Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
SARAH HARRIS: Last night, Treasurer Scott Morrison handed down the Budget and tax cuts were the centrepiece, as well as promising a return to surplus by 2020. For more on this plan, Finance Minister Mathias Cormann joins us now from Canberra. Thanks for joining us Minister.
MATHIAS CORMANN: Good to be here.
SARAH HARRIS: Has this budget been designed to win you the next election and will it?
MATHIAS CORMANN: This Budget has been designed to deliver a stronger economy, more jobs and to ensure that we can guarantee funding for all of the essential services Australians rely on and to make sure we don't put undue burdens onto future generations by ensuring the Government lives within its means.
ANGELA BISHOP: Well Minister, some of the criticism that has been levelled at the government this morning is that perhaps instead of tax cuts, you should have been paying down debt. What do you say to that?
MATHIAS CORMANN: We are paying down debt. Over the forward estimates by about $30 billion and over the next decade by more than $230 billion. Net debt is peaking this financial year, below where it was previously anticipated at 18.6 per cent and is projected to reduce to 3.8 per cent as a share of the economy. In fact, as of this financial year, the Government is no longer borrowing to fund the day-to-day living expenses of Government.
SARAH HARRIS: Now Minister, we actually put a call out on our Facebook page to see what viewers wanted to ask you. Now that we have got you in the hot seat, we wanted to put their questions to you. The first one is from Nicole and she writes “Why have no funds been allocated to education? They are quick to take away billions from public education but don’t want to put any back.” Can you answer that?
MATHIAS CORMANN: That is not right. We are significantly boosting schools funding. We are significantly boosting funding for education. In fact, we locked into legislation in June last year a significant funding boost for schools across Australia. In fact, we have implemented the Gonski reforms of needs-based funding for schools against the opposition from the Labor Party, who wanted to continue to persist with special deals for individual sectors.
ANGELA BISHOP: Another question was from Karen. She asked, "What have you doing to tackle the homeless problem?"
MATHIAS CORMANN: We are building a stronger economy, creating more jobs, creating better opportunities for all Australians to get ahead. Australians today and into the future deserve the best possible opportunity to get ahead. We are making sure that the economy is strong so we can also provide well targeted appropriate levels of welfare support, appropriate levels of income support for those most in need.
PETER BERNER: Minister, there was a question that came in from our viewer Kirsty who asked, “Do they think the lower income earners can survive on $200 a year tax cut when people on higher earnings get bigger cuts?”
MATHIAS CORMANN: Somebody who earns say below $37,000 a year will pay between $2000 and $3000 worth of income tax. If you are on about $90,000 a year, you pay about $20,000 worth of income tax. That is a function of that reality. We have provided income tax relief in this Budget, prioritising low and middle-income earners with income tax relief in the short term of up to $530 a year, which would be provided as a lump sum on assessment, as people fill in their income tax return for 2018-19. Which will help families deal with cost of living pressures, which will help address bracket creep moving forward and which will simplify the tax system as we implement our seven year plan.
ANGELA BISHOP: Now Carole has a question for you as well. “What is in the Budget for pensioners?”
MATHIAS CORMANN: We are helping pensioners by facilitating them to earn additional income, an additional $50 a fortnight before losing any of their pension. We are making it easier for them to access equity in their home to supplement their pension income and we are providing a significant additional investment into aged care at home, because we understand that many Australians would like to be able to stay in their home as they grow older. So we are providing 14,000 additional high care in the home places through this Budget, taking the number to 20,000 additional places in the last 12 months.
ANGELA BISHOP: Minister, it was trending on Twitter last night a hash tag keep my $10 with people suggesting that instead of giving them this $530 tax cut, that money could go to things like making dental part of Medicare and suggestions such as that. Is this tax cut, has it gone to the right place?
MATHIAS CORMANN: Any Australian who voluntarily wants to pay more tax can pay more tax. There is an avenue under our tax laws to voluntarily pay more tax than what is required by law. So anyone who feels that way, that is open to them. We have made decisions based on the right way forward. We want to keep the economy strong, we want to ensure that more jobs can be created, we want to make sure that all of the funding for essential services that Australians expect is guaranteed within the budget and we want to ensure that Government lives within its means. We are projected to return to surplus, to remain in surplus all the way over the medium term, to get back into surplus in excess of one per cent as a share of the economy by 2026- 27. In that circumstance, we believe it is appropriate for us to provide income tax relief to hard-working Australians, prioritising low and middle income earners, to deal with cost of living pressures, to address bracket creep, which is a drag on economic growth, but also to simplify the tax system overall.
SARAH HARRIS: We heard you all celebrated after the Budget last night. I feel like I need a drink after this segment. Thank you so much Minister, Mathias Cormann for explaining some of the Budget and also answering our viewer questions.
MATHIAS CORMANN: Always good to talk to you.