Transcript

Sky News – First Edition

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia

Transcription: 

PROOF COPY E & OE

Date: 

22/5/2018

Topic(s): 

Company tax cuts, Liddell Power Station, Income tax cuts

KIERAN GILBERT: Let us return to our top story now and negotiations over the Government’s company tax plans and broader tax initiatives. Let us go live to the Finance Minister Mathias Cormann. One Nation, they are on board, now they are not, what happened? 

MATHIAS CORMANN: I am disappointed with this latest development and I hope it is not the last word spoken on this. We have had very thorough and very constructive engagement with Pauline Hanson and her team earlier in the year, where we fleshed out all of the issues, where we fleshed out why it was so important to working families around Australia that the Senate passed our plan for a globally more competitive business tax rate for all businesses in full. We had firm private and public commitments of support from Pauline Hanson and her team. I am certainly hopeful that we can work our way back into that same position.

KIERAN GILBERT: She has cited her disappointment on a couple of things, let us go through them one by one if we can. On debt reduction, she says the Budget is built on eggshells and could crash at any time. What do you say to that when at the same time she is saying that she wants the company tax cuts delivered sooner? How do you match both of those issues?

MATHIAS CORMANN: We do not accept that proposition. Our Budget is based on economic growth assumptions that are realistic, that are in line with those of the Reserve Bank of Australia and the International Monetary Fund and in fact in parts are more conservative than the assumptions of those organisations. What it shows is that we are projected to return to balance by 2019-20 and to remain in surplus all the way through, including exceeding surplus as a share of GDP of one per cent by 2026-27 and remain in surplus all the way through. The whole reason why we are phasing in the business tax cuts rather than to implement them in one go is because we want to achieve both a return to surplus as soon as possible, because we think it is important for Government to live within its means, while also providing certainty to business that they will be able to benefit from a globally more competitive business tax rate down the track. We have always said as part of our ten-year enterprise tax plan that we would prioritise small and medium sized business, but progressively expand the lower business tax rates to more and more businesses until all businesses reach a business tax rate of 25 per cent….interrupted

KIERAN GILBERT: So will it still have an impact despite One Nation’s concerns that it will not?

MATHIAS CORMANN: Businesses today make investment decisions today based on their expectations of profitability after tax in the future. Australia is not alone in phasing in lower business tax rates over time. The UK has done that. In France they are proposing to reduce their business tax rate from 33 to 25 per cent by 2022. In the context of where the Budget is at, we have focused on both making sure that we could implement this plan, which is important for stronger growth to ensure that businesses in Australia are not disadvantaged compared to businesses in other parts of the world because of their higher tax rates. But also to get the Budget back into surplus as soon as possible and to ensure that those business tax cuts are affordable all the way through. The key thing to remember is that higher taxes on business in Australia than in other parts of the world means higher taxes on jobs in Australia than in other parts of the world. If we continue to put Australian business at a disadvantage with businesses in other parts of the world, because we impose higher taxes, we put Australian workers at a disadvantage compared to workers in other parts of the world.

KIERAN GILBERT: Pauline Hanson expressed disappointment that the deal, the agreement done with the Government on her apprenticeship scheme was not included in the Budget papers as well. What is your response to her on that? 

MATHIAS CORMANN: Pauline Hanson and her team raised a whole series of issues with us including the apprenticeship proposal. It was always understood by Pauline Hanson and her team and always accepted by Pauline Hanson and her team that those issues that we had reached agreement on were conditional on the successful passage of the business tax cut legislation in full through the Parliament. From our point of view, nothing has changed. All of the things that we have discussed with Pauline Hanson and her team earlier this year and since, we remain committed to all of those things that we discussed. As I have indicated, I hope that following further conversations we can get this back on to the same track as we were when we had firm public and private commitments that One Nation would support this very important economic reform.

KIERAN GILBERT: Some suggestions that you might have to overhaul the Petroleum Resource Rent Tax and an intuitive on a gas pipeline as well. Are these things that you are open to, to win back the One Nation support? 

MATHIAS CORMANN: One Nation did raise a whole series of issues with us. I do not make a habit of conducting negotiations through the media, but One Nation did raise a whole series of issues with us earlier in the year and the Government reached an agreement with One Nation on a whole range of issues. Those agreements were always conditional on the successful passage of the legislation. That was always understood by Pauline Hanson and One Nation and was always accepted by Pauline Hanson and One Nation. From the Government’s point of view, nothing has changed.

KIERAN GILBERT: Is it hard to remain patient when you have got what appears to be blatant attention seeking right now from One Nation given all you have said this morning to me, you have been good to your word with everything you have said to Pauline Hanson and she has duded you.

MATHIAS CORMANN: This is not about any of us. This is not about politics. This is about the Australian people. This is about making sure that our economy is on the strongest possible economic foundation and trajectory for the future to ensure that the nine out of ten working Australians who work for a private sector business continue to have the best possible opportunity to get ahead…interrupted

KIERAN GILBERT: It helps if people are true to their word. It does help if people are true to their word in politics as in anywhere else.

MATHIAS CORMANN: Just making the point again, this is about making sure that the nine out of ten working Australians who work for a private sector business have the best possible job security, have the best possible career prospects, have the best possible opportunity to secure wage increases into the future. In order to secure that, we need to ensure that the businesses that employ them and pay their wages have the best possible opportunity to be successful and profitable into the future and that they are not put at a deliberate competitive disadvantage, by forcing them to pay higher tax here than their competitors pay in other parts of the world.

KIERAN GILBERT: I know you believe that and that is your passionately held view, that is fine. How do you not give up on this now given you have got attention seeking crossbenchers, whether it by the Centre Alliance or One Nation who change with the tide. In March they supported it, now they do not. Their reasons have changed, you have given commitments, they have baulked. When do you give up?

MATHIAS CORMANN: We have a responsibility to the Australian people. We have a responsibility to the national interest. We will not leave any stone unturned. If this does not succeed, it would be a real shame. If we continue to impose higher taxes on Australian business than is applied to businesses in other parts of the world, it would be bad for our economy, bad for jobs and bad for working families. We have a responsibility to continue to do everything we can to secure the necessary support, given that Bill Shorten and the Labor Party have made such a reckless, politically opportunistic and disappointing decision to turn their back on what they know to be the right thing for the Australian economy. 

KIERAN GILBERT: Just a couple of quick ones before you go. Tony Abbott says the Government should acquire the Liddell Power Station and sell it. This is something Pauline Hanson has raised concerns about as well in terms of coal-fired power. Would you under any circumstances consider compulsorily acquiring Liddell?

MATHIAS CORMANN: We are not in the business of compulsorily acquiring private sector businesses. We do want the Liddell coal-fired Power Station to continue beyond its currently scheduled timeframe. That is a matter of public record. We hope that a commercial private sector solution can still be found.

KIERAN GILBERT: Labor says it is still open to the second phase of your income tax plan. Do you welcome that hint of compromise from Labor and would you be willing to at least break up the first two phases, given we are talking about, significantly into the medium term outlook, why not at least break up the first two phases from the third phase of your income tax plan, if you were to get Labor across the line?

MATHIAS CORMANN: We have put forward a seven-year plan to provide income tax relief to encourage and reward hardworking Australians. We are focused on securing passage of the whole plan. Labor will have to decide whether they want to stand in the way of income tax relief, helping low and middle-income earners by providing cost of living relief. We are focused on providing income tax relief to families by providing cost of living relief, but also by making sure that we address bracket creep, which is a drag on economic growth and by simplifying our tax system. We are committed to the whole plan and we call on Labor to support the plan in full.

KIERAN GILBERT: Minister thanks for your time, we will see you on Friday morning. Talk to you then.

[ENDS]

Senator the Hon Mathias Cormann, Minister for Finance and the Public Service, Perth