ABC News – National Wrap

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






Business tax cuts, personal income tax relief, ABC

PATRICIA KARVELAS: The Parliament has two weeks to sit before the long mid-Winter break and the super Saturday by-elections. The Government hopes to get its corporate and its income tax cuts through in that time. I spoke to the Finance Minister Mathias Cormann a short time ago.

Mathias Cormann welcome to National Wrap.

MATHIAS CORMANN: Good evening.

PATRICIA KARVELAS: How close is the Government to securing Senate crossbench support for your income tax cuts?

MATHIAS CORMANN: Our intention is to put those income tax cuts to the Senate this week. Our objective is to secure their passage. We want to provide income tax relief to hard working families, prioritising low and middle income earners in the first instance, to assist them with cost of living pressure relief, but we also want to address bracket creep, because bracket creep is a drag on economic growth. If we do not address bracket creep more and more middle income earners would end up in the higher income tax bracket.

PATRICIA KARVELAS: Okay, but the question is how close are you to securing the support. I know you would like the changes to pass, but how close are you?

MATHIAS CORMANN: I am not a commentator. I do not provide a running commentary. I am working to secure the necessary support to secure the passage. That is the position that we are in. We will be putting this very important economic reform to the Senate this week. It will be a matter for the Senate to decide. I never speculate on what the Senate is ultimately likely to decide.

PATRICIA KARVELAS: I know you say you have not spoken to Pauline Hanson about supporting stage three of the income tax cuts yet. But have you sought a meeting with Pauline Hanson this week to get the whole income tax plan through?

MATHIAS CORMANN: That is not quite what I said. What I said is that Pauline Hanson has been away overseas for the past two weeks. The last conversation I had with Senator Hanson was during the last sitting fortnight, the last sitting week for that matter. Of course, we have previously discussed our proposal to ensure that all businesses around Australia have access to a globally competitive business tax rate. We have also discussed our plan to provide income tax relief to all working families, prioritising low and middle income earners. But is true, over the last two weeks as Senator Hanson has been overseas we have not had any further conversations.

PATRICIA KARVELAS: So will you be having further conversations in coming days?

MATHIAS CORMANN: I am always keen to talk to all non-Government Senators who are prepared to engage with us.

PATRICIA KARVELAS: So have you secured a meeting with her?

MATHIAS CORMANN: I am not going to talk about these sorts of internal processes. I am always keen to talk to all of my Senate colleagues on the crossbench … interrupted

PATRICIA KARVELAS: But without her support you can’t get the income tax cuts through. So it is a very relevant question.

MATHIAS CORMANN: Again, we have thirty-one Senators. We need to get to thirty-nine. There are ten non-Government Senators on the crossbench. So in relation to any legislation that Labor and the Greens oppose, we need eight out of the ten Senate crossbenchers. But you are making an assumption that ultimately, when it is all said and done, that Labor will decide to stand in the way of income tax relief for hard working families. I would not necessarily make that assumption just yet.

PATRICIA KARVELAS: So in that context, have you also just approached Peter Georgiou, who is the other remaining One Nation Senator and tried to talk to him alone about this.

MATHIAS CORMANN: I do not talk about my interactions with individual Senate crossbenchers through the media. But what I can confirm, and that is not news, I have confirmed this on an ongoing basis for some time, I engage with all of my non-Government Senate colleagues on the crossbench as they are prepared to engage with me. Or as they reach out to me asking to engage with me. Of course I engage with all of them.

PATRICIA KARVELAS: So are you trying to talk to him alone though, that is quite crucial, rather than dealing with them as a party, with One Nation leader Pauline Hanson.

MATHIAS CORMANN: I am open to engaging with all of my crossbench Senate colleagues as they wish and as they see fit. A number of them reach out to me from time to time. I engage with all of them.

PATRICIA KARVELAS: On company tax cuts are you prepared to give the cut to companies with perhaps a turnover of $500 million. Is that something you would put on the table to get Pauline Hanson’s support.

MATHIAS CORMANN: No. We have been very clear. If we were to put a cap of $500 million in place, that would be a disincentive for further growth. That would be a perverse incentive as Bill Shorten used to say, for businesses to remain smaller and for businesses, as Bill Shorten used to say in fact, to lay people off when they approach that particular cap. We want smaller businesses in Australia to work hard to become bigger businesses in Australia, so they can hire more people. As they hire more people and there is increased competition for workers across Australia, they would be forced to pay them higher wages. The key ingredient of higher wages growth, stronger wages growth is increased competition, stronger growth and more jobs. That is what we are trying to secure here. If we keep business taxes in Australia high, when countries around the world are significantly lowering theirs, we are helping businesses in other parts of the world take investment and jobs away from Australia. We do not want to put Australian workers at a competitive disadvantage with workers in other parts of the world by putting higher burdens on businesses in Australia than are faced by businesses in other parts of the world.

PATRICIA KARVELAS: Okay. So you say you are prepared to campaign on this very hard during the by-elections. Does this make these by-elections essentially a referendum on your corporate tax cuts then?

MATHIAS CORMANN: What I have said in response to a question earlier is that we are campaigning on our economic mission. Our economic mission… interrupted

PATRICIA KARVELAS: So is it a referendum on the tax cuts?

MATHIAS CORMANN: If I may, you have asked a question. Our economic mission is to deliver stronger growth and more jobs, because we understand that if you want Australians today and into the future to have the best possible opportunity to get ahead we need to deliver stronger growth and more jobs. If we put businesses in Australia at a competitive disadvantage with businesses in other parts of the world because we impose a significantly higher tax rate then we make it harder for businesses in Australia to be successful. We make it harder for business to hire more Australians, which means that we would … interrupted

PATRICIA KARVELAS: So if I can return you to my question. Is it a referendum on your corporate tax cuts if you are going to campaign hard in the five by-elections.

MATHIAS CORMANN: Again, you are the commentator. Our economic mission … interrupted

PATRICIA KARVELAS: I am asking a question. It is not a commentary.

MATHIAS CORMANN: Yes, you are providing commentary. Our economic mission, I say it to you again, our economic mission is to deliver stronger growth and more jobs. More jobs will help us deliver stronger wages growth over time. Jobs do not grow on trees. Jobs are created by successful, profitable businesses. Nine out of ten working Australians work for a private sector business. We want businesses in Australia to have the best possible opportunity to be successful and profitable into the future so they can hire more Australians into the future and pay them better wages over time. That is why we believe that businesses in Australia need to have the benefit of a globally more competitive business tax rate. That is why we believe that putting businesses in Australia at a competitive disadvantage with businesses in other parts of the world hurts working families around Australia, because a less successful, less profitable business in Australia will hire fewer people than they otherwise would, which means higher unemployment, which means lower wages over time. You have to remember, Australia is an open trading economy. We compete for capital investment with businesses around world.  We compete for markets with businesses around the world. We are a relatively small market, with a small population. We rely on overseas investment into Australia. The United States actually has a much bigger market and is able to draw on its domestic capital market much more readily. We need to ensure that we are competitive. That is why we are persisting with this very important economic reform.

PATRICIA KARVELAS: Alright. Okay. The Liberal Party’s peak Federal Council has voted to sell off the ABC. Have you just handed your opponents ammunition because Labor Leader Bill Shorten says if the Liberal Party wins the next election it will be emboldened to privatise the ABC.

MATHIAS CORMANN: Bill Shorten is a liar. He knows that that is not true. Bill Shorten knows that the Government has absolutely no intention of privatising the ABC…interrupted

PATRICIA KARVELAS: But given your Federal Council voted for it, you are making his job easier aren’t you?

MATHIAS CORMANN: It was not my decision. It was the decision of a body made up of Liberal party volunteers representing the Liberal party membership. Let me just say again Bill Shorten is focusing on a policy that he knows will not happen, while he is standing in the way of the future success and opportunity of millions and millions of working Australians …interrupted

PATRICIA KARVELAS: But do you accept that your Federal Council has made that very easy for him now?

MATHIAS CORMANN: You are the commentator, again I am not …interrupted

PATRICIA KARVELAS: I asked you a question, do you accept that your Federal Council has made any scare campaign he wants to run much easier?

MATHIAS CORMANN: Bill Shorten will always be a shifty, dishonest scare campaigner, he is not focused on  …interrupted

PATRICIA KARVELAS: But he has got something to point to. Isn’t that the problem for you?

MATHIAS CORMANN: Again, if Bill Shorten was interested in the public interest, if he was interested in the future opportunity of Australians to get ahead, to get a well-paid job and a better job and build a career and achieve pay increases over time, he would be making a decision to support our business tax cuts in full. Instead he is focusing on things that he knows will never happen …interrupted

PATRICIA KARVELAS: In hindsight do you regret staying silent when the Federal Council delegates had their motion and they passed their motion to sell off the ABC?

MATHIAS CORMANN: Again, the meeting rules are that this is a meeting for Party volunteers and the responsible Minister has the opportunity to contribute to the debate, which is Minister Fifield. Minister Fifield made very clear on the spot that the Government had absolutely no intention to privatise the ABC, that that was not Government policy. It was not Government policy yesterday. It will not be Government policy tomorrow. It will not be Government policy after the next election …interrupted

PATRICIA KARVELAS: If it is not Government policy. Does that mean that the political wing, the Parliamentary Party is really out of step with your grassroots membership?

MATHIAS CORMANN: Again, that goes to commentary. All I can say to you…interrupted

PATRICIA KARVELAS: It is a question. Is it out of step?

MATHIAS CORMANN: It is commentary. The Government’s policy is very clearly that we have absolutely no intention to privatise the ABC. The ABC will not be privatised under our Government. But Bill Shorten, as he always does, instead of focusing on what matters to the Australian people, he knows that this is not going to happen, he is just playing politics. He should be focusing on the fact that his decision to stand against a globally more competitive business tax rate for businesses in Australia will hurt working families in Australia …interrupted

PATRICIA KARVELAS: But do you accept that going into the by-election season, this motion is a difficulty for you politically?

MATHIAS CORMANN: What I accept is that Bill Shorten’s agenda of higher taxes will hurt the economy, hurt families and will cost jobs in Australia and that Bill Shorten should be ashamed of himself that he is being such a reckless and irresponsible operator that does not care one little bit about the opportunity of Australians today and into the future to get ahead.

PATRICIA KARVELAS: John Howard says the Government’s chances and Longman and Braddon are very tough and very remote. Do you agree with that assessment?

MATHIAS CORMANN: It is a matter of history that incumbent Governments find it nigh on impossible to win seats off an Opposition at a by-election. For the last 100 years or so no Government, of either political persuasion has won a seat off an Opposition at a by-election. Of course we are the underdogs. We always knew it is going to be tough. What we would say to the Australian people, it is time to send a message to Bill Shorten. Bill Shorten is unbelievably shameless when it comes to lying again and again about what is happening. Mediscare was a big lie. The reason we have a by-election in Longman is because he lied about the due diligence processes of the Labor party when it came to the citizenship status of their MPs. He lies about what the fiscal impact of our business tax cuts, calling them a tax giveaway to the big end of town and the big banks, which he knows to be untrue. He is the most shameless liar that I have ever come across in politics in my life.

PATRICIA KARVELAS: Just finally one of your Senators Lucy Gichuhi has been caught basically breaking travel rules. She is going to pay back the money. But is that embarrassing for the Coalition, for the Government that she was so unaware of the rules that she thought it was okay to pay for these flights to her birthday?

MATHIAS CORMANN: I assume it was an administrative oversight. It is a matter for Senator Gichuhi to explain what happened. It is entirely appropriate that she is reimbursing a payment that should not have been made.

PATRICIA KARVELAS: Mathias Cormann thank you so much for joining me.

MATHIAS CORMANN: Always good to talk to you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth