Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
MATHIAS CORMANN: The Australian people now know beyond any doubt that whatever Bill Shorten promises tonight cannot be trusted. Any promise, any rolled gold guarantee from Bill Shorten is not worth the paper it is written on.
Bill Shorten gave the Australian people a rolled gold guarantee that Labor’s vetting processes of their candidates were watertight. He has been found out. A rolled gold guarantee that was not worth the paper it was written on.
Bill Shorten has form. He once gave Kevin Rudd a rolled gold guarantee that he had his 100 per cent support. Not worth the paper it was written on.
He once gave Julia Gillard a rolled gold guarantee that she had his 100 per cent support. Not worth the paper it was written on.
Bill Shorten once gave working families across Australia, working for private sector businesses across Australia, a rolled gold guarantee that he was in favour of company tax cuts for all businesses, because he understood that that would lead to more investment, more jobs and higher wages. Another Shorten rolled gold guarantee, not worth the paper it was written on.
Tonight, Bill Shorten must get serious about building a stronger economy.
Bill Shorten does not have a single policy to strengthen our economy and create more jobs. All Bill Shorten has is a long list of higher taxes.
Tonight, Bill Shorten and the Labor Party should drop their more than $200 billion in higher taxes on electricity, on small and family business, on income, on investment, on housing, on retirees. Because more than $200 billion in higher taxes would hurt our economy, would hurt families and would cost jobs.
Tonight, Bill Shorten and the Labor Party should reverse their plan to increase taxes on small and medium business because it would hurt our economy and cost jobs.
Tonight, Bill Shorten and the Labor Party should back our entire plan to provide income tax relief to encourage and reward hard working Australians.
When Bill Shorten and Chris Bowen lost Government in 2013, they left behind a weakening economy, rising unemployment and a rapidly deteriorating Budget position. Their current anti-growth, anti-jobs agenda would take Australia back to where Labor left off in 2013. Let me say that again, Labor’s current anti-growth, anti-jobs agenda would take Australia back to where Labor left off in 2013.
We have turned the corner on Labor’s debt and deficit disaster. We are now getting the Budget back into surplus and we are paying off the debt that Labor left behind. As of this year, the Government no longer has to borrow to fund our day-to-day living expenses. This is not the time to change direction. This is not the time to go to an anti-growth, anti-jobs agenda that would again take Australia to an economy which is weakening, unemployment which is rising and a Budget position which is rapidly deteriorating.
Happy to take questions.
QUESTION: Senator Cormann can you give a rolled gold guarantee that Jason Falinski is not a dual citizen? Should he be referred to the High Court?
MATHIAS CORMANN: Yes, I can give that rolled gold guarantee. This is the shiftiness of Bill Shorten. Bill Shorten has been found out. Bill Shorten has given a rolled gold guarantee that Labor’s vetting processes are watertight. In the meantime, every Liberal and National Member and Senator who realised that they had an issue took immediate action, referred themselves to the High Court or resigned and faced a by-election. That is not what Bill Shorten did. Bill Shorten in defiance of a very clear legal position, using shifty language as only Bill Shorten can, deceived the Australian people. The Australian people today know that whatever promises Bill Shorten makes tonight, whatever rolled gold guarantees Bill Shorten provides them in his speech tonight, they cannot be trusted.
QUESTION: Senator, three separate modellers have now found that the lion share of the benefits of the tax cuts by 2027 will go to the highest income earners. Is that the case?
MATHIAS CORMANN: We are providing income tax relief to encourage and reward hardworking Australians and we are prioritising low and middle income earners. Over the first four years, the income tax relief that we are providing in our Budget is going to low and middle income earners and we call on Bill Shorten to back the plan in full.
QUESTION: But once the seven year plan is implemented, won’t the lion share go to high income earners. So how does that fit in with the fairness argument?
MATHIAS CORMANN: At the end of the seven years, when the lion share of the plan is implemented, low income earners, those earning say about $30,000 a year, will have received an 8.3 per cent income tax cut every year. Over the first four years, higher income earners get a 0.2 per cent income tax cut and at the end of the process, do not get more than a 2.5 per cent income tax cut. What will happen at the end of our plan being implemented is that the top 20 per cent of income earners in Australia, the top 20 per cent of hardworking Australians will still pay about 60 per cent of income tax.
QUESTION: At the end of the day, someone on $30,000, gets $200 and someone on $200,000 gets $7,000. In money terms one end is getting more than the other, you cannot deny that.
MATHIAS CORMANN: Somebody on $30,000 gets an 8.3 per cent income tax cut….interrupted
QUESTION: No, I am talking in money terms.
MATHIAS CORMANN: If you pay less tax, then the tax cut in nominal terms is what it is. It is an 8.3 per cent tax cut at the lower end. It is a 0.2 per cent tax cut at the higher end. This is actually about Bill Shorten today. Today is the day when Bill Shorten provides his Budget reply speech and today Bill Shorten should get serious about building a stronger economy. He should get serious about creating more jobs in Australia, because a stronger economy is central to everything. Right now Bill Shorten does not have a single policy to create a stronger economy or create more jobs. In fact his current list of tax hikes will hurt the economy, lead to fewer jobs and fewer jobs means higher unemployment ,which over time means lower wages for Australian workers.
QUESTION: Are you still of the view that a referendum on Section 44 is a bad idea or is yesterday’s decision shown (inaudible)?
MATHIAS CORMANN: Section 44 is very clear. Everyone in Australia who seeks to nominate for election to the Australian Parliament knows what they have to do. Bill Shorten knew what they should have done and Bill Shorten deceived the Australian people. Bill Shorten cannot be trusted.
QUESTION: If the committee recommends that a referendum should be held, the Government will ignore that?
MATHIAS CORMANN: I am not persuaded that the Australian people disagree with the proposition that Members of the Australian Parliament should be Australian citizens only. The operation of Section 44 in our Constitution is very clear. The High Court has made it very clear what Section 44 means and everyone who wants to nominate for election to Parliament knows what they have to do to be able to be eligible.
QUESTION: Senator, you are one of the most senior West Australians in the Government, do you think the Liberal Party should run candidates in the Perth and Freemantle by-elections?
MATHIAS CORMANN: I do not give public advice to the Liberal Party organisation in Western Australia or elsewhere. These are matters that are properly considered and in due course, the Liberal Party in WA and in other states, will make relevant announcements.
QUESTION: What is the Government’s priority, passing personal income tax cuts or passing the company tax cuts?
MATHIAS CORMANN: Our priority is to pass both. We believe it is very important for working families across Australia that one, we provide income tax relief to encourage and reward working families around Australia. It is also in the interests of working families around Australia that we ensure that the businesses that employ them are not put at a permanent disadvantage with businesses in other parts of the world that they compete with. If businesses in Australia are put at a permanent disadvantage, because we are forcing them to pay higher taxes than the businesses they compete with, it will lead to fewer jobs in Australia. It will lead to investment going to other parts of the world instead of Australia. It will mean lower job security in Australia and lower wages over time. We stand here, in favour of lower business taxes because we stand in favour of backing in working families around Australia.
QUESTION: The Budget outlines plans to cut 30 jobs from ASIC. Why is the Government doing this, particularly given the evidence we have seen at the Royal Commission?
MATHIAS CORMANN: We have provided substantial additional resources to ASIC. That is a matter of public record.
QUESTION: Is this a show that the Government has less confidence in the regulator?
MATHIAS CORMANN: We have provided substantial additional resources to ASIC. That is a matter of public record.
QUESTION: The revenue over the next year suggests that the ASIC funding will be cut and 30 staff will have to go. How can they police the banks and financial services with fewer staff?
MATHIAS CORMANN: We have provided substantial additional resources to ASIC. That is a matter of public record. Once the Royal Commission reports, the Government will consider any findings and recommendations and make further decisions at that point. That was always going to be the timetable once we called a Royal Commission. We provided additional resources to ASIC last year and since then, the Royal Commission has been initiated. As soon as the findings and recommendations of the Royal Commission have been received, we will deal with them in the appropriate way.
QUESTION: The ABC boss Michelle Guthrie says the Government will face political backlash from freezing funding to the ABC. Are you worried about that?
MATHIAS CORMANN: The ABC is a taxpayer funded organisation and over that period, they will receive $3.2 billion worth of funding from taxpayers. The ABC, unlike nearly every other taxpayer funded organisation, has been exempt from the ongoing efficiency dividend for decades. The $84 million saving is equivalent to the efficiency dividend that applies to nearly all other taxpayer funded organisations. Those of you who work in media organisations other than the ABC, you know those media organisations had to find operational efficiencies and productivity improvements. There is no reason why the ABC should be completely immune from what is required of any other media organisation in Australia.
QUESTION: So should they stop whinging?
MATHIAS CORMANN: Well look, I am going to let the ABC management speak for themselves. The Government’s position is very clear. We believe that out of a $3.2 billion budget, it should be feasible to find $84 million of efficiencies.
MATHIAS CORMANN: Every other taxpayer funded organisation is expected to be as efficient and productive as possible. There is no reason why the ABC should be any different.
QUESTION: Senator Cormann, $126.6 billion (Inaudible). Is your Government providing year-by-year breakdown over the ten years?
MATHIAS CORMANN: Under normal budgeting rules, what Governments should provide under the Charter of Budget Honesty is forecasts and projections over the four year forward estimates period. That is what we have provided. In an abundance of openness and transparency when asked what the cost was over the medium term, we have provided that information. The truth is that Budget information by Governments, under Governments of both persuasions, is provided over a four year estimates period.
QUESTION: This is a ten year plan, doesn't the public expect to see ten years of costings?
MATHIAS CORMANN: That is why we have put the full cost of the plan over the medium term out into the public domain.
QUESTION: Is the $20 billion figure accurate, per year after the forward estimates?
MATHIAS CORMANN: We have provided the information, it is $140 billion over ten years.
QUESTION: Do you accept that proportionately once the ten year plan comes into place, higher income earners would be better?
MATHIAS CORMANN: What we understand is that Bill Shorten wants higher taxes. Bill Shorten wants higher taxes which would hurt the economy and cost jobs. Bill Shorten wants higher taxes, which would hurt the economy, hurt families and cost jobs. Tonight, Bill Shorten has the opportunity to stand up for growth, to stand up for working families around Australia, whose future success, whose future living standards depend on the businesses around Australia being more successful and more profitable into the future and who are looking for income tax relief, to help them deal with their cost of living pressures, to ensure that they do not get hurt by bracket creep which is also a drag on economic growth and they want to see the income tax system simplified.