Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
MATHIAS CORMANN: More and more Australians understand that their future job opportunities, their future job security and their future wage increases depend on the future success and profitability of the businesses that employ them. Australians understand that for them and for their children and grandchildren to have the best possible opportunity to get ahead, we need to ensure that businesses in Australia are not put at an ongoing competitive disadvantage with businesses in other parts of the world.
Nine out of 10 working Australians work for private sector business. Their future job opportunities, their future job security, their future career prospects, their future wage increases depend on the future profitability of the businesses that employ those nine out of ten working Australians.
Putting businesses in Australia at an ongoing competitive disadvantage, deliberately, by imposing higher taxes in Australia than are faced by their competitors in other parts of the world, puts Australian workers at an ongoing disadvantage and that is clearly the point that more and more Australians are starting to fully appreciate and support and that is why it the Government calls on all Senators to support our proposed business tax cut in full when the Senate comes back for the next sitting fortnight in the second half of June.
Let me also say, on behalf of the Coalition team in the Senate, that we very warmly welcome Senator Steve Martin as the newest addition to our Coalition Senate team. I have had reason to spend a lot of time with Senator Martin in recent times, discussing matters of public interest, including the issue of company tax cuts. It is great to have Senator Martin on board. He will make a fine contribution as a Coalition Senator for Tasmania.
Happy to take questions.
QUESTION: Senator, just confirming that you will put your company tax Bills or Bill to the Senate when it comes back and you want to vote on it by June 28, is that what you are saying?
MATHIAS CORMANN: Yes, that is most definitely our intention.
QUESTION: What happens if you do not have the numbers? Will you still put it to a vote?
MATHIAS CORMANN: The Government continues to work hard to secure the successful passage of what is a very important economic reform for working families around Australia. We never give up. We stand for the economic national interest. Bill Shorten earlier today was making various comments about what a vote for one or the other side of politics might mean. Well let me say, anyone who wants to vote for less investment, lower growth, fewer jobs, higher unemployment and lower wages over time, vote for Bill Shorten. If you want better opportunity for you and your families to get ahead, if you want more investment, stronger growth, more jobs and higher wages over time, vote for the Liberal-National Coalition team, vote for your Liberal-National candidates around Australia.
QUESTION: Senator Cormann, what is the strategic calculus of pushing for a vote in June? Why would you not wait until after the by-elections and go for a vote in August?
MATHIAS CORMANN: Our focus is on securing this very important economic reform through the Parliament. I flagged in March that after the Budget sittings that we would bring this legislation back as clearly there was some more work to be done. That work is continuing. We continue to work to secure the successful passage of what is very important reform, which is supported by more and more Australians. As they consider all of the ins and outs of this, more and more Australians are supporting this very important reform, which is very important for their future success and opportunity to get ahead.
QUESTION: What makes you think Pauline Hanson would change her mind?
MATHIAS CORMANN: I do not talk to my colleagues in public. I will continue to do as I always have done, we will do as we have always done and that is work constructively, respectfully and in private with all those non-government Senators who are prepared to engage with us in that way. I have always thoroughly appreciated the way Senator Hanson has engaged with me and the Government and we will continue to have constructive conversations with her regardless.
QUESTION: If One Nation comes on board would the original deal still stand?
MATHIAS CORMANN: It will work with all crossbench Senators, including…interrupted
QUESTION: But given that part of the deal put in public by the Senator herself, can you say yes Australian people part of this deal will still be on the table?
MATHIAS CORMANN: We will continue to work with all crossbench Senators. In fact the door is open to all non-government senators, including Labor and Green senators. If Bill Shorten who has been one of the most eloquent advocates of a lower, more competitive business tax rate in Australia, if he wanted to change his mind and instead of pursuing an anti-business, anti-growth, anti-opportunity, politics of envy agenda, which would make Australia poorer, if he wanted to remind himself of the national interest and the interest of families around Australia, who want to have the best possible opportunity to get ahead, if he wanted to change his mind, the door would be open for the Labor Party too.
QUESTION: A cynical person might say if the vote goes to the Senate in June and is defeated, it would be a handy excuse to drop the policy all together.
MATHIAS CORMANN: We are totally committed to the reform. As the Prime Minister, the Treasurer and myself have said on a number of occasions, this was a very important reform for Australia as we went to the last election in 2016. It is even more important and more urgent now. Since we went to the last election, the United States has legislated to lower their business tax rate to 21 per cent. Since we went to the last election, even France has decided to lower their business tax rate from 33 per cent to 25 per cent. Countries around the world who are focused on the best interest of working families in their respective economies are making sure that their businesses are not put at a competitive disadvantage. In Australia we must do the same. We cannot put Australian businesses, businesses here in Australia at a deliberate, ongoing disadvantage and think that this is not going to have negative consequences for the nine out of ten working Australians who work for those businesses.
QUESTION: So will you take the company tax plan to the people at the five by-elections on June 28?
MATHIAS CORMANN: Yes.
QUESTION: Regardless of the company tax, what happens there, is it the Government's intention still to reform the PRRT in line with the Callaghan recommendations?
MATHIAS CORMANN: The Government continues to consider the Callaghan recommendations. As soon as relevant decisions have been made in relation to those announcements, they will be made.
QUESTION: Senator Cormann, what is the timeline to having the Senate properly address the personal income tax package?
MATHIAS CORMANN: Our intention would be to deal with both the business tax reforms and the personal income tax reforms by the end of June.
MATHIAS CORMANN: That is right.
QUESTION: Derryn Hinch has talked about his $500 million threshold and that is something he has put to Pauline Hanson. Is that something you would even consider again or look at?
MATHIAS CORMANN: No, because it would be a barrier to growth. If you put an artificial ceiling on the growth that a business can aim for by essentially providing a disincentive to further growth beyond that threshold, you are putting a brake on jobs growth.
QUESTION: We have already got that though with the lower threshold.
MATHIAS CORMANN: It was always designed as part of a ten year plan. I cannot see that legislating it at that level and locking it in at that level would ever then be able to be addressed successfully down the track. This now needs to be addressed as one package. As Bill Shorten himself said, limiting business tax cuts to smaller businesses only is a disincentive to those businesses growing more strongly, as it puts a ceiling on jobs growth. Bill Shorten put that very succinctly. Do not think that he has changed his mind. All he has done is he is now blatantly pursuing an anti-business, anti-opportunity, anti-aspiration, politics of envy agenda because he thinks that suits his political interest. He is not acting in the national interest, he is not acting in the public interest. He is purely pursuing what he perceives to be in his political self-interest.
QUESTION: So it is all or nothing on the remainder of the package basically?
MATHIAS CORMANN: We are committed to securing the passage of our business tax cuts in full. We are very pleased to see that more and more Australians are strongly supportive of our efforts to secure the passage of those business tax cuts in full, because people understand that if we continue to put businesses in Australia at a competitive disadvantage we put them at a disadvantage. Nine out of ten working Australians working in a private sector business know that when Bill Shorten pushes for higher taxes on business than faced by businesses in other parts of the world, he is putting their jobs at risk, he is putting their future wage increases at risk. Bill Shorten stands for less investment, lower growth, fewer jobs, higher unemployment and lower wages over time. That is the only consequence of his high taxing, socialist, anti-business agenda that he is pursuing now.
QUESTION: Is there any merit to accelerating those company tax cuts rather than waiting for the full ten years for them to take effect?
MATHIAS CORMANN: The Government has always been very clear. We are pursuing two objectives in parallel, which are very important for our economy and in terms of the Government's capacity to live within its means moving forward. We are committed to both, to get the Budget back to surplus as soon as possible and the forecast now is that the Budget will return to balance by 2019-20 and then to a stronger surplus from 2020-21 onwards and remain in surplus all the way through. We also want to ensure that businesses around Australia, all businesses around Australia, can have access to a globally more competitive business tax rate. The benefit of legislating those business tax cuts now, even though it is on a phased trajectory, is that businesses today make investment decisions based on their expectations of future profitability after tax. Now, if businesses today know they can have certainty because the Parliament has legislated a trajectory of lower business tax rates into the future, then they will be able to make investment decisions today based on their expectations of improved future profitability after tax. Incidentally, a number of other countries have gone down this path. The United Kingdom lowered their tax rate on a phased trajectory and they are on track to lower it further to 17 per cent by 2020. Other countries have done it as a faced approach. We think it is important both, to get the Budget back into surplus as soon as possible and to ensure businesses around Australia are not put at an ongoing competitive disadvantage with businesses in other parts of the world.
QUESTION: Senator, should politicians be accepting money for interviews?
MATHIAS CORMANN: Every individual politician has to explain these matters for themselves. I do not have any comment in relation to that whatsoever. I am answering questions about my area of…interrupted
QUESTION: But taking the individual out of it, would you like to see changes to the disclosure rules? Do you think this is this something that Australian politicians should be doing?
MATHIAS CORMANN: I am not a commentator…interrupted
QUESTION: No but you are a legislator. So do you think that perhaps you should be legislating against this or at least putting in rules to stop this?
MATHIAS CORMANN: I do not think there is any need for legislation.
QUESTION: On personal income taxes, Labor is criticising the latest information from the Government saying look, it is crazy to be talking about middle income tax relief when some of the tax relief goes to people on $200,000. Who do you think qualifies as a middle income Australian worker who deserves a tax cut?
MATHIAS CORMANN: We are talking by 2024-25. The Labor Party wants people to go backwards. All we are proposing to do here is to address bracket creep. Not only is bracket creep a drag on economic growth, it also, in real terms, takes people backwards. Bill Shorten has clearly made the decision, that he wants to put himself forward as a socialist, anti-opportunity, anti-aspiration, politics of envy champion. Good luck to him. His agenda would lead to less investment, lower growth, fewer jobs, higher unemployment and lower wages. His agenda, if it was implemented in Government would make all Australians poorer. That is not our agenda. Our agenda is there for all to see. Let me say, as we have indicated since the Budget - right now, the 20 per cent top income earners in Australia pay about 61 per cent of income tax revenue here in Australia. If our plan is implemented in full by 2024-25 the top 20 per cent will still be paying about 61 per cent of the personal income tax revenue generated in Australia. Bill Shorten wants to punish people who work hard, who are making the effort to get ahead. We think, we believe, that providing reward, encouragement and incentive to hard-working Australians, encouraging them to get ahead is good for the economy overall. What is good for the economy overall, is good for all Australians, including lower and middle income earners, who also want to get ahead. If we end up with lower growth, which Bill Shorten’s agenda would lead us to, the people that would hurt the most as a result would be low income earners, because they are the first to feel the impact of lower growth and they are also by the way the first to feel the positive impact of stronger growth. That is why we are standing for stronger growth and more jobs.
QUESTION: So you will not split the package even if it is going to get through the Senate.
MATHIAS CORMANN: No, no we will not split the package. Bill Shorten has to make a decision whether he wants to stand in the way of personal income tax relief for low and middle income earners. He has to make a decision whether his anti-aspiration, politics of envy vendetta is more important to him than providing cost of living pressure relief to low and middle income earners. That has to be his decision.
QUESTION: Senator Cormann can I just ask you about the already legislated business tax cuts. I understand that on July one, companies between $25 million and $50 million in turnover are due to receive some of that relief. Labor has not actually finalised its position on that. Do they need to finalise their position on it before that tax relief flows through, or is there a risk these business will not view the tax cuts as real?
MATHIAS CORMANN: You are way too generous to the Labor Party. The Labor Party has finalised their decision on this, because the Labor Party has spent that money several times over. Not once, not twice, three times over. The Labor Party cannot say on one hand, we are going to keep spending this $65 billion dollar tax giveaway supposedly it was initially, now they are talking about an $80 billion give way, spend it several times over and then say they have not made a decision to whack small and medium-sized businesses with higher taxes. Bill Shorten has an agenda to increase the tax burden on the economy by more than $200 billion. $200 billion in higher taxes will hurt the economy, will hurt families, it will cost jobs, which is why we are saying Bill Shorten’s socialist, anti-opportunity, anti-aspiration, politics of envy agenda would leave all Australians poorer and they should vote against it. They should send Bill Shorten a very strong message and tell him that they actually believe in incentive, encouragement, reward for effort and helping Australians to get ahead and be the best they can be, rather than to hit people for six whenever they try to do their best.