrangements for the age pension are more generous than the indexation arrangements that apply to many other payments. That is the framework the way it currently exists.
ALI CLARKE: Where is the $1.8 billion that was promised for transport infrastructure upgrades? The State Opposition cannot find it. They are asking have they missed a page or something or was this just a political sweetener, a promise and not realised money since it is not in the forward estimates?
MATHIAS CORMANN: The State Opposition was very bad when they were the State Government. They clearly have not learnt how to read Budget papers. There is $1.8 billion in additional Federal infrastructure investment which we will deliver with the Marshall Liberal Government in South Australia. It is $1.4 billion in addition to the Commonwealth’s existing $1.6 billion commitment to the North-South Corridor project $177 million for the corridor from Regency Road to Pym Street. There is $160 million for the Joy Baluch Bridge duplication and there is $220 million for the Gawler line electrification enabling faster and more reliable rail.
ALI CLARKE: And we have heard so much of that. We have heard both State and Federal Ministers saying that this is going to be a good thing but the issue is that the $1.8 billion cannot be found in the forward estimates, which puts it past the four-year cycle so the State Opposition I think is asking, well is the money actually guaranteed?
MATHIAS CORMANN: They money is guaranteed. With infrastructure projects, if the Opposition in South Australia knew anything about infrastructure projects, the same as it was when they were in Government, there are lead times and there are timeframes involved in getting these projects shovel ready and getting them underway. The money is there. It is committed and the Federal Government together with the Marshall Government in South Australia will deliver them.
ALI CLARKE: Here in South Australia you promised a GST boost of half a billion dollars but there is a review into the national carve-up of the GST. What happens if the protagonists get their way and SA does not get their amount that you are banking on here?
MATHIAS CORMANN: You are making assumptions. The review has not been received. Once the review has been received, the Government will consider it and we will make judgments at that time. I will be very happy to come on your program and explain what it is that we have decided to do once we have made decisions.
ALI CLARKE: Minister Mathias Cormann ever since we asked you to come on and talk, your people said that can you please let him go at 7:18am because you wanted to get on to another ABC Station. Now there is $127 million cut from the ABC over the next four years in a funding freeze essentially. How confident are you that there will not be cuts to localised programming and you will have more than one person that you will want to talk to in four years’ time?
MATHIAS CORMANN: It is $84 million and it is an efficiency dividend. The ABC is one of only a very small number of taxpayer funded organisations that for the most of the last few decades has been fully exempt from the efficiency dividend that applies to nearly all other taxpayer funded organisations. There are opportunities for productivity and efficiency improvements in the ABC. The ABC over that three-year period will get more than $3.2 billion in funding from taxpayers and the $84 million is equivalent to the efficiency dividend that applies to nearly all other taxpayer funded organisations over that same three year period.
ALI CLARKE: I better let you go to your next ABC interview then. Thank you very much .
MATHIAS CORMANN: Thank you.